EXHIBIT 10.02
AMENDMENT NO. 7, CONSENT AND WAIVER
Dated as of June 30, 1999
to
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
This Amendment No. 7, Consent and Waiver (the "Amendment")
dated as of June 30, 1999 is entered into among AVIATION SALES DISTRIBUTION
SERVICES COMPANY, a Delaware corporation ("ASOC"), AEROCELL STRUCTURES, INC., an
Arkansas corporation ("Aerocell"), AVS/XXXXX-XXXXX MACHINE COMPANY, a Delaware
corporation ("Xxxxx-Xxxxx"), WHITEHALL CORPORATION, a Delaware corporation
("Whitehall"), TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation ("TIMCO"), APEX MANUFACTURING, INC., an Arizona corporation
("Apex"), CARIBE AVIATION, INC., a Florida corporation ("Caribe"), AIRCRAFT
INTERIOR DESIGN, INC., a Florida corporation ("Design"), AVIATION SALES LEASING
COMPANY, a Delaware corporation ("Leasing"), TIMCO ENGINE CENTER, INC., a
Delaware corpporation ("TIMCO Engine"), AVIATION SALES COMPANY, a Delaware
corporation ("Parent"), and the "Lenders" (as defined in the Credit Agreement
identified below) a party hereto. Capitalized terms used herein without
definition are used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, ASOC, Aerocell, Xxxxx-Xxxxx, Whitehall, TIMCO, Apex,
Caribe, and Design, as Borrowers, Parent, Citicorp USA, Inc., as Agent, and
certain financial institutions, as Lenders and Issuing Banks, are parties to
that certain Third Amended and Restated Credit Agreement dated as of October 17,
1997, as heretofore amended (the "Credit Agreement");
WHEREAS, effective December 15, 1998, the Credit Agreement was
amended pursuant to the terms of that certain Amendment No. 4 and Consent (the
"TROL Amendment") and under the terms of the TROL Amendment, the Parent,
Borrowers and Guarantors were permitted to enter into certain guaranties and
make certain Restricted Junior Payments with respect to Indebtedness incurred in
connection with a certain synthetic lease transaction more particularly
described in the TROL Amendment;
WHEREAS, due to increased costs related to the construction of
improvements on the real property which is the subject of the TROL Lease, the
principal amount of such Indebtedness guaranteed will increase by no more than
$5,000,000 and the consent of the Requisite Lenders is required to permit the
guarantee of such additional Indebtedness and any Restricted
Junior Payments required to be made in connection therewith;
WHEREAS, effective May 11, 1999, the Credit Agreement was
amended pursuant to the terms of that certain Amendment No. 6, Consent and
Waiver (the "Recapitalization Amendment"), at which time, it was anticipated
that Parent would issue 2,600,000 shares of its common stock (plus up to an
additional 525,000 of its common stock to underwriters under certain
circumstances) as more particularly described in its Form S-3 Registration
Statement filed with the Securities and Exchange Commission on April 20, 1999
and the Tangible Net Worth covenants set forth in Section 11.07 of the Credit
Agreement were determined based on the projected proceeds of the issuance of
such equity;
WHEREAS, in view of only 2,300,000 shares of Parent common
stock (including that issued to the underwriters) being issued generating
proceeds (net of underwriting discount but before expenses) in an aggregate
amount of approximately $80,100,000, the Borrowers have requested a modification
of the covenant levels set forth in Section 11.07 of the Credit Agreement for
the periods ending on and after June 30, 1999;
WHEREAS, Parent has caused TIMCO Engine to be formed as a new
wholly-owned Subsidiary of Aviation Sales Maintenance, Repair & Overhaul Company
and Parent, TIMCO and TIMCO Engine have entered into a Purchase Agreement dated
as of June 30, 1999 (the "Purchase Agreement"), with Kitty Hawk, Inc., a
Delaware corporation ("KHI"), Kitty Hawk International, Inc., a Michigan
corporation ("KHII"), and Kitty Hawk Aircargo, Inc., a Texas corporation
("KHAC") (KHI, KHII and KHAC being collectively referred to as "Kitty Hawk")
pursuant to which TIMCO Engine will acquire certain assets of Xxxxx Xxxx'x JT8D
repair and overhaul operations and Boeing 727 heavy maintenance operations
(collectively, the "Kitty Hawk Assets") upon payment of $18,000,000 in cash
(subject to adjustment as provided in the Purchase Agreement) and execution and
delivery by Parent, on behalf of certain of the Borrowers and Guarantors, of a
certain agreement with KHI granting to KHI "purchase credits" in the aggregate
amount of $3,500,000, as more particularly described in the Purchase Agreement;
WHEREAS, the formation of TIMCO Engine and the above-described
Investment in the Kitty Hawk Assets require the consent of the Requisite Lenders
and, as a condition to such consent, the Lenders have required that TIMCO Engine
become a party to the Credit Agreement as a Borrower, jointly and severally
liable with the other Borrowers for the Obligations;
WHEREAS, the Borrowers have requested an additional
extension of the time permitted for completion of Inventory
appraisals; and
WHEREAS, in consideration of the foregoing, the parties
hereto have agreed to amend the Credit Agreement as set forth
below in SECTION 1, subject to the terms and conditions stated in this
Amendment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of
June 30, 1999, subject to the satisfaction of the conditions precedent set forth
in SECTION 3 hereof, the Credit Agreement is hereby amended as follows:
1.1 SECTION 1.01 is amended to (a) delete the definitions of
"Borrower" in its entirety and substitute the following definitions therefor:
"BORROWER" means, individually, any of Aviation Sales
Distribution Services Company, a Delaware corporation; Aviation Sales Leasing
Company, a Delaware corporation; Aerocell Structures, Inc., an Arkansas
corporation; Apex Manufacturing, Inc., an Arizona corporation; Caribe Aviation,
Inc., a Florida corporation; AVS/Xxxxx-Xxxxx Machine Company, a Delaware
corporation; Aircraft Interior Design, Inc., a Florida corporation; Triad
International Maintenance Corporation, a Delaware corporation; Whitehall
Corporation, a Delaware corporation, and TIMCO Engine Center, Inc., a Delaware
corporation; and "BORROWERS" means, collectively, all of such Persons.
and (b) add the following definition for "TIMCO Engine":
"TIMCO Engine" means TIMCO Engine Center, Inc., a Delaware corporation
and wholly-owned Subsidiary of MR&O.
1.2 SECTION 11.07 is amended to delete the provisions thereof
in their entirety and substitute the following therefor:
11.07. MINIMUM TANGIBLE NET WORTH. The Parent shall maintain a
Tangible Net Worth of at least the amount set forth below for the fiscal quarter
of the Parent ending during the period set forth below opposite such amount.
PERIOD ENDING MINIMUM TANGIBLE NET WORTH
------------- --------------------------
March 31, 1999 $ 95,000,000
June 30, 1999 $180,000,000
September 30, 1999 $190,000,000
December 31, 1999 $200,000,000
3
March 31, 2000 $200,000,000
June 30, 2000 $200,000,000
September 30, 2000 $200,000,000
December 31, 2000 $240,000,000
March 31, 2001 $240,000,000
June 30, 2001 $240,000,000
September 30, 2001 $240,000,000
December 31, 2001 $280,000,000
March 31, 2002 $280,000,000
June 30, 2002 $280,000,000
1.3 Exhibits F and G to the Credit Agreement are hereby
deleted in their entirety and Exhibits F and G attached hereto and made a part
hereof are substituted therefor. Schedules 7.01-A and 7.01-C to the Credit
Agreement shall be deleted in their entirety and Schedules 7.01-A and 7.01-C
referenced on SCHEDULE 1 attached hereto and made a part hereof will be
substituted therefor upon their delivery as required by Section 3(b) below.
SECTION 2. CONSENTS AND WAIVER.
2.1 The Borrowers having heretofore covenanted and agreed to
obtain and deliver an appraisal of each Borrower's and its respective
Subsidiary's Inventory prepared by an independent appraiser satisfactory to the
Agent and on the same basis as the Appraisal by May 19, 1999, having heretofore
obtained extensions of such due date, and requested an additional extension of
the time permitted for such delivery, the Lenders hereby consent to the delivery
of such appraisal to the Agent and Lenders by no later than August 31, 1999.
2.2 The Lenders a party hereto, constituting at least the
Requisite Lenders, hereby consent to the increase by no more than $5,000,000 of
the principal amount of the Indebtedness evidenced by the Series A Notes issued
by First Security Bank, National Association, as trustee under Aviation Sales
Trust 1998- 1, a trust formed under the laws of the State of Florida guaranteed
pursuant to the terms of the TROL Guaranties, and any increased Restricted
Junior Payments required to be made in connection therewith as more particularly
described in Section 10.06(d).
2.3 The Lenders a party hereto, constituting at least
the Requisite Lenders, hereby waive any rights and remedies that might otherwise
arise under the terms of the Credit Agreement with respect to the formation of
TIMCO Engine and consent to the Investment in the Kitty Hawk Assets as described
herein; PROVIDED THAT TIMCO Engine executes and delivers to the Agent this
Amendment and the agreements and documents identified on SCHEDULE 1 attached
hereto and made a part hereof on or before the earlier to occur of the date on
which the Kitty Hawk Assets are acquired as aforesaid or August 15, 1999.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
AMENDMENT. This Amendment shall become effective as of June 30, 1999, if, and
only if the Agent shall have received:
(a) a facsimile or original executed copy of this Amendment executed by
the Parent, each Borrower (including TIMCO Engine), and the Requisite
Lenders; and
(b) solely with respect to all provisions of this Amendment other than
the consent set forth in Sections 2.1 and 2.2 hereof, the agreements
and documents identified on SCHEDULE 1 attached hereto and made a part
hereof on or before the earlier to occur of the date TIMCO Engine
acquires the Kitty Hawk Assets or August 15, 1999.
SECTION 4. REPRESENTATIONS AND WARRANTIES; ACKNOWLEDGMENT. The
Borrowers hereby represent and warrant as follows:
4.1 This Amendment and the Credit Agreement as previously
executed and delivered and as amended hereby constitute legal, valid and binding
obligations of the Borrowers and are enforceable against the Borrowers in
accordance with their terms.
4.2 No Event of Default or Potential Event of Default exists,
other than that arising due to the formation of TIMCO Engine without the prior
written consent of the Requisite Lenders as required by SECTION 10.04 of the
Credit Agreement as referenced above, or would result from any of the
transactions contemplated by this Amendment.
4.3 Upon the effectiveness of this Amendment, (a) each
Borrower hereby reaffirms all covenants, representations and warranties made by
it in the Credit Agreement to the extent the same are not amended hereby and
agree that all such covenants, representations and warranties shall be deemed to
have been remade as of the date this Amendment becomes effective (unless a
representation and warranty is stated to be given on and as of a specific date,
in which case such representation and warranty shall be true, correct and
complete as of such date) and (b) TIMCO Engine shall be jointly and severally
liable for all of the Obligations, whether incurred or arising prior to, on, or
after
the date of this Amendment.
SECTION 5. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
5.1 Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import shall mean and be a reference to the Credit Agreement, as
amended hereby, each reference to the Credit Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby, and each reference in the Loan Documents to "Borrowers" or "Borrower"
shall mean and include TIMCO Engine.
5.2 Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
5.3 The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of any
Lender or Issuing Bank or the Agent under the Credit Agreement, the Notes or any
of the other Loan Documents, nor constitute a waiver of any provision contained
therein, except as specifically set forth herein.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 7. GOVERNING LAW. This Amendment shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 8. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
AVIATION SALES DISTRIBUTION AEROCELL STRUCTURES, INC.
SERVICES COMPANY
By___________________________ By________________________
Name: Name:
Title: Title:
AVS/XXXXX-XXXXX MACHINE COMPANY WHITEHALL CORPORATION
By___________________________ By________________________
Name: Name:
Title: Title:
TRIAD INTERNATIONAL MAINTENANCE APEX MANUFACTURING, INC.
CORPORATION
By___________________________ By________________________
Name: Name:
Title: Title:
AIRCRAFT INTERIOR DESIGN, INC. CARIBE AVIATION, INC.
By___________________________ By________________________
Name: Name:
Title: Title:
AVIATION SALES COMPANY AVIATION SALES LEASING COMPANY
By__________________________ By________________________
Name: Name:
Title: Title:
TIMCO ENGINE CENTER, INC.
By__________________________
Name:
Title:
CITICORP USA, INC. XXXXXX FINANCIAL, INC.
By___________________________ By__________________________
Shapleigh X. Xxxxx Name:
Vice President Title:
CONGRESS FINANCIAL CORPORATION NATIONAL CITY COMMERCIAL
FINANCE, INC.
By____________________________ By__________________________
Name: Name:
Title: Title:
FIRST UNION COMMERCIAL CREDIT LYONNAIS, ATLANTA
CORPORATION AGENCY
By___________________________ By__________________________
Xxxxx X. Xxxx Xxxxx X. Xxxxxx
Vice President First Vice President &
Manager
IBJ WHITEHALL BUSINESS CREDIT BANKBOSTON, N.A.
CORPORATION
By__________________________ By__________________________
Xxxxxx X. Xxxxxxx Xxxx Xxxxx
Vice President Vice President
SUNTRUST BANK, MIAMI, N.A. BANKATLANTIC
By_________________________ By_________________________
Name: Xxx X. Xxxxxx
Title: Senior Vice President
THE INTERNATIONAL BANK OF NATIONAL BANK OF CANADA
MIAMI, N.A. A Canadian Chartered Bank
By_________________________ By_________________________
Xxxxxxx X. Xxxxxxxxx Xxxxx X. D'Alto
Vice President Vice President
Trade Finance Division
By_________________________
Xxxxxxx X. Xxxxxxxxxxx
Vice President & Manager
MERCANTILE BUSINESS CREDIT, INC. CITIZENS BUSINESS CREDIT
COMPANY
By_________________________ By_________________________
Xxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxx
Assistant Vice President Vice President
AMSOUTH BANK PNC BANK NATIONAL ASSOCIATION
By__________________________ By_________________________
Name: Name:
Title: Title:
