8-K

UNITED STATES

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

April 7, 2010

Date of Report (Date of earliest event reported)

AAR CORP.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1–6263	36–2334820
(Commission File Number)	(IRS Employer Identification No.)

One AAR Place, 1100 N. Wood Dale Road

Wood Dale, Illinois 60191

(Address and Zip Code of principal executive offices)

Registrant’s telephone number, including area code:  (630) 227-2000

Check the appropriate box below if the Form 8-K Filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.   Entry into a Material Definitive Agreement.

Immediately prior to the completion of the transaction described in Item 2.01, on April 7, 2010, AAR CORP. (“AAR”), AAR Airlift, LLC, a newly-formed, indirect, wholly-owned subsidiary of AAR (“Purchaser”), and Xe Services LLC (“Xe”) entered into an amendment (the “Amendment”) to the previously reported Membership Unit Purchase Agreement, dated March 25, 2010 (as so amended, the “Purchase Agreement”).  The Amendment recognizes that one of the contingencies subject to an escrow had been resolved and, accordingly, reduced the portion of the purchase price to be deposited into escrow.  A copy of the Amendment is attached as Exhibit 99.1.

Item 2.01   Completion of Acquisition or Disposition of Assets.

On April 7, 2010, Purchaser completed the purchase from Xe of the entire equity interest in Aviation Worldwide Services, L.L.C. (“AWS”), a leading provider of expeditionary airlift services and aircraft modifications to the U.S. and other government customers, pursuant to the Purchase Agreement.  AWS, through its operating subsidiaries, Presidential Airways, Inc. and STI Aviation, Inc., provides fixed- and rotary-wing flight operations, transporting troops and cargo in support of worldwide U.S. Department of Defense and Department of State operations, and performs engineering and design modifications on specialized rotary-wing aircraft for government customers.  Purchaser also acquired the entire equity interest in EP Aviation, LLC (“EPA”), an affiliated entity that owns and leases to AWS the aircraft used in AWS’s operations.

The aggregate consideration for the purchase was approximately $200,000,000 in cash, subject to a possible post-closing net asset value adjustment.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement.  A copy of the original Purchase Agreement was previously filed, and a copy of the Amendment is filed herewith, and both are incorporated into this Item 1.01 by reference.

Item 9.01.   Financial Statements and Exhibits.

(d)           Exhibits

Exhibit Number	Description
99.1	Amendment to Membership Unit Purchase Agreement, dated as of April 7, 2010

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SIGNATURE

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.

Date:   April 12, 2010
	AAR CORP.
	By	/s/ RICHARD J. POULTON
		Richard J. Poulton
		Vice President, Chief Financial Officer and
		Treasurer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Amendment to Membership Unit Purchase Agreement, dated as of April 7, 2010

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EX-99.1

Exhibit 99.1

AMENDMENT TO MEMBERSHIP UNIT PURCHASE AGREEMENT

This Amendment (the “Amendment”) is entered into as of April 7, 2010, by and among XE SERVICES LLC, a Delaware limited liability company (“Seller”), AAR AIRLIFT, LLC, a Delaware limited liability company (“Purchaser”), and AAR CORP., a Delaware corporation and the indirect parent of Purchaser (“AAR”), with respect to the Membership Unit Purchase Agreement dated as of March 25, 2010 (the “Purchase Agreement”) by and among Seller, Purchaser and, for the limited purposes specified therein, AAR.  Capitalized but undefined terms used in this Amendment shall have the same meanings as are set forth in the Purchase Agreement.

W I T N E S S E T H:

WHEREAS, Section 3.1(b) of the Purchase Agreement provides that $20,000,000 of the Purchase Price shall be deposited in escrow to be held and disbursed in accordance with the Escrow Agreement;

WHEREAS, the Escrow Agreement provides that Seller will be entitled to receive a disbursement of $10,000,000 upon settlement of the lawsuit captioned McMahon et al. v. Presidential Airways., et al., 6:05-cv-01002-JA-GJK (MDFL) (the “McMahon Case”);

WHEREAS, the McMahon Case has been settled, and the payments contemplated by the release and settlement agreement have been made; and

WHEREAS, the Parties desire to amend the Purchase Agreement to reduce the amount required to be deposited under the Escrow Agreement;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Amendment.  Section 3.1(b) of the Purchase Agreement is amended and restated in its entirety as follows:

“(b)At Closing, Purchaser shall deposit with the Escrow Agent an amount equal to $10,000,000 (the “Escrow Amount”), which shall be held and disbursed by the Escrow Agent in accordance with the Escrow Agreement;”

2.Escrow Agreement.  As contemplated by the form of Escrow Agreement attached as Exhibit C to the Purchase Agreement, the Escrow Agreement will be revised, in a form reasonably acceptable to the Parties, to reduce the Escrow Amount to $10,000,000 and to delete all provisions relating to the McMahon Case (including settlements thereof and claims, expenses and certificates relating thereto).

3.Second Escrow Agreement.  The Second Escrow Agreement will be revised, in a form reasonably acceptable to the Parties, to delete all provisions relating to the McMahon Case and the McMahon Reserve.

4.Governing Law.  This Agreement shall be construed, performed and enforced in accordance with, and governed by, the laws of the State of Delaware (without giving effect to the principles of conflicts of laws thereof), except to the extent that the laws of such state are superseded by applicable federal law.

5.Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

6.Counterparts.  This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute the same agreement.

7.Ratification.  Except as specifically amended above, the Purchase Agreement shall remain in full force and effect and is hereby in all respects ratified and confirmed.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

XE SERVICES LLC
By:	/s/ Christian M.L. Bonat
Name:	Christian M.L. Bonat
Title:	General Counsel
AAR AIRLIFT, LLC
By:	/s/ Randy Martinez
Name:	Randy J. Martinez
Title:	Chief Executive Officer
AAR CORP., for the purposes of Article 6, Section 7.3 and Section 7.19 of the Purchase Agreement only
By:	/s/David P. Storch
Name:	David P. Storch
Title:	Chairman and Chief Executive Officer