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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
------------
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
October 1, 1998
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AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 0-24275 52-2081515
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
3516 Centre Circle Drive
Fort Mill, South Carolina 29715
(Address of principal executive offices)
(803) 548-2160
(Registrant's telephone number, including area code)
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ITEM 5. Acquisition or Disposition of Assets
On October 1, 1998, American Aircarriers Support, Incorporated
(the "Company") completed the acquisition of Global Turbine Services, Inc.
("GTI") and Turbine Inspections, Incorporated ("TII") pursuant to an Asset
Purchase Agreement (the "Agreement") dated as of October 1, 1998 among American
Aircarriers Support Acquisition Corp., a wholly owned subsidiary of the Company
formed for the purpose of effecting the acquisition, GTI and TII (collectively,
GTI and TII, the "Sellers"). Pursuant to the Agreement, the Company acquired
substantially all of the assets of the Sellers for a purchase price $1,105,032
and assumption of certain accounts payable not to exceed $305,013. The purchase
price was comprised of $586,932 cash paid from working capital and issuance of
90,104 shares of the Company's Common Stock valued at $518,100.
Simultaneously with the execution of the Agreement, the Company and the
Sellers' founder and President, Mr. Mike Evans, also entered into a Consignment
Agreement pursuant to which Mr. Evans consigned to the Company certain aircraft
parts inventory controlled by him. The Company and Mr. Evans will share equally
in the net profits from the sale of the consigned inventory by the Company until
such time as Mr. Evans has received aggregate net profits of $1.6 million. At
such time, the Consignment Agreement will terminate and the Company will receive
legal ownership and title to all remaining inventory covered by the Consignment
Agreement. In consideration of the consignment rights, the Company paid Mr.
Evans $175,000 upon execution of the Consignment Agreement.
For a period of one year, the Sellers may "piggy-back" their shares
onto any registration statement which the Company files to register any of its
securities under the Securities Act of 1933, as amended (the "Act"), in
connection with a public offering for cash proceeds payable in whole or in part
to the Company. The Sellers also have been granted the right to request the
Company file a registration statement under the Act covering the shares of the
Company's Common Stock issued to them in connection with the acquisition. Such
"demand" registration right commences after July 1, 1999 and may only be
exercised on one occasion. All expenses incurred in connection with the
registration of the Sellers' shares pursuant to either the piggy-back and demand
registration rights are payable by the Company.
Simultaneously with the execution of the Agreement, the Company and Mr.
Evans entered into a three year employment agreement whereby Mr. Evans will
serve as Vice President of Power Plant Operations for the Company and will
continue to operate the business previously operated by the Sellers. Mr. Evans
is a licensed commercial pilot and has over twenty-five years' experience in the
commercial turbine industry and has specialized in JT8 and JT3 jet engines used
in the majority of narrow body planes such as the 727, 737, and DC9 aircraft.
The Sellers, located in the Fort Lauderdale, Florida area, provide
total engine management services to major commercial and cargo airlines. The
services provided by the Sellers include borescoping, trend monitoring, engine
condition analysis and valuation, overhaul management and troubleshooting.
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Forward Looking Statements
This Report on Form 8-K may contain forward-looking statements. When
used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," "believe" and similar expressions,
variations of these words or the negative of those words are intended to
identify forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
regarding events, conditions and financial trends including, without limitation,
business conditions in the aircraft spare parts industry and the general
economy, and other risks or uncertainties detailed in other of the Company's
Securities and Exchange Commission filings. Such statements are based on
management's current expectations and are subject to risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, the Company's actual plan of
operations, business strategy, operating results and financial position could
differ materially from those expressed in, or implied by, such forward-looking
statements.
ITEM 7. Financial Statements and Exhibits
(a) Financial statements relative to GTS and TII are not required
pursuant to Item 310(c) and (d) of Regulation S-B.
(b) Pro forma financial information relative to GTS and TII and
the Registrant are not required pursuant to Item 310(c) and (d) of Regulation
S-B.
(c) The following exhibits are furnished herewith in accordance
with the provisions of Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- --------
<S> <C> <C>
2.2 Asset Purchase Agreement among American Aircarriers Support 2
Acquisition Corp., Global Turbine Services, Inc. and Turbine Inspections,
Incorporated
4.2 Registration Rights Agreement between the Company and M. Mike Evans 4
10.1.3 Executive Employment Agreement between the Company and M. Mike 10
Evans
10.9 Consignment Agreement between the Company and M. Mike Evans 10
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
Date: October 12, 1998 By: /s/ Elaine T. Rudisill
----------------------------------------
Elaine T. Rudisill, Chief Financial
Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- --------
<S> <C> <C>
2.2 Asset Purchase Agreement among American Aircarriers Support 2
Acquisition Corp., Global Turbine Services, Inc. and Turbine Inspections,
Incorporated
4.2 Registration Rights Agreement between the Company and M. Mike Evans 4
10.1.3 Executive Employment Agreement between the Company and M. Mike 10
Evans
10.9 Consignment Agreement between the Company and M. Mike Evans 10
</TABLE>
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into as of the _____
day of October, 1998, by and among GLOBAL TURBINE SERVICES, INC. and TURBINE
INSPECTIONS, INCORPORATED, Florida corporations (collectively "Seller"), and
AMERICAN AIRCARRIERS SUPPORT ACQUISITION CORP., a Florida subsidiary of American
Aircarriers Support, Incorporated ("Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller is engaged in the business of supplying and
redistribution of aircraft engine parts and engines to commercial and cargo
airlines, maintenance and repair facilities and other redistributors, as well as
management of aircraft engine programs for commercial and cargo airlines.
WHEREAS, the Seller desires to sell and the Purchaser desires to
purchase substantially all the operating assets and properties used in the
business operations of Seller.
NOW, THEREFORE, the parties hereto agree that the purpose of this
Agreement is to set forth the terms and conditions upon which the Seller has
agreed to sell to the Purchaser certain of its business and assets; and the
Purchaser has agreed to purchase and pay for such business and assets; and
furthermore, the Seller and the Purchaser in consideration of the premises and
the mutual agreements contained herein, do hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
Section 1.1 Assets to be Purchased and Sold.
(a) Description of Assets. At the Closing (as defined in Section 1.2),
the Seller shall sell and convey to the Purchaser, and the Purchaser shall
purchase and acquire from the Seller, all equipment, furniture, fixtures and
inventory that are directly associated or connected with the operation of the
Seller's business. The operating assets of the Seller to be purchased hereunder
(which shall not include the Excluded Assets) are referred to herein as the
"Subject Assets," and shall include without limitation:
(i) all the Seller's inventory, which shall include, but not
be limited to, the Varig engine parts, Corsair inventory; and
miscellaneous JT-8 inventory;
(ii) all furniture, fixtures, furnishings, tools, equipment,
supplies, parts, accessories, inventories, machinery, shelving,
computer equipment, signage, and other tangible personal property of
the Seller including the
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Borescope in each of its business locations other than Excluded Assets
(the "Tangible Property"), and any additions or accessions thereto or
substitutions therefor or proceeds thereof, whether currently on the
books or used by Seller;
(iii) Boeing Engine 633682;
(iv) the Seller's interest in Joint Venture #1;
(v) the Seller's interest in Joint Venture #2;
(vi) All accounts receivables owned by Seller at Closing;
(vii) All tradenames, trademarks, service marks, copyrights,
licenses, patents and registrations thereof or applications therefor,
and trade secrets, secret processes (whether or not patentable),
suppliers and vendor lists, customer lists, parts libraries and
manuals, software, inventions (whether or not patentable), formulae and
other property belonging to, used in and appertaining to the Seller's
Subject Assets (collectively the "Intellectual Property");
(viii) All vehicles owned by Seller at Closing, except for
those set forth in the Excluded Assets;
(ix) All of the Seller's work in process; and
(x) All the Seller's federal, state and local government
permits, licenses and approvals required for the conduct of its
business (or held with respect to the assets and operations of the
business of the Seller) to the extent assignment thereof to the
Purchaser is permitted by applicable law.
(b) Excluded Assets. The assets to be purchased and sold hereunder, and
the term "Subject Assets" as used herein, shall not include the following assets
of the Seller existing on the Closing Date (the "Excluded Assets"):
(i) Cash;
(ii) 1998 Navigator; and
(iii) Airplane (1958 Aerocommander 500).
(c) Consignment Agreement. Separately from this Agreement, Seller shall
enter a consignment of his ASAP inventory under the terms of the Consignment
Agreement set forth in Exhibit 1.1(c).
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Section 1.2 Closing Date. The closing date (the "Closing Date") shall
be October 1, 1998, or such other date as may be mutually agreed to by the
parties. The closing of this transaction (the "Closing") shall be held at the
offices of David M. Furr, Gray, Layton, Kersh, Solomon, Sigmon, Furr & Smith,
P.A., Gastonia, North Carolina, or such other place as the parties may mutually
agree. At the Closing, subject to the fulfillment or waiver of the conditions
set forth in Article V, the Seller shall convey the Subject Assets to the
Purchaser by appropriate instruments of transfer and the Purchaser shall pay to
the Seller the Purchase Price as provided in Sections 1.3 and 1.4.
Section 1.3 Purchase Price. The final purchase price after any working
capital adjustments to be paid to the Seller for the Subject Assets (the
"Purchase Price") shall be an amount equal to (i) One Million Thirteen Thousand
Six Hundred Forty Dollars ($1,013,640.00) plus (ii) an amount equal to the
Accounts Receivables determined by the parties at Closing.
Section 1.4 Payment of Purchase Price. The Purchase Price shall be
payable by the Purchaser in cash or cash equivalent as well as Purchaser's stock
at Closing. The stock/cash allocation is set forth on Exhibit "A" attached
hereto and incorporated herein by reference. Any stock received shall be subject
to restraints on both timing and quantities of shares to be sold as set forth on
Exhibit "B".
Section 1.5 Assumption of Liabilities and Obligations.
(a) Assumed Liabilities. The following shall be assumed or paid by
Purchaser:
(i) Ordinary trade payables (including obligation to purchase
Borescope for $25,000) up to Twenty-Five Thousand Thirteen Dollars
($25,013.00) as set forth on Exhibit 1.5(a)(i);
(ii) Aviation sales payables if no more than Fifty-Five
Thousand Dollars ($55,000.00); and
(iii) Account Payable on Tonnish Engine transaction of no more
than Two Hundred Twenty-Five Thousand Dollars ($225,000.00) upon full
transfer of engine title to Purchaser.
(b) No Liabilities to be Assumed or Paid (the Excluded Liabilities).
The following shall neither be assumed or paid by Purchaser:
(i) Any liability of the Seller for federal, state or local
income, franchise, sales, use, social security,
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unemployment or withholding taxes, or penalties, interest, fines or
assessments in connection therewith;
(ii) The Seller's liability for ad valorem property taxes and
intangibles taxes with respect to all Assets for 1998 and all years
prior to 1998;
(iii) All accrued fees, expenses and other costs to be borne
by the Seller pursuant to Section 4.4 of this Agreement.
(iv) The Seller's obligations, liabilities, covenants,
commitments and undertakings under this Agreement or any instrument or
agreement entered into pursuant hereto;
(v) All accrued salaries or bonuses to Employees; and
(vi) Any liability relating to the lawsuit by Rich
International Airways, Inc. in the Circuit Court of the 11th Judicial
Circuit in and for Dade County, Florida, General Jurisdiction Division,
Case No. 95-17247 CA.
(c) No Other Liabilities Assumed; Liabilities of the Purchaser After
Closing. The Purchaser is not assuming any of the Seller's liabilities or
obligations, whether known or unknown, contingent or realized; except for the
Assumed Liabilities listed in Section 1.5(a). All liabilities incurred after the
Closing in connection with the Purchaser's operations after the Closing of the
business and assets acquired by the Purchaser hereunder shall be liabilities of
the Purchaser.
Section 1.6 Allocation of Purchase Price. The Purchase Price described
in Section 1.3 above will be allocated among the Subject Assets as described on
Exhibit "A". The Purchaser and the Seller each agrees that it will adopt and
utilize the amounts so allocated for purposes of all federal, state and other
tax returns filed by it and will not voluntarily take any position inconsistent
therewith upon examination of any such tax return, in any claim, in any
litigation or otherwise with respect to such tax returns. Notwithstanding any
other provisions of this Agreement, the foregoing representation, warranty and
agreement shall survive the Closing Date without limitation.
Section 1.7 Status of Stock Issued. The shares of Purchaser's stock to
be issued to the Seller will be "Restricted Stock" and will not have been
registered under the Securities Act of 1933, as amended, or under any laws of
any state, and will bear the following legend in addition to any other legends
required by state law or by other agreements executed contemporaneously
herewith:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT")
OR ANY STATE SECURITIES ACT, AND ARE "RESTRICTED
SECURITIES" WITHIN THE MEANING OF SUCH ACTS. THE SHARES
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER
SUCH ACTS OR THE RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
Section 1.8 Registration Rights. Purchaser shall file a Registration
Statement with the Securities and Exchange Commission registering the shares of
stock issued to the Seller upon request of the Seller after July 1, 1999, and
shall use its best efforts to cause the Registration Statement to be filed not
more than six months after the date of such request and to become effective as
soon as practicable thereafter. Furthermore, Purchaser shall maintain such
effectiveness for a minimum period of one year. Purchaser shall pay all expenses
incident to such Registration Statement, except for any commissions or taxes
related to the sale of the shares thereunder. Such registration rights shall be
in accordance with, and subject to, the terms and provisions of the form of
Registration Rights Agreement attached as Exhibit B hereto. The remaining shares
shall have "piggy-back" rights, subject to the reasonable approval of any
managing underwriter, to be included in any Registration Statement filed by
Purchaser within one year as such registration statement relates to an
underwritten public offering of Purchaser's securities.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
To induce the Purchaser to enter into this Agreement and to purchase
the Subject Assets, each Seller, jointly and severally, represents and warrants
that:
Section 2.1 Corporate Organization and Authority. The Seller is duly
organized and validly existing in good standing under the laws of the State of
Florida, with full power and authority to conduct its business as now conducted,
own its assets and enter into and perform its obligations under this Agreement.
The Seller's execution, delivery and performance of this Agreement and the sale
to the Purchaser of the Subject Assets have been duly authorized by all
requisite corporate action on the part of the Seller, and this Agreement
constitutes, and all deeds, bills of sale, assignments, agreements and other
instruments and documents to be executed and delivered by the Seller hereunder
will constitute, the Seller's legal, valid and binding obligations, enforceable
against the Seller in accordance with their respective terms.
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Section 2.2 Title to Assets.
(a) Furniture, Equipment, Etc. The Seller has good and marketable title
to the Tangible Property free and clear of all liens, charges, security
interests, easements, reservations, restrictions, encumbrances and other defects
in title (collectively, "Encumbrances"), has the right to convey such Tangible
Property to the Purchaser, at the Closing shall have conveyed to the Purchaser
good and marketable title to such Tangible Property free and clear of all
Encumbrances, and will warrant and defend the title to such Tangible Property in
the Purchaser against the lawful claims of all persons whomsoever.
(b) Inventory. The Seller has good and marketable title to the
Inventory described on the Closing Balance Sheet free and clear of all
Encumbrances, has the right to convey such Inventory to the Purchaser, at the
Closing shall have conveyed to the Purchaser good and marketable title to such
Inventory free and clear of all Encumbrances and will warrant and defend the
title to such Inventory in Purchaser against the lawful claims of all persons
whomsoever.
(c) Intellectual Property. Except as described in Exhibit 2.2(c), the
Seller has exclusive rights to use the Intellectual Property in connection with
its business as and where now conducted and the use of the Intellectual Property
by the Seller in its business as and where now conducted does not violate or
infringe the rights of any other person, nor is the Seller a party to any
agreement with another person or entity with respect to the use of the
Intellectual Property.
Section 2.3 Condition of Tangible Assets.
(a) Tangible Property. All the Tangible Property is in good operating
condition and repair, ordinary wear and tear excepted.
(b) Inventory. The level of Inventory at Closing will not exceed normal
inventory levels necessary to conduct the Seller's business in the ordinary
course of the Seller's business.
Section 2.4 Leases. Except as set forth in Exhibit 2.4, none of the
Tangible Property is leased by the Seller from any other party. There is no
default under the leases described on Exhibit 2.4 and such leases are valid and
enforceable in accordance with their terms.
Section 2.5 Capital Expenditures. Except as described on Exhibit 2.5
hereto, there are no material capital expenditures which the Seller now
anticipates will be required to be made in connection with the Seller's business
as now conducted in order to operate the business or comply with any existing
laws,
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regulations or other governmental requirements applicable to the Seller's
business, including without limitation requirements relating to occupational
health and safety.
Section 2.6 Compliance with Law.
(a) Conduct of Business. The Seller has conducted its business so as to
comply with, and is in compliance with, all laws, statutes, regulations, rules
and other requirements of any governmental authority applicable to it, the
noncompliance with which curing thereof could have a material adverse effect on
the Seller or its business or the Subject Assets.
(b) Pending or Threatened Litigation. Except as described in Exhibit
2.6(b), the Seller is not a party to any claim, action, suit or other proceeding
pending, or to the knowledge of the Seller threatened, before any court, agency
or other judicial, administrative or other governmental body or arbitrator.
(c) Investigations. Exhibit 2.6(c) describes all investigations of the
Seller or the Seller's business known to the Seller conducted by any grand jury,
administrative agency or other governmental authority, and describes all
inspection reports, questionnaires, inquiries, demands, requests for information
and claims of violations or noncompliance with law received by the Seller from
any governmental authority and all written statements or responses of the Seller
with respect thereto, including requests for information from the Internal
Revenue Service or any state department of revenue in connection with audits of
the Seller's income, sales, and use tax returns or routine questionnaires and
requests for information received generally by others in the Seller's industry.
(d) Judgments and Orders. Except as described in Exhibit 2.6(d), there
are no outstanding judgments, tax liens, orders, writs or decrees of any
judicial or other governmental authority binding specifically upon the Seller or
the Subject Assets and not of general application, other than judgments, orders,
writs and decrees with which the Seller has complied and which have no future
applicability.
Section 2.7 Environmental Matters. (a) Except as described in Exhibit
2.7, the Seller and the property owned or used in its business are, and at all
times have been, in compliance with all applicable Federal, state and local
statutes, laws, ordinances, regulations and codes related in any way to
Hazardous Materials (as hereinafter defined) and underground storage tanks. As
used herein, Hazardous Materials shall mean solid waste (as that term is defined
in the Resource Conservation
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and Recovery Act, 42 U.S.C.A. ss.6901, et seq, and the regulations adopted
pursuant thereto), hazardous substances (as that term is defined in the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.A.
ss.9601, et seq, and the regulations adopted pursuant thereto), and other
pollutants, including, without limitation, any solid, liquid, gaseous or thermal
irritant or contaminant, such as smoke, vapor, soot, fumes, acids, alkaloids or
chemicals.
(b) Except as described in Exhibit 2.7, during Seller's occupancy of
the property used in its business, no Hazardous Materials have been generated,
treated, stored or disposed of at, or transported to or from, the Seller or the
property owned or used in the Seller's business at any time.
(c) Except as described in Exhibit 2.7, no asbestos or materials
containing asbestos have been installed, used, treated, stored or disposed of by
the Seller in or on property owned or used by the Seller at any time.
(d) Except as described in Exhibit 2.7, during Seller's occupancy of
the property used in its business, no polychlorinated biphenyls are located on
or in the facilities of the Seller or any property owned or used by the Seller
at any time.
(e) Except as described in Exhibit 2.7, the Seller holds all necessary
permits or licenses to enable it to comply with all statutes, laws, ordinances,
regulations and codes related in any way to Hazardous Materials or underground
storage tanks.
(f) Except as described in Exhibit 2.7, no notice has been served on
the Seller or any of its directors, officers or shareholders from any entity,
governmental body or individual claiming violation of any statute, law,
ordinance, regulation or code related in any way to Hazardous Materials or
underground storage tanks, requiring compliance with any statute, law,
ordinance, regulation or code related in any way to Hazardous Materials or
underground storage tanks, or demanding payment of or contributions for damage
regarding the Seller or property owned or used by the Seller related in any way
to Hazardous Materials or underground storage tanks, including without
limitation, damages to the environment or natural resources.
Section 2.8 Employee Relations.
(a) Employee Census. Seller has furnished an accurate employee census,
detailing the Employee's date of hire, salary, benefits and other pertinent
information (attached hereto as Exhibit 2.8). There shall have been no increase
in any compensation paid or payable to the employees of Seller unless otherwise
disclosed on Exhibit 2.8 and agreed to by Purchaser.
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(b) No Contracts or Future Contracts. To the best of Seller's
knowledge, Seller has no employment contracts that cannot be terminated without
liability and further, Seller will not contact any Employees to work for Seller
after closing without first obtaining Purchaser's written permission.
Section 2.9 No Material Misstatements or Omissions. To the
best of its knowledge, the representations and warranties of the
Seller in this Agreement do not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements made therein
not misleading.
Section 2.10 No Sale of Assets, Etc. Seller has not sold or otherwise
disposed of any of the assets other than sales of inventory in the ordinary
course of business. In addition, Seller has, from the date hereof until Closing,
maintained the reputation of the business being sold hereunder and preserved the
goodwill of suppliers, customers and others having business relationships with
Seller.
Section 2.11 Other Representations and Warranties of Seller.
(a) Knowledge Respecting Purchaser. Seller (i) knows or has had the
opportunity to acquire all information concerning the business affairs,
financial condition, plans and prospects of Purchaser that Seller deems relevant
to make a fully informed decision respecting the acquisition of the stock; (ii)
has been encouraged and has had the opportunity to rely upon the advice of
Seller's legal counsel and accountants and other advisers with respect to the
acquisition of the stock; and (iii) has had the opportunity to ask such
questions and receive such answers and information respecting, among other
things, the business, affairs, financial condition, plans and prospects of
Purchaser and the terms and conditions of the acquisition of the stock as Seller
has requested so as to more fully understand Seller's investment.
(b) Absence of Representations and Warranties. Seller confirms that
neither Purchaser nor anyone purportedly acting on behalf of Purchaser has made
any representations, warranties, agreements or statements other than those
contained herein respecting the business, affairs, financial condition, plans or
prospects of Purchaser nor has Seller relied on any representations, warranties,
agreements or statements in the belief that they were made on behalf of the
foregoing nor has Seller relied on the absence of any such representations,
warranties, agreements or statements in reaching Seller's decision to acquire
the stock.
(c) No Distribution. Seller is acquiring the stock for Seller's own
account without a view to public distribution or
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resale, and Seller has no contract, undertaking, agreement or arrangement to
transfer, sell or otherwise dispose of any of the stock or any interest therein
to any other person.
(d) Shares to be Restricted. Seller understands that the stock will
remain "restricted securities" within the meaning of Rule 144 under the
Securities Act of 1933, as amended (the "1933 Act") and within the "lockup
agreement" required by the underwriter.
(e) No Registration. Seller understands that the stock will not be
registered under the 1933 Act, the state laws and the securities laws of any
other jurisdiction and must be held indefinitely without any transfer, sale or
other disposition unless the stock is subsequently registered under the 1933
Act, state law and the securities laws of any other applicable jurisdictions
pursuant to any attaching "piggy-back" rights or, in the opinion of counsel for
Purchaser, registration is not required under such Acts or laws as the result of
an available exemption.
(d) Legend of Certificates. Seller understands that there shall be
endorsed on the certificates evidencing the stock a legend substantially to the
following effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY
STATE SECURITIES ACT, AND ARE "RESTRICTED SECURITIES" WITHIN
THE MEANING OF SUCH ACTS. THE SHARES MAY NOT BE SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS OR THE
RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
THAT SUCH REGISTRATION IS NOT REQUIRED."
(e) Restrictions on Other Securities. Seller understands that, except
upon certain limited circumstances, the restrictions on the sale, transfer and
disposition of the stock will also apply to any and all shares of capital stock
or other securities issued or otherwise acquired with respect to the stock
including, without limitation, shares and securities issued or acquired as a
result of any stock dividend, stock split or exchange or any distribution of
shares or securities pursuant to any corporate reorganization, reclassification
or similar event.
(f) Stop Orders. Seller understands that Purchaser and its transfer
agent may refuse to effect a transfer, sale or other disposition of any of the
stock by Seller or Seller's successors or assigns otherwise than as contemplated
hereby.
(g) No Governmental Approval. Seller understands that no federal or
state agency has approved or disapproved the stock,
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passed upon or endorsed the merits of the offering of the stock, or made any
finding or determination as to the fairness of the stock for investment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
To induce the Seller to enter into this Agreement and to sell the
Subject Assets, the Purchaser hereby represents and warrants that:
Section 3.1 Corporate Organization and Authority. The Purchaser is a
corporation duly organized and validly existing and in good standing under the
laws of the State of North Carolina, with full corporate power and authority to
conduct its business as now conducted and to enter into and perform its
obligations under this Agreement. The Purchaser's execution, delivery and
performance of this Agreement and its acquisition of and payment for the Subject
Assets have been duly authorized by all requisite corporate action on the part
of the Purchaser, and this Agreement constitutes, and all agreements and other
instruments and documents to be executed and delivered by the Purchaser
hereunder will constitute, the Purchaser's legal, valid and binding obligations,
enforceable against the Purchaser in accordance with their terms.
Section 3.2 Absence of Conflicts and Consent Requirements. The
Purchaser's execution and delivery of this Agreement and performance of its
obligations hereunder, including the purchase of and payment for the Subject
Assets hereunder, do not and will not conflict with, violate or result in any
default under the Purchaser's Articles of Incorporation or Bylaws or any
mortgage, indenture, agreement, instrument or other contract to which the
Purchaser is a party or by any judgment, order, decree, law, statute, regulation
or other judicial or governmental restriction to which the Purchaser is subject.
The Purchaser's execution and delivery of this Agreement and performance of its
obligations hereunder, including the purchase of and payment for the Subject
Assets, do not and will not require the consent of, or any prior filing with or
notice to, any governmental authority or other third party.
Section 3.3 No Material Misstatements or Omissions. The representations
and warranties of the Purchaser in this Agreement do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made therein not misleading.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
11
<PAGE> 12
Section 4.1 Further Assurances. The Seller and the Purchaser each
hereby covenants and agrees with the other that at any time and from time to
time each will promptly execute and deliver to the other such further
assurances, instruments and documents and take such further action as the other
may reasonably request in order to carry out the full intent and purpose of this
Agreement.
Section 4.2 Fees and Expenses. The Seller and the Purchaser shall each
bear their own expenses in connection with the negotiation and preparation of
this Agreement and their consummation of the transactions contemplated hereby,
including without limitation the fees and expenses of their respective counsel,
accountants and consultants.
Section 4.3 No Brokers. The Seller and the Purchaser each represent and
warrant to the other that no broker or finder has been involved or engaged by it
in connection with the transactions contemplated hereby, and each hereby agrees
to indemnify and save harmless the other from and against any and all broker's
or finder's fees, commissions or similar charges incurred or alleged to have
been incurred by the indemnifying party in connection with the transactions
contemplated hereby and any and all loss, liability, cost or expense (including
reasonable attorneys' fees) arising out of any claim that the indemnifying party
incurred any such fees, commissions or charges.
Section 4.4 Bulk Transfer Compliance. Inasmuch as the Seller has agreed
to duly pay, perform and discharge the Excluded Liabilities and Obligations, the
Purchaser and the Seller hereby mutually agree to waive compliance with the
provisions of the Florida Bulk Sales laws and of the corresponding laws of any
other jurisdiction, to the extent applicable to the transactions contemplated
hereby. The Seller covenants and agrees to indemnify and save harmless the
Purchaser from and against any and all loss, liability, cost and expense
(including reasonable attorneys' fees) arising out of noncompliance with said
Bulk Transfers.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 Conditions to the Purchaser's Obligations. The obligations
of the Purchaser to complete the Closing are contingent upon the fulfillment of
each of the following conditions on or before the Closing Date, except to the
extent that the Purchaser may, in its absolute discretion, waive any one or more
thereof in whole or in part:
(a) Instruments of Transfer. The Seller shall have delivered to the
Purchaser such assignments, bills of sale, deeds, certificates of title and
other instruments of transfer, all in
12
<PAGE> 13
form reasonably satisfactory to the Purchaser, as are necessary to fully and
effectively convey to the Purchaser all of the Subject Assets in accordance with
the terms hereof and shall have executed the Consignment Agreement.
(b) No Material Adverse Change. On the date of Closing, there shall not
have occurred any event or condition materially and adversely affecting the
financial condition, results of operations or business prospects of the Seller
from those reflected on the enclosed Financial Statements, except for matters
resulting from adverse changes in economic conditions affecting businesses
generally.
(c) No Adverse Proceedings. No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been commenced, no
investigation by any governmental or regulatory authority shall have been
commenced, and no action, suit or proceeding by any governmental or regulatory
authority shall have been threatened against any of the parties to this
Agreement, or any of the principals, officers or directors of any of them, or
any of the Subject Assets seeking to restrain, prevent or change the
transactions contemplated hereby or questioning the validity or legality of any
of such transactions or seeking damages in connection with any of such
transactions.
(d) Other Assurances. The Seller shall have delivered to the Purchaser
such other and further certificates, assurances and documents as the Purchaser
may reasonably request in order to evidence the accuracy of the Seller's
representations and warranties, the performance of its covenants and agreements
to be performed at or prior to the Closing, and the fulfillment of the
conditions to the Purchaser's obligations.
(e) Lease of Facilities. Purchaser and the owner shall enter into
leases for the facilities in which Seller's business is presently located (the
"Leases").
(f) Closing on JT-3/ASAP. M. Mike Evans shall have satisfactorily
negotiated and closed on the JT-3/ASAP consignment with a payment of $175,000.00
for the consignment rights.
(g) Director and Shareholder Approval. All necessary director and
shareholder approval shall be given by Seller.
Section 5.2 Conditions to the Seller's Obligations. The obligations of
the Seller to complete the Closing are contingent upon the fulfillment of each
of the following conditions on or before the Closing Date, except to the extent
that the Seller may, in its absolute discretion, waive any one or more thereof
in whole or in part:
13
<PAGE> 14
(a) Payment of Purchase Price. The Purchaser shall have paid to the
Seller the Purchase Price.
(b) Employment Agreement. Purchaser shall enter into an employment
agreement with M. Mike Evans substantially in the form of Exhibit 5.2(b) hereto.
(c) No Adverse Proceedings. No action, suit or proceeding before any
court or any governmental or regulatory authority shall have been commenced, no
investigation by any governmental or regulatory authority shall have been
commenced, and no action, suit or proceeding by any governmental or regulatory
authority shall have been threatened, against any of the parties to this
Agreement, or any of the principals, officers or directors of any of them, or
any of the Subject Assets, seeking to restrain, prevent or change the
transactions contemplated hereunder or questioning the validity or legality of
any of such transactions or seeking damages in connection with any of such
transactions.
(d) Other Assurances. The Purchaser shall have delivered to the Seller
such other and further certificates, assurances and documents as the Seller may
reasonably request in order to evidence the accuracy of the Purchaser's
representations and warranties, the performance of its covenants and agreements
to be performed at or prior to the Closing, and the fulfillment of the
conditions to the Seller's obligations.
(e) Director Approval. The Agreement shall have been approved by the
Directors of the Purchaser.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification by the Seller. Subject to the procedures
and limitations set forth in this Article VI, the Seller hereby agrees to
indemnify and save harmless the Purchaser from and against any and all
liabilities, losses, claims, judgments, damages, expenses and costs (including,
without limitation reasonable counsel fees and costs and expenses incurred in
connection therewith) (a "Loss") incurred by the Purchaser arising after the
Closing out of any of the following:
(a) Breach of Warranty. The falsity or incorrectness of any
representation or warranty made by the Seller in this Agreement or in any
instrument or document delivered by the Seller to the Purchaser pursuant to this
Agreement;
(b) Breach of Covenants. The Seller's failure to duly perform any
covenant or agreement to be performed by it under this Agreement or under any
instrument or document delivered by the Seller to the Purchaser pursuant to this
Agreement;
14
<PAGE> 15
(c) Claims Against Subject Assets. Any levy or other claim by any third
party against or with respect to the Subject Assets, or any other claim by any
third party against the Purchaser, arising out of any act or omission or alleged
act or omission of the Seller prior to the Closing.
The Purchaser shall have the right to be put in the same financial position as
it would have been in had each of the representations and warranties of the
Seller been true and correct or had the Seller not breached any representations,
warranties, covenants or agreements.
Section 6.2 Survival of the Seller's Warranties. The representations
and warranties of the Seller made in this Agreement or in any instrument or
document delivered by the Seller to the Purchaser pursuant to this Agreement
shall survive the Closing.
Section 6.3 Indemnification by the Purchaser. After the Closing, the
Purchaser agrees that it will indemnify and save harmless the Seller from and
against any and all loss, liability, damages, cost or expense (including
reasonable attorneys' fees) incurred by the Seller (net of any benefits to the
Seller) arising out of the Purchaser's breach of any of its representations,
warranties, covenants and agreements in this Agreement or in any document
delivered by the Purchaser to the Seller hereunder.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Merger Clause. This Agreement contains the final, complete
and exclusive statement of the agreement between the parties with respect to the
transactions contemplated herein and all prior or contemporaneous written or
oral agreements with respect to the subject matter hereof are merged herein.
Section 7.2 Amendments. No change, amendment, qualification or
cancellation hereof shall be effective unless in writing and executed by each of
the parties hereto by their duly authorized officers.
Section 7.3 Benefits and Binding Effect. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
Section 7.4 Notices. All notices, requests and demands and other
communications hereunder must be in writing and shall be deemed to have been
duly given when (i) personally delivered, (ii) when forwarded by Federal
Express, Airborne or another private carrier which maintains records showing
delivery information, (iii) when sent via facsimile transmission but only if a
written or
15
<PAGE> 16
facsimile acknowledge of receipt is received by the sending party, or (iv) when
placed in the United States Mails and forwarded by Registered or Certified Mail,
return receipt requested, postage prepaid, addressed to the party to whom such
notice is being given at the following addresses:
AS TO THE SELLER: Global Turbine Services, Inc.
Hollywood-N. Perry Airport
7501 Pembroke Road
Pembroke Pines, FL 33023
Turbine Inspections, Incorporated
Hollywood-N. Perry Airport
7501 Pembroke Road
Pembroke Pines, FL 33023
AS TO THE PURCHASER: American Aircarriers Support,
Incorporated
Attn: Karl F. Brown
P. O. Box 7566
Charlotte, NC 28241
WITH COPY TO: David M. Furr
Gray, Layton, Kersh, Solomon,
Sigmon, Furr & Smith, P.A.
P. O. Box 2636
Gastonia, NC 28053-2636
Any party may change the address(es) to which notices to it are to be sent by
giving notice of such change to the other parties in accordance with this
Section.
Section 7.5 Captions. The captions are for convenience of reference
only and shall not be construed as a part of this Agreement.
Section 7.6 Governing Law. This Agreement shall be construed,
interpreted, enforced and governed by and under the laws of the State of
Florida.
Section 7.7 Exhibits. All of the Exhibits hereto referred to in this
Agreement are hereby incorporated herein by reference and shall be deemed and
construed to be a part of this Agreement for all purposes.
Section 7.8 Severability. The invalidity or unenforceability of any one
or more phrases, sentences, clauses or provisions of this Agreement shall not
affect the validity or enforceability of the remaining portions of this
Agreement or any part thereof.
16
<PAGE> 17
Section 7.9 Counterparts. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Seller and the Purchaser have each caused this
Agreement to be executed by their respective duly authorized officers under
seal, all as of the day and year first above written.
17
<PAGE> 18
SELLER:
GLOBAL TURBINE SERVICES, INC.
By /s/ Mike Evans
-----------------------------
President
ATTEST:
/s/ Diane M. Evans
- ---------------------------
Secretary
TURBINE INSPECTIONS, INCORPORATED
By /s/ Mike Evans
-----------------------------
President
ATTEST:
/s/ Diane M. Evans
- ---------------------------
Secretary
PURCHASER:
AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
By /s/ Karl F. Brown
-----------------------------
President
ATTEST:
/s/ David M. Furr
- ---------------------------
Secretary
18
<PAGE> 19
EXHIBIT "A"
OPERATING ASSETS
* 1) Property, plant, furniture and
equipment: $ 85,540
* 2) Inventory: $ 410,000
** 6) Buyout Joint Venture #1: $ 262,500
** 7) Buyout Joint Venture #2: $ 255,600
8) Accounts Receivable (assuming
collectability) $ 91,392
----------
$1,105,032
* = Cash
** = Stock
19
<PAGE> 20
EXHIBIT "B"
REGISTRATION RIGHTS AGREEMENT
20
<PAGE> 21
EXHIBIT 1.1(c)
CONSIGNMENT AGREEMENT
21
<PAGE> 22
EXHIBIT 1.5(a)(i)
ORDINARY TRADE PAYABLES
22
<PAGE> 23
EXHIBIT 2.4
LEASES
None
23
<PAGE> 24
EXHIBIT 2.2(c)
INTELLECTUAL PROPERTY
None
24
<PAGE> 25
EXHIBIT 2.5
CAPITAL EXPENDITURES
Big forklift is needed to be purchased.
25
<PAGE> 26
EXHIBIT 2.6(b)
PENDING OR THREATENED LITIGATION
None
26
<PAGE> 27
EXHIBIT 2.6(c)
INVESTIGATIONS
None
27
<PAGE> 28
EXHIBIT 2.6(d)
JUDGMENTS and ORDERS
None
28
<PAGE> 29
EXHIBIT 2.7
ENVIRONMENTAL MATTERS
1. A HAZMAT will not be done.
2. There is a waste oil tank. It is used and is contained.
3. There are no underground storage tanks that are part of Seller's
leasehold.
4. Mike Evans will remove any HAZMAT at his own expense.
29
<PAGE> 30
EXHIBIT 2.8
EMPLOYEE CENSUS
<TABLE>
<CAPTION>
EMPLOYEE W-4 GROSS FICA WITHHOLDING NET
-------- --- ----- ---- ----------- ---
<S> <C> <C> <C> <C> <C>
Michael Evans M-0 $5,000.00 $1,333.85 $ 382.50 $3,283.65
Dianne Evans*** M-0 $2,500.00 $ 432.00 $ 191.25 $1,876.75
Robert Sullivan S-0 $1,826.92 $ 363.00 $ 139.76 $1,324.16
Vincent Sullivan* M-2 $1,923.08 $ 206.00 $ 147.11 $1,630.17
Chris Hanlon**** S-0 $1,100.00 $ 161.00 $ 84.15 $ 854.85
Laura Smyth** S-3 $ 668.00 $ 38.00 $ 51.11 $ 578.89
</TABLE>
Note: 26 pay periods
* = As of 8/3/98 added to the payroll
** = As of 8/24/98 added to the payroll
*** = As of 9/4/98 deleted from the payroll
**** = As of 8/3/98 pay increase from $26,000 to $28,600
30
<PAGE> 31
EXHIBIT 5.2(b)
EMPLOYMENT AGREEMENT
31
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of October 1, 1998 by and
among AMERICAN AIRCARRIERS SUPPORT, INCORPORATED, a Delaware corporation (the
"Company") and Mr. M. MIKE EVANS (the "Holder").
The parties agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) "Common Stock" means the Company's Common Stock, $.001 par
value;
(b) "Registrable Securities" means 90,104 shares of Common
Stock to be issued to the Holder upon closing of that certain Asset
Purchase Agreement of even date (the "Agreement"; certain terms not
defined herein but used herein are used as defined in the Agreement);
(c) "register" and "registration" refer to a registration of
the Registrable Securities effected by filing a registration statement
or similar document pursuant to the Securities Act of 1933, as amended
(the "Act") and the declaring or ordering of effectiveness of such
registration statement; and
(d) The "Company" means American Aircarriers Support,
Incorporated, a Delaware corporation.
Section 2. Demand Registration.
(a) If at any time after July 1, 1999 the Company receives a
written request from the Holder that the Company file a registration
statement under the Act covering the registration of Registrable
Securities held by him, then the Company shall, subject to the
limitations of this Section 2, use its best efforts to, within six
months of the date of such request, effect the registration under the
Act of all Registrable Securities and will keep such registration
statement effective for a minimum period of 12 months thereafter. The
Company shall be obligated to effect only one (1) registration pursuant
to this Section 2(a).
(b) If the Holder intends to distribute the Registrable
Securities covered by his request by means of an underwriting, he shall
so advise the Company as a part of his request made pursuant to this
Section 2. The Holder shall (together with the Company as provided in
Section 3) enter into an underwriting agreement in customary form with
a mutually acceptable underwriter or underwriters.
Section 3. "Piggyback" Rights. For a period of one (1) year from
October 1, 1998, and if (but without any obligation to do so) the Company
proposes to register any of its securities under the
<PAGE> 2
Act in connection with a public offering of such common stock for cash proceeds
payable in whole or in part to the Company (other than with respect to a
Registration Statement filed on Form S-8 or Form S-4 or such other similar form
then in effect under the Securities Act), the Company shall, at such time,
subject to the provisions of Section 6 and 7 hereof and upon request of the
Holder cause to be registered under the Act all of the Registrable Securities
which the Holder requests be registered; provided, however, if the managing
underwriter of the public offering of shares proposed to be registered by the
Company advises the Holder in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the number of shares
of Registrable Securities of the Holder that may be included in the underwriting
shall be so limited prorata. Such "piggyback rights" shall expire on the
registration and sale of the Registrable Securities pursuant to Section 2 above
or upon the sale of the Registrable Securities hereunder, but in no event later
than October 1, 1999.
Section 4. Registration Procedure. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as is reasonably possible:
(a) Furnish to the Holder of the Registrable Securities
covered by such registration statement such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as he may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by him.
(b) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such
offering. The Holder participating in such underwriting shall also
enter into and perform his obligations under such agreement.
(c) Notify the Holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be
delivered under the Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing.
Section 5. Furnish Information. The Holder shall promptly furnish to
the Company in writing such reasonable information regarding the Holder, the
Registrable Securities held by the Holder, and the intended method of
disposition of such securities
2
<PAGE> 3
as shall be required to effect the registration of his Registrable Securities.
Section 6. Expenses of Registration. All of the foregoing expenses
relating to the Registrable Securities incurred in connection with registration,
filing or qualification pursuant to this Agreement, including (without
limitation) all registration, filing and qualification fees, printers' bills,
mailing and delivery expenses, accounting fees, and the fees and disbursements
of counsel for the Company, but excluding underwriting discounts or fees, shall
be borne by the Company.
Section 7. Indemnification and Contribution. In the event any
Registrable Securities are included in a registration statement under this
Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless the Holder, the officers and directors of each
Holder, any underwriter (as defined in the Act) for such holder, and
each person, if any, who controls such Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934 (the
"Exchange Act"), against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Act, the
Exchange Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse each
such Holder, officer or director, underwriter or controlling person for
any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage,
liability, or action; provided however, that the indemnity agreement
contained in this Section 7(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if
such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in such registration statement, preliminary prospectus or final
prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by any such Holder, underwriter or
controlling person; provided, further, however, that if any
3
<PAGE> 4
losses, claims, damages or liabilities arise out of or are based upon
any untrue statement, alleged untrue statement, omission or alleged
omission contained in any preliminary prospectus, and made in reliance
upon and in conformity with written information furnished by such
Holder expressly for use therein, which did not appear in the final
prospectus, the Company shall not have any such liability with respect
thereto to such Holder, any person who controls such Holder within the
meaning of the Act, or any director of such Holder, if such Holder
delivered a copy of the preliminary prospectus to the person alleging
such losses, claims, damages or liabilities and failed to deliver a
copy of the final prospectus, as amended or supplemented if it has been
amended or supplemented, to such person at or prior to the written
confirmation of the sale to such person, provided that such Holder had
an obligation to deliver a copy of the final prospectus to such person;
and
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Act, any
underwriter and any other Holder selling securities in such
registration statement or any of its directors or officers or any
person who controls such Holder or underwriter against any losses,
claims, damages or liabilities, joint or several) to which the Company
or any such director, officers, controlling person, or underwriter or
controlling person, or other such Holder or director, officer or
controlling person may become subject, under the Act, the Exchange Act
or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, if the untrue statement or omission or alleged
untrue statement or omission in respect of which such loss, claim,
damage or liability is asserted was made in reliance upon and in
conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter
or controlling person, or other Holder, officer, director, or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that
the indemnity agreement contained in this Section 7(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
4
<PAGE> 5
liability or action, if such settlement is effected without the consent
of the Holder (which consent shall not be unreasonably withheld);
provided, further that the maximum liability of any selling Holder
under this Section 7(b) in regard to any registration statement shall
in no event exceed the amount of the proceeds received by such selling
Holder from the sale of securities under such registration statement;
provided, further however, that if any losses, claims, damages or
liabilities arise out of or are based upon an untrue statement, alleged
untrue statement, omission or alleged omission contained in any
preliminary prospectus which did not appear in the final prospectus,
such seller shall not have any such liability with respect thereto to
the Company, any person who controls the Company within the meaning of
the Act, any officer of the Company who signed the registration
statement or any director of the Company, if the Company delivered a
copy of the preliminary prospectus to the person alleging such losses,
claims, damages or liabilities and failed to deliver a copy of the
final prospectus, as amended or supplemented if it has been amended or
supplemented, to such person at or prior to the written confirmation of
the sale to such person, provided that the Company had an obligation to
deliver a copy of the final prospectus to such person.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this
Section 7, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right
to participate in and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof with counsel mutually satisfactory to the parties.
An indemnified party shall have the right to retain its own counsel,
however, the fees and expenses of such counsel shall be at the expense
of the indemnified party, unless (i) the employment of such counsel has
been specifically authorized in writing by the indemnifying party, (ii)
the indemnifying party has failed to assume the defense and employ
counsel, or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised
by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of such
indemnified parry, it being understood, however, that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or
5
<PAGE> 6
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys for all indemnified parties). The
failure to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party
under this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities or actions in
respect thereof referred to therein, then each indemnifying party shall
in lieu of; indemnifying such indemnified party contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities or actions in such proportion as
is appropriate to reflect the relative fault of the Company, on the one
hand, and selling Holder, on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any required notice. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by such
selling Holder on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto acknowledge and agree
that it would not be just and equitable if contribution pursuant to
this subparagraph (d) were determined by prorata allocation (even if
all of the selling Holder were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subparagraph (d).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or actions in respect thereof
referred to above in this subparagraph (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subparagraph (d), the
amount the selling Holder shall be required to contribute shall not
exceed the amount, if any, by which the total price at which the
securities sold by each of them were offered to the public exceeds the
amount of any damages which they would have otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission, or other violation of law. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of fraudulent misrepresentation
Section 8. Miscellaneous.
6
<PAGE> 7
(a) Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the Company and to the Holder and their
respective heirs, personal representatives, successors and assigns.
(b) Notices. Except as otherwise provided herein, any notice,
consent or request to be given in connection with any term or provision
of this Agreement shall be deemed to have been given sufficiently if
sent by hand, registered or certified mail, postage prepaid, facsimile
transmission or courier (next day delivery), to the Company or to the
Holder at their respective addresses as provided on or about the date
hereof.
(c) Integration. This Agreement contains the entire agreement
between the parties with respect to the transactions contemplated
hereby and no party shall be bound by, nor shall any party be deemed to
have made, any covenants, representations, warranties undertakings or
agreements except those contained in such entire Agreement. The section
and paragraph headings contained in this Agreement are for the
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same agreement.
(e) Amendment. This Agreement may be amended, changed, waived
or terminated only in writing signed by each of the parties.
IN WITNESS WHEREOF, this Agreement has been executed effective as of
the date first above written.
AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
By /s/ Karl Brown
-------------------------------
President
HOLDER:
/s/ Mike Evans (SEAL)
-----------------------------
M. MIKE EVANS
7
<PAGE> 1
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT effective October 1, 1998 (the
"Agreement") by and between AMERICAN AIRCARRIERS SUPPORT, INCORPORATED (the
"Company") with principal offices at Fort Mill, South Carolina and M. MIKE EVANS
(the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and the
Executive agrees to serve the Company as its Vice President of Power Plant
Operations.
2. Position and Responsibilities. The Executive shall exert his best
efforts and devote full time and attention to the affairs of the Company. The
Executive shall have the authority and responsibility given by the general
direction, approval and control of the Board of Directors, President and Chief
Executive Officer of the Company, to the restrictions, limitations and
guidelines set forth by the Board of Directors in resolutions adopted in the
minutes of the Board of Directors meetings, copies of which will be provided to
the Executive from time to time and will be incorporated herein by reference.
3. Term of Employment. The term of the Executive's employment under
this Agreement shall be deemed to have commenced on October 1, 1998 and shall
continue until October 1, 2001, (the "Initial Term"), subject to extension as
hereinafter provided or termination pursuant to the provisions set forth
hereafter. Provided that Executive is in compliance with all of his obligations
hereunder, the term of Executive's employment shall be automatically extended
for an additional one-year term upon expiration of the Initial Term unless
either party hereto receives 30 days' prior written notice from the other
electing not to extend the Executive's employment. Compensation during the term
shall be that set forth in Section 5 hereof, unless one of the termination
provisions overrides.
4. Duties. During the period of his employment hereunder and except for
illness, specified vacation periods and reasonable leaves of absence, the
Executive shall devote his best efforts and full attention and skill to the
business and affairs of the Company and its affiliated companies, as such
business and affairs now exist and as they may be hereinafter changed or added
to, under and pursuant to the general direction of the Board of Directors of the
Company.
5. Compensation. Commencing on October 1, 1998, the Company shall pay
to the Executive as compensation for his services the sum
<PAGE> 2
2
of $150,000.00 per year, payable semi-monthly, until August 31, 1999. For years
two and three, Executive's salary shall be $175,000.00 and $200,000.00 per year,
respectively.
6. Expense Reimbursement. The Company will reimburse the Executive, at
least semi-monthly, for all reasonable and necessary expenses, including without
limitation, travel expenses, and reasonable entertainment expenses, incurred by
him in carrying out his duties under this Agreement. The Executive shall present
to the Company each month an account of such expenses in such form as is
reasonably required by the Board of Directors.
7. Medical and Dental Coverage. Commencing October 1, 1998, the
Executive will be entitled to participate in the Company's employee group
medical and other group insurance programs on the same basis as other executives
of the Company.
8. Medical Examination. The Executive agrees to submit himself for
physical examination on one occasion per year as requested by the Company for
the purpose of the Company's obtaining life insurance on the life of the
Executive for the benefit of the Company as may be required; provided, however,
that the Company shall bear the entire cost of such examinations and shall pay
all premiums on any key man life insurance obtained for the benefit of the
Company as beneficiary or with respect to any other designated beneficiary.
9. Vacation Time. The Executive shall be entitled each year to a
reasonable vacation in accordance with the established practices of the Company,
now or hereafter in effect for the executive personnel, during which time the
Executive's compensation shall be paid in full.
10. Benefits Payable on Disability. If the Executive becomes disabled
from properly performing services hereunder by reason of illness or other
physical or mental incapacity, the Company shall continue to pay the Executive
his then current salary hereunder for the first three (3) months of such
continuous disability commencing with the first date of such disability.
11. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the terms of his
employment under this Agreement, he will engage in no other business
activities directly or indirectly, which are competitive with or which
might place him in a competing position to that of the Company, or any
affiliated company.
(b) The Executive realizes that during the course of his
employment, Executive will have produced and/or have access to
confidential business plans, information, business opportunity
<PAGE> 3
3
records, notebooks, data, formula, specifications, trade secrets,
customer lists, account lists and secret inventions and processes of
the Company and its affiliated companies. Therefore, during or
subsequent to his employment by the Company, or by an affiliated
company, the Executive agrees to hold in confidence and not to directly
or indirectly disclose or use or copy or make lists of any such
information, except to the extent authorized by the Company in writing.
All records, files, business plans, documents, equipment and the like,
or copies thereof, relating to Company's business, or the business of
an affiliated company, which Executive shall prepare, or use, or come
into contact with, shall remain the sole property of the Company, or of
an affiliated company, and shall not be removed from the Company's or
the affiliated company's premises without its written consent, and
shall be promptly returned to the Company upon termination of
employment with the Company and its affiliated companies. The
restrictions and obligations of Executive set forth in this Section
12(b) shall not apply to (i) information that is or becomes generally
available and known to the industry (other than as a result of a
disclosure directly or indirectly by Executive); or (ii) information
that was known to Executive prior to Executive's employment by the
Company or its predecessor.
(c) Because of his employment by the Company, Executive shall
have access to trade secrets and confidential information about the
Company, its business plans, its business accounts, its business
opportunities, its expansion plans into other geographical areas and
its methods of doing business. Executive agrees that for a period of
two (2) years after termination or expiration of his employment, he
will not, directly or indirectly, compete with the Company in its then
present business or anticipated lines of business.
(d) In the event a court of competent jurisdiction finds any
provision of this Section 12 to be so overbroad as to be unenforceable,
then such provision shall be reduced in scope by the court, but only to
the extent deemed necessary by the court to render the provision
reasonable and enforceable, it being the Executive's intention to
provide the Company with the broadest protection possible against
harmful competition.
12. Termination for Cause by the Company. The Company may, without
liability, terminate the Executive's employment hereunder for cause at any time
upon written notice from the Board of Directors specifying such cause, and
thereafter the Company's obligations hereunder shall cease and terminate;
provided, however, that such written notice shall not be delivered until after
the Board of Directors shall have given the Executive written notice specifying
the conduct alleged to have constituted such cause and
<PAGE> 4
4
the Executive has failed to cure such conduct, if curable, within fifteen (15)
days following receipt of such notice. Grounds for termination "for cause" are
one or more of the following:
(a) A willful breach of a material duty by the Executive
during the course of his employment;
(b) Habitual neglect of a material duty by the Executive;
(c) Action or inaction by the Executive which places the
Company in circumstances of financial peril; and
(d) Fraud on the Company or conviction of a felony involving
or against the Company.
13. Termination by the Executive or the Company Without Cause.
(a) The Executive, without cause, may terminate this Agreement
upon 90 days prior written notice to the Company. In such event, the
Executive shall be required to render the services required under this
Agreement during such 90-day period unless otherwise directed by the
Board of Directors. Compensation for vacation time not taken by
Executive shall be paid to the Executive at the date of termination.
Executive shall be paid for only the ninety (90) day period pursuant to
normal pay practices and then all obligations regarding pay shall
cease.
(b) The Company, without cause, may terminate this Agreement.
In such event, the Company shall pay a severance allowance equal to the
balance of the contract payable over the term of the contract at
regular monthly installments unless the parties negotiate a mutually
acceptable discounted lump sum. No other benefits will be provided once
this Agreement is terminated.
14. Termination upon Death of Executive. In addition to any other
provision relating to the termination, this Agreement shall terminate upon the
Executive's death. In such event, the Company shall pay a severance allowance
equal to one hundred eighty (180) days' salary to the Executive's estate.
15. Arbitration. Any controversy, dispute or claim arising out of, or
relating to, this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Charlotte, North
Carolina in accordance with the Rules of the American Arbitration Association
then existing. This Agreement to arbitrate shall be specifically enforceable
under
<PAGE> 5
5
the prevailing arbitration law of the State of South Carolina. The award
rendered by the arbitrators shall be final and judgment may be entered upon the
award in any court of the State of South Carolina having jurisdiction of the
matter.
16. General Provisions.
(a) The Executive's rights and obligations under this
Agreement shall not be transferrable by assignment or otherwise, nor
shall Executive's rights be subject to encumbrance or to the claims of
the Company's creditors. Nothing in this Agreement shall prevent the
consolidation of the Company with, or its merger into, any other
corporation, or the sale by the Company of all or substantially all of
its property or assets.
(b) This Agreement and the rights of Executive with respect to
the benefits of employment referred to herein constitute the entire
Agreement between the parties hereto in respect of the employment of
the Executive by the Company and supersede any and all other agreements
either oral or in writing between the parties hereto with respect to
the employment of the Executive.
(c) The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part thereof are
declared invalid or unenforceable by a court of competent jurisdiction
or in an arbitration proceeding, the validity and enforceability of the
remainder of such provisions or parts thereof and the applicability
thereof shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a
written instrument executed by Company and Executive.
(e) This Agreement and the rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the
State of South Carolina.
17. Construction. Throughout this Agreement the singular shall include
the plural, and the plural shall include the singular, and the masculine and
neuter shall include the feminine, wherever the context so requires.
18. Text to Control. The headings of paragraphs and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
19. Authority. The officer executing this agreement on behalf of the
Company has been empowered and directed to do so by the Board of Directors of
the Company.
<PAGE> 6
6
20. Effective Date. This Agreement may be executed on the dates noted
below but shall only be effective on October 1, 1998.
FOR THE COMPANY: AMERICAN AIRCARRIERS SUPPORT, INC.
Dated October 1, 1998 By /s/ Karl Brown
--------------------- ----------------------------
Title: President & C EO
FOR THE EXECUTIVE:
Dated October 1, 1998 /s/ Mike Evans (SEAL)
--------------------- ---------------------------
M. MIKE EVANS
<PAGE> 1
STATE OF SOUTH CAROLINA
COUNTY OF YORK
CONSIGNMENT AGREEMENT BETWEEN
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED AND
MIKE EVANS
THIS CONSIGNMENT AGREEMENT ("Agreement") is made on the ____ day of
October, 1998, by and between AMERICAN AIRCARRIERS SUPPORT, INCORPORATED, a
Delaware corporation ("AAS") and MIKE EVANS, a Florida resident ("Evans"). AAS
and Evans referred together hereafter as the ("Parties").
RECITALS
1. The Parties desire to enter into an exclusive consignment
arrangement whereby Evans will consign to AAS all of its JT-3/ASAP aircraft
parts inventory and/or aircraft parts inventory controlled by Evans and/or other
aircraft parts inventory or equipment that may be made subject to this Agreement
at a later date ("Spare" or "Spares").
2. This Agreement sets forth the terms of the Consignment Agreement
between Evans and AAS.
STATEMENT OF AGREEMENT
In consideration of the above recitals and mutual covenants and
benefits provided herein, the Parties agree as follows:
1. Definitions. The following definitions shall apply:
a) Addendum. The document approved by Evans and AAS, which
identifies the Spares and sets forth the part number, quantity and
manufacturer's serial number, if known, and is subject to revisions
from time to time as both parties see fit.
b) Exchange. A transaction by which a third party requests
that a Spare held by AAS be shipped to the third party in order to
replace a part owned by the third party which is in need of repair. AAS
then sends the requested part to the third party and the third party
then sends the part needing repair to AAS. AAS has the part repaired
and retains it in AAS' inventory and bills the third party for the cost
of repair.
c) Exchange Fee. The amount billed to a third party and paid
to AAS pursuant to an exchange.
<PAGE> 2
2
d) Exchange Unit. The Spare originally consigned to AAS by
Evans which is shipped to a third party in an exchange.
e) Extended Price. The total price of all identical Spares
held by AAS.
f) Gross Profit. The total amount of the purchase price
received by AAS from a third party without the deduction of any costs
or expenses.
g) Net Profit. The profit remaining from a sale of a Spare
after AAS has subtracted any costs of repair, overhaul, recertification
and freight of the Spare from the Gross Profit.
h) Premises. The facility at 3516 Centre Circle Drive, Fort
Mill, South Carolina, at which AAS shall store the Spares consigned to
AAS by Evans. However, Spares may be stored at a location owned and
controlled by Evans as the parties see fit.
i) Off Unit. The Spare received from a third party after an
exchange is completed.
j) Notice of Inspection. The written notice to be provided by
Evans not less than twenty-four (24) hours prior to any inspection to
be carried out by Evans pursuant to paragraph 3. below.
k) Spares. The aircraft parts to be consigned by Evans to AAS
under this Agreement, as provided in paragraph 2.
below.
2. Consignment.
a) For each shipment of Spares to be consigned by AAS, Evans
shall provide Notice of Consignment.
b) Evans shall deliver to AAS on consignment such Spares as
the parties shall mutually approve and identify by execution of an
Addendum in the form described in Section 1(a). Each Addendum shall be
numbered sequentially beginning with Evans Addendum No. 1. These
Addendum's may be in the form of inventory listings that both parties
agree are complete and accurate.
3. Storage.
a) AAS shall, at its own expense, provide for the warehousing,
storage, removal, maintenance, marketing, sale and shipment (to
customers) of the Spares consigned and delivered to AAS, and AAS shall
also provide for all
<PAGE> 3
3
management, operating, accounting, and billing in connection therewith.
b) AAS shall keep all Spares identified as the property of
Evans distinguishable from any other goods owned or in the possession
of AAS.
c) AAS shall store and maintain the Spares in accordance with
customary aircraft spare parts storage standards in order to prevent
any damage and/or deterioration of the Spares that may be avoided by
following such standards.
d) Evans or its representatives shall have the right to
inspect all Spares consigned to AAS at reasonable times. To exercise
this right, Evans shall provide to AAS a written Notice of Inspection
at least 24 hours prior to the actual inspection. In order to conduct
such inspection, AAS shall permit Evans or its representatives to enter
the AAS premises.
4. Location. AAS shall store all Spares and any necessary records
concerning the Spares at the AAS premises.
5. Consideration for Consignment Rights. Upon execution of this
Agreement, AAS shall pay Evans One Hundred Seventy-Five Dollars ($175,000.00)
for the consignment rights.
6. Distribution of Proceeds from Sale or Exchange of Spares. AAS shall
use its best efforts to sell the consigned Spares at the best competitive market
price, and in consideration of its efforts in selling the Spares, AAS shall be
entitled to receive fifty percent (50%) of the Net Profit. Evans shall receive
the remaining fifty percent (50%) of the Net Profit. All sales from inventory
will be to a legitimate third party purchaser and an arms length transaction.
After Evans receives a total of One Million Six Hundred Thousand Dollars
($1,600,000.00) of proceeds from the fifty percent (50%) portion of Net Profit
to be received by him, this Agreement shall terminate and AAS shall receive
legal ownership and title to all remaining Spares.
7. Reporting.
a) AAS shall furnish to Evans once every sixty (60) days
during the term of this Agreement a written report listing all
transactions, including but not limited to any sales, exchanges, or
returns involving any Spare(s) within the sixty (60) days immediately
prior to the report. The report shall include:
i) The date of each transaction;
ii) The AAS invoice number of each transaction;
<PAGE> 4
4
iii) The part number and physical description of
each Spare involved;
iv) The general physical condition of the Spares
involved;
v) The quantity of the Spares involved;
vi) The Unit Price of each Spare involved;
vii) The Extended Price of Spares involved, if
applicable.
b) Beginning sixty (60) days after the date of the first sale,
and every sixty (60) days thereafter, AAS shall provide the report
described in Section 6(a). Any Net Profit due (as described in Section
5) in the sixty (60) day period will be submitted along with said
report, providing that AAS has been paid for such transaction. In the
event that AAS has not been paid within the sixty (60) day period for
such transaction, AAS will submit any Net Profit due Evans on the 10th
day of the month immediately following payment to AAS for said
transaction.
8. Taxes.
a) Sales or use taxes imposed by federal, state or local
taxing authorities and payable as a result of the sale of any Spare
shall be paid by the third party purchaser and are to be collected by
AAS at the time of sale. AAS shall be responsible to pay such taxing
authorities and shall indemnify Evans with respect to such taxes.
b) All property taxes on the Spares are the sole
responsibility of Evans as the owner and title holder of the Spares.
c) All income taxes due (federal, state or local) from the Net
Profit paid to Evans by AAS will be the sole responsibility of Evans
and Evans agrees to indemnify AAS for the payment of such tax.
9. Warranty of Title.
a) Evans shall, at all times prior to the consignment of any
Spare to AAS, have legal ownership and title thereto, free and clear of
all liens, claims, charges and encumbrances and shall indemnify AAS of
the same. Evans represents, warrants and indemnifies that title to the
consigned inventory is solely in his name and no other entity.
b) AAS shall not assign, dispose of, or grant any security
interest in or execute any financing statement in favor of any person
other than Evans covering any Spare.
10. Risk of Loss.
<PAGE> 5
5
a) AAS shall, at its expense, procure and maintain "risk"
insurance in form and amount satisfactory to Evans covering the Spares
under AAS' possession.
b) AAS shall cooperate fully with Evans to obtain the payment
to Evans of any insurance proceeds owing Evans as a result of damage to
any Spare covered by the insurance referenced in subsection (a) of this
paragraph.
11. Term of Agreement. This Agreement shall be for a term of five (5)
years and shall be automatically renewed for an additional five (5) year term,
unless either party gives written notice of its intent to terminate this
Agreement, which notice shall be given no later than six (6) months prior to the
end of the initial five (5) year term.
12. Termination of Agreement. Either party shall have the right to
terminate this Agreement at their sole option, upon thirty (30) days written
notice. Either party shall have the right to terminate without notice in the
event that:
a) Either party shall become insolvent, or if a petition in
bankruptcy shall be filed by or against either party.
b) Either party shall fail to make any payments required by
this Agreement.
This Agreement shall automatically terminate upon Evans receiving One
Million Six Hundred Thousand Dollars ($1,600,000.00) of proceeds from the fifty
percent (50%) portion of Net Profit to be received by him. Upon said automatic
termination, AAS receives legal title and ownership of the Spares.
13. Forced Delay. Neither party shall be liable for or deemed in
default on account of failure to perform or for any delays in performance under
this Agreement due to any cause which is beyond their reasonable control or
without their fault or negligence.
14. Indemnity. Evans agrees to assume and to release, indemnify,
protect, defend and hold harmless AAS and its named consignors, their assignees
and their directors, officers, agents and employees from and against any and all
claims, suits, actions, judgments, liabilities, and expenses of any nature,
including but not limited to those arising from death or injury to any person
and for loss of, or damage to or loss of use of any property whatsoever,
including but not limited to any Spare, in any manner arising out of, or
resulting from any actions or events taken or proximately caused from the sale,
delivery, ownership, installation, use or operation of any Spare, regardless of
whether such claims, suits, actions, judgments, liabilities or expense
<PAGE> 6
6
arise in tort, including strict liability. Except that such Indemnity shall not
apply to:
a) misrepresentation or gross negligence of AAS; or
b) any claims relating to off units.
15. Assignment. This Agreement shall inure to the benefit of and be
binding upon the Parties and their respective successors and assigns, but
neither the rights nor the duties of either AAS or Evans under this Agreement
may be voluntarily assigned.
16. Complete Agreement. This Agreement and the agreements and documents
referred to herein contain the complete agreement between the Parties and
supersede any prior understandings, agreements, or representations by or between
the Parties, written or oral, which may have related to the subject matter
hereof in any way.
17. Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be
given in writing and may be addressed as follows:
American Aircarriers Support, Incorporated
Post Office Box 7566
Charlotte, NC 28241
Attn: Karl F. Brown
Mike Evans
Hollywood-N. Perry Airport
7501 Pembroke Road
Pembroke Pines, FL 33023
18. Governing Law. The laws of the State of South Carolina will govern
all questions concerning the construction, validity, interpretation and
enforcement of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
By /s/ Karl Brown
----------------------------------
Title President
/s/ Mike Evans (SEAL)
--------------------------------
MIKE EVANS
