AMENDMENT NO. 3 TO FINANCING AGREEMENT
Exhibit 10.2
AMENDMENT NO. 3 TO
FINANCING AGREEMENT
FINANCING AGREEMENT
THIS AMENDMENT NO. 3 TO FINANCING AGREEMENT (“Amendment”), dated this 28th day of
September, 2005, made by and among
AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation (“AID”), XXXXX MANUFACTURING COMPANY,
INC., a California corporation (“Xxxxx”), TIMCO AVIATION SERVICES, INC., a Delaware corporation
(“Parent”), TIMCO ENGINE CENTER, INC., a Delaware corporation (“Engine”), TIMCO ENGINEERED SYSTEMS,
INC., a Delaware corporation (“Engineered Systems”), and TRIAD INTERNATIONAL MAINTENANCE
CORPORATION, a Delaware corporation (“TIMCO”; AID, Xxxxx, Parent, Engine, Engineered Systems and
TIMCO being collectively called the “Borrowers” and individually, a “Borrower”);
AVIATION SALES DISTRIBUTION SERVICES COMPANY, a Delaware corporation (“Distribution
Services”), AVIATION SALES LEASING COMPANY, a Delaware corporation (“Leasing”), AVIATION SALES
PROPERTY MANAGEMENT CORP., a Delaware corporation (“Property Management”), AVS/CAI, INC., a Florida
corporation (“AVS/CAI”), AVS/M-1, INC., a Delaware corporation (“AVS/M-1”), AVS/M-2, INC., a
Delaware corporation (“AVS/M-2”), AVS/M-3, INC., an Arizona corporation (“AVS/M-3”), AVSRE, L.P., a
Delaware limited partnership (“AVSRE”), HYDROSCIENCE, INC., a Texas corporation (“Hydroscience”),
TMAS/ASI, INC., an Arkansas corporation (“TMAS/ASI”), and WHITEHALL CORPORATION, a Delaware
corporation (“Whitehall”; Distribution Services, Leasing, Property Management, AVS/CAI, AVS/M-1,
AVS/M-2, AVS/M-3, AVSRE, Hydroscience, TMAS/ASI and Whitehall being collectively called the
“Guarantors” and, individually, a “Guarantor”; and the Borrowers and the Guarantors being
collectively called the “Companies” and, individually, a “Company”);
THE CIT GROUP/BUSINESS CREDIT, INC., in its capacity as collateral and administrative agent
for the Lenders (“Agent”); and
THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation, and XXXXX FARGO FOOTHILL, LLC, a
California limited liability company (collectively, the “Lenders” and, individually, a “Lender”)
which amends that certain Financing Agreement, dated April 5, 2004, as amended by Amendment No. 1
thereto, dated July 20, 2004, and by Amendment No. 2 thereto, dated April 8, 2005 (the Financing
Agreement, as amended, modified, supplemented or restated from time to time, being hereinafter
referred to as the “Financing Agreement”), among the Borrowers, the Guarantors, the Agent and the
Lenders. All capitalized terms used herein without definition shall have the meanings ascribed to
such terms in the Financing Agreement.
RECITALS
A. Pursuant to the Financing Agreement, upon the terms and subject to the conditions contained
therein, the Lenders have agreed to make loans and extend credit to and for the benefit of the
Borrowers secured by the Collateral.
B. The Borrowers have requested that the Agent and the Lenders amend Section 7.10(c) of the
Financing Agreement to change the required covenant for the four fiscal quarters ending September
30, 2005.
C. The Agent and the Lenders have agreed with such request and, to accomplish the foregoing,
the Borrowers, the Agent and the Lenders have agreed to make and execute this Amendment and the
Guarantors have agreed to grant their consent to such amendment to the Financing Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly acknowledged, each
Borrower, each Guarantor, the Agent and each Lender hereby agree as follows:
ARTICLE I
AMENDMENT TO FINANCING AGREEMENT
1.1 Financial Covenant. Effective on the date of the execution of this Amendment by
each of the parties hereto, Section 7.10(c) of the Financing Agreement is amended in its entirety
to read as follows:
| “(c) | Maintain a ratio of (i) the sum of Indebtedness as of such date minus PIK Subordinated Debt as of such date to (ii) EBITDA for the four (4) Fiscal Quarters then ending of not more than the ratio set forth below for the applicable period: |
| Period | Ratio | |
| |
||
Fiscal Quarter ending September 30, 2005
|
6.0 to 1.0 | |
Fiscal Quarter ending December 31, 2005
|
4.5 to 1.0 | |
Fiscal Quarter ending March 31, 2006
|
4.3 to 1.0 | |
Fiscal Quarter ending June 30, 2006
|
4.3 to 1.0 | |
Fiscal Quarter ending September 30, 2006
|
4.3 to 1.0 | |
Fiscal Quarter ending December 31, 2006
|
4.3 to 1.0 | |
Fiscal Quarter ending March 31, 2007
|
4.0 to 1.0 | |
Fiscal Quarter ending June 30, 2007
|
4.0 to 1.0 |
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| Period | Ratio | |
| |
||
Fiscal Quarter ending September 30, 2007
|
4.0 to 1.0 | |
Fiscal Quarter ending December 31, 2007
|
4.0 to 1.0 |
1.2 Amendment Fee. Effective on the execution of this Amendment by the Companies, the
Financing Agreement is amended by adding the following new Section 8.20 to the Financing Agreement
as follows:
”8.20 To induce the Agent and the Lenders to enter into the Amendment No. 3 to
this Financing Agreement, the Companies shall pay to the Agent, for the benefit of
the Lenders, an Amendment Fee in the amount of $40,000, which shall be fully earned
and nonrefundable upon execution of the Amendment No. 3 to this Financing Agreement
by the Companies.”
ARTICLE II
MODIFICATION OF LOAN DOCUMENTS;
CONSENT BY GUARANTORS
CONSENT BY GUARANTORS
2.1 Modification of Loan Documents. The Financing Agreement and each of the other
Loan Documents are amended to provide that any reference therein to the Financing Agreement or any
of the other Loan Documents shall mean, unless otherwise specifically provided, the Financing
Agreement and the other Loan Documents as amended hereby, and as further amended, restated,
supplemented or modified from time to time.
2.2 Consent by Guarantors. Each Guarantor hereby consents to, and agrees to be bound
by, (a) each of the amendments to the Financing Agreement and the other Loan Documents as set forth
herein, and (b) the other agreements set forth herein.
ARTICLE III
REPRESENTATIONS, WARRANTIES
AND ACKNOWLEDGMENTS
AND ACKNOWLEDGMENTS
Each Borrower and each Guarantor hereby represents and warrants to the Agent and the Lenders
that, as of the date hereof:
3.1 Compliance with the Financing Agreement and Other Loan Documents. The Companies
are in compliance with all of the terms and provisions set forth in the Financing Agreement and in
the other Loan Documents to be observed or performed by any Company.
3.2 Representations in Financing Agreement and other Loan Documents. Each Borrower
and each Guarantor represents and warrants that their respective representations and
warranties set forth in the Financing Agreement and the other Loan Documents to which such Borrower
or such Guarantor is a party are true and correct in all material respects except for changes
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in the nature of such Borrower’s or such Guarantor’s business or operations which have occurred after
the Closing Date so long as the Agent or the Required Lenders as required by the Financing
Agreement has or have consented to such changes, or such changes are not prohibited by the terms of
the Financing Agreement.
3.3 No Default or Event of Default. No Default or Event of Default exists.
3.4 Outstanding Obligations. Each Company hereby acknowledges and agrees that, as of
the close of business on September 20, 2005, the principal balance of the Obligations outstanding
under the Financing Agreement is in the sum of $25,391,203.29, consisting of unpaid Revolving Loans
in the amount of $8,721,295.92, an unpaid balance on the Term Loan in the amount of $5,236,364.00,
and $11,433,543.37 in Letter of Credit Obligations and Letter of Credit Guaranties are outstanding,
and that all of such Obligations outstanding are owed to the Agent and the Lenders without any
offset, deduction, defense or counterclaim of any nature.
ARTICLE IV
GENERAL
4.1 Full Force and Effect. As expressly amended hereby, the Financing Agreement shall
continue in full force and effect in accordance with the provisions thereof. As used in the
Financing Agreement, “hereinafter”, “hereto”, “hereof” or words of similar import, shall, unless
the context otherwise requires, mean the Financing Agreement as amended by this Amendment.
4.2 Applicable Law. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENT
AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NORTH CAROLINA.
4.3 Counterparts. This Amendment may be executed in one or more counterparts, each of
which shall constitute an original, but all of which when taken together shall constitute but one
and the same instrument.
4.4 Expenses. The Borrowers shall reimburse the Agent and the Lenders for all
reasonable legal fees and expenses, and other fees and expenses incurred by the Agent and the
Lenders in connection with the preparation, negotiation, execution and delivery of this Amendment
and all other agreements and documents or contemplated hereby.
4.5 Headings. The headings in this Amendment are for the purpose of reference only
and shall not affect the construction of this Amendment.
4.6 Waiver of Jury Trial. TO THE FULLEST EXTENT PROVIDED BY APPLICABLE LAW,
EACH COMPANY, THE AGENT AND EACH LENDER EACH HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREUNDER. EACH COMPANY HEREBY IRREVOCABLY
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WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
SERVICE OF PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED. IN NO EVENT WILL THE
AGENT OR ANY LENDER BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
UNDER SEAL on the date first above written.
| AIRCRAFT INTERIOR DESIGN, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| XXXXX MANUFACTURING COMPANY, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| TIMCO AVIATION SERVICES, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| TIMCO ENGINE CENTER, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| TIMCO ENGINEERED SYSTEMS, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
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| TRIAD INTERNATIONAL MAINTENANCE CORPORATION | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| AVIATION SALES DISTRIBUTION SERVICES COMPANY | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| AVIATION SALES LEASING COMPANY | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| AVIATION SALES PROPERTY MANAGEMENT CORP. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| AVS/CAI, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| AVS/M-1, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
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| AVS/M-2, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| AVS/M-3, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| AVSRE, L.P. | ||||||||
| By: | Aviation Sales Property Management Corp., its general partner |
|||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||||
| Title: Vice President, Treasurer | ||||||||
| HYDROSCIENCE, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| TMAS/ASI, INC. | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
| WHITEHALL CORPORATION | ||||||
| By: | /s/ Xxxxx Xxxxxx | (SEAL) | ||||
| Title: Vice President, Treasurer | ||||||
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| THE CIT GROUP/BUSINESS CREDIT, INC., as Agent |
||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | (SEAL) | ||||
| Title: Vice President | ||||||
| THE CIT GROUP/BUSINESS CREDIT, INC., as a Lender |
||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | (SEAL) | ||||
| Title: Vice President | ||||||
| XXXXX FARGO FOOTHILL, LLC, as a Lender | ||||||
| By: | /s/ Xxxxxx Xxxx | (SEAL) | ||||
| Title: Vice President | ||||||
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