EXHIBIT 10.17
December 1, 2000
▇▇▇▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Reference is made to that certain Lease dated December 1, 2000 (the
"Real Property Lease"), between ▇▇▇▇▇▇▇▇▇ Industries, Inc. ("▇▇▇▇▇▇▇▇▇") and
Aviation Sales Distribution Services Company ("ASDSC"), covering the real
property and improvements commonly known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, and being more particularly described in the Real Property Lease
(the "Property").
Prior to the execution of the Real Property Lease, ▇▇▇▇▇▇▇▇▇, ASDSC and
Aviation Sales Company ("AVS"), the parent company of ASDSC, entered into that
certain Asset Purchase Agreement dated September 20, 2000 (as amended, the
"Asset Purchase Agreement"), pursuant to which ASDSC agreed to sell or lease to
▇▇▇▇▇▇▇▇▇ substantially all of its assets, including the lease of the Property,
but specifically excluding ASDSC's aircraft spare parts inventory. In connection
with ▇▇▇▇▇▇▇▇▇'▇ lease of the Property and in addition to the agreements
contained in the Real Property Lease, both ▇▇▇▇▇▇▇▇▇ and ASDSC have agreed to
enter into this letter agreement (the "Letter Agreement") to memorialize certain
rights and options to extend the term of the Real Property Lease and to purchase
and sell the Property, all pursuant to the provisions contained herein.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings given to them in the Real Property Lease or the Terms and Conditions
(as defined below).
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, ▇▇▇▇▇▇▇▇▇ and ASDSC hereby agree as
follows:
1. Notwithstanding anything to the contrary contained in the Real
Property Lease, ▇▇▇▇▇▇▇▇▇ and ASDSC shall have the following rights and
options (each, an "Option," and collectively, the "Options"):
(a) From and after the expiration of the Term of the Real
Property Lease (including any extensions thereof pursuant
to the terms of the Real Property Lease or pursuant to
this Letter Agreement, as set forth below), and for a
period of sixty (60) days thereafter, ASDSC shall have the
right and option to require ▇▇▇▇▇▇▇▇▇ to purchase the
Property from ASDSC subject to and in accordance with this
Letter Agreement and the terms and conditions attached
hereto as Schedule 1 and incorporated herein by reference
(the "Terms and Conditions); and
1
(b) At any time during the Term of the Real Property Lease and
for a period of sixty (60) days after the expiration or
earlier termination of the Term of the Real Property Lease
(including any extensions thereof pursuant to the terms of
the Real Property Lease or this Letter Agreement),
▇▇▇▇▇▇▇▇▇ shall have the right and option to require ASDSC
to sell the Property subject to and in accordance with
this Letter Agreement and the Terms and Conditions.
For purposes of computing the time in which either party may exercise
the Option (but not for any other purpose under the Real Property
Lease), the expiration of the Term of the Real Property Lease shall not
be deemed to have occurred until both (i) the Termination Date has
occurred in accordance with the Real Property Lease, as modified
hereby, and (ii) the earlier of the Closing or twenty (20) days after
either party hereto has notified the other party in accordance with
Section 32(a) of the Real Property Lease that the Termination Date (as
modified) has occurred.
2. In the event that either party desires to exercise its Option, such
party (the "Obligating Party") shall notify the other party (the
"Obligated Party") in accordance with Section 12 of the Terms and
Conditions in writing of its exercise of its Option (an "Exercise
Notice"). Following such notice, the Obligated Party shall complete the
purchase and sale of the Property (the "Closing") within thirty (30)
days after the date of the Exercise Notice (the "Closing Date") at
▇▇▇▇▇▇▇▇▇'▇ offices, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, or at such
other location mutually acceptable to the parties. Notwithstanding the
exercise of the Option, Kellstrom shall be obligated to continue making
the applicable rental payments to ASDSC under the Real Property Lease
until the Closing. In the event the Closing does not occur because of
the action or inaction of ▇▇▇▇▇▇▇▇▇, ASDSC shall be entitled to all
remedies provided for in the Terms and Conditions, including, without
limitation, the right of specific performance.
3. ASDSC's Representations. ASDSC, as of the date hereof, represents
and warrants to ▇▇▇▇▇▇▇▇▇ and agrees with ▇▇▇▇▇▇▇▇▇ as follows in
connection with the Property:
(a) The Other Contracts and any matters identified in the
Title Commitment are the only contracts, agreements or
encumbrances affecting the Property;
(b) To the extent required, a certificate of occupancy has
been issued and is in effect for all improvements on the
Property. ASDSC has all licenses and permits required to
occupy and operate the Property. There are no: (i) to
ASDSC's knowledge, pending improvement liens to be made by
any governmental authority with respect to the Property,
(ii) violations of building codes and/or zoning ordinances
or other governmental regulations with respect to the
Property, (iii) pending or, to ASDSC's knowledge,
threatened lawsuits with respect to the Property, (iv)
pending or, to ASDSC's knowledge, threatened condemnation
proceedings with respect to the Property, or (v) defects
or inadequacies in the Property
2
which would adversely affect the insurability of the
Property or increase the cost thereof. All notices of
violations of law or municipal ordinances, orders or
requirements noted in or issued at any time prior to
Closing by a governmental entity, agency or authority
having jurisdiction over or affecting the Property shall
be complied with or cured by ASDSC at ASDSC's expense
prior to Closing;
(c) To the best of ASDSC's knowledge, the Property has direct,
uninterrupted access for pedestrian and vehicular traffic
to a publicly dedicated road. ASDSC has no notice or
knowledge of any fact or condition which would result in
the termination or impairment of any vehicular or
pedestrian access to the Property. ASDSC has no notice or
knowledge of any fact or condition which would result in
the discontinuation of water, sewage, electric, telephone,
drainage or other utilities or services to the Property
which are necessary and required for the use and operation
of the Property. All impact fees have been completely and
fully paid for by ASDSC. There shall not be any additional
fees imposed as a result of ASDSC's conveyance of the
Property to ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇'▇ subsequent use of
the Property;
(d) ASDSC has no notice or knowledge of any condition which
would interfere with ▇▇▇▇▇▇▇▇▇'▇ use and occupancy of the
Property as it is presently used;
(e) To ASDSC's knowledge, there are no latent defects in the
structural elements or roof of the improvements on the
Property and to the ASDSC's knowledge, all of the
structural elements and roof of the Property are in good
working order and condition and are not in need of repair
or replacement, ordinary wear and tear and routine
maintenance excepted;
(f) ASDSC is vested with good, indefeasible and insurable fee
simple title to the Realty, subject only to the Permitted
Exceptions as provided herein, and there are no
encroachments across the boundary lines of the Realty
except as shown on that certain survey of the Property
dated September 25, 2000, and prepared by ▇.▇. ▇▇▇▇▇ (the
"Survey"). ASDSC is vested with good and marketable title
to all fixtures, equipment, furnishings and items of
personal property referred to in Section 1 above free of
all financing and other liens or encumbrances;
(g) ASDSC is now in compliance with and shall comply prior to
Closing with all laws, rules, regulations, and ordinances
of all governmental authorities having jurisdiction over
the Property;
(h) Prior to Closing, no portion of the Property or any
interest therein shall be further (after the date hereof)
alienated, encumbered, conveyed or otherwise transferred;
3
(i) This Letter Agreement and the consummation of the
transaction contemplated hereby do not and will not
contravene any provision of any existing law or
regulation, order, decree, writ, injunction or recorded
restriction;
(j) ASDSC is not a "foreign person" within the meaning of the
United States tax laws and to which reference is made in
Internal Revenue Code Section 1445(b)(2). At Closing,
ASDSC shall deliver to ▇▇▇▇▇▇▇▇▇ an affidavit to such
effect, and also stating ASDSC's employer identification
number and the State within the United States under which
ASDSC was organized and exists. ASDSC acknowledges and
agrees that ▇▇▇▇▇▇▇▇▇ shall be entitled to fully comply
with Internal Revenue code Section 1445 and all related
sections and regulations, as same may be modified and
amended from time to time, and ASDSC shall act in
accordance with all reasonable requirements of ▇▇▇▇▇▇▇▇▇
to effect such full compliance by ▇▇▇▇▇▇▇▇▇;
(k) To the extent in ASDSC's or ASDSC's agent's or
contractor's possession, ASDSC shall provide ▇▇▇▇▇▇▇▇▇
with (i) all environmental audits, assessments or
occupational health studies undertaken during the prior
five years by any Governmental Authority, ASDSC or its
agents or representatives, or any third party, relating to
or affecting the Property; (ii) all ground water, soil,
air or asbestos monitoring undertaken by ASDSC or its
agents or representatives or undertaken by any
Governmental Authority or any third party, relating to or
affecting the Property; (iii) all written communications
between ASDSC, on the one hand, and any Governmental
Authority, on the other hand, arising under or relative to
Environmental Laws, including, but not limited to, all
notices issued to ASDSC and pertaining to the Property;
and (iv) all outstanding citations issued under OSHA, or
similar state or local statutes, laws, ordinances, codes,
rules, regulations, orders, rulings or decrees, relating
to or affecting the Property. For purposes hereof,
"Environmental Laws" means all federal, state, regional or
local statutes, laws rules, regulations, codes,
ordinances, orders or licenses, whether currently in
existence or hereafter enacted, any of which govern or
relate to pollution, protection of the environment, public
health and safety, air emissions, water discharges, waste
disposal, hazardous or toxic substances, solid or
hazardous waste, occupational, health and safety;
(l) ASDSC has no knowledge of any, and there is no basis for
any, pending or threatened litigation which would affect
any of the Property;
(m) There are no commissions, or compensation agreements of
any kind due in connection with the Property, and any
commissions or compensation by reason of agreements
entered into by ASDSC or ASDSC's predecessors in
connection with the Property shall be paid by ASDSC; and
4
(n) The Property constitutes all of the real property owned
and used by ASDSC in connection with the operation of the
improvements constituting a portion of the Property, and
ASDSC has entered into no agreement giving the ASDSC the
right to acquire additional real property for use in
connection with the Property.
▇▇▇▇▇▇▇▇▇ ACKNOWLEDGES, UNDERSTANDS AND AGREES THAT ▇▇▇▇▇▇▇▇▇
WILL BE AND IS BEING GIVEN THE OPPORTUNITY TO MAKE FULL AND
COMPLETE INSPECTIONS OF THE PROPERTY TO ▇▇▇▇▇▇▇▇▇'▇
SATISFACTION AS PROVIDED FOR HEREIN. ▇▇▇▇▇▇▇▇▇ IS RELYING
SOLELY ON ▇▇▇▇▇▇▇▇▇'▇ OWN INVESTIGATIONS OF THE PROPERTY AND
NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY ASDSC, OR
ANY AGENT, REPRESENTATIVE OR OTHER PARTY ACTING ON BEHALF OF
ASDSC. EXCEPT AS TO THE REPRESENTATIONS AND WARRANTIES SET
FORTH HEREIN, IT IS THE UNDERSTANDING AND INTENTION OF THE
PARTIES THAT THE SALE OF THE PROPERTY FROM ASDSC TO ▇▇▇▇▇▇▇▇▇
IS MADE ON AN "AS IS, WHERE IS" BASIS AND WITH ALL FAULTS.
ACCORDINGLY, EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN,
▇▇▇▇▇▇▇▇▇ ACKNOWLEDGES THAT ASDSC HAS NOT MADE, DOES NOT MAKE,
AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, EXPRESS OR IMPLIED, ORAL OR WRITTEN,
RELATING TO, CONCERNING OR WITH RESPECT TO (I) THE VALUE,
NATURE, QUALITY OR CONDITION OF THE PROPERTY, (II) THE
COMPLIANCE OF OR BY THE PROPERTY WITH ANY LAWS, RULES,
REGULATIONS, STATUTES OR ORDINANCES OF ANY APPLICABLE
GOVERNMENTAL AUTHORITY OR BODY, (III) THE LIABILITY,
MERCHANTABILITY, MARKETABILITY, OR PROFITABILITY, SUITABILITY
OR FITNESS FOR A PARTICULAR USE OR PURPOSE OF THE PROPERTY, OR
(IV) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY.
SPECIFICALLY, ▇▇▇▇▇▇▇▇▇ ACKNOWLEDGES THAT, EXCEPT AS OTHERWISE
EXPRESSLY SET OUT HEREIN AND THE ASSET PURCHASE AGREEMENT,
ASDSC HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES REGARDING
COMPLIANCE OF THE PROPERTY WITH ANY ENVIRONMENTAL PROTECTION
OR LAND USE LAWS, RULES OR REGULATIONS, ORDERS OR
REQUIREMENTS. ▇▇▇▇▇▇▇▇▇ REPRESENTS TO ASDSC THAT ▇▇▇▇▇▇▇▇▇
SHALL RELY SOLELY UPON ITS OWN INVESTIGATIONS, INSPECTIONS AND
STUDIES OF THE PROPERTY, AND NOT ON ANY INFORMATION PROVIDED
OR TO BE PROVIDED BY ASDSC, ASDSC'S AGENTS OR CONTRACTORS OR
OTHERWISE GENERATED FROM THIRD PARTY SOURCES. ASDSC SHALL NOT
BE LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL
5
OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION
PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF FURNISHED
BY ANY PARTY PURPORTING TO ACT ON BEHALF OF ASDSC. THE
STATEMENTS AND DISCLAIMERS MADE UNDER THIS PARAGRAPH SHALL
EXPRESSLY SURVIVE THE CLOSING.
4. The parties hereby agree as follows with respect to the extension of
the Term of the Real Property Lease:
(a) The term of the Real Property Lease may be extended by
▇▇▇▇▇▇▇▇▇ for up to six-one month periods in the event and
for so long as ▇▇▇▇▇▇▇▇▇ does not have sufficient
Availability (as defined in the Senior Loan Agreement,
hereafter defined) under the terms of the Senior Loan
Agreement to permit the purchase of the Property in
accordance with this Letter Agreement.
(b) For purposes hereof, the term "Senior Loan Agreement"
means that certain Amended and Restated Loan and Security
Agreement dated as of December 14, 1998 among ▇▇▇▇▇▇▇▇▇
and certain subsidiaries of ▇▇▇▇▇▇▇▇▇, as borrowers, and
Bank of America, N.A., certain other lenders and other
parties thereto, as amended through the date hereof.
(c) In the event ▇▇▇▇▇▇▇▇▇ desires to extend the Real Property
Lease beyond the initial twelve (12) month term contained
therein, ▇▇▇▇▇▇▇▇▇ may do so for one month at a time upon
providing notice to ASDSC at least five (5) days prior to
what would otherwise be the Termination Date, along with a
schedule certified by the Chief Financial Officer of
▇▇▇▇▇▇▇▇▇ setting forth the Availability of ▇▇▇▇▇▇▇▇▇
under the Senior Loan Agreement.
(d) During each month after the initial twelve (12) month Term
in which the Real Property Lease continues, ▇▇▇▇▇▇▇▇▇
agrees to pay to ASDSC Rent for the Property in an amount
equal to $20,329.81 per month.
(e) If ▇▇▇▇▇▇▇▇▇ shall elect to purchase the Property from
ASDSC pursuant to this Letter Agreement, then,
notwithstanding the provisions of the Real Property Lease
to the contrary, following the expiration of the Term, the
Real Property Lease shall not be considered terminated and
all provisions of the Real Property Lease shall remain in
full force and effect until the Property has been
purchased pursuant to this Letter Agreement and all
payments due under the Real Property Lease (other than
Minimum Rental accruing after the date of such purchase)
have been received in full by ASDSC.
(f) Upon the occurrence of an event of default under the Real
Property Lease by ▇▇▇▇▇▇▇▇▇, ASDSC may at its option
trigger the Option under this Letter Agreement.
6
(g) The definition of the word "Term" contained in the Real
Property Lease shall take into consideration any of the
six-one month extensions that are utilized in accordance
with this Letter Agreement.
▇▇▇▇▇▇▇▇▇ may assign its rights under this Letter Agreement including
(i) ▇▇▇▇▇▇▇▇▇'▇ right to exercise its Option, and (ii) any exercised Option,
provided that no such assignment shall release ▇▇▇▇▇▇▇▇▇ from any of its
obligations hereunder. ASDSC may collaterally assign any or all of its rights
under this Letter Agreement to and for the benefit of (i) its senior revolving
credit lenders and their agent (collectively, "Senior Lenders"), and (ii) the
holder of the Supplemental Term Loan Note (as defined in the Senior Lenders'
Credit Agreement) and its agent; provided that no such assignment shall release
ASDSC from its obligations hereunder or create any obligation on the part of the
Senior Lenders or the holder of the Supplemental Term Loan Note in respect
hereof.
Please confirm your acknowledgment, agreement and acceptance of the
foregoing by signing where indicated below.
7
AVIATION SALES DISTRIBUTION
SERVICES COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Acknowledged, Agreed and Accepted:
▇▇▇▇▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ Zivi ▇. ▇▇▇▇▇▇
----------------------------------------
Zivi ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
8
SCHEDULE 1
TERMS AND CONDITIONS
Following the exercise of any Option in accordance with the terms of
the Letter Agreement, the following Terms and Conditions shall, along with the
terms and conditions set forth in the Letter Agreement, control in connection
with the purchase and sale of the Property:
1. Purchase and Sale. ASDSC will sell to ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ will
purchase from ASDSC those certain parcels of real property located in Pearland,
Brazoria County, Texas including the land and all buildings, structures and
other improvements situated thereon, as more particularly described in Exhibit
"A" attached hereto (the "Realty"), together with the following:
(a) All strips and gores of land lying adjacent to the Realty
and owned by ASDSC, together with all easements,
privileges, rights-of-way, riparian and other water
rights, lands underlying any adjacent streets or roads,
and appurtenances pertaining to or accruing to the benefit
of the Realty;
(b) All of ASDSC's right, title and interest in and to
furniture, fixtures, equipment, machinery and personal
property used in connection with the operation of the
Realty whether or not located on the Realty, including,
without limitation, all attachments, appliances, fittings,
fixtures and other equipment (the "Equipment");
(c) To the extent assignable, ASDSC's right, title and
interest in and to any and all plans, drawings,
renderings, applications to governmental authorities and
all other work product made or produced in connection with
the Realty or any future development thereof (the
"Plans");
(d) To the extent assignable, all licenses and contract rights
pertaining to the ownership and/or operation of the
Realty; and
(e) All other similar assets and properties (whether personal
or real property) owned by ASDSC which are used or held
for use in connection with the Realty.
The personal property items and fixtures referred to in Sections 1(a) through
1(e) inclusive are hereinafter sometimes collectively called the "Included
Personal Property". The Realty and the Included Personal Property are
hereinafter collectively called the "Property".
2. Purchase Price. The purchase price (the "Purchase Price") to be paid
by ▇▇▇▇▇▇▇▇▇ to ASDSC for the Property is One Million Six Hundred Twenty Six
Thousand Three Hundred Eighty Five and No/100 Dollars ($1,626,385.00).
3. Terms of Payment. At Closing, ▇▇▇▇▇▇▇▇▇ shall pay the Purchase
Price, subject to adjustments as provided herein, to ASDSC by wire transfer.
4. Title and Survey.
(a) Within fifteen (15) business days after the Exercise
Notice, ASDSC shall cause Commonwealth Land Title Company,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, Attn: ▇▇▇▇▇
▇▇▇▇▇▇ (the "Title Company"), to deliver to ▇▇▇▇▇▇▇▇▇, at
ASDSC's expense, a current owner's title insurance
commitment (the "Commitment") naming ▇▇▇▇▇▇▇▇▇ as the
intended insured, which shall show ASDSC to be vested with
and ASDSC shall convey to ▇▇▇▇▇▇▇▇▇, good, marketable and
insurable fee simple title to the Realty, free and clear
of all liens and encumbrances, except the following (the
"Permitted Exceptions"):
(i) Ad valorem real estate taxes for 2000 and subsequent
years, which at the time of Closing shall not yet be
due and payable;
(ii) All matters shown on Schedule B, Item 9 of the
Commonwealth Land Title Insurance Company Commitment
with an effective date of October 8, 2000 and G.F.
No. 0084136 (the "October Commitment");
(iii) Matters set forth in this Letter Agreement;
(iv) Matters to be satisfied by ASDSC at or before the
Closing of this transaction; and
(v) Any other matters acceptable to ▇▇▇▇▇▇▇▇▇.
(b) Within fifteen (15) business days after the Exercise
Notice, ▇▇▇▇▇▇▇▇▇ may obtain, at ▇▇▇▇▇▇▇▇▇'▇ expense, an
update of the Survey of the Realty (the "Updated Survey").
The Commitment to be delivered by the Title Company to ▇▇▇▇▇▇▇▇▇ shall
show title to the Realty to be vested in ASDSC subject only to the Permitted
Exceptions. If ▇▇▇▇▇▇▇▇▇ finds title to be defective (but only to the extent not
disclosed in the October Commitment) or if the Updated Survey discloses any
encroachment in the Realty or that improvements located on the Realty encroach
on setback lines, easements, lands of others or violate any restrictions,
provisions of this Letter Agreement or applicable governmental regulations (and
provided that the Title Company cannot provide affirmative insurance as to such
items; and provided further that such items were not disclosed on the Survey,
▇▇▇▇▇▇▇▇▇ shall, within ten (10) days after ▇▇▇▇▇▇▇▇▇'▇ receipt of the
Commitment and Updated Survey, notify ASDSC in writing specifying the defect(s)
and ASDSC shall cause such defects to be cured by the Closing Date or at
Closing, including the bringing of lawsuits if necessary. ASDSC agrees to remove
by
-2-
payment, bonding, or otherwise any lien against the Property capable of
removal by the payment of money or bonding. ASDSC shall execute appropriate
documents at Closing as required for "gap coverage" by the title insurer to the
extent the title insurer can provide such gap coverage.
5. Deliveries. Within fifteen (15) business days after the Exercise
Notice, ASDSC shall deliver to ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇'▇ agents, or make
available to ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇'▇ agents at the office of ASDSC, true,
correct and complete copies of the following (collectively the "Documentation"),
but only to the extent such Documentation is in ASDSC's or ASDSC's agent's
possession or control:
(a) All contracts, arrangements, license agreements,
concession, easements, service arrangements, management
agreements, brokerage agreements, and any and all other
contracts or agreements, whether written or oral, if any,
which are unrecorded in the public records of the Counties
in which the Realty are located, and which may affect the
Property, or the use thereof from and after the Closing
Date (the "Other Contracts");
(b) All certificates of occupancy, permits, licenses,
authorizations or approvals (other than those which are no
longer in effect) in the custody of ASDSC which were
issued by any governmental body or agency having
jurisdiction over the Property and/or by any utility
company or authority, and which in any way are related to
the ownership, operation and/or use of the Property (the
"Licenses");
(c) All bills issued for the years 1999 and 2000 for real
estate and/or personal property taxes and any subsequently
issued notices pertaining to such real estate taxes or
assessments or personal property taxes applicable to the
Property, and evidence that those which are due and
payable have been paid in full;
(d) All warranties and guarantees of every kind and nature
pertaining to the Property, or any portion thereof, if
any, including, but not limited to, the roof
warranty(ies), the heating, ventilating and air
conditioning warranty(ies), warranty(ies) relating to wood
boring infestation and the general contractor's
warranty(ies) (the "Warranties") which are in ASDSC's
possession or control; and
(e) Any environmental studies, reports and notices relating to
the environmental condition of the Property within ASDSC's
possession or control or within the possession or control
of any of ASDSC's employees or agents;
6. ▇▇▇▇▇▇▇▇▇'▇ Conditions Precedent. Without limiting any of the rights
of ▇▇▇▇▇▇▇▇▇ elsewhere provided or herein, it is agreed that the obligations of
▇▇▇▇▇▇▇▇▇ hereunder shall be subject to the fulfillment of each of the
conditions set forth below:
-3-
(a) The warranties and representations made by ASDSC herein
and in the Letter Agreement shall be true, correct and
complete in all respects from and after the date of the
Letter Agreement through the Closing Date.
(b) ASDSC shall have timely performed all covenants,
undertakings and obligations and complied with all
conditions required hereunder to be performed or complied
with by ASDSC.
(c) ASDSC shall have delivered and made available to ▇▇▇▇▇▇▇▇▇
all closing documents required by Section 14 hereof.
In the event any of the conditions precedent set forth in this
subsection are not fulfilled as of Closing, then ▇▇▇▇▇▇▇▇▇ shall have the option
of waiving the unfulfilled conditions or canceling the Option without any
further liability.
7. ASDSC's Conditions Precedent. Without limiting any of the rights of
ASDSC elsewhere provided for herein, it is agreed that the obligations of ASDSC
hereunder shall be subject to ▇▇▇▇▇▇▇▇▇ having timely performed all covenants,
undertakings and obligations and complied with all conditions required hereunder
to be performed or complied with by ▇▇▇▇▇▇▇▇▇.
8. Default Provisions. In the event ▇▇▇▇▇▇▇▇▇ defaults under this
Letter Agreement, ASDSC shall have all remedies allowed to ASDSC under the Asset
Purchase Agreement. If ASDSC defaults, ▇▇▇▇▇▇▇▇▇ shall have all remedies allowed
to ▇▇▇▇▇▇▇▇▇ under the Asset Purchase Agreement, and shall also have the right
to seek specific performance of this Letter Agreement in connection with
enforcing its rights under the Asset Purchase Agreement.
9. Closing Costs. ▇▇▇▇▇▇▇▇▇ shall pay for the costs of all of its tests
and inspections, the cost of any owner's policy of title insurance issued in
connection with ▇▇▇▇▇▇▇▇▇'▇ purchase of the Property, the Survey and the cost of
recording of the Deed. ASDSC shall pay the amounts necessary to clear the
Property of monetary liens and encumbrances that are not Permitted Exceptions.
Each party shall bear its own attorney's fees relating to this transaction. All
certified, confirmed, or ratified and pending liens for governmental
improvements shall be paid in full by ASDSC.
10. Closing. The Closing shall take place as provided in the Letter
Agreement. In any and all events, ▇▇▇▇▇▇▇▇▇ and ASDSC shall have right to waive
in writing any one or every condition precedent or contingency set forth herein
and compel the conveyance of title.
At Closing, ASDSC shall execute and deliver to ▇▇▇▇▇▇▇▇▇ the following
closing documents:
(a) a Special Warranty Deed (the "Deed"), fully executed and
acknowledged by ASDSC, conveying to ▇▇▇▇▇▇▇▇▇ good,
marketable and insurable fee simple title to the Property
free and clear of all liens,
-4-
encumbrances, restrictions covenants and other matters,
except the Permitted Exceptions;
(b) an appropriate bills paid affidavit;
(c) an affidavit of exclusive possession;
(d) a non-foreign affidavit;
(e) an appropriate ▇▇▇▇ of sale with warranty of title for all
personal property included in this transaction;
(f) appropriate assignments of all deposits, licenses,
easements, rights-of-way, contract rights, guarantees and
warranties, intangible rights and other property and
rights included in this transaction, together with all
original Warranties;
(g) proof of payment of all real estate and personal property
taxes assessed against the Property through 2000;
(h) all original Licenses and certificates, if any;
(i) Affidavits required by the Title Company in order to cure
any defect in or objection or exception to title, in such
form and containing such statement as may be required by
such Title Company to cure any defect and eliminate all
objections and exceptions except the Permitted Exceptions;
(j) At Closing, ASDSC shall deliver to ▇▇▇▇▇▇▇▇▇ all keys,
combinations for any other locks and all instruments of
access to the Property;
(k) Such other documents as are required by this Letter
Agreement to be delivered to ▇▇▇▇▇▇▇▇▇ at Closing.
At Closing, ASDSC and ▇▇▇▇▇▇▇▇▇ shall each execute counterpart closing
statements.
11. Brokerage. The parties each represent and warrant to the other that
no realtor has been involved in the transfer of the Property. If a claim for
brokerage commissions or finder's fees in connection with this transaction is
made by any broker, salesman or finder claiming to have dealt through or on
behalf of one of the parties hereto, such party shall indemnify, defend and hold
harmless the other party hereunder, and such other party's officers, directors,
agents and representatives, from all liabilities, damages, claims, costs, fees
and expenses whatsoever (including reasonable attorney's fees and court costs)
with respect to said claim for brokerage. The provisions of this Section shall
survive the Closing and any cancellation or termination of this Letter
Agreement.
-5-
12. Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be deemed given if
delivered by certified or registered mail (first class postage prepaid),
guaranteed overnight delivery or facsimile transmission if such transmission is
confirmed by delivery by certified or registered mail (first class postage
prepaid) or guaranteed overnight delivery, to the following addresses and
telecopy numbers (or to such other addresses or telecopy numbers which any party
shall designate in writing to the other parties):
If to Kellstrom at:
▇▇▇▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Akerman Senterfitt & ▇▇▇▇▇▇, P.A.
Las Olas Centre II, Suite 1600
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. March, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to ASDSC at:
Aviation Sales Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be deemed given when accepted or refused if delivered by hand or
by overnight delivery service, or on the third (3rd) day following the date
mailed, if mailed in accordance with the foregoing.
-6-
13. Risk of Loss. In the event of any damage to the Property by fire or
other casualty, ▇▇▇▇▇▇▇▇▇ can elect to either cancel this Letter Agreement or
close with all proceeds of insurance and all claims relating to the casualty
assigned to ▇▇▇▇▇▇▇▇▇ at Closing.
14. Indemnification. The terms of the Asset Purchase Agreement shall
control with respect to the indemnity obligations of ASDSC and ▇▇▇▇▇▇▇▇▇.
15. Duty of Confidentiality.
(a) ▇▇▇▇▇▇▇▇▇ agrees to keep all information and/or reports
obtained from ASDSC, and the results of all of ▇▇▇▇▇▇▇▇▇'▇
tests and inspections, confidential and will not disclose
any such information to any person or entity, other than
to its employees, lawyers, accountants, consultants,
partners, investors, lenders and financial advisors,
without obtaining the prior written consent of ASDSC.
(b) ▇▇▇▇▇▇▇▇▇ and ASDSC each agree that, in addition to the
foregoing, the confidentiality provisions of the Asset
Purchase Agreement shall control as to this Letter
Agreement.
16. Miscellaneous.
(a) In construing this Letter Agreement, the singular shall be
held to include the plural, the plural shall include the
singular, the use of any gender shall include every other
and all genders, and captions and paragraph headings shall
be disregarded.
(b) All of the exhibits attached to this Letter Agreement are
by reference thereto incorporated in, and made a part of,
this Letter Agreement.
(c) ASDSC agrees that at any time and from time to time,
before and after the Closing, to execute and deliver such
further documents and do such further acts and things
▇▇▇▇▇▇▇▇▇ may reasonably request in order to fully
effectuate the purposes of this Letter Agreement.
(d) This Letter Agreement may be executed in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
(e) Time shall be considered of the essence with respect to
all of the provisions contained in this Letter Agreement.
-7-
(f) This Letter Agreement shall be assignable by ▇▇▇▇▇▇▇▇▇
provided that no assignment by ▇▇▇▇▇▇▇▇▇ shall release it
of any of its obligations hereunder.
(g) If the transfer of the Realty by ASDSC to ▇▇▇▇▇▇▇▇▇ is
subject to compliance with any municipal, county or state
regulations concerning the subdivision of lands, ASDSC
shall be responsible for complying with all such
applicable regulations and obtaining all required permits,
plats, waiver of plats or other approvals from the
applicable governmental agency prior to Closing.
(h) This Letter Agreement, the Real Property Lease and the
related Asset Purchase Agreement and all exhibits attached
hereto and thereto constitute the entire agreement between
the parties and supersede any prior oral or written
agreements between the parties with respect to the subject
matter hereof. This Letter Agreement (including all
exhibits and addenda attached hereto) may not be changed,
altered or modified except by an instrument in writing
executed by all parties. This Letter Agreement (including
all exhibits attached hereto) shall be binding upon the
parties and their respective successors and assigns.
Notwithstanding the foregoing, all representations,
warranties and indemnities contained in the Asset Purchase
Agreement which are applicable to the Property, shall
survive the Closing of this transaction and shall be
applicable to the Property to the extent set forth in the
Asset Purchase Agreement and to the extent they do not
conflict with the indemnities set forth herein.
(i) The terms, provisions and conditions of this Letter
Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
(j) The Texas Real Estate License Act requires that ASDSC
notify ▇▇▇▇▇▇▇▇▇ that ▇▇▇▇▇▇▇▇▇ should either (i) have an
attorney examine an abstract of title to the Property, or
(ii) obtain a title insurance policy covering the
Property. Notice to that effect is, therefore, hereby
given to and acknowledged by ▇▇▇▇▇▇▇▇▇.
(k) ▇▇▇▇▇▇▇▇▇ HEREBY WAIVES ITS RIGHTS UNDER THE DECEPTIVE
TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41
ET SEQ. OF THE TEXAS BUSINESS & COMMERCE CODE, A LAW THAT
GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
CONSULTATION WITH AN ATTORNEY OF ▇▇▇▇▇▇▇▇▇'▇ OWN
SELECTION, ▇▇▇▇▇▇▇▇▇ VOLUNTARILY CONSENTS TO THIS WAIVER.
-8-
