Exhibit 10.1
ASSET PURCHASE AGREEMENT
Dated May 15, 2009
among
RONSON
CORPORATION,
a New Jersey corporation,
and
RONSON AVIATION, INC.,
a New Jersey corporation,
SELLER,
HAWTHORNE TTN HOLDINGS, LLC
a Delaware Limited Liability Company,
BUYER.
Sale by Ronson Corporation of
Certain
of the Assets and
the Business of its Wholly Owned Subsidiary,
Ronson Aviation, Inc. to
Hawthorne TTN Holdings, LLC
<PAGE>
TABLE OF
CONTENTS
Page
----
Section 1. SALE AND PURCHASE OF ASSETS; ASSUMPTION OF
LIABILITIES.............1
(a) Sale and
Transfer of Assets......................................1
(b) Excluded
Assets..................................................2
(c) Assumption of
Liabilities and Obligations........................2
(d) Excluded
Liabilities.............................................3
Section 2. PURCHASE PRICE.
PAYMENT............................................3
(a) Purchase
Price...................................................3
(b) Allocation of
Purchase Price.....................................3
Section 3. THE
CLOSING........................................................4
(a) Time and Place
of Closing........................................4
(b) Aviation
Employees as of the Closing Date........................4
(c) Due Diligence
as Condition Precedent to the Closing..............4
(d) Shareholder
Approval.............................................4
Section 4. REPRESENTATIONS AND WARRANTIES OF
SELLER...........................5
(a) Organization
and Good Standing...................................5
(b) Authority
Execution and Delivery.................................5
(c) Consents, No
Conflicts, Etc......................................6
(d) No Other
Agreements to Sell the Assets...........................6
(e) Copies of
Documents..............................................6
(f)
Properties.......................................................6
(g)
Litigation.......................................................7
(h) Compliance
with Laws; Permits....................................7
(i)
Insurance........................................................8
(j) No
Brokers.......................................................8
(k) Transactions
with Certain Persons................................8
(l) Consequences
of Sale and Purchase................................8
(m) Environmental
Matters............................................8
(n) Tax
Matters.....................................................10
(o)
Disclosure......................................................10
(p)
Assets..........................................................10
(q) Government
Contracts............................................10
(r)
Utilities.......................................................10
(s) Financial
Statements............................................10
(t) No Undisclosed
Liabilities......................................11
(u) No Material
Adverse Change......................................11
(v) Employee
Benefits...............................................11
(w) Contracts; No
Defaults..........................................12
(x) Sufficiency of
Assets...........................................13
(y)
Solvency........................................................13
Section 5. REPRESENTATIONS AND WARRANTIES OF
BUYER...........................14
(a) Organization
and Good Standing..................................14
(b) Authority;
Execution and Delivery...............................14
(c) Consents, No
Conflicts, Etc.....................................14
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<PAGE>
(d) No
Brokers......................................................14
(e)
Disclosure......................................................14
Section 6. CERTAIN COVENANTS AND
AGREEMENTS..................................15
(a)
Nondisclosure...................................................15
(b) Conduct of
Business.............................................15
(c) Changes in
Representations and Warranties.......................15
(d) Mutual
Cooperation..............................................15
(e) Access to
Business..............................................16
(f) Further
Assurances..............................................16
(g)
Names...........................................................16
(h) Tax
Matters.....................................................17
(i) Product
Liability Insurance.....................................17
(j) Interim
Financial Statements....................................17
(k)
Noncompetition, Nonsolicitation and
Nondisparagement............18
(l)
Exclusivity.....................................................19
Section 7. CONDITIONS TO OBLIGATIONS OF
BUYER................................19
(a)
Representations and Warranties True at the Closing
Date.........19
(b) Seller's
Performance............................................19
(c) Instruments of
Conveyance and Transfer..........................19
(d) Approvals and
Consents..........................................19
(e)
Litigation......................................................20
(f) No Material
Adverse Change......................................20
(g) No Change in
Law................................................20
(h) Seller's
Failure to Meet Certain Conditions.....................20
(i) Financing
Contingency...........................................20
(j) County of
Mercer Lease Assignment...............................20
Section 8. CONDITIONS TO OBLIGATIONS OF
SELLER...............................20
(a)
Representations and Warranties True at the Closing
Date.........21
(b) Buyer's
Performance.............................................21
(c) Approvals and
Consents..........................................21
(d)
Litigation......................................................21
(e) No Change in
Law................................................21
Section 9. NATURE AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES.............21
(a) Survival of
Representations, Warranties, Etc....................21
(b) Seller's
Agreement to Indemnify.................................22
(c) Buyer's
Agreement to Indemnify..................................23
(d) Third Party
Claims..............................................23
(e) Remedies
Exclusive..............................................24
(f) Escrow
Agreement................................................24
Section 10. BULK SALES
ACTS..................................................24
Section 11.
DISCLAIMER.......................................................25
Section 12.
EXPENSES.........................................................25
Section 13.
WAIVER...........................................................25
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Section 14. NOTICES,
ETC.....................................................25
Section 15. ENTIRE AGREEMENT:
AMENDMENT......................................26
Section 16. PRESS
RELEASES...................................................26
Section 17.
GENERAL..........................................................26
Section 18.
SEVERABILITY.....................................................27
Section 19. TERMINATION AND
ABANDONMENT......................................27
iii
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET
PURCHASE AGREEMENT, dated May 15, 2009 (the "Agreement"), is
among RONSON CORPORATION, a New Jersey corporation ("Parent"), and
RONSON
AVIATION, INC., a New Jersey corporation ("Aviation") (Parent and
Aviation are
herein referred to together as "Seller"), and Hawthorne TTN
Holdings, LLC, a
Delaware limited liability company ("Buyer"), and includes by
reference a
collection of Exhibits and Schedules ("Disclosure
Memorandum,").
WHEREAS, Parent
owns 100% of the outstanding capital stock of Aviation;
and
WHEREAS, Seller
desires to sell and Buyer desires to purchase certain
of the assets and the business, as a going concern, of Aviation
utilized in its
Fixed Base Operations, Building and Ramp, Fuel Services, Aircraft
Maintenance
and Avionics operations at Trenton-Mercer Airport in Trenton, New
Jersey
including, but not limited to Aviation's fixed base operation lease
between
Aviation (as successor to Ronson Helicopters, Inc.) and the County
of Mercer
dated May 14, 1975, as amended from time to time ("Master Lease"),
subleases and
fuel operations, for the consideration provided herein (including
the assumption
by Buyer of certain of Aviation's liabilities and obligations).
NOW, THEREFORE, in
consideration of the mutual benefits to be derived
from this Agreement and the representations, warranties, covenants
and
agreements hereinafter contained, the parties hereby represent,
warrant,
covenant and agree as follows:
Section 1. SALE
AND PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES.
------------------------------------------------------
(a) Sale and Transfer of Assets. In reliance on the
---------------------------
representations, warranties, covenants and agreements contained
herein and
subject to the terms and conditions hereof, on the Closing Date (as
hereinafter
defined), Seller shall sell, convey, transfer and deliver to Buyer,
and Buyer
shall purchase from Seller, the assets, free and clear of any
encumbrances
(except as otherwise hereinafter expressly excluded), and the
business, as a
going concern, of Aviation including without limitation, the
following
(collectively, the "Assets"), free and clear of all liens, unless
specifically
listed in paragraph 1 (c):
(i) all assets of Aviation as reflected in Disclosure
Memorandum, Exhibit A, including, but not limited to customer
contracts and
contract rights of all kinds (including, but not limited to rental
contracts,
hanger leases, customer service contracts and tie down agreements,
but excluding
the fuel contract with BP) (collectively "Aviation Contracts"),
inventory,
tools, equipment, vehicles, furniture, fixtures, the name "Ronson
Aviation", FAA
certificates, to the extent assumable, and goodwill);
(ii) all rights of Aviation under the Master Lease
including leasehold improvements and leases, contracts, plans and
commitments
relating to the Assets listed on Disclosure Memorandum, Exhibit
A.;
(iii) all of Aviation's goodwill relating to the
business of Aviation; and
(iv) all right, title and interest of Aviation to
claims and causes of action relating to the Assets arising on or
after the
Closing Date.
With respect to any losses suffered by Buyer with
respect to the Assets attributable to any event occurring prior to
the Closing,
whether or not otherwise indemnified against hereunder, Seller
shall assign any
rights which Seller might have to pursue or, if such an assignment
is or would
be invalid or unenforceable as against third parties, shall pursue
and assert
diligently, in good faith and , any and all remedies Seller may
have, and Seller
shall pay over to Buyer any recovery so obtained.
1
<PAGE>
(b) Excluded Assets. Notwithstanding the foregoing provisions
---------------
of Section 1(a) above, it is expressly understood and agreed that
there shall be
excluded from the Assets being conveyed hereunder the following
(the "Excluded
Assets"):
(i) all receivables due to Aviation for work
performed and work in progress as of the Closing Date for which
invoices have
been issued as of the Closing Date;
(ii) all accounts receivable for goods delivered or
services provided prior to the Closing Date for which invoices were
issued to
customers on or prior to the Closing Date;
(iii) all of Seller's right, title and interest in
prepaid Income Taxes and any claims for refunds with respect to
Income Taxes
paid by Seller for any period ending on or before the Closing
Date;
(iv) all of Seller's right, title and interest in
prepaid insurance or any experience credits, premium deposits or
other refunds
under insurance policies or other prepaid expenses including,
without
limitation, prepaid rent and prepaid equipment lease payments, to
the extent the
same are refundable;
(v) all right, title and interest of Aviation to
claims and causes of action relating to the assets, business or
operations of
Aviation arising prior to the Closing Date;
(vi) cash on hand; and
(vii) BP Fuel Contract.
(c) Assumption of Liabilities and Obligations. On the Closing
-----------------------------------------
Date, subject to the provisions of Section 1(d) below, Buyer shall
assume and
agree to pay, perform and discharge the following liabilities and
obligations of
Seller to the extent that they relate to the Assets or the business
of Aviation
(collectively, the "Assumed Liabilities"):
(i) all liabilities and obligations relating to the
Assets arising on or after the Closing Date.
(d) Excluded Liabilities. Buyer is not assuming any other of
--------------------
the liabilities or obligations of the Seller, known or unknown,
which are not
expressly assumed by Buyer pursuant to Section 1(c) above, or which
were
incurred prior to the closing date or are shown on the Balance
Sheet (as
hereafter defined) of Aviation ("Excluded Liabilities").
Section 2.
PURCHASE PRICE. PAYMENT.
-----------------------
(a) Purchase Price. The purchase price (the "Purchase Price")
--------------
to be paid by Buyer to Aviation on the Closing Date for the Assets
shall be Nine
Million Five Hundred Thousand and No/100 Dollars
($9,500,000.00)
In accordance with this Section 2(a), at the Closing, the Purchase
Price shall
be delivered by Buyer to Seller as follows: (a) Nine Million and
No/100 Dollars
($9,000,000.00) by wire transfer; and (b) Five Hundred Thousand and
No/100
Dollars ($500,000.00) paid to the escrow agent pursuant to the
Escrow Agreement.
(b)
Allocation of Purchase Price. The Buyer and Seller agree
----------------------------
that the Purchase Price, including the amount of liabilities
assumed by the
Buyer under Section 1(c) hereof and treated as consideration for
the Assets
under Section 1060-1T of the Treasury Regulations shall be
allocated in
accordance with the rules set forth in Section 1060 of the Internal
Revenue Code
of 1986, as amended (the "Code") and the Treasury Regulations
promulgated
thereunder. For all purposes hereunder, the parties have agreed to
allocate the
Purchase Price as follows:
2
<PAGE>
(i)
Leasehold
$_____________
(ii) Main Hangar/Office
Complex $_____________
(iii) New Hangar/Office Complex
$_____________
(iii) T-Hanger
1
$_____________
(iv) T-Hanger
2
$_____________
(v) Fuel
Farm
$_____________
(vi) Parts Inventory and
Other
Inventory
$_____________
(vii)
Equipment
$_____________
(viii)
Fuel
$_____________
(xi)
Goodwill
$_____________
TOTAL
==============
In the event of any adjustment in the Purchase Price under Section
2(b) hereof,
such increase or decrease as the case may be, shall be allocated in
proportion
to the allocation of the Purchase Price as set forth above. Buyer
and Seller
shall each prepare Form 8594 or such other forms and returns as may
be required
in a manner consistent with the allocation made hereunder and any
adjustment
thereto and shall timely file Form 8594 or other required forms or
returns with
the Internal Revenue Service. Neither Seller nor Buyer shall take
any position
on any Tax form or return or in any tax audit or proceeding that is
inconsistent
with such allocation. Buyer and Seller will notify each other as
soon as
reasonably practical of any audit adjustment or proposed audit
adjustment by any
taxing authority that affects the allocations made hereunder.
Section 3. THE
CLOSING.
-----------
(a) Time and
Place of Closing. The closing of the transaction
-------------------------
contemplated by this Agreement (the "Closing") shall take place at
Ronson
Aviation, or such other location, on a date (the "Closing Date") on
or about
July 30, 2009.
(b) Aviation Employees as of the Closing Date. As of said
-----------------------------------------
Closing Date, Aviation shall have terminated all its employees and
have paid all
accrued salary, vacation pay, sick pay and all other employee
benefits. Buyer
will advise Seller no later than ten (10) days prior to the Closing
Date of any
Aviation employees which Buyer will not be hiring for its
operations and Buyer
will make offers of employment to all other employees of Aviation
effective as
of the Closing Date. As part of such offer, Buyer will agree to
grandfather
employees who are offered employment under Buyer's employee benefit
plans so
that such employees will receive credit for the time employed by
Aviation.
(c) Due Diligence As Condition Precedent to the Closing. Buyer
---------------------------------------------------
and its representatives shall have completed their financial,
supplier,
customer, legal and environmental due diligence review of Seller
and their
review of the transactions contemplated hereby within 30 days of
the expiration
of the standstill period per the terms of the Stipulation of
Settlement
Agreement dated October 12, 2007 by and among Ronson Corporation
and certain of
its shareholders, as Disclosure Memorandum, Exhibit B, and Buyer in
its sole
discretion shall be satisfied with the results of such due
diligence review
otherwise Buyer may terminate this Agreement by providing written
notice to
Seller at which time this Agreement shall be deemed null and
void.
(d) Shareholder Approval. Consummation of the transaction
--------------------
contemplated by this Agreement requires the approval of the
shareholders of
Parent. Such approval is a condition precedent to Closing for both
parties.
Prior to the Closing Date, Seller will prepare proxy solicitation
materials and
diligently make all necessary SEC filings in cooperation with
Buyer. (except
that Seller, at its option, shall not be obligated to make such
filings prior to
3
<PAGE>
expiration or waiver of Buyer's financing contingency under Section
7(l)
hereof). Buyer agrees to furnish promptly to Parent all information
concerning
Buyer and its affiliates and their respective businesses and
affairs which may
be required by applicable Federal securities laws or the SEC for
inclusion in
any proxy statement or other solicitation materials relating to the
solicitation
of shareholder approval for the transaction contemplated by this
Agreement, in
the form required or appropriate for inclusion, and, to the extent
reasonably
requested to do so, to cooperate with and assist Parent in the
preparation of
all such materials. All information furnished by Buyer concerning
Buyer, its
affiliate and their business and affairs, including financial
information, shall
(i) be in writing and itemized on an Information Schedule
maintained by Buyer
and acknowledged, from time to time, in writing by Seller, (ii) be
true and
correct in all material respects, (iii) comply with legal and
regulatory
requirements and (iv) not contain any misstatements of material
information or
omit any material information regarding Buyer and its business. If,
prior to the
shareholders' meeting at which shareholder approval will be
solicited, any event
occurs with respect to Buyer or any change occurs with respect to
information
supplied by Buyer for inclusion in the proxy statement, Buyer shall
promptly
notify Parent of such event and shall cooperate with Parent in the
prompt filing
with the SEC of any necessary amendment or supplement to the proxy
statement.
Section 4.
REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
----------------------------------------
represents and warrants to Buyer that, except as set forth in
Disclosure
Memorandum, Schedule A:
----------
(a) Organization and Good Standing.
------------------------------
(i) Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
Jersey, has all
requisite corporate power to carry on its business as it is now
being conducted
and is in good standing and duly qualified to do business in each
jurisdiction
where the failure to be so qualified would have a material adverse
effect on the
business of Parent and its subsidiaries, taken as a whole. Parent
owns
beneficially and of record all of the outstanding capital stock of
Aviation.
(ii) Aviation is a corporation duly organized,
validly existing and in good standing under the laws of the State
of New Jersey,
has all requisite corporate power to carry on its business as it is
now being
conducted and is in good standing and duly qualified to do business
in each
jurisdiction where the failure to be so qualified would have a
material adverse
effect on the business of Aviation. Aviation has no
subsidiaries.
(b) Authority Execution and Delivery. Subject to Section 3(d),
--------------------------------
each of Parent and Aviation has full corporate power and authority
to enter into
this Agreement and to sell the Assets in accordance with the terms
hereof so as
to vest in Buyer on the Closing Date good and marketable title to
the Assets,
free and clear of all claims, liens, pledges, options, charges,
security
interests or encumbrances of any nature whatsoever
(collectively,
"Encumbrances"). The execution, delivery and performance of this
Agreement by
Parent has been duly and effectively authorized by the Board of
Directors of
Parent. The execution, delivery and performance of this Agreement
by Aviation
has been duly and effectively authorized by the Board of Directors
of Aviation
and Parent. No other corporate proceedings on the part of Parent or
Aviation are
necessary, except as described in Section 3(d), to authorize this
Agreement and
the transactions contemplated hereby. This Agreement has been duly
executed and
delivered by each of Parent and Aviation and constitutes the legal,
valid and
binding obligation of each of Parent and Aviation, enforceable
against each of
Parent and Aviation in accordance with its terms, except as
enforcement thereof
may be limited by bankruptcy, insolvency, or other similar laws
affecting the
enforcement of creditors rights in general, moratorium laws or by
general
principles of equity. To the extent there are encumbrances on the
Assets, said
encumbrances shall be paid at closing with the proceeds of the
closing.
(c) Consents, No Conflicts, Etc. Except as contemplated by
---------------------------
this Agreement, neither the execution and delivery of this
Agreement, the
consummation of the transactions contemplated hereby nor compliance
by Parent
and Aviation with any of the provisions hereof will (with or
without the giving
of notice or the passage of time) (i) violate, conflict with,
result in a breach
of, constitute a default under, or result in the creation of any
Encumbrances
upon the Assets pursuant to, any of the terms, conditions or
provisions of (A)
the respective certificate of incorporation or by-laws of Parent
and Aviation,
or (B) any material note, bond, mortgage, indenture, deed of trust,
lease,
4
<PAGE>
license, agreement, or any other material instrument or obligation
to which
either Parent or Aviation is a party, (ii) violate any material
order, writ,
injunction, decree, statute, rule or regulation applicable to
Parent or Aviation
or any of their respective assets or properties or (iii) require
the consent,
approval, permission or other authorization of any court,
arbitrator or
governmental, administrative or self-regulatory authority or any
other person or
entity, except for violations, conflicts or defaults which would
not, or
consents, approvals, permissions or authorizations, the failure of
which to
obtain would not, individually or in the aggregate, have a material
adverse
effect on the Assets, the business of Aviation or the ability of
Parent and
Aviation to consummate the transactions contemplated hereby in
accordance with
the terms hereof
(d) No Other Agreements to Sell the Assets. Except as
--------------------------------------
otherwise provided in the Stipulation of Settlement dated October
12, 2007 among
Ronson Corporation and certain of its shareholders (Disclosure
Memorandum,
Exhibit B), Seller has no legal obligation, absolute or contingent,
to any other
person or firm to sell any of the Assets (other than in the
ordinary course of
business).
(e) Copies of Documents. Seller has previously made available
-------------------
to Buyer true and complete copies, or forms, of (i) all material
agreements,
contracts, leases, insurance policies, undertakings, commitments
and
arrangements relating to the Assets and (ii) all material
governmental or
regulatory licenses, permits, franchises, approvals and
certificates
(collectively, "Permits") required to conduct the business of
Aviation.
(f) Properties.
----------
(i) Aviation has good and marketable title, free and
clear of liens or encumbrances except as described on the 2008
Balance Sheet to
all of its owned properties and assets, tangible and intangible,
included in the
Assets.
(ii) Each lease, including the Master Lease, pursuant
to which Aviation leases real or personal property and each other
material
contract or commitment included in the Assets is valid and
enforceable, in full
force and effect, in accordance with its terms and Aviation is not
in default
under any provision of any such lease, contract or commitment. No
party from
whom Aviation leases real or personal property material to the
business of
Aviation and no party which is a party to any lease, contracts or
commitment
material to the business of Aviation is in default under any
provision of any
such lease, contract or commitment whereby the benefits of such
lease, contract
or commitment would not be realized in the future.
(iii) Aviation has not received notice of (1) any
violation of any applicable zoning regulation, ordinance or other
law, order,
regulation or requirement relating to the operations of its leased
real
properties included in the Assets that would materially impair the
business or
operations of Aviation or (2) any pending or threatened
condemnation proceedings
relating to any of its leased properties included in the
Assets.
(iv) As of the date hereof, to the best of Seller's
knowledge, the improvements at Aviation's facilities and all
machinery and
equipment included in the Assets are in good operating condition
for use in the
ordinary course of business, normal wear and tear excepted, except
for such
defects as would not substantially interfere with the continued use
thereof in
the conduct of normal operations and except for equipment
undergoing normal
operational maintenance. Notwithstanding the foregoing, Seller
makes no
representations or warranties with respect to the future
performance of the
improvements, machinery and equipment included in the Assets.
(g) Litigation. Other than as set forth in Disclosure
----------
Memorandum, Schedule A, there is no litigation, proceeding,
arbitral action or
----------
government investigation pending or threatened against Aviation
with respect to
the Assets or the business of Aviation which would have a material
adverse
effect on the Assets or the business of Aviation or interfere with
the ability
of Seller to consummate the transactions contemplated by this
Agreement in
accordance with the terms hereof. To Seller's knowledge, there are
no decrees,
injunctions or orders of any court or governmental department or
agency
outstanding against Aviation affecting the Assets or the business
of Aviation.
5
<PAGE>
(h) Compliance with Laws; Permits. Seller, has complied in all
-----------------------------
material respects with all applicable Permits, statutes,
regulations, orders,
ordinances, rules, licenses, codes, plans, decrees, judgments,
injunctions,
notices, or demand letters (including, without limitation,
applicable zoning,
environmental, occupational safety and health laws and regulations)
of all
governments and other governmental bodies and authorities, and
agencies of any
of the foregoing, to which it is subject in connection with the
conduct of the
business of Aviation, and any undertakings of Aviation to any of
the foregoing,
except for such failures to comply that would not, individually or
in the
aggregate, have a material adverse effect on the Assets or the
business of
Aviation. Aviation has not received any written notice of such a
failure to
comply with any of such Permits, statutes, regulations, orders,
ordinances,
rules, licenses, codes, plans, decrees, judgments, injunctions,
notices, or
demand letters or undertakings, and Aviation knows of no presently
existing
circumstances or changes in Permit conditions which would,
individually or in
the aggregate, have a material adverse effect on the Assets or the
business of
Aviation. To Aviation's knowledge, there are no products now being
manufactured,
sold or distributed by Aviation which at the date hereof would
require any
approval of any governmental body, whether federal, state, local or
foreign, for
which such approval has not been obtained. No proceedings for the
suspension or
cancellation of any Permit maintained by Aviation with respect to
the business
of Aviation is pending or, to Aviation's knowledge, threatened.
(i) Insurance. The policies of insurance maintained by Seller
---------
with respect to the Assets or the business of Aviation insure the
Assets and the
business of Aviation against such losses and risks as are adequate
in accordance
with customary industry practice to protect the Assets and the
business of
Aviation in the context of Parent's business. Seller has not
received notice
from any insurer or agent of such insurer that substantial capital
improvements
or other expenditures will have to be made in order to continue
such insurance
and, so far as known to Seller, no such improvements or
expenditures are
required.
(j) No Brokers. Seller has not entered into and will not enter
----------
into any agreement, arrangement or understanding with any person or
firm which
will result in the obligation of Buyer to pay any finder's fee,
brokerage
commission or similar payment in connection with the transactions
contemplated
hereby.
(k) Transactions with Certain Persons. No shareholder,
---------------------------------
officer, director or employee of Seller or any of their affiliates
or member of
his or her immediate family is presently a party to any material
transaction
with Aviation which is other than an arm's-length transaction.
(l) Consequences of Sale and Purchase. Seller is not aware
---------------------------------
that any person or entity which now has material business dealings
with Aviation
intends to cease to do so as a result of the consummation of the
transactions
contemplated by this Agreement.
(m) Environmental Matters. Except as disclosed in Disclosure
---------------------
Memorandum, Schedule A:
(i) Aviation and this transaction are not subject to
any reporting
requirement in the Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et
seq.
(ii)
NJDEP issued a letter to Aviation dated Sept.
12, 2002
requesting additional groundwater monitoring data respecting
well MW-203 at the
Airport, and a Remedial Action Workplan, stating
that failure to
comply may result in enforcement actions and statutory
penalties. NJDEP
considers this letter to still be in effect. According
to Aviation's
environmental consultant, data demonstrates that Aviation
is not the source
of the contamination at MW-203. NJDEP denied the
request for a NFA
letter on March 26, 2003. According to NJDEP,
"[b]ased on the
subsurface investigation completed to date [Mar. 26,
2003] the
Department cannot make a determination as to the source of
the free product
jet fuel found in monitoring well MW-203." Because
Aviation declined
to further investigate or remediate the free product
6
<PAGE>
conditions
associated with MW-203, NJDEP issued a letter dated June 19,
2003 to Mercer
County, as the owner of the Airport, to comply with the
investigation and
remedial action requirements of the Spill Act for
this area of
concern. In connection with this, Aviation filed Ronson v.
Mercer County,
Docket No. MER-L-1219-99, as a cost recovery action and
an action on a
leasehold. This matter is settled in part.
Correspondence
related to the open issue of contamination of MW-203 is
available for
review at Aviation.
(iii) Aviation operated oil/water separators, which
had storage tanks
attached to them. The oil/water separator tanks were
removed and a No
Further Action letter is expected from NJDEP shortly.
(iv) Except as described in 4(m)(ii) above, to the
best of Seller's
knowledge, there are no uncontrolled Hazardous
Substances
(defined below) and no uncontrolled Hazardous Wastes
(defined below)
present on the Premises including, asbestos, flammable
substances,
explosives, radioactive materials, polychlorinated
biphenyls
("PCBs"), urea formaldehyde foam insulation, corrosive,
irritant,
biologically infectious materials, garbage, refuse, sludge,
or toxic chemical
waste materials (other than ordinary course garbage
and refuse of
tenants and ordinary course cleaning materials). Except
as described in
4(m)(ii) above, Seller is not currently identified in
any litigation,
administrative proceeding or investigation as a
responsible party
or potentially responsible party for any liability
for clean-up
costs, natural resource damages or other damages or
liability for
prior disposal or release of Hazardous Substances,
Hazardous Wastes
or other environmental pollutants or contaminants at
the Premises, and
no lien or super- lien has been recorded, filed or
otherwise asserted
against the Premises. For purposes of this
Agreement,
"Hazardous Substances" means those elements and compounds
which are
designated as such in Section 101(14) of the Comprehensive
Response,
Compensation and Liability Act (CERCLA), 42 U.S.C. Section
9601 (14), as
amended, all petroleum products, and any other hazardous
substances as that
term may be further defined in any and all
applicable
federal, state and local laws; and "Hazardous Wastes" means
any hazardous
waste as defined in applicable federal or state laws.
(v) Except as described in Section 4(m)(i) through
(iv) above and on
Disclosure Memorandum, Schedule A, there has been no
significant
release of hazardous substances, including petroleum
products, by
Seller which has not been reported to the NJDEP, and to
Seller's knowledge
, there is no threat of release of any hazardous
substances, at or
from any facility or at any other location where any
hazardous
substances were generated, manufactured, refined,
transferred,
produced, imported, used, or processed from or by any
facility or from
any other property or asset (whether real, personal or
mixed) in which
Seller has or had an interest. However, except as set
forth herein,
Seller makes no representations about past releases or
discharges of
hazardous substances including petroleum products that
may have occurred
in the ordinary course of fueling, transport and/or
storage operations
at any property or location or by any facility owned
or leased by
Seller.
7
<PAGE>
(n) Tax
Matters.
-----------
(i) None of the Assets directly or indirectly secures
any debt the interest on which is tax-exempt under section 103(a)
of the Code.
(ii) None of the Assets is "tax-exempt use property"
within the meaning of section 168(h) of the Code
(iii) Seller is not a person other than a United
States person within the meaning of the Code.
(iv) Aviation has duly filed (or joined in the filing
of) on or before their due dates (including any extensions) all Tax
reports and
returns it was required to file (or join in the filing of). All
such returns and
reports were accurate and complete in all material respects when
filed and were
prepared in conformity with all applicable laws and regulations.
All Taxes shown
to be due on such Tax returns and reports or otherwise assessed or
due and
payable have been paid in full.
(v) The representations and warranties set forth in
subclause (iv) above are only applicable to the extent that the
Assets can be
made subject to Tax liens or Buyer can be made liable for Taxes
relating to the
matters constituting breaches of such representations and
warranties.
(o) Disclosure. No representation or warranty made by Seller
----------
in this Agreement or as provided herein contains any untrue
statement of a
material fact or omits to state a material fact necessary to make
the statements
contained herein not false or misleading.
(p) Assets. All the Assets being transferred to Buyer pursuant
------
to this Agreement are owned or leased by Aviation and comprise all
those
properties, assets and rights necessary to operate the business of
Aviation in
the ordinary course.
&nb
