EFTA01203028.pdf

I FMJ Draft *11.0v2.0,44944614.4-10/47420441919057.1 — 10/27/2014 STOCK PURCHASE AGREEMENT AMONG ZYLEX, LLC ("Purchaser"), JEGE, Inc. (the "Company"), AND [Jeffrey Epstein] ("Seller") October , 2014 EFTA01203028  TABLE OF CONTENTS Article 1 DEFINITIONS 1 1.1 "Aeljustment-AmeuntAircrall" 1 1.2 "AireFaftBusiness" 1.3 "BusinessCertificate" 1.4 Gerticheate"Closing" 1 1.5 "Closing"11.6"Closing Date" 21 1.6 "Code" 2 1.7 Geele"Company" 2 1.8 Gempttn*L"479"Company Statements" 2 1.9 "Consulting Agreement" 2 1.10 "Contemplated Transactions" 2 1.11 "Contracts" 2 1.12 "Delivery Conditions" 2 1.13 "EneutniwaneeDeposit" 2 1.14 aEquipmem"Encumbrance" 2 1.15 "Eger-ow-AgreementEquipment" 2 1.16 "GeeelyAilEscrow Account" 32 1.17 "Interim-StatementsEscrow Agent" 32 1.18 "IRC"3Escrow Agreement" 3 1.0 "FAA" 3 1.20 "Goodwill" 3 1 19"IRS1.21 "IRC" 3 1.22 "IRS" 3 4401.23 "Key Personnel" 3 4,241.24 "Liabilities and Obligations" 3 4421.25 "Noncompetition Agreements" 3 1.23 "Real Estate" 3 1.26 "Post Closing Escrow" 3 1.27 "Purchase Price" 3 1.28 "Second Deposit" 3 4441.29 "Securities Act" 3 1.30 "Seller's Closing Documents" 3 4451.31 "Seller Release" 3 4461.32 "Shares" 3 4441.33 "Tax" or "Taxes" 3 4481.34 "Tax Return" 44 Article 2 PURCHASE AND SALE OF THE SHARES 4 2.1 Purchase and Sale of the Shares from the Seller 4 2.2 Further Assurances 4 2.3 The Closing 4 2.4 Actions at the Closing 4 2.5 Purchase Price for the Shares 4 2.6 Adjustment Amount 5 EFTA01203029  2.7 Adjustment Procedure 5 242.6Post Closing Escrow 65 2.7 Closing Deliverables 5 2.9 Non Compete and Consulting Agreement 6 Article 3 AIRCRAFT 65 3.1 Inspection 65 3.2 Test Flight 76 3.3 Aircraft Condition 76 Article 4 REAL ESTATE MATTERS 7 4.1 Delivery-of-Deeuments-7Real Estate 7 4.2 West Palm Beach Facility 7 1.2 Inspection Article 5 INVESTIGATION 87 Article 6 REPRESENTATIONS AND WARRANTIES OF THE SELLER 97 6.1 Title to Shares 97 6.2 The Company 97 6.3 Authority; No Conflict 98 6.4 Capitalization 449 6.5 Financial Statements 449 6.6 Interim Statementa 11 6 76.6No Undisclosed Liabilities 449 646.7Business Operations 449 6796 8Taxes 4410 6,146.9 Other Operations 4410 6446.10 Contracts 4410 6.12 Condition and Sufficiency of Assets 11 6.136.11 Accounts Receivable 4-412 6.116.12 Inventory -1412 6.156.13 Equipment 4512 6446.14 Insurance 4512 6.176.15 Real Estate 4444 64-86.16 Assets Complete, Etc 4-914 64-96.17 Litigation 4914 6406.18 Compliance with Laws 4-914 672-46.19 Intellectual Property 4-915 6.226.20 Labor Relations. Compliance 2415 6.236.21 Employee Benefits 2415 67246.22 Changes in Suppliers 2617 6.256 23 Conduct of Business 2617 6466.24 Employees 2718 6.276.25 Certain Payments 2-818 6.286.26 Licenses and Permits 2819 6496.27 Suppliers 2919 EFTA01203030  6406.28 Related Parties 2419 6.316.29 Material Change 2419 6.326.30 Disclosure 2919 Article 7 REPRESENTATIONS AND WARRANTIES BY PURCHASER 2420 7.1 Organization and Standing 3920 7.2 No Conflict 4020 7.3 Authority 3020 7.4 Certain Proceedings 3020 Article 8 COVENANTS OF THE SELLER 3020 8.1 Action by the Company or the Seller 3020 8.2 Fees 3021 8.3 Further Assurances 3021 8.4 Best Efforts 3021 8.5 No Shop 4421 8.6 Notification of Breaches or Potential Breaches 34-21 8.7 Non Compete Agreement: Consulting Agreement 31 Article 9 NO BROKERS OR FINDERS 4421 Article 10 CONDITIONS PRECEDENT OF PURCHASER 34.22 10.1 Accuracy of Representations 4222 10.2 Seller's Performance 3222 10.3 Consents 3222 10.4 No Proceedings 3222 10.5 No Claim Regarding Stock Ownership or Sale Proceeds 3222 10.6 No Prohibition 3222 10.7 [Opinion of Seller's Counsel 3222 10.8 Casualty 3222 10.9 Adverse Development 4223 10.10 Non-Compete Agreement 3223 10.11 Consulting Agreement 4;23 10.12 Seller Release 3423 10.13 Real Estate3310 14 jFinancing —Errerl-Bookmark-not-definedt 44,14Investigations 4-323 44,1410.14 Representations and Warranties True at Closing 4-323 44,1410.15 Seller's Compliance with the Agreement 3323 444810.16 Officers' Certificate 3323 44,1410.17 t' ag!" 3323 iii EFTA01203031 Article 11 CONDITIONS PRECEDENT OF THE SELLER 4-323 11.1 Accuracy of Representations 4-323 11.2 Purchaser's Performance 3424 11.3 Consents 3424 11.4 Additional Documents 3424 11.5 Representations and Warranties True at Closing 4424 11.6 Purchaser's Compliance with the Agreement 3424 11.7 Officers' Certificate 3424 11.8 Injunction 3424 Article 12 Termination 3425 12.1 Termination Events 4525 12.2 Effect of Termination 4525 Article 13 INDEMNIFICATION 3525 Article 14 NATURE AND SURVIVAL OF REPRESENTATIONS 4626 Article 15 MISCELLANEOUS 3626 15.1 Notices 4626 15.2 Binding Effect 4727 15.3 Modification 3727 15.4 Conflicts of Interest 4727 15.5 Expenses 3828 15.6 Assignment 3828 15.7 Choice of Law 3828 15.8 Exclusive Jurisdiction 3828 15.9 Counterparts 4828 15.10 Invalidity of Provisions 3828 15.11 Headings 3829 15.12 Access to Books and Records 4929 15.13 Confidentiality 3929 15.14 Joint and Several Liability 4929 Exhibits: Exhibit A Non-Compete Agreement Exhibit B Consulting Agreement Exhibit C Aircraft Inspection Report Exhibit D Seller Release Exhibit E Escrow Agreement Schedules [Follow Exhibits] iv EFTA01203032  STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (hereinafter, together with the exhibits and schedules annexed hereto the "Agreement") is made and entered into as of the day of October, 2014, by and among Zylex, LLC, a Florida limited liability company, ("Purchaser"), JEGE, Inc., a Delaware corporation, (the "Company"), and [Jeffrey Epstein], who are all the shareholders (collectively, the "Seller") of the Company. WHEREAS, the Company owns and operates a business (the "Business") that includes operations under Part 125 charter operation certified by the Federal Aviation Association ("FAA"), operating a Boeing 727-100 aircraft (as defined further below, the "Aircraft"). WHEREAS, Seller owns the number of issued and outstanding shares of common stock, [$ 1 par value, of the Company ("Common Shares") and the number of issued and outstanding shares of [preferred stock], [$ 1 par value, of the Company ("Preferred Shares")] set forth opposite his, her or its name on Schedule I attached hereto, which Common Shares and Preferred Shares in the aggregate represent all of the issued and outstanding shares of capital stock of the Company as of the date hereof (the Common Shares and the Preferred Shares referred to hereinafter as the "Shares"). WHEREAS, the Seller desire to sell, and Purchaser desire to purchase, all of the issued and outstanding shares (the "Shares") of capital stock of the Company, for the consideration and on the terms set forth in this Agreement. NOW, THEREFORE, in consideration of the purchase and sale of the Shares and the mutual promises, covenants and conditions hereinafter set forth, Company and Seller, jointly and severally, and Purchaser, hereby agree as follows: ARTICLE 1 DEFINITIONS As used herein, the following terms shall have the meanings set forth below, and where said meanings are intended, said terms shall be capitalized: 4,1thastrnent-Aseunt2o-has-the-raeaaing-set-feEth-in-Seetien-2,6, LI 4,2"Aircraft"» means that certain Boeing 727-100 aircraft, bearing manufacturer's serial number 20115, and currently registered with the United States Federal Aviation Agency as N908JE, together with said aircraft's two Pratt and Whitney JT8D-219 engines and one Pratt and Whitney JT8D-7B engine, as further described on Schedule 3.1. 4.3 "Business"» has the meaning set forth in the second "Whereas" clause above. 1.3 4,4 "Certificate"» means that certain Certificate No. issues by the FAA for Aircraft operations for hire of the Business. 1.4 44 "Closing"» means the closing of the transactions contemplated by this 1 EFTA01203033 Agreement. 1.5 4,6"Closing Date"» means the date on which the Closing hereunder is held. The Closing shall be held at 10:00 then current Eastern Standard time, on 2014, or at such other time or date as the parties may mutually agree upon in writing, unless delayed by a party for failure to satisfy conditions precedent to said party's obligations hereunder, in which case Closing shall be held as soon as practicable after such conditions are satisfied. L.6 4-7-7"Code"» means the Internal Revenue Code of 1986, as amended, and shall include all of the rules and regulations promulgated thereunder. .L2 478"Company"» means JEGE, Inc., a Delaware corporation, and all subsidiaries thereof. -h9"Company Statements"» means the balance sheets of the Company as of December 31, 2013 and 0tntcment3 of income and retained carninga of the Company for the fisea4-year-s-ending-en-said-datesr [audited-and-c-eftified-by-eeFtified-publie-ac-c-euntants+eepies-of whiell-have-beefrptevided-te-Purehesefr has the meaning set forth in Section 6.5. 1,2 "Consulting Agreement"» means an agreement in the form of Exhibit B. 1.10 "Contemplated Transactions"» means all of the transactions contemplated by this Agreement, including: (a) the sale of the Shares by Seller to Purchaser; (b) the execution, delivery, and performance of the—Promissely—isieter the Consulting Agreements, the Noncompetition Agreements, the Seller Release, and the Escrow Agreement; (c) the performance by Purchaser and Seller of their respective covenants and obligations under this Agreement; and (d) Purchaser's acquisition and ownership of the Shares and exercise of control over the Company. 1.11 "Contracts"» means any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding. 1.12 "Delivery Conditions"» has the meaning set forth in Section 3.3. L11 "Deposit">> has the meaning set forth in Section 2.5(b). 1.14 4,1-3"Encumbrance"» means any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or 2 EFTA01203034 restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership. L15 -61-4"Equipment"» means all of the Company's tangible assets, ether-then-the Inventety-ancl-the-Real-Esrater including but not limited to any furniture, machinery, equipment, tooling, computers and the software utilized therewith, and vehicles, in each case, if any. L16 "Escrow Account"» means 1 1. 112 "Escrow Agent"» means Bank of New York Mellon at 200 Park Avenue, 56'h floor, New York, New York. L18 -1,1-5"Escrow Agreement"» means an escrow agreement substantially in the form attached as Exhibit E among Escrow Agent, Purchaser and Seller. 1.12 "FAA"» means the United States Federal Aviation Administration. 122 -1,1-6"Goodwill"» means all goodwill and business of the Company. -1,1-7 Inteeini-Statefneat eans-the-ttneudited-balaftee-sheet-ef--the-C-empany-as-of the-enel-ef-4.he-quafter-Rune4Or 20-1-41r and-Felated-unaudited-statements-ef-ineeme-aad-cetaised eamings-ef-the-Gempantferthe-Eseal-peried-ending-en-said-dater eempiled-brthe-Gempanr eepies-ef-whieh-have-beenrevided-te-the-Purehasee 21 -1,1-8 "IRC"» means the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law. 1.22 -1,1-9"IRS"» means the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of the Treasury. .L23 0"Key Personnel"» means and [Larry Viscossi1 and Larry Morrison. 1.24 4,24"Liabilities and Obligations"» means any indebtedness, claim, obligation or liability of any kind or nature whatsoever, whether absolute or contingent, liquidated or unliquidated, due or to become due, accrued or not accrued, or otherwise. 12,5 44-2"Noncompetition Agreements"» has the meaning set forth in Section 2.1(a)(iv)6.3. 4,23 Real-Estateno-Faeans-the-real-pcopefty-ewned-Or--leased-by-the-C-empany-and FROre—pagieulady—dOSC-Fibed—en—Seheeltile-64-7—attaehed—Ilefeter ineluding—buildings—and anprevements-lesated-thereenr alse-as-Fnace-paFtieulady-desecthed-en-Sehedule-64-77 L2.6 "Post Closing Escrow"» has the meaning set forth in Section 2.6. j "Purchase Price"» has the meaning set forth in Section 2.5(a). 122 "Second Deposit"» has the meaning set forth in Section 2.5(b). 3 EFTA01203035  1.29 4"Securities Act"» means the Securities Act of 1933 or any successor law, and regulations and rules issued pursuant to that Act or any successor law. un "Seller's Closing Documents"» has the meaning set forth in Section 6.3. L31 -1,24"SeIler Release"» means a release by Seller in the form attached as Exhibit D. 132 4726"Shares"» has the meaning set forth in the Recitals of this Agreement. 1 33 4` Tax" or "Taxes"» shall mean all taxes, charges, fees, levies or other similar assessments or liabilities in the nature of taxes, including income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, financial transaction, withholding, employment, unemployment, insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, escheat, windfall profits, customs, duties, franchise, estimated and other taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, whether or not disputed, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof. LIE -1,24"Tax Return"» means any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any governmental body in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any legal requirement relating to any Tax. ARTICLE 2 PURCHASE AND SALE OF THE SHARES 2.1 Purchase and Sale of the Shares from the Seller». Subject to and upon the terms and conditions of this Agreement, at the Closing, Seller shall sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept from Seller, all of the issued and outstanding Shares of the Company immediately prior to the Closing, as set forth opposite such Seller's name on Schedule 2.1 attached hereto. At the Closing, Seller shall deliver to the Purchaser appropriate evidence of the transfer of all of the Shares owned by such Seller to the Purchaser. 2.2 Further Assurances». At any time and from time to time after the Closing, at the Purchaser's request and without further consideration, Seller shall promptly execute and deliver such instruments of sale, transfer, conveyance, assignment and confirmation, and take all such other action as the Purchaser may reasonably request, more effectively to transfer, convey and assign to the Purchaser, and to confirm the Purchaser's title to, all of the Shares owned by all Seller immediately prior to the Closing, to put the Purchaser in actual possession and operating control of the assets, properties and business of the Company, to assist the Purchaser in exercising all rights with respect thereto and to carry out the purpose and intent of this Agreement and the transactions contemplated hereby. 4 EFTA01203036  2.3 The Closing». The Closing hereunder shall take place at the offices of JEGE, Inc. in West Palm Beach Florida on the Closing Date, or at such other place as may be mutually agreed upon in writing by Purchaser and the Seller. 2.4 Actions at the Closing». At the Closing: (a) the Company and the Seller shall deliver to the Purchaser the various certificates, instruments and documents referred to in Article -14-011. (b) the Purchaser shall deliver to the Company the various certificates, instruments and documents referred to in Article 40410; and (c) Seller shall deliver to the Purchaser all of his, her or its Shares, with appropriate instruments of transfer. 2.5 Purchase Price for the Shares». (a) The aggregate purchase price to be paid by the Purchaser in respect of all of the Shares shall be US $2,800,000, filps-the-Mjustment-Ameunt-if-enr3.000.000 (the "Purchase Price"). The Purchase Price shall be payable in the manner described in Section (b) At the Closing, the Purchaser shall deliveepay the Purchase Price as follows: @ Upon execution and delivery of this Agreement and the Escrow Agreement, Seller shall deliver a refundable deposit of $ (the "Deposit") to the Escrow Agent. into the Escrow Account. (44—te-Sellerr the-pectien-ef-the-Purehase-Ppiee-(after-reduetien-ef-the Per-ehase—Ppiee-by-the-payments-speeified-in-(ii)-helew]ate-te-sueh4ellerr as-set-feeh eppesite-etteh-sueh-Persenls-neme-en-Sehedule44-etteehed-heveter via-wire-transfeeef immediately—availahle-funds-te-the-aeeeunt-designated-hy-Selleeat-least-five-Business Deys-prieete-elesingt (ii) to the Escrow Agent, an amount in cash equal to [$ (sueh-ameunkexe4usive-ef-all-inter-est-and-etheeameunts-eemed-theFeen-hut-giving-effeet te-earreduefiens-therete-while-held-en-depesit-with4lie-Eseeewagentr in-eeeeelenee with-the-Eserew-Agreementr refeeed-te-hereiii-as-thefiserew-cashnkte-be-Ileld-apd invested-in-a-segr-egated-aseeunt-puFsuant-te-the-teens-ef-the4sereve-Agreementr as-a feseeee-te-setisfy-any-elaims-hy-a-Purehaseelademnified-Peey-feeindemnity-puFsuen4-te Article 13. 4,2-Atieteien4-26rwietintiirThe-Adjustmentameunt-fwhieh-Fney-be-e-pesitive-eenegefive Closing Date determined in accordance with GAAP, minus (b) $ At least one Business Day prior to the Closing Date, the Purchaser 5 EFTA01203037  shall deliver to Escrow Agent an amount equal to (A) the remainder of the Purchase Price, plus (B) any other costs or expenses payable by Purchaser at Closing, plus (C) one half of the Escrow Agent's fees, less (D) any reductions negotiated in the due diligence period, if any (collectively, the "Second Deposit"). The amount of the Second Deposit shall be agreed upon in writing by Seller and Purchaser prior to and as a condition of Purchaser's delivery of such amount. (iii) At Closing, Escrow Agent shall disburse (A) the Escrow Fee to Escrow Agent. (B) any other amounts owed to third parties per the joint written instructions of Seller and Purchaser, including, without limitation, pursuant to the Non- Compete Agreements or Consulting Agreements, and (C) the Purchase Price less Seller's share of the Escrow Fee and less the Post Closing Escrow (if any) to Seller. (c) The Deposit and the Second Deposit shall be fully refundable to Purchaser upon written demand except as set forth in the Escrow Agreement. h-3-Ailjustfnent-Pr-eeeilur-eu, (a) Seller will prepare and will cause the Company's seEtified-publie-aerreumantsr and Company-Statements-threugh-the-Clesing-Deterineluding-a-eemputetien-ef--eenselideteil stockholders' equity as of the Closing Date. Seller will deliver the Closing Financial Statements-te-Pufehaser-within-sixty-days-afier-the-Giesing-DaterIf-within-thirtrflays fellewing-Elelivey-ef--the-Closing-Finansial-Statemen4sr Purehaser-haye-net-given-Seller netiee-ef-its-objeetien-te-the-Glesing-Pinansial-Statenients—(sueh—netiee—fnust—eentain—a statement-ef-the-besis-ef--Purehasecis-objeetien)7 then-the-eonselielated-steekhekletu=equity lecte d Ameunt lf-Purehaser-give-sueh-fietiee-ef--ebjeetienrthen-the-issues-in-dispute-will-be submitted to , certified public accountants (the "Accountants"), for feselutien if-issues-in-dispute-aFe-subeittefl-te-the-Aeeeuntants-fer--Feselutienr(i) each party will—fueisii—te—the—Aeeeuntan4s—sueh—weciepapers—and—ether—deettmems—anii—infermatien uslating-te-the-elisputeel-issues-as-the-Aec-euntants-may-request-and-afe-available-te-that-paFty (er-its-iedependen‘publicrasseuntantskand-will-be-affeffied-the-eppectunity-te-pfesent-te-the Aec-euntan4s-any-matecial-r-elating-te-the-Eleteminatien-anel-teAiseuss-the-eleteminatien-with the-Aeetuntants(ii-)-the-Eleteffainatieci-h.frthe-Aeceuntantsr as-Ftet-fefth-in-a-netice-Elelivered te-beth-pafties-by-the-Aeeountantsr will-be-bintling-and-conclusive-en-the-paptiesand-(iii) Purchaser and Seller will each bear 50% of the fees of the Accountants for such determination. (4,-)-On-the-tenth-business-day-foilowing-the-final-Eleterminatien-ef--theadjustment Ameuntr if-the-Pur-ehase-Priee-is-greater--than-the-aggr-egate-ef--the-payments-made-puFsuant-te Seetiens-2,50-)(4)-and-27-5(13-)fie-and-the-aggregaterineipal-amount-ef-the-PromisseFy-Netes; Purchaser will pay the difference to Seller, and if the Purchase Price is less than such aggregate-amountr Pufehasec-will-pay-the-difference-te-Selier,A41-payments-will-be-Faaele inelecling-the-glesing-Date-ancl-eneling-eci-and-ineiuding-the-clate-ef--payment,Payments-Enust 6 EFTA01203038  he-made-in-immediately-availahle-fund ents-te-Seller--FEIRSt-he-Enade-in-the-Fnanner-and will-he-o -in-the-prepeFtiens-sef-fefth-in-Seetien ents-te-Parehasec-nnisf-he inade-hy-svire-tfansfec-te-such-hanle-aeeetint-as-Pareheser-will-speeify, 2_6 -1,4Post Closing Escrow» At closing, the amount of [$ ] shall be of the Bank of New York Mellon at 200 Park Avenue, 56'h floor, New York, New York. Far-eba-ser--Enay-withdca frein-the-Essecew-Aeaeunt-aii-ameam-equal-te-the-easts-af-the-sefviees to the outstanding liability to the employees for vacation pay as of the Closing Date. may withdraw f om the Escrow A mount the ameant ef the Negati ve Working Capital paid by Par-thaseF-(rte-the-ement-that-saell-ameunts-aeanied-pFier-te-the-C-4esing-Date),The-ESEFOW Aeeount-shall-he-held-in-an-interest-heanng-aeeeurn-at-the-Rank-ef--New--Y-er-k-Mellenr and-any funds remaining in the Escrow Account on the date that is [ ( )] months after the shall-enter--inte-m-esenaw-agreement-eensistentaivith-the-facegeing-previsiens-in-a-fenn feasenalaty-aeeeptable-te-Parehaser--and-the4etlen -6-5-Nen-C-enipete-thid-C-oftsalting Au-eel:nett If agreed in writing prior to Closing, at Closing the Escrow Agent shall retain an agreed upon amount (the "Post Closing Escrow"). The Post Closing Escrow shall be subject to the Escrow Agreement and any additional conditions agreed upon prior to Closing in writing by Seller and Purchaser. 2_7 Closing Deliverables». (a) _At the closing, Purchaser and the Seller shall enter into a Non-Compete Agreement with Seller in the form of Exhibit A attached hereto, pursuant to which Seller will agree not to compete with Purchaser for a period of five years after the Closings- etr ,-for said Agreement, Purchaser shall pay a total of $ , payable as specified on Exhibi t (b) At Closing, Purchaser and Seller also shall enter into a—Consulting 4g-earnest-Agreements substantially in the form of Exhibit B attached hereto with each of the Key Personnel. (c) At Closing, Seller and any other person that owns Shares of the Company or any residual rights therein shall execute and deliver a Seller Release. ARTICLE 3 AIRCRAFT 3.1 Inspection». Purchaser shall have the opportunity to inspect the Aircraft at a reasonable time prior to delivery at Purchaser's expense to determine whether the Aircraft conforms to the Delivery Conditions of this Agreement or is otherwise acceptable. Such inspection shall take place at the facility located at the 7 EFTA01203039 Aicpect- Comriany's facility at West Palm Beach, Florida Airport (PBI) and shall include but not be limited to a visual inspection of the Aircraft, a review of the logbook and Aircraft records, and any other inspections as are reasonably necessary to examine the operation and condition of the Aircraft, including a test flight in compliance with Section 3.2. Purchaser shall complete its inspection of the Aircraft by no later than ten business days after Purchaser's satisfactory completion of the test flight. Within two business days of Purchaser's completion of the inspection, Purchaser shall deliver an aircraft inspection report substantially in the form of Exhibit C, whereby Purchaser accepts the aircraft, rejects the Aircraft or accepts the Aircraft subject to the correction of any Discrepancies listed in the Aircraft Inspection Report. "Discrepancies" means any failure of the Aircraft to comply with the Delivery Conditions. Upon delivery of such Aircraft Inspection Report accepting the Aircraft subject to the correction of Discrepancies, Purchaser shall, at its option, elect to either (i) have Seller correct all such Discrepancies at Seller's sole cost and expense, (ii) reduce the Purchase Price by an amount equal to the cost of correcting all the Discrepancies. If the Purchaser rejects the Aircraft for any reason, Purchaser and Seller shall cause the Deposit to be returned to Purchaser by the Escrow Agent, and thereafter this Agreement shall terminate and the parties shall have no further liability hereunder. 3.2 Test Flight». Purchaser shall have the opportunity prior to the completion of the Purchaser's inspection of the Aircraft as set out in Section 3.1 to conduct a test flight with at least two of Purchaser's representatives onboard in order to observe operation of all systems. Seller shall retain operational control of the Aircraft at all times during the test flight, and Seller shall name Purchaser and any Purchaser pilots onboard the Aircraft during the test flight as additional insureds on Seller's applicable liability policy. Purchaser shall be responsible for all fuel and costs of the test flight. During any and all inspections, and test flights conducted pursuant to the Agreement, care, custody and control, and risk of loss of the Aircraft shall remain with Seller. 3.3 Aircraft Condition». Seller covenants and agrees that the Aircraft shall be in the following condition at Closing (the "Delivery GenclitienConditions"): (a) The Aircraft shall be airworthy, with all equipment, systems and engines shall be functioning in accordance with the manufacturer's tolerances and limitations, with no extensions or deferments. (b) All calendar and hourly inspections shall be in compliance with the manufacturer's recommended maintenance program. The aircraft will be considered maintenance current. (c) The Aircraft shall be in compliance with all known FAA Airworthiness Directives and known Mandatory Service Bulletins and type certificate for such Aircraft. (d) All Aircraft Documents shall be in English and in compliance with Federal Aviation Regulations (FAR) and include applicable STC and FAA Form 337 documentation, and all logbooks will be complete and continuous. 8 EFTA01203040  (e) The aircraft will be delivered with all loose equipment, spare parts, maintenance manuals, log books, spare parts, and any other items that normally pertain to the Aircraft 844-7-50-0276-will be delivered to Purchaser. (f) The Aircraft shall conform to the specifications in Schedule 3.1 with no more than total airframe hours. ARTICLE 4 REAL ESTATE MATTERS 471-430tef-Beettinents»rNet-less-than-tweitty-Re)-€1ays-befere-the-Glesing-Daterthe Seller-will-cletiver-te-Parehaser-a-sufvey-of-4he-Real-Estate-preparedr at-the-Bellegs-enpenser by-a Registereel-hand-Surveyer-whieh-shall-be-c-enifieel-te-Purehaser-anel-shali-shov.“the-lesatien-ef-ali buildings-and-parking-aretts-en-the-Real-Estater all-aeeess-reads-te-the-Rettl-Estater any enereaehmentsr anehall-easements-affeeting-the-Real-Estate,Saiel-supiey-shall-never-peneling-and levied-speeial-assessments-ana-shell-be-prepareel-at-the-getlerss-expense=The-sttrvershali-be Stan d ard Land Title Surveys jointly established by ALTA and ACSM in 1992 and pursuant to the Aeeur-aey-Standards-Eas-ailepted by-ALTA-and-AGSM-fer-an-lk-bact-Sufvey-as-Elefine€1-therein): 44-IntPurehaser-shall-be-allowed-ten-(40)-elays-after-Feeeipt-ef-saiel-supeey-fer the-examinanen-thereef-and-thernakintef-anrebjeetiens-to-the-marketabilitref-iitlersuch ebjeetiens-te-be-rnaile-in-writing-er-Eleemed-te-be-waive€1,Notivithetanding-anything-nentained hecein-te-the-eentrapyr Ileweverr Purekasec-shali-net-have4he-fight-te-raise-as-ebjeetiens-te-title any-ef-the-iffratter-s-listed-asPeffititted-Bnennibcaneesect-Seheelale-44-attitehed-hereterIf-any ebjeetiens-are-se-mader the4eller-shall-be-allewed-thiFty-(34)4ays-te-make-sueh4ifie-marketable, if-streh-clefeets-ttre-euretlawithiti-saiel-thirtr(30)-elerperietIrPureheser-shall-be-netifieel-inalvriting ef-the-eur-ing-ef-said-clefeetsrand such notice to perform in accordance with the terms of this Agreement. If such title is not marketable-and-net-nierie-se-within-seid-thiny-(30)-thy-peried-and-Purehasec-do-net-waiver by written-netiee-given-te-the-Seller-withiri-ten-Elays-after-the-encl-ef-saiel-thiFty-Royclay-pepieekthe eur-ing-ef-said-riefentsr this-Agr-eement-shall-be-null-anel-veklr in-whieli-event-seither-Parehaser nor the Seller shall be liable for damages hereunder to the other. If Purchaser elects to waive :d allowed (-34)-Elays-acter-i4-se-netifies-the-Selier-te-pepfenn-in tteeeMenee-with-the-terms-ef-this-Agreement, 41 Real Estate». Except as set forth in Schedule 6.15, the Company does not own, lease, license or use any real property in the Business, including, without limitation, any buildings, hangars, offices or other facilities. 4.2 West Palm Beach Facility». ITo address: what company or person has the facility at this airport and any future use of the facility by the Company in the future.. ARTICLE 5 INVESTIGATION From and after the date hereof and through the Closing Date, Company and the Seller 9 EFTA01203041 shall afford to the officers and representatives of Purchaser free access to the properties and records of the Company in order that Purchaser may have full opportunity to make such investigation at reasonable times as it shall desire of the assets and of the affairs of Company, including, without limitation, inspection of the Aircraft pursuant to Article 3, and Company and the Seller shall provide to Purchaser reasonable assistance in the conduct of said investigation. tiftErtereenduet—soil—befingsr evireneental—inspeetiens—cted—testsr whieli—environmental take—Fneasuremeats,During such access, such personnel shall not cause any unreasonable interference with the Company's operations or damage to its assets, except as may be necessary te-eenduet-an-etwireneentel-inspeetienr prevideel-Parehaser-shaft-promptly-Fepair-any-such Elamage-mal-Fes-tefe-the-assets-te-their-eenclifteci-immediately-pFier-te-saeli-Elafaage.As-paFt-ef the-buildiag-aael-ether--imprevements-haeated-ea-the-Real-Estater Company and the Seller shall also providc Purchaser originals or reproductions of plans assessment of the Real Estate as maybe in the possession of the Company or the Seller. ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE SELLER Seller and the Company, jointly and severally, represent and warrant to Purchaser that, except as specifically set forth on the exhibits and schedules listed below, the following statements are true and correct as of the date of this Agreement and will be true and correct on the Closing Date as if made on said Date: 6.1 Title to Shares». As of the date of this Agreement, Seller holds beneficially and of record and has good and marketable title to the Shares set forth opposite such Seller's name on Schedule I hereto, free and clear of any and all Encumbrances whatsoever, other than restrictions on transferability under the applicable U.S. federal and state securities laws. As of the Closing, Seller shall hold beneficially and of record and shall have good and marketable title to the Shares which are to be transferred to the Purchaser by such Seller pursuant hereto, as set forth opposite Seller's name on Schedule 2.1 attached hereto, free and clear of any and all Encumbrances, other than restrictions on transferability under the applicable U.S. federal and state securities Laws. 6.2 The Company». The Company is a corporation duly organized and existing and in good standing under the laws of the State of Delaware and is entitled to own or lease its properties and to carry on its business as and in the places where such properties are now owned, leased or operated, or such business is now conducted. The Company is qualified to do business as a foreign corporation in all jurisdictions in which the nature of the Company's 10 EFTA01203042 businessBusiness, the location of its assets or other factors require it to be so qualified. The Seller has delivered to Purchaser copies of the organizational documents of the Company, as currently in effect. 6.3 Authority; No Conflict». (a) This Agreement constitutes the legal, valid, and binding obligation of the Seller, enforceable against the Seller in accordance with its terms. Upon the execution and delivery by the Seller of the Escrow Agreement, the Consulting Agreements, the Seller Release, and the Noncompetition Agreements (collectively, the "Seller's Closing Documents"), the Seller's Closing Documents will constitute the legal, valid, and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms. The Seller have the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the Seller's Closing Documents and to perform their obligations under this Agreement and the Seller's Closing Documents. (b) Except as set forth in Schedule 6.3, neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time): (i) contravene, conflict with, or result in a violation of (A) any provision of the organizational documents of the Company, or (B) any resolution adopted by the board of directors or the stockholders of the Company; (ii) contravene, conflict with, or result in a violation of, or give any governmental body or other person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any legal requirement or any governmental order to which the Company or any Seller, or any of the assets owned or used by the Company, may be subject; (iii) contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any governmental body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any governmental authorization that is held by the Company or that otherwise relates to the business of, or any of the assets owned or used by, the Company; (iv) cause Purchaser or the Company to become subject to, or to become liable for the payment of, any tax; (v) cause any of the assets owned by the Company to be reassessed or revalued by any taxing authority or other governmental body; (vi) contravene, conflict with, or result in a violation or breach of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Contract; or (vii) result in the imposition or creation of any Encumbrance upon or II EFTA01203043  with respect to any of the assets owned or used by the Company. (c) Except as set forth in Schedule 6.3, neither the Company nor any Company is or will be required to give any notice to or obtain any consent from any person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions. (d) The Seller io acquiring the Promiocory Notec for their own account and not with-a-vie te-theif-distfibutien-within-the-Fpeaning-of--Seetien4(14)-ef-the-Seeuritiesast, Seller--is-anAteer-edited-ifivegter2=gs-sugh-tefra-is-defleed-inagle-50-1-(e)-under--the-Seetwities Aet, 6.4 Capitalization». The authorized equity securities of the Company consist of shares of common stock, par value $ per share, of which shares are issued and outstanding and constitute the Shares. Seller is and will be on the Closing Date the record and beneficial owners and holders of the Shares, free and clear of all Encumbrances. With the exception of the Shares (which are owned by Seller), all of the outstanding equity securities and other securities of each subsidiary of the Company are owned of record and beneficially by either the Company or a wholly-owned subsidiary of the Company, free and clear of all Encumbrances. No legend or other reference to any purported Encumbrance appears upon any certificate representing equity securities of the Company. All of the outstanding equity securities of the Company have been duly authorized and validly issued and are fully paid and nonassessable. There are no Contracts relating to the issuance, sale, or transfer of any equity securities or other securities of the Company. None of the outstanding equity securities or other securities of the Company was issued in violation of the Securities Act or any other legal requirement. The Company does not own, or have any Contract to acquire, any equity securities or other securities of any Person (other than its subsidiaries) or any direct or indirect equity or ownership interest in any other business. 6.5 Financial Statements». The Company does not maintain financial statements of any kind other than the balance sheet, accounts receivable and accounts payable lists dated as of October 30, 2014 prepared in connection with the Contemplated Transactions (the "Company Statements"). The Company Statements are true, complete and correct and-have-been-pcepaFed in-assecdanee-with-genecally-aesepted-asseunting-pcineiples-sepsistently-fellowed-thpaughout the-pecieds-indk-atedrThe-Cempapy-Statements-in all respects and fairly present the financial condition and assets and liabilities (whether accrued, absolute, contingent or otherwise) of the Company as of the dates indicated, and the results of operations of the Company for the periods then ended. As of the Closing, there have been no changes in the financial condition of the Company as reflected in the Company Statements. 676-1444epirp-F4atemen4ae-Interini-Statements-ace-tfuer semplete-and-genvetr have beep—pFepar-ed—ip—aeeeFdanee—with—gepecally—aeeepted—aeeeunting—pr-ipeiplesr c-epsisten4y felieweilr and fairly and accurately present the financial condition and assets and liabilities fwhether--aeefgeelr ithseiuter centingeet-er-ethefwiss9-4-the-Cempapy-as-ef-the-dates-indieated and4he-respits-of-epecatiens-of-4hp-Gempany-fer-the-pefieds-then-ewled, 6_6 64No Undisclosed Liabilities». Except as set forth in Schedule 6,76.6, the 12 EFTA01203044 Company has no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Company Statements-er--the-Interifn-Statements-and-euffent-lhibilities insucrecl-in-the-Ordinapy-CeuFse-ef-ausiness-s