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 Xxxxx & Xxxxxxx engines (one JT8D-11, currently
located at 00000 X.X. 000xx Xxxxx, Xxxxx, XX 00000, 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)
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 00000 X.X. 000xx Xxxxx,
Xxxxx, XX 00000, (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.
2
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 Xxxx of Sale and Assignment and Assumption Agreement covering
such Equipment, which Xxxx 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,
3
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
4
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
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 Xxxxx & 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
6
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:
AS TO THE SELLER: Atlantic Airmotive Corporation
ATTN: Xxxx Xxxxxx
0000-00 X.X. 00xx Xxxxxx
Xxxxx, XX 00000
WITH COPY TO: X. Xxxxxxxx Xxxxxx
Xxxxx & Xxxxxx, P.A.
3400 NationsBank Tower
000 Xxxxxxxxx 0xx Xxxxxx
Xxxxx, XX 00000
AS TO THE BUYER: American Aircarriers Support,
Incorporated
7
8
Attn: Xxxx X. Xxxxx
P. O. Xxx 0000
Xxxxxxxxx, XX 00000
WITH COPY TO: Xxxxx X. Xxxx
Xxxx, Layton, Kersh, Solomon,
Sigmon, Xxxx & Xxxxx, P.A.
P. O. Xxx 0000
Xxxxxxxx, XX 00000-0000
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
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
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
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/ Xxxx X. Xxxxx
--------------------------------
ATLANTIC AIRMOTIVE CORPORATION
By /s/ Xxxxx X. Xxxxxx
--------------------------------
11
