EXHIBIT 10.18
CONSENT AND AMENDMENT NO. 3
November 28, 2000
Aviation Sales Company
and Subsidiaries
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Re: Fourth Amended and Restated Credit Agreement dated as of May
31, 2000, as amended (the "Credit Agreement")
Gentlemen:
Reference is made to the Credit Agreement and all capitalized terms
used herein which are defined in the Credit Agreement shall have the meanings
herein as therein assigned.
You have informed the Lenders under the Credit Agreement and Citicorp
USA, Inc., in its capacity as Agent under the Credit Agreement and as holder of
the Supplemental Term Loan Note, of the desire of Aviation Sales Company ("AVS")
and its wholly-owned Subsidiary, Aviation Sales Distribution Services Company
("Distribution") to sell substantially all of Distribution's assets in a series
of transactions which are intended to constitute a single transaction and, in
connection with which:
Joint Venture
(i) AVS and Xxxxxxxxx Industries, Inc. ("Xxxxxxxxx") will organize a
Delaware limited liability company to be known as KAV Inventory, LLC ("KAV") and
each will make an initial contribution in the amount of $500 to the capital of
KAV (such Investment by AVS being referred to as the "AVS/KAV Joint Venture
Capital Investment") in return for a 50% equity interest therein as more
particularly described in that certain Operating Agreement dated as of September
20, 2000, a copy of which is attached hereto as Exhibit A and made a part hereof
(the "Operating Agreement"),
(ii) AVS and Xxxxxxxxx will agree to make, on a pari passu basis,
certain loans to KAV to pay certain fees and expenses of KAV, as more
particularly described in the Operating Agreement (such loans from AVS being
collectively referred to as the "AVS/KAV Joint Venture Loans"), and
(iii) a Letter of Credit will be required to be issued under the Credit
Agreement in the face amount of $8,500,000 naming the agent for lenders to KAV
as beneficiary (the "KAV Letter of Credit") as part of the credit support
required for KAV to be able to obtain certain financing to facilitate its
acquisition of certain of the assets of Distribution as more particularly
described below.
AVS Consent and Amendment
Asset Dispositions
(i) Caribe Aviation, Inc. ("Caribe") will transfer title to the
Inventory identified on Schedule 6.14(a) to the "Inventory Purchase Agreement"
(as defined below), included as part of Exhibit B attached hereto and made a
part hereof, to Distribution and Aerocell Structures, Inc. ("Aerocell") will
transfer title to the Inventory identified on Schedule 6.14(b) to the Inventory
Purchase Agreement included as part of Exhibit B to Distribution, in each
instance to enable Distribution to include the same as part of the Inventory
described in clause (ii) below which is to be sold to KAV under the Inventory
Purchase Agreement (such transfers of Inventory by Caribe and Aerocell to
Distribution being collectively referred to as the "Caribe/Aerocell Inventory
Transfers") and Aviation Sales Leasing Company ("Leasing") will transfer title
to the aircraft engines identified on Exhibit B to Distribution to enable
Distribution to include the same as part of the Inventory described in clause
(ii) below which is to be sold to KAV under the Inventory Purchase Agreement
(such transfer of engines by Leasing to Distribution being referred to as the
"Leasing Engine Transfer"),
(ii) Distribution will sell to KAV pursuant to the terms of that
certain Inventory Purchase Agreement dated as of September 20, 2000, as amended
by a letter agreements dated November 14, 2000, November 17, 2000 and November
28, 2000 (the "Inventory Purchase Agreement") Distribution's inventory,
including, without limitation, the inventory of aircraft engines, aircraft parts
and aircraft engine parts set forth on Schedule 2.1(a) to the Inventory Purchase
Agreement included as part of Exhibit C wherever located and in existence on the
"Closing Date" (as defined in the Inventory Purchase Agreement) and all data,
records and other documentation in any media or medium relating to such
inventory, as more particularly described in the Inventory Purchase Agreement
for a purchase price equal to 89% of the "Adjusted Book Value" of the "Purchased
Inventory", as more particularly described below,
(iii) AVS will grant to KAV, pursuant to the terms of that certain
License Agreement to be executed and delivered on the "Closing Date" (as defined
in the Xxxxxxxxx Purchase Agreement) (the "License Agreement"), a limited right
to use the mark "Aviation Sales" for a limited time and in a limited manner
following such Closing Date,
(iv) Distribution will (a) sell to Xxxxxxxxx, pursuant to the terms of
that certain Asset Purchase Agreement dated as of September 20, 2000, as amended
by a letter agreements dated November 14, 2000, November 17, 2000 and November
28, 2000 (the "Xxxxxxxxx Purchase Agreement") all of Distribution's business,
operations, properties and assets of every kind and description, tangible or
intangible (including, without limitation, the KAV Senior Subordinated Note A
referenced under Purchase Price and Payment Terms below), wherever located on
the "Closing Date" (as defined in the Xxxxxxxxx Purchase Agreement) other than
(1) those assets described on Exhibit D attached hereto and made a part hereof,
(2) the inventory being sold to KAV under the Inventory Purchase Agreement, and
(3) the equipment described on Exhibit E attached hereto and made a part hereof
which is the subject of the equipment lease described in clause (b) below (the
assets described in (1), (2) and (3) being referred to as the "Xxxxxxxxx Sale
Excluded Assets") for a purchase price equal to the book value of such assets on
such Closing Date as more particularly described below, (b) lease to Xxxxxxxxx,
pursuant to the terms of that certain Equipment Lease Agreement and a certain
letter agreement to be dated the "Closing Date" (such Equipment Lease Agreement
and letter agreement being collectively
AVS Consent and Amendment 2
referred to as the "Equipment Lease"), all of Distribution's equipment and (c)
lease to Xxxxxxxxx, pursuant to the terms of a certain Lease and a certain
letter agreement to be dated the "Closing Date" (such Lease and letter agreement
being collectively referred to as the "Xxxxxxxxx Real Property Lease"), certain
parcels of real property located in Pearland, Brazoria County, Texas, including
the land and all buildings, structures and other improvements situated thereon
and property and interests in property attendant thereto, as more particularly
described and defined as the "Leased Premises" in Section 1 of the Xxxxxxxxx
Real Property Lease (the Equipment Lease and Xxxxxxxxx Real Property Lease being
collectively referred to as the "Xxxxxxxxx Fixed Assets Leases"), and
(v) AVS will sublease a portion of the real property located at
Miramar, Florida and the improvements thereon which are the subject of the TROL
Lease, as more particularly described as the "Leased Premises" in that certain
Lease between AVS, as landlord, and Xxxxxxxxx, as tenant, to be dated the
"Closing Date" (the "Miramar Sublease") to Xxxxxxxxx for an initial term of
approximately five (5) years and, in connection therewith, inter alia, (a) the
rental payments thereunder (or a portion thereof) may be paid directly by
Xxxxxxxxx to the the holder of the mortgage on such premises and (b) the letter
of credit support for the transactions under the TROL Documents will be reduced
to $9,000,000.
The sales of assets provided for under the Xxxxxxxxx Purchase Agreement
and the Inventory Purchase Agreement are hereinafter collectively referred to as
the "Distribution Asset Sales". The leases of assets provided for under the
Xxxxxxxxx Fixed Asset Lease (including, without limitation, any purchase of the
subject leased assets on the terms provided therein) are hereinafter referred to
as the "Distribution Asset Lease". The sublease of such "Leased Premises" and
the assignment by AVS of the Miramar Sublease to First Security Bank, N.A., as
owner trustee, and to Bank of America, N.A., as agent for itself and for the
lenders and holders under the TROL Documents, are hereinafter referred to as the
"Miramar Transaction". The assets transferred as contemplated by the
Caribe/Aerocell Inventory Transfers, the Leasing Engine Transfer, and under the
terms of the Xxxxxxxxx Purchase Agreement and the Inventory Purchase Agreement
are hereinafter referred to collectively as the "Transferred Assets".
Purchase Price and Payment Terms
The Caribe/Aerocell Inventory Transfers and Leasing Engine Transfer
will be reflected on the books and records of the respective parties to such
transfers and consideration therefor will be entered at book value.
The purchase price and payment terms thereof for each of the
Distribution Asset Sales are as follows:
(a) The purchase price under the Xxxxxxxxx Purchase Agreement is cash
and assumption of certain liabilities of Distribution and the cash portion
thereof is estimated to be approximately $21,800,000 (subject to adjustment
thereafter as provided in Section 2.6 of the Xxxxxxxxx Purchase Agreement) and
paid by wire transfer of immediately available funds on the Closing Date.
AVS Consent and Amendment 3
(b) The purchase price under the Inventory Purchase Agreement is the
amount equal to 89% of the "Adjusted Book Value" (as defined in the Inventory
Purchase Agreement) of the "Purchased Inventory" (as defined in the Inventory
Purchase Agreement) as of the Closing Date. Such purchase price is to be
estimated two days prior to the Closing Date (subject to adjustment thereafter
as provided in Section 2.5 of the Inventory Purchase Agreement) and paid as
follows:
o the maximum amount which may be borrowed by KAV on the Closing
Date under its "Senior Credit Facility" to purchase the Purchased
Inventory (not to exceed 71% of the estimated purchase price and
currently estimated to be approximately $103,600,000) (the "Cash
Purchase Price") will be paid by wire transfer of immediately
available funds on the Closing Date;
o two promissory notes (collectively, the "KAV Senior Subordinated
Notes") each in an original principal amount equal to the lesser
of (1) 28.5% of the difference between the Adjusted Book Value of
the Purchased Inventory and the amount of the Cash Purchase Price
(currently estimated to be approximately $13,700,000) and (2)
$13,700,000 will be issued by KAV to Distribution, one of which
(the "KAV Senior Subordinated Note A") will be included in the
assets of Distribution sold to Xxxxxxxxx under the Xxxxxxxxx
Purchase Agreement as noted above;
o a promissory note (the "KAV Subordinated Note") in an original
principal amount (currently estimated to be $15,000,000) equal to
the difference between (1) the "Estimated Purchase Price"
(determined as and when referenced above) and (2) the sum of the
Cash Purchase Price and the aggregate original principal amount
of the KAV Senior Subordinated Notes will be issued by KAV to
Distribution and be subject to possible increase in principal
amount as and when provided in Section 2.5(e) of the Inventory
Purchase Agreement;
o if required post-closing by the terms of the Inventory Purchase
Agreement, promissory notes (the "KAV Senior Subordinated
Adjustment Notes") in an amount to be determined in accordance
with Section 2.5(e) of the Inventory Purchase Agreement will be
issued by KAV to Distribution and Xxxxxxxxx.
The KAV Senior Subordinated Notes will be senior to the KAV Subordinated Note
and junior to the Senior Credit Facility and the KAV Senior Subordinated
Adjustment Notes. The KAV Subordinated Note will be junior to the KAV Senior
Subordinated Notes, the Senior Credit Facility and the KAV Senior Subordinated
Adjustment Notes. The KAV Senior Subordinated Adjustment Note will be senior to
the KAV Senior Subordinated Notes and junior to the Senior Credit Facility.
The financial terms of the Xxxxxxxxx Fixed Assets Lease are as follows:
o The term of the Equipment Lease is 12 months from and after its
effective date, with month-to-month extensions thereafter until
the Equipment is
AVS Consent and Amendment 4
returned to Distribution as and when provided in the Equipment
Lease or purchased by Xxxxxxxxx as provided in the Equipment
Lease.
o The monthly rental under the Equipment Lease for the initial term
is one percent (1%) per annum of the net book value of the
subject Equipment, which is $92,577.16.
o The Equipment Lease provides for (i) Distribution to be able to
obligate Xxxxxxxxx to purchase the subject Equipment for a
purchase price equal to the net book value of the Equipment on
termination of the Equipment Lease or during a 60 day period
thereafter and (ii) Xxxxxxxxx to be able to obligate Distribution
to sell all or any part of the subject Equipment for a purchase
price equal to the net book value of the applicable Equipment at
any time during the 12 months from and after the Equipment Lease
becomes effective.
o The term of the Xxxxxxxxx Real Property Lease is 12 months from
and after its effective date, subject to extension for a period
of up to six (6) months under certain circumstances.
o The monthly rental under the Xxxxxxxxx Real Property Lease is to
be finally determined on the "Closing Date" and is estimated to
be approximately $16,617.32 for the initial 12-month term.
o The Xxxxxxxxx Real Property Lease provides for (i) Distribution
to be able to obligate Xxxxxxxxx to purchase the subject Leased
Premises during a 60 day period after termination of the
Xxxxxxxxx Real Property Lease for a purchase price equal to the
net book value of such Leased Premises as of the commencement of
the lease term and (ii) Xxxxxxxxx be able to obligate
Distribution to sell the subject Leased Premises at any time
during the lease term for a purchase price equal to the net book
value of such Leased Premises as of the commencement of the lease
term.
In connection with the Miramar Transaction:
x Xxxxxxxxx will sublease the subject real property and
improvements for a monthly "Minimum Rental" amount as described
on Schedule B to the Miramar Sublease, a copy of which Schedule B
is attached hereto as Exhibit F;
o AVS will assign the above-referenced Lease to First Security
Bank, N.A., as owner trustee, and to Bank of America, N.A., as
agent for itself and for the lenders and holders under the TROL
Documents; and
o the Agent will be required to acknowledge that the rights of AVS
as lessor under such Lease and payments due to the lessor
thereunder do not constitute Collateral for the Obligations and
Supplemental Term Loan Note.
AVS Consent and Amendment 5
Consent and Amendment Request
AVS and its Subsidiaries which are Borrowers and Guarantors under the
Credit Agreement have requested that Citicorp USA, Inc., as holder of the
Supplemental Term Loan Note, and the Lenders consent to:
(i) the AVS/KAV Joint Venture Investment, the AVS/KAV Joint Venture
Loans and the Investments resulting under promissory notes evidencing the
purchase price with respect to the Distribution Asset Sales;
(ii) the Caribe/Aerocell Inventory Transfers, the Leasing Engine
Transfer, the Distribution Asset Sales, the Distribution Asset Lease, the
Miramar Transaction (including, without limitation, those terms of the Miramar
Transaction referenced under Purchase Price and Payment Terms above), and the
transaction described in the License Agreement on the terms and conditions set
forth herein and in the Xxxxxxxxx Purchase Agreement, the Xxxxxxxxx Fixed Asset
Lease, the Inventory Purchase Agreement, the License Agreement, the Miramar
Documents, respectively;
(iii) application of the Net Cash Proceeds of Sale received by
Distribution with respect to the Distribution Asset Sales as follows:
1. that portion thereof which is equal to the amount of Availability
under the Borrowing Base attributable to the subject assets
included in the Distribution Asset Sales to be applied to payment
of the Revolving Loans as a mandatory prepayment thereof;
2. $4,900,000 thereof to payment of the Revolving Loans as a
mandatory prepayment thereof and reduction thereby of the
Overadvance Amount to $5,000,000; and
3. 100% of the amount of such Net Cash Proceeds of Sale remaining
after the applications described in items 1 and 2 above to
payment of the Revolving Loans as a mandatory prepayment thereof
and concurrent permanent reduction of the Revolving Credit Commitments to
$88,000,000,
(iv) a reduction in the amount of the Interest Reserve required to be
reflected in determination of the Borrowing Base, from and after the date on
which Net Cash Proceeds of Sale with respect to the Distribution Asset Sales are
received by Distribution and applied as set forth in clause (iii) hereinabove,
from $2,000,000 to $500,000,
(v) the issuance of the KAV Letter of Credit under the Credit Agreement
and the amendment of Irrevocable Letter of Credit No. NY-20517-30024577 naming
Bank of America, N.A., d/b/a NationsBank, N.A., successor to NationsBank,
National Association, as Administrative Agent, as beneficiary (the "TROL L/C")
to reduce the face amount thereof from $12,000,000 to $9,000,000 in connection
with the Miramar Transaction;
AVS Consent and Amendment 6
(vi) dividends being paid in cash to AVS by the Borrowers in such
amounts as are required to effect the AVS/KAV Joint Venture Investment and the
AVS/KAV Joint Venture Loans; and
(vii) the transfer of Xxxxx & Xxxxxxx engine, model JT8D-15, serial
number 695342 by Distribution to Timco Engine Center, Inc.
AVS and its Subsidiaries which are Borrowers and Guarantors under the
Credit Agreement have requested that; provided that the Distribution Asset
Sales, Miramar Transaction and Xxxxxxxxx Fixed Assets Lease are consummated as
and when described herein, the Credit Agreement be amended to:
(1) delete the provisions of Section 2.04 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
November 30, 2000 $ 9,900,000
Notwithstanding the foregoing:
(a) in the event Net Cash Proceeds of Sale are received in connection
with the sales of the "Transferred Assets" to Xxxxxxxxx Industries,
Inc. and KAV Inventory, LLC as and when described in that certain
Consent and Amendment dated November 28, 2000, the Overadvance Amount
shall be required to be reduced by $4,900,000 on the date of
Distribution's receipt of such Net Cash Proceeds of Sale as provided in
such Consent and Amendment and the remaining balance thereof,
$5,000,000, shall be reduced (either in cash or by adjustment of the
Borrowing Base) in twenty (20) equal weekly installments of $250,000
each during the period commencing on December 7, 2000 and continuing on
each Thursday thereafter to and including April 19, 2001, 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;
(b) in the event Net Cash Proceeds of Sale are received in connection
with the sale of Bearings, the Overadvance Amount shall be required to
be reduced on the Bearings Sale Date by $3,000,000, which reduction
shall be applied to the then remaining installments applicable under
this Section 2.04 in the inverse order of maturity; and
AVS Consent and Amendment 7
(c) the Overadvance Amount shall be required to be reduced on the date
of any Borrower's or Guarantor's receipt of any tax refund by the
amount of such tax refund, which reduction shall be applied to the then
remaining installments applicable under this Section 2.04 in the
inverse order of maturity.
(2) delete the amount "$30,000,000" in Section 3.01(a)(ii) and
substitute therefor the amount "$31,000,000" and
(3) conform the provisions of Section 4.01(b)(vi)(C)(2) to the
provisions of Section 2.04, as amended.
Consent, Amendment and Conditions Precedent
Citicorp USA, Inc., as holder of the Supplemental Term Loan Note, and
the Lenders signatory hereto (representing at least the Super-Majority Lenders)
hereby grant their consent to:
(A) the AVS/KAV Joint Venture Investment, the AVS/KAV Joint Venture
Loans, and the Investments resulting under promissory notes evidencing the
purchase price with respect to the Distribution Asset Sales;
(B) the Caribe/Aerocell Asset Transfers, Leasing Engine Transfer,
Distribution Asset Sales, the Distribution Asset Lease, the Miramar Transaction
(including, without limitation, those terms of the Miramar Transaction
referenced under Purchase Price and Payment Terms above), and the transaction
described in the License Agreement on the terms and conditions described or
referenced herein, authorize and direct the Agent to execute and deliver a
Release Letter in the form attached hereto as Exhibit G and made a part hereof
and the other documents referenced therein to release the Liens granted to the
Agent for the benefit of the Holders against the Transferred Assets upon the
conditions referenced hereinbelow being satisfied in full, and acknowledge that
the Holders shall not have the benefit of any Lien against the Miramar Sublease;
(C) the applications of Net Cash Proceeds of Sale received with respect
to the Distribution Asset Sales and reduction of the Revolving Credit
Commitments as set forth in clause (iii) under Consent Request above;
(D) the reduction in the amount of the Interest Reserve required to be
reflected in determination of the Borrowing Base, from and after the date on
which Net Cash Proceeds of Sale with respect to the Distribution Asset Sales are
received by Distribution and applied as set forth in clause (iii) under Consent
Request above, from $2,000,000 to $500,000;
(E) the issuance of the KAV Letter of Credit under the Credit Agreement
and the amendment of the TROL L/C to reduce the face amount thereof from
$12,000,000 to $9,000,000 in in connection with the Miramar Transaction;
AVS Consent and Amendment 8
(F) dividends being paid in cash to AVS by the Borrowers in such
amounts as are required to effect the AVS/KAV Joint Venture Investment and the
AVS/KAV Joint Venture Loans; and
(G) the transfer of Xxxxx & Xxxxxxx engine, model JT8D-15, serial
number 695342 by Distribution to Timco Engine Center, Inc.; provided that such
transfer shall be subject to the Lien against such engine granted by
Distribution for the benefit of the Holders, which Lien shall continue in
effect.
provided that :
(1) the Transferred Assets not include any cash proceeds (including
checks remitted to any of the Borrowers or Guarantors and/or deposited in
depository accounts maintained by any of the Borrowers or Guarantors) of
Collateral and all proceeds of Inventory of Distribution, Caribe and Aerocell
sold prior to the date on which the Distribution Asset Sales are consummated are
deposited as and when required by the terms of the Credit Agreement;
(2) Net Cash Proceeds of Sale in an amount of not less than
$120,400,000 payable with respect to sales of the Transferred Assets are
remitted on the Closing Date directly by the respective purchasers thereof to
the Agent for application on the outstanding Revolving Loans as set forth in
clause (iii) under Consent and Amendment No. 3 Request above;
(3) all Net Cash Proceeds of Sale payable after the Closing Date with
respect to the Distribution Asset Lease are remitted, on the date paid, to the
Agent for application against the reduction of the Overadvance Amount in the
inverse order of maturity and then on the outstanding balance of the Revolving
Loans without reduction of the Revolving Credit Commitments;
(4) proceeds of the sales of the Transferred Assets constituting
evidences of Indebtedness and Securities (other than the KAV Senior Subordinated
Note A delivered to Xxxxxxxxx as part of the Transferred Assets described in the
Xxxxxxxxx Purchase Agreement and at clause (c) under Purchase Price and Payment
Terms above) are duly pledged and endorsed and delivered to the Agent as part of
the Collateral on the "Closing Date" (as defined in the applicable Xxxxxxxxx
Purchase Agreement or Inventory Purchase Agreement) or, with respect to the KAV
Senior Subordinated Adjustment Notes, on the date executed and delivered to
Distribution;
(5) with respect to the consent set forth in clause (F) above, the
aggregate amount of such cash dividends does not exceed $500,000;
(6) Xxxxxxxxx and Distribution shall have executed and delivered to the
Agent an agreement in the form attached hereto as Exhibit H and made a part
hereof with respect to collections of Receivables on behalf of Distribution and
lease and purchase price payments made under the Xxxxxxxxx Fixed Assets Lease
and their deposit to Collection Accounts in accordance with the provisions of
Section 4.04 of the Credit Agreement and the Xxxxxxxxx Fixed Assets Lease shall
constitute part of the Collateral and Distribution shall execute and deliver to
the Agent such agreements with respect thereto as the Agent requires to evidence
the same;
AVS Consent and Amendment 9
(7) fully executed agreements and documents as more particularly
described on Exhibit I attached hereto and made a part hereof are delivered to
the Agent and no amendment or modification thereof shall have been made since
the date of execution thereof except as included on Exhibit I or otherwise
consented to by the Agent;
(8) the Borrowers shall have delivered to the Agent and Lenders a
Borrowing Base Certificate as of November 30, 2000, after giving effect to the
transactions referenced in and contemplated by this Consent and Amendment No. 3;
(9) obligees under the TROL Documents shall have consented to the
aforesaid transactions and asset transfers on terms satisfactory to the Agent
and no other consents, approvals or waivers with respect to the agreements
entered into in connection with the above-described transactions and asset
transfers, which have not been obtained, shall be required under the terms of
the Borrowers' and Guarantors' respective material Contractual Obligations;
(10) the above-described transfers of the Transferred Assets shall have
been consummated on or before November 30, 2000;
(11) the Borrowers shall have reimbursed the Agent for the expenses
identified on Exhibit J attached hereto and made a part hereof; and
(12) Citicorp USA, Inc., as holder of the Supplemental Term Loan Note,
Lenders constituting at least the Super-Majority Lenders, the Issuing Bank, the
Borrowers and Guarantors shall have executed and delivered this Consent and
Amendment No. 3 to the Agent on or before November 30, 2000.
The Lenders representing at least the Super-Majority Lenders signatory
hereto and the Issuing Bank hereby agree that, (A) effective concurrently with
the aforesaid consents becoming effective:
(I) the provisions of clause (iv) of the definition of "Borrowing Base"
is deleted in their entirety and the following substituted therefor:
(iv) up to fifty percent (50%) of the face amount of earned, but
unbilled for periods less than sixty-one (61) days, Receivables of
TIMCO (net of maximum discounts, allowances, retainage and any other
amounts deferred with respect thereto) in an amount not to exceed
$15,000,000 and arising with respect to sales of Inventory other than
ABX Kits and services performed, plus
(II) the provisions of Section 2.04 of the Credit Agreement are deleted
in their entirety and the following substituted 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:
AVS Consent and Amendment 10
Reduction Date Reduction Amount
-------------- ----------------
June 30, 2000 $ 7,500,000
September 30, 2000 $27,600,000
November 30, 2000 $ 9,900,000
Notwithstanding the foregoing:
(a) in the event, Net Cash Proceeds of Sale are received in connection
with the sales of assets to Xxxxxxxxx Industries, Inc. and KAV
Inventory, LLC as and when described in that certain Consent and
Amendment No. 3 dated November 28, 2000, the Overadvance Amount shall
be required to be reduced by $4,900,000 on the date of Distribution's
receipt of such Net Cash Proceeds of Sale as provided in such Consent
and Amendment No. 3 and the remaining balance thereof, $5,000,000,
shall be reduced (either in cash or by adjustment of the Borrowing
Base) in twenty (20) equal weekly installments of $250,000 each during
the period commencing on December 7, 2000 and continuing on each
Thursday thereafter to and including April 19, 2001, 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;
(b) in the event Net Cash Proceeds of Sale are received in connection
with the sale of Bearings, the Overadvance Amount shall be required to
be reduced on the Bearings Sale Date by $3,000,000, which reduction
shall be applied to the then remaining installments applicable under
this Section 2.04 in the inverse order of maturity; and
(c) the Overadvance Amount shall be required to be reduced on the date
of any Borrower's or Guarantor's receipt of any tax refund by the
amount of such tax refund, which reduction shall be applied to the then
remaining installments applicable under this Section 2.04 in the
inverse order of maturity.
(III) Section 3.01(a)(ii) of the Credit Agreement shall be and is
hereby amended to delete the amount "$30,000,000" therein and substitute
therefor the amount "$31,000,000",
(IV) Section 4.01(b)(vi)(C)(2) of the Credit Agreement is deleted in
its entirety and the following substituted therefor:
(2) second to the Overadvance Amount as provided in Section 2.04,
and
(V) Article VIII is amended to add the following as Section 8.15:
8.15. Tax Refund Notice. Upon receipt by any Borrower or Guarantor of
any tax refund, Parent and Distribution shall deliver or cause to be
delivered to the Agent and Lenders written notice of such receipt, by
which Person the same was
AVS Consent and Amendment 11
received, and the amount of such tax refund and remit the same for
application on the Obligations and in reduction of the Overadvance
Amount as provided in Section 4.04 and Section 2.04.
and, (B) effective concurrently with the application of Net Cash Proceeds of
Sale received by Distribution with respect to the Distribution Asset Sales on
the closing date set forth in the Xxxxxxxxx Purchase Agreement and Inventory
Purchase Agreement, the Revolving Credit Commitments in effect as of such date
shall be reduced to $88,000,000 and the maximum amount of each Lender's
Revolving Credit Commitment shall be as set forth on Schedule 1.01.10 attached
hereto and made a part hereof, which Schedule shall be substituted, as of such
date, for Schedule 1.01.10 attached to the Credit Agreement. Except to the
extent hereinabove provided, the Revolving Credit Commitments shall continue to
be subject to all terms set forth in the Credit Agreement, including, without
limitation, those terms relating to their adjustment and termination.
Except as consented to as expressly set forth above, (a) the execution
and delivery of this Consent and Amendment No. 3 shall in no way affect any
right, power or remedy of the (i) Agent, Lenders or Issuing Banks with respect
to any Event of Default or Potential Event of Default or constitute a waiver of
any provision of the Credit Agreement or any of the other Loan Documents or (ii)
Citicorp USA, Inc., as holder of the Supplemental Term Loan with respect to any
Event of Default or Potential Event of Default or constitute a waiver of any
provision of the Supplemental Term Loan, and (b) the Credit Agreement, the other
Loan Documents, the promissory note evidencing the Supplemental Term Loan, and,
in each instance, all other documents, instructions, and agreements executed
and/or delivered pursuant thereto and in connection therewith shall remain in
full force and effect and are hereby ratified and confirmed.
This Consent and Amendment No. 3 may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same document. Delivery of an executed counterpart of
this Consent and Amendment No. 3 by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
THIS CONSENT AND AMENDMENT NO. 3 SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Remainder of Page Intentionally Left Blank
AVS Consent and Amendment 12
IN WITNESS WHEREOF, this Consent and Amendment No. 3 has been duly
executed and delivered as of the day and year first written above.
CITICORP USA, INC. XXXXXX FINANCIAL, INC.
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
NATIONAL CITY COMMERCIAL SALOMON BROTHERS HOLDING
FINANCE, INC. COMPANY INC.
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
FIRST UNION COMMERCIAL IBJ WHITEHALL BUSINESS CREDIT
CORPORATION CORPORATION
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
FLEET NATIONAL BANK FIRSTAR BANK, N.A.
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
THE INTERNATIONAL BANK OF NATIONAL BANK OF CANADA
MIAMI, N.A. A Canadian Chartered Bank
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
By
------------------------------
Name:
Title:
AVS Consent and Amendment Signature Page 1
AMSOUTH BANK CITIZENS BUSINESS CREDIT
COMPANY
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
PNC BANK NATIONAL ASSOCIATION
By
------------------------------
Name:
Title:
CITICORP USA, INC., as CITIBANK, N.A., as
holder of the Supplemental Term Loan Issuing Bank
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
AVS Consent and Amendment Signature Page 2
The terms and conditions of the aforesaid Consent and Amendment No. 3 are hereby
acknowledged and accepted by each of the Borrowers and Guarantors and each
Borrower and Guarantor hereby represents and warrants that no consents,
approvals or waivers with respect to the agreements entered into in connection
with the above-referenced transactions and asset transfers, which have not been
obtained, are required under the terms of the Borrowers' and Guarantors'
respective material Contractual Obligations. Aviation Sales Distribution
Services Company hereby covenants to deliver the KAV Senior Subordinated
Adjustment Note and any promissory note evidencing any increase in the KAV
Subordinated Note to the Agent as part of the Collateral immediately upon its
receipt of same in accordance with the terms of the Inventory Purchase
Agreement. The Borrowers and Guarantors hereby acknowledge and covenant that
proceeds of Receivables collected by Xxxxxxxxx on behalf of Distribution, and
the lease payments made under the Xxxxxxxxx Fixed Assets Lease, will be deemed
proceeds of Collateral and will be deposited in accordance with the provisions
of Section 4.04 of the Credit Agreement.
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:
AVS Consent and Amendment Signature Page 3
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:
TIMCO ENGINE CENTER, INC. AVIATION SALES BEARINGS
COMPANY
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
AVIATION SALES MANUFACTURING AVIATION SALES PROPERTY
COMPANY MANAGEMENT CORP.
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
AVIATION SALES FINANCE COMPANY AERO HUSHKIT CORPORATION
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
AVS Consent and Amendment Signature Page 4
TIMCO ENGINEERED SYSTEMS, INC. HYDROSCIENCE, INC.
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
AVIATION SALES MAINTENANCE, REPAIR AVIATION SALES SPS I, INC.
& OVERHAUL COMPANY
By By
------------------------------ ------------------------------
Name: Name:
Title: Title:
cc: Sidley & Xxxxxx
Xxxxxxx, Xxxxxxxxxx & Xxxxxx, P.A.
AVS Consent and Amendment Signature Page 5
