AMENDMENT NO. 3
Dated as of November 24, 1998
to
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
This Amendment No. 3 ("Agreement") dated as of November 24, 1998 is entered
into among AVIATION SALES DISTRIBUTION SERVICES COMPANY, a Delaware corporation
(formerly known as Aviation Sales Operating Company) ("ASDC"), 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") (ASDC, Aerocell, Xxxxx-Xxxxx, Whitehall and
TIMCO being collectively referred to as the "Existing Borrowers" and each
individually, an "Existing Borrower"), APEX MANUFACTURING, INC., an Arizona
corporation ("Apex"), CARIBE AVIATION, INC., a Florida corporation ("Caribe"),
AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation ("Design"), AERO
CORPORATION, a Florida corporation "Aero Florida"), and AERO CORP MACON, INC., a
Delaware corporation ("Aero Macon") (Apex, Caribe, Design, Aero Florida, and
Aero Macon, together with the Existing Borrowers, being collectively referred to
as the "Borrowers") and the "Lenders" (as defined in the Credit Agreement
identified below). Capitalized terms used herein without definition are used
herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, the Existing Borrowers, Citicorp USA, Inc., as Agent, and certain
financial institutions, as Lenders and Issuing Bank, are parties to that certain
Third Amended and Restated Credit Agreement dated as of October 17, 1997, as
heretofore amended (the "Credit Agreement");
WHEREAS, in view of the Parent having effected certain changes in its
corporate structure as permitted by certain consents heretofore delivered under
the terms of the Credit Agreement and that certain Amendment No. 2 and Consent
dated as of September 18, 1998, the parties hereto are desirous of certain
Guarantors becoming borrowers under the Credit Agreement and the Borrowers have
requested an increase in the Revolving Credit Commitments; and
WHEREAS, subject to the terms and conditions stated herein, parties hereto
have agreed to amend the Credit Agreement as set forth below in SECTION 1;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of November 24,
1998, subject to the satisfaction of the conditions precedent set forth in
SECTION 2 hereof, the Credit Agreement is hereby amended as follows:
1.1 The introductory paragraph of the Credit Agreement is deleted in its
entirety and the following substituted therefor:
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 Distribution Services Company,
a Delaware corporation formerly known as Aviation Sales Operating Company,
Aerocell Structures, Inc., an Arkansas corporation, AVS/Xxxxx-Xxxxx Machine
Company, a Delaware corporation, Whitehall Corporation, a Delaware corporation,
Triad International Maintenance Corporation, a Delaware corporation, Apex
Manufacturing, Inc., an Arizona corporation, Caribe Aviation, Inc., a Florida
corporation, Aircraft Interior Design, Inc., a Florida corporation, Aero
Corporation, a Florida corporation, and Aero Corp Macon, Inc., a Delaware
corporation, 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").
1.2 SECTION 1.01 is amended to (i) delete the definitions of "Acquisition
Loan Notes", "Acquisition Subfacility", "Term Lender", "Term Loan Pro Rata
Share", "Term Loan Reserve", "Term Loan Termination Date", "Term Loans", and
"Term Notes" in their entirety and all references to such terms appearing in the
Agreement; (ii) delete the definitions of "Borrower", "Borrowers", and
"Revolving Credit Commitment" in their entirety and substitute the following
therefor:
"BORROWER" means, individually, any of Aviation Sales Distribution
Services 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;
Aero Corporation, a Florida corporation; and Aero Corp Macon, Inc., a
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Delaware corporation; and "BORROWERS" means, collectively, all of such
Persons.
"REVOLVING CREDIT COMMITMENT" means, with respect to any Revolving
Lender, the obligation of such Lender to make Revolving Loans and to
participate in Letters of Credit pursuant to the terms and conditions
of this Agreement, in an aggregate amount at any time outstanding which
shall not exceed the principal amount set forth on SCHEDULE 1.01.9
attached hereto and made a part hereof under the heading "Revolving
Credit Commitment" thereon or on the signature page of the Assignment
and Acceptance by which it became a Lender, as modified from time to
time pursuant to the terms of this Agreement, or to give effect to any
applicable Assignment and Acceptance, and "REVOLVING CREDIT
COMMITMENTS" means the aggregate principal amount of the Revolving
Credit Commitments of all the Revolving Lenders, the maximum amount of
which shall be $250,000,000, as reduced from time to time pursuant to
SECTION 4.01.
(iii) delete all references to Caribe, Apex, and the Whitehall Subsidiaries in
the definitions of "ELIGIBLE INVENTORY" and "ELIGIBLE RECEIVABLES", and (iv) add
the following definitions thereto:
"ASOC" means Aviation Sales Distribution Services Company, a Delaware
corporation, formerly known as Aviation Sales Operating Company.
"MR&O" means Aviation Sales Maintenance, Repair & Overhaul Company, a
Delaware corporation and wholly-owned Subsidiary of Parent.
1.3 SECTION 2.01 is amended to delete the provisions thereof in their
entirety.
1.4 SECTION 2.02(C)(I)(A) is amended to delete the second and third
sentences thereof in their entirety and substitute the following therefor:
Subject to the fulfillment of the conditions precedent set forth in
SECTION 6.01 or SECTION 6.02, as applicable, each Revolving Lender
shall deposit an amount equal to its Revolving Loan Pro Rata Share of
the amount requested by ASOC to be made as Revolving Loans with the
Agent at its office in New York, New York, in immediately available
funds, (A) on the Effective Date with respect to the Borrowing of
Revolving Loans on such date specified in the initial Notice of
Borrowing and (B) not later than 1:00 p.m. (New York time) on any other
Funding Date for Revolving
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Loans and the Agent shall make the proceeds of such amounts received by
it available to the Borrowers at the Agent's office in New York, New
York on such Funding Date (or on the date received if later than such
Funding Date) and shall disburse such proceeds in accordance with the
disbursement instructions set forth in the applicable Notice of
Borrowing.
1.5 SECTION 2.02(E) is amended to delete the amount "$131,428,571.40"
therein and substitute therefor the amount "$250,000,000".
1.6 SECTION 2.03 is amended to delete the provisions thereof in their
entirety.
1.7 SECTION 8.03 is amended to delete the language ", Caribe, Apex, the
Whitehall Subsidiaries" appearing after each reference in the last sentence of
such section to "the Borrowers".
1.8 ARTICLE VIII is amended to add the following as Section 8.14
thereof:
8.14. YEAR 2000. The Parent and Borrowers covenant and agree that their
computer systems and equipment containing embedded microchips
(including systems and equipment supplied by others, with which such
systems interface or on which such Persons rely) will function properly
on December 31, 1999 and thereafter and the Parent and each Borrower is
taking all necessary and appropriate action to reasonably ensure the
same.
1.9 ARTICLE IX is amended to (i) delete SECTION 9.16(C) thereof in its
entirety and substitute the following therefor:
(c) Notwithstanding the foregoing, nothing in this SECTION 9.16 shall
permit any Borrower or Parent or any Subsidiary of a Borrower to make
any Investment, directly or indirectly, not otherwise permitted by
SECTION 10.04 or SECTION 10.17.
and (ii) add the following as Section 9.18 thereof:
9.18. ADDITIONAL PARENT COVENANTS. The Parent shall:
(a) maintain its existence as a corporation duly organized and existing
and qualified and in good standing as a corporation authorized to do
business in the states of Delaware and Florida and in 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;
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(b) comply in all material respects with all Requirements of Law
applicable to it;
(c) file all tax returns and reports required to be filed by it with
any Governmental Authority as and when required to be filed or to pay
taxes, assessments, fees or other governmental charges upon it or its
Property, assets, income or franchises which are shown in such returns
or reports to be due and payable as and when due and payable, except
for taxes, assessments, fees and other governmental charges (i) that
are being contested by it in good faith by an appropriate proceeding
diligently pursued, (ii) for which adequate reserves have been made on
its books and records, and (iii) the amounts the non-payment of which
would not individually, or in the aggregate, result in a Material
Adverse Effect; and
(d) within three (3) days after its receipt of any distribution,
dividend or payment from any Subsidiary of Parent, make a capital
contribution in the amount thereof (net of taxes allocable to transfers
under Requirements of Law) to ASOC.
1.10 ARTICLE X is amended to add "(A)" immediately before the first
sentence thereof and the following provisions after the conclusion of SECTION
10.16 thereof:
(B) The Parent covenants and agrees that it shall comply with the
following covenants so long as any Revolving Credit Commitments are
outstanding and thereafter until payment in full of all of the
Obligations (other than indemnities not yet due), unless the Requisite
Lenders shall otherwise give prior written consent:
10.17. PARENT COVENANTS. The Parent shall not:
(a) merge or liquidate with or into any other Person and, as a result
thereof and after giving effect thereto, the Parent is not the
surviving Person;
(b) repurchase or redeem any of its Capital Stock other than as
required with respect to the Permitted Equity Securities Options;
(c) engage in any business other than that of acting as a holding
company for ASOC, Leasing Affiliate, Finance Affiliate, M&R, MR&O and
Aviation Sales Company FSC, Ltd., a Barbados corporation;
(d) make or maintain any Investments other than (i) its Investments in
Leasing Affiliate existing as of the Effective Date or from the
proceeds of issuance of (A)
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Indebtedness by Parent which is unsecured and subordinated to the
Parent's obligations as a Guarantor pursuant to agreements in form and
substance satisfactory to the Agent or (B) equity Securities of Parent,
(ii) Investments in ASOC, M&R, Finance Affiliate, and MR&O, an (iii)
Investments in Cash Equivalents;
(e) incur any Indebtedness other than that identified on SCHEDULE
1.01.3 or described in CLAUSE (D)(I)(A) above;
(f) grant or suffer to exist any Lien against any property or asset of
the Parent other than Liens securing the Obligations.
1.11 ARTICLE XI is amended to add "(A)" immediately before the first
sentence thereof and the following provisions after the conclusion of SECTION
11.07 thereof:
(B) The Parent covenants and agrees that so long as any Revolving
Credit Commitments are outstanding and thereafter until payment in full
of all of the Obligations (other than indemnities not yet due):
11.08. PARENT FINANCIAL COVENANTS. The Parent shall:
(a) maintain a Fixed Charge Coverage Ratio, as determined as of the
last day of each fiscal quarter of the Parent commencing with the
fiscal quarter ending June 30, 1997 and ending with the fiscal quarter
ending September 30, 2000, for the four-fiscal-quarter period then
ending, of at least 1.10 to 1.00;
(b) maintain a Fixed Charge Coverage Ratio, as determined as of the
last day of each fiscal quarter of the Parent commencing with the
fiscal quarter ending December 31, 2000 and ending with the fiscal
quarter ending September 30, 2001, for the four-fiscal-quarter period
then ending, of at least 1.15 to 1.00;
(c) maintain a Fixed Charge Coverage Ratio, as determined as of the
last day of each fiscal quarter of the Parent commencing with the
fiscal quarter ending December 31, 2001 and ending with the fiscal
quarter ending June 30, 2002, for the four-fiscal-quarter period then
ending, of at least 1.20 to 1.00;
(d) maintain a ratio of Funded Debt of the Parent to EBITDA of the
Parent, determined as of the end of each fiscal quarter of the Parent,
for the four-fiscal-quarter period then ended, of not more than 6.00 to
1.00;
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(e) limit the Capital Expenditures made by the Parent and its
Subsidiaries during (i) the period commencing on the Effective Date and
ending on December 31, 1997 to no more than $3,000,000, (ii) the period
commencing on January 1, 1998 and ending on December 31, 1998 to no
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 (vi) any Fiscal Year ending after 2001 in excess of
$7,400,000 in the aggregate; PROVIDED, HOWEVER, to the extent the
Parent and its Subsidiaries have not made Capital Expenditures in the
amount permitted in CLAUSES (I) - (VI) above for a given period,
Capital Expenditures in an amount equal to 100% of the amount specified
for any such respective period but not made in such period may be made
in the immediately next succeeding Fiscal Year; PROVIDED THAT to the
extent amounts carried forward from one period to the next succeeding
Fiscal Year are not expended in such Fiscal Year, such surplus may not
be carried forward to any other succeeding year.
1.12 ARTICLE XII is amended to add the following sentence at the end of
CLAUSE (B) thereof:
Parent shall fail duly and punctually to perform or observe any
agreement, covenant or obligation binding on the Parent under SECTION
9.18, ARTICLE X or ARTICLE XI.
and (ii) delete the provisions of SECTION 12.01(O) thereof in their entirety.
1.13 SECTION 15.20 is amended to add the following provisions at the
end thereof:
The Parent and each Borrower acknowledges that each of the Agent,
Issuing Bank and Lenders and their respective Affiliates (collectively,
the "Bank Parties") may be providing debt financing, equity capital or
other services, including, without limitation, advisory services, to
other companies in respect of which the Parent and Borrowers may have
conflicting interests regarding transactions described herein and
otherwise. Each of the Bank Parties hereby agrees that it will not use
confidential information obtained from the Parent and/or Borrowers by
virtue of the transactions contemplated by this Agreement or its other
relationships with the Parent and/or Borrowers in
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connection with the performance by such Bank Party of services for
other companies nor will it furnish any such information to such other
companies. The Parent and Borrowers each hereby acknowledge that no
Bank Party has any obligation to use confidential information obtained
from other companies in connection with the transactions contemplated
by this Agreement or to furnish the same to the Parent or any Borrower.
1.14 SCHEDULE 1.01.9 is amended to delete the provisions thereof in
their entirety and substitute therefor SCHEDULE 1.01.9 attached hereto and made
a part hereof.
1.15 EXHIBIT B is amended to delete the provisions thereof in their
entirety and substitute therefor EXHIBIT B attached hereto and made a part
hereof
SECTION 2. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT.
This Amendment shall become effective as of November 24, 1998, if, and only if
the Agent shall have received by 11:00 a.m. (New York time) on November 24,
1998, a facsimile or original executed copy of this Amendment executed by the
Parent, each Borrower and each Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
represent and warrant as follows:
3.1 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.
3.2 No Event of Default or Potential Event of Default exists or would
result from any of the transactions contemplated by this Amendment.
3.3 Upon the effectiveness of this Amendment, 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).
SECTION 4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
4.1 Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import shall
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mean and be a reference to the Credit Agreement, as amended 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.
4.2 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.
4.3 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 5. 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 6. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. 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.
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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 SERVICES COMPANY
By___________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
AEROCELL STRUCTURES, INC.
By___________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
AVS/XXXXX-XXXXX MACHINE COMPANY
By___________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
WHITEHALL CORPORATION
By___________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
TRIAD INTERNATIONAL MAINTENANCE CORPORATION
By___________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
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APEX MANUFACTURING, INC.
By___________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
CARIBE AVIATION, INC.
By___________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
AIRCRAFT INTERIOR DESIGN, INC.
By__________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
AERO CORPORATION
By__________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
AERO CORP MACON, INC.
By__________________________
Xxxxxxx X. Xxxxxxxx
Authorized Signatory
AVIATION SALES COMPANY
By__________________________
Xxxxxxx X. Xxxxxxxx
Senior Vice President
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CITICORP USA, INC. XXXXXX FINANCIAL, INC.
By___________________________ By__________________________
Xxxx X. Xxxxxxxxx Name:
Attorney-in-Fact 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__________________________
Name: Xxxxx X. Xxxxxx
Title: First Vice President &
Manager
IBJ XXXXXXXX BUSINESS CREDIT BANKBOSTON, N.A.
CORPORATION
By__________________________ By__________________________
Xxxxxx X. Xxxxx Xxxx Xxxxx
Title: Vice President
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SUNTRUST BANK, MIAMI, N.A. BANKATLANTIC
By_________________________ By_________________________
Xxxxx X. Fine Xxx X. Xxxxxx
Vice President 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_________________________
Name: Name:
Title: Title:
AMSOUTH BANK PNC BANK NATIONAL ASSOCIATION
By__________________________ By_________________________
Xxxxxx Xxxxxx Name:
Attorney-in-Fact Title:
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