EXHIBIT 10.1
AMENDMENT NO. 4, CONSENT AND LIMITED WAIVER
Dated as of May 14, 2003
to
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 12, 2002
This Amendment No. 4, Consent and Limited Waiver (this
"Amendment") dated as of May 14, 2003 is entered into among TMAS/ASI, INC.,
an Arkansas corporation formerly known as Aerocell Structures, Inc.
("Aerocell"), TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation ("TIMCO"), AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation
("Design"), TIMCO ENGINE CENTER, INC., a Delaware corporation ("Engine Center"),
and XXXXX MANUFACTURING COMPANY, INC., a California corporation ("Xxxxx")
(Aerocell, TIMCO, Design, Engine Center and Xxxxx being collectively referred to
as the "Borrowers"), and TIMCO AVIATION SERVICES, INC., a Delaware corporation
("Parent"), AVIATION SALES DISTRIBUTION SERVICES COMPANY, a Delaware corporation
("Distribution"), AVS/M-2, INC., a Delaware corporation ("Xxxxx-Xxxxx"),
WHITEHALL CORPORATION, a Delaware corporation ("Whitehall"), AVS/M-3, INC., an
Arizona corporation ("Apex"), AVS/CAI, INC., a Florida corporation ("Caribe"),
AVIATION SALES LEASING COMPANY, a Delaware corporation ("Leasing"), AVIATION
SALES PROPERTY MANAGEMENT CORP., a Delaware corporation ("Property Management"),
AVS/M-1, INC., a Delaware corporation ("Manufacturing"), AVSRE, L.P., a Delaware
limited partnership ("AVSRE"), HYDROSCIENCE, INC., a Texas corporation
("Hydroscience"), TIMCO ENGINEERED SYSTEMS, INC., a Delaware corporation
("Engineered Systems") (Parent, Distribution, Xxxxx-Xxxxx, Whitehall, Apex,
Caribe, Leasing, Property Management, Manufacturing, AVSRE, Hydroscience and
Engineered Systems being collectively referred to as the "Guarantors"), the
"Lenders" (as defined in the Credit Agreement identified below) a party hereto
and Citicorp USA, Inc., in its capacity as agent for the Lenders and the
"Issuing Banks" (as defined in the Credit Agreement identified below) (in such
capacity, the "Agent"). Capitalized terms used herein without definition are
used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENTS:
WHEREAS, Borrowers (other than Xxxxx), Parent, the Agent and
certain financial institutions, as Lenders and Issuing Banks, are parties to
that certain Fifth Amended and Restated Credit Agreement dated as of July 12,
2002 (as amended, supplemented or otherwise modified through the date hereof,
the "Credit Agreement");
WHEREAS, the Specified Events of Default (as defined in
Section 2.2 below) have occurred and are continuing, and the Parent and the
Borrowers have requested that the Agent and the Requisite Lenders waive their
rights and remedies with respect to the Specified Events of Default;
WHEREAS, the Parent and Borrowers have requested that the
Requisite Lender consent to (i) the Parent's incurrence of additional
Indebtedness to LJH, Ltd. which, among other things, will result in the receipt
by the Parent of not less than $6,050,000 in Net Cash Proceeds of Issuance of
Indebtedness being paid to the Lenders on, or within 60 days after, the
"Amendment Effective Date" (as defined in Section 3 below), as mandatory
prepayments of the Revolving Loans under Section 4.01(b) of the Credit Agreement
(as amended hereby), and execution and delivery of certain agreements, documents
and instruments in connection therewith, as expressly set forth below, (ii)
TIMCO's sublease of the Goodyear Facility (as defined below) from LJH, Ltd.,
(iii) TIMCO's purchase from LJH, Ltd. of Inventory acquired by LJH, Ltd. from
Aviation Management Systems, Inc. ("AMS"), for a purchase price not to exceed
the sum of (A) up to $50,000 in cash to be paid on the Amendment Effective Date
and (B) after the Agent's receipt and review of the Fourth Amendment Appraisals
(as defined in Section 1.2(i) below) with respect to such Inventory, an
additional amount not to exceed the lesser of (x) the Fair Market Value of such
Inventory less $50,000 and (y) $900,000, which additional amount shall be paid
solely by an increase in the principal amount of the LJH Note (as defined in
Section 1.2(n) below) (the transactions described in clauses (i), (ii) and (iii)
are collectively referred to herein as the "LJH Transactions") and (iv) the
termination of the Keepwell Agreement and the cure of LJH, Ltd.'s failure to
make a $59,000 payment thereunder with the funding of the initial installment of
the LJH Note on the Amendment Effective Date;
WHEREAS, the Parent and the Borrowers have requested that
Xxxxx be added as a Borrower under the Credit Agreement upon the satisfaction of
certain conditions and that the Credit Agreement be amended in certain other
respects, in each case as expressly set forth below; and
WHEREAS, the Requisite Lenders are willing to grant such
limited waiver and consents and to amend the Credit Agreement and certain of the
other Loan Documents, in each case on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Amendments to the Credit Agreement. Upon the Amendment
Effective Date, the Credit Agreement is hereby amended as follows effective as
the Amendment Effective Date, provided, that in the case of the amendments set
forth in Sections 1.2(t), 1.15 and 1.16 below, such amendment shall be
retroactively effective as of March 31, 2003:
1.1 The preamble to the Credit Agreement is hereby amended to
delete in its entirety the reference therein to "Aerocell Structures, Inc., an
Arkansas corporation, Triad International Maintenance Corporation, a Delaware
corporation, Aircraft Interior Design, Inc., a Florida corporation, TIMCO Engine
Center, Inc., a Delaware corporation, TIMCO Aviation Services, Inc., a Delaware
corporation," and to substitute in lieu thereof the following:
"TMAS/ASI, Inc., an Arkansas corporation formerly known as Aerocell
Structures, Inc., Triad International Maintenance Corporation, a
Delaware corporation, Aircraft Interior Design, Inc., a Florida
corporation, TIMCO Engine Center, Inc., a Delaware corporation, TIMCO
Aviation Services, Inc., a Delaware corporation, and Xxxxx
Manufacturing
2
Company, Inc., a California corporation (each, a `Borrower' and,
collectively, the `Borrowers')"
1.2 Section 1.01 of the Credit Agreement is hereby amended as
follows:
(a) The following definition of "Aero Consigned
Inventory" is added in proper alphabetical order:
"Aero Consigned Inventory" shall mean
Inventory of TIMCO listed on Exhibit A to the Fourth Amendment
(i) which has been delivered to Aero Technologies, LLC, a
Florida limited liability company ("Aero"), on consignment
pursuant to a consignment agreement between Aero and TIMCO, in
form and substance satisfactory to the Agent, (ii) which is
located at all times at Aero's facility at 0000 Xxxxxxxxx 00xx
Xxxxxx, Xxxxx, Xxxxxxx 00000 , (iii) which has a book value
not to exceed $750,000 at any time, (iv) which is the subject
of a valid and enforceable consignee waiver executed by Aero,
in form and substance satisfactory to the Agent, (v) with
respect to which the Agent has received a file-stamped UCC
financing statement from the Secretary of State of Florida
describing such Inventory and naming Aero, as
Debtor-Consignee, TIMCO, as Secured Party-Consignor and the
Agent, as Assignee and (vi) with respect to which all
creditors of Aero purporting to have a Lien on such Inventory
have disclaimed any interest therein pursuant to an agreement
in form and substance satisfactory to the Agent and, if
requested by the Agent, provided to the Agent file-stamped
copies of UCC partial release statements evidencing such
disclaimer.
(b) The definition of "Borrowers" is amended and restated
in its entirety to read as follows:
"Borrower" and "Borrowers" are defined in
the preamble to this Agreement.
(c) The definition of "Borrowing Base" is amended (i) to
add "and Xxxxx" immediately following the reference to "TIMCO" in
clause (iii) thereof; and (ii) to amend and restate clause (xii)
thereof to read as follows:
"(xii) an amount equal to the sum of (A) (I) $1,000,000,
provided, that such amount shall increase to $2,000,000 as of
May 30, 2003 if the Agent has not received Designated
Prepayments of at least $3,050,000 arising from fundings under
the LJH Note on or before May 30, 2003 or (II) zero, if the
Agent has received (x) Designated Prepayments of at least
$6,050,000 arising from fundings under the LJH Note on and
after the Fourth Amendment Effective Date, (y) the Fourth
Amendment Appraisals and (z) a Borrowing Base Certificate
reflecting any revised advance rates required by the Agent
after completing its review of the Fourth Amendment
Appraisals, plus (B) if the Covington, Kentucky Sale has
occurred, the Net Cash Proceeds of Sale resulting therefrom;"
3
(d) The following definition of "Covington, Kentucky
Sale" is added in proper alphabetical order:
"Covington, Kentucky Sale" shall mean the
sale by Xxxxx-Xxxxx of the real property in Covington,
Kentucky described on Exhibit B to the Fourth Amendment, for a
cash purchase price sufficient to result in Net Cash Proceeds
of Sale of not less than $450,000 and otherwise on terms and
conditions satisfactory to the Agent.
(e) The definition of "Eligible Inventory" is amended (i)
to add ", is Aero Consigned Inventory (but only for the period ending
45 days after the Fourth Amendment Effective Date)" immediately
following the reference to "United States" in clause (ii) thereof; (ii)
to delete in its entirety the period (".") at the end of clause (7)
thereof and to substitute a semi-colon (";") in lieu thereof; and (iii)
to add the following proviso to the entire definition of Eligible
Inventory immediately following clause (7):
"provided, however, that in the case of Inventory of Xxxxx or
Inventory of any Borrower located at the Goodyear Facility
(including, without limitation, the Inventory acquired by LJH,
Ltd. from Aviation Management Systems, Inc. and sold by LJH,
Ltd. to TIMCO on the Fourth Amendment Effective Date), such
Inventory shall not constitute Eligible Inventory until the
Agent's receipt of (w) the landlord waivers required to be
delivered by the Fourth Amendment, (x) Designated Prepayments
of not less than $6,050,000 arising from fundings under the
LJH Note on and after the Fourth Amendment Effective Date, (y)
the Fourth Amendment Appraisals and (z) a Borrowing Base
Certificate reflecting any revised advance rates required by
the Agent after completing its review of the Fourth Amendment
Appraisals.
(f) The definition of "Eligible Receivables" is amended
as follows:
(i) to amend and restate the parenthetical
phrase in clause (vi) thereof in its entirety to read as
follows:
"(unless the account debtor is a debtor-in-possession
in a Chapter 11 case and has available
debtor-in-possession financing from sources and under
terms acceptable to the Agent and the Receivable is
entitled to priority under Section 507 of the
Bankruptcy Code as an administrative expense allowed
under Section 503(b) of the Bankruptcy Code)"
(ii) to delete in its entirety the period (".")
at the end of clause (xx) thereof and to substitute "; or" in
lieu thereof; and
(iii) to add the following as new clause (xxi)
thereof:
"(xxi) it is originated by, or owing to,
Xxxxx and, at such time, the Agent has not received
Designated Prepayments of at least $6,050,000
4
arising from fundings under the LJH Note on and after
the Fourth Amendment Effective Date.
(g) The following definition of "Engine Center" is added
in proper alphabetical order:
"Engine Center" shall mean TIMCO Engine
Center, a Delaware corporation.
(h) The following definition of "Fourth Amendment" is
added in proper alphabetical order:
"Fourth Amendment" shall mean Amendment No.
4, Consent and Limited Waiver dated as of May 14, 2003 to
Fifth Amended and Restated Credit Agreement dated as of July
12, 2002 among the Borrowers, the Guarantors, the Agent and
the Lenders.
(i) The following definition of "Fourth Amendment
Appraisals" is added in proper alphabetical order:
"Fourth Amendment Appraisals" shall mean the
appraisals of each Borrower's and each Guarantor's Inventory
and Equipment obtained by the Agent in connection with the
Fourth Amendment, in form and substance satisfactory to the
Agent.
(j) The following definition of "Fourth Amendment
Effective Date" is added in proper alphabetical order:
"Fourth Amendment Effective Date" shall mean
the "Amendment Effective Date" under (and as defined in) the
Fourth Amendment.
(k) The following definition of "Goodyear Facility" is
added in proper alphabetical order:
"Goodyear Facility" shall mean TIMCO's
facility located on the real property known as Hangars 18 and
52 and additional land located at the Phoenix Goodyear Airport
in Goodyear, Arizona which real property is subleased from
LJH, Ltd.
(l) The definition of "Keepwell Agreement" is deleted in
its entirety.
(m) The definition of "LJH Intercreditor Agreement" is
amended and restated in its entirety to read as follows:
"LJH Intercreditor Agreement" shall mean
that certain Amended and Restated Intercreditor Agreement
dated as of the Fourth Amendment
5
Effective Date to which the Agent, Citicorp USA, Inc., Bank of
America, N.A., and LJH, Ltd. are parties, acknowledged by the
Parent.
(n) The definition of "LJH Note" is amended and restated
in its entirety to read as follows:
"LJH Note" shall mean that certain Term
Promissory Note in the original principal amount of $7,350,000
dated the Fourth Amendment Effective Date executed by the
Parent in favor of LJH, Ltd., together with all increases
thereon or additional notes issued in respect of (i) after the
Agent's receipt and review of the Fourth Amendment Appraisals
with respect to the Inventory acquired by LJH, Ltd. from
Aviation Management Systems, Inc. and sold by LJH, Ltd. to
TIMCO on the Fourth Amendment Effective Date, an increase in
the purchase price for such Inventory in an amount not to
exceed the lesser of (A) the Fair Market Value of such
Inventory less $50,000 and (B) $900,000 or (ii) accrued
interest on such Term Promissory Note and on such additional
notes (all of which shall be payable in kind but not in cash),
in each case the obligations under which are subordinated in
right of payment to the Obligations pursuant to the LJH
Intercreditor Agreement, together with the side letter dated
the Fourth Amendment Effective Date between the Parent, TIMCO
and LJH, Ltd. with respect to the increases in the principal
amount described in clause (ii) above.
(o) The definition of "LJH Note Documents" is added in
proper alphabetical order:
"LJH Note Documents" shall mean the LJH
Note, the guaranty agreement executed by the Borrowers and the
Guarantors (other than the Parent) with respect thereto, the
Shareholder Security Agreement and any other agreements,
documents and instruments executed in connection with any of
the foregoing.
(p) The definition of "Loan Documents" is amended to
delete the reference therein to "the Keepwell Agreement,".
(q) The definition of "PIK Subordinated Debt" is amended
and restated in its entirety to read as follows:
"PIK Subordinated Debt" means Indebtedness
evidenced by (i) the Junior Subordinated Notes, (ii) the 8%
Senior Subordinated Convertible PIK Notes due 2006 issued by
the Parent under that certain Indenture dated as of February
28, 2002 and (iii) the LJH Note.
(r) The definition of "Shareholder Security Agreement" is
amended and restated in its entirety to read as follows:
"Shareholder Security Agreement" means that
certain Amended and Restated Security Agreement dated as of
the Fourth Amendment Effective
6
Date to which Xxx X. Xxxxxxx and LJH, Ltd. (as secured
parties) and the Borrowers and Guarantors (as grantors) are
parties.
(s) The definition of "Shareholder Subrogation Claims" is
amended and restated in its entirety to read as follows:
"Shareholder Subrogation Claims" means those
claims against the Borrowers and Guarantors, if any, of Xxx X.
Xxxxxxx and LJH, Ltd. arising in the event such Persons are
subrogated to the rights of Bank of America, N.A. with respect
to Indebtedness evidenced by the BofA Note by virtue of the
performance of their obligations under the Shareholder
Guarantees.
(t) The definition of "Tangible Net Worth" is amended and
restated in its entirety to read as follows:
"Tangible Net Worth" means the amount
calculated as (i) the consolidated net worth of the Parent and
its Subsidiaries minus (ii) the consolidated intangibles of
the Parent and its Subsidiaries including, without limitation,
goodwill, trademarks, tradenames, copyrights, patents, patent
applications, licenses and rights in any thereof and other
items treated as intangibles in accordance with GAAP. For
purposes of determination of Tangible Net Worth, (i) the PIK
Subordinated Debt shall be deemed to be equity so long as no
interest with respect thereto has been paid in cash and (ii)
no effect shall be given to Inventory write-downs taken in
Fiscal Year 2002, provided that the aggregate amount of such
write-downs shall not exceed $8,584,000.
(u) The definition of "TIMCO Engine" is deleted in its
entirety.
(v) The definition of "United Receivables" is deleted in
its entirety.
1.3 Section 2.03(d) of the Credit Agreement is hereby amended to
delete each reference therein to "LJH Note" in its entirety and to substitute in
lieu thereof a reference to "LJH Note Documents".
1.4 Section 4.01(b) of the Credit Agreement is hereby amended as
follows:
(a) to add the following proviso immediately before the
period (".") at the end of subsection (ix)(A) thereof:
"; provided, however, that in the case of the
Designated Prepayment made with (x) the Net Cash
Proceeds of Issuance of Indebtedness arising from
fundings under the LJH Note on and after the Fourth
Amendment Effective Date and (y) the Net Cash
Proceeds of Sale arising from the Covington, Kentucky
Sale, such Designated Prepayment shall be allocated
and applied first to reduce the amount, if any, by
which the outstanding principal amount of the
Revolving Credit Obligations exceeds the Borrowing
Base at the time of receipt of such Designated
Prepayments by application to repayment of the
Revolving Loans then outstanding, second
7
to the outstanding principal balance of the Revolving
Loans until paid in full, third to the outstanding
principal balance of the Term Loan until paid in
full, fourth to the Letter of Credit Obligations (or,
to the extent such Letter of Credit Obligations are
contingent, deposited in the Cash Collateral Account
to provide Cash Collateral in respect of such Letter
of Credit Obligations)"
(b) to delete subsection (x) thereof in its entirety.
1.5 Section 7.01(a)(i) of the Credit Agreement is hereby amended
to delete the first sentence therein in its entirety and to substitute in lieu
thereof the following two sentences:
"Each of Distribution Xxxxx-Xxxxx, TIMCO, Whitehall, Manufacturing,
Leasing, Property Management, Engine Center, TIMCO Engineered Systems
and Parent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and of 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. Hydroscience is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas and of 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."
1.6 Section 7.01(b)(iv) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
"(iv) Each of the BofA Documents, the TROL Documents and the
LJH Note Documents to which any Borrower or any Guarantor is a party is
in full force and effect. No material term or condition of any BofA
Document has been amended, modified or waived from the terms and
conditions contained therein as delivered to the Agent, without the
prior written consent of the Requisite Lenders and no default or breach
of any covenant thereunder by any party thereto exists. No material
term or condition of any LJH Note Document has been amended, modified
or waived from the terms and conditions contained therein as delivered
to the Agent, without the prior written consent of the Requisite
Lenders (other than increases in the principal amount of the LJH Note
as contemplated by the definition of "LJH Note") and no default or
breach of any covenant thereunder by any party thereto exists. Since
the Effective Date, no amendment or other modification of any TROL
Document has been effected which would have the effect of shortening
the tenor of the obligations thereunder, increasing the pricing
associated with such obligations (other than due to Transaction Costs
otherwise permitted under the terms of this Agreement), accelerating
the scheduled payments due thereunder, or modifying the prepayment
requirements thereunder without the prior written consent of the
Requisite Lenders and no default or breach of any covenant thereunder
by any party thereto has occurred and is continuing without cure or
waiver."
1.7 Section 7.01(d)(ii) of the Credit Agreement is hereby amended
to delete the reference therein to "LJH Note" in its entirety and to substitute
in lieu thereof a reference to "LJH Note Documents".
8
1.8 Section 8.01(a)(B) of the Credit Agreement is hereby amended
to delete the following phrase immediately prior to the period at the end
thereof:
", together with a calculation in reasonable detail of the amount of
the `Xxxxx Xxxx Shortfall' (as defined in the Keepwell Agreement) for
such month and a reconciliation of such amount with the financial
statements delivered pursuant to this Section 8.01(a) for such month
and, in the case of such financial statements for October 2002, a
statement of the transaction costs associated with the acquisition of
Xxxxx"
1.9 Section 8.04(iii) of the Credit Agreement is hereby amended to
delete the reference therein to "$3,000,000 (exclusive of the Borrowing Base
reserve in effect pursuant to clause (xii) of the definition of `Borrowing
Base'" in its entirety and to substitute in lieu thereof "$2,000,000 plus the
amount of such cash payment to be made".
1.10 Section 8.13 of the Credit Agreement is hereby amended as
follows:
(a) to delete in its entirety the following parenthetical
phrase therein: "(including, without limitation, all additional or
substitute notes delivered due to the making of payments under the
Keepwell Agreement as described in the definition of "LJH Note")"; and
(b) to delete each reference therein to "LJH Note" in its
entirety and to substitute in lieu thereof a reference to "LJH Note
Documents".
1.11 Section 10.01(c) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Indebtedness (i) under the LJH Note Documents
(provided, that no payments in respect of the LJH Note Documents shall
be made except as expressly permitted by the LJH Intercreditor
Agreement), (ii) under the Junior Subordinated Notes, (iii) in respect
of non-cash interest under the PIK Subordinated Debt and (iv) with
respect to Shareholder Subrogation Claims, in each case whether
directly or by Accommodation Obligation"
1.12 Section 10.02(e) of the Credit Agreement is hereby amended to
insert the following phrase at the beginning thereof: "(i) the Covington,
Kentucky Sale, provided, that (A) the Borrower shall not make any request
pursuant to Section 4.01(b)(i) to use any portion of the Net Cash Proceeds of
Sale arising from such sale for working capital purposes in lieu of making a
prepayment and (B) no Event of Default or Potential Event of Default shall then
have occurred and be continuing; and (ii)".
1.13 Section 10.03(e) of the Credit Agreement is hereby amended to
delete in its entirety the phrase therein "on the Effective Date" and to
substitute in lieu thereof "on or prior to the Fourth Amendment Effective Date".
1.14 Section 10.14(c) of the Credit Agreement is hereby amended to
delete the reference therein to "LJH Note" in its entirety and to substitute in
lieu thereof a reference to "LJH Note Documents".
9
1.15 Section 11.01 of the Credit Agreement is hereby amended to
amend and restate each row of text under the headings "Determination Date",
"Applicable Period" and "Minimum Amount" for Determination Dates in 2003 to read
as follows:
March 31, 2003 One Fiscal Quarter period then ending $ 1,700,000
June 30, 2003 Two Fiscal Quarter period then ending $ 5,100,000
September 30, 2003 Three Fiscal Quarter period then ending $ 8,100,000
December 31, 2003 Four Fiscal Quarter period then ending $10,100,000
1.16 Section 11.03 of the Credit Agreement is hereby amended to
amend and restate each row of text under the headings "Determination Date",
"Applicable Period" and "Minimum Ratio" for Determination Dates in 2003 to read
as follows:
March 31, 2003 One Fiscal Quarter period then ending 1.1 to 1.0
June 30, 2003 Two Fiscal Quarter period then ending 1.1 to 1.0
September 30, 2003 Three Fiscal Quarter period then ending 1.1 to 1.0
December 31, 2003 Four Fiscal Quarter period then ending 1.1 to 1.0
1.17 Section 12.01 of the Credit Agreement is hereby amended as
follows:
(a) Section 12.01(e)(ii) is amended to delete in its
entirety the reference therein to "or any TROL Document";
(b) Section 12.01(p) of the Credit Agreement is amended
and restated in its entirety to read as follows:
"(p) LJH Note Documents. At any time, for
any reason, any holder of any Indebtedness evidenced by the
LJH Note Documents shall initiate any action contrary to the
terms of the LJH Intercreditor Agreement or raise any defense
to any of the terms thereof."
(c) Subclause (A) of the last paragraph of Section 12.01
is amended and restated in its entirety to read as follows:
"(A) no Event of Default shall be deemed to have occurred due
solely to the occurrence of any breach, default or event of
default, or any other condition under any TROL Document,
unless the any of the same causes or results in the
acceleration, mandatory redemption or other required
repurchase of any Indebtedness arising under the TROL
Documents (whether such acceleration, mandatory redemption or
other required repurchase occurs with or without notice
10
from any holder(s) of such Indebtedness or any representative
of such holder(s)) and"
1.18 Schedule 1.01.3 is hereby amended and restated in its entirety
with the schedule attached hereto as Exhibit C attached hereto and made a part
hereof.
SECTION 2. Consents; Limited Waivers; Post-Closing Deliveries.
2.1 Upon the Amendment Effective Date, the Requisite Lenders
hereby consent to (i) the LJH Note Documents, in substantially the forms
attached to the LJH Intercreditor Agreement referred to in clause (ii) below and
the cancellation of the LJH Note (as defined in the Credit Agreement prior to
being redefined herein); (ii) the amendment and restatement of the LJH
Intercreditor Agreement, in substantially the form of Exhibit D attached hereto
and made a part hereof; (iii) TIMCO's sublease of the Goodyear Facility from
LJH, Ltd. pursuant to a sublease in substantially the form of Exhibit E-1
attached hereto and made a part hereof, provided, that (A) all amounts required
to be paid by TIMCO under such sublease shall not exceed amounts payable by LJH,
Ltd. under its lease with the City of Phoenix, Arizona or in respect of
reimbursements for improvements to the Goodyear Facility made by LJH, Ltd. in an
amount not to exceed $100,000 (such reimbursements to be paid in 36 equal
monthly installments), a true and complete copy of which is attached hereto as
Exhibit E-2 and (B) LJH, Ltd. and the City of Phoenix shall deliver landlord
waivers with respect to the Goodyear Facility within 30 days (in the case of
LJH, Ltd.) and 60 days (in the case of the City of Phoenix) after the Amendment
Effective Date; (iv) TIMCO's purchase from LJH, Ltd. of Inventory acquired by
LJH, Ltd. from AMS, for a purchase price not to exceed the sum of (A) up to
$50,000 in cash to be paid on the Amendment Effective Date, plus (B) after the
Agent's receipt and review of the Fourth Amendment Appraisals with respect to
such Inventory, an additional amount not to exceed the lesser of (x) the Fair
Market Value of such Inventory less $50,000 and (y) $900,000, which additional
amount shall be paid solely by an increase in the principal amount of the LJH
Note, pursuant to the agreements, documents and instruments delivered, and in
form and substance satisfactory, to the Agent as required by Section 3.1(c)
below (in the case of agreements, documents and instruments delivered on the
Amendment Effective Date) or Section 8.13 of the Credit Agreement (in the case
of amendments to the LJH Note delivered thereafter); and (v) the termination of
the Keepwell Agreement.
2.2 Upon the Amendment Effective Date, the Requisite Lenders
hereby waive their rights and remedies with respect to (and solely with respect
to) the following Events of Default under the Credit Agreement (the "Specified
Events of Default"): (i) the Parent failed to comply with one or more of the
financial covenants tested as of December 31, 2002 under Article XI of the
Credit Agreement; (ii) the Parent made a payment in respect of its obligations
under the Subordinated Note Documents on February 18, 2003 without having the
minimum Revolving Credit Availability required under Section 12.01(o) of the
Credit Agreement; (iii) the Events of Default arising under Section 12.01(e)(ii)
of the Credit Agreement in respect of (A) one or more financial covenant "Events
of Default" under Section 28.4 of the TROL Lease as of December 31, 2002, (B)
the failure of Parent to timely deliver the financial statements dated as of
December 31, 2002 and to deliver an Unqualified Report (as defined below) in
each case as required by Section 28.1.1(c) of the TROL Lease and (C) the
Parent's failure to give notice to the applicable parties under the TROL
Documents as required by Section 17.1(q) of the TROL Lease (the "TROL
Defaults"); (iv) the Parent and Xxxxx failed to obtain a landlord waiver from
11
each landlord for any premises on which Xxxxx maintains at least $250,000 of
Inventory as of the Amendment Effective Date within 60 days after the Second
Amendment Effective Date as required by Section 2.2 of the Second Amendment,
Consent and Waiver dated as of October 11, 2002, provided, that such landlord
waivers shall be delivered within 30 days after the Amendment Effective Date;
(v) the Event of Default arising under Section 12.01(p) of the Credit Agreement
(prior to being amended hereby) due to the failure by LJH, Ltd. to make payments
aggregating not more than $59,000 under the Keepwell Agreement on a timely
basis, provided, that such default shall be deemed cured by the funding of the
initial installment of the LJH Note on the Amendment Effective Date; (vi) the
Parent and the Borrowers failed to deliver a report from KPMG Peat Marwick LLP
on the consolidated Financial Statements of the Parent and its Subsidiaries for
Fiscal Year 2002 not containing a "going concern" qualification (an "Unqualified
Report") as required by Section 8.01(c) of the Credit Agreement; and (vii) the
Parent failed to notify the Agent and the Lenders of one or more of the
aforementioned Events of Default, as required by Section 8.04 of the Credit
Agreement. Each of the parties hereto acknowledges and agrees that the letter
agreement dated February 28, 2003 purporting to waive the Specified Events of
Default described in clauses (i), (ii), (iii) and (vii) above did not become
effective in accordance with its terms and is hereby deemed to be null and void.
2.3 The failure to comply with any of the provisions of this
Section 2 shall constitute an automatic Event of Default under the Credit
Agreement (without the benefit of any grace period).
SECTION 3. Conditions Precedent. This Amendment shall become effective
as of the date hereof (the "Amendment Effective Date") upon the satisfaction of
the following conditions precedent:
3.1 The Agent shall have received:
(a) a facsimile or original executed copy of this
Amendment executed by the Parent, each Borrower, the Guarantors, the
Requisite Lenders and the Agent;
(b) corporate resolutions of the Parent, Borrowers and
Guarantors authorizing the execution and delivery of this Amendment and
all instruments and documents required to be executed and delivered in
connection herewith;
(c) the Loan Documents, the documents pertaining to the
LJH Transactions and other agreements, documents, instruments,
certificates and legal opinions, in each case as set forth on Exhibit F
attached hereto and made a part hereof, in form and substance
satisfactory to the Agent and the Requisite Lenders;
(d) all agreements, documents and instruments delivered
to the obligees under the TROL Documents as a result of the LJH
Transactions or this Amendment, including without limitation a waiver
of the TROL Defaults, in form and substance satisfactory to the Agent
and the Requisite Lenders;
(e) all agreements, documents and instruments delivered
to the obligees under the BofA Note and guaranties executed and
delivered in connection therewith as a result
12
of the LJH Transactions or this Amendment, in form and substance
satisfactory to the Agent and the Requisite Lenders;
(f) the annual report, financial statements, report of
KPMG Peat Marwick LLP and other reports for Fiscal Year 2002 required
to be delivered pursuant to Section 8.01(c) of the Credit Agreement
(after giving effect to the waiver with respect thereto in Section
2.2(vi) above);
(g) receipt by the Agent, for the ratable benefit of the
Lenders, of at least $2,050,000 in proceeds from the initial funding
under the LJH Note as a mandatory prepayment of the Revolving Loans
under Section 4.01(b) of the Credit Agreement (as amended hereby);
(h) payment of the expenses of the Agent and certain of
the Lenders in the amounts identified on Exhibit G attached hereto and
made part hereof; and
(i) such other agreements, documents, instruments,
certificates and opinions as the Agent may reasonably request.
3.2 After giving effect to this Amendment and the waiver of the
TROL Defaults,
(a) no "Potential Event of Default" or "Event of Default" shall
have occurred and be continuing under the terms of the Credit
Agreement; and
(b) all of the representations and warranties in this Amendment
shall be true and correct in all material respects.
SECTION 4. Representations and Warranties; Reaffirmation.
4.1 Parent and each of the Borrowers hereby represents and
warrants that:
(a) This Amendment and the Credit Agreement as previously
executed and delivered and as amended and supplemented hereby
constitute legal, valid and binding obligations of the Parent and the
Borrowers and are enforceable against the Parent and the Borrowers in
accordance with their terms.
(b) After giving effect to this Amendment and the waiver
of the TROL Defaults required as a condition hereof, no Event of
Default or Potential Event of Default exists or would result from any
of the transactions contemplated by this Amendment.
(c) No event of default or default has occurred and is
continuing under the terms of (a) any of the TROL Documents (after
giving effect to the waiver of the TROL Defaults required as a
condition hereof), (b) under any of the agreements and documents
executed with respect to the Senior Subordinated Notes or under which
the Senior Subordinated Notes have been issued, (c) under any of the
agreements and documents executed with respect to the BofA Note, (d)
under any of the agreements and documents executed with respect to the
Junior Subordinated Notes or under which the Junior Subordinated Notes
have been issued or (e) under the LJH Note.
13
(d) None of the holders of the Senior Subordinated Notes,
the trustee under the Indenture under which the Senior Subordinated
Notes were issued, the holders of the Junior Subordinated Notes, the
trustee under the Indenture under which the Junior Subordinated Notes
were issued, the obligees under the TROL Documents (or Person acting on
any such obligee's behalf), the obligees under the BofA Note or any of
the agreements and documents executed in connection therewith, the
holder of the LJH Note or any other agent or lender under any credit
facility for the Borrowers or Guarantors shall have commenced the
exercise of any remedies with respect to any default or event of
default with respect thereto.
(e) As of the funding of the initial installment of the
LJH Note on the Amendment Effective Date, the aggregate amount of
payments due under the Keepwell Agreement does not exceed $59,000.
4.2 Parent, each of the Borrowers and each of the Guarantors
hereby reaffirm all covenants, representations and warranties made by it, and
all Obligations owing by it, pursuant to the Credit Agreement (to the extent the
same are not amended hereby), the Notes and the other Loan Documents to which it
is a party 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 5. Reference to and Effect on the Credit Agreement.
5.1 Upon the effectiveness of this Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import shall mean and be a reference to the Credit Agreement, as
amended hereby, each reference to the Credit Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.
5.2 Except as expressly set forth herein, neither this Amendment,
nor any actions taken by any Lenders or the Agent shall be deemed or construed
as an amendment of the Loan Documents, or a waiver with respect to any Potential
Event of Default or Event of Default, whether now existing or occurring after
the date hereof, known or unknown, under the Loan Documents. Except as
specifically amended or agreed above, each of the Parent, the Borrowers and the
Guarantors hereby agree that the Credit Agreement, the Notes and all other Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed.
5.3 The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of any Lender or
Issuing Bank or the Agent under the Credit Agreement, the Notes or any of the
other Loan Documents, nor constitute a waiver of any provision contained
therein, except as specifically set forth herein.
5.4 No course of dealing on the part of the Agent or any of the
Lenders, or any such party's officers or representatives, nor any failure or
delay in the exercise of any right by any
14
Lender or the Agent shall operate as a waiver thereof, and any single or partial
exercise of any such right shall not preclude any later exercise of such right.
Further, any failure by any Lender or the Agent at any time to require strict
performance by the Parent, any Borrower or any of their respective Subsidiaries
of any provision of the Loan Documents shall not affect any right of any Lender
or the Agent thereafter to demand strict compliance and performance thereunder.
Without limiting the generality of the foregoing, nothing in this letter
agreement shall obligate the Agent or any Lender to agree to any similar waiver
of any Default or Event of Default in the future.
SECTION 6. Release.
6.1 The Borrowers and the Guarantors acknowledge that they have no
existing defense, counterclaim, offset, cross-complaint, claim or demand of any
kind or nature whatsoever that can be asserted to reduce or eliminate all or any
part of the Obligations. In consideration for the execution of this Amendment,
each Borrower and each Guarantor hereby releases and forever discharges the
Agent and the other Holders and Citicorp USA, Inc., as holder of the
Supplemental Term Loan Warrant, and all of their respective officers, directors,
employees, Affiliates and agents (collectively, the "Released Parties") from any
and all actions, causes of action, debts, dues, claims, demands, liabilities and
obligations of every kind and nature, both in law and in equity, known or
unknown, whether heretofore or now existing, liquidated or unliquidated, matured
or unmatured, fixed or contingent (collectively, the "Release Claims"), which
might be asserted against any of the Released Parties. This Release applies to
all matters arising out of or relating to any of the Loan Documents, the
Supplemental Term Loan Warrant, any Property of any Borrower or any Guarantor,
any of the LJH Transactions or any Obligations, commitment letters with respect
to other loan facilities, and the lending and borrowing relationships, and (to
the extent any Release Claims relating to such deposit relationships are now
known to any Borrower or any Guarantor or any of their Subsidiaries) the deposit
relationships, between Parent or its Subsidiaries, and Citibank, N.A., the Agent
and the Holders, including the administration, collateralization and funding
thereof. Each of Parent and each of its Subsidiaries further agrees not to bring
any action in any judicial, administrative or other proceeding against the
Released Parties, or any of them, alleging any such Release Claim or otherwise
arising in connection with any such Release Claim. Without limiting the
generality of the foregoing, Parent and its Subsidiaries release any claims they
may have for any overpayment of interest or Rent prior to the date hereof, and
agree that any such claim shall be deemed a Release Claim for the purpose of
this Amendment.
6.2 It is the intent of the parties that except as otherwise set
forth herein, the foregoing release shall be effective as a full and final
accord and satisfaction of all claims hereby released and each of Parent and
each of its Subsidiaries hereby agrees, represents and warrants that the matters
released herein are not limited to matters which are known or disclosed. In this
connection, each of Parent and each of its Subsidiaries hereby agrees,
represents and warrants that it realizes and acknowledges that factual matters
now existing and unknown to it may have given or may hereafter give rise to
Release Claims, which are presently unknown, unsuspected, unliquidated,
unmatured and/or contingent, and it further agrees, represents and warrants that
this release has been negotiated and agreed upon in view of that realization.
Nevertheless, Parent and its Subsidiaries hereby intend to release, discharge
and acquit the Released Parties of and from any such unknown, unsuspected,
unliquidated, unmatured and/or contingent Release Claims,
15
which are in any way set forth in or related to the matters identified above in
this Section 6. Parent and its Subsidiaries hereby explicitly waive the benefits
of any common law or statutory rule with respect to the release of such Release
Claims.
6.3 The acceptance and delivery of this Amendment by the Agent and
the Requisite Lenders on behalf of the Released Parties shall not be deemed or
construed as an admission of liability with respect to the Release Claims or
otherwise by the Released Parties, or any of them, and the Released Parties
hereby expressly deny liability of any nature whatsoever arising from or related
to the subject of the release contained in this Section 6.
6.4 Each of Parent and each of its Subsidiaries hereby agrees,
represents and warrants that: (i) such party has not voluntarily, by operation
of law or otherwise, assigned, conveyed, transferred or encumbered, either
directly or indirectly, in whole or in part, any right to or interest in any of
the Release Claims purported to be released by this Section 6; (ii) such party
has had advice of counsel of its own choosing in negotiations for and the
preparation of this Amendment; and (iii) such party is fully aware of the effect
of releases such as that contained in this Section 6.
SECTION 7. 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 8. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 9. Miscellaneous. This Amendment is a Loan Document. 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.
[Remainder of Page Intentionally Left Blank]
16
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.
Agent and Lenders:
CITICORP USA, INC., SALOMON BROTHERS HOLDING
as Agent and as a Lender and as holder COMPANY INC.
of the Supplemental Term Loan Warrant
By: /s/ By: /s/
----------------------------- -----------------------------
Xxxxx X. Xxxxxxx Name:
Vice President Title:
UPS CAPITAL CORPORATION ARK CLO 2000-1, LIMITED
By: /s/ By: Patriarch Partners, LLC,
----------------------------- its Collateral Manager
Name:
Title:
By: /s/
-----------------------------
Name:
Title:
Signature Page 1
Borrowers and Guarantors:
TMAS/ASI, INC. (formerly known as TRIAD INTERNATIONAL MAINTENANCE
Aerocell Structures, Inc.) CORPORATION
By: /s/ By: /s/
------------------------------ ------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officer Chief Financial Officer
AIRCRAFT INTERIOR DESIGN, INC. TIMCO ENGINE CENTER, INC.
By: /s/ By: /s/
------------------------------ ------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officer Chief Financial Officer
TIMCO AVIATION SERVICES, INC. AVIATION SALES DISTRIBUTION
SERVICES COMPANY
By: /s/ By: /s/
------------------------------ ------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officr Chief Financial Officer
AVS/M-2, INC. WHITEHALL CORPORATION
By: /s/ By: /s/
------------------------------ ------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officer Chief Financial Officer
AVS/M-3, INC. AVS/CAI, INC.
By: /s/ By: /s/
------------------------------ ------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officer Chief Financial Officer
Signature Page 2
AVIATION SALES LEASING COMPANY AVIATION SALES PROPERTY MANAGEMENT
CORPORATION
By: /s/ By: /s/
------------------------------- -------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officer Chief Financial Officer
AVS/M-1, INC. AVSRE, L.P.
By: Aviation Sales Property Management
Corp. as General Partner
By: /s/ By: /s/
------------------------------- -------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officer Chief Financial Officer
HYDROSCIENCE, INC. TIMCO ENGINEERED SYSTEMS, INC.
By: /s/ By: /s/
------------------------------- -------------------------------
C. Xxxxxx Xxxxxxxx C. Xxxxxx Xxxxxxxx
Vice President and Vice President and
Chief Financial Officer Chief Financial Officer
XXXXX MANUFACTURING COMPANY, INC.
By: /s/
------------------------------
C. Xxxxxx Xxxxxxxx
Vice President and
Chief Financial Officer
Signature Page 3
