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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):
NOVEMBER 19, 1998
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 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 19, 1998, American Aircarriers Support, Incorporated (the
"Company") completed the acquisition of substantially all of the assets of
American Jet Engine Services, Inc. ("AmJet"), a FAA certified repair and
maintenance facility, pursuant to an Asset Purchase Agreement (the "Agreement")
dated as of November 19, 1998, but effective as of October 1, 1998 among the
Company, American Aircarriers Support Acquisition II Corp., a wholly owned
subsidiary of the Company formed for the purpose of effecting the acquisition
(the "Subsidiary"), AmJet, and Anton K. Khoury and Hanna K. Khoury, the
shareholders of AmJet (the "Shareholders"). Pursuant to the Agreement, the
Company acquired substantially all of the assets of AmJet for a purchase price
of $12,450,000 and assumption of certain accounts and trade payables, certain
warranty claims, employee bonuses, and claims and liability arising from
specified investigations. The purchase price was comprised of approximately
$8,600,000 cash paid from the Company's bank credit facility, the issuance of
625,000 shares of the Company's Common Stock valued at $3,750,000 and
adjustments of approximately $100,000 credited to the Company. In addition, the
Company acquired the inventories of Global Air Spares, Inc. ("GASI") and
Atlantic Airmotive Corporation ("AAC") and assumed an aircraft engine lease from
AAC for an aggregate purchase price of $2,550,000 cash, also paid from the
Company's bank credit facility. GASI and AAC, also owned by the Shareholders,
are redistributors of jet engines and engine parts. AmJet, GASI and AAC are all
located in Miami, Florida.
Simultaneously with the execution of the Agreement, the Company entered
into a lease with Anthony Khoury for one of the facilities in which AmJet's
business has been operating and another lease with Hanna Khoury for the other
facility in which AmJet's business has been operating. During the initial one
year term, the rental payments are $5,218 and $5,325 per month for the
approximately 12,000 square foot and 15,000 square foot facilities,
respectively.
For a period of one year, AmJet may "piggy-back" its 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.
AmJet also was granted the right to "demand" that the Company file a
registration statement under the Act covering such shares. The "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 AmJet
shares pursuant to either the piggy-back and demand registration rights are
payable by the Company, excluding underwriting discounts or fees.
Simultaneously with the execution of the Agreement, the Company
appointed Anton Khoury to the Board of Directors and also entered into a three
year employment agreement with each of the Shareholders. Under their respective
agreements, Anton K. Khoury is to serve as President of the Subsidiary and Hanna
K. Khoury is to serve as Executive Vice President of the Subsidiary, which will
continue the operations of AmJet. Both of these officers have substantial
experience in the jet engine and spare parts overhaul and maintenance industry.
Anton Khoury has over 18 years of industry experience. Prior to founding AmJet,
he was employed in various capacities with major commercial airlines and engine
repair agencies. Hanna Khoury has over 22 years of business experience. Before
founding GASI and AAC, he spent 12 years with the Northrop Corporation both in
Los Angeles and Saudi Arabia in support of such company's F-5 program.
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ITEM 5. OTHER EVENTS
The Board of Directors of the Company was expanded in order to appoint
Anton K. Khoury, as described above, and Michael F. Evans, who was named Vice
President of Power Plant Operations in conjunction with the recently completed
acquisition of the assets of Global Turbine Services, Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) It is impracticable to provide the required financial
statements for AmJet at this time. In accordance with Item 7(a)(1) of Form 8-K,
the Company will file the required financial statements as an amendment to this
Form 8-K as soon as practicable, but not later than 60 days after the date on
which this report on Form 8-K must be filed.
(b) It is impracticable to provide the required pro forma
financial information for AmJet and the Company at this time. In accordance with
Item 7(b)(2) of Form 8-K, the Company will file the required pro forma financial
information as an amendment to this Form 8-K as soon as practicable, but not
later than 60 days after the date on which this report on Form 8-K must be
filed.
(c) The following exhibits are furnished herewith in accordance
with the provisions of Item 601 of Regulation S-B:
<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- --------
<S> <C> <C>
2.4 Asset Purchase Agreement among the Company, American Jet Engine 2
Services, Inc. and its Shareholders and American Aircarriers
Support Acquisition II Corp.
4.4 Registration Rights Agreement between the Company and American Jet 4
Engine Services, Inc.
10.1.6 Executive Employment Agreement between the Company and Anton K. 10
Khoury
10.1.7 Executive Employment Agreement between the Company and Hanna K. 10
Khoury
10.5.4 Lease of Real Property between the Company and Anton K. Khoury 10
10.5.5 Lease of Real Property between the Company and Hanna K. Khoury 10
10.10 Inventory Sales Agreement between the Company and Global Air Spares, 10
Inc.
10.11 Aircraft Engine Sales Agreement between the Company and Atlantic 10
Airmotive Corporation
</TABLE>
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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 Act
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.
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: December 4, 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>
2.4 Asset Purchase Agreement among the Company, American Jet Engine 2
Services, Inc. and its Shareholders and American Aircarriers
Support Acquisition II Corp.
4.4 Registration Rights Agreement between the Company and American Jet 4
Engine Services, Inc.
10.1.6 Executive Employment Agreement between the Company and Anton K. 10
Khoury
10.1.7 Executive Employment Agreement between the Company and Hanna K. 10
Khoury
10.5.4 Lease of Real Property between the Company and Anton K. Khoury 10
10.5.5 Lease of Real Property between the Company and Hanna K. Khoury 10
10.10 Inventory Sales Agreement between the Company and Global Air Spares, 10
Inc.
10.11 Aircraft Engine Sales Agreement between the Company and Atlantic 10
Airmotive Corporation
</TABLE>
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EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into as of the 19th
day of November, 1998 but to be made effective as of October 1, 1998, by and
among AMERICAN JET ENGINE SERVICES, INC., a Florida corporation (the
"Seller"),d/b/a "Amjet, Inc.," ANTON K. KHOURY and HANNA K. KHOURY (collectively
referred to as "Shareholders") and AMERICAN AIRCARRIERS SUPPORT ACQUISITION II
CORP. (the "Purchaser"), a Florida Subsidiary of AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED, a Delaware corporation ("AASI").
W I T N E S S E T H:
WHEREAS, the Seller is engaged in the business of maintenance and
overhaul of aircraft parts and engines to commercial and cargo airlines, and
aircraft engine leasing and sales companies.
WHEREAS, the Shareholders own one hundred percent (100%) of the
outstanding shares of Seller.
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 for cash and certain stock in AASI.
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, substantially all the business and assets
of the Seller existing and owned by the Seller or used by the Seller in Seller's
business
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on the Closing Date (as defined in Section 1.2) relating to Seller's business,
other than the Excluded Assets (as defined in Section 1.1(b)). The 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 described on Exhibit 1.1(a)(i);
(ii) all the Seller's rights to prepaid license fees,
deposits, prepaid lease expenses and other rights acquired under any
leases, other than Excluded Assets (the "Prepaid Expenses"). The Seller
shall prepare a detailed listing of such Prepaid Expenses as of the
Closing Date which shall be included as Exhibit 1.1(a)(ii) hereto;
(iii) all furniture, fixtures, furnishings, tools, equipment,
supplies, parts, accessories, inventories, machinery, shelving,
computer equipment, signage, and other tangible personal property of
the Seller other than Excluded Assets (the "Tangible Property"),
including without limitation the items of Equipment and other Tangible
Property described on Exhibit 1.1(a)(iii) hereto and any additions or
accessions thereto or substitutions therefor or proceeds thereof;
(iv) all rights of the Seller under all contracts, service
agreements, advertising agreements, sales contracts, customer orders,
leases, licenses, and agreements other than Excluded Assets (the
"Contracts"), including without limitation the Seller's rights existing
on the Closing Date under the Contracts described or referred to in
Exhibit 1.1(a)(iv) hereto and Seller and Purchaser shall execute a bill
of sale and assignment and assumption agreement to this extent;
(v) (A) all rights of the Seller in the name "American Jet
Engine Services, Inc." or its d/b/a Amjet, Inc. and any trademarks,
tradenames or service marks, and all registrations thereof and pending
applications therefor, in connection therewith (the "Name"), and (B)
all other tradenames, trademarks, service marks, copyrights, licenses,
proprietary rights and technology, patents and registrations
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thereof or applications therefor, and trade secrets, secret processes
(whether or not patentable), supplies and vendor lists, customer lists,
software, inventions (whether or not patentable), formulae and other
property belonging to, used in or appertaining to the Seller's Subject
Assets, all as described on Exhibit 1.1(a)(v) hereto (collectively,
with the Name, the "Intellectual Property");
(vi) books, records, ledgers, files, documents,
correspondence, lists, prints, plans, drawings, and specifications,
creative materials, advertising and promotional materials, studies,
reports, and other printed or written materials directly related to
Seller's business other than Excluded Records (as defined in subsection
1.1(b)(ii) (the "Records");
(vii) all the Seller's federal, state and local governmental
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) shall be included on Exhibit 1.1(a)(vii)
hereto, and Seller shall make an assignment thereof to the Purchaser to
the extent such assignment is permitted by applicable law (the
"Licenses");
(viii) all the Seller's work-in-process; and
(ix) all accounts receivables owned by Seller at Closing and
listed on Exhibit 1.1(a)(ix).
(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) The Seller's cash balances as of Closing and any passive
investments of Seller as identified on Exhibit 1.1(b)(i).
(ii) The Seller's corporate minute books, stock records and
income tax records, and other records of the Seller relating
exclusively to Excluded Assets (the "Excluded Records"), however with
regard to tax return and financial statement information, Purchaser
shall have access to such
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information, including all accounting work papers, for the last three
(3) years to the extent the same are related to the Seller's business
being acquired hereunder as may be periodically requested;
(iii) The Seller's tax prepayments listed on Exhibit
1.1(b)(iii).
(iv) The personal property listed on Exhibit 1.1(b)(iv).
Section 1.2 Closing Date. The closing date (the "Closing Date") shall
be November 19, 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 Homer & Bonner, P.A., Miami, Florida, 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, subject to any
working capital adjustments set forth on Exhibit 1.3, to be paid to the Seller
for the Subject Assets (the "Purchase Price") shall be an amount equal to Twelve
Million Four Hundred Fifty Thousand Dollars ($12,450,000.00).
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 cash/stock allocation shall be $8,700,000.00 and 625,000 shares
of AASI stock. Any stock received shall be subject to restraints on both timing
and quantities of shares to be sold as set forth on Exhibit 1.8.
Section 1.5 No 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 all trade
and accounts payable as of the Closing. Exhibit 1.5(a) lists all trade and
accounts payable over $1,000 and other assumed liabilities. Provided, however,
all liabilities incurred after the Closing in connection with the Purchaser's
operations after the Closing shall be liabilities of the Purchaser. However,
Purchaser shall be responsible for payment
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of all premiums and deductibles under Purchaser's Aviation Products and
Grounding Liability Insurance as set forth in the policy attached hereto as
Exhibit 1.5(b), naming as beneficiaries the Seller and the Shareholders, in the
amount of $25,000,000 for any product liability claims that may occur. Purchaser
agrees to keep in place this policy or one similar in scope and monetary
coverage for 3 years. Seller and Shareholder agree to provide Purchaser with
reasonable assistence with any disputed assumed liabilities, including without
limitation numbers 1, 3, and 4 as listed on Exhibit 1.5.
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 1.6. The Purchaser and the Seller each agrees that it will adopt and
utilize the amounts so allocated on Exhibit 1.6 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 AASI 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:
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. AASI shall file a Registration
Statement with the Securities and Exchange Commission registering the shares of
stock issued to the Seller upon request
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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 period of one
year or for such time-frame as is required before the shares have met all of the
Rule 144 holding periods in order to be freely transferable. 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 1.8 hereto.
Notwithstanding anything in this paragraph to the contrary, any shares not sold
pursuant to a registration statement shall continue to have "piggy back" rights
set forth in Exhibit 1.8.
Section 1.9 Board of Directors of AASI. After November 19, 1998, AASI
shall create one seat on its Board of Directors for one of the shareholders and
will invite the non-director/shareholder to attend all Board of Director's
meetings as the Board of Directors' special guest. The Board of Directors will
support the nomination of one shareholder to the Board of Directors for a
two-year term, and will then nominate the non-director/shareholder to the Board
of Directors for the following two-year term, with such two-year rotation to
continue unless otherwise requested, in writing, by both shareholders. AASI will
first nominate Anton K. Khoury to the Board of Directors, and the two-year
rotation will begin as of AASI's annual meeting in June 1999.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SHAREHOLDERS
To induce the Purchaser and AASI to enter into this Agreement and to
purchase the Subject Assets, the Seller and Shareholders, jointly and severally,
represent and warrant that the statements contained in this Article II are
correct and complete as of the Closing Date, except as set forth in the
disclosure schedule accompanying this Agreement and initialed by the Parties
(the "Disclosure Schedule").
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Section 2.1 Organization of the Seller. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. These representations and warranties shall
survive five (5) years from the date of the Closing.
Section 2.2 Subsidiaries and Foreign Qualification.
(a) Subsidiary. The Seller has no subsidiaries and no other equity
investments in any other corporation, partnership, joint ventures or other
business entity.
(b) Foreign Qualification. The Seller has qualified to transact
business as a foreign corporation in the following jurisdictions as indicated on
Exhibit 2.2, and the nature and location of the Seller's business and assets is
such that no further qualification is required. These representations and
warranties shall survive five (5) years from the date of the Closing.
Section 2.3 Authorization of Transaction. The Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes a valid and legally binding obligation of the Seller and
Shareholders, enforceable in accordance with its terms and conditions. These
representations and warranties shall survive five (5) years from the date of the
Closing.
Section 2.4 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any statute, regulation, rule, judgment, order, decree,
stipulation, injunction, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject or any provision of
the charter or bylaws of the Seller or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, require any notice
under any contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of indebtedness,
security interest, or other arrangements to which the
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Seller is a party or by which it is bound or to which any of its assets is
subject, except with respect to the required third party consents identified on
Section 2.4 of the Disclosure Schedule. Except as set forth in Section 2.16,
Seller does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any governmental or governmental agency
in order for the parties to consummate the transactions contemplated by this
Agreement. These representations and warranties shall survive five (5) years
from the date of the Closing.
Section 2.5 Financial Statements; Books and Records. Seller has
delivered to Purchaser and AASI financial statements of Seller prepared by
Cherry Bekaert & Holland for the year ended December 31, 1997 and August 31,
1998 (together the "Financial Statements"). All of the information provided to
Cherry Bekaert & Holland used to prepare the financial statements is correct and
complete. The Financial Statements present fairly and materially the financial
position of Seller as at such dates and the results of operations for the
periods then ended, except that the Financial Statements are subject to normal
year-end adjustments. To the best of Seller's knowledge, the results of the
Seller, as indicated in the Financial Statements were not dependent in any way
upon, and the income shown therein is not greater than it would have been in the
absence of, any other business in which Seller has an interest and the transfer
of whose assets is not included herein, except for any intercompany transactions
that may have occurred with Global Air Spares, Inc. and Atlantic Airmotive,
Corp.
Except for Exhibit 2.5, none of the records, systems, data or
information of the Seller is recorded, stored, maintained, operated or
otherwise, wholly or partly, dependent on or held or accessible by any means
(including, but not limited to, an electronic, mechanical or photographic
process, computerized or not) which are not under the exclusive ownership and
direct control of the Seller.
The books of account, minute books and other material business
records of the Seller are complete and correct and have been
maintained in accordance with sound business practices. The Seller
has:
(a) made and kept its books, records and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of its
assets, and
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(b) devised and maintained a system of internal accounting control
sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with
management's general or specific authorization;
(ii) transactions are recorded as necessary (A) to permit
preparation of financial statements in conformity with GAAP (if Seller
were to have used GAAP) or any other criteria applicable to such
statements, and (B) to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization;
(iv) the recorded accountability for assets as compared with
the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences; and
(v) the accounts/trade payables set forth on Exhibit 1.5 were
incurred in the ordinary course of business and except as set forth on
Exhibit 2.5(b)(v), no disputes exist thereto.
Section 2.6 Absence of Certain Changes or Events . Since September 30,
1998, there has not been any material adverse change in the assets, Liabilities,
business, financial condition, operations, results of operations, or future
prospects of the Seller's business except as occurring in the ordinary course of
business. Without limiting the generality of the foregoing, since that date:
(a) the Seller has not sold, leased, transferred, or assigned any of
its assets, tangible or intangible, used in the business other than for a fair
consideration in the ordinary course of business;
(b) with respect to Seller's business, the Seller has not entered into
any contract lease, sublease, license, or sublicense (or series of related
contracts, leases, subleases, licenses, and sublicenses) either involving more
than $5,000 or outside the ordinary course of business;
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(c) except as set forth on Exhibit 2.6(c), with respect to Seller's
business, no party (including the Seller) has accelerated, terminated, modified,
or canceled any contract, lease, sublease, license, or sublicense (or series of
related contracts, leases, subleases, licenses, and sublicenses) involving more
than $5,000 to which the Seller is a party or by which it is bound subject to
the limitations set forth in section 2.12;
(d) the Seller has not imposed any security interest upon any of its
assets, tangible or intangible;
(e) with respect to Seller's business, the Seller has not made any
capital expenditure (or series of related capital expenditures) either involving
more than $5,000 or outside the ordinary course of business;
(f) with respect to Seller's business, the Seller has not made any
capital investment in, any loan to, or any acquisition of the securities or
assets of any other person (or series of related capital investments, loans, and
acquisitions) either involving more than $5,000 or outside the ordinary course
of business;
(g) with respect to Seller's business, the Seller has not created,
incurred, assumed, or guaranteed any indebtedness (including capitalized lease
obligations) either involving more than $5,000 or outside the ordinary course of
business;
(h) with respect to Seller's business, the Seller has not delayed or
postponed (beyond its normal practice) the payment of accounts payable and other
Liabilities;
(i) with respect to Seller's business, the Seller has not canceled,
compromised, waived, or released any right or claim (or series or related rights
and claims) either involving more than $5,000 or outside the ordinary course of
business;
(j) with respect to Seller's business, the Seller has not granted any
license or sublicense of any rights under or with respect to any Intellectual
Property;
(k) there has been no change made or authorized in the charter or
bylaws of the Seller other than those contemplated herein;
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(l) with respect to Seller's business, the Seller has not experienced
any damage, destruction, or loss (whether or not covered by insurance) to its
property;
(m) with respect to Seller's business, the Seller has not made any loan
to, or entered into any other transaction with, any of its directors, officers,
and employees outside the ordinary course of business giving rise to any claim
or right on its part against the person or on the part of the person against it;
(n) with respect to Seller's business, the Seller has not entered into
any employment contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement;
(o) except as set forth in Exhibit 2.6(o), with respect to Seller's
business, the Seller has not granted any increase outside the ordinary course of
business in the base compensation of any of its directors, officers, and
employees;
(p) with respect to Seller's business, the Seller has not adopted any
(i) bonus, (ii) profit-sharing, (iii) incentive compensation, (iv) pension, (v)
retirement, (vi) medical, hospitalization, life, or other insurance, (vii)
severance, or (viii) other plan, contract, or commitment for any of its
directors, officers, and employees, or modified or terminated any existing such
plan, contract, or commitment;
(q) with respect to Seller's business, the Seller has not made or
pledged to make any charitable or other capital contribution outside the
ordinary course of business;
(r) with respect to Seller's business, the Seller has not delayed
payment of any amount to any third party with respect to any Liability or
obligation (including any costs and expenses the Seller has incurred or may
incur in connection with this Agreement or any of the transitions contemplated
hereby); and
(s) with respect to Seller's business, there has not been any other
occurrence, event, incident, action, failure to act, or transaction outside the
ordinary course of business involving the Seller.
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Section 2.7 Undisclosed Liabilities. Except as set forth on Exhibit
2.7, with respect to the Seller's business, the Seller has no Liability (and
there is no basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim or demand against any of them giving
rise to any Liability), except for (i) Liabilities set forth on the face of the
September 30, 1998 Balance Sheet and (ii) Liabilities which have arisen after
September 30, 1998 in the ordinary course of business (none of which relates to
any breach of contract, breach of warranty, tort, infringement, or violation of
law or arose out any charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand).
Section 2.8 Tax Matters.
(a) The Seller has filed all tax returns that it was required to file.
All taxes owed by the Seller (whether or not shown on any tax return) have been
paid. The Seller currently is not the beneficiary of any extension of time
within which to file any tax return. No claim has ever been made by an authority
in a jurisdiction where the Seller does not file tax returns that it is or may
be subject to taxation by that jurisdiction. There are no security interests on
any of the assets of any of the Seller that arose in connection with any failure
(or alleged failure) to pay any tax.
(b) The Seller has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other third party.
(c) No officer (or employee responsible for tax matters) of the Seller
expects any authority to assess any additional taxes for any period for which
tax returns have been filed. There is no dispute or claim concerning any tax
liability of the Seller either (i) claimed or raised by any authority in writing
or (ii) as to which any of officers (and employees responsible for tax matters)
of the Seller has knowledge based upon personal contact with any agent of such
authority.
(d) All ad valorem property taxes for 1998 and all years prior to 1998
imposed on the Seller with respect to, or which may become a lien on, the
Subject Assets have been paid in full.
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Section 2.9 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.
Except as set forth in Section 2.9 of the Disclosure Schedule, none of
the Tangible Property is leased by the Seller from any other party. There is no
default under the leases described on Section 2.9 of the Disclosure Schedule and
such leases are valid and enforceable in accordance with their terms.
All Tangible Property is in good operating condition and repair,
ordinary wear and tear excepted.
The Purchaser has had reasonable opportunity to inspect all Tangible
Property and to conduct due diligence on the Tangible Property.
Section 2.10 Inventory. The Seller has good and marketable title to the
Inventory described on the September 30, 1998 Balance Sheet and listed on
Exhibit 1.1(a)(i), free and clear of all Encumbrances, has the right to convey
such Inventory to the Purchaser, at the Closing will convey 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.
The level of Inventory at Closing will not vary materially from that
shown on September 30, 1998 Balance Sheet and will not exceed normal inventory
levels necessary to conduct the Seller's business in the ordinary course of the
Seller's business. The Purchaser has had reasonable opportunity to inspect this
inventory and to conduct due diligence on this inventory.
Section 2.11 Intellectual Property. The Seller has exclusive
rights to use the Intellectual Property described on Exhibit 2.11
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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 any other person or entity with respect to the use
of the Intellectual Property.
Section 2.12 Contracts. With respect to Seller's business, Exhibit
1.1(a)(iv) lists the following contracts, agreements, and other written
arrangements to which the Seller is a party:
(a) any written arrangement for the lease of personal property from or
to third parties providing for lease payments;
(b) any written on-going arrangement for the purchase or sale of raw
materials, commodities, supplies, products, or other personal property or for
the furnishing or receipt of services;
(c) any written arrangement concerning a partnership or joint venture;
(d) any written arrangement under which it has created, incurred,
assumed, or guaranteed (or may create, incur, assume, or guarantee) indebtedness
(including capitalized lease obligations) or under which it has imposed (or may
impose) a security interest on any of its assets, tangible or intangible;
(e) any written arrangement concerning confidentiality or competition;
(f) any written arrangement involving any of the Seller's stockholders
and its affiliates;
(g) any written arrangement with any of its directors, officers, and
employees in the nature of a collective bargaining agreement, employment
agreement, or severance agreement;
(h) to the Seller's knowledge, any written arrangement under which the
consequences of a default or termination could have an adverse effect on the
assets, Liabilities, business, financial condition, operations, results of
operations, or future prospects of Seller's business; or
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(i) any other written arrangement either involving more than $5,000 or
not entered into in the ordinary course of business.
The Seller has delivered to the Purchaser and AASI a correct and
complete copy of each written arrangement listed in Exhibit 1.1(a)(iv). With
respect to each Contract: (i) the written arrangement is legal, valid, binding,
enforceable, and in full force and effect; (ii) the written arrangement will
continue to be legal, valid, binding, and enforceable and in full force and
effect on identical terms following the Closing; (iii) no party is in breach or
default, and no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination, modification, or
acceleration, under the written arrangement; and (iv) no party has repudiated
any provision of the written arrangement. The Seller is not a party to any
verbal contract, agreement, or other arrangement, which, if reduced to written
form, would be required to be listed in Exhibit 1.1(a)(iv) under terms of this
Section 2.12. The contracts and arrangements on Exhibit 1.1(a)(iv) constitute
all of the agreements, contracts, arrangements and rights necessary to conduct
the Seller's business as it is presently conducted and presently proposed to be
conducted. Seller discloses that all contracts for work-in-process are subject
to a hold at the direction of the customer; however, Seller represents that
Seller has not taken as a credit a deposit for work-in-process without having
completed the corresponding amount of work on the contract.
To Seller's knowledge, no filled customer order or commitment of the
Seller's business obligating the Seller to process, manufacture, or deliver
products or perform services will result in a loss to the Seller upon completion
of performance. No purchase order or commitment of the Seller with respect to
Seller's business is in excess of normal requirements, nor are prices provided
therein in excess of current market prices for the products or services to be
provided thereunder. To Seller's knowledge, no supplier of the Seller has
indicated within the past year that, with respect to Seller's business, it will
stop, or decrease the rate of, supplying materials, products, or services to
them and no customer of the Seller has indicated within the past year that it
will stop, or decrease the rate of, buying materials, products, or services from
it.
Section 2.13 Software and Information Systems.
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(a) Section 2.13 of the Disclosure Schedule sets forth an accurate and
complete list and summary description of all the software used in and related to
Seller's business ("Software"). The Software identified on Section 2.13 of the
Disclosure Schedule is all the software necessary for the operation of Seller's
business as it is presently conducted and as presently proposed to be conducted.
Section 2.13 of the Disclosure Schedule identifies or describes (i) Software
which is owned by the Seller and (ii) Software which is licensed to the Seller
by third parties.
(b) Seller does not sell, license, sublicense or otherwise market
Software to third parties and has not entered into any Contract that grants any
third party a license or sublicense in Software. Seller has not entered into any
Contract, other than those Contracts listed on Section 2.13(b) of the Disclosure
Schedule, that restricts Seller's use of Software or that obligates Seller to
maintain, enhance, protect or otherwise take any action with respect to
Software.
(c) Except as is set forth in Section 2.13(c) of the Disclosure
Schedule, all Software that Seller uses includes four digit format for the
indication of the relevant year and, at no additional costs to Purchaser, and
without human intervention, will correctly recognize and correctly process data
and formulas relating to the year 2000 and beyond and provide all such date-
related data and formulas used by other applications in a format that will
permit the correct recognition and processing of data by the other applications.
Seller, except as disclosed in this Section 2.13 is not aware of any year 2000
(Y2K) issues with any major customers and suppliers. However, Seller has not
conducted an independent investigation into such issues with respect to its
major customers and suppliers.
(d) To Seller's knowledge, except as set forth in Section 2.13(d) of
the Disclosure Schedule, there are no defects or errors in the Software, which
defects or errors could materially and adversely affect Purchaser's or any
licensee's use of the Software or the functioning of the Software in accordance
with the specifications for the Software.
Section 2.14 Real Property Leases. With respect to Seller's business,
Section 2.14 of the Disclosure Schedule lists and describes briefly all real
property leased or subleased to the
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Seller. The Seller has described, in sufficient detail, the terms of the leases
and subleases listed in Section 2.14 of the Disclosure Schedule. With respect to
each lease and sublease listed in Section 2.14 of the Disclosure Schedule:
(a) the lease or sublease is legal, valid, binding, enforceable, and in
full force and effect;
(b) no party to the lease or sublease is in breach or default, and no
event has occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or acceleration
thereunder;
(c) no party to the lease or sublease has repudiated any provision
thereof;
(d) there are no disputes, oral agreements, or forbearance programs in
effect as to the lease or sublease;
(e) with respect to each sublease, the representations and warranties
set forth in subsections (a) through (e) above are true and correct with respect
to the underlying lease;
(f) the Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the leasehold or subleasehold;
(g) all facilities leased or subleased thereunder have received all
approvals of governmental authorities (including licenses and permits) required
in connection with the operation thereof and have been operated and maintained
in accordance with applicable laws, rules, and regulations; and
(h) all facilities leased or subleased thereunder have received all
approvals of governmental authorities (including licenses and permits) required
in connection with the operation thereof and have been operated and maintained
in accordance with applicable laws, rules, and regulations.
Section 2.15 Accounts Receivable. All accounts receivable of the Seller
with respect to Seller's business are reflected properly on its books and
records, are valid receivables subject to no setoffs or counterclaims, are
presently current and collectible,
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and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts, which is $34,200, set forth on the
face of the September 30, 1998 Balance Sheet as adjusted for the passage of time
in accordance with the past custom and practice of the Seller. In the event that
180 days after Closing there is any account receivable overdue and outstanding
over and above the reserve for bad debt and indemnification limits of Article 6
for which Purchaser seeks indemnification from Seller, then Purchaser shall
notify Seller, in writing, of the specific account receivable and the specific
dollar amount of the deficiency. Seller shall promptly remit payment to
purchaser for the amount of the uncollected accounts receivable (less the
reserve for bad debt and indemnification limits of Article 6). Purchaser shall
then assign and transfer to Seller the uncollected accounts receivable by
execution of appropriate documents. After such assignment to Seller, Seller
shall be entitled to collect for their own account the accounts receivable
assigned by Purchaser to Seller and to take any action in connection with such
accounts receivable that Seller deems reasonable and appropriate, provided that
Seller keep Purchaser informed of Seller's actions, and if Purchaser receives
payment for any such assigned accounts receivable, Purchaser shall promptly
transfer such payments to Seller.
Section 2.16 Licenses. The rights of the Seller under the Licenses
described or referred to in Exhibit 1.1(a)(viii) are valid and enforceable by
the Seller in accordance with their respective terms. Neither the Seller nor the
other parties thereto are in default in any material respects (nor does any
circumstance exist which, with notice or the passage of time or both, would
result in such a default) under the Licenses. The parties further acknowledge
that subsequent to the closing of the instant agreement, Purchaser will be
required, pursuant to 14 C.F.R. ss.145.15 to apply for an amended certificate
pursuant to 14 C.F.R. ss.145.11. Prior to the grant of the amended certificate,
Seller and Purchaser shall act under the Seller's old certificate as may be
legally permissible to continue without interruption the operation of the
Seller. Seller does not make any representation as to the validity of such
arrangement or to the permissible term of such an arrangement.
Section 2.17 Litigation. Section 2.17 of the Disclosure Schedule sets
forth each instance in which the Seller or the
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Shareholders (i) are subject to any unsatisfied judgment, order, decree,
stipulation, injunction, or charge or (ii) are a party to the knowledge of any
officers (and employees with responsibility for litigation matters) of the
Seller or is threatened to be made a party to any charge, complaint, action,
suit, proceeding, hearing, or investigation of or in any court or quasi-judicial
or administrative agency of any federal, state, local, or foreign jurisdiction
or before any arbitrator. None of the charges, complaints, actions, suits,
proceedings, hearings, and investigations set forth in Section 2.17 of the
Disclosure Schedule could result in any adverse change in the assets,
liabilities, business, financial condition, operations, results of operations,
or future prospects of Seller's business. None of the officers or shareholders
(and employees with responsibility for litigation matters) of the Seller have
any reason to believe that any such charge, complaint, action, suit, proceeding,
hearing, or investigation may be brought or threatened against the Seller.
Section 2.18 Employees.
(a) Employee Census. Seller has furnished an accurate employee census,
detailing the Employee's date of hire, salary, benefits and other pertinent
information in Section 2.18 of the Disclosure Schedule. There shall have been no
material increase in any compensation paid or payable to the employees of Seller
unless otherwise disclosed and agreed to by Purchaser. Any increase in
compensation paid or payable to the employees of Seller from September 30, 1998
through Closing is set forth on Section 2.18(a) of the Disclosure Schedule.
(b) No Contracts or Future Contracts. To the 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.
(c) Restrictions on Employees. To the Seller's knowledge, no officer or
employee of the Seller is subject to any agreement with any other person or
entity which requires such officer or employee to assign any interest in
inventions or other intellectual property or keep confidential any trade
secrets, proprietary data, customer lists or other business information or which
restricts such officer
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or employee from engaging in competitive activities or solicitation of
customers.
(d) Retention of Employees. Seller has no employment contracts, written
or oral, with any employee of Seller that is not terminable at Seller's
discretion and with no commitment or obligation of severance pay or benefits
except as described in Section 2.18 of the Disclosure Schedule. Seller shall be
responsible for any severance or wrongful termination claims each of these
employees may have and agrees to indemnify Purchaser from the same occurring
prior to the Closing or resulting from any dispute as to a separation bonus with
the Seller. Purchaser shall be responsible for any severance or wrongful
termination claims each of these employees may have and agrees to indemnify
Seller from the same occurring subsequent to the Closing.
(e) Employee Benefits. Section 2.18 of the Disclosure Schedule lists
all employee benefit plans that the Seller maintains or to which the Seller
contributes for the benefit of any current or former employee of the Seller
("Employee Benefit Plan").
(f) ERISA Matters.
(i) Except as set forth on Section 2.18 of the Disclosure
Schedule, the Seller (or any person or entity under "common control"
with it ("ERISA Affiliates"), as "common control" is defined under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
does not maintain or contribute to, or has not maintained or
contributed to, any bonus, pension, profit sharing, deferred
compensation, retirement, hospitalization, medical or dental
reimbursement, severance pay, vacation pay, disability, death benefit,
insurance, and other similar plans, programs, or arrangements providing
benefits to the employees of the Seller (including but not limited to
"employee pension benefit plans" and "employee welfare benefit plans"
within the meaning of Section 3(1) and 3(2) of ERISA ("Pension Benefit
Plans") and Welfare Benefit Plans" respectively)). The Seller has
delivered to Purchaser true copies of all plans set forth in Section
2.18 of the Disclosure Schedule.
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(ii) Neither the Seller nor its ERISA Affiliates have or have
ever had an obligation to contribute to a "multiemployer plan" within
the meaning of Section 4001(a)(3) of ERISA.
(iii) Each Welfare Benefit Plan has been funded and will
continue to be funded in accordance with its terms through the Closing
Date, including the payment of applicable premiums, for coverage
through Closing Date, on any insurance contract funding a Welfare
Benefit Plan.
(iv) Each Welfare Benefit Plan which is a "group health plan,"
as defined in Section 607(1) of ERISA has been operated in material
compliance with the provisions of Part 6 of Title I of ERISA and
Section 4980B of the Code at all times. Section 2.18 of the Disclosure
Schedule has a complete and accurate list of all present and former
employees of the Seller and their respective beneficiaries who, as of
the date hereof, are receiving or who are eligible to elect to receive
benefits pursuant to such group health plans and the provisions of
ERISA and the Code as well as the current hourly pay or yearly salary.
Section 2.19 Environmental Matters.
(a) Except as set forth in Section 2.19(a) of the Disclosure Schedule,
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 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 set forth in Section 2.19(a) of the Disclosure Schedule,
during Seller's occupancy of the property used in its business, no Hazardous
Materials have been generated, treated,
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stored or disposed of at, or transported to or form, the Seller or the property
owned or used in the Seller's business at any time.
(c) Except as set forth in Section 2.19(c) of the Disclosure Schedule,
to Seller's knowledge 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) To Seller's knowledge, except as set forth in Section 2.19(d) of
the Disclosure Schedule, 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 set forth in Section 2.19(e) of the Disclosure Schedule,
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 set forth in Section 2.19(f) of the Disclosure Schedule,
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 2.20 Legal Compliance.
(a) To the knowledge of the Seller, and with respect to Seller's
business, the Seller has complied with all laws (including rules and regulations
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof), and no charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand, or notice has been filed or commenced against the
Seller alleging any failure to comply with any such law or regulation.
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(b) With respect to Seller's business, to Seller's knowledge the Seller
has complied with all applicable laws (including rules and regulations
thereunder) relating to the employment of labor, employee civil rights, and
equal employment opportunities.
(c) With respect to Seller's business, the Seller has not violated in
any respect or received a notice or charge asserting any violation of the
Sherman Act, the Clayton Act, The Robinson-Patman Act, or the Federal Trade
Commission Act, each as amended.
(d) With respect to Seller's business, the Seller has not:
(i) made or agreed to make any contribution, payment, or gift
of funds or property to any governmental official, employee, or agent
where either the contribution, payment, or gift or the purpose thereof
was illegal under the laws of any federal, state, local, or foreign
jurisdiction;
(ii) established or maintained any unrecorded operating asset
for any purpose; or
(iii) made or agreed to make any contribution, or reimbursed
any political gift or contribution made by any other person, to any
candidate for federal, state, local, or foreign public office.
(e) To Seller's knowledge, with respect to Seller's business, the
Seller has filed in a timely manner all reports, documents, and other materials
it was required to file (and the information contained therein was correct and
complete in all respects) under all applicable laws (including rules and
regulations thereunder).
(f) To Seller's knowledge, with respect to Seller's business, the
Seller has possession of all records and documents it was required to retain
under all applicable laws (including rules and regulations thereunder).
Section 2.21 Product Warranty. With respect to Seller's business, each
service provided, engine, overhauled parts and other parts and products
manufactured, sold, leased, or delivered by the Seller has been in conformity
with all applicable contractual commitments and all express and implied
warranties, and, with
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respect to Seller's business, the Seller has no liability (and to Seller's
knowledge there is no present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against any service,
engine, overhauled parts or other parts and products giving rise to any
liability) for replacement or repair thereof or other damages in connection
therewith, except as is disclosed in Section 2.21 of the Disclosure Schedule.
With respect to Seller's business, no service, engine, overhauled parts or other
parts and products manufactured, sold, leased, or delivered by the Seller is
subject to any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale or lease. With respect to Seller's
business, Section 2.21 of the Disclosure Schedule includes copies of the
standard invoices (containing terms and conditions of services provided, terms
and conditions of sale or lease, applicable guaranty, warranty, and indemnity
provisions).
Upon receipt of a notice of supposed claim for warranty, after the
Closing other than any assumed liability as described in Exhibit 1.5, for
contracts completed by Seller prior to the Closing, Seller shall promptly
provide the details of the warranty claim to Purchaser. Purchaser then has the
right, in its sole discretion, to assume such warranty claim, and Purchaser
shall promptly notify Seller of its decision. In the event that Purchaser
assumes such warranty claim, then Seller shall have no further financial
obligation for such warranty claim set forth in Section 2.21. In the event that
Purchaser declines to assume such warranty claim, then Seller may, in its sole
discretion, determine whether such claim is a valid claim for warranty and
whether it will honor such claim. However, in no event is Seller responsible for
any warranty beyond that expressly stated in the standard warranty. In the event
that Seller determines to honor such warranty claim, then Purchaser agrees to
provide all labor for the warranty claim at no charge and to provide all parts,
in stock, at cost. In the event that Seller determines not to honor the warranty
claim for any reason, then Seller may take all steps that it deems reasonable
and necessary to defend against such claim.
Section 2.22 Product Liability; Product Safety. Except as set forth on
Section 2.22 of the Disclosure Schedule, the Seller has no liability (and to
Seller's knowledge there is no present of future charge, complaint, action,
suit, proceeding, hearing, investigation, claim, or demand against Seller giving
rise to any
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liability) arising out of any injury to persons or property as a result of a
service performed by Seller or as a result of the ownership, possession, or use
of any engine, overhauled part or other parts and products manufactured, sold,
leased, or delivered by the Seller.
Except as set forth on Section 2.22 of the Disclosure Schedule, the
Seller has not been required to file any notification or other report with or to
provide information to any product safety agency, commission, board or other
governmental authority of any jurisdiction concerning actual or potential
hazards with respect to any service Seller has provided or with respect to any
engine, overhauled parts or other parts and products manufactured or sold by
Seller. Each service performed by Seller, engine, overhauled part and other
parts and products manufactured, distributed or sold by Seller complies in all
material respects of all product safety standards or each applicable product
safety agency, commission, board or other governmental authority. The Seller has
not made any misrepresentation or furnished any information containing any
material omission to any products safety testing laboratory or a similar
organization. The Seller has not failed to obtain approval of any product,
component or process which is used, manufactured or licensed by the Seller in
the conduct of its business which is legally required to be approved by any
independent or government-sponsored testing laboratory, industry, trade
association or similar body agency or association.
Section 2.23 Insurance. Section 2.23 of the Disclosure Schedule lists
all policies of insurance owned by the Seller and now in effect insuring all its
business, assets and personnel, and sets forth for such policy the name of the
insurer, the type of coverage, the amount of coverage, the term thereof and the
annual premium.
Section 2.24 Disclosure. To the best of Seller's knowledge, none of the
representations or warranties of Seller contained herein, none of the
information contained in the Disclosure Schedule referred to in this Article II
and none of the other information or documents furnished to the Purchaser
pursuant to the terms of this Agreement is or will be false or misleading in any
material respect, or omits or will omit to state a fact herein or therein
necessary to make the statements herein or therein not misleading in any
material respect. To Seller's knowledge, there
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is no fact which adversely affects or in the future is likely to affect
adversely the Subject Assets or the Seller's business in any material respect
which has not been set forth or referred to in this Agreement, Exhibits or the
Schedules hereto.
Section 2.25 Other Representations and Warranties of Seller and
Shareholders.
(a) Knowledge Respecting Purchaser and AASI. Seller and Shareholders
(i) know or have had the opportunity to acquire all information concerning the
business affairs, financial condition, plans and prospects of Purchaser and AASI
that they deem relevant to make a fully informed decision respecting the
acquisition of the stock; (ii) have been encouraged and have had the opportunity
to rely upon the advice of their legal counsel and accountants and other
advisers with respect to the acquisition of the stock; and (iii) have 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 AASI and the terms and conditions of the
acquisition of the stock as they have requested so as to more fully understand
their investment.
(b) Absence of Representations and Warranties. Seller and Shareholders
confirm that neither Purchaser and AASI nor anyone purportedly acting on behalf
of Purchaser and AASI has made any representations, warranties, agreements or
statements other than those contained herein respecting the business, affairs,
financial condition, plans or prospects of Purchaser and AASI nor have Seller
and Shareholders relied on any representations, warranties, agreements or
statements in the belief that they were made on behalf of the foregoing nor has
Seller or Shareholders relied on the absence of any such representations,
warranties, agreements or statements in reaching their decision to acquire the
stock.
(c) No Distribution. Seller and Shareholders are acquiring the stock
for their own account without a view to public distribution or resale, and they
have 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, except as provided herein. Further, Seller and Shareholders agree that
they shall make no attempted sales or transfers of any of the AASI stock prior
to July 1, 1999, except for distributions to
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<PAGE> 27
Shareholders or unless registered under piggy-back rights as set forth in
Exhibit 1.8.
(d) Shares to be Restricted. Seller and Shareholders understand that
the stock will remain "restricted securities" within the meaning of Rule 144
under the Securities Act of 1933, as amended (the "1933 Act") until registered
or the holding period under Rule 144 is met.
(e) No Registration. Seller and Shareholders understand that the stock
will not be registered under the 1933 Act, state law 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.
(f) Legend of Certificates. Seller and Shareholders understand 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."
(g) Restrictions on Other Securities. Seller and Shareholders
understand 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
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<PAGE> 28
pursuant to any corporate reorganization, reclassification or similar event.
(h) Stop Orders. Seller and Shareholders understand that Purchaser and
AASI and its transfer agent may refuse to effect a transfer, sale or other
disposition of any of the stock by Seller or Shareholders' or their successors
or assigns otherwise than as contemplated hereby.
(i) No Governmental Approval. Seller and Shareholders understand that
no federal or state agency has approved or disapproved the stock, 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 AND AASI
To induce the Seller to enter into this Agreement and to sell the
Subject Assets, the Purchaser and AASI hereby represent and warrant that the
statements contained in this Article III are correct and complete as of the
Closing Date, except as set forth in the Disclosure Schedule.
Section 3.1 Organization of the Purchaser. The Purchaser and AASI are
corporations duly organized, validly existing, and in good standing under the
laws of the jurisdiction of their incorporation.
Section 3.2 Authorization of Transaction. The Purchaser and AASI have
full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform their obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Purchaser and AASI, enforceable in accordance with its terms and conditions.
Section 3.3 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to herein), will (i) violate
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any government, governmental agency, or court to
which the Purchaser is subject or any provision
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<PAGE> 29
of its charter or bylaws or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of indebtedness,
security interest, or other arrangement to which the Purchaser and AASI is a
party or by which it is bound or to which any of its assets is subject. The
Purchaser and AASI do not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any governmental agency in
order for the parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to herein). The
Purchaser and AASI warrant and represent that they have obtained all necessary
consents from NationsBank to obtain all funds necessary to complete the
transactions contemplated herein.
Section 3.4 Capital Structure. The capital structure of AASI has been
accurately disclosed in its public filings. To date, the stock options disclosed
in the 1998 Omnibus Stock Option Plan are the only stock options issued by AASI.
To date, the warrants issued to the underwriter described in AASI's registration
statement and prospectus are the only warrants issued and outstanding on AASI.
Section 3.5 No Material Misstatements or Omissions. None of the
representations and warranties of the Purchaser and AASI contained herein, and
none of the information or documents furnished to the Seller pursuant to the
terms of this Agreement is or will be false or misleading in any material
respect, or omits or will omit to state a fact herein or therein necessary to
make the statements herein or therein not misleading in any material respect. To
Purchaser's knowledge and without regard to any general stock market conditions
which may effect Seller's investment, there is no fact which adversely affects
or in the future is likely to affect adversely the Seller in any material
respect which has not been set forth or referred to in this Agreement, Exhibits
or the Schedules hereto. The transaction is exempt from the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.
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<PAGE> 30
Further, Purchaser and AASI (i) know or have had the opportunity to
acquire all information concerning the business affairs, financial condition,
plans and prospects of Seller that they deem relevant to make a fully informed
decision respecting the acquisition of the assets; (ii) have been encouraged and
have had the opportunity to rely upon the advice of their legal counsel and
accountants and other advisers with respect to the acquisition of the assets;
and (iii) have 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 Seller and the terms and conditions
of the acquisition of the assets as they have requested so as to more fully
understand this Agreement.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
Section 4.1 Change of the Seller's Name. Promptly after the Closing,
and in no event later than thirty (30) days following the Closing, the Seller
will take all action necessary to discontinue use of the Name and to enable the
Purchaser exclusively to use the Name, and at the Closing shall deliver to the
Purchaser all documents necessary to accomplish the foregoing. Seller may remain
in existence for the sole purpose of completing the liquidation and distribution
of the assets of Seller for up to three (3) years. Notwithstanding the
foregoing, Shareholders may utilize Seller for effective tax planning.
Section 4.2 Maintenance of Records. Inasmuch as certain of the Seller's
books, records and documents are to be included as Subject Assets and sold to
the Purchaser hereunder, and certain other of the Seller's books, records and
documents are Excluded Assets to be retained by the Seller hereunder, and the
Purchaser or the Seller may have need to have access to the books, records and
documents held by the other after the Closing, the Purchaser and the Seller
agree that they shall each maintain for at least three years after the Closing
Date (or for such longer period as may be required by applicable law) the
respective books, records and documents sold or retained hereunder. During such
period, representatives of the Purchaser shall be permitted to inspect and make
copies of such books, records, accounting work papers and other documents
retained by the Seller during normal business hours
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<PAGE> 31
and upon reasonable notice for purposes related to the continuation by the
Purchaser of the Seller's business; and representatives of the Seller shall be
permitted to inspect and make copies of the books, records and documents sold to
the Purchaser during normal business hours and upon reasonable notice for
purposes related to winding up its affairs.
Section 4.3 Further Assurances. The Seller, the Shareholders, the
Purchaser and AASI 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 4.4 Fees and Expenses. The Seller, the Shareholders 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. Purchaser shall pay for the
audits performed by Cherry Bekaert & Holland, CPA.
Section 4.5 No Brokers. The Seller, the Shareholders 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 4.6 Bulk Transfer Compliance. Inasmuch as the Seller has agreed
to duly pay, perform and discharge any liabilities and obligations associated
with the Inventory, the Purchaser and the Seller hereby mutually agree to waive
compliance with the provisions of any bulk sales or similar law, if any. The
Seller covenants and agrees to indemnify and save harmless the Purchaser from
and against any and all loss, liability, cost and expense
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<PAGE> 32
(including reasonable attorneys' fees) arising out of noncompliance with any
such laws.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 Conditions to the Purchaser's Obligations. The obligations
of the Purchaser and AASI 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, certificates of title and other
instruments of transfer, all in 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.
(b) Consents. The consents described in the Disclosure Schedule hereto,
and all other consents required for the Seller to perform its obligations
hereunder, shall have been obtained in form reasonably satisfactory to the
Purchaser.
(c) Opinion of Seller's Counsel. The Purchaser shall have received from
counsel for the Seller an opinion dated as of the date of Closing in form and
substance satisfactory to the Purchaser and its counsel, to the effect that:
(i) Seller is a corporation duly organized, validly existing
and in good standing under the laws of Florida.
(ii) Seller is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction, if any, in
which the ownership or leasing of its properties and assets or the
conduct of its business requires such qualification, except where the
failure to be so qualified or be in good standing would not have a
material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of Seller taken as
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a whole. Seller has all corporate power and authority necessary to
engage in the business in which it is presently engaged and to execute,
deliver and perform its obligations under this Agreement.
(iii) Execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action, corporate or otherwise, by
Seller and Shareholders. This Agreement and the transactions
contemplated hereby are legal, valid and binding obligations of Seller
and Shareholders, enforceable against Seller and Shareholders in
accordance with their terms except as enforcement may be limited by
general equitable principles or bankruptcy, insolvency or similar laws
affecting creditors' rights generally. Seller has all requisite power
and authority to execute, deliver and perform this Agreement and the
transactions contemplated hereby. All necessary corporate proceedings
of Seller have been taken to authorize the execution, delivery and
performance by Seller of this Agreement and the transactions
contemplated hereby.
(iv) Seller has good and marketable title to the Subject
Assets transferred hereunder, free and clear of all liens, charges,
security interests, encumbrances and other defects in title, has the
right to convey such property to the Purchaser, and, at the Closing,
shall have conveyed to the Purchaser good and marketable title to such
property free from all Encumbrances;
(v) Except as is disclosed in this Agreement, the Disclosure
Schedule or Exhibits hereto, to the best knowledge of such counsel,
Seller is not in violation or default of any provision of its Articles
of Incorporation or ByLaws or of any provision of any instrument or
contract to which it is party or by which it is bound or, of any
provision of any federal, state or local judgment, writ, decree, order,
law, statute, rule or government regulation, applicable to it. To the
best knowledge of such counsel, the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby will not result in any such violation or be in conflict with or
constitute, with or without the passage of time and giving of notice,
either a violation or default under any such provision or an event
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which results in the creation of any lien, charge of encumbrance upon
any asset of Seller. No consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing
with any federal, state, local or other governmental authority or any
court or other tribunal is required by Seller for the execution,
delivery or performance by Seller of this Agreement or the transactions
contemplated hereby. To the best knowledge of such counsel, no consent
of any party to any contract, agreement, instrument, lease, license,
arrangement or understanding to which Seller is a party, or to which
any of its properties or assets are subject, is required for the
execution, delivery or performance of this Agreement or the
transactions contemplated hereby.
(vi) Except as disclosed in this Agreement, the Disclosure
Schedule or the Exhibits hereto, such counsel is not aware of any
pending or threatened action, suit, proceeding or investigation before
any court or any public, regulatory, or governmental agency, authority
or body, involving Seller or any of its existing officers or directors
and such counsel do not know of any legal matter or government
proceedings regarding Seller.
In rendering such an opinion, counsel for Seller may rely (i) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of Seller; and (ii) to the extent they deem proper, upon written
statements or certificates of officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing
of Seller, provided that copies of any such statements or certificates shall be
delivered to counsel for the Purchaser.
(d) 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.
(e) No Adverse Proceedings. No action, suit or proceeding before any
court or any governmental or regulatory authority shall
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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.
(f) Articles of Incorporation, Bylaws, and Minutes. The Seller shall
have delivered to the Purchaser the Articles of Incorporation, the Bylaws, and
the corporate minutes of the Seller, along with a certificate, dated as of the
Closing Date, certifying as to the accuracy and completeness of such corporate
documents.
(g) Corporate Documents. The Seller shall deliver to the Purchaser at
the Closing the following:
(i) a good standing certificate issued by the Secretary of the
State of Florida with respect to the Seller;
(ii) certified copies of resolutions of the shareholders and
board of directors of the Seller authorizing the execution, delivery
and performance by the Seller of this Agreement, the conveyance of the
Subject Assets and the transactions contemplated hereby; and
(iii) a certificate of the Seller certifying that each of the
obligations of the Seller to be performed on or before the Closing
pursuant to this Agreement shall have been duly performed as of the
Closing.
(h) Other Assurances. The Seller shall have delivered to the Purchaser
such other and further certificates, assurances and documents as the Purchaser
or AASI 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.
Section 5.2 Conditions to the Seller's Obligations. The obligations of
the Seller to complete the Closing are contingent
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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:
(a) Payment of Purchase Price and Delivery of Stock. The Purchaser and
AASI shall have paid to the Seller the Purchase Price at Closing and delivered
the shares of AASI stock, described in Section 1.3, within ten (10) business
days of the Closing.
(b) Employment Agreement. Purchaser shall enter into an employment
agreement with Anton K. Khoury and Hanna K. Khoury 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) Opinion of the Purchaser's Counsel. The Purchaser shall have
furnished the Seller with an opinion, dated the date of Closing, of Gray,
Layton, Kersh, Solomon, Sigmon, Furr & Smith, P.A., counsel for the Purchaser
and AASI, in form and substance satisfactory to the Seller and its counsel, to
the effect that: (i) the Purchaser and AASI are corporations duly organized,
validly existing and in good standing under the laws of Florida and Delaware
respectively and has all requisite power and authority to execute and deliver
this Agreement and to perform their obligations
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under this Agreement; (ii) all corporate or other proceedings required by law,
the Articles of Incorporation and By-laws of Purchaser and AASI or by the
provisions of this Agreement to be taken by the Purchaser and AASI on or before
the date of Closing, in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transaction contemplated
by this Agreement, have been duly and validly taken; (iii) the Purchaser and
AASI have the legal power and authority to consummate this transaction; and (iv)
this transaction is exempt from the requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification by the Seller and Shareholders. Subject to
the procedures and limitations set forth in this Article VI, the Seller and
Shareholders, jointly and severally, hereby agree 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 through
both trial and appellate proceedings) (a "Loss") incurred by the Purchaser or
AASI 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 or Shareholders in this Agreement
or in any instrument or document delivered by the Seller or Shareholders 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;
(c) Excluded Liabilities. The Excluded Liabilities and any
other liability or obligations, or alleged liability or
obligations, of the Seller; or
(d) Claims Against Subject Assets. Any levy or other claim by any third
party against or with respect to the Subject Assets, or
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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 or Shareholders prior to
the Closing.
The Purchaser shall not be entitled to assert any claim under this
Article VI until such cumulative Losses exceed Twenty-Five Thousand Dollars
($25,000.00), but Purchaser shall thereafter be entitled to recover the full
amount of such damages in accordance with the provisions of this Article VI.
To the extent that it has a material impact on the Purchaser, the
Purchaser shall have the right to be put in the same financial position as it
would have been (net of any benefits to the Purchaser, including tax benefits)
in had each of the representations and warranties of the Seller and Shareholders
been true and correct or had the Seller or Shareholders not breached any
representations, warranties, covenants or agreements.
Section 6.2 Survival of the Seller's and Shareholders' Warranties.
Unless otherwise expressly stated to the contrary herein, the representations
and warranties of the Seller and Shareholders made in this Agreement or in any
instrument or document delivered by the Seller or Shareholders to the Purchaser
pursuant to this Agreement shall survive three (3) years from the date of 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,
without limitation reasonable counsel fees and costs and expenses incurred in
connection therewith through both trial and appellate proceedings) incurred by
the Seller (net of any benefits to the Seller, including tax benefits) 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.
The Seller shall not be entitled to assert any claim under this Article
VI until such cumulative losses exceed Twenty-Five Thousand Dollars
($25,000.00), but Seller shall thereafter be entitled to recover the full amount
of such damages in accordance with the provisions of this Article VI.
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Section 6.4 Matters Involving Third Parties. If any third party shall
notify any Party (the "Indemnified Party") with respect to any matter which may
give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Article, then the Indemnified Party shall
notify each Indemnifying Party thereof promptly; provided, however, that no
delay on the part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any liability or obligation hereunder
unless (and then solely to the extent) the Indemnifying Party thereby is
damaged. Within 15 days after the Indemnified Party has given notice of the
matter the Indemnifying Party may notify the Indemnified Party that the
Indemnifying Party is going to cure the matter and release the Indemnified Party
from any and all liability with respect thereto. In the event any Indemnifying
Party notifies the Indemnified Party within 15 days after the Indemnified Party
has given notice of the matter that the Indemnifying Party is assuming the
defense thereof, (A) the Indemnifying Party will defend the Indemnified Party
against the matter with counsel of its choice reasonably satisfactory to the
Indemnified Party, (B) the Indemnified Party may retain separate co-counsel (at
its cost), (C) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party (not to be withheld unreasonably), and
(D) the Indemnifying Party will not consent to the entry of any judgment with
respect to the matter, or enter into any settlement which does not include a
provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all Liability with respect thereto, without the written
consent of the Indemnified Party (not to be withheld unreasonably). In the event
the Indemnifying Party fails to notify the Indemnified Party within 15 days
after the Indemnified Party has given notice of the matter, the Indemnified
Party may defend against, or enter into any settlement with respect to, the
matter in any manner it reasonably may deem appropriate. Under this
circumstance, the indemnified party is entitled to recover all costs and fees
incurred in the defense of the matter, if any.
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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 Press Releases and Announcements. No party shall issue any
press release or announcement relating to the subject matter of this Agreement
prior to the Closing without the prior written approval of the other party;
provided, however, that any party may make any public disclosure it believes in
good faith is required by law or regulation (in which case the disclosing party
will advise the other party prior to making the disclosure).
Section 7.4 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 7.5 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 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:
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<TABLE>
<CAPTION>
<S> <C>
AS TO THE SELLER: American Jet Engine Services, Inc.
ATTN: Mr. Anton K. Khoury
Mr. Hanna K. Khoury
13495 SW 139 Court
Miami, FL 33186
WITH COPY TO: R. Lawrence Bonner
Homer & Bonner, P.A.
3400 NationsBank Tower
100 Southeast 2nd Street
Miami, FL 33131
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
</TABLE>
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 Submission to Jurisdiction. Each of the parties submits to
the jurisdiction of any state or federal court sitting in Miami/Miami-Dade
County, Florida in any action or proceeding arising out of or relating to this
Agreement, agrees that all claims in respect of the action or proceeding may be
heard and determined in any such court, and agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the parties waives any defense of
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inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety, or other security that might be required of any other
party with respect thereto by suit on the judgment or in any other manner
provided by law.
Section 7.8 No Third-Party Beneficiaries. This Agreement is not
intended to be for the benefit of and shall not be enforceable by any person who
or which is not a party hereto (or a permitted assign or successor to such
party).
Section 7.9 Section, Exhibit and Schedule Reference. All of the
Exhibits and Schedules 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. The inclusion of an item in one Section,
Exhibit or Schedule shall be deemed to be inclusion of that item on each and
every Section, Exhibit or Schedule to which that item applies, whether or not
that item is specifically cross-referenced in the Exhibit or Schedule.
Section 7.10 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.
Section 7.11 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.
SELLER:
ATTEST: AMERICAN JET ENGINE SERVICES, INC.
\s\ Hanna K. Khoury By \s\ Anton K. Khoury
- ---------------------------------- --------------------------------------
Secretary President
42
<PAGE> 43
SHAREHOLDERS:
/s/ Anton K. Khoury (SEAL)
--------------------------------------
ANTON K. KHOURY
/s/ Hanna K. Khoury (SEAL)
--------------------------------------
HANNA K. KHOURY
PURCHASER:
ATTEST: AMERICAN AIRCARRIERS SUPPORT
ACQUISITION II CORP.
/s/ David M. Furr By /s/ Karl F. Brown
- ---------------------------------- --------------------------------------
Secretary President
ATTEST: AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
/s/ David M. Furr By /s/ Karl F. Brown
- ---------------------------------- --------------------------------------
Secretary President
43
<PAGE> 1
EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of November 16,
1998 by and among AMERICAN AIRCARRIERS SUPPORT, INCORPORATED, a
Delaware corporation (the "Company") and AMERICAN JET ENGINE
SERVICES, INC. ("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 625,000 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.
(e) "Holder" means American Jet Engine Services, Inc. or any
shareholder thereof who shall receive the shares by permittable
transfer or assignment.
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 them, 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
<PAGE> 2
statement effective for a minimum period of 12 months thereafter or for
such time-frame as is required before the shares have met all of the
Rule 144 holding periods in order to be freely transferable. 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 their request by means of an underwriting, they
shall so advise the Company as a part of their 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.
(c) Separately, in the event the Company sells, merges, or
reorganizes with another entity, the Holder shall have demand rights
equivalent to any received by Karl Brown.
SECTION 3. "PIGGYBACK" RIGHTS. For a period through of one (1) year
from November 16, 1998, and if (but without any obligation to do so) the Company
proposes to register any of its securities under the 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 November 16, 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:
<PAGE> 3
(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 they may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by them.
(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 their 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 as shall be required to effect the registration
of their 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:
<PAGE> 4
(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 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
<PAGE> 5
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,
<PAGE> 6
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
<PAGE> 7
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 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
<PAGE> 8
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.
(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 along with that certain Asset
Purchase Agreement dated November 19, 1998 and all other agreements
contemplated thereby, 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 or the Asset Purchase Agreement and
all other agreements contemplated thereby. 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
<PAGE> 9
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 F. Brown
----------------------------------------
President
AMERICAN JET ENGINE SERVICES, INC.
By /s/ Anton K. Khoury
----------------------------------------
President
<PAGE> 1
EXHIBIT 10.1.6
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT effective November 19, 1998 (the
"Agreement") by and between AMERICAN AIRCARRIERS SUPPORT, INCORPORATED (the
"Company") with principal offices at Fort Mill, South Carolina and ANTON K.
KHOURY (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 President in
a newly formed subsidiary.
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 November 19, 1998 and shall
continue until November 18, 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
<PAGE> 2
2
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 November 19, 1998, the Company shall pay
to the Executive as compensation for his services the sum of $190,000.00 per
year, payable semi-monthly. Executive shall also be eligible for a bonus subject
to the discretion of the Compensation Committee of the Board of Directors. In
the event that the Agreement is not renewed or extended or if the Company
terminates the Executive without cause, then the Executive shall be compensated
as set forth in Section 13 below.
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 November 19, 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.
<PAGE> 3
3
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 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 11(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.
<PAGE> 4
4
(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 aviation business or anticipated lines of aviation business.
However, the applicability of the non-compete provisions is expressly
limited by paragraph 13 below.
(d) In the event a court of competent jurisdiction finds any
provision of this Section 11 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 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
<PAGE> 5
5
(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 that event and provided the noncompete provisions of this Agreement
apply, the Company shall pay a severance allowance equal to one-half
(1/2) of Executive's then current salary each year for a two (2) year
period at the regularly scheduled pay intervals. No other benefits will
be provided once this Agreement is terminated.
(c) The severance pay referenced in Section 13(b) shall also
be payable to the Executive in the event that this Agreement is not
renewed or extended pursuant to Section (3) supra. In that event and
provided the noncompete provisions of this Agreement apply, the Company
shall pay a severance allowance equal to one-half (1/2) of Executive's
then current salary each year for a two (2) year period at the
regularly scheduled pay intervals. No other benefits will be provided
under this subsection (c).
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
<PAGE> 6
6
shall, unless resolved by agreement of the parties, be settled by binding
arbitration in Miami, Miami-Dade County, Florida in accordance with the Rules of
the American Arbitration Association then existing. This Agreement to arbitrate
shall be specifically enforceable under the prevailing arbitration law of the
State of Florida. The award rendered by the arbitrators shall be final and
judgment may be entered upon the award in any court of the State of Florida
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 Florida.
<PAGE> 7
7
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.
20. Effective Date. This Agreement may be executed on the dates noted
below but shall only be effective on November 19, 1998.
FOR THE COMPANY: AMERICAN AIRCARRIERS SUPPORT, INC.
Dated 11/19/98 By /s/ Karl F. Brown
------------------------- ----------------------------
Title: President
------------------------
FOR THE EXECUTIVE:
Dated 11/19/98 /s/ Anton K. Khoury (SEAL)
------------------------- -------------------------
ANTON K. KHOURY
<PAGE> 1
EXHIBIT 10.1.7
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT effective November 19, 1998 (the
"Agreement") by and between AMERICAN AIRCARRIERS SUPPORT, INCORPORATED (the
"Company") with principal offices at Fort Mill, South Carolina and HANNA K.
KHOURY (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 Executive Vice President in a
newly formed subsidiary.
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 November 19, 1998 and shall
continue until November 18, 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
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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 November 19, 1998, the Company shall
pay to the Executive as compensation for his services the sum of $190,000.00
per year, payable semi-monthly. Executive shall also be eligible for a bonus
subject to the discretion of the Compensation Committee of the Board of
Directors. In the event that the Agreement is not renewed or extended or if the
Company terminates the Executive without cause, then the Executive shall be
compensated as set forth in Section 13 below.
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 November 19, 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.
<PAGE> 3
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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
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 11(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.
<PAGE> 4
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(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 aviation business or anticipated lines of aviation business.
However, the applicability of the non-compete provisions is expressly
limited by paragraph 13 below.
(d) In the event a court of competent jurisdiction finds any
provision of this Section 11 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 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
<PAGE> 5
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(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 that event and provided the noncompete provisions of this Agreement
apply, the Company shall pay a severance allowance equal to one-half
(1/2) of Executive's then current salary each year for a two (2) year
period at the regularly scheduled pay intervals. No other benefits
will be provided once this Agreement is terminated.
(c) The severance pay referenced in Section 13(b) shall also
be payable to the Executive in the event that this Agreement is not
renewed or extended pursuant to Section (3) supra. In that event and
provided the noncompete provisions of this Agreement apply, the
Company shall pay a severance allowance equal to one-half (1/2) of
Executive's then current salary each year for a two (2) year period at
the regularly scheduled pay intervals. No other benefits will be
provided under this subsection (c).
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
<PAGE> 6
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shall, unless resolved by agreement of the parties, be settled by binding
arbitration in Miami, Miami-Dade County, Florida in accordance with the Rules
of the American Arbitration Association then existing. This Agreement to
arbitrate shall be specifically enforceable under the prevailing arbitration
law of the State of Florida. The award rendered by the arbitrators shall be
final and judgment may be entered upon the award in any court of the State of
Florida 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 Florida.
<PAGE> 7
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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.
20. Effective Date. This Agreement may be executed on the dates noted
below but shall only be effective on November 19, 1998.
FOR THE COMPANY: AMERICAN AIRCARRIERS SUPPORT, INC.
Dated 11/19/98 By /s/ Karl F. Brown
------------------------- --------------------------------
Title: President
----------------------------
FOR THE EXECUTIVE:
Dated 11/19/98 /s/ Hanna K. Khoury (SEAL)
------------------------- --------------------------
HANNA K. KHOURY
<PAGE> 1
EXHIBIT 10.5.4
STATE OF FLORIDA
COUNTY OF MIAMI-DADE LEASE OF REAL PROPERTY
----------------------
THIS AGREEMENT, executed the 16th day of November, 1998, by and between
ANTON K. KHOURY, hereinafter referred to as "Lessor", and AMERICAN AIRCARRIERS
SUPPORT, INCORPORATED, a Delaware corporation, hereinafter referred to as
"Lessee";
W I T N E S S E T H
WHEREAS, Lessor owns certain realty suitable for leasing;
WHEREAS, Lessee is desirous of leasing said realty to utilize in its
business of maintaining, overhauling, supplying and redistributing aircraft
engines and associated parts to commercial and cargo airlines;
NOW, THEREFORE, in consideration of and subject to the premises, the
mutual covenants herein contained, and each and every act performed hereunder by
all of the parties, such parties enter into the following Articles of Agreement:
ARTICLE I
THE DEMISED PREMISES AND THE TERM
Section 1.01 - Demised Premises. Lessor hereby warrants that it is the
owner of that certain realty which Lessor lets and demises to Lessee, and the
Lessee leases from Lessor. Said real estate, located at 13945 S.W. 139th Street,
Miami, Florida 33186, is more particularly described in Exhibit "A" annexed
hereto and is hereinafter designated and referred to as "Demised Premises".
Section 1.02 - Title. Lessor warrants that it has a merchantable fee
simple title in and to the Demised Premises free and clear of all liens,
easements, restrictions and encumbrances, rights of way of record and easements
of record now existing thereon for public utilities and highway use except those
which have been disclosed to the Lessee on Schedule 1.02 hereto.
Section 1.03 - Zoning and Other Restrictions. Lessor warrants that the
Demised Premises and all improvements thereon are currently being used in
compliance with existing zoning. Lessor further warrants that no other
restrictions exist that would
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inhibit Lessee's use of the Demised Premises. Further Lessor warrants that no
other party has any rights to the Demised Premises, either for possession or
acquisition thereof.
Section 1.04 - Habendum and Term. Lessor hereby leases the Demised
Premises to Lessee to have and to hold the Demised Premises with the rights,
privileges, easements and appurtenances thereto attaching and belonging, to the
Lessee, its successors and assigns, with a quiet and undisturbed possession to
Lessee, for an initial term of one (1) year from the date hereof ("Initial
Term"). This lease shall be automatically extended for an additional one (1)
year upon the same terms and conditions as apply herein unless Lessee provides
written notice of termination to the Lessor at least sixty (60) days prior to
termination of the Initial Term. Lessee may terminate this Lease at any time
upon sixty (60) days written notice to Lessor.
Section 1.05 - Use. The Lessee covenants that its use of the Demised
Premises shall be limited to its overhauling, maintenance, supplying and
redistribution of aircraft engines and associated parts (or such other aircraft
uses as the parties agree) to commercial and cargo airlines business and that it
will not use the Demised Premises or any improvements thereon for any illegal or
unlawful purpose, and further covenants not to grant permission for the use by
any permitted subtenant or occupant for illegal or unlawful purposes, and the
Lessee covenants that it will immediately, upon the discovery of any such
illegal or unlawful use, exert its best efforts to compel the discontinuance of
such uses.
ARTICLE II
RENT
Section 2.01 - Rent. The Lessee shall pay the Lessor rent in the amount
of Five Thousand Three Hundred Twenty Five Dollars ($5,325.00) per month,
payable in advance on the first day of each month commencing on the effective
date of this Agreement.
Section 2.02 - Rent Payment. The Lessee shall during the term hereby
granted, pay to the Lessor the rent herein reserved and all such other sums as
may become payable on account of the Lessee's default in the observance of any
of the covenants herein contained
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on the Lessee's part to be performed, at the time and in the manner limited and
prescribed herein for the payment thereof.
Section 2.03 - Late Payment. Any installment of rent accruing under the
provisions of this lease which is not paid when due shall, after ten (10) days
written notice, bear interest at the rate of ten percent (10%) per annum from
the date due until paid, plus an additional service fee of two percent (2%) for
each delinquent payment due.
ARTICLE III
LESSEE'S COVENANTS
Section 3.01 - Taxes and Assessments. Lessee agrees to pay ten (10)
days before delinquent all taxes, general and special assessments and other
public charges levied upon or assessed against the Demised Premises which become
payable from and after the date this lease commences until expiration or
termination of this lease.
Section 3.02 - Receipts; Proration. Lessee shall exhibit to Lessor from
time to time official receipts evidencing payment of taxes as required in
Section 3.01 prior to the delinquent date. Any such taxes and other public
charges assessed against the Demised Premises for the tax year in which this
lease commences or terminates shall be equitably prorated between the parties
hereto if the commencement and the end of the term of this lease do not coincide
with the beginning or end of the tax year.
Section 3.03 - Installment Payment. Lessee shall have the right to
execute in the name of the Lessor and as its attorney in fact such agreement or
agreements or other instrument which may be required or permitted by law to
permit the payment of such taxes or assessments in installments, but Lessee
shall not be liable to pay any installments for taxes not due at the end of this
original or any renewed term after occupancy of the Lessee has closed.
Section 3.04 - Unpaid Taxes. If Lessee fails to pay any such taxes,
assessments or other public charges which it is obligated to pay as provided in
this Article, before the same become delinquent, then and in such event, Lessor
may pay the same, together with any interest and penalties thereon, and the
amount so paid shall be
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deemed rent immediately due and payable by Lessee to Lessor on demand, together
with interest thereon at the rate of ten percent (10%) per annum plus an
additional service fee of two percent (2%).
Section 3.05 - Contest of Taxes. Anything in this Article to the
contrary notwithstanding, Lessor agrees that Lessee shall have the right, at
Lessee's sole cost and expense, to contest the legality, validity, or the basis
of calculation, of any of the taxes, assessments or other public charges
provided to be paid by Lessee, but no such contest shall be carried on or
maintained by Lessee after such taxes, assessments or other public charges
become delinquent unless Lessee shall have duly paid the amount involved under
protest or shall procure and maintain a stay of all proceedings to enforce any
collection thereof and any forfeiture or sale of the Demised Premises, and shall
also provide for payment thereof together with all penalties, interest, cost and
expense by deposit of a sufficient sum of money or by a good and sufficient
undertaking as may be required by law to accomplish such stay. Lessor agrees
that it will, at the request of Lessee, execute or join in the execution of any
instrument or documents necessary in connection with any such contest except
bonds or undertakings. In the event any such contest is made by Lessee, Lessee
shall promptly, upon final determination thereof adversely to Lessee, pay and
discharge the amount involved, or affected by, any such contest, together with
any penalties, fines, interest, costs and expenses that may have accrued
thereon.
Section 3.06 - Maintenance and Repairs. As between the Lessor and the
Lessee, the Lessee shall pay or cause to be paid all non-structural repair and
maintenance costs and shall take good care of the Demised Premises and keep the
same and all parts thereof, together with any and all alterations, additions and
improvements therein or thereto, in good order and condition, except for normal
wear and tear, damage done by casualty not covered by the provisions of the
usual fire and extended coverage insurance, or acts of the Lessor.
The Lessor agrees to maintain the premises and structure in a good
state of repair during the term of this lease and, further, specifically agrees
that Lessor shall be responsible for: (1) major repairs to the utility systems
of the demised premises including, but not necessarily limited to, the
following: heating and air conditioning systems, sewer, water, electric, and
plumbing;
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(2) all non-structural and structural maintenance and repair to the roof,
exterior walls, and structural components; (3) replacement or modification of
the electrical system or plumbing system as necessary to bring the demised
premises into compliance with applicable building codes. In the event the Lessor
fails to make the repairs, replacements or modifications, or to perform the
maintenance described herein, the Lessee shall have the right to terminate this
lease upon thirty (30) days written notice sent by first class mail to the
Lessor.
Section 3.07 - Alterations and Improvements. The Demised Premises may
not be altered or changed without the written consent of the Lessor and the
Lessee shall not attach anything whatsoever to the Demised Premises that might
damage the Demised Premises or that might be a permanent attachment to the
Demised Premises without the written consent of Lessor. The consent of Lessor
shall not be unreasonably withheld. The costs of any such alterations or
improvements approved by Lessor shall be borne by the Lessee and shall remain
upon and be surrendered with the Demised Premises; provided, however, that any
trade fixtures installed by Lessee may be removed by Lessee at the expiration of
the term of this Lease, or of any renewal, provided that the Lessee is not in
default under the terms hereof and provided further that any damage occasioned
by any such removal shall be paid by Lessee.
Section 3.08 - Fees and Commissions. Lessor and Lessee represent to
each other that neither party has engaged the services of a real estate broker
or agent in negotiating or consuming the closing of this Lease. Lessor and
Lessee agree to indemnify and hold each other free and harmless of any
obligation for real estate commissions, finder's fees and legal fees earned as
services performed in connection with this lease.
Section 3.09 - Indemnification of Lessor. Lessee covenants and agrees
that Lessor shall not be liable for any injuries or damages to persons,
entities, or property from any cause whatsoever by reason of the use,
occupation, control or enjoyment of the Demised Premises by Lessee, or any
person entering thereon for any reason or invited (other than Lessor or their
agents), suffered or permitted by Lessee to go or be thereon or holding under
Lessee at any time during the term of this lease, and Lessee will save and hold
harmless Lessor from and against any and all liability, penalties, damages,
expenses and judgments whatsoever on account of
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such injuries or damages. The injuries and damages referred to in this paragraph
shall include, without limiting the generality of the preceding provisions, to
injuries, damages and mechanic's liens arising directly or indirectly out of any
demolition, repairs, restoration, reconstruction, changes, alterations and
construction which Lessee may make or cause to be made upon the Demised Premises
or any part thereof. Lessee, at Lessee's expense, agrees to employ legal counsel
to defend any action for which any claim shall be made for injuries or damages
commenced against Lessor by reason of the foregoing.
Section 3.10 - Compliance with Laws. The Lessee covenants that it will
during the demised term properly observe and at its own expense promptly comply
with and execute all present and future laws, rules, regulations and notices of
every nature and kind whatsoever of any governmental agency or authority
concerning the Demised Premises. It is expressly understood that the Lessee
shall have thirty (30) days or such time as said authorities shall accord, or
that Lessee shall necessarily need, within which to comply with, contest, obey,
carry out, observe and/or perform any such law, rule, regulation or notice.
Section 3.11 - Utilities. Lessee shall either pay or cause to be paid
all charges for gas, electricity, water, sewer and other public utility services
supplied to the Demised Premises during the term of this lease.
Section 3.12 - Liability and Property Insurance. Lessor shall, during
the term of this lease, maintain adequate fire and casualty liability insurance
coverage on the Demised Premises in solvent, mutual or stock companies or
company, insuring both the Lessor and Lessee, in an amount and form reasonably
acceptable to the parties.
Lessee shall, during the demised term, maintain adequate personal
property insurance insuring all equipment, trade fixtures, fixtures, inventory
and other personal property located on the Demised Premises. Lessee shall
maintain throughout the term of this lease adequate general liability insurance
coverage on the Demised Premises in solvent, mutual or stock companies or
company, insuring both the Lessor and the Lessee, in an amount and form
reasonably acceptable to the parties.
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ARTICLE IV
LESSOR'S COVENANTS
Section 4.01 - Quiet Possession. The Lessor covenants that the Lessee,
upon payment of the rent above reserved, and upon the due performance of the
covenants and agreements herein contained, shall and may at all times during the
term hereby granted, peaceably and quietly have, hold and enjoy the Demised
Premises pursuant to the terms hereof.
ARTICLE V
ENVIRONMENTAL COMPLIANCE
Section 5.01 - Definitions "Toxic or Hazardous Substances" shall be
interpreted broadly to include, but not be limited to, any material or substance
that is defined or classified under federal, state or local laws as: (a) a
"hazardous substance" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. ss.9601(14), Section 311 of
the Federal Water Pollution Control Act, 33 U.S.C. ss.1321, as now or hereafter
amended; (b) a "hazardous waste" pursuant to Section 1004 or Section 3001 of the
Resource Conservation and Recovery Act, 42 U.S.C. ss.6903, 42 U.S.C. ss.6921, as
now or hereafter amended; (c) a toxic pollutant under Section 307(1)(a) of the
Federal Water Pollution Control Act, 33 U.S.C. ss.1317(1)(a); (d) a "hazardous
air pollutant" under Section 112 of the Clean Air Act, 42 U.S.C. ss.7412, as now
or hereafter amended; (e) a "hazardous material" under the Hazardous Material
Transportation Act, 49 U.S.C. ss.1802(2), as now or hereafter amended; (f) toxic
or hazardous pursuant to regulations promulgated now or hereafter under the
aforementioned laws; or (g) presenting a risk to human health or the environment
under other applicable federal, state or local laws, ordinances, or regulations,
as now or as may be passed or promulgated in the future. "Toxic or Hazardous
Substances" shall also mean any substance that after release into the
environment upon exposure, ingestion, inhalation or assimilation, either
directly from the environment or indirectly by ingestion through food chains,
will or may reasonably be anticipated to cause death, disease, behavior
abnormalities, cancer or genetic abnormalities. "Toxic or Hazardous Substance"
specifically includes, but not limited to,
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asbestos, polychorinated biphenyls (PCBs), petroleum and petroleum based
derivatives and urea formaldehyde.
Section 5.02 - Representations and Warranties L e s s o r represents
and warrants to Lessee that (i) to the best knowledge of Lessor, any handling,
transportation, storage, treatment or use of Toxic or Hazardous Substances that
has occurred on the Demised Premises to date has been in compliance with all
applicable federal, state, and local laws, regulations and ordinances, and (ii)
to the best knowledge of Lessor, no leak, spill, release, discharge, emission or
disposal of Toxic or Hazardous Substances has occurred on the Demised Premises
to date and the soil, groundwater, and soil vapor on or under the Demised
Premises is free of Toxic or Hazardous Substances as of the date the term of
this Lease commences. Lessor shall be responsible for any required cleanup or
liability brought about by actions or inactions of any parties prior to Lessee's
possession of the Demised Premises.
Section 5.03 - Indemnities
(a) Lessor's Indemnity. Lessor agrees to indemnify, defend (with
counsel satisfactory to Lessee) and hold Lessee and its officers, employees,
contractors, and agents harmless from any claims, judgments, damages, penalties,
fines, expenses, liabilities or losses arising during or after the lease term
out of or in any way relating to a breach of the environmental warranties made
by Lessor above or to the presence, release or disposal of Toxic or Hazardous
Substances on or from the Demised Premises except where such presence, release
or disposal results from any act or omission of Lessee during its occupancy of
the Demised Premises. Such indemnity shall include, without limitation, costs
incurred in connection with:
(i) the presence or suspected presence of Toxic or Hazardous
Substances in the soil, groundwater or soil vapor on or under the
Demised Premises before Lessee occupies the Demised Premises or the
Lease Term commences;
(ii) the presence or suspected presence of Toxic or Hazardous
Substances on or under the Demised Premises as a result of any
discharge, dumping, spilling (accidental or otherwise) onto the Demised
Premises during Lessee's occupancy
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of the Demised Premises or after the lease term commences by Lessor.
The indemnification provided by this section shall also specifically
cover, without limitation, costs incurred in connection with any investigation
of site conditions or any cleanup, remedial removal or restoration work required
in either event by any federal, state or local governmental agency or political
subdivision or by court order because of the presence or suspected presence of
Toxic or Hazardous Substances in the soil, groundwater, or soil vapor on or
under the Demised Premises, for which Lessor is responsible as provided above.
Such costs may include, but not be limited to, response costs incurred as a
result of the order of a court or governmental agency and related attorneys
fees, consultants fees, and expert fees.
The foregoing environmental indemnity shall survive the expiration or
earlier termination of this Lease and/or any transfer of all or any portion of
the Demised Premises, or of any interest in this Lease.
(b) Lessee's Indemnity Lessee agrees to indemnify, defend (with counsel
satisfactory to Lessor) and hold Lessor and its officers, employees,
contractors, and agents harmless from any claims, judgments, damages, penalties,
fines, expenses, liabilities or losses arising during or after the lease term
out of or in any way relating to the presence, release or disposal of Toxic or
Hazardous Substances on or from the Demised Premises where such presence,
release or disposal results from any act or omission of Lessee during its
occupancy of the Demised Premises. Such indemnity shall, without limitation,
include costs incurred in connection with:
(i) the presence or suspected presence of Toxic or Hazardous
Substances in the soil, groundwater or soil vapor on or under the
Demised Premises resulting from any act or omission of Lessee;
(ii) the presence or suspected presence of Toxic or Hazardous
Substances on or under the Demised Premises as a result of any
discharge, dumping, spilling (accidental or otherwise) onto the Demised
Premises by Lessee during Lessee's
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occupance of the Demised Premises or after the lease term commences.
The indemnification provided by this section shall also specifically
cover, without limitation, costs incurred in connection with any investigation
of site conditions or any cleanup, remedial removal or restoration work required
in either event by any federal, state or local governmental agency or political
subdivision or by court order because of the presence or suspected presence of
Toxic or Hazardous Substances in the soil, groundwater, or soil vapor on or
under the Demised Premises, for which Lessee is responsible as provided above.
Such costs may include, but not be limited to, response costs incurred as a
result of the order of a court or governmental agency and related attorneys
fees, consultants fees, and expert fees.
The foregoing environmental indemnity shall survive the expiration or
earlier termination of this lease and/or any transfer of all or any portion of
the Demised Premises, or of any interest in this lease.
ARTICLE VI
EMINENT DOMAIN
Section 6.01 - Eminent Domain. If more than twenty-five percent (25%)
of the land area of the Demised Premises is taken under the power of eminent
domain (including any conveyance made in lieu thereof), and such taking shall
make the operation of Lessee's business on the Demised Premises impractical,
then Lessee shall have the right to terminate this lease by giving Lessor
written notice of such termination within thirty (30) days after such taking or
condemnation. If Lessee does not so elect to terminate this lease, the rental to
be paid by Lessee hereunder shall be equitably reduced in proportion to Lessee's
loss of the use of the Demised Premises. Any award or awards payable on account
of any taking or condemnation of all or part of the Demised Premises shall be
payable to Lessor.
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ARTICLE VII
DEFAULT
Section 7.01 - Termination of Lease. Upon occurrence of any default,
Lessor may, at its option, in addition to any other remedy or right given
hereunder or by law,
(a) terminate and cancel this lease at any time after the expiration of
thirty (30) days from the giving of notice of default to the party in
default, but only if the party in default has not remedied such default
within the said thirty (30) days or if the party in default has not
commenced such act or acts as shall be necessary to remedy the default
and shall complete such act or acts promptly; or
(b) terminate this lease for the nonpayment of rent at any time after
the expiration of ten (10) days following written notice to Lessee of
nonpayment of such rent (provided each default has not been cured); and
(c) any termination of this lease under sub-paragraphs (a) and (b) of
this Section 7.01 shall not prejudice Lessor's right to prosecute any
other remedy which it may have for a breach of this lease or default
hereunder.
Section 7.02 - Event of Default Defined. Each of the following shall be
deemed an event of default:
(a) Default in the payment of rent or other payments hereunder where
such default has not been cured within 10 days of written notice of
such default;
(b) If Lessee shall default in the performance or observance of any
other covenant or condition of this lease by the Lessee to be performed
or observed and such default has not been cured within 30 days written
notice of such default;
(c) The filing or execution or occurrence of
(1) A petition in bankruptcy by or against the Lessee which
remains undischarged for 60 days after filing;
(2) A petition or answer against Lessee seeking a
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or other relief of the same or
different kind under any provision of the Bankruptcy Act;
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(3) Adjudication of Lessee as a bankrupt or insolvent or
insolvency in the bankruptcy or equity sense;
(4) An assignment by Lessee for the benefit of creditors,
whether by trust mortgage or otherwise;
(5) A petition or other proceeding by or against the Lessee
for, or the appointment of, a trustee, receiver, guardian,
conservator or liquidator of Lessee with respect to all or
substantially all of its property;
(6) A petition or other proceeding by or against the Lessee
for its dissolution or liquidation, or the taking of
possession of the property of the Lessee by any governmental
authority in connection with dissolution or liquidation; or
(7) The taking by any person of the leasehold created hereby
or part thereof upon execution, attachment or other process of
law or equity (except pursuant to a valid assignment or
sublease pursuant to Article VIII).
Section 7.03 - Repossession. Upon termination of this lease as
hereinabove provided, or pursuant to statute, or by summary proceedings or
otherwise, the Lessor may enter forthwith without further demand or notice upon
any part of the Demised Premises, if it has not theretofore done so, and resume
possession either by summary proceedings, or by action at law or in equity or by
entry or otherwise as the Lessor may determine, and shall not be liable in
trespass or for any damages to Lessee or any other person. In no event shall
such re-entry or resumption of possession or reletting as hereafter provided be
deemed to be an acceptance or surrender of this lease or a waiver of the rights
or remedies of Lessor hereunder.
Section 7.04 - Reletting. Upon termination of this lease in any manner
above provided, the Lessor shall use reasonable efforts to relet the Demised
Premises.
Section 7.05 - Lessor's Right to Cure Default of Lessee. If Lessee
shall be in default in any of the terms or provisions of this lease, other than
the payment of rental, Lessor may, after thirty (30) days written notice to
Lessee, immediately or at any
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time thereafter, without being required to give notice, perform the same for the
account of Lessee and at the cost and expense of Lessee, and Lessee shall pay to
Lessor on demand any amount properly paid by Lessor including reasonable
attorney fees for such purpose, with interest thereon at the rate of ten percent
(10%) per annum plus an additional service fee of two percent (2%) from the date
of payment thereof by Lessor.
Section 7.06 - Non-Exclusive Effect. The default provisions in this
Article VII shall not operate to exclude, override or limit any other right or
remedy provided in this lease, but shall be read in conjunction with the other
provisions hereof as supplementary thereto, and any election by the party for
whose benefit a particular provision operates, as communicated in any notice to
the other party, shall be conclusive as to the provision under which the former
is proceeding. Unless otherwise specified in such notice, however, any such
election shall not act as a waiver of the right to proceed under any other
provision at any other time with respect to the same or any other breach,
default, omission or failure of performance which may be the subject of the
election.
ARTICLE VIII
ASSIGNMENT, SUBLETTING, ATTORNMENT
Section 8.01 - Assignment. This lease may be assigned only with the
written consent of the Lessor which will not be unreasonably withheld.
Section 8.02 - Subletting. Lessee shall not sublet the Demised Premises
or any part thereof without the express written consent of the Lessor which will
not be unreasonably withheld.
Section 8.03 - Assignment by Lessor. Lessor may, from time to time,
without further consent of Lessee, assign Lessor's interest in this lease,
either in whole or in part, to any bank, insurance company, or other established
lending institution, but only subject to the rights of Lessee under this lease
and only while the Lessee is not in default.
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ARTICLE IX
TRANSFER OF LESSOR'S INTEREST
Section 9.01 - Transfer of Lessor's Interest. In the event of the sale,
assignment or transfer by Lessor of its interest in the Demised Premises or in
this lease (other than a collateral assignment to secure a debt of Lessor) to a
successor in interest who expressly assumes the obligations of Lessor hereunder,
Lessor shall thereupon be released or discharged from all of its covenants and
obligations hereunder, except such obligations as shall have accrued prior to
any such sale, assignment or transfer; and Lessee agrees to look solely to such
successor in interest of Lessor for performance of such obligations. Lessor's
assignment of the lease or of any or all of its rights herein shall in no manner
affect Lessee's obligations hereunder. Lessee shall thereafter attorn and look
to such assignee, as Lessor, provided Lessee has first received written notice
of such assignment of Lessor's interest.
ARTICLE X
SUPPLEMENTARY AGREEMENT
Section 10.01 - Agreement as to Modification. Lessee agrees at any time
and from time to time upon not less than ten (10) days prior written request by
Lessor, to execute, acknowledge and deliver to Lessor, and Lessor agrees at any
time and from time to time, upon not less than ten (10) days prior written
request by Lessee, to execute, acknowledge and deliver to Lessee a statement in
writing certifying that this lease is unmodified and in full force and effect
(or if there have been mutually agreed upon modifications that the same is in
full force and effect, as modified, and stating the modifications), and the
dates to which the fixed rent and other charges have been paid in advance, if
any, and whether or not there is any existing default, other than on any
existing mortgage, by Lessee with respect to any sums of money required to be
paid by Lessee under the terms of this lease, or notice of default served by
Lessor, it being intended that any such statement delivered pursuant to this
paragraph may be relied upon by any prospective purchaser of the fee or
leasehold estate or by any prospective or existing mortgagee or assignee of any
mortgage upon the leasehold estate, or by any prospective assignee or subtenant
of the leasehold estate. If any such certification by Lessor shall allege
non-performance by Lessee, the nature and extent of such non-performance shall,
insofar as actually known by Lessor, be summarized therein. In the event that
either party shall fail to execute, acknowledge and deliver to the other each
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statement prior to the expiration of said ten (10) day period, it shall be
conclusively presumed a certification that this lease is unmodified and in full
force and effect, that all rental has been paid to date and that there is no
existing default.
Section 10.02 - Acknowledgment of Rent. The Lessor within ten (10)
days, upon request of the Lessee or any holder of a mortgage on the fee or
leasehold interest herein demised, will furnish a written statement duly
acknowledging the amount of rent and additional rent due, if any.
Section 10.03 - Easements. Lessor covenants and agrees that it will
execute any and all instruments that may be required of the Lessor in connection
with the granting of easements for installation of water, gas, steam,
electricity, telephone, sewage and storm drainage of the various utility
companies affecting any street, opened or proposed, on any part of the Demised
Premises.
Section 10.04 - Notice of Default. Wherever in this lease the Lessor is
given the right to pay any sum of money or perform any act which, by the terms
of this lease, are to be performed by the Lessee, Lessor agrees that it will not
so pay or perform until it has given Lessee thirty (30) days written notice of
its intent so to do and the Lessee at the expiration of such thirty (30) day
period has not made such payment or commenced and is diligently prosecuting such
performance; provided, however, that such period shall not exceed any other
period of notification specifically set forth herein relating to specific acts
of the parties hereto, it being specifically understood that this thirty (30)
day period notice shall not control or override the other notice requirements
specifically set forth in the lease agreement.
ARTICLE XI
NOTICES
Any and all notices by the Lessor to the Lessee, or by the Lessee to
the Lessor, shall be in writing and by registered or certified mail addressed to
the respective addresses below stated:
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To the Lessor by Communication addressed to:
Anton K. Khoury
---------------------------------
Miami, Florida 33166
With a Copy to:
R. Lawrence Bonner
Homer & Bonner, P.A.
3400 NationsBank Tower
100 Southeast 2nd Street
Miami, FL 33131
To the Lessee by Communication addressed to:
American Aircarriers Support, Incorporated
Attn: Karl F. Brown
P. O. Box 7566
Charlotte, NC 28241
With a Copy to:
David M. Furr
Gray, Layton, Kersh, Solomon,
Sigmon, Furr & Smith, P.A.
Post Office Box 2636
Gastonia, NC 28053-2636
Rent shall be payable by check sent by ordinary mail to the Lessor at the above
address for notices.
ARTICLE XII
VALIDITY OF PROVISIONS
If any clause or provision herein contained shall be adjudged invalid,
the same shall not affect the validity of any other clause or provision of this
lease or constitute any cause of action in favor of either party as against the
other, unless the same shall prevent the operation upon the Demised Premises of
the use now contemplated by the parties.
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The Lessor and the Lessee hereto agree to execute and deliver upon
notice as set forth elsewhere in this lease, any and all instruments in writing
necessary to carry out any terms, conditions, covenants or assurances in this
lease.
ARTICLE XIII
BINDING ON HEIRS
It is further covenanted and agreed, by and between the Lessor and the
Lessee, that all the covenants, agreements, provisions, conditions and
undertakings in this lease contained shall extend to and be binding upon the
heirs, executors, successors, and permitted assigns of the respective Lessor and
Lessee hereto, and the same as if they were in every case named and expressed,
and shall be construed as covenants running with the land; and that wherever in
this lease reference is made to either the Lessor or the Lessee hereto, it shall
be held to include and apply to (wherever and whenever applicable) also the
heirs, executors, successor, personal or legal representatives, and permitted
assigns of each Lessor or Lessee, and same as if in each and every case so
expressed.
ARTICLE XIV
EXTENSION OF TIME
It is covenanted and agreed by and between the Lessor and the Lessee
that the time or times herein specified within which the Lessee or Lessor is
required to perform any act or to do anything in order to comply with the terms
and provisions of this lease except for the obligation to pay rent or other sums
coming due, shall be, and they are each hereby, extended to the extent that the
Lessee or Lessor is actually and in good faith delayed or hindered by strikes,
lockouts, force majeure, the elements, or other causes or conditions beyond
Lessee's or Lessor's control.
ARTICLE XV
SURRENDER OF PREMISES
The Lessee shall surrender and deliver up the Demised Premises, in as
good condition as when received, reasonable and ordinary wear and tear excepted.
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ARTICLE XVI
INSPECTION AND ACCESS TO DEMISED PREMISES
The Lessor shall have access to the Demised Premises at reasonable
hours for inspection. Lessor's inspection shall be on a reasonable interval and
upon reasonable notice to the Lessee. Lessor shall have access to the Demised
Premises so that Lessor may enter other parts of the building (i.e. Section B
and Section C). Since the driveway is a common driveway used by all tenants of
the building, Lessee shall not do anything whatsoever to prevent other tenants
access to the driveway.
ARTICLE XVII
ATTORNEYS' FEES
In the event it is necessary for either Lessor or Lessee to commence
legal action against the other on account of a default or violation of any of
the terms or conditions of this lease, by the other, the party prevailing in
such action shall be entitled to recover, in addition to any other relief
granted, attorneys' fees in an amount which the Court may determine to be
reasonable.
ARTICLE XVIII
CONSTRUCTION AND INTERPRETATION
The titles, headings or catch lines preceding the Articles of this
lease agreement are for the purpose of easy reference and shall not be
considered a part of this agreement. Further, this lease agreement is made and
executed in the State of Florida and shall be construed, interpreted, and
enforced pursuant to the laws of the State of Florida.
ARTICLE XIX
SHORT FORM LEASE
Lessor or Lessee shall have the right to require of the other party
that a short form lease be executed at the time of the execution of this lease
instrument, or thereafter upon request at
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Lessee's sole expense said short form lease to be for recording purposes only.
ARTICLE XX
WAIVER
No waiver of a breach of any of the agreements or provisions contained
in this lease shall be construed to be a waiver of any subsequent breach of the
same or of any other provisions in the lease.
ARTICLE XXI
REQUEST TO SIGN LANDLORD WAIVER
Lessor agrees to any reasonable request to execute a landlord waiver in
favor of any lending institution of Lessee.
ARTICLE XXII
COMPLETE AGREEMENT
This instrument contains the complete agreement of the parties
regarding the terms and conditions of the lease of the Demised Premises and
there are no oral or written conditions, terms, understanding of other
agreements pertaining thereto which have not been incorporated herein.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and year first above written.
LESSOR:
/s/ Anton K. Khoury
--------------------------------------
ANTON K. KHOURY
LESSEE:
ATTEST: AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
- ----------------------------- --------------------------------------
/s/ David M. Furr By /s/ Karl F. Brown
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EXHIBIT 10.5.5
STATE OF FLORIDA
COUNTY OF MIAMI-DADE LEASE OF REAL PROPERTY
THIS AGREEMENT, executed the 16th day of November, 1998, by and between
HANNA K. KHOURY, hereinafter referred to as "Lessor", and AMERICAN AIRCARRIERS
SUPPORT, INCORPORATED, a Delaware corporation, hereinafter referred to as
"Lessee";
W I T N E S S E T H
WHEREAS, Lessor owns certain realty suitable for leasing;
WHEREAS, Lessee is desirous of leasing said realty to utilize in its
business of maintaining, overhauling, supplying and redistributing aircraft
engines and associated parts to commercial and cargo airlines;
NOW, THEREFORE, in consideration of and subject to the premises, the
mutual covenants herein contained, and each and every act performed hereunder by
all of the parties, such parties enter into the following Articles of Agreement:
ARTICLE I
THE DEMISED PREMISES AND THE TERM
Section 1.01 - Demised Premises. Lessor hereby warrants that it is the
owner of that certain realty which Lessor lets and demises to Lessee, and the
Lessee leases from Lessor. Said real estate, located at 7980-88 N.W. 56th
Street, Miami, Florida 33166, is more particularly described in Exhibit "A"
annexed hereto and is hereinafter designated and referred to as "Demised
Premises".
Section 1.02 - Title. Lessor warrants that it has a merchantable fee
simple title in and to the Demised Premises free and clear of all liens,
easements, restrictions and encumbrances, rights of way of record and easements
of record now existing thereon for public utilities and highway use except those
which have been disclosed to the Lessee on Schedule 1.02 hereto.
Section 1.03 - Zoning and Other Restrictions. Lessor warrants that the
Demised Premises and all improvements thereon are currently being used in
compliance with existing zoning. Lessor further warrants that no other
restrictions exist that would
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inhibit Lessee's use of the Demised Premises. Further Lessor warrants that no
other party has any rights to the Demised Premises, either for possession or
acquisition thereof.
Section 1.04 - Habendum and Term. Lessor hereby leases the Demised
Premises to Lessee to have and to hold the Demised Premises with the rights,
privileges, easements and appurtenances thereto attaching and belonging, to the
Lessee, its successors and assigns, with a quiet and undisturbed possession to
Lessee, for an initial term of one (1) year from the date hereof ("Initial
Term"). This lease shall be automatically extended for an additional one (1)
year upon the same terms and conditions as apply herein unless Lessee provides
written notice of termination to the Lessor at least sixty (60) days prior to
termination of the Initial Term. Lessee may terminate this Lease at any time
upon sixty (60) days written notice to Lessor.
Section 1.05 - Use. The Lessee covenants that its use of the Demised
Premises shall be limited to its overhauling, maintenance, supplying and
redistribution of aircraft engines and associated parts (or such other aircraft
uses as the parties agree) to commercial and cargo airlines business and that it
will not use the Demised Premises or any improvements thereon for any illegal or
unlawful purpose, and further covenants not to grant permission for the use by
any permitted subtenant or occupant for illegal or unlawful purposes, and the
Lessee covenants that it will immediately, upon the discovery of any such
illegal or unlawful use, exert its best efforts to compel the discontinuance of
such uses.
ARTICLE II
RENT
Section 2.01 - Rent. The Lessee shall pay the Lessor rent in the amount
of Five Thousand Two Hundred Eighteen Dollars and fifty cents ($5,218.50) per
month, payable in advance on the first day of each month commencing on the
effective date of this Agreement.
Section 2.02 - Rent Payment. The Lessee shall during the term hereby
granted, pay to the Lessor the rent herein reserved and all such other sums as
may become payable on account of the Lessee's default in the observance of any
of the covenants herein contained
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on the Lessee's part to be performed, at the time and in the manner limited and
prescribed herein for the payment thereof.
Section 2.03 - Late Payment. Any installment of rent accruing under the
provisions of this lease which is not paid when due shall, after ten (10) days
written notice, bear interest at the rate of ten percent (10%) per annum from
the date due until paid, plus an additional service fee of two percent (2%) for
each delinquent payment due.
ARTICLE III
LESSEE'S COVENANTS
Section 3.01 - Taxes and Assessments. Lessee agrees to pay ten (10)
days before delinquent all taxes, general and special assessments and other
public charges levied upon or assessed against the Demised Premises which become
payable from and after the date this lease commences until expiration or
termination of this lease.
Section 3.02 - Receipts; Proration. Lessee shall exhibit to Lessor from
time to time official receipts evidencing payment of taxes as required in
Section 3.01 prior to the delinquent date. Any such taxes and other public
charges assessed against the Demised Premises for the tax year in which this
lease commences or terminates shall be equitably prorated between the parties
hereto if the commencement and the end of the term of this lease do not coincide
with the beginning or end of the tax year.
Section 3.03 - Installment Payment. Lessee shall have the right to
execute in the name of the Lessor and as its attorney in fact such agreement or
agreements or other instrument which may be required or permitted by law to
permit the payment of such taxes or assessments in installments, but Lessee
shall not be liable to pay any installments for taxes not due at the end of this
original or any renewed term after occupancy of the Lessee has closed.
Section 3.04 - Unpaid Taxes. If Lessee fails to pay any such taxes,
assessments or other public charges which it is obligated to pay as provided in
this Article, before the same become delinquent, then and in such event, Lessor
may pay the same, together with any interest and penalties thereon, and the
amount so paid shall be
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deemed rent immediately due and payable by Lessee to Lessor on demand, together
with interest thereon at the rate of ten percent (10%) per annum plus an
additional service fee of two percent (2%).
Section 3.05 - Contest of Taxes. Anything in this Article to the
contrary notwithstanding, Lessor agrees that Lessee shall have the right, at
Lessee's sole cost and expense, to contest the legality, validity, or the basis
of calculation, of any of the taxes, assessments or other public charges
provided to be paid by Lessee, but no such contest shall be carried on or
maintained by Lessee after such taxes, assessments or other public charges
become delinquent unless Lessee shall have duly paid the amount involved under
protest or shall procure and maintain a stay of all proceedings to enforce any
collection thereof and any forfeiture or sale of the Demised Premises, and shall
also provide for payment thereof together with all penalties, interest, cost and
expense by deposit of a sufficient sum of money or by a good and sufficient
undertaking as may be required by law to accomplish such stay. Lessor agrees
that it will, at the request of Lessee, execute or join in the execution of any
instrument or documents necessary in connection with any such contest except
bonds or undertakings. In the event any such contest is made by Lessee, Lessee
shall promptly, upon final determination thereof adversely to Lessee, pay and
discharge the amount involved, or affected by, any such contest, together with
any penalties, fines, interest, costs and expenses that may have accrued
thereon.
Section 3.06 - Maintenance and Repairs. As between the Lessor and the
Lessee, the Lessee shall pay or cause to be paid all non-structural repair and
maintenance costs and shall take good care of the Demised Premises and keep the
same and all parts thereof, together with any and all alterations, additions and
improvements therein or thereto, in good order and condition, except for normal
wear and tear, damage done by casualty not covered by the provisions of the
usual fire and extended coverage insurance, or acts of the Lessor.
The Lessor agrees to maintain the premises and structure in a good
state of repair during the term of this lease and, further, specifically agrees
that Lessor shall be responsible for: (1) major repairs to the utility systems
of the demised premises including, but not necessarily limited to, the
following: heating and air conditioning systems, sewer, water, electric, and
plumbing;
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(2) all non-structural and structural maintenance and repair to the roof,
exterior walls, and structural components; (3) replacement or modification of
the electrical system or plumbing system as necessary to bring the demised
premises into compliance with applicable building codes. In the event the Lessor
fails to make the repairs, replacements or modifications, or to perform the
maintenance described herein, the Lessee shall have the right to terminate this
lease upon thirty (30) days written notice sent by first class mail to the
Lessor.
Section 3.07 - Alterations and Improvements. The Demised Premises may
not be altered or changed without the written consent of the Lessor and the
Lessee shall not attach anything whatsoever to the Demised Premises that might
damage the Demised Premises or that might be a permanent attachment to the
Demised Premises without the written consent of Lessor. The consent of Lessor
shall not be unreasonably withheld. The costs of any such alterations or
improvements approved by Lessor shall be borne by the Lessee and shall remain
upon and be surrendered with the Demised Premises; provided, however, that any
trade fixtures installed by Lessee may be removed by Lessee at the expiration of
the term of this Lease, or of any renewal, provided that the Lessee is not in
default under the terms hereof and provided further that any damage occasioned
by any such removal shall be paid by Lessee.
Section 3.08 - Fees and Commissions. Lessor and Lessee represent to
each other that neither party has engaged the services of a real estate broker
or agent in negotiating or consuming the closing of this Lease. Lessor and
Lessee agree to indemnify and hold each other free and harmless of any
obligation for real estate commissions, finder's fees and legal fees earned as
services performed in connection with this lease.
Section 3.09 - Indemnification of Lessor. Lessee covenants and agrees
that Lessor shall not be liable for any injuries or damages to persons,
entities, or property from any cause whatsoever by reason of the use,
occupation, control or enjoyment of the Demised Premises by Lessee, or any
person entering thereon for any reason or invited (other than Lessor or their
agents), suffered or permitted by Lessee to go or be thereon or holding under
Lessee at any time during the term of this lease, and Lessee will save and hold
harmless Lessor from and against any and all liability, penalties, damages,
expenses and judgments whatsoever on account of
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such injuries or damages. The injuries and damages referred to in this paragraph
shall include, without limiting the generality of the preceding provisions, to
injuries, damages and mechanic's liens arising directly or indirectly out of any
demolition, repairs, restoration, reconstruction, changes, alterations and
construction which Lessee may make or cause to be made upon the Demised Premises
or any part thereof. Lessee, at Lessee's expense, agrees to employ legal counsel
to defend any action for which any claim shall be made for injuries or damages
commenced against Lessor by reason of the foregoing.
Section 3.10 - Compliance with Laws. The Lessee covenants that it will
during the demised term properly observe and at its own expense promptly comply
with and execute all present and future laws, rules, regulations and notices of
every nature and kind whatsoever of any governmental agency or authority
concerning the Demised Premises. It is expressly understood that the Lessee
shall have thirty (30) days or such time as said authorities shall accord, or
that Lessee shall necessarily need, within which to comply with, contest, obey,
carry out, observe and/or perform any such law, rule, regulation or notice.
Section 3.11 - Utilities. Lessee shall either pay or cause to be paid
all charges for gas, electricity, water, sewer and other public utility services
supplied to the Demised Premises during the term of this lease.
Section 3.12 - Liability and Property Insurance. Lessor shall, during
the term of this lease, maintain adequate fire and casualty liability insurance
coverage on the Demised Premises in solvent, mutual or stock companies or
company, insuring both the Lessor and Lessee, in an amount and form reasonably
acceptable to the parties.
Lessee shall, during the demised term, maintain adequate personal
property insurance insuring all equipment, trade fixtures, fixtures, inventory
and other personal property located on the Demised Premises. Lessee shall
maintain throughout the term of this lease adequate general liability insurance
coverage on the Demised Premises in solvent, mutual or stock companies or
company, insuring both the Lessor and the Lessee, in an amount and form
reasonably acceptable to the parties.
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ARTICLE IV
LESSOR'S COVENANTS
Section 4.01 - Quiet Possession. The Lessor covenants that the Lessee,
upon payment of the rent above reserved, and upon the due performance of the
covenants and agreements herein contained, shall and may at all times during the
term hereby granted, peaceably and quietly have, hold and enjoy the Demised
Premises pursuant to the terms hereof.
ARTICLE V
ENVIRONMENTAL COMPLIANCE
Section 5.01 - Definitions "Toxic or Hazardous Substances" shall be
interpreted broadly to include, but not be limited to, any material or substance
that is defined or classified under federal, state or local laws as: (a) a
"hazardous substance" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601(14), Section
311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as now
or hereafter amended; (b) a "hazardous waste" pursuant to Section 1004 or
Section 3001 of the Resource Conservation and Recovery Act, 42 U.S.C. Section
6903, 42 U.S.C. Section 6921, as now or hereafter amended; (c) a toxic pollutant
under Section 307(1)(a) of the Federal Water Pollution Control Act, 33 U.S.C.
Section 1317(1)(a); (d) a "hazardous air pollutant" under Section 112 of the
Clean Air Act, 42 U.S.C. Section 7412, as now or hereafter amended; (e) a
"hazardous material" under the Hazardous Material Transportation Act, 49 U.S.C.
Section 1802(2), as now or hereafter amended; (f) toxic or hazardous pursuant to
regulations promulgated now or hereafter under the aforementioned laws; or (g)
presenting a risk to human health or the environment under other applicable
federal, state or local laws, ordinances, or regulations, as now or as may be
passed or promulgated in the future. "Toxic or Hazardous Substances" shall also
mean any substance that after release into the environment upon exposure,
ingestion, inhalation or assimilation, either directly from the environment or
indirectly by ingestion through food chains, will or may reasonably be
anticipated to cause death, disease, behavior abnormalities, cancer or genetic
abnormalities. "Toxic or Hazardous Substance" specifically includes, but not
limited to,
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asbestos, polychorinated biphenyls (PCBs), petroleum and petroleum based
derivatives and urea formaldehyde.
Section 5.02 - Representations and Warranties Lessor represents and
warrants to Lessee that (i) to the best knowledge of Lessor, any handling,
transportation, storage, treatment or use of Toxic or Hazardous Substances that
has occurred on the Demised Premises to date has been in compliance with all
applicable federal, state, and local laws, regulations and ordinances, and (ii)
to the best knowledge of Lessor, no leak, spill, release, discharge, emission or
disposal of Toxic or Hazardous Substances has occurred on the Demised Premises
to date and the soil, groundwater, and soil vapor on or under the Demised
Premises is free of Toxic or Hazardous Substances as of the date the term of
this Lease commences. Lessor shall be responsible for any required cleanup or
liability brought about by actions or inactions of any parties prior to Lessee's
possession of the Demised Premises.
Section 5.03 - Indemnities
(a) Lessor's Indemnity. Lessor agrees to indemnify, defend (with
counsel satisfactory to Lessee) and hold Lessee and its officers, employees,
contractors, and agents harmless from any claims, judgments, damages, penalties,
fines, expenses, liabilities or losses arising during or after the lease term
out of or in any way relating to a breach of the environmental warranties made
by Lessor above or to the presence, release or disposal of Toxic or Hazardous
Substances on or from the Demised Premises except where such presence, release
or disposal results from any act or omission of Lessee during its occupancy of
the Demised Premises. Such indemnity shall include, without limitation, costs
incurred in connection with:
(i) the presence or suspected presence of Toxic or Hazardous
Substances in the soil, groundwater or soil vapor on or under the
Demised Premises before Lessee occupies the Demised Premises or the
Lease Term commences;
(ii) the presence or suspected presence of Toxic or Hazardous
Substances on or under the Demised Premises as a result of any
discharge, dumping, spilling (accidental or otherwise) onto the Demised
Premises during Lessee's occupancy
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of the Demised Premises or after the lease term commences by
Lessor.
The indemnification provided by this section shall also specifically
cover, without limitation, costs incurred in connection with any investigation
of site conditions or any cleanup, remedial removal or restoration work required
in either event by any federal, state or local governmental agency or political
subdivision or by court order because of the presence or suspected presence of
Toxic or Hazardous Substances in the soil, groundwater, or soil vapor on or
under the Demised Premises, for which Lessor is responsible as provided above.
Such costs may include, but not be limited to, response costs incurred as a
result of the order of a court or governmental agency and related attorneys
fees, consultants fees, and expert fees.
The foregoing environmental indemnity shall survive the expiration or
earlier termination of this Lease and/or any transfer of all or any portion of
the Demised Premises, or of any interest in this Lease.
(b) Lessee's Indemnity Lessee agrees to indemnify, defend (with counsel
satisfactory to Lessor) and hold Lessor and its officers, employees,
contractors, and agents harmless from any claims, judgments, damages, penalties,
fines, expenses, liabilities or losses arising during or after the lease term
out of or in any way relating to the presence, release or disposal of Toxic or
Hazardous Substances on or from the Demised Premises where such presence,
release or disposal results from any act or omission of Lessee during its
occupancy of the Demised Premises. Such indemnity shall, without limitation,
include costs incurred in connection with:
(i) the presence or suspected presence of Toxic or Hazardous
Substances in the soil, groundwater or soil vapor on or under the
Demised Premises resulting from any act or omission of Lessee;
(ii) the presence or suspected presence of Toxic or Hazardous
Substances on or under the Demised Premises as a result of any
discharge, dumping, spilling (accidental or otherwise) onto the Demised
Premises by Lessee during Lessee's
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occupance of the Demised Premises or after the lease term
commences.
The indemnification provided by this section shall also specifically
cover, without limitation, costs incurred in connection with any investigation
of site conditions or any cleanup, remedial removal or restoration work required
in either event by any federal, state or local governmental agency or political
subdivision or by court order because of the presence or suspected presence of
Toxic or Hazardous Substances in the soil, groundwater, or soil vapor on or
under the Demised Premises, for which Lessee is responsible as provided above.
Such costs may include, but not be limited to, response costs incurred as a
result of the order of a court or governmental agency and related attorneys
fees, consultants fees, and expert fees.
The foregoing environmental indemnity shall survive the expiration or
earlier termination of this lease and/or any transfer of all or any portion of
the Demised Premises, or of any interest in this lease.
ARTICLE VI
EMINENT DOMAIN
Section 6.01 - Eminent Domain. If more than twenty-five percent (25%)
of the land area of the Demised Premises is taken under the power of eminent
domain (including any conveyance made in lieu thereof), and such taking shall
make the operation of Lessee's business on the Demised Premises impractical,
then Lessee shall have the right to terminate this lease by giving Lessor
written notice of such termination within thirty (30) days after such taking or
condemnation. If Lessee does not so elect to terminate this lease, the rental to
be paid by Lessee hereunder shall be equitably reduced in proportion to Lessee's
loss of the use of the Demised Premises. Any award or awards payable on account
of any taking or condemnation of all or part of the Demised Premises shall be
payable to Lessor.
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ARTICLE VII
DEFAULT
Section 7.01 - Termination of Lease. Upon occurrence of any default,
Lessor may, at its option, in addition to any other remedy or right given
hereunder or by law,
(a) terminate and cancel this lease at any time after the expiration of
thirty (30) days from the giving of notice of default to the party in
default, but only if the party in default has not remedied such default
within the said thirty (30) days or if the party in default has not
commenced such act or acts as shall be necessary to remedy the default
and shall complete such act or acts promptly; or
(b) terminate this lease for the nonpayment of rent at any time after
the expiration of ten (10) days following written notice to Lessee of
nonpayment of such rent (provided each default has not been cured); and
(c) any termination of this lease under sub-paragraphs (a) and (b) of
this Section 7.01 shall not prejudice Lessor's right to prosecute any
other remedy which it may have for a breach of this lease or default
hereunder.
Section 7.02 - Event of Default Defined. Each of the following shall be
deemed an event of default:
(a) Default in the payment of rent or other payments hereunder where
such default has not been cured within 10 days of written notice of
such default;
(b) If Lessee shall default in the performance or observance of any
other covenant or condition of this lease by the Lessee to be performed
or observed and such default has not been cured within 30 days written
notice of such default;
(c) The filing or execution or occurrence of
(1) A petition in bankruptcy by or against the Lessee which
remains undischarged for 60 days after filing;
(2) A petition or answer against Lessee seeking a
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or other relief of the same or
different kind under any provision of the Bankruptcy Act;
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(3) Adjudication of Lessee as a bankrupt or insolvent or
insolvency in the bankruptcy or equity sense;
(4) An assignment by Lessee for the benefit of creditors,
whether by trust mortgage or otherwise;
(5) A petition or other proceeding by or against the Lessee
for, or the appointment of, a trustee, receiver, guardian,
conservator or liquidator of Lessee with respect to all or
substantially all of its property;
(6) A petition or other proceeding by or against the Lessee
for its dissolution or liquidation, or the taking of
possession of the property of the Lessee by any governmental
authority in connection with dissolution or liquidation; or
(7) The taking by any person of the leasehold created hereby
or part thereof upon execution, attachment or other process of
law or equity (except pursuant to a valid assignment or
sublease pursuant to Article VIII).
Section 7.03 - Repossession. Upon termination of this lease as
hereinabove provided, or pursuant to statute, or by summary proceedings or
otherwise, the Lessor may enter forthwith without further demand or notice upon
any part of the Demised Premises, if it has not theretofore done so, and resume
possession either by summary proceedings, or by action at law or in equity or by
entry or otherwise as the Lessor may determine, and shall not be liable in
trespass or for any damages to Lessee or any other person. In no event shall
such re-entry or resumption of possession or reletting as hereafter provided be
deemed to be an acceptance or surrender of this lease or a waiver of the rights
or remedies of Lessor hereunder.
Section 7.04 - Reletting. Upon termination of this lease in any manner
above provided, the Lessor shall use reasonable efforts to relet the Demised
Premises.
Section 7.05 - Lessor's Right to Cure Default of Lessee. If Lessee
shall be in default in any of the terms or provisions of this lease, other than
the payment of rental, Lessor may, after thirty (30) days written notice to
Lessee, immediately or at any
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time thereafter, without being required to give notice, perform the same for the
account of Lessee and at the cost and expense of Lessee, and Lessee shall pay to
Lessor on demand any amount properly paid by Lessor including reasonable
attorney fees for such purpose, with interest thereon at the rate of ten percent
(10%) per annum plus an additional service fee of two percent (2%) from the date
of payment thereof by Lessor.
Section 7.06 - Non-Exclusive Effect. The default provisions in this
Article VII shall not operate to exclude, override or limit any other right or
remedy provided in this lease, but shall be read in conjunction with the other
provisions hereof as supplementary thereto, and any election by the party for
whose benefit a particular provision operates, as communicated in any notice to
the other party, shall be conclusive as to the provision under which the former
is proceeding. Unless otherwise specified in such notice, however, any such
election shall not act as a waiver of the right to proceed under any other
provision at any other time with respect to the same or any other breach,
default, omission or failure of performance which may be the subject of the
election.
ARTICLE VIII
ASSIGNMENT, SUBLETTING, ATTORNMENT
Section 8.01 - Assignment. This lease may be assigned only with the
written consent of the Lessor which will not be unreasonably withheld.
Section 8.02 - Subletting. Lessee shall not sublet the Demised Premises
or any part thereof without the express written consent of the Lessor which will
not be unreasonably withheld.
Section 8.03 - Assignment by Lessor. Lessor may, from time to time,
without further consent of Lessee, assign Lessor's interest in this lease,
either in whole or in part, to any bank, insurance company, or other established
lending institution, but only subject to the rights of Lessee under this lease
and only while the Lessee is not in default.
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ARTICLE IX
TRANSFER OF LESSOR'S INTEREST
Section 9.01 - Transfer of Lessor's Interest. In the event of the sale,
assignment or transfer by Lessor of its interest in the Demised Premises or in
this lease (other than a collateral assignment to secure a debt of Lessor) to a
successor in interest who expressly assumes the obligations of Lessor hereunder,
Lessor shall thereupon be released or discharged from all of its covenants and
obligations hereunder, except such obligations as shall have accrued prior to
any such sale, assignment or transfer; and Lessee agrees to look solely to such
successor in interest of Lessor for performance of such obligations. Lessor's
assignment of the lease or of any or all of its rights herein shall in no manner
affect Lessee's obligations hereunder. Lessee shall thereafter attorn and look
to such assignee, as Lessor, provided Lessee has first received written notice
of such assignment of Lessor's interest.
ARTICLE X
SUPPLEMENTARY AGREEMENT
Section 10.01 - Agreement as to Modification. Lessee agrees at any time
and from time to time upon not less than ten (10) days prior written request by
Lessor, to execute, acknowledge and deliver to Lessor, and Lessor agrees at any
time and from time to time, upon not less than ten (10) days prior written
request by Lessee, to execute, acknowledge and deliver to Lessee a statement in
writing certifying that this lease is unmodified and in full force and effect
(or if there have been mutually agreed upon modifications that the same is in
full force and effect, as modified, and stating the modifications), and the
dates to which the fixed rent and other charges have been paid in advance, if
any, and whether or not there is any existing default, other than on any
existing mortgage, by Lessee with respect to any sums of money required to be
paid by Lessee under the terms of this lease, or notice of default served by
Lessor, it being intended that any such statement delivered pursuant to this
paragraph may be relied upon by any prospective purchaser of the fee or
leasehold estate or by any prospective or existing mortgagee or assignee of any
mortgage upon the leasehold estate, or by any prospective assignee or subtenant
of the leasehold estate. If any such certification by Lessor shall allege
non-performance by Lessee, the nature and extent of such non-performance shall,
insofar as actually known by Lessor, be summarized therein. In the event that
either party shall fail to execute, acknowledge and deliver to the other each
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statement prior to the expiration of said ten (10) day period, it shall be
conclusively presumed a certification that this lease is unmodified and in full
force and effect, that all rental has been paid to date and that there is no
existing default.
Section 10.02 - Acknowledgment of Rent. The Lessor within ten (10)
days, upon request of the Lessee or any holder of a mortgage on the fee or
leasehold interest herein demised, will furnish a written statement duly
acknowledging the amount of rent and additional rent due, if any.
Section 10.03 - Easements. Lessor covenants and agrees that it will
execute any and all instruments that may be required of the Lessor in connection
with the granting of easements for installation of water, gas, steam,
electricity, telephone, sewage and storm drainage of the various utility
companies affecting any street, opened or proposed, on any part of the Demised
Premises.
Section 10.04 - Notice of Default. Wherever in this lease the Lessor is
given the right to pay any sum of money or perform any act which, by the terms
of this lease, are to be performed by the Lessee, Lessor agrees that it will not
so pay or perform until it has given Lessee thirty (30) days written notice of
its intent so to do and the Lessee at the expiration of such thirty (30) day
period has not made such payment or commenced and is diligently prosecuting such
performance; provided, however, that such period shall not exceed any other
period of notification specifically set forth herein relating to specific acts
of the parties hereto, it being specifically understood that this thirty (30)
day period notice shall not control or override the other notice requirements
specifically set forth in the lease agreement.
ARTICLE XI
NOTICES
Any and all notices by the Lessor to the Lessee, or by the Lessee to
the Lessor, shall be in writing and by registered or certified mail addressed to
the respective addresses below stated:
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To the Lessor by Communication addressed to:
Hanna K. Khoury
---------------------------------
Miami, Florida 33166
With a Copy to:
R. Lawrence Bonner
Homer & Bonner, P.A.
3400 NationsBank Tower
100 Southeast 2nd Street
Miami, FL 33131
To the Lessee by Communication addressed to:
American Aircarriers Support, Incorporated
Attn: Karl F. Brown
P. O. Box 7566
Charlotte, NC 28241
With a Copy to:
David M. Furr
Gray, Layton, Kersh, Solomon,
Sigmon, Furr & Smith, P.A.
Post Office Box 2636
Gastonia, NC 28053-2636
Rent shall be payable by check sent by ordinary mail to the Lessor at the above
address for notices.
ARTICLE XII
VALIDITY OF PROVISIONS
If any clause or provision herein contained shall be adjudged invalid,
the same shall not affect the validity of any other clause or provision of this
lease or constitute any cause of action in favor of either party as against the
other, unless the same shall prevent the operation upon the Demised Premises of
the use now contemplated by the parties.
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The Lessor and the Lessee hereto agree to execute and deliver upon
notice as set forth elsewhere in this lease, any and all instruments in writing
necessary to carry out any terms, conditions, covenants or assurances in this
lease.
ARTICLE XIII
BINDING ON HEIRS
It is further covenanted and agreed, by and between the Lessor and the
Lessee, that all the covenants, agreements, provisions, conditions and
undertakings in this lease contained shall extend to and be binding upon the
heirs, executors, successors, and permitted assigns of the respective Lessor and
Lessee hereto, and the same as if they were in every case named and expressed,
and shall be construed as covenants running with the land; and that wherever in
this lease reference is made to either the Lessor or the Lessee hereto, it shall
be held to include and apply to (wherever and whenever applicable) also the
heirs, executors, successor, personal or legal representatives, and permitted
assigns of each Lessor or Lessee, and same as if in each and every case so
expressed.
ARTICLE XIV
EXTENSION OF TIME
It is covenanted and agreed by and between the Lessor and the Lessee
that the time or times herein specified within which the Lessee or Lessor is
required to perform any act or to do anything in order to comply with the terms
and provisions of this lease except for the obligation to pay rent or other sums
coming due, shall be, and they are each hereby, extended to the extent that the
Lessee or Lessor is actually and in good faith delayed or hindered by strikes,
lockouts, force majeure, the elements, or other causes or conditions beyond
Lessee's or Lessor's control.
ARTICLE XV
SURRENDER OF PREMISES
The Lessee shall surrender and deliver up the Demised Premises, in as
good condition as when received, reasonable and ordinary wear and tear excepted.
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ARTICLE XVI
INSPECTION AND ACCESS TO DEMISED PREMISES
The Lessor shall have access to the Demised Premises at reasonable
hours for inspection. Lessor's inspection shall be on a reasonable interval and
upon reasonable notice to the Lessee. Lessor shall have access to the Demised
Premises so that Lessor may enter other parts of the building (i.e. Section B
and Section C). Since the driveway is a common driveway used by all tenants of
the building, Lessee shall not do anything whatsoever to prevent other tenants
access to the driveway.
ARTICLE XVII
ATTORNEYS' FEES
In the event it is necessary for either Lessor or Lessee to commence
legal action against the other on account of a default or violation of any of
the terms or conditions of this lease, by the other, the party prevailing in
such action shall be entitled to recover, in addition to any other relief
granted, attorneys' fees in an amount which the Court may determine to be
reasonable.
ARTICLE XVIII
CONSTRUCTION AND INTERPRETATION
The titles, headings or catch lines preceding the Articles of this
lease agreement are for the purpose of easy reference and shall not be
considered a part of this agreement. Further, this lease agreement is made and
executed in the State of Florida and shall be construed, interpreted, and
enforced pursuant to the laws of the State of Florida.
ARTICLE XIX
SHORT FORM LEASE
Lessor or Lessee shall have the right to require of the other party
that a short form lease be executed at the time of the execution of this lease
instrument, or thereafter upon request at
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Lessee's sole expense said short form lease to be for recording purposes only.
ARTICLE XX
WAIVER
No waiver of a breach of any of the agreements or provisions contained
in this lease shall be construed to be a waiver of any subsequent breach of the
same or of any other provisions in the lease.
ARTICLE XXI
REQUEST TO SIGN LANDLORD WAIVER
Lessor agrees to any reasonable request to execute a landlord waiver in
favor of any lending institution of Lessee.
ARTICLE XXII
COMPLETE AGREEMENT
This instrument contains the complete agreement of the parties
regarding the terms and conditions of the lease of the Demised Premises and
there are no oral or written conditions, terms, understanding of other
agreements pertaining thereto which have not been incorporated herein.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and year first above written.
LESSOR:
/s/ Hanna K. Khoury
------------------------------------
HANNA K. KHOURY
LESSEE:
ATTEST: AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
/s/ David M. Furr By /s/ Karl F. Brown
- ---------------------------- ----------------------------------
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EXHIBIT 10.10
INVENTORY SALES AGREEMENT
THIS INVENTORY SALES AGREEMENT ("Agreement") is made and entered into
as of the 19th day of November, 1998, by and between AMERICAN AIRCARRIERS
SUPPORT, INCORPORATED, a Delaware corporation ("Buyer") and GLOBAL AIR SPARES,
INC., a Florida corporation ("Seller").
WITNESSETH:
WHEREAS, Seller has bulk inventory materially described in Exhibit "A"
attached hereto and incorporated herein by reference that it desires to sell to
Buyer, and
WHEREAS, Buyer desires to purchase said bulk inventory.
NOW, THEREFORE, in consideration of mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. SALE OF INVENTORY. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell to Buyer and Buyer hereby agrees to
purchase from Seller its inventory, its inventory records (including all repair
information and invoices associated therewith), parts associated with its
inventory, and all support items thereto (the "Inventory").
2. PURCHASE PRICE AND PAYMENT. Buyer shall pay to Seller an amount
equal to One Million One Hundred Seventy-Five Thousand Dollars ($1,175,000.00)
(the "Purchase Price"). The Purchase Price shall be paid to Seller in cash or
cash equivalent upon Delivery, as is defined in Section 4, to Buyer at 2822/2824
N.W. 72nd Avenue, Miami, FL 33122. Cash payments shall be made by wire transfer
of good and unrestricted bank funds to Seller's designated account number.
3. INSPECTION.
a. Prior to Delivery, Buyer, at its expense, may perform or cause to be
performed a visual inspection of the Inventory and its records at the Seller's
place of business ("Inspection"). Upon completion of an Inspection, Buyer shall
promptly advise Seller whether or not, in Buyer's sole discretion, the Inventory
and its records are acceptable to Buyer. Buyer's decision on the acceptability
of the Inventory records will depend, in part, upon the accuracy and
completeness of the records (including but not
<PAGE> 2
limited to Buyer's evaluation of traceability of life-limited parts, shop
records, AD and SB status reports, etc.). For any Inventory, Buyer's failure to
perform the inspection, prior to Delivery, or failure to advise Seller of
Buyer's findings promptly after the Inspection shall be deemed conclusive that
such Inventory and its records are acceptable to Buyer. Inventory shall be
considered "Accepted" by Buyer if Buyer has determined or if it is deemed
conclusive that the Inventory and its records are acceptable to Buyer.
b. If a question develops with regard to the Inventory records after
Delivery, then, within thirty (30) days after receipt by Seller of Buyer's
written notice thereof, Seller will reasonably assist in causing the records to
be acceptable to Buyer, if reasonably possible. However, nothing in this
paragraph shall be construed to affect the purchase price or to impose any
financial obligation upon the Seller.
c. Seller warrants that, at Delivery hereunder, the Inventory will be
in the same condition as when Accepted by Buyer.
d. Seller also warrants that the diskette delivered prior to the
Inspection materially represents a true and accurate Inventory as regards to
identification of the items of Inventory and quantity thereof.
4. DELIVERY.
a. Delivery of the Inventory to Buyer (the "Delivery") shall occur on
or before November 19, 1998 (the "Delivery Date") and at 2822/2824 N.W. 72nd
Avenue, Miami, Florida 33122 (the "Delivery Location") upon satisfaction of the
conditions precedent stated in this Agreement.
b. Upon Delivery, Buyer shall execute and deliver to Seller a receipt
therefor substantially in the form set forth in Exhibit "B" attached hereto and
made a part hereof.
c. At Delivery, all of the Inventory records in the possession of
Seller will be provided to Buyer.
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5. TITLE.
a. Title to the Inventory shall pass to Buyer at Delivery. Upon
transfer of such title to Buyer, risk of loss, damage to or destruction of such
Inventory and its records shall forthwith transfer from Seller to Buyer.
b. Upon transfer of title for any Inventory to Buyer, Seller shall
deliver to Buyer a Bill of Sale covering such Inventory, which Bill of Sale
shall be substantially in the form of Exhibit "C" attached hereto and made a
part hereof.
6. TAXES.
a. Buyer will indemnify, defend and hold Seller harmless from and
against any and all taxes of whatsoever kind or nature (except for taxes levied
against Seller based on its net income) including costs or expenses incurred in
connection therewith, which may be assessed against, chargeable to or
collectible from either Buyer or Seller by any taxing authority of any country,
federal, state or local government, and which are based upon or levied or
assessed with respect to the sale of the Inventory hereunder to Buyer or the
subsequent operation, possession or use of the Inventory. If Seller is required
to pay any contested tax levied, then Buyer agrees to immediately reimburse
Seller for the full amount of such tax. If Buyer elects to contest any tax
levied against Seller which is to be paid by Buyer hereunder, Buyer shall pay
all costs of such contest, including, but not limited to, reasonable attorneys'
fees through all proceedings, including appellate proceedings. The parties agree
to furnish each other with such documents and certificates as they may
reasonably request in connection with any claims of exemptions for the payment
of any taxes.
b. Buyer hereby warrants and represents that it is purchasing the
Inventory for ultimate resale.
7. DELAYS. Seller shall not be responsible for, nor deemed to be in
default on account of, delay in Delivery due to force majeure causes, including,
but not limited to, acts of God or the public enemy, civil war, insurrection or
riots, fires, floods, explosions, earthquakes, restrictions or strikes,
government legislation, acts, orders or regulations, inability or failure of
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suppliers to deliver, or for any other cause to the extent it is beyond Seller's
control.
8. LIMITED WARRANTY AND DISCLAIMER. Seller represents and warrants to
Buyer that:
a. At Delivery, Seller will have good legal and beneficial title to the
Inventory and have full power and lawful authority to transfer such title to
Buyer. Buyer is not assuming any liabilities or obligations associated with said
Inventory, whether known or unknown, contingent or realized, except for
liabilities set forth specifically in this Agreement.
b. At Delivery, the Inventory will be subject to no mortgage, pledge,
lien, charge or other encumbrance (collectively the "Liens").
c. Inasmuch as the Seller has agreed to duly pay, perform and discharge
any liabilities and obligations associated with the Inventory, the Buyer and the
Seller hereby mutually agree to waive compliance with the provisions of the
Florida Bulk Sales laws, to the extent applicable to the transactions
contemplated hereby. The Seller covenants and agrees to indemnify and save
harmless the Buyer from and against any and all loss, liability, cost and
expense (including reasonable attorneys' fees) arising out of noncompliance with
said Bulk Sales laws.
d. EXCEPT AS OTHERWISE STATED HEREIN, THE INVENTORY, INCLUDING THE
COMPONENT PARTS THEREOF, BEING SOLD BY SELLER TO BUYER WILL BE SOLD "AS IS" AND
SELLER MAKES NO WARRANTIES, GUARANTEES OR REPRESENTATIONS OF ANY KIND, EITHER
EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, THAT SHALL SURVIVE DELIVERY AS TO
THE INVENTORY AND THE COMPONENT PARTS THEREOF, INCLUDING BUT NOT LIMITED TO THE
CONDITION OR AIRWORTHINESS THEREOF; AND BUYER HEREBY WAIVES ALL OTHER
WARRANTIES, REMEDIES OR LIABILITIES, EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE, AND SELLER SHALL HAVE NO LIABILITY TO BUYER WITH RESPECT TO FITNESS
FOR ANY INTENDED PURPOSE AND MERCHANTABILITY, ANY OBLIGATION OF SELLER ARISING
FROM TORT OR STRICT LIABILITY TORT CLAIMS, OR FOR LOSS OF USE, REVENUE OR
PROFIT, OR FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY EXPENSE DIRECTLY
OR INDIRECTLY ARISING FROM THIS TRANSACTION AND THE USE OF THE INVENTORY OR ANY
INABILITY TO USE THE INVENTORY EITHER SEPARATELY OR IN COMBINATION WITH OTHER
PARTS OR APPARATUS
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<PAGE> 5
OR FROM ANY OTHER CAUSE. Buyer acknowledges that the foregoing waiver and
agreements were agreed to by it in the course of bargaining and negotiation with
respect to the Agreement and that the Purchase Price and other terms herein and
in the Agreement reflect such waivers and agreements by Buyer.
e. Seller makes no representation as to what use or application may be
made of the Inventory in the condition in which the Inventory is delivered.
Further, Seller makes no representation as to whether the Inventory complies
with, or is capable of being modified so as to comply with, any present or
future environmental restrictions or requirements imposed by any governmental
entity, including, but not limited to, requirements with respect to noise
abatement and emission control. Buyer shall have the responsibility of obtaining
whatever certifications, waivers or exemptions are necessary from applicable
government agencies for projected uses or applications of the Inventory.
Additionally, Seller makes no representations as to the fair market value of the
Inventory.
f. To the best of Seller's knowledge, the Inventory has not been
involved in an incident or accident.
g. To the best of Seller's knowledge at Delivery, the Inventory will
meet all of the manufacturer's specifications applicable to such Inventory, and
all Inventory has been manufactured by or approved by the FAA for manufacture by
a company under a Parts Manufacturer Approval.
h. Seller shall provide material certification for all inventory either
individually or by lot, as agreed between the parties.
i. After the conclusion of this transaction, Seller shall cease doing
any aviation business, whether sales, leasing or otherwise.
9. WARRANTIES ASSIGNMENT. Seller hereby assigns to the Buyer any and
all assignable warranties, if any, of maintenance and overhaul agencies, of and
for the Inventory, effective upon Delivery. Upon the request of Buyer, Seller
shall give notice to any such maintenance and overhaul agencies of the
assignment of such warranties to Buyer and shall give Buyer aid and assistance
in
5
<PAGE> 6
enforcing the rights of Buyer arising under such warranties. Buyer shall
reimburse Seller for any reasonable costs and expenses incurred by Seller in
rendering such assistance.
10. INDEMNITY.
a. Buyer hereby releases and agrees to indemnify, defend and save
harmless Seller, its directors, officers, agents and employees from and against
any and all liability, damages, losses, expenses and claims, including without
limitation, all reasonable attorneys' fees and all other costs and expenses in
connection therewith and incident thereto through all proceedings, including
appellate proceedings, for death of or injury to any persons whomsoever,
including without limitation, the officers, agents and employees of the parties
hereto, and for loss of, damage to, or delay in delivery of any property
whatsoever, including without limitation any aircraft on which the Inventory may
be installed and loss of use of the aircraft and any other property of the
parties hereto or of their officers, agents or employees, in any manner arising
out of, incident to, or in connection with such Inventory or the use, operation,
storage, or testing of the Inventory, subsequent to Delivery hereunder, unless
due to the negligence or willful or wanton misconduct of Seller.
b. Buyer further agrees to reimburse Seller for the cost of storing the
inventory after Delivery, including without limitation payment of monthly rent
and all incidental expenses (insurance, security, utilities and waste disposal)
for the leased premises through the duration of the lease.
c. NEITHER BUYER NOR SELLER SHALL BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES WHICH MAY RESULT FROM PERFORMANCE OR FAILURE TO PERFORM
UNDER THIS AGREEMENT.
11. APPLICABLE LAW. The provisions of the Agreement and all rights and
obligations thereunder shall be governed by and construed in accordance with the
laws of the State of Florida.
12. 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
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<PAGE> 7
sent via facsimile transmission but only if a written or 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:
<TABLE>
<CAPTION>
<S> <C>
AS TO THE SELLER: Global Air Spares, Inc.
ATTN: Hanna Khoury
2822/2824 N.W. 72nd Avenue
Miami, FL 33122
WITH COPY TO: R. Lawrence Bonner
Homer & Bonner, P.A.
3400 NationsBank Tower
100 Southeast 2nd Street
Miami, FL 33131
AS TO THE BUYER: 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
</TABLE>
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.
13. REPRESENTATIONS.
a. Authority of Seller and Buyer. Buyer and Seller each represents to
the other that:
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<PAGE> 8
(1) it has the full power, authority and legal right to enter
into this Agreement;
(2) the execution, delivery and performance of this Agreement
has been duly authorized and that all necessary approvals or consents
shall have been duly obtained;
(3) the execution, delivery and performance of this Agreement
does not contravene any law binding on it or contravene any agreement
to which it is a party or by which it is bound; or any law,
governmental rule, regulation or order;
(4) such party is not a party to any agreement or instrument
or subject to any charter or other restriction which will adversely
affect its ability to perform its obligations under this Agreement;
(5) neither the execution or delivery of this, nor the
consummation of any of the transactions contemplated hereby, require
the consent or approval of, the giving of notice to or the registration
with, or the taking of any other action in respect of any United States
or foreign government authority or agent;
(6) this Agreement constitutes a legal, valid and binding
obligation enforceable in accordance with the terms hereof; and that
there are no pending or threatened actions or proceedings before any
court or administrative agency which will adversely affect the ability
of such party to perform its obligations under this Agreement; and
(7) the Buyer has had reasonable opportunity to inspect the
Inventory and to conduct due diligence on the Inventory.
b. No Broker. Buyer and Seller represent to each other that they have
negotiated the sale of the Inventory directly with each other, and that no agent
or broker has procured or otherwise participated to any extent in such
negotiations nor is entitled to any compensation therefor. Each party shall be
responsible for and shall indemnify and hold the other party harmless from and
against any and all claims, demands, liabilities, damages, losses and judgment
arising out of its own action or negotiations with or in respect to any agent or
broker.
8
<PAGE> 9
14. CONFIDENTIALITY. This Agreement and all information contained in
this Agreement are confidential and proprietary to Seller and Buyer and are
solely for the internal use of the parties hereto. Disclosure to third parties
is prohibited, except as otherwise stated in this Agreement, as required by law
or order of a governmental authority, or as required to enforce the terms of the
Agreement. However, Buyer may issue a press release confirming the closing of
this Agreement.
15. MISCELLANEOUS.
a. Any provision of the Agreement which is prohibited or unenforceable
in any jurisdiction shall, at to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
b. No term or provision of the Agreement may be changed, waiver,
discharged or terminated orally, but only by an instrument in writing and signed
by the party against which the enforcement of the change, waiver, discharge or
termination is sought.
c. Any ambiguities in the construction or interpretation of this
Agreement or any clause or provision herein shall not be construed or resolved
against the party solely because that party drafted the Agreement.
d. The section headings contained herein are for convenience and
reference only and are not intended to define or limit the scope of any
provisions of the Agreement.
e. The Agreement contains the entire understanding of the parties with
respect to the purchase and sale of the Inventory, and no warranties,
representations or undertakings have been made or relied on in entering into
this Agreement by either party except as expressly set forth herein. Any
previous oral or written communications, representations, agreements or
understandings between Seller and Buyer relating to the subject matter hereof
are no longer of any force and effect, are superseded and replaced in their
entirety by the provisions of the Agreement.
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<PAGE> 10
f. This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties.
g. This Agreement may not be assigned by either party except with the
prior written consent of the other party, such consent not to be unreasonably
withheld.
h. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. A facsimile
signature on any counterpart hereto will be deemed an original for all purposes.
i. All of the Exhibits referred to in this Agreement are incorporated
herein by reference and shall be deemed and construed to be a part of this
Agreement for all purposes.
IN WITNESS WHEREOF, the Seller and the Buyer 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.
AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED,
By /s/ Karl F. Brown
-----------------------------------
GLOBAL AIR SPARES, INC.
By /s/ Hanna Khoury
-----------------------------------
10
<PAGE> 1
EXHIBIT 10.11
AIRCRAFT ENGINE SALES AGREEMENT
THIS AIRCRAFT ENGINE SALES AGREEMENT ("Agreement") is made and entered
into as of the 19th day of November, 1998, by and between AMERICAN AIRCARRIERS
SUPPORT, INCORPORATED, a Delaware corporation ("Buyer") and ATLANTIC AIRMOTIVE
CORPORATION, a Florida corporation ("Seller").
WITNESSETH:
WHEREAS, Seller has two Pratt & Whitney engines (one JT8D-11, currently
located at 13945 S.W. 139th Court, Miami, FL 33186, and one JT8D-15, currently
leased to Integrated Technology Corp.) and equipment as described in Exhibit "A"
attached hereto and incorporated herein by reference ("Equipment");
WHEREAS, Seller desires to sell the Equipment and to assign the
Integrated Technology Corp. lease (A copy of the Lease is attached hereto as
Exhibit "B" and incorporated herein by reference) to Buyer; and
WHEREAS, Buyer desires to purchase said Equipment and to
assume the Integrated Technology Corp. lease.
NOW, THEREFORE, in consideration of mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. SALE OF EQUIPMENT. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell to Buyer and Buyer hereby agrees to
purchase from Seller, the Equipment and its records.
2. PURCHASE PRICE AND PAYMENT. Buyer shall pay to Seller an amount
equal to One Million Three Hundred Seventy-Five Thousand Dollars ($1,375,000.00)
(the "Purchase Price"). The Purchase Price shall be paid to Seller in cash or
cash equivalent upon Delivery, as is defined in Section 4. Cash payments shall
be made by wire transfer of good and unrestricted bank funds to Seller's
designated account number.
3. INSPECTION.
a. Prior to Delivery, Buyer, at its expense and discretion, may perform
or cause to be performed a visual (including borescope)
<PAGE> 2
inspection of the Equipment and its records at the Seller's place of business
("Inspection"). Upon completion of an Inspection, Buyer shall promptly advise
Seller whether or not, in Buyer's sole discretion, the Equipment and its records
are acceptable to Buyer. Buyer's decision on the acceptability of the Equipment
records will depend, in part, upon the accuracy and completeness of the records
(including but not limited to Buyer's evaluation of traceability of life-limited
parts, shop records, AD and SB status reports, etc.). For any Equipment, Buyer's
failure to perform the inspection prior to Delivery, or failure to advise Seller
of Buyer's findings promptly after the Inspection shall be deemed conclusive
that such Equipment and its records are acceptable to Buyer. Equipment shall be
considered "Accepted" by Buyer if Buyer has determined or if it is deemed
conclusive that the Equipment and its records are acceptable to Buyer.
b. If a question develops with regard to the records after Delivery,
then, within thirty (30) days after receipt by Seller of Buyer's written notice
thereof, Seller will reasonably assist in causing the records to be acceptable
to Buyer, if reasonably possible. However, nothing in this paragraph shall be
construed to affect the purchase price or to impose any financial obligation
upon the Seller.
c. Seller warrants that, at Delivery hereunder, the JT8D-11 will be in
the same condition as when Accepted by Buyer and that the records for the
JT8D-15 will be in the same condition as when Accepted by Buyer.
4. DELIVERY.
a. Delivery of the Equipment to Buyer (the "Delivery") shall occur on
or before November 19, 1998 (the "Delivery Date") and at 13945 S.W. 139th Court,
Miami, FL 33186, (the "Delivery Location") upon satisfaction of the conditions
precedent stated in this Agreement.
b. Upon Delivery, Buyer shall execute and deliver to Seller a receipt
therefor substantially in the form set forth in Exhibit "C" attached hereto and
made a part hereof. Execution of the receipt attached hereto as Exhibit C shall
be deemed Delivery of the Equipment.
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<PAGE> 3
c. At Delivery, all of the Equipment records in the possession of
Seller will be provided to Buyer.
d. At Delivery, Seller will have performed the following on the
JT8D-11, if requested:
(i) Cap and plug all openings.
(ii) Completely cover the Engine.
(iii) Otherwise prepare the Engine for shipment in
accordance with the engine manufacturer's
specifications.
5. TITLE.
a. Title to the Equipment and its records shall pass to Buyer at
Delivery. Upon transfer of such title to Buyer, risk of loss, damage to or
destruction of such Equipment and its records shall forthwith transfer from
Seller to Buyer.
b. Upon transfer of title for any Equipment to Buyer, Seller shall
deliver to Buyer a Bill of Sale and Assignment and Assumption Agreement covering
such Equipment, which Bill of Sale shall be substantially in the form of Exhibit
"D" attached hereto and made a part hereof.
6. TAXES.
a. Buyer will indemnify, defend and hold Seller harmless from and
against any and all taxes of whatsoever kind or nature (except for taxes levied
against Seller based on its net income) including costs or expenses incurred in
connection therewith, which may be assessed against, chargeable to or
collectible from either Buyer or Seller by any taxing authority of any country,
federal, state or local government, and which are based upon or levied or
assessed with respect to the sale of the Equipment hereunder to Buyer or the
subsequent operation, possession or use of the Equipment. If Seller is required
to pay any contested tax levied, then Buyer agrees to immediately reimburse
Seller for the full amount of such tax. If Buyer elects to contest any tax
levied against Seller which is to be paid by Buyer hereunder, Buyer shall pay
all costs of such contest, including, but not limited to,
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<PAGE> 4
reasonable attorneys' fees through all proceedings, including appellate
proceedings.. The parties agree to furnish each other with such documents and
certificates as they may reasonably request in connection with any claims of
exemptions for the payment of any taxes.
b. Buyer hereby warrants and represents that it is purchasing the
Equipment for ultimate resale.
7. DELAYS. Seller shall not be responsible for, nor deemed to be in
default on account of, delay in Delivery due to force majeure causes, including,
but not limited to, acts of God or the public enemy, civil war, insurrection or
riots, fires, floods, explosions, earthquakes, restrictions or strikes,
government legislation, acts, orders or regulations, inability or failure of
suppliers to deliver, or for any other cause to the extent it is beyond Seller's
control.
8. LIMITED WARRANTY AND DISCLAIMER. Seller represents and warrants to
Buyer that:
a. At Delivery, Seller will have good legal and beneficial title to the
Equipment and have full power and lawful authority to transfer such title to
Buyer.
b. At Delivery, the Equipment will be subject to no mortgage, pledge,
lien, charge or other encumbrance (collectively the "Liens"). Buyer acknowledges
that the JT8D-15 has a lien filed by Integrated Technology Corp., the
corporation subleasing the engine to Transportes Aereos Ejecutivos, SA de CV.
Seller warrants that this lien is merely a protective one that has been filed to
prevent any other user from placing a lien on the property and that no money is
owed to any creditor as a result of this lien filing.
c. The Seller has provided Buyer with correct and complete copies of
the leases of the engines. The leases are legal, valid, binding, enforceable and
in full force and effect and will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following execution
of this Agreement and Delivery. $170,000 remains to be paid on the lease with
the next payment being due November 24, 1998. If closing occurs prior to the
actual payment date, rent shall be prorated for the previous rental period. No
party to the lease is in breach or default and
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<PAGE> 5
no event has occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification or acceleration
thereunder. No party to the lease has repudiated any provision thereof. There
are no disputes, oral agreements or forbearance programs in effect as to the
leases. There are no claims or setoffs existing or anticipated. Lessee has paid
a security deposit in the amount of $42,500, which shall be forwarded to Buyer
at Delivery. Thereafter, Buyer will be solely responsible for returning the
security deposit to the Lessee or crediting that amount to the last lease
payment in accordance with the specific terms of the Lease.
d. EXCEPT AS OTHERWISE STATED HEREIN, THE EQUIPMENT, INCLUDING THE
COMPONENT PARTS THEREOF, BEING SOLD BY SELLER TO BUYER WILL BE SOLD "AS IS" AND
SELLER MAKES NO WARRANTIES, GUARANTEES OR REPRESENTATIONS OF ANY KIND, EITHER
EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, THAT SHALL SURVIVE DELIVERY AS TO
THE EQUIPMENT AND THE COMPONENT PARTS THEREOF, INCLUDING BUT NOT LIMITED TO THE
CONDITION OR AIRWORTHINESS THEREOF; AND BUYER HEREBY WAIVES ALL OTHER
WARRANTIES, REMEDIES OR LIABILITIES, EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE, AND SELLER SHALL HAVE NO LIABILITY TO BUYER WITH RESPECT TO FITNESS
FOR ANY INTENDED PURPOSE AND MERCHANTABILITY, ANY OBLIGATION OF SELLER ARISING
FROM TORT OR STRICT LIABILITY TORT CLAIMS, OR FOR LOSS OF USE, REVENUE OR
PROFIT, OR FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY EXPENSE DIRECTLY
OR INDIRECTLY ARISING FROM THIS TRANSACTION AND THE USE OF THE EQUIPMENT OR ANY
INABILITY TO USE THE EQUIPMENT EITHER SEPARATELY OR IN COMBINATION WITH OTHER
PARTS OR APPARATUS OR FROM ANY OTHER CAUSE. Buyer acknowledges that the
foregoing waiver and agreements were agreed to by it in the course of bargaining
and negotiation with respect to the Agreement and that the Purchase Price and
other terms herein and in the Agreement reflect such waivers and agreements by
Buyer.
e. Seller makes no representation as to what use or application may be
made of the Equipment in the condition in which the Equipment is delivered.
Further, Seller makes no representation as to whether the Equipment complies
with, or is capable of being modified so as to comply with, any present or
future environmental restrictions or requirements imposed by any governmental
entity, including, but not limited to, requirements with respect to noise
abatement and emission control. Buyer shall have the responsibility of obtaining
whatever certifications,
5
<PAGE> 6
waivers or exemptions are necessary from applicable government agencies for
projected uses or applications of the Equipment.
f. At Delivery, each Engine will be in accordance with its Engine
records.
g. To the best of Seller's knowledge, each Engine was not involved in
an incident or accident; that is, each Engine was not involved in an Abnormal
Operational Circumstance as defined by Pratt & Whitney's Overhaul Standard
Practices Manual Section 70-00 which resulted in an Engine being deemed by the
manufacturer as unacceptable for continued aircraft usage.
h. Each engine has never been subjected to military or government
operation.
i. At Delivery, each engine will meet all of the manufacturer's
specifications applicable to such Engine.
j. After the conclusion of this transaction, Seller shall cease doing
any aviation business, whether sales, lease or otherwise.
9. WARRANTIES ASSIGNMENT. Seller hereby assigns to the Buyer any and
all assignable warranties, if any, of maintenance and overhaul agencies, of and
for the Equipment, effective upon Delivery. Upon the request of Buyer, Seller
shall give notice to any such maintenance and overhaul agencies of the
assignment of such warranties to Buyer and shall give Buyer aid and assistance
in enforcing the rights of Buyer arising under such warranties. Buyer shall
reimburse Seller for any reasonable costs and expenses incurred by Seller in
rendering such assistance.
10. INDEMNITY.
a. Buyer hereby releases and agrees to indemnify, defend and save
harmless Seller, its directors, officers, agents and employees from and against
any and all liability, damages, losses, expenses and claims, including without
limitation, all reasonable attorneys' fees through all proceedings, including
appellate proceedings, and all other costs and expenses in connection therewith
and incident thereto, for death of or injury to any persons whomsoever,
including without limitation, the officers, agents and employees of
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<PAGE> 7
the parties hereto, and for loss of, damage to, or delay in delivery of any
property whatsoever, including without limitation any aircraft on which the
Equipment may be installed and loss of use of the aircraft and any other
property of the parties hereto or of their officers, agents or employees, in any
manner arising out of, incident to, or in connection with such Equipment or the
use, operation, storage, or testing of the Equipment, subsequent to Delivery
hereunder, unless due to the negligence or willful or wanton misconduct of
Seller.
b. NEITHER BUYER NOR SELLER SHALL BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES WHICH MAY RESULT FROM PERFORMANCE OR FAILURE TO PERFORM
UNDER THIS AGREEMENT.
11. APPLICABLE LAW. The provisions of the Agreement and all rights and
obligations thereunder shall be governed by and construed in accordance with the
laws of the State of Florida.
12. 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 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:
<TABLE>
<CAPTION>
<S> <C>
AS TO THE SELLER: Atlantic Airmotive Corporation
ATTN: Tony Khoury
7980-88 N.W. 56th Street
Miami, FL 33166
WITH COPY TO: R. Lawrence Bonner
Homer & Bonner, P.A.
3400 NationsBank Tower
100 Southeast 2nd Street
Miami, FL 33131
AS TO THE BUYER: American Aircarriers Support,
Incorporated
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
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.
13. REPRESENTATIONS.
a. Authority of Seller and Buyer. Buyer and Seller each represents to
the other that:
(1) it has the full power, authority and legal right to enter
into this Agreement;
(2) the execution, delivery and performance of this Agreement
has been duly authorized and that all necessary approvals or consents
shall have been duly obtained;
(3) the execution, delivery and performance of this Agreement
does not contravene any law binding on it or contravene any agreement
to which it is a party or by which it is bound; or any law,
governmental rule, regulation or order;
(4) such party is not a party to any agreement or instrument
or subject to any charter or other restriction which will adversely
affect its ability to perform its obligations under this Agreement;
(5) neither the execution or delivery of this, nor the
consummation of any of the transactions contemplated hereby, require
the consent or approval of, the giving of notice to or the registration
with, or the taking of any other action in respect of any United States
or foreign government authority or agent;
8
<PAGE> 9
(6) this Agreement constitutes a legal, valid and binding
obligation enforceable in accordance with the terms hereof; and that
there are no pending or threatened actions or proceedings before any
court or administrative agency which will adversely affect the ability
of such party to perform its obligations under this Agreement.
b. No Broker. Buyer and Seller represent to each other that they have
negotiated the sale of the Equipment directly with each other, and that no agent
or broker has procured or otherwise participated to any extent in such
negotiations nor is entitled to any compensation therefor. Each party shall be
responsible for and shall indemnify and hold the other party harmless from and
against any and all claims, demands, liabilities, damages, losses and judgment
arising out of its own action or negotiations with or in respect to any agent or
broker.
14. CONFIDENTIALITY. This Agreement and all information contained in
this Agreement are confidential and proprietary to Seller and Buyer and are
solely for the internal use of the parties hereto. Disclosure to third parties
is prohibited, except as otherwise stated in this Agreement, as required by law
or order of a governmental authority, or as required to enforce the terms of the
Agreement. However, Buyer may issue a press release confirming the closing of
this Agreement.
15. MISCELLANEOUS.
a. Any provision of the Agreement which is prohibited or unenforceable
in any jurisdiction shall, at to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
b. No term or provision of the Agreement may be changed, waiver,
discharged or terminated orally, but only by an instrument in writing and signed
by the party against which the enforcement of the change, waiver, discharge or
termination is sought.
c. Any ambiguities in the construction or interpretation of this
Agreement or any clause or provision herein shall not be
9
<PAGE> 10
construed or resolved against the party solely because that party drafted the
Agreement.
d. The section headings contained herein are for convenience and
reference only and are not intended to define or limit the scope of any
provisions of the Agreement.
e. The Agreement contains the entire understanding of the parties with
respect to the purchase and sale of the Equipment, and no warranties,
representations or undertakings have been made or relied on in entering into
this Agreement by either party except as expressly set forth herein. Any
previous oral or written communications, representations, agreements or
understandings between Seller and Buyer relating to the subject matter hereof
are no longer of any force and effect, are superseded and replaced in their
entirety by the provisions of the Agreement.
f. This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties.
g. This Agreement may not be assigned by either party except with the
prior written consent of the other party, such consent not to be unreasonably
withheld.
h. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. A facsimile
signature on any counterpart hereto will be deemed an original for all purposes.
i. All of the Exhibits referred to in this Agreement are incorporated
herein by reference and shall be deemed and construed to be a part of this
Agreement for all purposes.
10
<PAGE> 11
IN WITNESS WHEREOF, the Seller and the Buyer 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.
AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED,
By /s/ Karl F. Brown
--------------------------------
ATLANTIC AIRMOTIVE CORPORATION
By /s/ Hanna K. Khoury
--------------------------------
11
