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EXHIBIT 10.1
SECOND AMENDMENT
This SECOND AMENDMENT dated as of May 4, 2001 (this "Amendment), is
made by and among (a) AVIALL, INC, a Delaware corporation (the "Borrower"), (b)
FLEET NATIONAL BANK (formerly known as BankBoston, N.A.), a national banking
association, as administrative agent (in such capacity the "Agent") for the
Banks referred to below and as Issuing Bank, (c) BANK OF AMERICA, N.A., as
documentation agent, and (d) FLEET NATIONAL BANK, BANK OF AMERICA, N.A. and the
other lending institutions from time to time parties to the Credit Agreement
referred to below (collectively, the "Banks"). Terms not otherwise defined
herein that are defined in the Credit Agreement referred to below shall have the
respective meanings herein assigned to such terms in the Credit Agreement.
WHEREAS, the Borrower, the Banks and the Agent are parties to that
certain Revolving Credit and Term Loan Agreement, dated as of December 23, 1999,
as amended by the First Amendment, dated as of October 2, 2000 (as further
amended, modified, supplemented or restated and in effect from time to time, the
"Credit Agreement");
WHEREAS, the Borrower has requested that the Banks amend certain terms
of the Credit Agreement in order, among other things, to increase the amount of
Revolving Credit Loans available to the Borrower by the aggregate amount of
$30,000,000 in connection with the Borrower's assumption of certain parts
distribution and servicing agreements; and
WHEREAS, the Banks have agreed, subject to the terms and conditions set
forth in this Amendment, to amend the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement and in this Amendment and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. Subject to the
satisfaction of the conditions set forth in Section 4 below, the Credit
Agreement is hereby amended as follows:
SECTION 1.1. AMENDMENTS TO DEFINITIONS.
(a) The definition of "Agent" set forth in Section 1.1 of the
Credit Agreement is hereby amended by deleting the words "BankBoston,
N.A." and replacing them with the words "Fleet National Bank". All
references in the Credit Agreement and the other Loan Documents to the
"Agent" shall hereafter be deemed references to Fleet National Bank in
its capacity as administrative agent for the Banks.
(b) The definition of "Applicable Margin" set forth in Section
1.1 of the Credit Agreement is hereby amended by deleting the table set
forth in such definition in its entirety and by replacing it with the
following new table:
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Eurodollar
Total Funded Debt to Base Rate Rate Commitment
Level Pro-Forma EBITDA Loans Loans Fees
----- -------------------- --------- ---------- ----------
I Greater than or equal to
3.00:1.00 1.50% 2.50% 0.50%
II Less than 3.00:1.00 but
greater than or equal to 1.25% 2.25% 0.45%
2.50:1.00
III Less than 2.50:1.00 but
greater than or equal to 1.00% 2.00% 0.35%
2.00:1.00
IV Less than 2.00:1.00 but 0.75% 1.75% 0.30%
greater than or equal to
1.50:1.00
V Less than 1.50:1.00 0.50% 1.50% 0.250%
The definition of "Applicable Margin" is hereby further
amended by deleting the existing clause (a) in the paragraph
immediately following the table in such definition in its entirety and
replacing it with the following new clause (a):
"(a) from the Second Amendment Effective Date until delivery
by the Borrower to the Agent of a Compliance Certificate
pursuant to Section 9.4(c) for the Reference Period ending
December 31, 2001, the Applicable Margin shall be the
Applicable Margin set forth above in Level I, and"
(c) The definition of "BKB" set forth in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety. All references in
the Credit Agreement and the other Loan Documents to "BKB" shall
hereafter be deemed references to Fleet National Bank in its capacity
as a Bank.
(d) The definition of "Borrowing Base" set forth in Section
1.1 of the Credit Agreement is hereby amended by replacing the comma at
the end of clause (c) thereof with a semicolon and by inserting,
immediately after such clause (c), the word "minus", and the following
additional clause:
"(d) from and after June 30, 2002, the then outstanding
principal amount of the Term Loan,"
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(e) The definition of "Fee Letter" set forth in Section 1.1 of
the Credit Agreement is hereby amended by deleting the words "November
23, 1999 among the Borrower, FBRS and the Agent" and replacing them
with the words "April 4, 2001 among the Borrower, Fleet Securities,
Inc. and the Agent".
(f) The definition of "Leverage Ratio" set forth in Section
1.1 of the Credit Agreement is hereby amended by deleting the existing
definition in its entirety and replacing it with the following new
definition:
"Leverage Ratio. As at any date of determination, the
ratio of (a) Total Funded Indebtedness outstanding on such
date to (b) EBITDA for the Reference Period ended on such
date; provided that, for purposes of calculating the Leverage
Ratio only, EBITDA shall be increased by (a) the amount of the
applicable Honeywell Fuel Systems Credit for each of the
Reference Periods ending on March 31, 2001, June 30, 2001,
September 30, 2001 and December 31, 2001, and (b) the amount
of the applicable Honeywell Airline Systems Credit for each of
the Reference Periods ending on June 30, 2001, September 30,
2001, December 31, 2001 and March 31, 2002.
(g) The definition of "Total Commitment" set forth in Section
1.1 of the Credit Agreement is hereby amended by deleting the final
sentence thereof in its entirety and by replacing it with the following
new sentence definition:
"On the Second Amendment Effective Date, the Total Commitment
is $120,000,000."
(h) Section 1.1 of the Credit Agreement is hereby further
amended by inserting, in the appropriate place in the alphabetical
order, the following new definitions:
"Airline Systems Amount. The expected annual
incremental EBITDA of the Borrower and its Subsidiaries
arising from the distribution services arrangements under the
Honeywell Airline Systems Contract, as previously described to
the Agent and as such amount is set forth in the Compliance
Certificate delivered to the Agent pursuant to Section 9.4(c)
for the Reference Period ended June 30, 2001; provided that in
no event shall the Airline Systems Amount exceed $ 6,000,000."
"Airline Systems Start Date. The date on which the
Borrower commenced material sales of products and services
related to the Honeywell Airline Systems Contract, as set
forth in the Compliance Certificate delivered to the Agent
pursuant to Section 9.4(c) for the Reference Period ended June
30, 2001; provided that in no event shall the Airline Systems
Start Date be later than June 30, 2001."
"Fleet. Fleet National Bank, a national banking
association, in its capacity as a Bank."
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"Fuel Systems Amount. The expected annual incremental
EBITDA of the Borrower and its Subsidiaries arising from the
distribution services arrangements under the Honeywell 250
Fuel Systems Contract, as previously described to the Agent
and as such amount is set forth in the Compliance Certificate
delivered to the Agent pursuant to Section 9.4(c) for the
Reference Period ended March 31, 2001; provided that in no
event shall the Fuel Systems Amount exceed $4,000,000."
"Fuel Systems Start Date. The date on which the
Borrower commenced material sales of products and services
related to the Honeywell 250 Fuel Systems Contract, as set
forth in the Compliance Certificate delivered to the Agent
pursuant to Section 9.4(c) for the Reference Period ended
March 31, 2001; provided that in no event shall the Airline
Systems Start Date be later than March 31, 2001."
"Honeywell 250 Fuel Systems Contract. Means that
certain Agreement, dated December 28, 2000, by and between
Honeywell International Inc. ("Honeywell") and Services, in
the form delivered to the Agent on or before the Second
Amendment Effective Date, whereby, among other things,
Services agrees to distribute certain hydrochemical controls
products manufactured by Honeywell for use on the Xxxxxxx
Rolls Royce 250 Series Engine and the Honeywell LT101 Series
engines."
"Honeywell Airline Systems Contract. Means that
certain Distributor Agreement, dated as of March 23, 2001, by
and between Honeywell and Services in the form delivered to
the Agent on or before the Second Amendment Effective Date,
whereby, among other things, Services agrees to distribute
certain products manufactured by Honeywell for use on various
commercial air transport and regional engine and aircraft
applications."
"Honeywell Airline Systems Credit. For each of the
Reference Periods ended June 30, 2001, September 30, 2001,
December 31, 2001 and March 31, 2002, the amount equal to the
Airline Systems Amount multiplied by a fraction the numerator
of which is equal to (a) twelve (12) minus (b) the number of
months elapsed from the Airline Systems Start Date to the end
of the applicable Reference Period, and the denominator of
which is equal to twelve (12).
"Honeywell Fuel Systems Credit. For each of the
Reference Periods ended March 31, 2001, June 30, 2001,
September 30, 2001 and December 31, 2001, the amount equal to
the Fuel Systems Amount multiplied by a fraction the numerator
of which is equal to (a) twelve (12) minus (b) the number of
months elapsed from the Fuel Systems Start Date to the end of
the applicable Reference Period, and the denominator of which
is equal to twelve (12).
"Second Amendment Effective Date. May 4, 2001."
SECTION 1.2 AMENDMENT TO SECTION 2.4 OF THE CREDIT AGREEMENT.
Section 2.4 of the Credit Agreement is hereby amended by deleting the
phrase "dated as of the Closing Date and" from the first sentence of
such Section.
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SECTION 1.3 AMENDMENT TO SECTION 8.17 OF THE CREDIT AGREEMENT.
Section 8.17 of the Credit Agreement is hereby amended by inserting the
following new sentence immediately after the end of the first sentence
of such Section:
"The proceeds of Revolving Credit Loans made on or
after the Second Amendment Effective Date shall be used to
support increased working capital requirements of the Borrower
in connection with the assumption of distribution services
under the Honeywell 250 Fuel Systems Contract and the
Honeywell Airline Systems Contract and for other working
capital and general corporate purposes."
SECTION 1.4 AMENDMENT TO SECTION 9.12 OF THE CREDIT AGREEMENT.
Section 9.12 of the Credit Agreement is hereby amended by inserting the
following new sentence immediately after the end of the first sentence
of such Section:
"The Borrower will use the proceeds of Revolving
Credit Loans made on or after the Second Amendment Effective
Date to support increased working capital requirements of the
Borrower in connection with the assumption of distribution
services under the Honeywell 250 Fuel Systems Contract and the
Honeywell Airline Systems Contract, for payment of transaction
fees and expenses, for Capital Expenditures and for working
capital and general corporate purposes."
SECTION 1.5 AMENDMENTS TO SCHEDULE 1 AND EXHIBITS TO THE
CREDIT AGREEMENT.
(a) Schedule 1 to the Credit Agreement is hereby amended by
replacing it with the new Schedule 1 attached hereto. All references in
the Credit Agreement and the other Loan Documents to "Schedule 1" shall
hereafter be deemed references to the new Schedule 1 attached hereto.
(b) Exhibit A to the Credit Agreement is hereby amended by
replacing it with the new Exhibit A attached hereto. All references
herein and in the Credit Agreement and the other Loan Documents to
"Exhibit A" or to the "Borrowing Base Report" shall hereafter be deemed
references to the new Exhibit A attached hereto.
(c) Exhibit F to the Credit Agreement is hereby amended by
replacing it with the new Exhibit F attached hereto. All references
herein and in the Credit Agreement and the other Loan Documents to
"Exhibit F" or to a "Revolving Credit Note" shall hereafter be deemed
references to the Amended and Restated Revolving Credit Notes executed
in substantially the form of the new Exhibit F attached hereto.
(d) Exhibit I to the Credit Agreement is hereby amended by
replacing it with the new Exhibit I attached hereto. All references
herein and in the Credit Agreement and the other Loan Documents to
"Exhibit I" or to the "Compliance Certificate" shall hereafter be
deemed references to the new Exhibit I attached hereto.
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SECTION 2. INCREASE OF TOTAL COMMITMENT. The Banks hereby consent to
the increase in the Total Commitment from $90,000,000 to $120,000,000, such
increase allocated to each Bank such that, after giving effect to such increase,
each Bank's Commitment shall be that set forth opposite its name on the attached
Schedule 1 and evidenced by an amended and restated Revolving Credit Note dated
as of the Second Amendment Effective Date.
SECTION 3. GUARANTORS' CONSENT. Each of the Guarantors hereby consents
to the amendments to the Credit Agreement set forth in this Amendment, and each
confirms its obligation to the Agent and the Banks under its Guaranty and agrees
that its guaranty of the Obligations under the Credit Agreement shall extend to
and include the Credit Agreement as amended by this Amendment.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS; NO DEFAULT;
AUTHORIZATION. The Borrower hereby represents, warrants and covenants to the
Agent and the Banks as follows:
(a) each of the representations and warranties of the Borrower
contained in the Credit Agreement was true in all material respects as
of the date as of which it was made, and except to the extent of
changes resulting from transactions contemplated or permitted by the
Credit Agreement and the other Loan Documents and changes occurring in
the ordinary course of business that singly or in the aggregate are not
materially adverse or to the extent that such representations and
warranties relate expressly to an earlier date, such representations
and warranties also are true in all material respects as of the date of
this Amendment, and no Default or Event of Default has occurred and is
continuing as of the date of this Amendment after giving effect to this
Amendment;
(b) this Amendment has been duly authorized, executed and
delivered by each of the Borrowers and Guarantors and is in full force
and effect; and
(c) upon the execution and delivery of this Amendment by the
respective parties hereto, this Amendment shall constitute the legal,
valid and binding obligation of the Borrowers and the Guarantors,
enforceable in accordance with its terms, except that the
enforceability thereof may be subject to any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights
generally.
SECTION 5. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment shall be subject to the satisfaction of the following conditions
precedent:
(a) This Amendment shall have been duly executed and delivered
by the Borrower, each Guarantor and each of the Banks.
(b) The Agent shall have received amended and restated
Revolving Credit Notes in the amounts and in favor of the Banks set
forth on the attached Schedule 1, duly executed and delivered by the
Borrower and in full force and effect.
(c) The Agent shall have received copies, certified as being
true, correct and complete by an officer of the Borrower, of the duly
executed Honeywell 250 Fuel
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Systems Contract and the duly executed Honeywell Airline Systems
Contract, in each case in form and substance satisfactory to the Agent.
The Agent shall have received evidence satisfactory to it that all
conditions to the effectiveness of each such Contract shall have been
satisfied on or prior to the Second Amendment Effective Date.
(d) The Borrower shall have delivered to the Agent a
Compliance Certificate in the form of Exhibit I attached hereto for the
Reference Period ended March 31, 2001 demonstrating compliance with the
covenants contained in Section 11 of the Credit Agreement, as amended
by this Amendment.
(e) The Borrower shall have paid all fees in such amounts and
at such times as provided therefor in the Fee Letter.
(f) The Agent shall have received a copy of each Assignment
and Acceptance (if any) executed in connection with this Amendment,
each of which shall have been duly executed by the assigning Bank, the
assignee and consented to by the Borrower.
(g) The Agent shall have received an opinion of counsel to the
Borrowers and the Guarantors addressed to the Banks and the Agent in
form and substance reasonably satisfactory to the Agent.
(h) The Agent shall have received all such UCC-1 financing
statements, UCC-3 amendments and other instruments and agreements as
the Agent may request in order to confirm that the Security Documents
shall continue to be effective to create in favor of the Agent a legal,
valid and enforceable first priority security interest and lien upon
the Collateral other than the Mortgaged Property. The Borrower shall
have paid all recording fees, taxes and other charges in connection
with all such instruments and agreements.
SECTION 6. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement and all documents, instruments and agreements related thereto
are hereby ratified and confirmed in all respects. All references in the Credit
Agreement or any related agreement or instrument shall hereafter refer to the
Credit Agreement as amended hereby.
SECTION 7. NO IMPLIED WAIVER. Except as expressly provided herein,
nothing contained herein shall constitute a waiver of, impair or otherwise
affect any Obligations, any other obligations of any of the Borrowers or
Guarantors or any right of the Agent or any Bank consequent thereon.
SECTION 8. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
SECTION 9. GOVERNING LAW. THIS AMENDMENT SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW).
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IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as a sealed instrument as of the date first above written.
Borrower: AVIALL, INC.
By:
-----------------------------------------------
Name:
Title:
Guarantors: AVIALL SERVICES, INC.
By:
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Name:
Title:
AVIALL PRODUCT REPAIR
SERVICES, INC.
By:
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Name:
Title:
INVENTORY LOCATOR SERVICE, LLC
(SUCCESSOR BY MERGER TO INVENTORY LOCATOR SERVICE,
INC.)
By:
-----------------------------------------------
Name:
Title:
9
Agent and Banks: FLEET NATIONAL BANK
(f/k/a BankBoston, N.A.),
individually, as Administrative Agent
and as Issuing Bank
By:
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Name:
Title:
00
XXXX XX XXXXXXX, X.X., individually and
as Documentation Agent
By:
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Name:
Title:
00
XXXXXXXX XXXX XX XXXXXX
By:
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Name:
Title:
By:
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Name:
Title:
12
BANK OF SCOTLAND
By:
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Name:
Title:
13
COMERICA BANK
By:
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Name:
Title:
14
COMPASS BANK
By:
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Name:
Title:
15
FIRSTAR BANK (f/k/a)
MERCANTILE BANK
NATIONAL ASSOCIATION
By:
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Name:
Title:
16
NATIONAL CITY BANK
By:
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Name:
Title:
17
SANWA BANK CALIFORNIA
By:
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Name:
Title:
18
TRANSAMERICA BUSINESS
CAPITAL CORPORATION
By:
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Name:
Title:
19
ALLFIRST BANK
By:
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Name:
Title:
