EX-10.12 10 y97636a4exv10w12.txt STOCK PURCHASE AGREEMENT EXHIBIT 10.12 EXECUTION COPY - -------------------------------------------------------------------------------- STOCK PURCHASE AGREEMENT by and between MACQUARIE INVESTMENT HOLDINGS, INC. EXECUTIVE AIR SUPPORT, INC. and THE SHAREHOLDERS OF EXECUTIVE AIR SUPPORT, INC. Dated as of April 28, 2004 - -------------------------------------------------------------------------------- TABLE OF CONTENTS
PAGE ---- ARTICLE 1 PURCHASE AND SALE.................................................................. 1 1.1 Agreement to Sell and Purchase............................................. 1 1.2 Purchase Price............................................................. 1 1.3 Adjustments to Purchase Price.............................................. 2 1.4 Payment of Purchase Price.................................................. 3 1.5 The Closing................................................................ 5 1.6 Conduct of Closing......................................................... 5 1.7 Net Working Capital Determination.......................................... 6 1.8 Cash and Cash Equivalents Determination.................................... 8 1.9 Shareholder Representative................................................. 9 ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER................................. 10 2.1 Authority Relative to the Agreement........................................ 10 2.2 Title to Stock............................................................. 10 2.3 Shareholder Authorization; Absence of Breach; Consents..................... 10 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS................................. 11 3.1 Qualification.............................................................. 11 3.2 Authorization.............................................................. 11 3.3 No Violations.............................................................. 11 3.4 Consents and Approvals..................................................... 12 3.5 Capitalization............................................................. 12 3.6 Subsidiaries............................................................... 12 3.7 Interests in Other Entities................................................ 13 3.8 Compliance with Law........................................................ 13 3.9 Litigation................................................................. 13 3.10 Insurance.................................................................. 14 3.11 Financial Statements....................................................... 14 3.12 Accounts Receivable........................................................ 14 3.13 Inventory.................................................................. 14 3.14 No Undisclosed Liabilities................................................. 14 3.15 Powers of Attorney......................................................... 15 3.16 Contracts.................................................................. 15 3.17 Bank Accounts, Etc......................................................... 16 3.18 Employees; Employee Benefit Plans.......................................... 16 3.19 Labor Matters.............................................................. 19 3.20 Property................................................................... 21 3.21 Taxes...................................................................... 23 3.22 Environmental Matters...................................................... 25 3.23 Permits.................................................................... 27 3.24 Transactions with Affiliates............................................... 27 3.25 Intellectual Property...................................................... 28 3.26 Absence of Certain Changes or Events....................................... 28
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3.27 Brokerage.................................................................. 30 3.28 Fuel Flowage............................................................... 30 ARTICLE 4 REPRESENTATION AND WARRANTIES OF PURCHASER......................................... 30 4.1 Organization............................................................... 30 4.2 Authorization.............................................................. 30 4.3 No Violations.............................................................. 31 4.4 Brokerage.................................................................. 31 ARTICLE 5 OTHER OBLIGATIONS.................................................................. 31 5.1 Conduct of Business Pending Closing........................................ 31 5.2 Access, Information and Documents.......................................... 33 5.3 Acquisition Proposals...................................................... 33 5.4 HSR Filing; Further Assurances............................................. 33 ARTICLE 6 CONDITIONS TO CLOSING; TERMINATION................................................. 34 6.1 Conditions Precedent to Obligations of Purchaser........................... 34 6.2 Conditions Precedent to the Obligations of the Shareholders................ 37 6.3 Termination................................................................ 38 ARTICLE 7 CERTAIN ADDITIONAL COVENANTS....................................................... 39 7.1 Costs, Expenses............................................................ 39 7.2 Public Announcement........................................................ 39 7.3 Mutual Covenants........................................................... 39 7.4 Tax Matters................................................................ 39 7.5 Indemnification of Directors and Officers.................................. 40 7.6 Shareholder Agreement...................................................... 41 7.7 Subsequent Transaction..................................................... 41 7.8 Updating of Disclosure Schedules........................................... 41 7.9 Atlantic Indemnification Claim............................................. 41 7.10 Additional Covenant of Certain Shareholders................................ 42 ARTICLE 8 SURVIVAL/INDEMNIFICATION........................................................... 42 8.1 Nature and Survival of Representations and Agreements...................... 42 8.2 Indemnification by Shareholders............................................ 42 8.3 Indemnification by Purchaser............................................... 45 8.4 Indemnity Procedures....................................................... 45 8.5 Exclusive Remedy........................................................... 47 8.6 Adjustments to Purchase Price.............................................. 47 ARTICLE 9 MISCELLANEOUS...................................................................... 47 9.1 Entire Agreement........................................................... 47 9.2 Notices.................................................................... 47 9.3 Successors and Assigns..................................................... 48 9.4 Arbitration................................................................ 48 9.5 Headings; Interpretation................................................... 49 9.6 Knowledge.................................................................. 49
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9.7 Further Assurances......................................................... 49 9.8 Amendment and Waiver....................................................... 49 9.9 No Other Beneficiaries..................................................... 50 9.10 Governing Law.............................................................. 50 9.11 Schedules.................................................................. 50 9.12 Additional Matters Regarding Canterbury Warrant............................ 50 9.13 Counterparts............................................................... 50
iii LIST OF EXHIBITS Exhibit A List of Shareholders Exhibit B Escrow Agreement Exhibit C Form of Cancellation Agreement Exhibit D Form of Opinion of Shareholders Counsel Exhibit E Form of Shareholder Release Exhibit F Form of Opinion of Purchaser Counsel iv LIST OF SCHEDULES Schedule 1.3 Excluded Funded Indebtedness Schedule 1.7 Working Capital Determination Schedule 3.1 Subsidiaries Schedule 3.3 No Violations/Third Party Consents Schedule 3.4 Governmental Consents Schedule 3.5 Shareholders/Options/Warrants Schedule 3.6 Subsidiaries Schedule 3.7 Interests in Other Entities Schedule 3.8 Compliance with Law Schedule 3.9 Litigation Schedule 3.10 Insurance Schedule 3.11(a) Financial Statements Schedule 3.11(b) Funded Indebtedness Schedule 3.12 Accounts Receivable Schedule 3.13 Inventory Schedule 3.14 Undisclosed Liabilities Schedule 3.15 Powers of Attorney Schedule 3.16 Contracts Schedule 3.16(b)(i) FBO Leases Schedule 3.16(b)(ii) Terms/Renewal Periods of FBO Leases Schedule 3.17 Bank Accounts Schedule 3.18(a) Employees Schedule 3.18(b) Benefit Plans Schedule 3.18(c)(i) and (ii) Qualified Plans Schedule 3.18(c) (vii) Multiemployer Plans Schedule 3.18(d) Retiree Benefits Schedule 3.18(e) Bonus Compensation Schedule 3.19 Labor Matters Schedule 3.20 Property Schedule 3.21 Taxes Schedule 3.22 Environmental Matters Schedule 3.23 Permits Schedule 3.24 Transactions with Affiliates Schedule 3.25 Intellectual Property Schedule 3.26 Absence of Certain Changes Schedule 3.28 Fuel Flowage Statements Schedule 6.1(m) Estoppel Letters Schedule 8.2(b)(ii) Certain Indemnification Matters Schedule 9.6 Certain EAS Individuals v TABLE OF DEFINED TERMS
vii STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT"), dated as of April 28, 2004, is made by and between Macquarie Investment Holdings, Inc., a Delaware corporation ("PURCHASER"), Executive Air Support, Inc., a Delaware corporation ("EXECUTIVE"), and all the Shareholders of Executive (individually, a "SHAREHOLDER" and collectively, the "SHAREHOLDERS"). The Shareholders are listed on Exhibit A to this Agreement. Background The Shareholders collectively own all the outstanding shares of capital stock of Executive (collectively, the "SHARES"); Canterbury Mezzanine Capital II, L.P., a Shareholder of Executive ("CANTERBURY"), is the record owner of warrants to purchase 1,104,354 shares of Common Stock of Executive (the "CANTERBURY WARRANT SHARES") pursuant to a Warrant Agreement, dated December 20, 2000 (the "CANTERBURY WARRANT"); and Subject to the terms and conditions hereinafter set forth in this Agreement, the Purchaser desires to purchase from the Shareholders, and the Shareholders desire to sell to the Purchaser, the Shares and the Canterbury Warrant. Terms In consideration of the premises and the mutual terms and covenants contained herein, the parties hereto agree as follows: ARTICLE 1. PURCHASE AND SALE 1.1 Agreement to Sell and Purchase. Subject to the terms and conditions of this Agreement, at the Closing, the Shareholders shall sell to Purchaser, and Purchaser shall purchase from the Shareholders, the Shares and the Canterbury Warrant, free and clear of any and all liens, claims, options, charges, pledges, security interests, voting agreements or trusts, proxies, preemptive rights, rights of first refusal, encumbrances or other restrictions (other than any restrictions under federal and state securities laws) or interests of any kind or nature whatsoever (collectively, "CLAIMS"). 1.2 Purchase Price. Subject to the terms and conditions of this Agreement, Purchaser shall pay at the Closing, an aggregate cash purchase price in the amount of Two Hundred Seventeen Million Dollars ($217,000,000) (the "PURCHASE PRICE"); provided, however, that the Purchase Price shall be subject to adjustment on the date of Closing as provided in Section 1.3 of this Agreement and subject to further adjustment after the Closing as provided in Section 1.7 and Section 1.8 of this Agreement. 1.3 Adjustments to Purchase Price. (a) Adjustments on the Closing Date. The Purchase Price shall be subject to adjustment at the Closing as follows: (i) Decreases. The Purchase Price shall be decreased as follows: (1) by an amount equal to the outstanding principal of, and accrued interest on, the Funded Indebtedness (as defined below) as of the Closing Date; and (2) by an amount equal to the amount by which the Base Net Working Capital exceeds the Net Working Capital estimated as of the Closing Date pursuant to Section 1.7(c), if any. (ii) Increases. The Purchase Price shall be decreased as follows: (1) by an amount equal to the amount by which the Net Working Capital estimated as of the Closing Date pursuant to Section 1.7(c) exceeds Base Net Working Capital, if any; (2) by an amount equal to the amount of the Cash and Cash Equivalents of Executive estimated as of the Closing Date pursuant to Section 1.8(a); and (3) by an amount equal to all capital expenditures paid by Executive on or after April 1, 2004, but prior to the Closing, for the construction of capital improvements at its fixed base operation located at Midway Airport, Chicago, Illinois up to a maximum amount of Two Million One Hundred Fifty Thousand Dollars ($2,150,000). (b) Definitions. For the purposes of this Agreement, "FUNDED INDEBTEDNESS" shall mean the aggregate amount (including the current portions thereof) of (i) all indebtedness for money borrowed from others (whether in the form of direct loans or capital leases) and purchase money indebtedness of Executive or its Subsidiaries, other than the indebtedness listed in Schedule 1.3; (ii) indebtedness of the type described in clause (i) above secured by any lien upon property owned by either Executive or its Subsidiaries, even though Executive or its Subsidiaries has not in any manner become liable for the payment of such indebtedness, (iii) interest expense accrued but unpaid, and all prepayment premiums, on or relating to any of such indebtedness, (iv) indebtedness of the type described in clause (i) above guaranteed, directly or indirectly, by either Executive or its Subsidiaries, and (v) any purchase money indebtedness for premiums for insurance maintained by Executive and its Subsidiaries to the extent the outstanding balance thereof exceeds the amortized value of the premiums. Funded Indebtedness shall not include the letters of credit listed in Schedule 1.3 to the extent outstanding on the Closing Date. Reference to the "Confidentiality Agreement" shall mean the letter agreement dated November 5, 2003, between Executive Air Support, Inc, and Macquarie Securities (USA) Inc. 2 (c) Closing Certification. Executive shall deliver to Purchaser at least two (2) days prior to the Closing its certification, duly executed by the Chief Executive Officer and Chief Financial Officer of Executive, in form acceptable to Purchaser ("CLOSING CERTIFICATION"), of (a) the amount of the Funded Indebtedness as of the Closing, broken down by lender, accompanied by pay-off statements or the functional equivalent thereof from all of the lenders of the Funded Indebtedness in form reasonably acceptable to Purchaser, (b) a list of all shareholders of Executive as of the Closing and the number of shares of Common Stock and Series A Preferred Stock owned by each, (c) a list of all holders of stock options and warrants of Executive and number and type of shares of capital stock subject to each such stock option and warrant held by each holder and (d) the amount of all capital expenditures paid by Executive on or after April 1, 2004, but prior to Closing, for the construction of capital improvements at its fixed base operation located at Midway Airport, Chicago, Illinois. 1.4 Payment of Purchase Price. (a) The Purchase Price shall be payable as set forth pursuant to a closing statement (the "CLOSING STATEMENT") in a form reasonably acceptable to Purchaser and duly executed by the Chief Executive Officer and Chief Financial Officer of Executive which shall (i) calculate the Purchase Price as adjusted pursuant to Section 1.3 hereof, (ii) reflect the amounts payable with respect to the Funded Indebtedness that were deducted from the Purchase Price pursuant to Section 1.3(a)(i)(1) hereof, and (iii) reflect the portion of the Purchase Price payable to each Shareholder and to each holder of stock options and warrants to satisfy the payment obligations of Executive pursuant to the Cancellation Agreements as defined in Section 3.5. (b) Two Million Five Hundred Thousand Dollars ($2,500,000) (together with any interest thereon, the "ESCROW FUNDS") of the Purchase Price shall be paid to Wachovia Bank, N.A., as Escrow Agent ("ESCROW AGENT") which shall hold and disburse the Escrow Funds pursuant to the terms of the Escrow Agreement in the form of Exhibit B (the "ESCROW AGREEMENT"). As set forth in the Escrow Agreement, the Escrow Funds shall be used solely for the payment of any amounts payable to the Purchaser under Section 1.7 or 1.8 of this Agreement and to satisfy any indemnification obligations of the Shareholders pursuant to Section 8.2. On the first anniversary of the Closing Date, the balance of the Escrow Funds that have not been used to pay Purchaser under Section 1.7 or 1.8 of this Agreement or to satisfy indemnification obligations of the Shareholders pursuant to Section 8.2, less the aggregate amount of any indemnification claims asserted by one or more Purchaser Indemnified Parties that are pending as of the first anniversary of the Closing Date, shall be distributed in accordance with Section 1.4(e)(iii) to the Shareholders and the stock option and warrant holders. If, upon resolution of all such indemnification claims pending as of such first anniversary date, there is a positive balance of Escrow Funds, such positive balance shall be distributed in accordance with Section 1.4(e)(iii) to the Shareholders and the stock option and warrant holders. (c) The amount of the Purchase Price payable to the Shareholders and the consideration payable to the stock option and warrant holders pursuant to the Cancellation Agreements, as defined in Section 3.5, as shown in the Closing Statement less the Escrow Funds (such difference being referred to as the "DISBURSEMENT FUND") shall be paid to ABS Capital Partners III, LLC to act as the disbursement agent for the Shareholders and the stock option and warrant holders (the "DISBURSEMENT AGENT") by wire transfer of same day funds on the Closing 3 Date to an account designated by the Disbursement Agent at least two (2) business days prior to Closing. (d) The Disbursement Agent shall hold such fund in trust for the Shareholders and the stock option and warrant holders in a separate account until its application as provided herein. (e) The Disbursement Agent shall apply the Disbursement Fund as follows: (i) The Disbursement Agent shall retain One Million Dollars ($1,000,000) to be held for disbursement upon the instructions of the Shareholder Representative for the payment of expenses incurred for or on behalf of Executive, the Shareholders or the stock option and warrant holders for which the Shareholders are responsible pursuant to Section 7.1 of this Agreement or, if not so used, for distribution to the Shareholders and the stock option and warrant holders pursuant to Section 1.4(e)(iii) below. (ii) Next, the holder of each share of Series A Preferred Stock outstanding immediately prior to the Closing shall be paid $1.81 in cash per share; and (iii) Next, the holders of each share of Common Stock, each share of Series A Preferred Stock and each share of Option Equivalent Stock (as defined in Section 1.4(f) below) outstanding immediately prior to the Closing shall be paid an amount per share determined on a prorata per share basis in the balance of the Disbursement Fund remaining after the payments pursuant to Subsections (i) and (ii) above. Such prorata allocation shall be reflected in the Closing Certification. For the purposes of this Section 1.4(e)(iii), subject to Section 9.12 of this Agreement, Canterbury shall be deemed to hold, in addition to any other shares of capital stock of Executive owned by Canterbury, a number of shares of Common Stock equal to the number of shares of the Canterbury Warrant Shares as if such shares were outstanding shares of Common Stock and the payments made to Canterbury pursuant to this Section 1.4(e)(iii) shall include the consideration payable to Canterbury for the purchase of the Canterbury Warrant. (f) As used in this Agreement, the term "Option Equivalent Stock" shall mean the result obtained by multiplying the total number of shares subject to an outstanding employee stock option or outstanding warrant (other than the Canterbury Warrant) by the Option Ratio (defined below) and rounding the result to a whole number. For purposes of this Section: (i) the phrase "Option Ratio" shall mean a fraction (A) the numerator of which shall be the amount calculated by dividing the Adjusted Purchase Price by the Applicable Number of Shares and reducing the result by $3.62, and (B) the denominator of which shall be the Adjusted Purchase Price divided by the Applicable Number of Shares; (ii) the phrase "Adjusted Purchase Price" 4 shall be Purchase Price adjusted: (A) as provided in Section 1.3 of this Agreement, (B) by decreasing the same by the product of $1.81 times the number of Series A Preferred Shares outstanding immediately prior to Closing, and (C) by increasing the same by $3.62 times the total number of shares subject to an outstanding employee stock option or outstanding warrant (other than the Canterbury Warrant) immediately prior to Closing; and (iii) the phrase "Applicable Number of Shares" shall mean the total of each of the following which is outstanding immediately prior to Closing: (A) each share of Common Stock, (B) each share of Series A Preferred Stock, and (C) the total number of shares subject to an outstanding employee stock option or outstanding warrant (other than the Canterbury Warrant). Option Equivalent Stock shall apply to all the outstanding employee stock options and warrants of Executive, other than the Canterbury Warrant. (g) Any additional Purchase Price paid to the Disbursement Agent pursuant to Section 1.7 and Section 1.8 of this Agreement shall be distributed by the Disbursement Agent in accordance with the provisions of Section 1.4(e)(iii) above. 1.5 The Closing. The closing of the transactions contemplated by this Agreement (the "CLOSING") will take place on a business day selected by Purchaser with written notice to Executive and the Shareholder Representative that is no sooner than three (3) days and no later than five (5) days after the day on which the last of the conditions set forth in Sections 6.1 and 6.2 (other than those conditions which are only capable of being satisfied contemporaneous with the Closing) is fulfilled or waived or on such other date as the parties hereto may agree in writing (the "CLOSING DATE"), at 10:00 a.m. (local time) at such place as the parties hereto shall mutually agree (including Closing by facsimile transmission exchange of executed documents or signature pages followed promptly by overnight courier of originals), and will be effective as of the 12:01 a.m. on the Closing Date ("EFFECTIVE TIME"), 1.6 Conduct of Closing. (a) At or prior to the Closing, Executive shall deliver to Purchaser: (i) The original share certificates representing the Shares and the original certificate representing the Canterbury Warrant, all duly endorsed for transfer by the respective Shareholder or with appropriate stock powers with respect thereto duly endorsed by the respective Shareholder; (ii) The certificates required in Section 6.1 (a) and (b) hereof; (iii) The opinion of counsel referred to in Section 6.1(c); (iv) The Closing Certification duly executed by the Chief Executive Officer and Chief Financial Officer of Executive; (v) The Escrow Agreement duly executed by the Shareholder Representative, the Disbursement Agent and Executive; and 5 (vi) Any other documents and certificates contemplated by Article 5 and Article 6 hereof to be delivered by or on behalf of Executive, the Shareholders or the stock option and warrant holders. (b) At or prior to the Closing, Purchaser shall deliver to the Shareholder Representative: (i) The certificates referred to in Section 6.2 (a) and (b) hereof; (ii) The opinion of counsel referred to in Section 6.2 (c); (iii) The Escrow Agreement duly executed by Purchaser; and (iv) Any other documents and certificates contemplated by Article 5 and Article 6 hereof. (c) At or prior to the Closing, the Purchaser shall deliver to the holders of the Funded Indebtedness the amount reflected in the pay-off statements or the functional equivalents thereof from such holders as necessary to pay such indebtedness in full. (d) At or prior to the Closing, the Purchaser shall deliver to the Escrow Agent the Escrow Funds. (e) At or prior to the Closing, the Purchaser shall deliver to the Disbursement Agent the Disbursement Fund. 1.7 Net Working Capital Determination. (a) As used herein, the term "Net Working Capital" shall mean the aggregate current assets of Executive and its Subsidiaries on a consolidated basis (excluding all cash and cash equivalents which would otherwise be included in current assets) minus the aggregate current liabilities of Executive and its Subsidiaries on a consolidated basis (excluding the current portion of any Funded Indebtedness to be paid in connection with the Closing which would otherwise be included in current liabilities), all as determined in accordance with generally accepted accounting principles ("GAAP") consistent with past practice and all as determined as of the Effective Time; provided, however, that the determination of Net Working Capital shall take into account the adjustments and changes to current assets and current liabilities resulting from the cancellation of the employee stock options and the warrants effective upon the Closing and resulting from the payment of the Funded Indebtedness upon the Closing hereunder. (b) As used herein, the term "Base Net Working Capital" shall mean a negative $2,599,500. (c) At least ten (10) business days prior to Closing, Executive shall deliver to Purchaser a reasonable estimate of Net Working Capital as of the Effective Time, based on a balance sheet as of the last day of the most recently ended calendar month prior to the Closing Date and containing reasonable detail and supporting documents showing the derivation of such estimate. Certain principles, specifications and methodologies for determining Net Working 6 Capital are specified in Schedule 1.7 and shall be used for purposes of calculating Net Working Capital. (d) Within ninety (90) days after the Closing, Purchaser shall deliver to the Shareholder Representative its determination of the actual Net Working Capital as of the Effective Time (following the same principles, specifications and methodologies used to determine the estimated Net Working Capital as set forth in Schedule 1.7). Each party shall have full access to the financial books and records pertaining to Executive and its Subsidiaries to confirm or audit the Net Working Capital computations. Should the Shareholder Representative disagree with Purchaser's determination of Net Working Capital, the Shareholder Representative shall notify Purchaser within thirty (30) days after Purchaser's delivery of its determination of Net Working Capital. If the Shareholder Representative and Purchaser fail to agree within thirty (30) days after Shareholder Representative's delivery of notice of disagreement on the amount of Net Working Capital, such disagreement shall be resolved in accordance with the procedure set forth in Section 1.7(f) which shall be the sole and exclusive remedy for resolving accounting disputes relative to the determination of Net Working Capital. (e) The Purchase Price shall be increased or decreased based on whether the actual Net Working Capital as of the Effective Time (determined pursuant to Section 1.7(d)) exceeds or is less than the estimated Net Working Capital as of such time (determined pursuant to Section 1.7(c) hereof). If the actual Net Working Capital as of the Effective Time (determined pursuant to Section 1.7(d)) exceeds the estimated Net Working Capital as of such time (determined pursuant to Section 1.7(c) hereof), then the Purchase Price shall be increased by such difference. If the actual Net Working Capital as of the Effective Time (determined pursuant to Section 1.7(d)) is less than the estimated Net Working Capital as of such time (determined pursuant to Section 1.7(c) hereof), then the Purchase Price shall be decreased by such shortfall. Within five (5) business days after the final determination of the actual Net Working Capital as of the Effective Time, any increase in the Purchase Price shall be paid in cash by Purchaser to the Disbursement Agent, and any decrease in the Purchase Price shall be paid in cash to Purchaser out of the Escrow Funds by the Escrow Agent, or, if such amount is insufficient, from the Shareholders. (f) In the event that the Shareholder Representative and the Purchaser are not able to agree on the actual Net Working Capital as of the Effective Time within thirty (30) days after the Shareholder Representative's delivery of notice of disagreement, the Shareholder Representative and the Purchaser shall each have the right to require that such disputed determination be submitted to Ernst & Young, LLP, or if Ernst & Young, LLP is not available for any reason or does not maintain its independent status, such other independent certified public accounting firm as the Shareholder Representative and the Purchaser may then mutually agree upon in writing (the "ACCOUNTING FIRM") for computation or verification in accordance with the provisions of this Agreement. The Accounting Firm shall review the matters in dispute and acting as arbitrators shall promptly decide the proper amounts of such disputed entries (which decision shall also include a final calculation of the actual Net Working Capital as of the Effective Time). The submission of the disputed matter to the Accounting Firm shall be the exclusive remedy for resolving accounting disputes relative to the determination of Net Working Capital. The Accounting Firm's determination shall be binding upon the Shareholder 7 Representative and the Purchaser. The Accounting Firm's fees and expenses shall be borne equally by the Shareholders out of the Escrow Funds and the Purchaser. 1.8 Cash and Cash Equivalents Determination. (a) At least ten (10) business days prior to Closing, Executive shall deliver to Purchaser a reasonable estimate of cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time containing reasonable detail and supporting documents showing the derivation of such estimate. The amount of cash and cash equivalents shall be determined in accordance with GAAP, consistent with past practice. (b) Within ninety (90) days after the Closing, Purchaser shall deliver to the Shareholder Representative its determination of the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time immediately prior to the consummation of the transaction contemplated by this Agreement. Each party shall have full access to the financial books and records pertaining to Executive and its Subsidiaries to confirm or audit the cash and cash equivalents computations. Should the Shareholder Representative disagree with Purchaser's determination of cash and cash equivalents, the Shareholder Representative shall notify Purchaser within thirty (30) days after Purchaser's delivery of its determination of the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time. If the Shareholder Representative and Purchaser fail to agree within thirty (30) days after Shareholder Representative's delivery of notice of disagreement on the amount of cash and cash equivalents, such disagreement shall be resolved in accordance with the procedure set forth in Section 1.8(d) which shall be the sole and exclusive remedy for resolving accounting disputes relative to the determination of cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time. (c) The Purchase Price shall be increased or decreased based on whether the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time (determined pursuant to Section 1.8(b)) exceeds or is less than the estimated cash and cash equivalents as of such time (determined pursuant to Section 1.8(a) hereof). If the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time (determined pursuant to Section 1.8(b)) exceeds the estimated cash and cash equivalents as of such time (determined pursuant to Section 1.8(a) hereof), the Purchase Price shall be increased by such difference. If the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time (determined pursuant to Section 1.8(b)) is less than the estimated cash and cash equivalents as of such time (determined pursuant to Section 1.8(a) hereof), the Purchase Price shall be decreased by such shortfall. Within five (5) business days after the final determination of the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time, any increase in the Purchase Price shall be paid in cash by Purchaser to the Disbursement Agent, and any decrease in the Purchase Price shall be paid in cash to Purchaser out of the Escrow Funds by the Escrow Agent, or, if such amount is insufficient, from the Shareholders. (d) In the event that the Shareholder Representative and the Purchaser are not able to agree on the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time within thirty (30) days after the Shareholder Representative's delivery of notice of disagreement, the Shareholder Representative and the Purchaser shall each have the right to 8 require that such disputed determination be submitted to the Accounting Firm (as determined in accordance with Section 1.7(f)) for computation or verification in accordance with the provisions of this Agreement. The Accounting Finn shall review the matters in dispute and acting as arbitrators shall promptly decide the proper amounts of such disputed entries (which decision shall also include a final calculation of the actual cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time). The submission of the disputed matter to the Accounting Firm shall be the exclusive remedy for resolving accounting disputes relative to the determination of the amount of cash and cash equivalents of Executive and its Subsidiaries as of the Effective Time. The Accounting Firm's determination shall be binding upon the Shareholder Representative and the Purchaser. The Accounting Firm's fees and expenses shall be borne equally by the Shareholders out of the Escrow Funds and the Purchaser. 1.9 Shareholder Representative. (a) Appointment. By execution and delivery of this Agreement, each Shareholder, for the heirs, executors, legal representatives, successors and assigns of each Shareholder, irrevocably constitutes and appoints ABS Capital Partners, III, LLC (the "SHAREHOLDER REPRESENTATIVE"), as his/her/its true and lawful agent and attorney-in-fact with full power of substitution to act in the name, place and stead of such Shareholder with respect to all transactions contemplated by the terms and provisions of this Agreement, and to act on behalf of the Shareholders in any dispute, litigation or arbitration involving matters arising as a result of or under this Agreement, and to take all actions on behalf of the Shareholders in connection therewith. (b) Authority. The appointment of the Shareholder Representative shall be deemed coupled with an interest and shall be irrevocable, and the Purchaser and any other person may conclusively and absolutely rely, without inquiry, upon any action of the Shareholder Representative on behalf of the Shareholders in all matters in which it has been granted authority pursuant to Section 1.9(a) above. The Shareholder Representative shall act for the Shareholders in all matters set forth in this Agreement. (c) Final Decision. All actions, decisions and instructions of the Shareholder Representative taken, made or given pursuant to the authority granted to the Shareholder Representative pursuant to Section 1.9(a) above shall be final, conclusive and binding upon all Shareholders and all actions, decisions and instructions of the Shareholder Representative taken, made or given pursuant to the authority granted to such Shareholder Representative pursuant to Section 1.9(a) shall be conclusive and binding upon all individual Shareholders. Purchaser, its officers, directors, employees, agents and affiliates shall be able to rely exclusively on the instructions, decisions and actions of the Shareholder Representative. (d) Power of Attorney. The provisions of this Section are independent and severable, shall constitute an irrevocable power of attorney, complete with an interest and surviving death or dissolution, granted by each Shareholder and shall be binding upon the heirs, executors, legal representatives, successors and assigns of each Shareholder. 9 ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER Each Shareholder, severally and not jointly, represents and warrants to Purchaser as follows: 2.1 Authority Relative to the Agreement. This Agreement has been duly and validly executed and delivered by the Shareholder and constitutes a valid, legal and binding agreement of the Shareholder enforceable in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, moratorium reorganization, receivership and similar laws relating to or affecting the enforcement of the rights and remedies of creditors generally and (ii) principles of equity (regardless of whether considered and applied in a proceeding in equity or at law). The other agreements to be executed and delivered by the Shareholder pursuant to this Agreement will be valid, legal and binding agreements of the Shareholder enforceable in accordance with their respective terms when so executed and delivered by the Shareholder, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, moratorium reorganization, receivership end similar laws relating to or affecting the enforcement of the rights and remedies of creditors generally and (ii) principles of equity (regardless of whether considered and applied in a proceeding in equity or at law). 2.2 Title to Stock. The Shareholder is the unconditional sole legal, beneficial, record and equitable owner of the number of the Shares set forth opposite the name of such Shareholder on Exhibit A and, in the case of Canterbury, the Canterbury Warrant except as noted in Section 9.12. The Shareholder has not granted and is not a party to any agreement granting preemptive rights, rights of first refusal or any similar or comparable rights with respect to the Shares (and, in the case of Canterbury, the Canterbury Warrant except as noted in Section 9.12), except as have been waived in this Agreement. The Shareholder is not entering into this Agreement as a trustee of any trust. At the Closing, each Shareholder will convey to Purchaser good and valid title to the Shares owned by the Shareholder (and, in the case of Canterbury, the Canterbury Warrant, free and clear of any and all Claims. 2.3 Shareholder Authorization; Absence of Breach; Consents. The execution and delivery of this Agreement and the performance of the transactions contemplated by this Agreement and all other instruments, agreements, certificates and documents contemplated hereby to which the Shareholder is or will be a party does not (i) violate any decree or judgment of any court or governmental authority which may be applicable to the Shareholder; (ii) violate any law, rule or regulation binding on, or any fiduciary obligation of, the Shareholder; (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under any of the terms, conditions, or provisions of any material contract or other agreement, including any charter documents or bylaws if the Shareholder is a corporation, partnership, limited liability company or other entity, to which the Shareholder is a party, or by which the Shareholder is bound; (iv) require the consent, approval or authorization of any person, entity or governmental agency. The Shareholder is not insolvent and no receiver has been appointed over any part of the Shareholder's assets. 10 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS The Shareholders, jointly and severally, hereby represent and warrant to Purchaser as follows: 3.1 Qualification. Executive and its Subsidiaries are corporations or limited liability companies duly organized or formed, validly existing and in good standing under the laws of their respective states of incorporation or formation as set forth in Schedule 3.1. Executive and its Subsidiaries have all requisite power and authority to own and operate their businesses as conducted as of the date hereof (collectively the "BUSINESS") and to own, operate and lease the properties and assets owned, operated or leased by Executive or its Subsidiaries and used in the Business. Executive and its Subsidiaries are licensed or qualified to do business as a foreign corporation and each is in good standing in each jurisdiction in which the properties owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be qualified would not be material to Executive or its Subsidiaries as a whole. Executive has heretofore made available to Purchaser complete and correct copies of the Certificates of Incorporation, Certificates of Formation, Bylaws and Operating Agreements or similar constituent documents, as the case may be, of Executive and its Subsidiaries as currently in effect. 3.2 Authorization. Executive has the full corporate power and authority to enter into this Agreement and the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Executive. This Agreement has been duly executed and delivered by Executive and constitutes a valid, legal and binding obligation of Executive enforceable in accordance with its terms and conditions, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, moratorium reorganization, receivership and similar laws relating to or affecting the enforcement of the rights and remedies of creditors generally and (ii) principles of equity (regardless of whether considered and applied in a proceeding in equity or at law). 3.3 No Violations. Except as set forth in Schedule 3.3 or in Schedule 3.4, the execution, delivery and performance of this Agreement by Executive will not (a) conflict with or result in any breach of any provision of the Certificates of Incorporation, Certificates of Formation, Bylaws or Operating Agreements or similar organizational documents of Executive or its Subsidiaries, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of amendment, termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which Executive or its Subsidiaries are a party or by which any of them is bound or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Executive or its Subsidiaries, or their properties or assets. Except as set forth in Schedule 3.3 or Schedule 3.4, neither Executive nor any of its Subsidiaries is or will be required to give any notice or obtain any consent from any person, corporation, general partnership, limited partnership, limited liability company, proprietorship, joint venture, trust, association, union, entity, or other form of business organization or any Governmental Entity (as defined in Section 3.4 below) (a 11 "PERSON") whatsoever in connection with the execution of this Agreement and the consummation of the transactions contemplated hereby. 3.4 Consents and Approvals. Except as set forth in Schedule 3.4, no consent, approval, order or authorization of or registration, declaration or filing with or exemption (collectively, "CONSENTS") by any court, administrative agency or commission or other governmental authority or instrumentality, whether local, domestic or foreign (each a "GOVERNMENTAL ENTITY"), is required by or with respect to Executive or its Subsidiaries or the Shareholders in connection with the execution and delivery of this Agreement by Executive, or the consummation of the transactions contemplated hereby, except for the filing of all required documents by Purchaser and the Shareholders, and the expiration of all applicable waiting periods, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT"). 3.5 Capitalization. (a) The authorized capital stock of Executive consists of 30,000,000 shares of Common Stock, $.01 par value per share, of which 1,843,689 shares of the Common Stock are issued and outstanding; and 20,000,000 shares of Preferred Stock, par value of $.01 per share, of which 18,508,784 have been designated as Series A Preferred Stock and of which 18,508,784 shares of Series A Preferred Stock are issued and outstanding. Except as set forth in Schedule 3.5, all of the issued and outstanding shares of Common Stock and Series A Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights, were not issued in violation of the terms of any agreement or other understanding binding upon Executive or any other Person and were issued in compliance with applicable federal and state securities or blue sky laws and regulations. Except for the Shares and the outstanding employee stock options (the "OPTIONS") and the outstanding warrants (the "WARRANTS") set forth in Schedule 3.5, which Options and Warrants shall be exercised or terminated as of the Closing Date, there are not now and will not be as of the Closing any other shares of capital stock of Executive issued or outstanding nor, except as described in this Section, any options, warrants, subscriptions, calls, rights, convertible securities or other agreements or commitments obligating Executive or its Subsidiaries to issue, transfer, sell, redeem, repurchase or otherwise acquire any share of its capital stock. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to Executive or any of its Subsidiaries. Each holder of Options and Warrants (other than the Canterbury Warrant) marked with an asterisk in Schedule 3.5 has duly executed and delivered to Executive a cancellation agreement in the form of Exhibit C (each a "CANCELLATION AGREEMENT"). (b) The Shareholders owning all of the issued and outstanding capital stock of Executive are shown on Exhibit A. Except as shown in Schedule 3.5, there are no voting trust agreements or other agreements restricting the voting, dividend rights or disposition of any of the shares of Stock. 3.6 Subsidiaries. Schedule 3.6 contains a complete and accurate list of each Subsidiary of Executive and sets forth for each such Subsidiary: (a) its name and jurisdiction of incorporation or organization, (b) its authorized capital stock or ownership interests and (c) the number of issued and outstanding shares of capital stock or ownership interests. Executive owns 12 directly or indirectly each of the outstanding shares of capital stock (or other ownership interests having by their terms ordinary voting power to elect a majority of directors or others performing similar functions with respect to such Subsidiary) of each of the Subsidiaries set forth in Schedule 3.6. Each of the outstanding shares of capital stock (or other ownership interests) of each of Executive's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. All of the outstanding shares of capital stock (or other ownership interests) of each such Subsidiary is owned, directly or indirectly, by Executive, free and clear of all liens, pledges, security interests, claims, or other encumbrances, except as set forth in Schedule 3.6. There are not now, and at Closing there will not be, (a) issued or outstanding (i) any shares of capital stock or ownership interests of any of Executive's Subsidiaries other than shares or ownership interests owned by Executive, directly or indirectly, or (ii) any securities convertible into or exchangeable for, or any options, warrants, calls, subscriptions or other rights (preemptive or otherwise) to acquire, any shares of capital stock or ownership interests of any of Executive's Subsidiaries, or (b) any agreements or contractual commitments obligating Executive, or restricting Executive's rights, to transfer, sell, or vote, the capital stock or ownership interests of Executive's Subsidiaries owned by it, directly or indirectly. For purposes of this Agreement, the definition of "Subsidiaries" shall mean with respect to any Person, any corporation, partnership, joint venture or other legal entity of which such Person (either alone or through or together with any other Subsidiary), owns, directly or indirectly, at least 50% of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity. 3.7 Interests in Other Entities. Except as set forth in Schedule 3.7, neither Executive nor any of its Subsidiaries, directly or indirectly, has any (a) interest in the outstanding stock or ownership interests of any corporation or in any partnership, joint venture or other entity, other than the Subsidiaries, or (b) agreement, understanding, contract or commitment relating to an interest in any such entity or Executive's or any of its Subsidiaries' investment therein. 3.8 Compliance with Law. Except as set forth in Schedule 3.8, each of Executive and its Subsidiaries has complied in all material respects with (or, in these instances occurring and relating solely to periods prior to the Effective Date in which Executive or its Subsidiaries has not complied, such compliance has been achieved, waived or resolved prior to the Effective Time with no continuing liability or obligation of Executive or any of its Subsidiaries), and is in compliance in all material respects with, all federal, state, county, and local laws, regulations, and orders that are applicable to Executive's and its Subsidiaries' Business, including, but not limited to, the rules and regulations of the Federal Aviation Administration (the "FAA"), and the states and municipalities in which Executive and its Subsidiaries are located, and has timely filed with the proper authorities all material statements and reports required by the laws, regulations, and orders to which Executive, its Subsidiaries and their respective Businesses are subject. 3.9 Litigation. Except as described in Schedule 3.9, Executive and its Subsidiaries have received no notice of any litigation, claim, action, suit, proceeding or governmental investigation pending and there is no pending, or, to the Shareholders' Knowledge, threatened litigation, claim, action, suit, proceeding or governmental investigation against Executive or its Subsidiaries. Executive and its Subsidiaries are not in violation of any material term of any judgment decree, injunction or order outstanding against them. 13 3.10 Insurance. (a) Each of Executive and its Subsidiaries maintains insurance with respect to the Business, and Executive and its Subsidiaries are in compliance with all requirements and provisions thereof and have not failed to give any notice or present any claim under any such policy in a timely fashion or in the manner or detail required by the policy. (b) True and correct copies of all insurance policies relating to such coverage have been made available by Executive to Purchaser. All such policies are in full force and effect and no notice of cancellation has been given to or received by Executive or any of its Subsidiaries with respect to any of its insurance policies and no such policy permitted to lapse, and, except as set forth in Schedule 3.10, no such policies are subject to any retroactive rate or audit adjustments or coinsurance arrangements. 3.11 Financial Statements. (a) Attached hereto as Schedule 3.11 (a) are true and complete copies of (i) the audited consolidated balance sheets of Executive and its Subsidiaries as of December 31, 2001, 2002 and 2003 and the related statements of operations and cash flow for each of the fiscal years in the three fiscal-year period ending December 31, 2003 and (ii) the unaudited consolidated balance sheet and statements of income, changes in stockholders' equity and cash flow of Executive and its Subsidiaries (the "EXECUTIVE BALANCE SHEET") as of and for the two (2) month period ended February 29, 2004 (the "INTERIM BALANCE SHEET DATE") for Executive and its Subsidiaries (collectively, including the notes thereto, the "FINANCIAL STATEMENTS"). The Financial Statements have been prepared in accordance with the books and records of Executive and its Subsidiaries and present fairly the financial position and the results of operations and cash flows of Executive and its Subsidiaries as of the dates or for the periods set forth therein. The Financial Statements have been prepared in accordance with GAAP, consistently applied. (b) Schedule 3.11(b) includes a list of all Funded Indebtedness as of the date hereof. 3.12 Accounts Receivable. Except as set forth in Schedule 3.12, each of Executive's and its Subsidiaries' accounts receivable arose, and all accounts receivable that will be outstanding as of the Closing Date shall have arisen, from bona fide transactions in the ordinary course of business. The reserve for accounts receivables set forth in the Executive Balance Sheet have been established consistently with Executive's and its Subsidiaries' historical accounting practice. 3.13 Inventory. Except as set forth in Schedule 3.13, Executive's and its Subsidiaries' inventory consists of items of a quality and quantity usable and salable in the ordinary course of business. The value of the inventory, which is obsolete, of below standard quality or in excess of reasonably estimated usage has been written-off or down and adequate reserves provided therefor. The values at which Executive and its Subsidiaries' inventories carried in the Financial Statements reflect the normal inventory valuation policy of Executive and its Subsidiaries. 3.14 No Undisclosed Liabilities. Except as set forth in Schedule 3.14 or expressly set forth in any of the other Schedules hereto, Executive and its Subsidiaries have no liabilities or 14 obligations of any nature (contingent or otherwise) required by GAAP to be disclosed on the Executive Balance Sheet, except for the liabilities or obligations reflected or reserved against in the Executive Balance Sheet and for current liabilities incurred in the ordinary course of business since February 29, 2004. 3.15 Powers of Attorney. Except as set forth in Schedule 3.15, neither Executive nor any of its Subsidiaries or any of their directors or officers, has any power of attorney with respect to Executive's and its Subsidiaries' Business outstanding. 3.16 Contracts. (a) Schedule 3.16 lists all of the following Contracts ("CONTRACTS") of Executive and each of its Subsidiaries: (i) each partnership, joint venture or other similar agreement or arrangement to which Executive or any of its Subsidiaries is a party; (ii) each lease of real property to which Executive or one of its Subsidiaries is a party, including all FBO Leases (defined below), and each lease of personal property to which Executive or one of its subsidiaries is a party that has rent payable after the date hereof in excess of $100,000; (iii) each agreement of Executive and its Subsidiaries relating to indebtedness for borrowed money (whether incurred, assumed, guaranteed or secured by any asset); (iv) each contract containing covenants purporting to materially limit the freedom of Executive or any of its Subsidiaries to compete in any line of business or in any geographic area; (v) each contract that is not for the purchase, sale or license of goods or services in the ordinary course of business consistent with past practice; (vi) each policy of insurance; and (vii) each agreement which has aggregate expenditure obligations of $150,000 or more to any Person. (b) True and complete copies of all such Contracts have been provided to Purchaser. True and complete copies of the lease or use agreement with or on behalf of the airport authority relating to each fixed base operation location of Executive and its Subsidiaries (the "FBO LEASES") are attached to Schedule 3.16(b)(i). Each of the FBO Leases has a term and renewal period as set forth in Schedule 3.16(b)(ii). Except as set forth in Schedule 3.16, the Contracts are in full force and effect, are valid and binding, and enforceable against Executive and its Subsidiaries, as applicable, and, to the Knowledge of the Shareholders, the other parties 15 thereto in accordance with their respective terms. Neither Executive nor any of its Subsidiaries, nor, to the Shareholders' Knowledge, any other party to any such contract is in default in the performance of, or is not in compliance with, any material provision of any such contract, including any minimum service requirements under any FBO Lease and no event has occurred that with the passage of time or the giving of notice or both would constitute a default by Executive or any Subsidiary or, to the Shareholders' Knowledge, any other party under any material provision thereof. (c) Except as set forth in Schedule 3.16, the consummation of the transactions contemplated by this Agreement would not give any party to a Contract listed in Schedule 3.16 the right to terminate or alter the terms of such contract. (d) Set forth in Schedule 3.16 is a list of the twenty-five (25) largest customers of Executive and its Subsidiaries by gallons of fuel purchased in the 2003 calendar year at each facility where Executive or a Subsidiary has a fixed base operation. Other than the customers set forth in Schedule 3.16, no other customer accounted for more than five percent (5%) of the gallons of fuel purchased by customers of Executive and its Subsidiaries taken as a whole in the 2003 calendar year. None of the customers listed in Schedule 3.16 has given Executive or its Subsidiaries written notice that such customer intends to cease or reduce its buying of goods or services from Executive or its Subsidiaries. (e) Except as disclosed in Schedule 3.16, no material supplier to or landlord of Executive or any of its Subsidiaries, including any party to the FBO Leases, or any Governmental Entity has taken, and neither Executive nor any of its Subsidiaries have received any written notice that, any material supplier to or landlord of Executive or any of its Subsidiaries, including any party to any of the FBO Leases, or any Governmental Entity contemplates taking, any steps to terminate the business relationship of the Executive or any of its Subsidiaries with such supplier or landlord, including any party to the FBO Leases. 3.17 Bank Accounts, Etc. Schedule 3.17 sets forth a true, and complete list of all bank accounts, safe deposit boxes and lock boxes of Executive and its Subsidiaries including, with respect to each such account and lock box, identification of all authorized signatories. 3.18 Employees; Employee Benefit Plans. (a) Schedule 3.18(a) sets forth a complete and correct list of each person who, as of the date set forth in Schedule 3.18(a), is employed by Executive or any of its Subsidiaries, including each active employee and each employee classified as inactive as a result of disability, leave of absence, layoff, or other absence. With respect to each such person, Schedule 3.18(a) includes the position, 2003 compensation, and the current wage rate as of the date specified on the Schedule. Schedule 3.18(a) sets forth a listing of all bonuses paid to management employees of Executive or any of its Subsidiaries with respect to calendar year 2003 and all bonuses in excess of $1,000 per individual paid to other employees of Executive or any of its Subsidiaries with respect to calendar year 2003. (b) Schedule 3.18(b) lists all deferred compensation, pension, profit sharing, stock option, stock purchase, savings, group insurance and retirement plans, and all vacation pay, 16 severance pay, incentive compensation, consulting, bonus and other employee benefit or fringe benefit plans or arrangements, including but not limited to all plans or programs that constitute "employee benefit plans" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), maintained by Executive or its Subsidiaries or with respect to which contributions are made by Executive or its Subsidiaries (including health, life insurance and other benefit plans maintained for retirees) or with respect to which Executive or its Subsidiaries have any current or contingent liability (the "BENEFIT PLANS"). Schedule 3.18(b) identifies all Benefit Plans (if any) that are "QUALIFIED PLANS". A "Qualified Plan" means those Benefit Plans intended to qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "CODE") and any trusts maintained pursuant thereto which are intended to be exempt from federal income taxation under Section 501 of the Code. (c) With respect, as applicable, to Benefit Plans (provided, however, that for the purposes of Sections 3.18(c)(iii) through (vi), inclusive, and Section 3.18(g), the term Benefit Plan shall not include the I.A.M. National Pension Fund listed on Schedule 3.18(b)): (i) Except as set forth in Schedule 3.18(c)(i), neither Executive nor any of its Subsidiaries has since January 1, 1999, maintained or contributed to a Qualified Plan and, except to the extent accrued on the Financial Statements, Executive and its Subsidiaries have no unpaid material liability with respect to any Qualified Plan required by GAAP to be reflected on the Financial Statements. (ii) Except as set forth in Schedule 3.18(c)(ii), neither Executive nor any of its Subsidiaries has since January 1, 1999 sponsored, maintained, contributed to, had any obligation to sponsor, maintain, contribute to or had any material liability (whether actual, contingent with respect to any of its assets, or otherwise) with respect to any Benefit Plan subject to Section 302 of ERISA or Section 412 of the Code or Title IV of ERISA. Except as shown in Schedule 3.18(c)(ii), Executive and its Subsidiaries neither have nor, since January 1, 1999, have had any ERISA Affiliates other than each other. For purposes of this Agreement, "ERISA AFFILIATE" shall mean any person, trade or business, whether or not incorporated, which together with such person would be deemed, at any time from January 1, 1999 through the Closing Date, to be a single employer pursuant to the rules set forth in Section 4001 of ERISA or Section 414(b), (c), (m) or (o) of the Code. (iii) True, correct and complete copies of all of the following documents with respect to each Benefit Plan have been provided to Purchaser: (1) all plan documents, including but not limited to trust agreements, insurance policies, service agreements and amendments thereto, (2) the Forms 5500 and any financial statements attached thereto for the last three plan years for each Benefit Plan, (3) the last Internal Revenue Service ("IRS") determination letters that covered the qualification of each 17 Qualified Plan, and the materials submitted by Executive to obtain those letters, (4) the most recent summary plan descriptions and summaries of material modifications, (5) copies of all non-discrimination testing reports for the last three plan years for each Benefit Plan and (6) all other material employee communications relating to such Benefit Plans. To the Knowledge of the Shareholders, no officer, director, agent, representative or employee of Executive has made any oral or written representation which is inconsistent in any material respect with the terms of any written Benefit Plan. (iv) There are no pending claims or lawsuits by, against, or relating to any Benefit Plan, and no claims or lawsuits have been asserted or instituted relating to any Benefit Plan, against the assets of any trust or other funding arrangement under any such plan, by or against Executive or any of its Subsidiaries with respect to any Benefit Plan or by or against the plan administrator or any fiduciary of any Benefit Plan, and the Shareholders do not have Knowledge of any fact that could form the basis for any such claim (other than routine claims for benefits) or lawsuit. (v) Each Benefit Plan has been maintained in all material respects in accordance with its constituent documents and with all applicable provisions of the Code, ERISA and other laws, including federal and state securities laws. Each Benefit Plan that is a Qualified Plan meets the requirements of Section 401(a) of the Code. (vi) Except to the extent that it could not reasonably be expected to result in a liability to Purchaser, Executive or any Subsidiary, with respect to each Benefit Plan, there has occurred no material non-exempt "prohibited transaction" (within the meaning of Section 4975 of the Code) or material transaction prohibited by Section 406 of ERISA or material breach of any fiduciary duty described in Section 404 of ERISA and no Benefit Plan held or holds any stock or other security issued by Executive or its Subsidiaries. (vii) Executive and its Subsidiaries do not contribute to and do not have any actual or contingent liability with respect to any "multiemployer plan" as defined in Section 3(37) of ERISA other than the I.A.M. National Pension Fund, and have not incurred any withdrawal liability with respect to any such plans including but not limited to the I.A.M. National Pension Fund, since January 1, 1999. (viii) Neither Executive nor any Subsidiary has ever maintained, contributed to or had any actual or contingent liability to a "voluntary employees beneficiary association" as defined on 18 Section 501(c)(9) of the Code or any other "welfare benefit fund" as defined on Section 419(e) of the Code and all liability with respect to any self funded or self insured Benefit Plan has been properly accrued on the Financial Statements to the extent required by GAAP. (ix) No matters are currently pending with respect to any Benefit Plan under the Employee Plans Compliance Resolution System maintained by the IRS or any similar program maintained by any other governmental entity. (x) All contributions, premiums or other payments due under each Benefit Plan or required by applicable law have been made within the time due and all unpaid amounts attributable to each Benefit Plan for any period prior to the Closing Date will be accrued on the books and records of Executive and its Subsidiaries in accordance with GAAP. (d) Except as set forth in Schedule 3.18(d), no employee, independent contractor, or former employee (or any dependents or beneficiaries of any such person) of Executive or any of its Subsidiaries is entitled to receive any benefits, including, without limitation, death or medical benefits (whether or not insured) beyond retirement or other termination of employment, other than (1) death or retirement benefits under a Qualified Plan, (2) deferred compensation benefits accrued as liabilities on the Financial Statements or (3) continuation coverage mandated under Section 4980B of the Code or other applicable law. (e) Except as set forth in Schedule 3.18(e), neither Executive nor any of its Subsidiaries has declared or paid or will pay any bonus compensation in contemplation of the transactions contemplated by this Agreement. (f) Neither Executive nor its Subsidiaries are parties to any contract, agreement, plan or arrangement requiring them to make payments to any person that would be a "parachute payment" (within the meaning of Section 280G of the Code) by reason of the consummation of the transactions contemplated by this Agreement. (g) Each Benefit Plan is terminable at the discretion of Executive or a Subsidiary and without cost to such entity. (h) To the Knowledge of the Shareholders and subject to the provisions of the existing labor union agreements listed in Schedule 3.19, Executive and its Subsidiaries may, without cost, withdraw its employees from the I.A.M. National Pension Fund. For purposes of this paragraph, withdrawal liability with respect to such multiemployer plan shall be treated as a cost. 3.19 Labor Matters. Except as set forth in the correspondingly numbered section of Schedule 3.19, with respect to employees of Executive and its Subsidiaries: 19 (a) Executive and its Subsidiaries are and have been in material compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including without limitation any such laws respecting employment discrimination, workers compensation, family and medical leave, the Immigration Reform and Control Act, the Americans with Disabilities Act, and occupational safety and health requirements, and have not and are not engaged in any unfair labor practice; (b) There is not now, nor since January 1, 2000 has there been any unfair labor practice complaint against Executive or any of its Subsidiaries pending or to the Shareholders' Knowledge, threatened before the National Labor Relations Board or any other comparable authority; (c) There is not now, nor since January 1, 2000, has there been, any labor strike, lock-out, slowdown, or work stoppage actually pending or, to the Shareholders' Knowledge, threatened against or directly affecting Executive or any of its Subsidiaries; (d) No labor representation organization effort exists nor has there been any such activity since January 1, 2000; (e) No grievance or any arbitration proceeding arising out of or under collective bargaining agreements is pending and, to the Shareholders' Knowledge, no claims therefor exist or have been threatened; (f) The employees of Executive and its Subsidiaries are not represented by any labor union, and no collective bargaining agreement is binding and in force against Executive or any of its Subsidiaries or currently being negotiated by Executive or any of its Subsidiaries; (g) Neither Executive nor its Subsidiaries is a party to an employment agreement and, subject to the provisions of the employment agreements listed in Schedule 3.18(b) and the labor union agreements listed in Schedule 3.19, the terms of employment of all employees of Executive and each Subsidiary are such that their employment may be terminated at will with notice given at any time and without liability for payment of compensation or damages; (h) Since January 1, 2000, all individuals classified by Executive and its Subsidiaries as "independent contractors" satisfy and have satisfied the requirements of law to be so classified and Executive and its Subsidiaries have fully and accurately reported the compensation paid to such independent contractors on IRS Forms 1099 when required to do so; and (i) No employee of Executive or any Subsidiary is currently on leave as a result of any work related injury or accident or receiving disability benefits under any Benefit Plan. 20 3.20 Property. (a) Schedule 3.20 lists all oral or written leases, including the FBO Leases, subleases, licenses, concession agreements or other use or occupancy agreements pursuant to which Executive or its Subsidiaries lease to or from any other party any real property, including all renewals, extensions, modifications or supplements to any of the foregoing or substitutions for any of the foregoing (collectively, the "LEASES"), and, if applicable, identifies each of the municipal airports to which they relate (collectively, the "AIRPORTS"). Executive and its Subsidiaries do not own any real property. (b) Schedule 3.20 identifies, as of the date reflected thereon all tangible personal property and assets (other than inventory) owned or leased by Executive or its Subsidiaries. Except as set forth in Schedule 3.20, each of Executive and its Subsidiaries has good and marketable title to all, of tangible and intangible property and assets owned by it, free of liens except for statutory mechanics' and materialmen's liens and liens for Taxes (as defined in Section 3.21(b) below) not yet due and payable (such items described therein bring referred to as "PERMITTED LIENS") of any nature whatsoever. Executive and its Subsidiaries own or lease all assets and properties that are used in or necessary to the operation of the Business. (c) Except as set forth in Schedule 3.20: (i) All Leases are valid and in full force and effect, and have not been assigned, modified, supplemented or amended. Executive has provided Purchaser with true and complete copies of all of the Leases and all amendments thereto, and has made available to Purchaser all material correspondence related thereto. Except as set forth in Schedule 3.20, Executive's and its Subsidiaries' interests under the Leases are held free of all mortgages, liens, charges, claims, restrictions, pledges, security interests, impositions, covenants, conditions and other encumbrances. (ii) Executive and its Subsidiaries have received no notice of threatened condemnation proceedings, lawsuits or administrative actions relating to any of the real property or any other matters which do or may adversely effect the current use, occupancy or value thereof and there an no pending or, to the Shareholders' Knowledge, threatened condemnation proceedings, lawsuits or administrative actions relating to any of the real property or any other matters which do or may adversely effect the current use, occupancy or value thereof. (iii) All facilities, buildings, improvements and other structures located on the leased real property and all present uses and operations of the leased real property and the structures by Executive and its Subsidiaries, comply in all material respects to the Knowledge of the Shareholders with all applicable zoning, land-use, building, fire, labor, safety, subdivision and other governmental 21 requirements and all deed or other title covenants or restrictions applicable thereto. Neither Executive nor any of its Subsidiaries has received any notice that any of the leased real property or any of the structures, or the use, occupancy or operation thereof by Executive or its Subsidiaries, violate any governmental requirements or deed or other title, covenants or restrictions, except for any violations which do not have a material effect. (iv) Each of Executive and its Subsidiaries has obtained all approvals of governmental authorities (including certificates of use and occupancy, licenses and permits) required in connection with the construction, ownership, use, occupation and operation of the leased real property and the structures thereon, and all equipment owned or used by Executive or its Subsidiaries. To the Knowledge of the Shareholders, none of the leased real property or any of the structures thereon are dependent upon or benefit from any "nonconforming use" or similar zoning classification. (v) Other than in the ordinary course of business, there are no parties other than Executive or its Subsidiaries in possession of any of the leased real property or any portion thereof, and, other than in the ordinary course of business, there are no leases, subleases, licenses, concessions or other agreements, written or oral, granting to any party or parties the right of use or occupancy of any of the leased real property or any portion thereof. (vi) To the Knowledge of the Shareholders, the legal descriptions for the real property contained in the Leases adequately describe the leased real property subject thereto. To the Knowledge of the Shareholders, all structures on the leased real property are located within the boundary lines of the leased real property and no structures, facilities or other improvements on any parcel adjacent to any of the leased real property encroach onto any of the leased real property. To the Knowledge of the Shareholders, all structural, mechanical and other physical systems related to the leased real property are in good operating condition and repair, reasonable wear and tear excepted, in all material respects. (vii) Neither Executive nor its Subsidiaries nor their respective landlords are in default under any of the Leases, nor are there any state of facts which with notice, the passage of time or both would constitute a default by Executive or any of its Subsidiaries under any of the Leases. Neither Executive nor any of its Subsidiaries has received any notice of default or claim of default by any landlord under any of the Leases. 22 (viii) Neither Executive nor any of its Subsidiaries is required to make any capital expenditure under the terms of the Leases. 3.21 Taxes. (a) Executive and its Subsidiaries have timely filed with the appropriate federal, state, local or foreign governmental authorities (each a "TAXING AUTHORITY") any and all declarations, returns, reports, estimates, information returns, schedules, statements or other documents filed or required to be filed with any Taxing Authority, ("TAX RETURNS") on or before the date hereof (taking into account any extension of time obtained or allowed for filing such Tax Returns) (and will file all such Tax Returns required to be filed after the date hereof through the Closing Date), and such Tax Returns are (or will be) true, correct and complete in all material respects. Executive and its Subsidiaries have made available to Purchaser true and complete copies of all their Tax Returns for all periods ending on or after December 31, 2000, and all material examination reports issued since such date by Taxing Authorities with respect to Taxes of Executive and its Subsidiaries and statements of material Taxes assessed since such date against Executive or its Subsidiaries that were not shown, but were required to have been shown, on Tax Returns filed by them. (b) Executive and its Subsidiaries have paid in full all federal, state and local or foreign income, estimated, payroll, withholding, excise, sales, use, real and personal property, use and occupancy, business and occupation, mercantile, transfer, capital stock and franchise or other taxes of any kind whatsoever (all the foregoing taxes, including interest, additions and penalties thereon, being hereinafter collectively called ("TAXES") required to have been paid by Executive and its Subsidiaries (whether or not shown on any Tax Return). (c) Except as set forth in Schedule 3.21, Executive and its Subsidiaries have made adequate provision in the Executive Balance Sheet and will make adequate provision in the estimated statement of Net Working Capital described in Section 1.7(c), in accordance with GAAP, for payment of all Taxes payable by Executive and its Subsidiaries for any taxable period or portion thereof ending on or before the effective date of such statement, and any Tax attribute reflected on its Tax Returns is correctly reflected in all material respects. (d) Except as set forth in Schedule 3.21, none of Executive or its Subsidiaries is delinquent in the payment of any Tax or has requested or been granted any extension of time within which to file any Tax Return which Tax Return has not since been filed. (e) Except as set forth in Schedule 3.21, there are no outstanding requests for rulings or determinations in respect of any Tax or Tax attribute pending between Executive or any of its Subsidiaries and any Taxing Authority. (f) None of Executive or its Subsidiaries has granted any extension or waiver of the statute of limitations period applicable to assessment or collection of any Tax, which period (after, giving effect to such extension or waiver) has not expired. (g) For purposes of filing income Tax Returns and calculating income Taxes, except as set forth in Schedule 3.21, neither Executive nor its Subsidiaries have been a member of an affiliated, consolidated, combined or unitary group other than one of which Executive was 23 the common parent. Except as set forth in Schedule 3.21, Executive and Subsidiaries are not and have not been a party to any Tax allocation, Tax sharing or similar agreement or arrangement, have no liability for or with respect to Taxes of another Person pursuant to Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise. (h) Executive and its Subsidiaries have not received any written notice of deficiency or assessment from any Taxing Authority with respect to liabilities for income Taxes or any other Taxes which have not been fully paid or finally settled. There are no mortgages, pledges, security interests, encumbrances, liens or charges of any kind with respect to Taxes upon any of the properties or assets of Executive or its Subsidiaries, other than liens for Taxes not yet due and payable or that are being contested in good faith. (i) Except as set forth in Schedule 3.21, there are no ongoing audits relating to Taxes of Executive or any of its Subsidiaries or examinations of any Tax Return which includes Executive or any of its Subsidiaries and no notice of such audit or examination has been received by Executive or any of its Subsidiaries in respect of any such future audit or examination. (j) Executive and its Subsidiaries have not entered into nor has there been entered into on their behalf any closing or similar agreement with any Taxing Authority, and have not obtained any ruling or determination relating to Taxes, that remains in effect (including, without limitation, any requirement, incident to a change in method of accounting, to include an amount in income for any taxable period ending after the Closing Date pursuant to Section 481(a) of the Code or any similar provision). (k) Executive and its Subsidiaries have received no notice of any claims, actions, suits, proceedings, or investigations, and there are no pending claims, actions, suits, proceedings, or investigations, with respect to Executive or any of its Subsidiaries in respect of any Tax or Tax attribute. (l) All monies which Executive or its Subsidiaries are required by law to withhold from employees or other third parties have been withheld and either timely paid to the proper governmental authority or set aside in accounting for payment when due and accrued in the books of Executive or its Subsidiaries. Executive and its Subsidiaries have complied with all information reporting and backup withholding requirements. (m) Except as set forth in Schedule 3.21, neither Executive nor any Subsidiary is a party to any contract, agreement, plan or arrangement covering any employee or former employee of either Executive or any of its Subsidiaries that, individually or collectively, would obligate Executive or any of its Subsidiaries to make a payment of any amount (or portion thereof) that would not be deductible pursuant to Sections 280G, 404 or 162 of the Code; provided that for purposes of determining compliance with this representation, payments made after the Closing other than payments made pursuant to contracts, agreements, plans or arrangements described above that are in effect as of the time of the Closing shall not be taken into account, and the law in effect as of the Closing Date shall be applied. 24 (n) Neither Executive nor its Subsidiaries has filed any consent agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by any of them. (o) Neither Executive nor any of its Subsidiaries is, and has not been at any time, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code. (p) Neither Executive nor its Subsidiaries have taken any action not in accordance with past practice that would have the effect of deferring a measure of Tax from a period (or portion thereof) ending on or before the Closing Date to a period (or portion thereof) beginning after the Closing Date. Neither Executive nor its Subsidiaries have any deferred income or Tax Liability arising out of any transaction, including without limitation, any (i) intercompany transaction (as defined in Treasury Regulation Section 1.1502-13), or (ii) the disposal of any property in a transaction accounted for under the installment method pursuant to Section 453 of the Code, except to the extent adequately reserved for on the Interim Balance Sheet. (q) No property owned by Executive or its Subsidiaries is (i) property required to be treated as being owned by another Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect immediately prior to the enactment of the Tax Reform Act of 1986, (ii) "tax-exempt use property" within the meaning of Section 168(h)(1) of the Code or (iii) is "tax-exempt bond financed property" within the meaning of Section 168(g) of the Code. (r) None of Executive or its Subsidiaries have, in the two years prior to the date of this Agreement, constituted either a "distributing corporation" or a "controlled corporation" within the meaning of Section 355(a)(1)(A) of the Code in a distribution qualifying (or intended to qualify) under Section 355 of the Code (or so much of Section 356 as relates to Section 355). 3.22 Environmental Matters. (a) Except as set forth in Schedule 3.22: (i) To the Knowledge of the Shareholders, Executive and each of its Subsidiaries hold, and are in compliance in all material respects with, all Permits, and with all applicable federal, state and local laws, regulations, orders, requirements, and common law relating to pollution or protection of the environment, health, or safety (including, without limitation, ambient air, surface water, groundwater, land, or surface or subsurface strata) including, without limitation, all federal, state or local laws, regulations, orders, requirements, and common law relating to emissions, discharges, releases or threatened releases of petroleum and petroleum-derived products, pollutants, contaminants, chemicals, 25 or industrial, toxic or hazardous substances or wastes (collectively, "HAZARDOUS SUBSTANCES"), and all federal, state or local laws, regulations, orders, requirements, and common law relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of any Hazardous Substances including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. ("CERCLA"), the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., and the rules and regulations promulgated thereunder, all as amended and supplemented from time to time, and together with any successors thereto (all the foregoing collectively, "ENVIRONMENTAL LAWS"), and, to the Shareholders' Knowledge, there are no circumstances that will prevent such compliance in the future. (ii) Neither Executive nor any of its Subsidiaries has received any written request for information, or has been notified that it is a potentially responsible party, under the CERCLA, or any similar state law with respect to any on-site or offsite location. (iii) No notice, notification, demand, request for information, citation, summons, complaint or order has been issued, no complaint has been filed, no penalty has been assessed, no claim has been made, and no investigation or review (collectively, "ENVIRONMENTAL NOTICES") is pending or, to the Shareholders' Knowledge, threatened by any Governmental Entity or other Person with respect to any (1) alleged violation by Executive or any of its Subsidiaries of any Environmental Law or liability thereunder or (2) alleged failure by Executive or any of its Subsidiaries to have any required Permit. (iv) Other than those listed in Schedule 3.22, to the Knowledge of the Shareholders, there have been no discharges, emissions, spilling, leaking, pouring, emptying, or other releases of Hazardous Substances which are or were reportable by Executive or its Subsidiaries under any Environmental Law. (b) Except as set forth in Schedule 3.22, there has been no investigation, study, audit, test, review or other analysis (including any Phase I environmental assessments) conducted by, for, or provided to Executive or its Subsidiaries in relation to any real property or the Business. (c) Neither Executive nor any of its Subsidiaries is subject to any judgment, decree, order, or consent agreement relating to compliance with any Environmental Law, or the cleanup of Hazardous Substances under any Environmental Law. 26 3.23 Permits. (a) Executive and each of its Subsidiaries has obtained and holds in full force, and Schedule 3.23 sets forth a complete and accurate list of, all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises, rights, orders, qualifications and similar rights or approvals granted or issued by any governmental or regulatory authority relating to the Business of Executive or any of its Subsidiaries (each, a "PERMIT" and collectively, "PERMITS") that are necessary or advisable for the operation of the Business or of any real property or equipment used therein. Executive, its Subsidiaries and each of their employees, independent contractors or agents is in compliance with the material terms of any such Permit. (b) Neither Executive nor any of its Subsidiaries (1) hold any Permit issued by the FAA or by the U.S. Department of Transportation or (2) own or lease aircraft or (3) operate aircraft for a third party under a management agreement or other similar arrangement. (c) Neither Executive nor any of its Subsidiaries provide aircraft repair or maintenance services to third parties or operate aircraft for compensation or hire and the failure to provide aircraft repair or maintenance service to third parties or to operate aircraft for compensation or hire does not contravene any provision in any contract, license, permit, order, lease, or agreement with any party and does not form the basis for termination of any contract, license, permit, lease or agreement. (d) Except as set forth in Schedule 3.23, neither the execution, delivery and performance of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) result in or give to any person any right of termination, non-renewal, cancellation, acceleration or modification in or with respect to any such Permit, (ii) result in or give to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under any such Permit or (iii) result in the creation or imposition of any adverse claim upon Executive, any of its Subsidiaries or any of their respective assets under the terms of any Permit. (e) Except as set forth in Schedule 3.23, there is no order, notice, rule, or directive, outstanding or, to the Knowledge of Shareholders, any proposed order, rule notice or directive, issued by any governmental authority against Executive or any of its Subsidiaries, nor is there now pending, or to the Knowledge of the Shareholders, threatened, any legal or regulatory proceeding, which could adversely affect the business or assets of Executive or any of its Subsidiaries, or any Permit required to be obtained and maintained by Executive or any of its Subsidiaries. 3.24 Transactions with Affiliates. Except as set forth in Schedule 3.24 since January 1, 2000 there have been no transactions, contracts, understanding or agreements of any kind between Executive or any of its Subsidiaries and any of their respective Affiliates (as defined below) which require disclosure in audited financial statements prepared in accordance with GAAP and were not disclosed. For purposes of this Agreement, "AFFILIATE" shall mean, with respect to any Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the first mentioned Person. 27 3.25 Intellectual Property. Schedule 3.25 contains an accurate and complete list of (a) all patents, patent applications, registered trademarks and service marks, trademark and service mark applications, registered copyrights and copyright registration applications owned or filed by Executive or any of its Subsidiaries and (b) all material licenses and other agreements relating to technology, know-how, software or processes used in or otherwise necessary to the Business of Executive or any of its Subsidiaries, whether proprietary to Executive or any of its Subsidiaries or licenses or otherwise authorized to use by others (the items set forth in clauses (a) and (b) above are collectively referred to herein as the "INTELLECTUAL PROPERTY"). Except as set forth in Schedule 3.25, the patents, trademarks and the copyrights that constitute Intellectual Property are valid, subsisting and enforceable in accordance with their terms and conditions (subject to (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, moratorium, reorganization, receivership and similar laws relating to or affecting the enforcement of the rights and remedies of creditors generally and (ii) principles of equity (regardless of whether considered and applied in a proceeding in equity or at law)), and the patents, registered trademarks and services marks, and registered copyrights are duly recorded in the name of Executive or its Subsidiaries. Except as set forth in Schedule 3.25, no claims have been asserted by any entity or person with respect to challenging the ownership, validity, enforceability or use of the Intellectual Property, nor to the Shareholders' Knowledge, is there any valid grounds for any such bona fide claims. The use or other exploitation of such Intellectual Property by Executive and its Subsidiaries do not infringe the rights of any other entity or person. Schedule 3.25 sets forth a true and complete list of all license agreements between any of Executive or any of its Subsidiaries and third-parties with respect to the use of the Intellectual Property. To the extent Executive or any of its Subsidiaries uses any Intellectual Property owned by a third party, Executive or Subsidiary has a license with such third party for the use of such Intellectual Property and, to the Knowledge of the Shareholders, is not in default under any such license. 3.26 Absence of Certain Changes or Events. From December 31, 2003 to the date hereof, except as disclosed in Schedule 3.26 or in the Financial Statements, or as otherwise expressly consented to in writing by Purchaser, Executive's and its Subsidiaries' Business have been operated only in the ordinary course of business (except as expressly contemplated by this Agreement), and there has not been any: (a) Change in the financial condition, assets, liabilities, prospects, or net worth of Executive or its Subsidiaries, except changes in the ordinary course of business, none of which, individually or in the aggregate has been or is reasonably likely to be materially adverse to Executive or its Subsidiaries; (b) Sale, assignment or transfer, other than in the ordinary course of business and consistent with past practice, of any assets of Executive or any of its Subsidiaries; (c) Acquisition by merger, consolidation with, purchase of substantially all of the assets or capital stock of, or any other acquisition of any material assets or business of, any corporation, partnership, association or other business organization or division thereof; (d) Change in accounting methods or practices by Executive or any of its Subsidiaries, except as required by GAAP; 28 (e) Entry into, or termination, amendment or modification of, any material contract, agreement, commitment, transaction, license, permit or other instrument (including, without limitation, any borrowing, capital expenditure, capital contribution or capital financing). (f) Increase in salary, bonuses or other compensation payable or to become payable to, or any advance or loan to any officer or employee of Executive or its Subsidiaries, except in the ordinary course of business, consistent with past practice, and neither Executive nor its Subsidiaries have (i) entered into any Benefit Plan or Benefit Agreement, employment, severance, or other agreements relating to compensation or fringe benefits or (ii) adopted or changed any existing Benefit Plan or Benefit Arrangement; (g) Casualty involving material assets of Executive's or any of its Subsidiaries' Business, not covered by insurance, in excess of $15,000; (h) Strike, walkout, labor trouble or any other new or continued event, development or condition of any character which has or could materially adversely affect the Business, properties, assets of Executive or its Subsidiaries; (i) Declaration, setting aside or payment of a dividend or other distribution in respect of any of the capital stock of Executive or its Subsidiaries, or any direct or indirect redemption, purchase or other acquisition of any capital stock of Executive or its Subsidiaries or any rights to purchase such capital stock or securities convertible into or exchangeable for such capital stock; (j) Cancellation or waiver of any right material to the operation of Executive's or its Subsidiaries' Business or any cancellation or waiver of any debts or claims of substantial value or any cancellation or waiver of any debts or claims against any officer, director or employee of Executive or its Subsidiaries; (k) Payment, discharge or satisfaction of any liability or obligation (whether accrued, absolute, contingent or otherwise) by Executive or any of its Subsidiaries, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities or obligations shown or reflected on the Financial Statements or incurred in the ordinary course of business since the Interim Balance Sheet Date; (l) Adverse change, or, to the Knowledge of the Shareholders, threat of any adverse change, in Executive's or any of its Subsidiaries' relations with, or any loss, or, to the Knowledge of the Shareholders, threat of loss of, Executive's or any of its Subsidiaries' landlords, suppliers, clients or customers, including any party to the FBO Leases or any Governmental Entity, which, individually or in the aggregate, has been or will be materially adverse to Executive or any of its Subsidiaries as a whole; (m) Write-offs as uncollectible of any notes or accounts receivable of Executive or its Subsidiaries or write-downs of the value of any asset or inventory by Executive other than in immaterial amounts or in the ordinary course of business consistent with past practice and at a rate no greater than the during the six months ended on the Interim Balance Sheet Date; 29 (n) Creation, incurrence, assumption or guarantee by Executive or its Subsidiaries of any obligations or liabilities (whether absolute, accrued, contingent or otherwise and whether due or to become due), except in the ordinary course of business, or any creation, incurrence, assumption or guarantee by Executive or its Subsidiaries of any indebtedness for borrowed money; (o) Disposition of or failure to keep in effect any rights in, or for the use of any patent, trademark, service mark, trade name or copyright, or any disclosure to any person not an employee or other disposal of any trade secret, process or know-how; (p) Transaction, agreement or event (i) outside the ordinary course of business for Executive's or any of its Subsidiaries' Business, or (ii) inconsistent with past practice and which could have a material adverse affect on Executive, any of its Subsidiaries or the Business; or (q) Agreement by Executive to do any of the foregoing. 3.27 Brokerage. Executive has not made any agreement or taken any other action which might cause anyone to become entitled to a broker's fee or commission as a result of the transactions contemplated hereby. 3.28 Fuel Flowage. True and correct copies of Executive's and its Subsidiaries' fuel flowage and gross receipt statements as filed with the relevant Airport authorities for the period from January 1, 2003 through December 31, 2003, reflecting the gallons of fuel sold by Executive and its Subsidiaries, and revenues on which Executive and its Subsidiaries paid a percentage fee, during such period are attached to Schedule 3.28. Such statements accurately reflect the gallons of fuel sold and revenues earned by Executive and its Subsidiaries during such period and were prepared in accordance with Executive's books and records. Executive's and its Subsidiaries' fuel sales records for each customer who purchased fuel during the period January 1, 2004 through March 31, 2004 are also attached to Schedule 3.28. Such fuel sales records accurately reflect the actual number of gallons sold to each customer of Executive and its Subsidiaries during such period and the actual prices charged by Executive and its Subsidiaries to each customer during such period. ARTICLE 4 REPRESENTATION AND WARRANTIES OF PURCHASER Purchaser represents and warrants to Executive as follows: 4.1 Organization. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 4.2 Authorization. Purchaser has the full corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by Purchaser of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by the Purchaser and constitutes a valid, legal and binding obligation of Purchaser, enforceable in accordance with its terms and 30 conditions, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, moratorium reorganization, receivership and similar laws relating to or affecting the enforcement of the rights and remedies of creditors generally and (ii) principles of equity (regardless of whether considered and applied in a proceeding in equity or at law). 4.3 No Violations. The execution, delivery and performance of this Agreement by Purchaser, and the consummation by Purchaser of the transactions contemplated hereby, will not (a) conflict with or result in any breach of any provision of the Certificate of Incorporation or Bylaws of Purchaser, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of amendment, termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which Purchaser is a party or by which it is bound, or (c) assuming compliance with the HSR Act, violate any order, writ, injunction, decree, statute, rule or regulation applicable to Purchaser, or its properties or assets. 4.4 Brokerage. Purchaser has not made any agreement or taken any other action which might cause anyone to become entitled to a broker's fee or commission from Executive or the Shareholders as a result of the transactions contemplated hereunder. ARTICLE 5 OTHER OBLIGATIONS 5.1 Conduct of Business Pending Closing. From and after the date hereof and pending Closing, and unless Purchaser shall otherwise consent or agree in writing, Executive and the Shareholders covenant and agree that: (a) Ordinary Course. The Business of Executive and its Subsidiaries will be conducted only in the ordinary course and consistent with past practice, including billing and collection practices and payment of accounts payable. (b) Preservation of Business. Executive and the Shareholders will use commercial best efforts to preserve the business organization of Executive and its Subsidiaries intact, to keep available the services of the present officers and employees of Executive and its Subsidiaries, and to preserve the goodwill of the suppliers, customers and others having business relations with Executive and its Subsidiaries. (c) Material Transactions. Executive will not, and will not permit its Subsidiaries to: (i) amend its certificate of incorporation, bylaws, or other organizational documents; (ii) change its authorized or issued capital stock, or other equity interest or issue any rights or options to acquire shares of its capital stock or other equity interest; 31 (iii) enter into any contract or commitment the performance of which may extend beyond the Closing, except those made in the ordinary course of business, the terms of which are consistent with past practice and reasonable in light of current conditions; (iv) enter into any employment or consulting contract or arrangement with any person which is not terminable at will, without penalty or continuing obligation; (v) incur, create, assume or suffer to exist any mortgage, pledge, lien, restriction, encumbrance, tenancy, encroachment, covenant, condition, right-of-way, easement, claim, security interest, charge or other matter affecting title on any of its assets or other property, except Permitted Liens; (vi) make, change or revoke any Tax election or make any agreement or settlement with any Taxing Authority; (vii) incur any debt or other obligation for money borrowed; (viii) loan, advance funds or make an investment in or capital contribution to any person other than Executive; (ix) except as expressly contemplated in this Agreement, take any action or permit to occur any event described in Section 3.26; (x) take any action or omit to take any action which will result in a violation of any applicable law or cause a breach of any agreements, contracts or commitments; or (xi) enter into any agreement, or otherwise commit, to do any of the foregoing. It is expressly understood, however, that Executive, at its discretion, may elect at any time prior to the Closing to resolve its pending claim for indemnification under the indemnification insurance policy obtained in connection with the acquisition of Atlantic Aviation Corporation by Executive. (d) Interim Financial Statements. Executive will deliver to Purchaser as soon as practicable after the end of each month and the end of each calendar quarter prior to the Closing Date, commencing with the month ended March 31, 2004, an unaudited consolidated balance sheet as of such date and related unaudited consolidated statements of income and cash flows for the periods then ended for Executive and its Subsidiaries (the "INTERIM FINANCIAL STATEMENTS"), which Interim Financial Statements shall fairly present Executive and its Subsidiaries' financial condition, results of operations and cash flows for the periods then ended in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement or the Confidentiality Agreement, the Purchaser (and its permitted assigns) shall have the right to use and disclose the Interim Financial Statements and related documents, together with such information about Executive and its Subsidiaries as Purchaser (or its permitted assign) 32 reasonably believes is required or advisable to be included therewith, in connection with any debt or equity financing to be done by the Purchaser or any of its Affiliates. (e) Maintenance of Employees. Executive will use, and cause each of its Subsidiaries to use, commercially reasonable efforts to retain all existing employees of Executive and its Subsidiaries and will promptly notify Purchaser of the termination of employment of any existing employee or the receipt by Executive or any of its Subsidiaries of notice of termination of employment of any existing employee. (f) Insurance. Executive and its Subsidiaries shall maintain and shall cause its Subsidiaries to maintain in full force and effect the policies of insurance listed in Schedule 3.16, subject only to variations required by the ordinary operations of the Business, or else will obtain, prior to the lapse of any such policy, substantially similar coverage with insurers of recognized standing and approved in writing by the Purchaser which approval shall not be unreasonably withheld or delayed. Executive shall promptly advise Purchaser in writing of any change of insurer or type of coverage in respect of the policies listed in Schedule 3.16. 5.2 Access, Information and Documents. Executive and its Subsidiaries will give to Purchaser and to Purchaser's counsel, accountants and other representatives reasonable access during normal business hours to all of Executive's and its Subsidiaries' properties, books, Tax Returns, contracts, commitments, records, officers, personnel, accountants, customers and suppliers and will furnish to Purchaser all such documents and copies of documents (certified to be true copies if requested) and all information with respect to the affairs of Executive and its Subsidiaries as Purchaser may reasonably request. No investigation or receipt of information by Purchaser pursuant to this Agreement shall diminish or obviate any of the representations, warranties, covenants or agreements of Executive under this Agreement or the conditions to the obligations of Purchaser under this Agreement. 5.3 Acquisition Proposals. From the date hereof through the Closing, the Shareholders shall not sell or otherwise transfer any of the Shares to any other person, and neither Executive nor its Subsidiaries, or any of their Affiliates, officers, directors, employees, representatives or agents, shall, directly or indirectly, solicit, initiate or participate in any way in discussions or negotiations with, or provide any information or assistance to, any person or group of persons (other than Purchaser) concerning any acquisition of an equity interest in, or in a merger, consolidation, liquidation, dissolution, disposition of assets (other than in the ordinary course of business and as specifically permitted pursuant to this Agreement) of Executive or any of its Subsidiaries, or any disposition of any of the Shares (other than pursuant to the transactions contemplated by this Agreement), or assist or participate in, facilitate or encourage any effort or attempt by any other person to do or seek to do any of the foregoing. 5.4 HSR Filing; Further Assurances. (a) Each of the parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated hereby as soon as practicable. Without limiting the foregoing, Executive and Purchaser will as promptly as practicable, but in no event later than ten (10) days following the execution and delivery of this Agreement, file 33 with the Federal Trade Commission and the Department of Justice the notification and report form, if any, required for the transactions contemplated hereby pursuant to the HSR Act. Any such notification and report will be in substantial compliance with the requirements of the HSR Act. Executive and Purchaser shall furnish to the other such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission which is necessary under the HSR Act. Executive and Purchaser shall keep each other apprised of the status of any communications with, and inquiries or requests for additional information from, the Federal Trade Commission and Department of Justice. Purchaser shall be responsible for the payment of all filing or other fees applicable to the Notification and Report Form filed pursuant to the HSR Act. (b) Each party shall promptly give the other party written notice of the existence or occurrence of any condition which would make any representation or warranty herein contained of either party untrue as of the date of this Agreement or any subsequent date as if made on and as of such subsequent date (except for those representations and warranties which address matters only as of a particular date) or which might reasonably be expected to prevent the consummation of the transactions contemplated hereby. (c) From and after the date hereof, Executive covenants and agrees to cooperate with the Purchaser and shall use its commercially reasonable efforts to take, or cause to be taken, all actions and to do or cause to be done, all things necessary or desirable, including the making of any applicable disclosures, under applicable law and regulation as the Purchaser may reasonably request to take or do in connection with any restructuring or equity or debt financing done by the Purchaser or any of its Affiliates; provided, however, that Executive shall not be obligated to incur or pay any costs or expenses in connection with providing such cooperation or taking or doing any such actions or things. ARTICLE 6 CONDITIONS TO CLOSING; TERMINATION 6.1 Conditions Precedent to Obligations of Purchaser. The obligations of Purchaser to proceed with the Closing under this Agreement are subject to the fulfillment prior to or at Closing of the following conditions (any one or more of which may be waived in whole or in part by Purchaser in Purchaser's sole discretion): (a) Bringdown of Representations and Warranties. The representations and warranties of the Shareholders contained in this Agreement shall be true and correct in all material respects on and as of the time of Closing, with the same force and effect as though such representations and warranties had been made on, as of and with reference to such time, and Purchaser shall have received a certificate to such effect as to the representations and warranties contained in Article 3 of this Agreement signed by an officer of Executive and the Shareholder Representative in form reasonably acceptable to Purchaser. (b) Performance and Compliance. The Shareholders and Executive shall have performed, in all material respects, all of the covenants and complied, with all of the provisions required by this Agreement to be performed or complied with by them on or before the Closing, 34 and Purchaser shall have received a certificate to such effect signed by an officer of Executive and the Shareholder Representative in form reasonably acceptable to Purchaser. (c) Opinion of Counsel. Purchaser shall have received from counsel for the Shareholders and Executive an opinion dated the date of the Closing substantially in the form set forth in Exhibit D. (d) Satisfactory Instruments. All instruments and documents reasonably required on the part of the Shareholders or Executive to effectuate and consummate the transactions contemplated hereby shall be delivered to Purchaser and shall be in form and substance reasonably satisfactory to Purchaser and its counsel. Purchaser shall have received the original certificates representing all of the Shares and the Canterbury Warrant, duly endorsed in blank or with duly executed stock powers attached, and certificates of good standing of Executive and each of its Subsidiaries, issued not earlier than ten (10) days prior to the Closing Date, by the appropriate Governmental Entity for the jurisdiction of its incorporation or formation. (e) Required Consents. All required consents and approvals of third parties, including, without limitation, all governmental departments, agencies, authorities and commissions to the transactions contemplated hereby shall have been obtained and no such consent or approval shall have been conditioned upon the modification in any material respect, cancellation or termination of any material lease, commitment, agreement, easement, right, license, permit or authorization of Executive or any of its Subsidiaries or shall impose on Purchaser, Executive or any of its Subsidiaries any material condition, provision or requirement not presently imposed upon any of them or any condition that would be materially more restrictive after the Closing than the conditions presently imposed on Executive or any of its Subsidiaries, as the case may be. (f) HSR. All waiting periods applicable under the HSR Act shall have expired and no action shall have been taken or threatened by the Federal Trade Commission or the Department of Justice seeking to prohibit the transactions contemplated hereby. (g) Litigation. No order of any court or administrative agency shall be in effect which restrains or prohibits the transactions contemplated hereby or which would limit or adversely affect Purchaser's ownership or control of Executive, any or its Subsidiaries or the Business of Executive or any of its Subsidiaries, and there shall not have been threatened, nor shall there be pending, any action or proceeding by or before any court or governmental agency or other regulatory or administrative agency or commission: (i) challenging any of the transactions contemplated by this Agreement or seeking monetary relief by reason of the consummation of such transactions; (ii) by any present or former owner of any capital stock or equity interest in Executive of any of its Subsidiaries (whether through a derivative action or otherwise) against Executive or any of its Subsidiaries or any officer, director or shareholder of Executive or any of its Subsidiaries in his or her capacity as such; or (iii) which could reasonably be expected to have a material adverse effect on the business or condition (financial or otherwise) of Executive or any of its Subsidiaries. 35 (h) No Material Adverse Change. No material adverse change in its business, operations, properties, assets, income, cash flow, liabilities, working capital or condition (financial or otherwise) of Executive and its Subsidiaries, as a whole, shall have occurred since December 31, 2003. (i) Stock Options. As of the Closing, all of the Options and Warrants (other than the Canterbury Warrant) shall have been cancelled pursuant to Cancellation Agreements for the consideration specified in the Cancellation Agreements. Simultaneously with the Closing, the holders of such Options and Warrants shall have paid to Executive the amount of all required withholding Taxes due as a result of the cancellation of such Options and Warrants. (j) Convertible Notes. On or before ten (10) days after date of this Agreement, either (i) Executive and the holder of that certain Subordinated Convertible Note dated November 7, 2000 in the original principal amount of $100,000 payable to Susan B. Sullivan and that certain Subordinated Convertible Note dated November 7, 2000 in the original principal amount of $250,000 payable to Timothy M. Bannon (collectively, the "CONVERTIBLE NOTES") have entered into irrevocable agreements for the payment in full of the Convertible Notes prior to the Effective Time or (ii) the holders of the Convertible Notes have converted the Convertible Notes in full and executed an agreement by which the holder has become a party to this Agreement as a Shareholder. (k) Affiliate Loans. All loans by Executive or any of its Subsidiaries to any Affiliate, if any, shall have been repaid in full, and there shall be no outstanding debts or obligations due from any Affiliate of Executive, Shareholder or holder of Options or Warrants to Executive or any of its Subsidiaries. (l) Releases. Each of the Shareholders shall have executed and delivered to Purchaser a release in substantially the form of Exhibit E to this Agreement. (m) Estoppel Letters. Purchaser shall have received duly executed estoppel letters from the third parties to the FBO Leases addressed to Purchaser, dated not earlier than thirty (30) days prior to the Closing Date, stating the following: (i) the copy of the contract with such third party attached to the estoppel letter is a true, correct and complete copy of such FBO Lease and represents the entire agreement between the third party and Executive or its Subsidiary, as the case may be, (ii) to the knowledge of such third party neither the third party nor Executive or its Subsidiary, as the case may be, is in breach or default under such FBO Lease, and, to the knowledge of such third party, no event has occurred which, with notice or the passage of time, or both, would constitute a breach or default, or permit termination or modification of such FBO Lease, (iii) the third party has not repudiated any provision of such FBO Lease, (iv) to the third party's knowledge, there are no disputes or forbearance programs in effect as to such FBO Lease, (v) if listed in Schedule 6.1(m) or if otherwise required, the consent of the third party to the transaction contemplated by this Agreement, including any subsequent assignment of the capital stock of Executive to any Affiliate of Purchaser, and (vi) the third party's current notice address. (n) Resignations. Purchaser shall have received the written resignations, effective as of the Closing Date, of such of the directors and officers of Executive and its 36 Subsidiaries as are designated by Purchaser to resign, which resignations shall include releases of liability for the benefit of Executive, its Subsidiaries, and their respective successors and assigns. (o) Tax Certificates. Purchaser shall have received: (i) a properly executed Foreign Investment and Real Property Tax Act of 1980 Notification Letter, which states that Shares do not constitute "United States real property interests" under Section 897(c) of the Code, for purposes of satisfying Purchaser's obligations under Treasury Regulation Section 1.1445-2(c)(3) and a form of notice to the IRS in accordance with the requirements of Treasury Regulation Section 1.897-2(h)(2), along with written authorization for Purchaser to deliver such notice to the IRS on behalf of Executive; and (ii) all clearance certificates or similar types of documents which may be required by any Taxing Authority in order to relieve the Purchaser of any obligation to withhold any portion of the Purchase Price or any transferee liability. (p) Additional Cancellation Agreements. On or before ten (10) days after the date of this Agreement, the Shareholders shall have delivered to the Purchaser Cancellation Agreements in the form of Exhibit C signed by each holder of a stock option whose name was not marked with an asterisk in Schedule 3.5. 6.2 Conditions Precedent to the Obligations of the Shareholders. The obligations of the Shareholders to proceed with the Closing hereunder are subject to the fulfillment prior to or at Closing of the following conditions (any one or more of which may be waived in whole or in part by the Shareholder Representative in its sole discretion): (a) Bringdown of Representations and Warranties. The representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects on and as of the time of Closing, with the same force and effect as though such representations and warranties had been made on, as of and with reference to such time and Purchaser shall have delivered to the Shareholders a certificate to such effect. (b) Performance and Compliance. Purchaser shall have performed all of the covenants and complied, in all material respects, with all the provisions required by this Agreement to be performed or complied with by it on or before the Closing, and Purchaser shall have delivered to the Shareholders a certificate to such effect. (c) Opinion of Counsel. The Shareholders shall have received from counsel for Purchaser an opinion dated the date of Closing substantially in the form set forth in Exhibit F. (d) Litigation. No order of any court or administrative agency shall be in effect which restrains or prohibits the transactions contemplated hereby, and there shall not have been threatened, nor shall there be pending, any action or proceeding by or before any court or governmental agency or other regulatory or administrative agency or commission challenging any of the transactions contemplated by this Agreement or seeking monetary relief by reason of the consummation of such transactions. (e) Satisfactory Instruments. All instruments and documents required on the part of Purchaser to effectuate and consummate the transactions contemplated hereby shall be delivered to the Shareholders. 37 (f) HSR. All waiting periods applicable under the HSR Act shall have expired and no action shall have been taken or threatened by the Federal Trade Commission or the Department of Justice seeking to prohibit the transactions contemplated hereby. 6.3 Termination. (a) When Agreement May Be Terminated. This Agreement may be terminated at any time prior to Closing: (i) By mutual consent of Purchaser and the Shareholder Representative; (ii) By Purchaser if there has been a material misrepresentation by the Shareholders or a material breach by the Shareholders of any of their warranties or covenants, and such breach shall not have been cured within 10 days after notice thereof has been delivered by Purchaser to the Shareholder Representative (or in any event prior to the date of Closing), or if any of the conditions specified in Section 6.1 hereof shall not have been fulfilled by the time required and shall not have been waived by Purchaser; (iii) By the Shareholder Representative, if there has been a material misrepresentation by Purchaser, or a material breach by Purchaser of any of its warranties or covenants, and such breach shall not have been cured within 10 days after notice thereof has been delivered by the Shareholder Representative to Purchaser (or in any event prior to the date of Closing), or if any of the conditions specified in Section 6.2 hereof shall not have been fulfilled by the time required and shall not have been waived by the Shareholder Representative; (iv) By Purchaser or the Shareholder Representative if Closing shall not have occurred prior to August 15, 2004; provided, however, that Purchaser or the Shareholder Representative may terminate this Agreement pursuant to this subparagraph (iv) only if Closing shall not have occurred by such date for a reason other than a failure by such party to satisfy the conditions to Closing of the other party set forth in Sections 6.1 or 6.2 hereof, as applicable that are within the control of such party. (b) Effect of Termination. In the event of termination of this Agreement by either the Shareholder Representative or Purchaser, as provided above, this Agreement shall forthwith terminate; provided, however, that the obligations of the parties set forth in Sections 7.1 and 8.5 hereof shall survive such termination; and, provided further, that no such termination will relieve Purchaser, Executive or the Shareholders from liability for any breach of any representation or warranty or the failure to perform any covenant or agreement set forth in this Agreement prior to such termination, and, in the event of such breach or failure to perform, the 38 parties hereto shall be entitled to exercise any and all remedies available under law or equity in accordance with this Agreement, subject to the limitation that, in the event such breach or failure is not the result of a knowingly or intentional breach or failure by Executive or the Shareholders the maximum amount of damages that Purchaser may recover as a result of any such breach by the Shareholders or Executive shall be a total of not more than $2,000,000 and the Purchaser shall only have recourse against Executive with respect to any such Damages. ARTICLE 7 CERTAIN ADDITIONAL COVENANTS 7.1 Costs, Expenses. Except as may be specified elsewhere in this Agreement, Purchaser shall pay all costs and expenses, including legal fees and the fees of any broker, relating to or resulting from Purchaser's negotiation, performance of and compliance with this Agreement by Purchaser. The Shareholders shall pay all costs and expenses, including legal fees and the fees of any broker relating to or resulting from the negotiations, performance of, and compliance with this Agreement by Executive and the Shareholders but only to the extent that such cost and expense either has not been paid by Executive prior to the Effective Time or is not included in the calculation of Net Working Capital pursuant to Section 1.7 of this Agreement. For the purposes of this Section 7.1, the consulting fee listed in Schedule 3.18(e) shall constitute an expense of the Shareholders relating to this Agreement. 7.2 Public Announcement. No party hereto shall make or issue, or cause to be made or issued, any public announcement or written statement concerning this Agreement or the transactions contemplated hereby without the prior written consent of the other party, except to the extent required by law or in accordance with the rules, regulations and orders of any Governmental Entity. 7.3 Mutual Covenants. The parties mutually covenant from the date of this Agreement to the Closing Date: (a) to cooperate with each other in determining whether filings are required to be made or consents required to be obtained in any jurisdiction in connection with the consummation of the transactions contemplated by this Agreement and in making or causing to be made any such filings promptly and in seeking to obtain timely any such consents; (b) to use all reasonable efforts in good faith to obtain promptly the satisfaction of the conditions to the Closing of the transactions contemplated herein, including, without limitation, the obtaining of all required consents and approvals; (c) to furnish to the other and to the other's counsel all such information as may be reasonably required in order to effectuate the foregoing actions; and (d) to advise the other party promptly if such party determines that any condition precedent to its obligations hereunder will not be satisfied in a timely manner. 7.4 Tax Matters. 39 (a) Purchaser shall be responsible for preparing or causing to be prepared Tax Returns for Executive and its Subsidiaries that are required to be filed after the Effective Time. (b) Notwithstanding any other provision of this Agreement, the Shareholders shall not be considered to be in breach of any of their representations or warranties under this Agreement if and to the extent any such representation or warranty is rendered inaccurate as a result of, and the Shareholders shall not be obligated to provide indemnification with respect to, any Taxes or other Damages arising from, either: (i) the filing of Tax Returns after the Effective Time prepared in a manner that is not consistent with past practice of Executive and its Subsidiaries (to the extent applicable), except to the extent that treating a specific item in a manner consistent with past practice would not have sufficient legal support to avoid the imposition of penalties (assuming that such treatment were not specifically disclosed or identified in such Tax Return in a Treasury Form 8275 or similar disclosure statement); (ii) the filing, after the Closing, of an amended Tax Return amending a Tax Return filed by or with respect to Executive or any of its Subsidiaries prior to the Effective Time without the consent of the Shareholder Representative, such consent not to be unreasonably withheld, or unless such filing is required by applicable law, or is an appropriate correlative adjustment to a final determination of a Taxing Authority relating to another taxable period; or (iii) any election under Section 338 of the Code (or any comparable provision of state, local or foreign Tax law) made with respect to the transactions contemplated by this Agreement. (c) In the event that the parties disagree as to (i) whether any Tax Return has been prepared in a manner consistent with past practice, (ii) whether preparation of any Tax Return in a manner consistent with past practice would have insufficient legal support to avoid the imposition of penalties, or (iii) whether applicable law requires the filing of an amended Tax Return, the parties shall submit the matter to the Accounting Firm, which shall resolve the dispute. The Accounting Firm shall, within forty-five (45) days after submission, make a determination with respect to the dispute and report such determination to the parties in writing. The determination of the Accounting Firm shall be conclusive and binding on the parties. The fees and expenses of the Accounting Firm shall be borne equally by Purchaser and the Shareholders. 7.5 Indemnification of Directors and Officers. Nothing contained herein shall be deemed or construed to waive, discharge, release or limit in any respect whatever indemnification rights (including rights to advancement of expenses) any present or former director, officer or employee of Executive and its Subsidiaries in office prior to the Effective Time have under the Certificate of Incorporation and Bylaws of Executive and any such Subsidiary in effect on the date hereof with respect to all acts or omissions by such persons in 40 such respective capacity on or prior to the Effective Time; provided, however that such indemnification rights shall not apply with respect to any liability with respect to which any such person is obligated as a Shareholder to indemnify Purchaser under Section 8.2 of this Agreement. 7.6 Shareholder Agreement. Each of the Shareholders and Executive hereby consents to the transfer of the Shares by the other Shareholders pursuant to the terms of this Agreement and hereby waives and releases any rights of first refusal or comparable rights that such Shareholder or Executive may have with respect to such transfer under that certain Shareholders Agreement, dated as of March 14, 2000, as amended, by and between Executive and certain shareholders of Executive. 7.7 Subsequent Transaction. In the event that, within twelve (12) months of the Closing Date, the Purchaser enters into a binding agreement with an unaffiliated third party that, as of the date of this Agreement, owns or operates general aviation fixed base operations, at multiple locations in the United States pursuant to which the Purchaser, directly or indirectly, will sell, transfer or convey all the equity ownership interests in Executive or all or substantially all of the assets of Executive to such unaffiliated third party (a "SUBSEQUENT TRANSACTION"), then Purchaser shall pay to the Shareholders an amount equal to fifty percent (50%) of the difference between the aggregate consideration, including the assumption of any indebtedness for borrowed money, paid to Purchaser for the Subsequent Transaction and the Purchase Price, net of fees, costs and expenses (other than taxes), Purchaser incurs or otherwise pays in connection with the transactions contemplated hereby and the Subsequent Transaction. If such aggregate consideration for the Subsequent Transaction is less than the Purchase Price, then no payment shall be due from the Purchaser to the Shareholders. Such payment, if any, shall be made to the Disbursement Agent upon the closing of the Subsequent Transaction. For purposes of this Agreement, any third party that is managed by an entity that is owned or controlled, directly or indirectly, by Macquarie Bank Limited shall be deemed affiliated with Purchaser. 7.8 Updating of Disclosure Schedules. The Shareholders shall notify Purchaser of any changes, additions, or events which cause any material change in or addition to the Schedules promptly after the Shareholders become aware of the same by delivery of appropriate updates to all such Schedules to Purchaser. No notification of a change or addition to a Schedule made pursuant to this Section 7.8 shall be deemed to cure any breach of any representation or warranty resulting from such change or addition unless Purchaser specifically agrees thereto in writing or consummates the Closing under this Agreement after receipt of such written notification, nor shall any such notification be considered to constitute or give rise to a waiver by Purchaser of any condition set forth in this Agreement, unless Purchaser specifically agrees thereto in writing or consummates the Closing under this Agreement after receipt of such written notification. 7.9 Atlantic Indemnification Claim. In the event that the pending indemnification claim by Executive under the indemnification insurance policy obtained in connection with the acquisition of Atlantic Aviation Corporation is not settled and paid prior to the Effective Time but is thereafter resolved and a payment made to Executive as a result thereof, Purchaser shall cause Executive to pay to the Disbursement Agent fifty percent (50%) of the amount of such payment after deduction of all out-of-pocket expenses incurred by Executive after the Effective Time in connection with resolving such claim. 41 7.10 Additional Covenant of Certain Shareholders. Each Shareholder that is not a natural person covenants and agrees that, for a period of eighteen (18) months from the Effective Time, such Shareholder shall not dissolve, liquidate or otherwise distribute its assets without creating and maintaining a reserve fund for satisfaction of the indemnity obligation of such Shareholder pursuant to Section 8.2 of this Agreement in an amount equal to the maximum individual liability of such Shareholder under Section 8.2(b)(iv) of this Agreement (without consideration of any exception to such limitation); provided, however, the Shareholder shall not be obligated to maintain such reserve fund, if the Shareholder provides to Purchaser a guaranty in form satisfactory to Purchaser of such obligation up to such dollar amount executed by a financially viable person or entity reasonably satisfactory to Purchaser. ARTICLE 8 SURVIVAL/INDEMNIFICATION 8.1 Nature and Survival of Representations and Agreements. The representations, warranties, covenants and agreements of Purchaser, Shareholders and Executive contained in this Agreement, and all statements contained in this Agreement or any Exhibit or Schedule hereto or any certificate, financial statement or report or other document delivered pursuant to this Agreement or in connection with the transactions contemplated hereby, shall be deemed to constitute representations, warranties, covenants and agreements of the respective party delivering the same. All such representations, warranties, covenants and agreements, including the indemnification obligations for breaches or failures with respect thereto, other than such representations, warranties, covenants and agreements specifically identified in the following clause, shall survive the Closing for a period of eighteen (18) months after the Effective Time; provided, that, (A) the representations and warranties made in Section 2.2 (Title to Stock) and Section 3.5 (Capitalization), and Section 3.21 (Taxes), (B) any claims based on fraud, willful misconduct or intentional misrepresentation and (C) any matter set forth in Schedule 8.2(b)(ii) shall survive the Closing for a period of (a) sixty (60) days after the expiration of the applicable federal or state statute of limitations, whichever is longer, or (b) the fifth (5th) anniversary of the Closing Date, whichever is later, and that the representations and warranties made in Section 3.18 (Employees; Employee Benefit Plans) and Section 3.19 (Labor Matters) shall survive for a period of three (3) years after the Effective Time. Notwithstanding the foregoing, any matter as to which an indemnification notice (including, without limitation, a notice relating to a potential or contingent claim) shall have been asserted during the applicable survival period shall continue in effect with respect to such claim until such claim shall have been finally resolved or settled. 8.2 Indemnification by Shareholders. (a) Extent of Indemnity. Subject to the provisions of Section 8.2(b) hereof, the Shareholders hereby agree, jointly and severally, except as noted below, to indemnify and hold harmless Purchaser, Executive and its Subsidiaries, and their officers, directors, shareholders, and employees (the "PURCHASER INDEMNIFIED PARTIES") from and against: any and all Damages (as defined below) of or to any Purchaser Indemnified Parties arising out of or resulting from (i) any misrepresentation, breach of warranty or nonfulfillment of any agreement on the part of the Shareholders or, at or before the Effective Time, Executive, contained in this Agreement or in any statement or certificate furnished or to be furnished to Purchaser pursuant hereto, and (ii) any of the matters disclosed on Schedule 8.2(b)(ii). Provided, however, 42 notwithstanding the foregoing or any other provision of this Agreement to the contrary, such indemnity and hold harmless obligations of the Shareholders in favor of the Purchaser Indemnified Parties based on or arising out of a breach of the representations and warranties of each Shareholder contained in Article 2 of this Agreement shall be several but not joint. For purposes of this Agreement, "DAMAGES" shall mean any and all losses, liabilities, claims, demands, damages (including any governmental penalty or punitive damages), deficiencies, diminution in value, interest, costs and expenses and any actions, judgments, costs and expenses (including attorneys' fees and all other reasonable expenses incurred in investigating, preparing or defending any litigation or proceeding commenced incident to the enforcement of this Agreement). For purposes of calculating the amount of Damages incurred by a party arising out of or resulting from, any breach of a representation, warranty, covenant or agreement by the other party, the references to materiality (or other correlative terms) shall be disregarded. (b) Limitations. (i) Notwithstanding anything else contained herein to the contrary, the Shareholders' obligation to indemnify Purchaser pursuant to Section 8.2(a) shall be Purchaser's sole and exclusive remedy for breaches of all matters (including breaches of representations and warranties) relating to this Agreement and shall be limited in amount as set forth below. (ii) Subject to the exceptions in Section 8.2(b)(vii), Purchaser shall not be entitled to indemnification for any Damages pursuant to Section 8.2(a) hereof unless (x) in the case of an individual claim, the Damages relating to such claim exceed Twenty-Five Thousand Dollars ($25,000) (for these purposes, the parties acknowledge and agree that any claim for Damages arising from a single event or series of related circumstances or transactions shall be deemed to be an individual claim) and (y) the cumulative total of Damages for all claims asserted pursuant to Section 8.2(a) exceeds One Million Dollars ($1,000,000) in the aggregate; and in such case the amount of Damages that may be recovered shall only be the amount that such Damages exceed One Million Dollars ($1,000,000); provided, however, that such cumulative indemnification threshold shall not be applicable to (A) breaches of the representations or warranties set forth in Section 3.18 (Employees; Employee Benefit Plans) and Section 3.21 (Taxes) and (B) any of the matters listed in Schedule 8.2(b)(ii). (iii) Subject to the exceptions in Section 8.2(b)(vii), subject to the separate individual limitations applicable to each Shareholder as set forth below, and subject to the several and not joint nature of the representations and warranties of each Shareholder contained in Article 2 hereof, the aggregate amount of Damages recoverable 43 from all Shareholders shall be Twenty Million Dollars ($20,000,000). (iv) With respect to the amount of Damages that may be recovered against a Shareholder with respect to each indemnification claim, (1) the amount of each such claim against a Shareholder shall be limited to the total amount of such Damages of such claim multiplied by a fraction equal to the amount of the Purchase Price less the amount of the Fund Indebtedness that is distributed to the Shareholder for the Shares and Option Equivalent Stock owned by such Shareholder divided by the total aggregate Purchase Price less the amount of the Fund Indebtedness distributed to all Shareholders for the Shares and Option Equivalent Stock and (2), subject to the exceptions in Section 8.2(b)(vii), the total aggregate liability of each Shareholder for all indemnification claims shall be limited to Twenty Million Dollars ($20,000,000) multiplied by the same fraction (such percentage and the maximum indemnification liability of each Shareholder shall be set forth on the Closing Statement);. (v) The amount payable by the Shareholders with respect to any Damages for which they have an indemnification obligation under this Section 8.2 shall be reduced by the amount of any insurance proceeds received by Purchaser Indemnified Parties. Purchaser, Executive and each of its Subsidiaries shall fully pursue all potential claims against applicable policies with respect to Damages before recovering any portion of such Damages from the Escrow Funds or the Shareholders; (vi) Any Damages shall be calculated and determined net of any tax benefit to the Purchaser or Executive resulting from the indemnifiable event or matter; and (vii) Notwithstanding the foregoing, the Shareholders shall be liable for all Damages incurred by the Purchaser Indemnified Parties arising from: (A) breaches of the representations or warranties set forth in Section 2.2 (Title to Stock), but only on several and not joint basis, Section 3.5 (Capitalization) and Section 3.21 (Taxes), and (B) any claims based on fraud, willful misconduct or intentional misrepresentation without regard to the cumulative indemnification threshold set forth in clause (y) of Section 8.2(b)(ii), or the aggregate limitation on indemnification set forth in Section 8.2(b)(iii); provided, however, that, in any such case, the total amount of Damages for which a Shareholder shall be liable shall be the amount of the Purchase Price distributed to the Shareholder for the Shares and Option Equivalent Stock owned by such Shareholder, and provided, further, however that the provisions of 44 Subsection (1) of Section 8.2(b)(iv) shall still be applicable in each such case. 8.3 Indemnification by Purchaser. (a) Extent of Indemnity. Purchaser hereby agrees to indemnify and hold harmless the Shareholders and their respective shareholders, partners, directors, officers and employees from and against any and all damages of or to the Shareholders arising out of or resulting from any misrepresentation, breach of warranty or nonfulfillment of any agreement on the part of Purchaser contained in this Agreement or in any statement or certificate furnished or to be furnished to Executive pursuant hereto or in connection with the transactions contemplated hereby. (b) Limitations. Notwithstanding any provisions of this Section 8.3 to the contrary, the aggregate amount of Damages recoverable by the Shareholders under this Section 8.3 shall be Twenty Million Dollars ($20,000,000); provided, however, that the Purchaser shall be liable for all Damages incurred by the Shareholders arising from any claims based on fraud, willful misconduct or intentional misrepresentation of the Purchaser without regard to such indemnification Damages limitation. 8.4 Indemnity Procedures. (a) Third Party Claims. In case any claim, demand or action shall be brought by any third party including, without limitation, any governmental authority, against a party entitled to indemnity under Section 8.2 or 8.3 above, such party shall promptly notify the other party or parties, as the case may be, from whom indemnity is or may be sought in writing and the indemnifying party or parties shall assume the defense thereof, including the employment of counsel. In addition, in case a party hereto shall become aware of any facts which could reasonably be expected to result in any such claim, demand or action, such party shall promptly notify the other party or parties who would be obligated to provide indemnity hereunder with respect to such claim, demand or action, and such other party or parties shall have the right to take such action as it or they may deem appropriate to resolve such matter. The indemnifying party shall have fifteen (15) days from the receipt of notice of a third party claim for which an indemnified party is seeking indemnification under Section 8.2 or 8.3 above to notify the indemnified party (i) whether or not the indemnifying party disputes liability to the indemnified party hereunder with respect to Damages attributable to such third party claim and (ii) whether or not the indemnifying party desires, at its sole cost and expense, to defend against such third party claim. In the event that the indemnifying party timely notifies the indemnified party that the indemnifying party does not dispute its obligation to indemnify hereunder and desires to defend the indemnified party against such third party claim and except as hereinafter provided, the indemnifying party shall have the right to defend by appropriate proceedings, which proceedings shall be promptly settled or prosecuted by the indemnifying party to a final conclusion; provided that, unless the indemnified party otherwise agrees in writing, the indemnifying party may not settle any matter (in whole or in part) unless such settlement includes a complete and unconditional release of the indemnified party with respect to claims raised in such proceeding. The indemnified party or parties shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be 45 at the expense of such indemnified party or parties, unless the employment of such counsel has been specifically authorized by the indemnifying party or parties. If requested by the indemnifying party, the indemnified party shall cooperate with the indemnifying party and its counsel and use its best efforts in contesting any such claim or, if appropriate, in making any counter-claim or cross-complaint against the party asserting the claim, provided that the indemnifying party will reimburse the indemnified party for reasonable expenses incurred in so cooperating upon presentation of receipts or other evidence of such expense. The indemnifying party and its representatives shall have full and complete access during reasonable hours to all books, records and files of the indemnified party expressly related to the defense of any claim undertaken by the indemnifying party pursuant to this Section 8.4(a); provided, that, the indemnifying party shall safeguard and maintain the confidentiality of all such books, records and files. Notwithstanding the foregoing, if at any time, in the reasonable opinion of the indemnified party, notice of which shall be given in writing to the indemnifying party, any such third party claim seeks relief which could have a material adverse effect on any indemnified party, the indemnified party shall have the right to control or assume (as the case may be) the defense of any such claim and the amount of any judgment or settlement and the reasonable costs and expenses of defense shall be included as part of the indemnification obligations of the indemnifying party hereunder. If the indemnified party should elect to exercise such right, the indemnifying party shall have the right to participate in, but not control, the defense of such claim at the sole cost and expense of the indemnifying party. If the indemnifying party elects not to defend the indemnified party against such third party claim, whether by failure of the indemnifying party to give the indemnified party timely notice as provided above or otherwise, then the indemnified party, without waiving any rights against the indemnifying party, may settle or defend against any such claim in the indemnified party's sole discretion and the indemnified party shall be entitled to recover from the indemnifying party the amount of any settlement or judgment and, on an ongoing basis, all costs and expenses of the indemnified party with respect thereto, including interest from the date such costs and expenses were incurred, subject to the provisions of Section 8.2 or 8.3, as the case may be. (b) Other Claims. With respect to any other claim as to which a party shall seek indemnity from the other party, such party shall promptly notify the other party from whom indemnity is or may be sought in writing of the claim. The notice of claim (i) shall state in reasonable detail the nature of the alleged liability, (ii) shall state the amount of the loss that the party claims it is entitled to be indemnified including, if appropriate, the estimate of the potential loss, and (iii) shall further provide a particular statement explaining the basis of the claim and of the amount or estimate of the loss. The indemnifying party shall have the right to take such action as it may deem appropriate to resolve such matter; provided, however, that the indemnified party shall have the right to participate in such matter. In the event that the parties are ultimately unable to resolve in good faith the claim or the amount of the loss, then the parties will arbitrate the claim. (c) The indemnified party's failure to give reasonably prompt notice to the indemnifying party of any actual, threatened or possible claim or demand which may give rise to a right of indemnification hereunder, shall not relieve the indemnifying party of any liability which it may have to the indemnified party unless, and solely to the extent that, the failure to give such notice materially and adversely prejudiced the indemnifying party. 46 8.5 Exclusive Remedy. The indemnification obligations of the Shareholders and Purchaser contained in this Article 8 shall, if the Closing occurs, be the sole and exclusive remedy of the parties hereto, their Affiliates, successors and assigns with respect to any and all claims for Damages sustained or incurred arising out of or relating to this Agreement or the transactions contemplated hereby. 8.6 Adjustments to Purchase Price. Amounts payable in respect of the indemnification obligations under Sections 8.2 and 8.3 hereof shall be treated by the Shareholders and Purchaser as adjustments to the Purchase Price to the extent such amounts may be properly so treated for Tax Purposes. ARTICLE 9 MISCELLANEOUS 9.1 Entire Agreement. This Agreement and the Schedules and Exhibits hereto, each of which is hereby incorporated herein, set forth all of the promises, covenants, agreements, conditions, undertakings, representations and warranties between the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written. 9.2 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered, telefaxed (with confirmation of transmission) or, if mailed, when mailed by United States first-class, certified or registered mail, postage prepaid, or by any national overnight delivery service, to the other party at the following addresses (or at such other address as shall be given in writing by any party to the other): (a) if to Purchaser, to: Macquarie Investment Holdings, Inc. 800 Fifth Avenue 20th Floor New York, New York 10020 Attention: Mr. Murray Bleach, President Fax: 212 ###-###-#### With a required copy to: Shaw Pittman LLP 1650 Tysons Blvd., Suite 1400 McLean, Virginia 22102 Attention: Craig E. Chason, Esq. Fax: (703) 770-7901 47 (b) If to Executive to: Executive Air Support, Inc. 6504 International Parkway Suite 1100 Plano, Texas 75093 Attention: Louis T. Pepper Fax: (972) 447-4229 With a required copy to: Strasburger & Price, LLP 901 Main Street Suite 4300 Dallas, Texas 75202 Attention: David K. Meyercord, Esq. Fax: (214) 651-4330 (c) If to the Shareholder Representative to: ABS Capital Partners, III, LLC 400 Pratt Street, Suite 910 Baltimore, Maryland ###-###-#### Attention: Don Hebb Fax: 410 ###-###-#### with a required copy to: Strasburger & Price, LLP 901 Main Street Suite 4300 Dallas, Texas 75202 Attention: David K. Meyercord, Esq. Fax: (214)-651-4330 9.3 Successors and Assigns. Purchaser may assign this Agreement in whole or in part to any of its Subsidiaries, to any Affiliate of Purchaser or Macquarie Bank Limited or to any person or entity which becomes a successor in interest (by purchase of assets or stock, or by merger or otherwise) to Purchaser, although no such assignment shall relieve Purchaser of its obligations hereunder. Subject to the foregoing, this Agreement, and all rights and powers granted hereby, will bind and inure to the benefit of the parties hereto and their respective successors and assigns. 9.4 Arbitration. All disputes under this Agreement may at the election of the Indemnified Party, be settled by arbitration in Wilmington, Delaware, pursuant to the rules of the American Arbitration Association (the "ASSOCIATION") before a panel of three (3) arbitrators. Arbitration may be commenced at any time by a party hereto giving written notice to all other parties hereto that such dispute has been referred to arbitration. The party (or parties) initiating 48 the arbitration shall be entitled to select one arbitrator, the other party (or parties) shall be entitled to select one arbitrator, and the two arbitrators so selected shall select the third arbitrator; provided, that, all three of the arbitrators shall be selected from a list of arbitrators with expertise in commercial disputes and/or contract interpretation maintained by the Association. Any award rendered by the arbitrators shall be conclusive and binding upon the parties hereto; provided, however, that any such award shall be accompanied by a written opinion of the arbitrators giving the reasons for the award. This provision for arbitration shall be specifically enforceable by the parties and the decision of the arbitrator in accordance herewith shall be final and binding and there shall be no right of appeal therefrom. Each party shall pay its own expense of arbitration and the expenses of the arbitrators shall be equally shared; provided, however, that if in the opinion of the arbitrators any claim made was unreasonable, the arbitrators may assess, as part of their award, all or any part of the arbitration expenses of the other party (including reasonable attorneys' fees) and of the arbitrators against the party raising such unreasonable claim, defense or objection. To the extent that arbitration may not be legally permitted hereunder or the parties to any dispute hereunder may not at the time of such dispute mutually agree to submit such dispute to arbitration any party may commence a civil action in the federal district courts in Wilmington, Delaware, and the parties agree to submit to the personal jurisdiction of such court. Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any proceeding brought in the federal district courts in Wilmington, Delaware, any claim that any proceeding brought in such a court has been brought in an inconvenient forum, and any right to which it may be entitled on account of its place of residence or domicile. 9.5 Headings; Interpretation. The headings preceding the text of the sections and subsections hereof are inserted solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. The parties agree that any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. 9.6 Knowledge. For purposes of this Agreement, "KNOWLEDGE OF THE SHAREHOLDERS" "SHAREHOLDERS' KNOWLEDGE" or words of similar import, shall mean the actual knowledge of the individuals listed in Schedule 9.6 and the knowledge that such individuals should have acquired in performing their respective duties as officers and/or employees of Executive and its Subsidiaries, as the case maybe. 9.7 Further Assurances. Each party shall cooperate and take such action as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby. 9.8 Amendment and Waiver. The parties may by mutual agreement amend this Agreement in any respect, and any party, as to such party, may (a) extend the time for the performance of any of the obligations of any other party, (b) waive any inaccuracies in representations by any other party, (c) waive compliance by any other party with any of the agreements contained herein and performance of any obligations by such other party, and (d) waive the fulfillment of any condition that is precedent to the performance by such party of any 49 of its obligations under this Agreement. To be effective, any such amendment or waiver, must be in writing and be signed by the party against whom enforcement of the same is sought. 9.9 No Other Beneficiaries. This Agreement is being made and entered into solely for the benefit of Purchaser and the Shareholders, and neither Purchaser nor the Shareholders intend hereby to create any rights in favor of any other person as a third party beneficiary of this Agreement or otherwise. 9.10 Governing Law. This Agreement shall be governed by the laws of the State of Delaware without regard to its principles of conflict of laws. 9.11 Schedules. References to a Schedule shall include any disclosure expressly set forth on the face of any other Schedule which a reasonable person would conclude is, by its terms, applicable to another Schedule, even if not specifically cross-referenced to such other Schedule; provided, however, that the representations and warranties of a party set forth in this Agreement shall not be affected or deemed modified, waived or limited in any respect by the information contained in any agreement or document listed or referenced in a Schedule unless the reference on the face of the Schedule expressly indicates how the agreement or document modifies or limits the scope of a representation or warranty. 9.12 Additional Matters Regarding Canterbury Warrant. Canterbury hereby discloses to Purchaser that it has assigned to Argosy Investment Partners, L.P. ("ARGOSY"), a Shareholder, a portion of the Canterbury Warrant representing the right to acquire 31,553 shares of Common Stock of Executive and retained the right to acquire the remaining 1,077,801 shares of Common Stock of Executive subject to the Canterbury Warrant. Canterbury and Argosy have not as of the date hereof surrendered the original certificate representing the Canterbury Warrant and requested Executive to issue replacement warrant certificates to effectuate such assignment. Argosy hereby agrees that Canterbury is authorized to bind its beneficial interest in the Canterbury Warrant to be sold to the Purchaser as provided in this Agreement and such assignment of Canterbury contained in this Agreement shall be fully binding upon and enforceable against Argosy to the extent of the beneficial interest of Argosy in the Canterbury Warrant. Argosy hereby makes and hereby agrees that it shall be deemed and considered to have made for the purposes of Article 2 of this Agreement, the same representations and warranties as are contained in Section 2.2 of this Agreement with respect to its beneficial interest in the right to acquire 31,553 shares of Common Stock of Executive under the Canterbury Warrant that has been assigned to it by Canterbury. 9.13 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument. A facsimile of this Agreement may be executed by one or more parties hereto and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. [SIGNATURE PAGE FOLLOWS] 50 IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase Agreement as of the day and year first above written. PURCHASER EXECUTIVE MACQUARIE INVESTMENT HOLDINGS, INC. EXECUTIVE AIR SUPPORT, INC. By: /s/ Oliver Yates /s/ Murray Bleach By: /s/ Louis T. Pepper ---------------------------------------- ---------------------------- Oliver Yates, President Louis T. Pepper, President Its: ---------------------------------------- Murray Bleach, Executive Director GUARANTY Macquarie Bank Limited ("GUARANTOR"), a __________, guarantees the full and complete performance of all of the payment obligations of the Purchaser to the Shareholders under and pursuant to the foregoing Stock Purchase Agreement, dated as of April ____, 2004 (the "PURCHASE AGREEMENT") of whatsoever nature (collectively, the "GUARANTEED OBLIGATIONS"); provided, that, Guarantor's liability hereunder shall not exceed, and in no event shall Guarantor be obligated to expend more than, the Purchase Price pursuant to this Guaranty and this Guaranty shall terminate on August 31, 2004 or immediately following the Closing, whichever occurs first, except as to any demand for performance of this Guaranty which has been made prior to such date as to which this Guaranty shall remain applicable. In addition, upon payment of the Purchase Price by Purchaser, this Guaranty shall terminate. The Shareholders may waive, exchange, subordinate, release, surrender or in any other manner deal with Purchaser without affecting Guarantor's obligations hereunder. Guarantor waives all notices, including notice of (i) Shareholders' acceptance of this Guaranty, Shareholders' intention to act or any Shareholders' action hereunder; (ii) the existence or creation of or any alteration in any of the Guaranteed Obligations; (iii) any default by Purchaser; and (iv) the obtaining, enforcing or releasing of any other guaranty or of any pledge, assignment or security for any of the Guaranteed Obligations and all other notices related to the Guaranteed Obligations. Shareholders may proceed against Guarantor without first proceeding against Purchaser for performance of the Guaranteed Obligations and is not required to join Purchaser in any such proceeding against Guarantor; provided, however, as a condition precedent to the commencement of any action against Guarantor, Shareholders shall first comply with all procedures specified in the Purchase Agreement with respect to actions taken by the Shareholders against Purchaser. EXECUTED as of the 28th day of April, 2004. Macquarie Bank Limited /s/ Murray Bleach By: ---------------------------------------- MURRAY BLEACH Name: -------------------------------------- EXECUTIVE DIRECTOR Title: ------------------------------------- [SIGNATURE PAGES OF SHAREHOLDERS FOLLOW] 51 SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Susan C. Sommers -------------------------------------------- Shareholder Name: SUSAN C. SOMMERS --------------------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Louis T. Pepper ---------------------------------- Shareholder Name: LOUIS T. PEPPER ----------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. Argosy Investment Partners, L.P. By: Argosy Associates, L.P., its general partner By: Argosy Associates, Inc., its general partner By: /s/ Kirk B. Griswold ----------------------------------------------- Kirk B. Griswold, Vice President SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Gregory S. Campbell, President, CD Ventures, LLC, Its General Partner --------------------------------------------- Shareholder Name: CD Ventures, V, L.P. C-6 SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. Bermuda Trust (Limited) as Trustee for Trident Private Equity Fund, L.P. By: /s/ Illegible ------------------------------------------------- Shareholder Name: ----------------------------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Gregory S. Campbell -------------------------------------------- Shareholder Gregory S. Campbell as Name: --------------------------------------- Attorney-in-Fact for Brian G. Campbell C-8 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS That I, Brian G. Campbell have made, constituted and appointed, and by these presents do make, constitute and appoint, Gregory S. Campbell (hereinafter "my Attorney"), my true and lawful attorney for me and in my name and on my behalf generally to do and perform all matters and things, transact all business, make, execute and acknowledge the Agreement and Plan of Merger by and between EAS Acquisition, Inc. and Executive Air Support, Inc. and all other documents and instruments which may be requisite or proper regarding the sale of my stock in Executive Air Support, Inc., with the same powers and to all intents and purposes with the same validity as I could, if personally present, hereby ratifying and confirming whatsoever my Attorney shall or may do by virtue hereof. This Power of Attorney shall not be affected by my later disability or incapacity at law and shall expire on April 30, 2004. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th day of April, 2004. WITNESS: /s/ Illegible /s/ Brian G. Campbell - ---------------------------------- ------------------------------------- Brian G. Campbell COMMONWEALTH OF PENNSYLVANIA : : SS COUNTY OF CHESTER : On this, the 16th day of April, 2004, before me, the undersigned officer, personally appeared Brian G. Campbell known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. /s/ Kay W. Myers ----------------------------------------- Notary Public My Commission Expires: Notarial Seal Kay W. Myers, Notary Public West Sadsbury Twp., Chester County My Commission Expires Mar. 18, 2006 ------------------------------------------- Member Pennsylvania Association of Notaries SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. CD Venture Partners LLC /s/ Gregory S. Campbell, President, CD Ventures LLC, Its General Partner -------------------------------------------- Shareholder Name: CDV Equity Associates, L.P. C-9 SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. ABS Capital Partners III, L.P. -------------------------------------------------------- Shareholder Name: /s/ Donald B. Hebb, Jr. -------------------------------------------------- Donald B. Hebb, Jr. Managing Member of ABS Partners III, L.L.C. General Partner of ABS Capital Partners, III, L.P. SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Gordon G. Cohen ------------------------------------------- Merchants Capital Partners, LP Name: Gordon G. Cohen --------------------------------------- Title: Principal -------------------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Jason Le Roux /s/ Gillian Newton -------------------------------------------- Shareholder Name: Jason Le Roux Gillian Newton --------------------------------------- Authorized Signatory Authorized Signatory FOR AND ON BEHALF OF BANC OF BERMUDA. (illegible) LIMITED AS CUSTODIAN FOR (illegible) INTERNATIONAL GROWTH FUND. SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. Hare & Co. Signature Guaranteed Medallion Guaranteed The Bank of New York -------------------------------------------- Shareholder Name: /s/ Illegible --------------------------------------- (SG510) Executive Vice President SECURITIES TRANSFER X0809012 AGENTS MEDALLION PROGRAM SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Illegible -------------------------------------------- Shareholder Name: Illegible --------------------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. PNC VENTURE CORP BY PETER V DEL PRESTO PARTNER -------------------------------------------- Shareholder Name: /s/ Illegible --------------------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. CANTERBURY MEZZANINE CAPITAL II, L.P., as Agent and as a Lender, By: Canterbury Capital II, L.L.C., its general partner, By: /s/ Nicholas B. Dunphy ------------------------------------ Name: Nicholas B. Dunphy Title: Manager SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. DAVIS PARTNERS LP -------------------------------------------- Shareholder Name: /s/ Illegible --------------------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. /s/ Gregory S. Campbell, President, CD Ventures, LLC ---------------------------------------------------- Shareholder Name: CD Venture Partners V, L.P. its General Partner AP. 18 ----------------------------------------------- SIGNATURE PAGE OF SHAREHOLDER IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock Purchase Agreement as of the day and year first above written. BancBoston Capital, Inc. /s/ Maia D. Heymann -------------------------------------------- Shareholder Name: Maia D. Heymann --------------------------------------- Managing Director Exhibit 10.12 EXECUTION COPY CLOSING LETTER AGREEMENT This Closing Letter Agreement is entered into as of July 29, 2004, by and between North America Capital Holding Company, a Delaware corporation ("Purchaser"), Executive Air Support, Inc., a Delaware corporation ("Executive"), and ABS Capital Partners III, L.P., a Delaware limited partnership, as the Shareholder Representative under that certain Stock Purchase Agreement by and between Macquarie Investment Holdings, Inc., a Delaware corporation, Executive and the stockholders of Executive, dated as of April 28, 2004, as assigned to Purchaser (the "Stock Purchase Agreement"). Now, therefore, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows: 1. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Stock Purchase Agreement. 2. Executive has paid the Port Authority of New York and New Jersey (the "Port Authority") the sum of Five Hundred Thousand Dollars ($500,000.00) as the payment (the "Consent Fee") required by the Port Authority to receive an estoppel letter in the form provided to the Port Authority and previously approved by Purchaser, which estoppel letter is a condition precedent to the Purchaser's obligation to consummate the Closing pursuant to Section 6.1(m) of the Stock Purchase Agreement. The full amount of such payment is reducing Executive's cash and cash equivalents as of the Effective Time for purposes of determining any adjustment to the Purchase Price under Section 1.8 of the Stock Purchase Agreement. At the Closing, as reflected on the Closing Statement, the Purchase Price paid by Purchaser is being increased by Two Hundred Fifty Thousand Dollars ($250,000.00) to reflect the parties' agreement to split the cost of the Consent Fee. In addition, the Shareholders shall indemnify the Purchaser Indemnified Parties for one-half (1/2) of any payments(s) required by the Department of Transportation of the State of New York to receive an estoppel letter with respect to Executive's operations at Republic Airport, Farmingdale, New York; provided, that, in no event shall the Shareholders be liable under the foregoing clause for more than Two Hundred Fifty Thousand Dollars ($250,000.00); and provided, further, that such indemnification obligation shall not be subject to the limitations set forth in Section 8.2(b)(ii) of the Stock Purchase Agreement. 3. The parties acknowledge that it is impractical to obtain pay-off statements or the functional equivalents thereof from the holders of the Funded Indebtedness set forth on Exhibit A hereto prior to the Closing as contemplated by Section 1.3(c) of the Stock Purchase Agreement. Accordingly, the parties agree that payment of such Funded Indebtedness by the Purchaser to such holders at or prior to the Closing shall not be a condition precedent to the Closing, but the Purchase Price shall be reduced by an amount equal to the outstanding principal of, and accrued interest on, such Funded Indebtedness as of the Closing Date. 4. In addition to the indemnification obligations set forth in Article 8 of the Stock Purchase Agreement and notwithstanding anything to the contrary set forth in the Stock Purchase Agreement, the Shareholders shall, jointly and severally, indemnify and hold harmless the 1 Purchaser Indemnified Parties from and against any and all Damages, except as expressly limited herein, of or to any Purchaser Indemnified Parties arising out of or resulting from: (a) any and all benefits accrued or required to be accrued under the General Aviation Corporation Retirement Plan (the "GAC 401(k) Plan") as of the Closing Date, and all other Damages incurred in connection with, resulting from or arising out of, directly or indirectly (whether or not involving a third party claim), the GAC 401(k) Plan with respect to acts or omissions prior to the Effective Time including, but not limited to: (i) the failure of General Aviation, LLC ("GAC") to adopt timely either a "GUST" amendment within the meaning of Section 12.03 of Revenue Procedure 2003-44 or an "EGTRRA good faith amendment" within the meaning of Section 4.10 of IRS Revenue Procedure 2003-44 for the GAC 401(k) Plan; (ii) the failure of GAC to file timely with the IRS a Form 5500 with respect to the GAC 401(k) Plan for the 2002 calendar year; or (iii) the failure of GAC to have performed an independent financial audit of the GAC 401(k) Plan for the 2002 calendar year and included such audit with the Form 5500 with respect to the GAC 401(k) Plan for the 2002 calendar year, as filed with the IRS; and (b) the failure of Executive or GAC to have satisfied in full any amounts specified in the estoppel letter attached hereto as Exhibit B which are finally determined to be due and owing to the City of New Orleans arising out of or resulting from operations at the New Orleans International Airport prior to the Closing; (c) the termination or surrender of, and the failure of EAS or the Subsidiaries to have maintained, the FCC licenses listed on Exhibit C hereto; (d) any action or threatened action by the Town of Babylon regarding construction of a hanger facility for Talon Air Services, LLC on premises leased by Flightways of Long Island, Inc., at Republic Airport, Farmingdale, New York; and (e) Taxes incurred as a result of the mergers or dissolutions of the Subsidiaries identified with an asterisk (*) on Schedule 3.1; provided, that, the loss or diminution of any net operating losses (NOLs) of such Subsidiaries shall not be deemed to be Damages for these purposes. Purchaser covenants and agrees to use commercially reasonable efforts to mitigate "Damages" under this paragraph 4, which efforts shall include causing Executive to duly pursue all indemnification rights from the former owners of GAC under the Member Interests Purchase Agreement dated December 17, 2003, as amended, between Executive and such former owners. The indemnification obligations set forth in this paragraph 4 shall survive the Closing for a period of (i) sixty (60) days after the expiration of the applicable federal or state statute of limitations, whichever is longer, or (ii) five (5) years after the Closing, whichever is later. The indemnification obligations set forth in this paragraph 4 shall be subject to the limitations set 2 forth in Section 8.2 of the Stock Purchase Agreement, other than the limitation set forth in Section 8.2(b)(ii)(y) of the Stock Purchase Agreement which shall not apply. 5. The parties hereby further amend the Stock Purchase Agreement as follows: (a) all references to "ABS Capital Partners, III, LLC" are replaced with "ABS Capital Partners III, L.P."; (b) the following paragraph is added as Section 1.9(e): "Purchaser covenants and agrees to provide the Shareholder Representative reasonable access to information of and concerning any Claim (provided such access is not restricted or precluded by law, regulation or any agreement to which Purchaser is bound, or would otherwise adversely affect Purchaser's right to assert a legal privilege with respect thereto) and shall cause its officers and employees to cooperate with the Shareholder Representative in performing its duties and exercising its rights hereunder. The Shareholder Representative shall treat all such information as confidential information and not disclose any such information to anyone (except to the Shareholder Representative's attorneys, accountants or other advisers, to the arbitrators appointed to resolve disputes, and on a need-to-know basis to other individuals who agree to keep such information confidential)." (c) Section 3.5(a) is amended to change the number disclosed for Executive's issued and outstanding shares of Common Stock from 1,843,689 to 1,895,684. 6. The parties acknowledge and agree that any post-Closing adjustments to the Purchase Price based on Executive's and its Subsidiaries' Net Working Capital and Cash and Cash Equivalents as of the Effective Time shall be determined in a manner that is consistent with Exhibit D hereto and calculated as of July 31, 2004; provided, however, such determination shall not take into account any charges, dividends or distributions, outside the ordinary course of business, effected by Executive after the Closing. 7. In the event of any conflict between any provision of this Closing Letter Agreement and any provision of the Stock Purchase Agreement, such provision of this Closing Letter Agreement shall prevail. 8. This Closing Letter Agreement may be executed by facsimile transmission and in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. This Closing Letter Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 3
