EXHIBIT 10.1
AMENDMENT NO. 2
AND
CONSENT
Dated as of September 18, 1998
to
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
This Amendment No. 2 and Consent ("Agreement") dated as of
September 18, 1998 is entered into among AVIATION SALES OPERATING COMPANY, a
Delaware corporation ("ASOC"), AEROCELL STRUCTURES, INC., an Arkansas
corporation ("Aerocell"), AVS/▇▇▇▇▇-▇▇▇▇▇ MACHINE COMPANY, a Delaware
corporation ("▇▇▇▇▇-▇▇▇▇▇") (ASOC, Aerocell and ▇▇▇▇▇-▇▇▇▇▇ being collectively
referred to as the "Existing Borrowers" and each, individually, an "Existing
Borrower"), WHITEHALL CORPORATION, a Delaware corporation ("Whitehall"), TRIAD
INTERNATIONAL MAINTENANCE CORPORATION, a Delaware corporation ("TIMCO" and,
together with the Existing Borrowers and Whitehall, the "Borrowers" and each
individually, a "Borrower") and the "Lenders" (as defined in the Credit
Agreement identified below) signatory hereto. Capitalized terms used herein
without definition are used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, Borrowers, Aviation Sales Company, a Delaware
corporation (the "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 as of March 31, 1998 (the "Credit Agreement");
WHEREAS, Borrowers have informed the Agent that Aviation Sales
Maintenance, Repair & Overhaul Company, a Delaware corporation and wholly-owned
subsidiary of the Parent ("MR&O"), has entered into that certain Stock Purchase
Agreement dated as of August 10, 1998 (as amended by First Amendment to Stock
Purchase Agreement dated September 18, 1998) with Primark Corporation, a
Michigan corporation ("Primark"), and TIMCO, a true and correct copy of which is
attached hereto as ANNEX I (the "Purchase Agreement"), pursuant to which, among
other things, MR&O has agreed to purchase from Primark, and Primark has agreed
to sell to MR&O, all of the issued and outstanding capital stock of TIMCO for
$70,000,000 in cash (the "Purchase"), and the Parent has guaranteed the
performance of MR&O's obligations under the Purchase Agreement (the "Guaranty");
AVS Amendment No. 2
WHEREAS, Borrowers have requested that the Lenders (i) agree
to amend the Credit Agreement to increase the Revolving Credit Commitments by
$108,571,428.60 to $200,000,000, (ii) consent to the Purchase and Guaranty
pursuant to the terms and conditions of the Purchase Agreement, (iii) consent to
the use by Borrowers of the proceeds of a $70,000,000 Borrowing of Revolving
Loans under the Credit Agreement for application by Borrowers to the payment of
the cash consideration due Primark upon consummation of the Purchase pursuant to
the terms of the Purchase Agreement (the "Acquisition Funding"), (iv) agree to
amend the letter of credit sublimit to permit the issuance by the Issuing Bank
of Standby Letters of Credit as security for obligations relative to certain
special facility revenue bonds pertaining to TIMCO's Greensboro, North Carolina
facility and (v) add each of TIMCO and Whitehall Corporation, a Delaware
corporation and wholly-owned subsidiary of MR&O, as "Borrowers" under and as
defined in the Credit Agreement; and
WHEREAS, subject to the terms and conditions stated herein,
the Borrowers and the Lenders have agreed to the consents and amendments
described in SECTIONS 1 and 2 hereof;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. CONSENT TO THE PURCHASE AND RELATED MATTERS.
Effective as of September 22, 1998, and subject to the satisfaction of the
conditions precedent set forth in SECTION 3 hereof, the Lenders hereby consent
to:
(a) MR&O's consummation of the Purchase, and Parent's granting
the Guaranty, pursuant to the terms and conditions of the Purchase
Agreement (without giving effect to any amendments or modifications
thereof which have not been approved in writing by the Requisite
Lenders as defined in the Credit Agreement after giving effect to the
amendments to the definition of "Requisite Lenders" set forth in
SECTION 2 hereof; all further references in this Agreement to the
Purchase Agreement being construed to mean the Purchase Agreement as so
constituted), notwithstanding the provisions of SECTIONS 10.04, 10.05
or 10.08 of the Credit Agreement;
(b) use by Borrowers of the proceeds of a $70,000,000
Borrowing of Revolving Loans under the Credit Agreement on the date
hereof for application by Borrowers to the payment of the cash
consideration due Primark upon consummation of the Purchase pursuant to
the terms of CLAUSE (A) of this section, notwithstanding the provisions
of SECTIONS 2.05, 10.04 or 10.08 of the Credit Agreement; and
AVS Amendment No. 2 2
(c) the transfer by (i) AVS Manufacturing & Repair Company of
all of the issued and outstanding Capital Stock of Caribe Aviation,
Inc., a Florida corporation to MR&O, (ii) AVS Manufacturing & Repair
Company of all of the issued and outstanding Capital Stock of Aerocell
to MR&O, and (iii) Whitehall of all of the issued and outstanding
Capital Stock of Aero Hushkit Corporation, a Delaware corporation, to
Leasing Affiliate or a Subsidiary thereof and the modification of
SCHEDULE 7.01-C to the Credit Agreement to give effect to such
transfers.
SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of
September 22, 1998, and subject to the satisfaction of the conditions precedent
set forth in SECTION 3 hereof, the Credit Agreement is hereby amended as
follows:
(a) the introductory paragraph of the Credit Agreement is
deleted in its entirety and replaced with the following provision:
This Third Amended and Restated Credit Agreement
dated as of October 17, 1997 (as amended, supplemented or modified from
time to time, the "Agreement") is entered into among Aviation Sales
Operating Company, a Delaware corporation ("ASOC"), Aerocell
Structures, Inc., an Arkansas corporation ("Aerocell"), AVS/▇▇▇▇▇-▇▇▇▇▇
Machine Company, a Delaware corporation ("▇▇▇▇▇-▇▇▇▇▇"), Whitehall
Corporation, a Delaware corporation ("Whitehall"), and Triad
International Maintenance Corporation, a Delaware corporation ("TIMCO")
(ASOC, Aerocell, ▇▇▇▇▇-▇▇▇▇▇, Whitehall and TIMCO being collectively
referred to as the "Borrowers" and each, individually, as a
"Borrower"), Aviation Sales Company, a Delaware corporation (the
"Parent"), the institutions from time to time a party hereto as
Lenders, whether by execution of this Agreement or an Assignment and
Acceptance, the institutions from time to time a party hereto as
Issuing Banks, whether by execution of this Agreement or an Assignment
and Acceptance, Citicorp Securities, Inc., a Delaware corporation, in
its capacity as arranger, and Citicorp USA, Inc., a Delaware
corporation, in its capacity as agent for the Lenders and the Issuing
Banks hereunder (in such capacity, the "Agent").
(b) SECTION 1.01 of the Credit Agreement is further amended to
delete, in its entirety, the definition of "BORROWING BASE" and to replace such
definition with the following definition:
"BORROWING BASE" means, as of any date of
determination, an amount equal to the sum of:
AVS Amendment No. 2 3
(i) seventy-five percent (75%) of the face amount of Eligible
Receivables of ASOC, Aerocell, ▇▇▇▇▇-▇▇▇▇▇, Distribution, and Apex (net
of maximum discounts, allowances, retainage and any other amounts
deferred with respect thereto), PLUS
(ii) eighty-five percent (85%) of the face amount of Eligible
Receivables of Caribe, TIMCO and the Whitehall Subsidiaries (net of
maximum discounts, allowances, retainage and any other amounts deferred
with respect thereto), PLUS
(iii) fifty percent (50%) of the face amount of earned, but unbilled
for periods less than ninety-one (91) days, Receivables of TIMCO and
the Whitehall Subsidiaries (net of maximum discounts, allowances,
retainage and any other amounts deferred with respect thereto), PLUS
(iv) up to forty percent (40%) of the value of Eligible Inventory of
Aerocell, ▇▇▇▇▇-▇▇▇▇▇, Caribe, Apex, TIMCO and the Whitehall
Subsidiaries, in each case as set forth on the Borrowing Base
Certificate, PLUS
(v) (a) during the period commencing on September 22, 1998 and ending
on March 21, 1999, up to the respective percentages of the value of
Eligible Inventory included in Inventory Asset Group A, Inventory Asset
Group B, and Inventory Asset Group C, in each case as set forth on the
Borrowing Base Certificate, or (b) from and after March 22, 1999, the
lesser of (1) up to the respective percentages of the value of Eligible
Inventory included in Inventory Asset Group A, Inventory Asset Group B,
and Inventory Asset Group C, in each case as set forth on the Borrowing
Base Certificate, or (2) seventy percent (70%) of the appraised value
of Eligible Inventory included in Inventory Asset Group A, Inventory
Asset Group B and Inventory Asset Group C, in each case as set forth in
appraisals prepared in form and substance and by appraisers
satisfactory to the Requisite Lenders on an orderly liquidation basis
consistent with that methodology used in preparation of the Appraisals,
PLUS
(vi) fifty percent (50%) of the appraised fair market value of
▇▇▇▇▇-▇▇▇▇▇'▇ owned Real Property, PLUS
(vii) sixty percent (60%) of the appraised orderly liquidation value of
▇▇▇▇▇-▇▇▇▇▇'▇ owned Equipment.
For purposes of this definition, (1) Eligible Receivables and Eligible
Inventory, in each case and as of any date of determination, shall be
determined after deduction of all Eligibility Reserves then effective
with respect to such items, (2) the value referenced in CLAUSES (IV)
and (V)
AVS Amendment No. 2 4
shall be determined on the bases described in the Borrowing Base
Certificate as reflected on the books and records of the Borrowers, the
Whitehall Subsidiaries or Distribution, as applicable, and (3) the
advance rates applicable under CLAUSE (I) with respect to Eligible
Receivables of Apex and Caribe, CLAUSE (II), CLAUSE (III), and CLAUSE
(IV) with respect to Eligible Inventory of Caribe, Apex, TIMCO and the
Whitehall Subsidiaries, (and the related provisions of the form of
Borrowing Base Certificate) shall be subject to adjustment
(increase/decrease but in no event in the case of CLAUSES (I) or (II)
below 75%) and modification by the Agent on or before March 22, 1999 by
written notice to the Borrowers and Lenders dependent upon the results
of the Agent's audit of the Receivables and Inventory of Caribe, Apex,
TIMCO and the Whitehall Subsidiaries. In each instance, the amounts
described hereinabove shall be designated as such on the Borrowing Base
Certificate dated as of such date of determination.
(c) SECTION 1.01 of the Credit Agreement is further amended to
add the reference ", Caribe, Apex, the Whitehall Subsidiaries" after each
reference to the term "Borrowers", to add the reference ", Caribe, Apex,
Whitehall Subsidiary" after each reference to the term "Borrower", and to add
the reference ", Caribe's, Apex's, Whitehall Subsidiary's" after each reference
to the term "Borrower's", in each case in the definitions of "ELIGIBLE
INVENTORY" and "ELIGIBLE RECEIVABLES" set forth in such section.
(d) SECTION 1.01 of the Credit Agreement is further amended to
delete the figure "$131,428,571.40" which appears in the definition of
"REVOLVING CREDIT COMMITMENT" in such section and to replace such figure with
the figure "$200,000,000."
(e) SECTION 1.01 of the Credit Agreement is further amended to
(i) delete, in their entirety, each of the definitions of "BASE RATE MARGIN",
"ELIGIBILITY RESERVES", "EURODOLLAR RATE MARGIN", "PERFORMANCE LEVEL 1",
"PERFORMANCE LEVEL 2", "PERFORMANCE LEVEL 3", "PERFORMANCE LEVEL 4",
"PERFORMANCE LEVEL 5" and "PERFORMANCE LEVEL 6", and to replace such definitions
with the following definitions:
"BASE RATE MARGIN" means, as of any date of
determination, a per annum rate equal to the rate set forth below
opposite the then applicable Performance Level set forth below:
PERFORMANCE LEVEL BASE RATE MARGIN
----------------- ----------------
1 0.000%
2 0.000%
3 0.000%
4 0.250%
AVS Amendment No. 2 5
5 0.500%
6 0.750%
7 1.000%
; PROVIDED, HOWEVER, THAT, notwithstanding the foregoing, the Base Rate
Margin shall be 0.500% at all times during the period commencing
September 22, 1998 and ending December 31, 1998.
"ELIGIBILITY RESERVES" means, as of three (3)
Business Days after the date of written notice of any determination
thereof to the Borrowers by the Agent, or to the Borrowers and the
Agent by the Requisite Revolving Lenders, such amounts as the Agent, or
the Requisite Revolving Lenders, as the case may be, in the exercise of
its or their reasonable credit judgment, may from time to time
establish against the gross amounts of Eligible Inventory and unbilled
Receivables of TIMCO and the Whitehall Subsidiaries to reflect material
changes in risks or contingencies arising after the Effective Date
which may affect such items.
"EURODOLLAR RATE MARGIN" means, as of any date of
determination, a per annum rate equal to the rate set forth below
opposite the then applicable Performance Level set forth below:
PERFORMANCE LEVEL EURODOLLAR RATE MARGIN
----------------- ----------------------
1 1.125%
2 1.250%
3 1.500%
4 1.750%
5 2.000%
6 2.250%
7 2.500%
; PROVIDED, HOWEVER, THAT, notwithstanding the foregoing, the
Eurodollar Rate Margin shall be 2.000% at all times during the period
commencing September 22, 1998 and ending December 31, 1998.
"PERFORMANCE LEVEL 1" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is less than or equal to 2.75 to
1.0.
"PERFORMANCE LEVEL 2" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of
AVS Amendment No. 2 6
the Parent for the then most recently ended four (4) fiscal quarter
period of ASOC is greater than 2.75 to 1.0 and less than or equal to
3.25 to 1.0.
"PERFORMANCE LEVEL 3" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 3.25 to 1.0 and
less than or equal to 3.75 to 1.0.
"PERFORMANCE LEVEL 4" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 3.75 to 1.0 and
less than or equal to 4.25 to 1.0.
"PERFORMANCE LEVEL 5" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 4.25 to 1.0 and
less than or equal to 4.75 to 1.0.
"PERFORMANCE LEVEL 6" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 4.75 to 1.0 and
less than or equal to 5.25 to 1.0.
"PERFORMANCE LEVEL 7" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 5.25 to 1.0.
(ii) add the following provision as clause (5) at the end of the definition of
"Eligible Inventory":
(5) goods constituting "Scrap/Out of Date Material",
and (iii) add the following provision at the end of the definitions of
"Requisite Lenders" and "Requisite Revolving Lenders", respectively:
AVS Amendment No. 2 7
Notwithstanding the foregoing, in no event shall the Requisite Lenders
or Requisite Revolving Lenders be comprised of less than two (2)
Lenders at any time.
(f) SECTION 1.01 of the Credit Agreement is further amended to
add each of the following definitions to such section in the appropriate
alphabetical location:
"APEX" means Apex Manufacturing, Inc., an Arizona
corporation and wholly-owned Subsidiary of AVS Manufacturing & Repair
Company, a Delaware corporation and wholly-owned Subsidiary of Parent.
"CARIBE" means Caribe Aviation, Inc., a Florida
corporation and wholly-owned Subsidiary of Aviation Sales Maintenance,
Repair & Overhaul Company, a Delaware corporation and wholly-owned
Subsidiary of Parent.
"WHITEHALL SUBSIDIARIES" means, collectively, Aero
Corporation, a Florida corporation, and Aero Corp Macon, Inc., a
Delaware corporation, in each case for so long as such entities
constitute wholly-owned, direct Subsidiaries of Whitehall.
(g) SECTION 3.01(A)(II) of the Credit Agreement is amended to
delete the figure "$15,000,000" which appears in CLAUSE (A)(I) thereof and to
replace such figure with the figure "$30,000,000."
(h) SECTION 8.03 of the Credit Agreement is amended to add the
language ", Caribe, Apex, the Whitehall Subsidiaries" after each reference in
the last sentence of such section to "the Borrowers".
(i) SECTION 11.04 of the Credit Agreement is amended to delete
in their entirety CLAUSES (II) and (III) of such section and to replace such
clauses with the following clauses:
(ii) the period commencing on January 1, 1998 and ending on
December 31, 1998 aggregating more than $17,000,000,
(iii) the period commencing on January 1, 1999 and ending on
December 31, 1999 aggregating more than $14,400,000,
(iv) the period commencing on January 1, 2000 and ending on
December 31, 2000 aggregating more than $12,200,000,
(v) the period commencing on January 1, 2001 and ending on
December 31, 2001 aggregating more than $7,300,000, or
AVS Amendment No. 2 8
(vi) any Fiscal Year ending after 2001 in excess of $7,400,000
in the aggregate;
(j) SECTION 15.07(C) of the Credit Agreement is amended to
delete the references therein to "Borrowing Base" and "Borrowing Base
Certificate" and to replace such references with references to "Borrowing Base
(except to the extent modified by the Agent as anticipated by the text of such
definition set forth in this Agreement with the consent of the Requisite
Lenders)" and "Borrowing Base Certificate" (except to the extent modified by the
Agent as anticipated by the text of the definition of Borrowing Base set forth
in this Agreement)", respectively.
(k) The Credit Agreement is further amended to delete in their
entirety (i) all of the schedules thereto and to replace such schedules,
respectively, with the corresponding schedules attached to this Agreement as
ANNEX II and (ii) Exhibit B and to replace such Exhibit with the Exhibit B
attached to this Agreement as ANNEX III.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
AMENDMENT. The provisions of SECTIONS 1 and 2 of this Agreement shall become
effective on September 22, 1998, if, and only if, each of the following
conditions shall have been satisfied on or before such date:
(a) the Agent shall have received a facsimile or original
executed copy of this Agreement executed by each Borrower, Guarantor and Lender;
(b) the Agent shall have received each of the agreements,
documents, instruments, certificates and opinions set forth in ANNEX IV hereto
(except to the extent indicated on such annex as permitted to be delivered at a
later date), in each case in form and substance acceptable to the Agent and the
Lenders;
(c) the Agent shall have received evidence satisfactory to it
that the Purchase has been consummated in accordance with the terms and
conditions of the Purchase Agreement;
(d) no Event of Default or Potential Event of Default shall
have occurred and be continuing as of the date all other conditions set forth in
this SECTION 3 shall have been satisfied;
(e) no law, regulation, order, judgment or decree of any
Governmental Authority shall, and the Agent shall not have received any notice
that litigation is pending or threatened which is likely to, (i) enjoin,
prohibit or restrain (A) this Agreement from becoming effective or the making of
the Acquisition Funding or (B) the consummation of the Purchase or (ii) result
in a Material Adverse Effect;
AVS Amendment No. 2 9
(f) no material adverse change shall have occurred in the
operations, assets, financial condition or prospects of Parent, TIMCO, any
Borrower or Leasing Affiliate since December 31, 1997, and the Agent and the
Lenders shall be satisfied that no such material adverse change shall result
from the consummation of the Purchase;
(g) all of the representations and warranties contained in
SECTION 7.01 of the Credit Agreement, SECTION 4 of this Agreement, and in each
of the other Loan Documents, shall be true and correct in all material respects
on and as of the date hereof and on and as of the date of the Acquisition
Funding except for such representations and warranties which are expressly made
only as of a particular earlier date or dates;
(h) there shall have been paid to the Agent, for the account
of the Lenders, Issuing Banks, and the Agent, as applicable, all fees and
expenses due and payable on or before the date of the Acquisition Funding in
connection with the execution and delivery of this Agreement, including, without
limitation, the fees payable in accordance with the terms of that certain Fee
Letter of even date herewith among the Borrowers and Citicorp;
(i) the Agent shall have received evidence satisfactory to it
that, after giving effect to the consummation of the Purchase and the
Acquisition Funding, each Borrower and Guarantor is Solvent; and
(j) all filings have been made and all actions have been
taken, as determined to be necessary or desirable by the Agent, to create and
perfect the Agent's lien on and security interest in substantially all of the
property and equity interests of TIMCO as security for the Obligations, and the
Agent shall have received evidence satisfactory to it that such liens and
security interests are senior in priority to all other liens and security
interests except as permitted by the terms of the Credit Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The
Borrowers hereby represent and warrant as follows:
(a) This Agreement, the Credit Agreement as previously
executed and delivered and as amended hereby, and each of the Loan Documents,
constitute legal, valid and binding obligations of the Borrowers and the
Guarantors named as parties thereto and are enforceable against the Borrowers
and Guarantors, as applicable, in accordance with their terms.
(b) No Event of Default or Potential Event of Default exists
or would result from any of the transactions contemplated by this Agreement or
the Purchase Agreement.
AVS Amendment No. 2 10
(c) Each of the representations and warranties contained in
the Purchase Agreement are true and correct in all material respects as of the
date hereof and as of the date of the Acquisition Funding, and, as of such
dates, each of the parties to the Purchase Agreement have substantially
performed all covenants, duties and undertakings required of such parties as of
such dates pursuant to the terms of the Purchase Agreement. All conditions
precedent to, and all consents necessary to permit, the consummation of the
Purchase pursuant to the Purchase Agreement have been satisfied or delivered, or
waived with the prior written consent of the Requisite Lenders (defined as
amended by this Agreement), and no action has been taken by any competent
authority which restrains, prevents or imposes material adverse conditions upon,
or seeks to restrain, prevent or impose material adverse conditions upon, the
consummation of the Purchase or the Acquisition Funding. As of the date of the
Acquisition Funding, the Purchase has been consummated.
(d) TIMCO is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. TIMCO is duly
qualified to do business and is in good standing under the laws of the State of
North Carolina and each other jurisdiction in which failure to be so qualified
and in good standing will result, or is reasonably likely to result, in a
Material Adverse Effect. As of the date hereof, TIMCO has no Subsidiaries.
(e) The execution, delivery, performance and filing or
recording, as the case may be, of each of the Purchase Agreement and the
agreements or documents which are required to be executed, filed or recorded by
or on behalf of the Borrowers and the Guarantors in connection with the Purchase
(collectively, together with the Purchase Agreement, the "Purchase Documents")
and the consummation of the transactions contemplated thereby are within each
such Person's, as applicable, corporate powers, have been duly authorized by all
necessary corporate action and such authorization has not been rescinded. No
other corporate action or proceedings on the part of any Borrower or Guarantor
are necessary to consummate such transactions.
(f) The execution, delivery and performance of each of the
Purchase Documents to which any Borrower or any Guarantor is a party do not and
will not (i) conflict with the Organizational Documents of any such Person, (ii)
to the best of each Borrower's and each Guarantor's knowledge, constitute a
tortious interference with any Contractual Obligation of any Person or conflict
with, result in a breach of or constitute (with or without notice or lapse of
time or both) a default under any Requirement of Law or Contractual Obligation
of any Borrower or any Guarantor or require termination of any Contractual
Obligation, the consequences of which violation, breach, default or termination,
singly or in the aggregate, will result, or is reasonably likely to result, in a
Material Adverse Effect or may
AVS Amendment No. 2 11
subject the Agent, any of the Lenders or any of the Issuing Banks to any
liability, (iii) result in or require the creation or imposition of any Lien
whatsoever upon any of the Property or assets of a Borrower or such Guarantor,
other than Liens contemplated by the Loan Documents, or (iv) require any
approval of the shareholders of such Person which has not been obtained.
(g) Except as set forth in the Purchase Agreement, the
execution, delivery and performance of each of the Purchase Documents to which
any Borrower or any Guarantor is a party do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by any Governmental Authority, except filings, consents or notices which
have been made, obtained or given.
(h) Complete and accurate copies of the following financial
statements, materials and other information have been delivered to the Agent:
(i) a pro forma balance sheet, as estimated as of September 30, 1998, of the
consolidated results and operations of the Parent and its Subsidiaries combined
with the consolidated results and operations of Whitehall and its Subsidiaries
and of TIMCO as of such date (the "Pro Forma"), (ii) projected balance sheets,
statements of income and statements of cash flow for the combined, consolidated
operations of the Parent and its Subsidiaries, Whitehall and its Subsidiaries
and TIMCO, for the fiscal year ending 1998 (the "Projections"), (iii) the
audited financial statements of Whitehall and its Subsidiaries for the fiscal
year ended on December 31, 1997, (iv) the audited financial statements of TIMCO
for the fiscal year ended on December 31, 1997, (v) the interim unaudited
financial statements of Whitehall and its Subsidiaries for its fiscal quarter
ending June 30, 1998 and of TIMCO for the fiscal quarter ending June 30, 1998.
All such historical financial statements were prepared in all material respects
in conformity with GAAP, except as otherwise noted therein, and fairly present
in all material respects the respective financial positions, and the results of
operations and cash flows for each of the periods covered thereby of the
applicable Person as at the respective dates thereof.
(i) The Pro Forma fairly presents on a PRO FORMA basis the
consolidated and consolidating financial condition of the Parent and its
Subsidiaries as of the date of the Acquisition Funding, after giving effect to
the Purchase and the acquisition by merger of Whitehall and its Subsidiaries,
and reflects on a PRO FORMA basis those liabilities reflected in the notes
thereto and resulting from consummation of such transactions and related
transaction costs. The Projections and the assumptions expressed in the Pro
Forma are reasonable based on the information avail able to the Parent at the
time so furnished.
(j) There is no action, suit, proceeding, Claim, investigation
or arbitration before or by any Governmental Authority or private arbitrator
pending or, to the knowledge of
AVS Amendment No. 2 12
any Borrower, threatened against any Borrower or any Guarantor or any of their
respective Property challenging the validity or the enforceability of the
Purchase or any Purchase Document.
(k) After giving effect to the Purchase and the Acquisition
Funding, each Borrower and each Guarantor is Solvent.
(l) Each of the representations and warranties contained in
the Credit Agreement and each other Loan Document are true and correct in all
material respects as of the date hereof and as of the date of the Acquisition
Funding (in each case after giving effect to the amendments set forth in SECTION
2 of this Agreement), except for such representations and warranties which are
expressly made only as of a particular earlier date or dates.
SECTION 5. PRO RATA OUTSTANDINGS. On the date of the
Acquisition Funding, the Lenders whose Pro Rata Shares are increased as a result
of the amendments effected pursuant to this Agreement shall fund such amounts
(in addition to their Pro Rata Shares of the Borrowings being made on such date)
to the Lenders whose Pro Rata Shares are decreased by such amendments in amounts
and to such Lenders as is necessary to cause all of the Lenders' outstanding
Loans and interests in Letters of Credit to be proportionate to their respective
Pro Rata Shares as modified pursuant to this Agreement. Such fundings shall
constitute assignments of portions of the Loans and interests in Letters of
Credit in accordance with the Credit Agreement notwithstanding any terms or
conditions therein to the contrary.
SECTION 6. REAFFIRMATION. Each Borrower and Guarantor hereby
reaffirms all covenants, representations and warranties made by it in the Credit
Agreement and in each other Loan Document to which it is a party (as amended
hereby) and agree that all such covenants, representations and warranties shall
be deemed to have been remade as of the date this Agreement 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). Each Borrower and Guarantor hereby
reaffirms and ratifies each grant of security granted by such Person pursuant to
each Loan Document to which it is a party, and each payment, guaranty and
performance obligation thereunder after giving effect to this Agreement, the
Purchase and the Acquisition Funding.
SECTION 7. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Agreement, 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
AVS Amendment No. 2 13
hereby, and 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.
(b) Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in full force and
effect.
(c) The execution, delivery and effectiveness of this
Agreement 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.
SECTION 8. EXECUTION IN COUNTERPARTS. This Agreement 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
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 10. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
SECTION 11. NOTICE. Pursuant to SECTION 15.08 of the Credit
Agreement, the Borrowers hereby give notice to the Agent, Lenders and Issuing
Bank that the notice address for the Borrowers and Parent is hereby changed from
that appearing in the Credit Agreement to:
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
AVS Amendment No. 2 14
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 OPERATING COMPANY
AEROCELL STRUCTURES, INC.
AVS/▇▇▇▇▇-▇▇▇▇▇ MACHINE COMPANY
WHITEHALL CORPORATION,
as Borrowers September 18, 1998
By___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
TRIAD INTERNATIONAL MAINTENANCE CORPORATION,
as a Borrower September 22, 1998
By____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
AVS Amendment No. 2 15
AVIATION SALES COMPANY
AVIATION SALES LEASING COMPANY
AVIATION SALES FINANCE COMPANY
AVIATION SALES BEARINGS COMPANY
AVIATION SALES MAINTENANCE REPAIR & OVERHAUL COMPANY
CARIBE AVIATION, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AERO CORPORATION
AERO HUSHKIT CORPORATION
AERO CORP MACON, INC.
HYDROSCIENCE, INC.
AVIATION SALES MANUFACTURING & REPAIR COMPANY
APEX MANUFACTURING, INC.,
as Guarantors
By___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
CITICORP USA, INC. ▇▇▇▇▇▇ FINANCIAL, INC.
By___________________________ By_________________________
Shapleigh ▇. ▇▇▇▇▇ Name:
Attorney-in-Fact Title:
CONGRESS FINANCIAL CORPORATION NATIONAL CITY COMMERCIAL
FINANCE, INC.
By____________________________ By_________________________
Name: Name:
Title: Title:
FIRST UNION COMMERCIAL CORPORATION
By___________________________
Name:
Title:
AVS Amendment No. 2 16
ANNEX I
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
PURCHASE AGREEMENT AND FIRST AMENDMENT
Attached
AVS Amendment No. 2
ANNEX II
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
SUBSTITUTED SCHEDULES
Attached
AVS Amendment No. 2
SCHEDULE 1.01.9
dated September 18, 1998
to
Third Amended and Restated Credit Agreement
dated as of October 17, 1997, as amended
COMMITMENTS(1)
LENDER REVOLVING CREDIT COMMITMENT
------ ---------------------------
CITICORP USA, INC. $129,895,238.11
▇▇▇▇▇▇ FINANCIAL, INC. $ 18,285,714.28
NATIONAL CITY COMMERCIAL
FINANCE, INC. $ 12,190,476.19
CONGRESS FINANCIAL CORPORATION $ 14,628,571.42
FIRST UNION COMMERCIAL
CORPORATION $ 25,000,000.00
---------------
TOTAL $200,000,000.00
----------
(1) As of the date hereof, all Term Loans and Revolving Loans under the
Acquisition Subfacility have been repaid in full and the Lenders have no further
commitments with respect to such Loans.
AVS Amendment No. 2
ANNEX III
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
SUBSTITUTED EXHIBIT B
Attached
AVS Amendment No. 2
ANNEX IV
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
LIST OF CLOSING DOCUMENTS
Attached
AVS Amendment No. 2
