Document:

ex_115428.htm

Exhibit 10.1

 

 

 

May 23, 2018

 

 

Mr. Robert G. Brown

SPAR Business Services, Inc.

7711 N. Military Trail

Suite 1000

Palm Beach Gardens, FL 33410

 

Attention: Robert G. Brown, President

 

Re: Notice of Cessation of Use of SBS Services Anticipated on or before August 15, 2018.

 

Dear Bob,

 

As per our discussion on May 3, 2018, SPAR Marketing Force, Inc. ("SMF"), is hereby giving SPAR Business Services (“SBS”) notice of SMF's decision to cease using SBS's services, anticipated on or before August 15, 2018.

 

SMF will work together with SBS (in particular, you and your team) throughout this transition while SBS continues to provide its services, and SMF continues to use those services, as we each strive to accomplish a smooth and seamless transition.

 

Please let me know of any questions.

 

Sincerely,

 

 

 

Kori Belzer

Chief Operating Officer

SPAR Marketing Force, Inc.

 

 

	
			cc:

				
			 Christiaan M. Olivier

			
	 	
			 James R. Segreto

			 Arthur B. Drogue

			 Lawrence David Swift, Esq.Exhibit 10.1

 

EXECUTION COPY

 

FIRST AMENDMENT TO PURCHASE AGREEMENT

 

This First Amendment to Purchase Agreement, dated as of May 22, 2018 (this “Amendment”), is among AAR CORP. (“AAR”), a Delaware corporation, as seller representative (in such capacity, the “Seller Representative”) on behalf of itself and each seller set forth on Exhibit A hereto (collectively, the “Sellers”), as servicer (in such capacity, the “Servicer” and, together with the Seller Representative, the “AAR Parties” and each an “AAR Party”), and as parent (in such capacity, the “Parent”), and CITIBANK, N.A. (the “Buyer”).

 

RECITALS

 

WHEREAS, the AAR Parties, the Sellers and the Buyer are parties to that certain Purchase Agreement, dated as of February 23, 2018 (as amended, restated, supplemented or otherwise modified through the date hereof, the “Agreement”);

 

WHEREAS, the parties hereto desire to amend the Agreement in certain respects as set forth herein;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

SECTION 1.                            Definitions. Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings assigned thereto in the Agreement.

 

SECTION 2.                            Amendments to the Agreement.

 

(a)                                 The third sentence of Section 4(b) of the Agreement is hereby amended and restated in its entirety to read as follows: “Following the occurrence of a Material Adverse Change, the Buyer shall have the right to issue a notice to the Seller Representative (the “DACA Notice”) requesting that the Servicer enter into an account control agreement covering the existing Collection Account.  Following receipt of the DACA Notice by the Seller Representative, the parties shall use commercially reasonable efforts to negotiate and enter into an account control agreement covering the existing Collection Account in form and substance reasonably satisfactory to the Buyer on or prior to the DACA Date.”.

 

(b)                                 Section 12(c) of the Agreement is hereby amended by deleting the second sentence therein in its entirety.

 

(c)                                  Schedules I and II to the Agreement are hereby amended and restated in the form of Annex A attached hereto.

 

(d)                                 The definition of “Collection Account” in Exhibit A to the Agreement is hereby amended by deleting the following language in its entirety: “if the Agreement has not been terminated pursuant to the second sentence of Section 12(c) thereof,”.

 

(e)                                  The definition of “DACA Date” in Exhibit A to the Agreement is hereby amended and restated in its entirety to read as follows:

 

 

“DACA Date”: With respect to the DACA Notice issued by the Buyer pursuant to Section 4(b), the date specified in such notice, which date shall be no less than 90 days following the date of receipt by the Seller Representative of such notice (or such later date as may be agreed by the Buyer and the Seller Representative).  Prior to the issuance of the DACA Notice, there shall be no DACA Date then in effect.

 

SECTION 3.                            Conditions to Effectiveness. This Amendment shall become effective on the date on which each of the parties hereto shall have received counterparts of this Amendment executed by each of the other parties hereto.

 

SECTION 4.                            Representations and Warranties. The Seller Representative (on behalf of itself and each Seller) and the Servicer hereby make to the Buyer, on and as of the date hereof, the following representations and warranties:

 

(a)                                 Authority. The execution, delivery and performance by the applicable AAR Party of this Amendment (i) are within such AAR Party’s corporate powers and (ii) have been duly authorized by all necessary corporate action;

 

(b)                                 Enforceability. This Amendment constitutes the legal, valid and binding obligation of the applicable AAR Party, enforceable against such AAR Party in accordance with its terms, except as limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws relating to the enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforcement is sought at equity or law);

 

(c)                                  Representations, Warranties and Covenants. Its representations, warranties and covenants contained in the Agreement (other than those set forth in clauses (i) and (k) of Exhibit C thereof) are true and correct in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date; and

 

(d)                                 No Event of Termination. No Event of Termination has occurred and is continuing.

 

SECTION 5.                            Ratification of Parent Undertaking.  The Parent hereby acknowledges and agrees that, immediately after giving effect to this Amendment, the Parent Undertaking shall remain in full force and effect and is hereby ratified and confirmed.

 

SECTION 6.                            Effect of Amendment; Ratification.

 

(a)                                 Upon the effectiveness of this Amendment, each reference in the Agreement to the “Purchase Agreement”, “this Agreement”, “hereunder,” “hereof,” “herein,” “hereby” or words of like import shall mean and be a reference to the Agreement as amended hereby, and each reference to the Agreement in any other document, instrument and agreement executed and/or delivered in connection with the Agreement shall mean and be a reference to the Agreement as amended hereby.

 

(b)                                 Except as specifically amended hereby, the Agreement and all other documents,

 

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instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed in all respects.

 

(c)                                  The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Buyer or any of its assignees under the Agreement or any other document, instrument, or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein.

 

SECTION 7.                            Execution; Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by electronic mail attachment in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Amendment.

 

SECTION 8.                            Governing Law. This Amendment shall be governed by the laws of the State of New York, without giving effect to conflicts of law principles.

 

SECTION 9.                            Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

 

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

 

	
 
    	
AAR   CORP., as Seller Representative (on behalf of itself and each Seller) and as   Servicer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jason Secore
    
	
 
    	
Name:
    	
Jason   Secore
    
	
 
    	
Title:
    	
Vice   President & Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AAR   CORP., as Parent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jason Secore
    
	
 
    	
Name:
    	
Jason   Secore
    
	
 
    	
Title:
    	
Vice   President & Treasurer
    

 

First Amendment

 

 

	
 
    	
CITIBANK,   N.A.,
    
	
 
    	
as   Buyer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James. R Williams
    
	
 
    	
Name:
    	
James.   R Williams
    
	
 
    	
Title:
    	
Vice   President
    

 

First Amendment

 

 

EXHIBIT A

 

AAR CORP.

 

AAR Aircraft Services, Inc.

 

AAR Airlift Group, Inc.

 

AAR Manufacturing, Inc.

 

AAR Supply Chain, Inc.

 

AAR International, Inc.

 

AAR Government Services, Inc.

 

AAR Landing Gear LLCExhibit 10.2

 

 

May 24, 2018

 

Mr. David P. Storch

1270 Linden Avenue

Highland Park, IL  60035

 

RE:                          Retirement

 

Dear David:

 

This letter agreement sets forth the terms and conditions of your voluntary retirement from AAR CORP. (“AAR”) on May 31, 2018.

 

In consideration of the mutual promises in this letter agreement, you and we hereby agree to the following:

 

1.                                      Voluntary Retirement.

 

(a)                                 You will continue to serve as AAR’s Chief Executive Officer, and you will continue to receive your full salary, benefits and perquisites, until your retirement as an employee of AAR on May 31, 2018.  You also will be entitled to a bonus for the fiscal year-ending May 31, 2018, as determined under AAR’s Fiscal 2018 Short-Term Incentive Plan, regardless of your employment having terminated prior to the date such annual bonus is paid.

 

(b)                                 You will receive the Supplemental Company Contributions and Supplemental Profit Sharing Contributions under the SKERP for the period January 1, 2018 through May 31, 2018.  You will also be eligible to receive any Additional Supplemental Company Contributions for the period June 1, 2017 through May 31, 2018.  Your SKERP benefit will be paid in accordance with the terms of the SKERP.

 

(c)                                  You are retirement eligible under AAR’s stock plans, meaning that you will continue to vest in all currently outstanding unvested stock awards in accordance with the terms of the awards.  Any stock options that are vested or become vested following your retirement will remain exercisable for their full remaining original term.

 

(d)                                 You are entitled to the benefits under three separate amended and restated split-dollar agreements dated March 1, 2000 relating to the following life insurance policies: (i) Policy No. 56005683 with New York Life; (ii) Policy No. 968290008U with MetLife; and (iii) Policy No. 968290009U with Metropolitan Life.

 

(e)                                  Upon your retirement from AAR, you (and your spouse) will be entitled to participate, for your (and your spouse’s) lifetime, in AAR’s medical, hospitalization and dental plans, and any executive health programs then in effect, on the same terms and in amounts and of the same type(s) generally made available to any actively employed executive officer of AAR.  Consistent with IRS guidance, AAR will furnish you with an IRS Form that reflects the portion of the premiums paid by AAR for your continued coverage under these plans for each year.

 

 

2.                                      Termination of Employment Agreement. The Employment Agreement between you and AAR, dated as of April 18, 2017 (“Employment Agreement”) is terminated effective May 31, 2018 and is replaced by (a) this letter agreement relating to your retirement and (b) the separate letter agreement also dated May 24, 2018 relating to your post-retirement; provided that Section 8 (“Confidential Information and Restriction of Competition”) and Section 11 (“Legal Fees”) of your Employment Agreement will survive the termination of the Employment Agreement and are incorporated by reference into this agreement.

 

3.                                      Mutual Release.

 

(a)                                 AAR does hereby fully, finally and unconditionally release and forever discharge you, your heirs, executors, administrators, spouse, children, beneficiaries, legal representatives, agents, successors and assigns from any and all liabilities, actions, causes of action, claims, rights, obligations, damages, costs, attorneys’ fees, suits and demands of any and every kind, known and unknown, liquidated and unliquidated, absolute or contingent, at law or in equity, enforceable under any local, state or federal statute or ordinance, or under the common law of the United States or any state, arising out of or related to your employment or retirement from employment, including but not limited to claims of breach of implied or express contract, breach of promise, misrepresentation, negligence, fraud, estoppel, defamation, infliction of emotional distress, violation of public policy, wrongful or constructive discharge, or any other employment related tort; except only AAR’s right to enforce the terms of this letter agreement.  Nothing in this release requires AAR to release rights or claims that may arise after this letter agreement is executed.

 

(b)                                 You do hereby fully, finally and unconditionally release and forever discharge AAR and all of its affiliated companies, and all of their former and current directors, officers, employees, agents, and assigns, in their personal and corporate capacities, from any and all liabilities, actions, causes of action, claims, rights, obligations, damages, costs, attorneys’ fees, suits and demands of any and every kind, known and unknown, liquidated and unliquidated, absolute or contingent, at law or in equity, enforceable under any local, state or federal statute or ordinance, or under the common law of the United States or any state, arising out of or related to your employment or retirement from employment, including but not limited to claims for benefits under the Company’s policies and procedures or handbooks, or the Employee Retirement Income Security Act of 1974, as amended, any claims of harassment or discrimination based upon race, age, color, national origin, ancestry, religion, marital status, sex, sexual orientation, citizenship status, medical condition or disability under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, Section 1981 of the Civil Rights Act of 1866, the Worker Adjustment and Retraining Notification Act, the Age Discrimination in Employment Act of 1967, as amended, or any other federal state or local law prohibiting discrimination in employment; claims of breach of implied or express contract, breach of promise, misrepresentation, negligence, fraud, estoppel, defamation, infliction of emotional distress, violation of public policy, wrongful or constructive discharge, or any other employment related tort; except only (i) your right to enforce the terms of this letter agreement, and (ii) the rights described in paragraph 9.  This release does not waive your right to file an administrative charge of discrimination but you agree to waive all claims for damages or other relief.  Nothing in this release requires you to release rights or claims that may arise after this letter agreement is executed, including your rights under the SKERP, the AAR CORP. Retirement Savings Plan or the AAR CORP. Retirement Plan.  This release does not waive your rights under your Indemnification Agreement dated August 24, 1989 (the “Indemnification Agreement”).

 

4.                                      Severability.                        If any provision of this letter agreement is, in whole or in part, illegal or unenforceable under applicable law or public policy, then only such illegal or unenforceable part shall be void and of no effect, and the balance of this letter agreement shall be construed to give effect to the intent of the parties to the greatest possible extent.

 

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5.                                      Fee Reimbursement.  You will be reimbursed for the reasonable fees you incur in connection with the negotiation and documentation of this Agreement and related agreements, with a maximum reimbursement of $15,000.

 

6.                                      Binding Effect.  This letter agreement is binding upon you, your heirs, executors, administrators, successors and assigns.

 

7.                                      Entire Agreement.  This letter agreement contains the entire understanding of the parties with respect to the matters addressed herein, and supersedes all other agreements or communications regarding such matters (except for the letter agreement dated the date of this letter agreement pertaining to your service as Non-Executive Chairman of the Board and as a consultant to AAR and the surviving Sections 8 and 11 of the Employment Agreement and your Indemnification Agreement).

 

8.                                      Choice of Law.  This letter agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to its conflict of law rules.

 

9.                                      Knowing and Voluntary.  Further, in consideration of the promises of AAR referred to in this letter agreement, you intend to waive and release all claims identified in paragraph 4(b), including claims that you may have under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Section 620 et seq. to the fullest extent permitted by law in accordance with Title II of the Older Workers Benefit Protection Act of 1990, Public Law 101-433. In furtherance of this intention, you acknowledge and understand that:

 

(a)                                 You may have until June 14, 2018 to consider and execute this letter agreement.

 

(b)                                 Within seven (7) days after you execute this letter agreement, you will have the right, by providing written notice to AAR’s Vice President, General Counsel and Secretary, to revoke your acceptance of this letter agreement.  This letter agreement will not become effective until after this revocation period expires.

 

(c)                                  You are receiving consideration for this letter agreement in addition to that which you otherwise would be entitled.

 

(d)                                 You are entering into the letter agreement voluntarily, knowingly and without duress.

 

(e)                                  You are advised to consult with an attorney prior to executing this letter agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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Please indicate your acknowledgment of, and agreement to, the terms and conditions of this letter agreement by signing and returning a copy of this letter agreement to AAR.

 

	
Very truly yours,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AAR CORP.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ RONALD B. WOODARD
    	
 
    
	
Name:
    	
Ronald B. Woodard
    	
 
    
	
Title:
    	
Chairman of the   Compensation Committee of the Board of Directors
    	
 
    
	
Date:
    	
May 24, 2018
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AAR CORP.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ JOHN M. HOLMES
    	
 
    
	
Name:
    	
John M. Holmes
    	
 
    
	
Title:
    	
President and Chief   Operating Officer
    	
 
    
	
Date:
    	
May 24, 2018
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Acknowledged and Agreed:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ DAVID P. STORCH
    	
 
    
	
Name:
    	
David P. Storch
    	
 
    
	
Date:
    	
May 24, 2018
    	
 
    

 

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