EXHIBIT 10.1
AMENDMENT NO. 1
Dated as of August 14, 2000
to
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 31, 2000
This Amendment No. 1 (the "Amendment") dated as of August 14,
2000 is entered into among AVIATION SALES DISTRIBUTION SERVICES COMPANY, a
Delaware corporation ("Distribution"), AEROCELL STRUCTURES, INC., an Arkansas
corporation ("Aerocell"), AVS/XXXXX-XXXXX MACHINE COMPANY, a Delaware
corporation ("Xxxxx-Xxxxx"), WHITEHALL CORPORATION, a Delaware corporation
("Whitehall"), TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation ("TIMCO"), APEX MANUFACTURING, INC., an Arizona corporation
("Apex"), CARIBE AVIATION, INC., a Florida corporation ("Caribe"), AIRCRAFT
INTERIOR DESIGN, INC., a Florida corporation ("Design"), AVIATION SALES LEASING
COMPANY, a Delaware corporation ("Leasing"), TIMCO ENGINE CENTER, INC., a
Delaware corporation ("TIMCO Engine"), AVIATION SALES BEARINGS COMPANY, a
Delaware corporation ("Bearings"), and AVIATION SALES COMPANY, a Delaware
corporation ("Parent"), and the "Lenders" (as defined in the Credit Agreement
identified below) a party hereto. Capitalized terms used herein without
definition are used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, Distribution, Aerocell, Xxxxx-Xxxxx, Whitehall,
TIMCO, Apex, Caribe, Design,, Leasing, TIMCO Engine and Bearings, as Borrowers,
Parent, Citicorp USA, Inc., as Agent, and certain financial institutions, as
Lenders and Issuing Banks, are parties to that certain Fourth Amended and
Restated Credit Agreement dated as of May 31, 2000 (the "Credit Agreement");
WHEREAS, the Borrowers have requested the amendment of certain
terms of the Credit Agreement as they pertain to the calculation of the
Borrowing Base, financial covenants, sales of Property identified on Schedule
1.01.1, and election of members of the Boards of Directors of the Borrowers and
Guarantors and the Lenders a party hereto have agreed to the same on the terms
and conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Amendments to the Credit Agreement;
Consents/Approvals.
A. Effective as of June 25, 2000, subject to the satisfaction
of the conditions precedent set forth in Section 2 hereof, the Credit Agreement
is hereby amended as follows:
1.1 Section 1.01 is amended to (i) delete the definitions of
"Performance Level 1", "Performance Level 2" and "Performance Level 3" in their
entirety, (ii) delete the definitions of "Base Rate Margin", "Eurodollar Rate
Margin", "Excess Borrowing Amount", "Interim Liquidity Amount", and "Overadvance
Amount", in their entirety and substitute the following therefor:
"Base Rate Margin" means three percent (3.00%) per annum.
"Eurodollar Rate Margin" means four and one-half percent
(4.50%) per annum.
"Excess Borrowing Amount" means $35,405,000.
"Interim Liquidity Amount" means $9,595,000.
"Overadvance Amount" means, as of any date of determination,
the sum of (i) the Interim Liquidity Amount plus (ii) the
Excess Borrowing Amount, as such sum is reduced from time to
time pursuant to Section 2.04.
and (iii) add the following definitions thereto:
"Asset Sale Adjustment Date" means the earlier to occur of (i)
September 30, 2000 and (ii) the date on which Net Cash
Proceeds of Sale are received with respect to the sale of the
Capital Stock or assets of Manufacturing, Xxxxx-Xxxxx and
Apex.
"Bearings Sale Date" means the date on which Net Cash Proceeds
of Sale are received with respect to the sale of the Capital
Stock or assets of Bearings.
1.2 To effect the requested amendment of the Overadvance
Amount component of Borrowing Base, Section 2.04 is amended to delete the
provisions thereof in their entirety and substitute the following therefor:
2.04. Reduction of Overadvance Amount. The Overadvance Amount
shall be reduced (either in cash or by adjustment of the
Borrowing Base) in installments on the dates and by the
amounts set forth below which reductions shall be applied
proportionately to each Lender's Pro Rata Share of the
Overadvance Amount in accordance with its Pro Rata Share of
such installment:
Reduction Date Reduction Amount
-------------- ----------------
June 30, 2000 $ 7,500,000
September 30, 2000 $27,600,000
October 31, 2000 $ 4,950,000
November 30, 2000 $ 4,950,000
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Notwithstanding the foregoing, in the event:
(a) Net Cash Proceeds of Sale are received from the sale of
Airbus Series A300B4 aircraft before the Asset Sale Adjustment
Date, no concurrent reduction in the Overadvance Amount shall
be required in connection with such sale(s) until the Asset
Sale Adjustment Date;
(b) Net Cash Proceeds of Sale are received from the sale of
Airbus Series A300B4 aircraft after the date on which Net Cash
Proceeds of Sale are received with respect to the sale of the
Capital Stock or assets of Manufacturing, Xxxxx-Xxxxx and
Apex, the Overadvance Amount shall be required to be reduced
by the balance of the Net Cash Proceeds of Sale received from
each such sale on the date received in accordance with the
terms of such sale after giving effect to the required
application of such Net Cash Proceeds of Sale to reduction of
the Borrowing Base occasioned by such sale;
(c) the Capital Stock or assets of Manufacturing, Xxxxx-Xxxxx
and Apex are sold on or before September 30, 2000, the
above-referenced Reduction Amount for September 30, 2000 will
be adjusted to provide for application of $22,500,000 of the
Net Cash Proceeds of Sale received from such sale to reduction
of the Overadvance Amount as of the Asset Sale Adjustment
Date; and
(d) Net Cash Proceeds of Sale are received in connection with
the sale of Bearings prior to October 31, 2000, the
Overadvance Amount shall be required to be reduced on the
Bearings Sale Date by the balance of the Net Cash Proceeds of
Sale received from each such sale after giving effect to the
required application of such Net Cash Proceeds of Sale to
reduction of the Borrowing Base occasioned by such sale.
1.3 Schedule 1.01.1 is amended to delete the provisions
thereof in their entirety and substitute those set forth on Schedule 1.01.1
attached hereto and made a part hereof.
1.4 Section 4.01(b)(vii)(D) is amended to delete the
provisions thereof in their entirety and substitute the following therefor:
(D) Notwithstanding the foregoing, from and after (1) January
1, 2001, the Revolving Credit Commitments shall not exceed
$200,000,000 and (2) July 1, 2001, the Revolving Credit
Commitments shall not exceed $175,000,000 and, in each
instance, the Borrowers shall immediately and without notice
or demand of any kind make repayments of the Loans to the
extent necessary to reduce the outstanding principal amount of
the Revolving Credit Obligations to an amount not to exceed
the amount of the Revolving Credit Commitments as of such
date.
1.5 Section 5.03(b)(i) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
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(i) Borrowers may only select (A) during the period commencing
on the Effective Date and ending on August 14, 2000, as to a
particular Borrowing of Eurodollar Rate Loans, a Eurodollar
Interest Period of one (1), three (3), six (6), or, if
available to all Lenders, nine (9) or twelve (12) months in
duration and (B) from and after August 14, 2000, as to a
particular Borrowing of Eurodollar Rate Loans, a Eurodollar
Interest Period of one (1) month's duration;
1.6 Section 5.04 is deleted in its entirety.
1.7 Section 8.01 is amended to add the following as clause (g)
at the end thereof:
(g) TIMCO Payables Reports. On Wednesday of each week, a
report of the accounts payable of each of Triad International
Maintenance Corporation, Timco Engine Center, Inc. and TIMCO
Engineered Systems, Inc., in each instance, including a then
current aging of the same.
1.8 Sections 11.01 through 11.07 are amended to delete the
provisions thereof in their entirety and substitute the following therefor:
11.01 Minimum EBITDA. The Parent shall maintain EBITDA,
determined as of the last day of each Fiscal Quarter set forth below for the
period then ending described below, of at least the amount set forth below
opposite such date of determination:
Determination Date Applicable Period Minimum EBITDA
------------------ ----------------- --------------
June 30, 2000 January 1, 2000-- June 30, 2000 $17,000,000
September 30, 2000 January 1, 2000-- September 30, 2000 $20,000,000
December 31, 2000 January 1, 2000-- December 31, 2000 $26,500,000
March 31, 2001 April 1, 2000 - March 31, 2001 $22,000,000
June 30, 2001 July 1, 2000 - June 30, 2001 $33,500,000
September 30, 2001 October 1, 2000 - September 30, 2001 $42,500,000
December 31, 2001 January 1, 2001 - December 31, 2001 $50,000,000
March 31, 2002 April 1, 2001 - March 31, 2002 $57,500,000
June 30, 2002 July 1, 2001 - June 30, 2002 $62,500,000
11.02 Capital Expenditures. The Parent and its Subsidiaries
shall not make Capital Expenditures in the aggregate during any period set forth
below in excess of the amount set forth below opposite such period; (in each
instance, the "Maximum Amount"):
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Determination Date Applicable Period Minimum EBITDA
------------------ ----------------- --------------
June 30, 2000 January 1, 2000-- June 30, 2000 $13,000,000
September 30, 2000 January 1, 2000-- September 30, 2000 $14,000,000
December 31, 2000 January 1, 2000-- December 31, 2000 $16,000,000
March 31, 2001 Four Fiscal Quarter period then ending $10,000,000
June 30, 2001 Four Fiscal Quarter period then ending $10,000,000
September 30, 2001 Four Fiscal Quarter period then ending $10,000,000
December 31, 2001 Four Fiscal Quarter period then ending $10,000,000
March 31, 2002 Four Fiscal Quarter period then ending $10,000,000
June 30, 2002 Four Fiscal Quarter period then ending $10,000,000
provided, however, to the extent the Parent and its Subsidiaries have not made
Capital Expenditures in the amount permitted above for any given period set
forth above, Capital Expenditures in an amount equal to 100% of the Maximum
Amount of such Capital Expenditures permitted but not made in such period may be
made in the immediately next succeeding period in addition to any amounts
permitted above for such succeeding period; provided that to the extent amounts
carried forward from one period to the next succeeding period are not expended
in such period, such surplus may not be carried forward to any other succeeding
period.
11.03 Fixed Charge Coverage Ratio. The Parent shall maintain a
Fixed Charge Coverage Ratio for the Parent and its Subsidiaries, as determined
as of the last day of each Fiscal Quarter set forth below for the period then
ending described below, of at least the level set forth below opposite such
determination date:
Determination Date Applicable Period Minimum Ratio
------------------ ----------------- -------------
March 31, 2001 Four Fiscal Quarter period then ending 0.90 to 1.00
June 30, 2001 Four Fiscal Quarter period then ending 0.90 to 1.00
September 30, 2001 Four Fiscal Quarter period then ending 1.15 to 1.00
December 31, 2001 Four Fiscal Quarter period then ending 1.50 to 1.00
March 31, 2002 Four Fiscal Quarter period then ending 1.50 to 1.00
June 30, 2002 Four Fiscal Quarter period then ending 1.75 to 1.00
11.04 Working Capital. Working Capital shall be (a)
$325,000,000 at June 30, 2000, (b) $300,000,000 during the period September 30,
2000 through June 30, 2001, and (c) $275,000,000 at September 30, 2001 and at
all times thereafter during the term of this Agreement, in each instance,
determined at the end of each Fiscal Quarter commencing with the Fiscal Quarter
ending June 30, 2000.
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11.05 Minimum Tangible Net Worth. The Parent shall maintain a
Tangible Net Worth of at least the amount set forth below for the Fiscal Quarter
ending during the period set forth below opposite such amount.
Fiscal Quarter Ending Minimum Tangible Net Worth
--------------------- --------------------------
June 30, 2000 $132,500,000
September 30, 2000 $119,000,000
December 31, 2000 $109,000,000
March 31, 2001 $109,000,000
June 30, 2001 $114,000,000
September 30, 2001 $118,000,000
December 31, 2001 $124,000,000
March 31, 2002 $133,000,000
June 30, 2002 $142,000,000
11.06 Leverage Ratio. The Parent shall maintain a ratio of
Funded Debt of the Parent to EBITDA of the Parent, determined as of the end of
each Fiscal Quarter ending on or after June 30, 2001, for the
four-fiscal-quarter period then ended, of not more than:
Four Fiscal Quarter Period Ending Maximum Ratio
--------------------------------- -------------
June 30, 2001 10.00 to 1.00
September 30, 2001 8.00 to 1.00
December 31, 2001 6.00 to 1.00
March 31, 2002 5.50 to 1.00
June 30, 2002 5.00 to 1.00
11.07 Ratio of Senior Debt to EBITDA. The Parent shall
maintain a Ratio of Senior Debt to EBITDA, determined as of the end of each
Fiscal Quarter of the Parent ending on or after December 31, 2000, for the
four-Fiscal-Quarter period then ended, of not more than:
Four Fiscal Quarter Period Ending Maximum Ratio
--------------------------------- -------------
December 31, 2000 7.00 to 1.00
March 31, 2001 7.75 to 1.00
June 30, 2001 5.50 to 1.00
September 30, 2001 4.00 to 1.00
December 31, 2001 3.00 to 1.00
March 31, 2002 2.50 to 1.00
June 30, 2002 2.25 to 1.00
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1.9 Section 12.01 is amended to (i) delete the provisions of
clause (o) thereof in their entirety and substitute the following therefor:
(o) Boards of Directors. One outside director reasonably
acceptable to the Agent, in addition to those Persons acting
as members of the Board of Directors of Parent as of the
Effective Date, shall not have been elected to serve as a
member of the Parent's Board of Directors by September 30,
2000; or one outside director reasonably acceptable to the
Agent, in addition to those Persons acting as members of the
Board of Directors of Parent as of the Effective Date and the
aforesaid additional outside director, shall not have been
elected to serve as a member of the Parent's Board of
Directors by December 31, 2000; or two directors in addition
to Xxxx X. Xxxxx shall not have been elected to serve as
members of the respective Boards of Directors of each Borrower
and other Guarantor (with the exception of Finance Affiliate)
by September 30, 2000. For purposes of the foregoing, the term
"outside director" shall not include any Person (i) having any
material direct or indirect financial interest in or with
respect to Parent or any of its Subsidiaries or having,
directly or beneficially, voting control of five percent
(5.0%) or more of the issued and outstanding Capital Stock of
Parent or (ii) representing any Person described by the terms
of clause (i) above.
and (ii) add the following provision as clause (p) thereof:
(p) Sale of Property. Occurrence of an event set forth on
Schedule 12.01-P attached hereto and made a part hereof.
B. Effective as of August 14, 2000, subject to the Agent's
receipt of the consent referenced in Section 2.1(e) below on or before such
date, the Lenders signatory hereto representing the Requisite Lenders hereby
consent to the amendment of the TROL Documents on the terms and conditions
attached hereto as Exhibit A.
C. The Lenders signatory hereto representing the Requisite
Lenders and the Agent hereby confirm their approval, as required by clause (v)
of the defininition of "EBITDA" in the Credit Agreement, of inclusion of the
items described on Exhibit B attached hereto and made a part hereof in the
calculation (as part of such clause (v)) of EBITDA for the periods referenced on
Exhibit B.
SECTION 2. Conditions Precedent.
2.1 This Amendment shall become effective as of June 25, 2000,
if, and only if (1) the Agent shall have received on or before August 14, 2000:
(a) a facsimile or original executed copy of this Amendment executed by
the Parent, each Borrower, and the Lenders;
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(b) a plan and financial forecast consisting of a balance sheet, income
statement and statement of cash flows by month for the Fiscal Year
ending December 31, 2000, accompanied by a discussion of the underlying
assumptions with respect to each of the business segments referred to
as "Distribution", "Xxxxx Aerospace", "Aerocell", "Caribe", "Airframe
Maintenance/Engine Overhaul", "Apex", "Xxxxx-Xxxxx", and "Leasing"
prepared by Parent and the Borrowers, in form and substance
satisfactory to the Agent and Lenders;
(c) a plan and financial forecast for each of the Fiscal Years ending
December 31, 2001 and December 31, 2002, including forecasted
consolidated balance sheet, income statement, and statement of cash
flow for the Parent and its Subsidiaries for each such Fiscal Year;
(d) projected cash flow statements of Parent and its Subsidiaries, by
week, for the period August 7,2000 - September 29, 2000;
(e) a written consent of the obligee parties to the TROL Documents to
the terms of this Amendment and to the sales of assets identified on
Schedule 1.01.1 in form and substance satisfactory to the Agent;
(f) a waiver of all events of default which exist as of August 14,
2000, if any, under any loan agreement(s) (collectively, the "Norlease
Agreement") among Norlease, Inc., Aviation Sales SPS I, Inc., and
Aviation Sales Company and the rights and remedies of the parties
thereunder arising with respect thereto pursuant to an agreement in
form and substance satisfactory to the Agent;
(g) an opinion of counsel to the Borrowers and Parent with respect to
non-contravention of the TROL Documents and agreements under which the
Senior Subordinated Notes have been issued, this Amendment and the
instruments and documents executed by the Borrowers and Guarantors in
connection herewith;
(h) 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;
(i) from the Borrowers, for the benefit of each Lender executing and
delivering this Amendment to the Agent on or before August 14, 2000, a
fee in consideration of its executing and delivering this Amendment, in
the amount of (i) three-eighths of one percent (0.375%) of such
Lender's Revolving Credit Commitment in effect on August 10, 2000 if
this Amendment is so executed and delivered by such Lender on or before
August 10, 2000 or (ii) one-quarter of one percent (0.25%) of such
Lender's Revolving Credit Commitment in effect on August 10, 2000, if
this Amendment is so executed and delivered by such Lender on or after
August 11, 2000;
(j) from the Borrowers, reimbursement for the expenses of the Agent
identified on Exhibit C attached hereto and made a part hereof; and
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(2) as of August 14, 2000, no "Event of Default" shall have occurred and be
continuing under the terms of the Credit Agreement, TROL Documents, Norlease
Agreement or Indenture under which the Senior Subordinated Notes have been
issued, as supplemented through the date of this Amendment and no "Change of
Control" (as defined in such Indenture) shall have occurred.
SECTION 3. Representations and Warranties; Acknowledgment. The
Borrowers hereby represent and warrant as follows:
3.1 This Amendment and the Credit Agreement as previously
executed and delivered and as amended hereby constitute legal, valid and binding
obligations of the Borrowers and are enforceable against the Borrowers in
accordance with their terms.
3.2 After giving effect to this Amendment, no Event of Default
or Potential Event of Default exists or would result from any of the
transactions contemplated by this Amendment. No event of default or default has
occurred and is continuing under the terms of any of the TROL Documents, under
the terms of the Norlease Agreement, or 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.
3.3 Upon the effectiveness of this Amendment, Parent and each
of the Borrowers hereby reaffirm all covenants, representations and warranties
made by it, respectively, in the Credit Agreement to the extent the same are not
amended hereby and agree that all such covenants, representations and warranties
shall be deemed to have been remade as of the date this Amendment becomes
effective (unless a representation and warranty is stated to be given on and as
of a specific date, in which case such representation and warranty shall be
true, correct and complete as of such date).
SECTION 4. Reference to and Effect on the Credit Agreement.
4.1 Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import shall 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.
4.2 Except as specifically amended or agreed above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
4.3 The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of any
Lender or Issuing Bank or the Agent under the Credit Agreement, the Notes or any
of the other Loan Documents, nor constitute a waiver of any provision contained
therein, except as specifically set forth herein.
SECTION 5. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of
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which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of this Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this Amendment.
SECTION 6. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 7. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
CITICORP USA, INC. XXXXXX FINANCIAL, INC.
as Agent and Lender
__________________________ By__________________________
Name: Name:
Title: Title:
NATIONAL CITY COMMERCIAL
FINANCE, INC.
By____________________________
Name:
Title:
FIRST UNION COMMERCIAL SALOMON BROTHERS HOLDING
CORPORATION COMPANY, INC.
By___________________________ By__________________________
Name: Name:
Title: Title:
IBJ WHITEHALL BUSINESS CREDIT FLEET NATIONAL BANK
CORPORATION
By__________________________ By__________________________
Name: Name:
Title: Title:
00
XXX XXXXXXXXXXXXX XXXX XX XXXXXXXX XXXX XX XXXXXX
MIAMI, N.A. A Canadian Chartered Bank
By_________________________ By_________________________
Xxxxxxx X. Xxxxxxxxx Xxx Xxxxxxxxx
Vice President Vice President
Trade Finance Division
By_________________________
Xxxxxxx X. Xxxxxxxxxxx
Vice President & Manager
FIRSTAR BANK, N.A. CITIZENS BUSINESS CREDIT
COMPANY
By_________________________ By_________________________
Xxxxxx X. Xxxxxxxx Xxxx Xxxxxxxxx
Assistant Vice President Vice President
AMSOUTH BANK PNC BANK NATIONAL ASSOCIATION
By__________________________ By_________________________
Name: Name:
Title: Title:
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AVIATION SALES DISTRIBUTION AEROCELL STRUCTURES, INC.
SERVICES COMPANY
By___________________________ By________________________
Name: Name
Title: Title:
AVS/XXXXX-XXXXX MACHINE COMPANY WHITEHALL CORPORATION
By___________________________ By________________________
Name: Name
Title: Title:
TRIAD INTERNATIONAL MAINTENANCE APEX MANUFACTURING, INC.
CORPORATION
By___________________________ By________________________
Name: Name
Title: Title:
AIRCRAFT INTERIOR DESIGN, INC. CARIBE AVIATION, INC.
By___________________________ By________________________
Name: Name
Title: Title:
AVIATION SALES COMPANY AVIATION SALES LEASING COMPANY
By__________________________ By________________________
Name: Name
Title: Title:
13
TIMCO ENGINE CENTER, INC. AVIATION SALES BEARINGS
COMPANY
By__________________________ By________________________
Name: Name:
Title: Title:
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