GMAC
Commercial Credit LLC
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000
000-000-0000
December 15, 1999
VIA FIRST CLASS MAIL
Aviation Distributors, Inc.
Xxx Xxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Ladies and Gentlemen:
Reference is hereby made to a certain Credit and Security Agreement dated
as of June 25, 1997, as supplemented and/or amended (the "Agreement"), by and
between GMAC Commercial Credit, LLC (successor in interest to BNY Financial
Corporation) and you.
You have requested and we are willing to amend certain terms and conditions
of the Agreement. Accordingly, the Agreement is hereby amended as follows:
1. The text of the definition of "Loans" is deleted from Section 1(A) of
the Agreement in its entirety and the following text is inserted in
its place and stead:
"'Loans' means the Revolving Credit Advances, Term Loan and all other
extensions of credit hereunder."
2. The text of the definition of "Maximum Loan Amount" is deleted from
Section 1(A) of the Agreement in its entirety and the following text
is inserted in its place and stead:
"'Maximum Loan Amount' means Twenty-one Million Dollars ($21,000,000)."
3. The following definitions are hereby added to Section 1(A) in their
appropriate alphabetical order.
"'TERM LOAN' shall have the meaning set forth in Section 2(k)."
"TERM LOAN MATURITY DATE' means December 1, 2002."
"'TERM LOAN NOTE' shall have the meaning set forth in Section 2(k)."
"'TERM LOAN RATE' means an interest rate per annum equal to the (i)
Alternative Base Rate plus (ii) two percent (2.0%)."
4. Section 2 of the Agreement is hereby amended by adding a new
subsection (k) as follows:
"(k) Subject to the terms and conditions set forth herein and in the
Ancillary Agreements, Lender, in its discretion, will make a term loan to
Borrower in the sum of One Million ($1,000,000) Dollars ("Term Loan") which
shall be evidenced by and subject to the terms and conditions set forth in a
secured promissory note in evidencing such Term Loan ("Term Loan Note")."
5. Section 5 of the Agreement is hereby amended by adding a new
subsection (a)(iv):
"Amounts due under the Term Loan shall be payable as follows:
(1) Beginning on December 1, 2000, and on the first day of each three
month quarterly period thereafter, until the Term Loan Maturity
Date, Borrower shall make quarterly payments of principal each in
the amount of One Hundred and Twenty-Five Thousand ($125,000.00)
Dollars; and
(2) Beginning on January 1, 2000 and continuing on the same day of
each month thereafter until the Term Loan is paid in full,
Borrower shall make monthly payments of interest from time to
time on the outstanding principal balance of the Term Loan.
Subject to acceleration upon the occurrence of an Event of Default
hereunder or termination of this Agreement."
6. Section 12 of the Agreement is hereby amended by adding a new
subsection (bb):
"(bb) Borrower shall only use the proceeds of the Term Loan first, to
pay any amounts due under the Revolving Credit Facility in excess of the formula
amount and second, for general working capital purposes."
For purposes of clarification by letter amendment to the Agreement
dated September 8, 1997 a section "2(d)" was added to the Agreement. This
confirms that said section did not, and was not intended to replace the section
2(d) which existed and continues to exist in the Agreement
and the original section 2(d) of the Agreement shall nunc pro tunc appear and be
referred to as section "2(j)" in the Agreement.
All other provisions of the Agreement remain in full force and effect
in accordance with the original terms except as amended hereby. You hereby
confirm the Agreement as amended hereby as being your valid and binding
Agreement enforceable in accordance with its terms, as amended hereby and that
you have no defenses to the enforceability thereof.
If the foregoing accurately reflects your agreement with us, please so
indicate by signing a copy of this letter and returning it to our offices.
Sincerely,
GMAC Commercial Credit LLC
By:____________________________________
Its:______________________________
READ AND AGREED TO
Aviation Distributors, Inc.
By:________________________________
Its:
GMAC
Commercial Credit LLC
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000
000-000-0000
February 23, 2000
Aviation Distributors, Inc.
0 Xxxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Ladies/Gentlemen:
Reference is made to the Credit and Security Agreement between us dated
June 25, 1997 as supplemented and amended (the "Agreement"). Capitalized terms
not otherwise defined herein shall have such meanings as are ascribed to them
under the Agreement.
You have requested that we cancel the Shadow Warrant which you recently
granted in our favor for the cash equivalent of thirty-five percent (35%) of the
issued and outstanding stock of your company, because you have determined that
such Shadow Warrant would, among other things, tend to depress the market value
of your securities. This letter shall serve to confirm our willingness to cancel
said Shadow Warrant on the condition that:
1. you execute a Two Million Dollar ($2,000,000) Promissory Note in our
favor of even date herewith on the terms set forth in said Promissory
Note;
2. the Warrant heretofore issued by you in our favor for the equivalent
of five percent (5%) of the issued and outstanding stock of your
company be exchanged for a new warrant equal to 9.9% of the issued and
outstanding stock of your company with an exercise price of $.25 per
share on terms which are otherwise similar to the former warrant,
which warrant shall be of even date herewith;
3. the definition of the word "Term" set forth in Section 1(A) shall be
amended and restated to read in its entirety as follows:
""Term" means the closing date through and including the date
preceding the 13th anniversary of the Closing Date in the year
2010, subject to acceleration upon the occurrence of an Event of
Default hereunder or other termination hereunder."
4. by amending the fourth sentence of Section 17 of the Agreement which
shall be amended and restated in its entirety to read as follows:
"For purposes hereof, Required Percentage shall mean (a) three
percent (3%) of this Agreement is terminated prior to the fourth
anniversary of the Closing Date: (b) two percent (2%) if this
Agreement is terminated on or after the fourth anniversary of the
Closing Date but prior to the fifth anniversary of the Closing
Date; (c) one percent (1%) if this Agreement is terminated on or
after the fifth anniversary of the Closing Date, but prior to the
thirteenth (13th) anniversary of the Closing Date."
By your execution of this letter in the space provided below, you agree to
execute the promissory note and the new warrant described above, and you further
agree to the effectiveness of the amendments to the Loan Agreement as are stated
in condition 3 and 4 above.
If the foregoing correctly sets forth the Agreement between us, please
execute a copy of this letter in the space provided below and return an executed
copy to our offices.
Except as hereby or heretofore modified or amended, all of the terms and
provisions of the Agreement shall continue to remain in full force and effect in
accordance with its original terms.
Very truly yours,
GMAC COMMERICAL CREDIT LLC
By:_________________________________
Title:
READ AND AGREED TO:
AVIATION DISTRIBUTORS, INC.
By:_____________________________
Title:
- 2 -
PROMISSORY NOTE
$2,000,000 New York, New York, February 23, 2000
FOR VALUE RECEIVED, the undersigned, AVIATION DISTRIBUTORS, INC. (the
"Maker") hereby promises to pay to the order of GMAC COMMERCIAL CREDIT LLC (the
"Payee"), at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such
other place as may be designated in writing by the holder hereof, the principal
sum of Two Million Dollars ($2,000,000), in lawful money of the United States of
America, in one (1) installment of two Million Dollars ($2,000,000) which shall
be due on the earlier of (a) February 1, 2010 or (b) the occurrence of one of
the following: (i) termination for any reason of the Credit and Security
Agreement (the "Credit Agreement") dated June 25, 1997 between Maker and Payee
as awarded and supplemented, or (ii) a secondary capital stock offering by the
Maker, or (iii) the Maker's stock price reaching a market price of $6.00 per
share for any ten (10) consecutive day period, (iv) any change of control of the
Maker, or (v) termination of the employment of Xxx Xxxxxx with Maker, upon the
occurrence of any of the foregoing the entire unpaid principal balance hereof,
together with all interest accrued thereon, shall be due and payable.
The Maker agrees to pay interest on the first day of each six (6) month
semi-annual period (each September 1 and March 1) hereafter occurring commencing
with September 1, 2000, at the same place, on the principal amount of this Note
from time to time outstanding. Interest shall be calculated for each month at
the Alternate Base Rate in effect during the previous month, as such term is
defined in the Credit Agreement. All payments received hereunder shall be
applied first to interest due and the remainder to principal. Notwithstanding
anything to the contrary contained herein, in no event shall the Maker be
required to pay interest hereunder at a rate in excess of the maximum rate
permitted by applicable law.
The Maker shall have the right to prepay this Note, at any time, in whole
or in part, without premium or penalty. Each partial prepayment shall be applied
first to accrued interest and thereafter to installments of principal in the
inverse order of their maturity.
The entire unpaid principal balance hereof together with all interest
accrued thereon shall immediately become due and payable in full, without notice
or demand, in the event of: (i) default in the payment of any installment of
principal or of interest hereunder, or any renewal or extension hereof; or (ii)
default by the Maker under the Agreement, or under any other agreement between
the Maker and the Payee or executed by the Maker in favor of the Payee; or (iii)
default by the Maker or any other signatory under any additional instruments or
documents evidencing or granting collateral security for, or guaranteeing any of
the Obligations (as defined in the Agreement) of the Maker to the Payee (all
such additional instruments and documents being hereinafter collectively
referred to as the "Collateral Documents"); or (iv) termination of the Agreement
for any reason or
termination of any of the Collateral Documents without the consent of the Payee;
or (v) default by any endorser hereof under any agreement between the Payee and
such endorser; or (vi) any action being taken by or against any endorser hereof
or any guarantor of the Obligations, which, if taken by or against the Maker,
would constitute a default under the Agreement. The failure to assert this right
shall not be deemed a waiver thereof.
After maturity (by acceleration or otherwise), this Note shall continue to
bear interest at the rate provided for herein until it is paid in full. If this
Note is placed with an attorney for collection, the Maker agrees to pay all
costs and expenses of collection, including reasonable attorneys' fees, which
shall be added to the principal amount due hereunder.
The Maker and each endorser of this Note, if any, hereby waive presentment
for payment, demand, protest, notice of protest and notice of dishonor hereof
and each endorser agrees to all of the terms and conditions hereof and
guarantees the payment of this Note at maturity.
The holder may extend the time of payment of this Note, postpone the
enforcement hereof, grant any other indulgences and/or add or release and
collateral for the Obligations of any party primarily or secondarily liable
hereon without affecting or diminishing the holder's right or recourse against
the Maker and endorsers of this Note, which right is hereby expressly reserved.
This Note evidences an Obligation and is secured by, among other things,
the security interests and liens granted to the payee under the Agreement and
the Collateral Documents.
The Note evidences a borrowing under the Agreement and under the Collateral
Documents and, subject to the specific terms hereof, is entitled to the benefits
of the Agreement and the Collateral Documents and is subject to all of the terms
and conditions thereof provided, however, that no payments on, or other proceeds
of, accounts receivable of the Maker shall be applied to reduction of the
indebtedness evidenced by this Note until all other Obligations have been paid
in full.
This Note shall be governed by, and interpreted in accordance with, the
laws of the State of New York and the Maker and endorsers hereof consent to the
jurisdiction of the Federal and State courts of such state for all purposes in
connection with this Note.
- 2 -
TO THE EXTENT LEGALLY PERMISSIBLE, BOTH MAKER AND PAYEE WAIVE ALL RIGHT TO
TRAIL BY JURY IN ANY LITIGATION RELATING TO TRANSACTIONS UNDER THIS NOTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
AVIATION DISTRIBUTORS, INC.
By:________________________________
Title:
- 3 -
AVIATION DISTRIBUTORS, INC.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
PURSUANT TO A REGISTRATION STATEMENT UNDER THE ACT WHICH HAS BECOME EFFECTIVE
AND IS CURRENT WITH RESPECT TO THE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC
EXEMPTION FROM REGISTRATION UNDER THE ACT BUT ONLY UPON THE HOLDER HEREOF FIRST
HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE COMPANY, OR OTHER COUNSEL
ACCEPTABLE TO THE COMANY, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL
APPLICABLE PROVISIONS OF THE ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR
LAW.
February 23, 2000
AVIATION DISTRIBUTORS, INC.
THIS WARRANT REPLACES AND SUPPLANTS IN ITS ENTIRETY ANY WARRANTS OR SHADOW
WARRANTS HERETOFORE ISSUED BY THE COMPANY IN FAVOR OF GMAC.
For good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged by Aviation Distributors, Inc., a Delaware corporation,
with its principal office at 0 Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000 (the
"Company"), GMAC Commercial Credit LLC (the "Holder" or "GMAC"), of 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, subject to the terms and conditions
of this Warrant, is hereby granted the right to purchase, at the initial
exercise price per share equal to $0.25 at any one or more times from the date
hereof until 5:00 p.m. on February 28, 2010, in the aggregate, Three Hundred
Thirty Five Thousand Three Hundred Sixty-Two (335,362) shares of Common Stock of
the Company, $.01 par value (the "Shares"), subject to adjustment as provided in
Section 5 hereof.
This Warrant initially is exercisable at a price of $0.25 payable in cash,
by certified or official bank check in New York Clearing House funds or other
form of payment reasonably satisfactory to the Company, subject to adjustment as
provided in Section 5 hereof.
1. Exercise of Warrant. The purchase rights represented by this Warrant are
exercisable at the option of the Holder hereof, in whole or in part, at one or
more times during any period in which this Warrant may be exercised as set forth
above. The Holder shall not be deemed to have exercised its purchase rights
hereunder until the Company receives written notice of the Holder's intent to
exercise its purchase rights hereunder along with payment for the purchased
Shares. The written notice shall be in the form of a duly executed Subscription
Form attached hereto and made a part hereof. Less than all of the Shares may be
purchased under this Warrant in which case a new Warrant representing the
unexercised portion of the Warrant will be executed and returned to Holder (or
its assigns).
- 2 -
2. Issuance of Certificates. Upon the exercise of this Warrant, the
issuance of certificates for Shares underlying this Warrant which are purchased
shall be made forthwith (and in any event within ten (10) business days after
the Company's receipt of (i) written notice and payment for the purchased Shares
hereunder as specified in Section 1 above) and (ii) good funds in respect of the
Purchase Price pursuant to Section 4 hereof for the shares so exercised and such
certificates shall be issued in the name of the Holder hereof. Upon issuance,
such shares shall be deemed fully paid non-assessable shares of common stock of
the Company.
3. Restriction on Transfer and Registration Rights. Neither this Warrant
nor any Shares issuable upon exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Act"), and neither may be sold or
transferred in whole or in part unless the Holder shall have first given prior
written notice to the Company describing such sale or transfer and furnished to
the Company an opinion, satisfactory to counsel for the Company as determined by
such counsel in its discretion, to the effect that the proposed sale or transfer
may be made without registration under the Act; provided, however, that the
foregoing shall not apply if there is in effect a registration statement with
respect to this Warrant or the Shares issuable upon exercise hereof, as the case
may be, at the time of the proposed sale or transfer. Upon exercise, in part or
in whole, of this Warrant, each certificate issued representing the Shares
underlying this Warrant shall bear a legend to the foregoing effect. The Holder
shall have such rights to request the Company to register all or any of the
Shares issuable upon exercise of this Warrant as set forth in Annex B hereto
(the "Registration Rights") subject to the terms of Annex B.
4. Price.
4.1 Initial and Adjusted Purchase Price. The initial Purchase Price per
share shall be equal to $0.25. The adjusted Purchase Price shall be the price
which shall result from time to time from any and all adjustments of the initial
purchase price in accordance with the provisions of Section 5. hereof.
4.2 Purchase Price. The term "Purchase Price" herein shall mean the initial
purchase price of the adjusted purchase price, as the case may be.
5. Adjustments of Purchase Price and Number of Shares. The Shares subject
to this Warrant and the Purchase Price thereof shall be appropriately adjusted
by the Company in accordance with the Statement of Rights to Warrants included
in Annex A hereto.
6. Replacement of Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in case of such loss, theft, destruction or mutilation, of
indemnity or security reasonably satisfactory to it in its sole discretion, and
reimbursement to the Company of all expenses incidental or relating thereto, and
upon surrender and cancellation of this Warrant (unless lost, stolen or
destroyed), the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant.
- 3 -
7. Notice to Warrant Holder. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof prior to exercise of this Warrant
the right to vote or to consent as a shareholder in respect of any meetings of
shareholders for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company. The Company shall, however,
during the term of this warrant supply GMAC with copies of all filings made with
the SEC under the Securities Exchange Act of 1934, as amended and of all
documents delivered to stockholders of the Company.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of this Warrant, to the address of
such Holder as shown on the books of the Company.
(b) If to the Company, to the address set forth on the first page of
this Warrant or to such other address as the Company may designate by
notice to the Holder.
9. Successors. All the agreements contained in this Warrant shall bind the
parties hereto and their respective heirs, executors, administrators,
distributees, permitted successors and assigns. The Holder may assign this
Warrant without the Company's prior written consent provided that the Holder
complies with the provisions of this agreement and applicable securities laws.
Any attempted assignment in violation of the preceding sentence shall be void
and of no effect.
10. Headings. The headings in this Warrant are inserted for purposes of
convenience only and shall have no substantive effect.
11. Law Governing. This Warrant is delivered in the State of New York and
shall be construed and enforced in accordance with, and governed by, the laws of
the State of Delaware, without giving effect to conflicts of law principles.
12. The Company hereby represents and warrants to the Holder hereof, that
it has the requisite power and authority to execute this Warrant and that this
Warrant has been executed by the Company and such execution has been fully
authorized by its Board of Directors.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its
corporate name by, and such signature to be attested to by, a duly authorized
officer as of the date first above written.
AVIATION DISTRIBUTORS, INC.
By:_____________________________
Its:
- 4 -
ANNEX A
STATEMENT OF RIGHTS TO WARRANTS
AND
FORMS OF SUBSCRIPTION AND ASSIGNMENT
(a) Adjustment to Purchase Price and Number of Shares. In case, prior to
the expiration of this Warrant by exercise or by its terms, the Company shall
issue any shares of its Common Stock as a stock dividend or subdivide the number
of outstanding shares of its Common Stock into a greater number of shares, then
in either of such cases, the then applicable Purchase Price per share of the
shares of Common Stock purchasable pursuant to this Warrant in effect at the
time of such action shall be proportionately reduced and the number of shares at
that time purchasable pursuant to this Warrant shall be proportionately
increased; and conversely, in the event the Company shall contract the number of
outstanding shares of Common Stock by combining such shares into a smaller
number of shares, then, in such case, the then applicable Purchase Price per
share of the shares of Common Stock purchasable pursuant to this Warrant in
effect at the time of such action shall be proportionately increased and the
number of shares of Common Stock purchasable pursuant to this Warrant shall be
proportionately decreased. If the Company shall, at any time during the term of
this Warrant, declare a dividend payable in cash on its Common Stock and shall,
at substantially the same time, offer to its stockholders a right to purchase
new Common Stock from the proceeds of such dividend or for an amount
substantially equal to the dividend, all Common Stock so issued shall, for the
purpose of this Warrant, be deemed to have been issued as a stock dividend. Any
dividend paid or distributed upon the Common Stock shall be treated as a
dividend paid in Common Stock to the extent that shares of Common Stock are
issuable upon conversion thereof.
(b) Purchase Price Reset Provision. In the event that prior to the
expiration of this Warrant the Company sells publicly or privately (i) shares of
its Common Stock, (ii) securities convertible into shares of its Common Stock,
or (iii) options or warrants to purchase shares of its Common Stock or
securities convertible into shares of its Common Stock at a sale, conversion or
exercise price per share (the "Issue Price"), as the case may be, less than the
Purchase Price then in effect, the Purchase Price shall be reset to the Issue
Price and the number of shares purchasable pursuant to this Warrant shall be
increased pro rata to the percentage reduction in the Purchase Price, provided,
however, that the number of shares purchasable shall not exceed nine and
nine-tenths percent (9.9%) of the then outstanding shares of Common Stock of the
Company after giving effect to the exercise or conversion of any outstanding
options warrants or convertible securities and provided further that the reset
provision shall not apply to
(i) any shares issued upon exercise or conversion of any currently
outstanding options, warrants or convertible securities,
(ii) any Common Stock options or warrant issuable pursuant to an employee
stock option plan or other compensation arrangement or any underlying Common
Stock issued on the exercise thereof, or
- 5 -
(iii) one or more sales of any such securities which in the aggregate do
not equal 5% or more than the currently outstanding shares of Common Stock after
giving effect to the conversion or the exercise of all such securities.
The Issue Price shall be calculated taking into account the amount paid for
the issuance of such Common Stock, option or warrant or convertible security and
the amount, if any, payable upon the exercise of conversion thereof.
(c) Recapitalization. In case, prior to the expiration of this Warrant by
exercise or by its terms, the Company shall be recapitalized by reclassifying
its outstanding Common Stock, (other than a change in par value to no par
value), or the Company or a successor corporation shall consolidate or merge
with or convey all or substantially all of its or of any successor corporation's
property and assets to any other corporation or corporations (any such other
corporations being included within the means of the term "successor corporation"
hereinbefore used in the event of any consolidation or merger of any such other
corporation with, or the sale of all or substantially all of the property of any
such other corporation to, another corporation or corporations), the Holder of
this Warrant shall receive thirty (30) days' prior written notice of any such
action and then, as a condition of such recapitalization, consolidation, merger
or conveyance, lawful and adequate provision shall be made whereby the Holder of
this Warrant shall thereafter have the right to purchase, upon the basis and on
the terms and conditions specified in this Warrant, in lieu of the Shares of
Common Stock of the Company theretofore purchasable upon the exercise of this
Warrant, such shares of stock, securities, property or assets of the other
corporation (including, without limitation, cash) as to which the Holder of this
Warrant would have been entitled had this Warrant been exercised immediately
prior to such recapitalization, consolidation, merger or conveyance; and in any
such event, the rights of the Warrant Holder to any adjustment in the number of
Shares of Common Stock purchasable upon the exercise of this Warrant, as
hereinbefore provided, shall continue and be preserved in respect of any stock
which the Warrant Holder becomes entitled to purchase.
(d) Dissolution. In case the Company at any time while this Warrant shall
remain unexpired and unexercised shall sell all or substantially all of its
property or dissolve, liquidate or wind up its affairs, lawful provision shall
be made as part of the terms of any such sale, dissolution, liquidation or
winding up, so that the Holder of this Warrant may thereafter receive upon
exercise hereof in lieu of each Share of Common Stock of the Company which it
would have been entitled to receive, the same kind and amount of any securities
or assets as may be issuable, distributable or payable upon any such sale,
dissolution, liquidation or winding up with respect to each share of Common
Stock of the Company; provided, however, that in any case of any such sale or of
dissolution, liquidation or winding up, the right to exercise this Warrant shall
terminate on a date fixed by the Company. Such date so fixed shall be no earlier
than 3 P.M. New York City Time, on the forty-fifth (45th) day next succeeding
the date on which notice of such termination of the right to exercise this
Warrant has been given by mail to the registered Holder of this Warrant at its
address as it appears on the books of the Company.
(e) No fractional Shares. Upon any exercise of this Warrant by the Warrant
Holder, the Company shall not be required to deliver fractions of one share, but
adjustment in the Purchase
- 6 -
Price payable by the Warrant Holder shall be made in respect of any such
fraction of one Share on the basis of the Purchase Price per share then
applicable upon exercise of this Warrant.
(f) Notices. In the event that, prior to the expiration of this Warrant by
exercise or by its terms, the Company shall determine to take a record of its
stockholders for the purpose of determining stockholders entitled to receive any
dividend, stock dividend, distribution or other right that whether or not it may
cause any change or adjustment in the number, amount, price or nature of the
securities or assets deliverable upon the exercise of this Warrant pursuant to
the foregoing provisions, the Company shall give at least ten (10) days' prior
written notice to the effect that it intends to take such record to the
registered Holder of this Warrant at its address as it appears on the books of
the Company, said notice to specify the date as of which such record is to be
taken, the purpose for which such record is to be taken, and the effect which
the action which may be taken will have upon this Warrant.
(g) Registered Owner. The Company may deem and treat the registered Holder
of the Warrant at any time as the absolute owner hereof for all purposes, and
shall not be affected by any notice to the contrary.
(h) Status. This Warrant shall not entitle any Holder hereof to any of the
rights of a stockholder, and shall not entitle any Holder hereof to any
dividend declared upon the Common Stock unless the Holder shall have exercised
the within Warrant and purchased the Shares of Common Stock prior to the record
date fixed by the Board of Directors for the determination of Holders of Common
Stock entitled to exercise any such rights to receive said dividend.
(i) No Adjustment for Small Amounts. Anything in the Statement of Rights to
Warrants to the contrary notwithstanding, the Company shall not be required to
give effect to any adjustment in the Purchase Price unless and until the net
effect of one or more adjustments, determined as above provided, shall have
required a change of the Purchase Price by at least ten cents, but when the
cumulative net effect of more than one adjustment so determined shall be to
change the actual Purchase Price by at least ten cents, such change in the
Purchase Price shall thereupon be given effect.
- 7-
ASSIGNMENT
(To Be Executed By the Registered Holder to Effect a Transfer to the Within
Warrant)
FOR VALUE RECEIVED ____________________________________ hereby sells, assigns
and transfers unto (Name) ____________________________________________ (Address)
______________________________ the right to purchase Common Stock evidenced by
the within Warrant, to the extent of shares of Common Stock, and does hereby
irrevocably constitute and appoint ___________________________________________
to transfer the said right on the books of the Company, with full power of
substitution.
Date: _________________, 2000.
___________________________
(Signature)
NOTICE: The signature to this assignment must correspond with the name as
written upon
the case of the within Warrant in every particular, without alteration
or enlargement, or any change whatsoever and must be guaranteed by a
bank, other than a savings bank or trust company, having an office or
correspondent in New York, or by a firm having membership on a
registered national securities exchange and an office in New York, New
York.
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To Aviation Distributors, Inc.
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, shares of Common Stock of Aviation Distributors, Inc. and
herewith makes payment of $ therefor, and requests that the certificate or
certificates for such shares be issued in the name of and delivered to the
undersigned.
Dated: _________________
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrants)
(Address)
Insert here the maximum number of shares or, in the case of a partial exercise,
the portions hereof as to which the Warrant is being exercised.
- 8 -
ANNEX B
REGISTRATION RIGHTS
(a) If, at any time prior to February 28, 2010, the Company proposes to
register any of its securities under the Securities Act of 1933 (the "Securities
Act") (other than securities to be issued pursuant to a stock option or other
employee benefit or similar plan or in connection with a transaction
contemplated by Rule 145 under the Securities Act, the Company shall, promptly
give written notice (the "Registration Notice") to Holder of the Company's
intention to effect such registration. The Company also agrees that on two
occasions it will deliver such a Registration Notice to Holder within 30 days of
its receipt of a written demand from Holder for a Registration Notice. If,
within 15 days after receipt of such Registration Notice, Holder submits a
written request to the Company specifying the number of shares of Common Stock
which it will receive upon exercise of the Warrant and which it proposes to sell
or otherwise dispose of (the "Subject Stock") the Company shall include the
Subject Stock in such registration statement. Notwithstanding anything herein to
the contrary GMAC shall not be entitled to require the Company to include the
Subject Stock in a registration statement more frequently than twice during the
term hereof. GMAC when requesting inclusion of the Subject Stock in any such
registration statement, may in its discretion delay exercise of the Warrant and
notify the Company it that will exercise its Warrant as to the Subject Stock
immediately upon the registration statement becoming effective or for delivery
upon closing of a related offering. The Company will use its reasonable best
efforts in good faith to effect promptly (but in no event later than one hundred
and twenty (120) days-after the receipt from GMAC of the request to register the
Subject Stock provided, however, that such period shall be extended for up to
sixty (60) additional days in the event-of a material development that shall
hinder the Company from effecting such registration) the registration of the
Subject Stock. The Company shall keep each registration statement covering any
Subject Stock in effect until the earlier of (i) 90 days following the
effectiveness of such registration statement (except for an underwritten
offering which is closed sooner) and maintain compliance with each applicable
federal and state law and regulation and (ii) the sale of the Subject Shares.
Notwithstanding the foregoing, if the offering of the Company's securities
pursuant to such registration statement is to be made by or through
underwriters, the Company shall not be required to include Subject Stock therein
if and to the extent that the underwriter managing the offering advises the
Company in writing that such inclusion would materially adversely affect such
offering and, in such event, the Company an delay the effectiveness of the
registration of or cause Holder to delay the sale of the Subject Stock for a
period of not more than 30 days after completion of the distribution of
securities being underwritten on behalf of the Company (but in no event for more
than 180 days after the registration statement first becomes effective) and the
Company shall thereupon promptly file such supplements and post-effective
amendments and take such other steps as may be necessary to permit Holder to
make its proposed offering following the end of such period of delay.
(b) In connection with any offering of shares of Subject Stock registered
pursuant to this Annex B the Company (i) shall furnish to Holder such number of
copies of each registration statement, each prospectus and each preliminary
prospectus, and of each amendment, and supplement to any thereof as Holder may
reasonably request in order to effect the offering and sale
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of the Subject Stock to be offered and sold, but only while the Company shall be
required under the provisions hereof to cause the registration statement to
remain current and (ii) take such action as shall be necessary to qualify the
shares covered by such registration statement under such blue sky or other state
securities law as for offer and sale as Holder shall request; provided, however,
that the Company shall not be obligated to qualify as a foreign corporation to
do business under the laws of any jurisdiction in which it shall not then be
qualified or to file any general consent to service of process in any
jurisdiction in which such a consent has not been previously filed or subject
itself to taxation in any jurisdiction in which the company is not already
subject to taxation. To the extent the Company shall enter into an underwriting
agreement (the "Agreement") with a managing underwriter or underwriters selected
by it containing representations, warranties, indemnities and agreements then
customarily included by an issuer in underwriting agreements with respect to
secondary distributions, Holder agrees as a condition to participation in such
offering to make such representations and warranties with respect to information
as to it as selling stockholder, and as to its holdings, which is furnished in
writing to the underwriter for use in the registration statement as are
customary and appropriate. In connection with any offering of Subject Stock
registered pursuant to this Annex B, the Company shall furnish to the
underwriter, at the Company's expense, unlegended certificates representing
ownership of the Subject Stock being sold in such denominations as requested and
instruct any transfer agent and registrar of the Subject Stock to release any
stop transfer orders with respect to such Subject Stock.
(c) Upon the receipt of notice from the Company to suspend sales to permit
the Company to correct or update a registration statement or prospectus, GMAC
will not (until a receipt of a notice to the contrary) effect sales of Subject
Stock included in any registration statement. The obligations of the Company
with respect to maintaining any registration statements current and effective
shall be extended by a period of days equal to the period that such suspension
is in effect.
(d) In connection with any registration pursuant to this Annex B all
expenses of registration shall be borne by the Company (unless contrary to the
federal securities laws or the laws of any state where the Subject Stock is to
be offered), provided, however, in connection with any such registration, Holder
shall be obligated to pay any and all underwriter's and/or brokers commissions,
to the extent that such commissions would not have been so incurred in the
absence of the registration of such Subject Stock. Under no circumstances shall
the Company have any liability for any fees and expenses of underwriters,
counsel, accountants or other agents of Holder relating to the subject stock
with respect to any registration statement filed pursuant hereto, including but
not limited to any out-of-pocket expenses, securities liability insurance
policies, the costs of any investigations by or on behalf of Holder of the
accuracy and completeness of such registration statement or related to the
furnishing of information by Holder in connection with such registration
statement.
(e) For a period until the earlier of (i) ninety (90) days from and after
the effective date of any registration statement filed pursuant hereto in which
any of the Subject Stock is included and (ii) the sale of the Subject Shares,
the Company shall from time to time amend or supplement the registration
statement and the prospectus used in connection therewith as may be necessary to
permit such sale and disposition and to the extent necessary in order to keep
such registration statement effective and such prospectus current under the Act
so that neither the registration
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statement nor the prospectus contains any untrue statement as to any material
fact, omits any statement necessary to make the statements contained therein not
misleading.
(f) In the case of any offering registered pursuant to this Annex B, the
Company agrees to indemnify and hold harmless Holder and each controlling person
of Holder within the meaning of Section 15 of the Securities Act, and the
directors and officers of Holder, against any and all losses, claims, damages or
liabilities to which they or any of them may become subject under the Securities
Act or any other statute or common law or otherwise, and to reimburse them from
time to time upon request, for any legal or other expenses reasonably incurred
by them in connection with investigating any claims and defending any actions,
insofar as any such losses, claims, damages, liabilities or actions shall arise
out of or shall be based upon any untrue statement or alleged untrue statement
contained in the registration statement relating to the sale of such Subject
Stock in any preliminary prospectus or in any prospectus or in any supplement or
amendment to any of the foregoing of a material fact, or the omission or alleged
omission to state therein a material fact required to be stated or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, provided, however, that the indemnification agreement
contained in this paragraph (f) shall not apply to such losses, claims, damages,
liabilities or actions which shall, arise from (i) the sale of Subject Stock if
such losses, claims, damages, liabilities or actions shall arise out of or shall
be based upon any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission shall have been made
in reliance upon and in conformity with information furnished in writing to the
Company by Holder specifically for use in connection with the preparation of the
registration statement or any preliminary prospectus or prospectus contained in
the registration statement or any amendment thereof or supplement thereto; or
(ii) any actual or alleged untrue statement of a material fact or any actual or
alleged omission of a material fact required to be stated in any preliminary
prospectus if Holder sells Securities to a Person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the final
prospectus or of the final prospectus as then amended or supplemented, whichever
is most recent, if the Company had previously furnished copies thereof to Holder
or its representatives and such final prospectus, as then amended or
supplemented, corrected any such misstatement or omission; or (iii) the use of
any preliminary, final or summary prospectus by or on behalf of Holder after the
Company has notified Holder that such Prospectus contains an untrue statement of
a material fact or omits to state a material fact required to be stated therein,
in the light of the circumstances under which they were made, not misleading; or
(iv) the use of any final prospectus, as amended or supplemented, by or on
behalf of Holder after such time as the obligation of the Company under this
Annex B to keep the related registration statement effective has expired; or (v)
any violation of any federal or state securities laws, rules or regulations
committed by Holder (other than any violation that arises out of or is based
upon the circumstances described above and as to which Holder would otherwise be
entitled to indemnification hereunder).
(g) In connection with any registration statement in which Holder is
participating, Holder will indemnify, to the extent permitted by law, the
Company, controlling persons of the Company under Section 15 of the Securities
Act and its directors and officers against any and all losses, claims, damages,
liabilities and expenses resulting, and to reimburse them, from time to time
upon request, for any legal or other expenses reasonably incurred by them in
connection with
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investigating any claims and defending any actions, solely by reason of (I) any
untrue statement of a material fact or any omission of a material fact necessary
to make the statements therein not misleading, in the registration statement or
any prospectus or preliminary prospectus or any amendment or supplement thereto,
but only to the extent that such untrue statement is contained in, or such
omission is omitted from, information so furnished to the Company by Holder in
writing; (ii) the use of any prospectus by or on behalf of Holder (x) after the
Company has notified Holder that such prospectus contains an untrue statement of
a material fact or omits to state a material fact required to be stated therein,
in light of the circumstances under which they were made, not misleading or (y)
after such time as the obligation of the Company to keep the related
registration statement effective and current has expired; (iii) the failure to
send or deliver to a party to whom Holder sells the Securities, at or prior to
the written confirmation of sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent, if the
Company had previously furnished copies thereof to Holder or its
representatives; or (iv) any violations by Holder of any federal or state
securities law or rule or regulation thereunder (other than any violation that
arises out of or is based upon the circumstances described above and as to which
Holder is entitled to indemnification hereunder); provided, however, that Holder
shall not be liable in the aggregate for any amounts exceeding the product of
the sale price minus the exercise price per share of Subject Stock of Holder
sold in such registered offering and the number of shares of Subject Stock sold
pursuant to such registration statement or prospectus by Holder.
(h) Each party indemnified under paragraph (f) or (g) of this Annex B
shall, promptly after receipt of notice of the commencement of any action
against such indemnified party in respect of which indemnity may be sought
hereunder, notify the indemnifying party in writing of the commencement thereof.
The omission of any indemnified party to so notify an indemnifying party of any
such action shall not relieve the indemnifying party from any liability in
respect of such action which it may have to such indemnifies party on account of
the indemnity agreement contained in paragraph (f) or (g) of this Annex B,
unless the indemnifying party was prejudiced by such omission, and in no event
shall relieve the indemnifying party from any other liability which it may have
to such indemnified party. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it may desire to assume the defense thereof through counsel
satisfactory to the indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under paragraph (f) or (g) of this Annex B for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation (unless such indemnified
party reasonably objects to such assumption on the grounds that there may be
defenses available to it which are different from or in addition to such
indemnifying party in which event the indemnified party shall be reimbursed by
the indemnifying party for the expenses incurred in connection with retaining
one separate legal counsel).
(i) Nothing in paragraph (f) (g) of this Annex B shall prevent the
indemnified party from retaining counsel of its own choosing, at its own
expense, to defend or cooperate in the defense or investigation of any claim in
respect of which indemnification is available hereunder. No
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indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(j) If recovery is not available under the foregoing indemnification
provisions, for any reason other than as specified therein, the parties entitled
to indemnification by the terms thereof shall be entitled to contribution for
any and all losses, claims, damages, or liabilities, joint or several, and
expenses to which they may become subject, in such proportion as is appropriate
to reflect the relative fault of the parties entitled to indemnification, on the
one he and, and the indemnifying parties, on the other, in connection with the
matter out of which such losses, claims, damages, liabilities or expenses arise
or result from. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the parties' relative
knowledge and access to information concerning the matter with respect to which
the action was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate under the
circumstances. The Company and each Holder agrees that it would not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocations. Notwithstanding the provisions of this Section (I) the Holder shall
not be required to contribute any amount in excess of the amount by which the
net proceeds received by such Holder from the sale of its Warrants or underlying
shares of Common Stock exceeds the amount of the exercise price of the Warrants
plus any damages that such Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
(k) Notwithstanding the foregoing, Holder shall furnish to the Company such
information regarding Holder, its intended method of distribution of the
Securities and such other information as the Company may from time to time
reasonably request for purposes of preparation of any registration statement
pursuant to this Annex B and to maintain the effectiveness of such registration
statement.
(i) At least five business days prior to any disposition of Securities
(other than pursuant to an underwritten offering) by Holder, Holder will orally
advise the Company (and promptly confirm such advise in writing) of the dates on
which such disposition is expected to commence and terminate, the number of
Securities expected to be sold, the method of disposition and such other
information as the Company may reasonably request in order to supplement the
prospectus contained in the registration statement in accordance with the rules
and regulations of the Commission. Promptly after receiving such advise, the
Company will, if necessary, (x) prepare a supplement to the prospectus based
upon such advice and file the same with the Commission pursuant to Rule 424(b)
under the Securities Act and (y), if necessary, qualify the Securities to be
sold under the Securities or blue sky laws of such jurisdiction in the United
States as Holder shall reasonably request (subject to the provision of Section
(b) of this Annex B).
(ii) Holder agrees that, upon receipt of any notice from the Company of any
event of the kind described in Section (d) of this Annex B, Holder will
forthwith discontinue disposition of the Securities pursuant to such
registration statement until receipt of copies of the supplemented or amended
prospectus contemplated by Section (d), and, if so directed by the Company, will
deliver
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to the Company all copies of the prospectus covering the Securities in its
possession at the time of receipt of such notice.
(iii) Holder shall, at any time it is engaged in a distribution of
Securities, comply with all applicable requirements of Rule M (or any successor
provisions then in force) promulgated under the Exchange Act and (x) will not
engage in any stabilization activity in connection with the securities of the
Company in contravention of such rules, (y) will distribute the Securities
solely in the manner described in the registration statement and (z) will not
bid for or purchase any securities of the Company or attempt to induce any
person to purchase any securities of the Company other than as permitted under
the Exchange Act.
(iv) Holder shall provide such information and materials, execute all such
documents and take all such other actions as the Company shall reasonably
request in order to permit the Company to comply with all applicable
requirements of law and to effect the registration of Holder's Securities.
(v) If Securities are registered for sale pursuant to Rule 415 under the
Securities Act, Holder shall cease any distribution of such shares under the
registration statement twice a year, for up to 90 days each, upon the request of
the Company if: (x) such distribution would require the public disclosure of
material non-public information concerning any transaction or negotiations
involving the Company or any of its affiliates that, in the good faith judgment
of the Company's Board of Directors (or the executive committee thereof), would
materially interfere with such transaction or negotiations, (y) such
distribution would otherwise require premature disclosure of information that,
in the good faith judgment of the Company's Board of Directors, would adversely
affect or otherwise be detrimental to the Company or (z) the Company proposes to
file a registration statement under the Securities Act for the offering and sale
of securities for its own account in an underwritten offering and the managing
underwriter therefor shall advise the Company in writing that in its opinion the
continued distribution of the Securities would adversely affect the success of
the offering of the securities proposed to be registered for the account of the
Company. The Company shall promptly notify Holder at such time as (I) such
transactions or negotiations have been otherwise publicly disclosed or
terminated, (ii) such non-public information has been publicly disclosed or
counsel to the Company has determined that such disclosure is not required due
to subsequent events or (iii) the completion of such underwritten offering.
(vi) The Company shall be entitled to postpone once a year, for a
reasonable period of time not to exceed 90 days, the filing of a registration
statement otherwise required to be prepared and filed by it pursuant to Section
(a) of this Annex B if, at the time it receives the written demand, (y) such
registration would require the public disclosure of material non-public
information concerning any transaction or negotiations involving the Company or
any affiliate that, in the opinion of counsel to the Company, is not yet
required to be publicly disclosed and the Company's Board of Directors, in good
faith, determines that such disclosure would materially interfere with such
transaction or negotiations on (z) such registration would, in good faith
judgment of the Company, otherwise required premature disclosure of information
which would adversely affect or otherwise be detrimental to the Company.
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