EXHIBIT 10.19
Amendment and Consent Agreement No. 5 for
Participation Agreement and
Certain Other Operative Agreements
THIS AMENDMENT AND CONSENT AGREEMENT (the "Amendment Agreement") is
made and entered into as of the 1st day of December, 2000, by and among AVIATION
SALES COMPANY, a Delaware corporation ("Aviation Sales"), as Construction Agent
(the "Construction Agent"); AVIATION SALES COMPANY, as Lessee (the "Lessee");
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, except as expressly stated in the Operative Agreements, but solely
as Owner Trustee under the Aviation Sales Trust 1998-1 (the "Owner Trustee");
BANK OF AMERICA, N.A., successor to NationsBank, National Association ("Bank of
America"), as a Holder and as a Lender; BANK OF AMERICA, N.A., successor to
NationsBank, National Association, as Administrative Agent (the "Agent"); each
of the holders party to the Trust Agreement (defined below) (the "Holders");
each of the Lenders party to the Credit Agreement (defined below)(the
"Lenders"); and each of the Guarantors party to the Guaranty Agreement (defined
below).
W I T N E S S E T H:
WHEREAS, the Construction Agent, the Lessee, the Owner Trustee, the
Agent, the Lenders and the Holders have entered into the Participation Agreement
dated as of December 17, 1998 (as amended, the "Participation Agreement"); and
WHEREAS, the Owner Trustee, the Lenders and the Agent have entered into
the Credit Agreement dated as of December 17, 1998 (as amended, the "Credit
Agreement"); and
WHEREAS, the Owner Trustee and the Lessee have entered into the Lease
Agreement dated as of December 17, 1998 (as amended, the "Lease" or "Lease
Agreement"); and
WHEREAS, Aviation Sales, Subsidiaries of Aviation Sales, and the Agent
have entered into the respective Guaranty Agreements (Series A Obligations)
dated as of December 17, 1998, February 18, 2000, March 31, 2000 or May 31,
2000, as the case may be, (collectively, as amended, the "Series A Guaranty
Agreement"); and the Subsidiaries of Aviation Sales and the Owner Trustee have
entered into the respective Guaranty Agreements (Lessee Obligations) dated as of
December 17, 1998 February 18, 2000, March 31, 2000 or May 31, 2000, as the case
may be, (collectively, as amended, the "Lessee Guaranty Agreement", and
collectively with the Series A Guaranty Agreement and any other Guaranty
Agreement (as defined in the Participation Agreement), the "Guaranty Agreement"
or "Guaranty"); and
WHEREAS, the Lessee desires to enter into certain transactions,
including without limitation a sublease of a portion of the Property in Miramar,
Florida, as described in Section 5 of this Amendment Agreement; and
WHEREAS, the Lessee has requested the parties hereto to consent to such
transactions and to amend the Lease Agreement and certain other Operative
Agreements; and
WHEREAS, the parties hereto are willing to grant the consents set forth
herein, and agree to the amendments to the Operative Agreements set forth
herein, all subject to the terms and conditions set forth herein;
NOW, THEREFORE, the Construction Agent, the Lessee, the Owner Trustee,
the Holders, the Agent and the Lenders do hereby agree as follows:
1. Definitions. The terms "Participation Agreement", "Credit
Agreement", "Lease" and "Lease Agreement", as used herein and in the Operative
Documents (as defined in the Participation Agreement) shall mean such agreements
as hereby amended and modified, and as further amended, modified, supplemented
or restated from time to time in accordance with the terms thereof. Unless the
context otherwise requires, all terms used herein without definition shall have
the definition provided therefor in the Participation Agreement.
2. Amendments to Participation Agreement. Subject to the conditions
hereof, the Participation Agreement is hereby amended, effective as of the date
hereof, as follows:
(a) The last sentence of Section 5.6 of the Participation Agreement
is amended by deleting the comma at the end of clause (y); deleting the
symbol "(y)" before "the Total Commitment"; and deleting the clause "and
(z) simultaneously with such reduction in Commitments and Holder
Commitments, the amount of the Letter of Credit shall be reduced by an
amount equal to the Funding Shortfall".
(b) Section 10.3(h) of the Participation Agreement is amended in its
entirety, so that as amended it reads as follows:
"(h) The Lessee and the Construction Agent agree that they
shall, so long as any Commitment or Holder Commitment Exists, or any
obligation remains unpaid under any Operative Agreements, maintain
the Letter of Credit, in form and substance satisfactory to the
Agent, securing the L/C Obligations (defined below) of the Lessee
and the Construction Agent in an amount not less than $9,000,000.
'L/C Obligations' means, collectively, (A) any obligations of the
Lessee or the Construction Agent under the Guaranty Agreement, (B)
any payment identified as a payment pursuant to Section 22.1(b) of
the Lease (or otherwise) of the Maximum Residual Guaranty Amount (or
any such lesser amount as may be required pursuant to such Section)
in respect of the Properties, and (C) upon and during the
continuation of an Event of Default, any obligations of the Lessee
or the Construction Agent under any Operative Agreement. The parties
hereto agree that the failure to maintain the Letter of Credit in
the amount required by this Section 10.3(h) shall constitute an
immediate and automatic Lease Event of Default, Credit Agreement
Event of Default and Agency Agreement Event of Default."
(c) Appendix A to the Participation Agreement is amended by adding
each of the following
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definitions, in the appropriate alphabetical order; each of the following
definitions of any term replaces any previous definition of such term that
may have appeared in the Participation Agreement:
" 'Amendment No. 5' shall mean that certain Amendment
and Consent Agreement No. 5 for Participation Agreement and
Certain Other Operative Agreements, dated as of December 1,
2000, among the Construction Agent, the Lessee, the Owner
Trustee, the Agent, the Lenders parties thereto and the
Holders parties thereto."
" 'Assignment of Sublease' shall mean, the Assignment of
Lease dated as of December 1, 2000, among the Trustee, the
Lessee, Bank of America as a Lender and Holder, and the Agent,
as such agreement, may be amended, modified, restated or
supplemented from time to time in accordance with the terms
thereof."
" 'Citibank' shall mean Citibank, N.A."
" 'Letter of Credit' shall mean that certain standby
letter of credit dated December 19, 1989, issued by Citibank
in favor of the Agent, securing the obligations of the Lessee
and Construction Agent under the Operative Agreements, as such
letter of credit may be amended, modified, restated or
supplemented from time to time."
" 'KAV' shall mean KAV Inventory, LLC, a Delaware
limited liability company."
" 'KAV Credit Agreement' shall mean the Loan and
Security Agreement dated as of December 1, 2000, among KAV,
the financial institutions party thereto from time to time,
Bank of America, N.A., as agent and security trustee for such
lenders, and Banc of America Securities LLC, as syndication
agent, as such agreement may be amended, modified or restated
from time to time."
" 'Xxxxxxxxx' shall mean Xxxxxxxxx Industries, Inc."
" 'Xxxxxxxxx Credit Agreement' shall mean the Amended
and Restated Loan and Security Agreement dated as of December
14, 1998, among Xxxxxxxxx and certain of its subsidiaries
named therein, the financial institutions party thereto from
time to time, Bank of America, N.A., as agent for such
lenders, and Banc of America Securities LLC, as syndication
agent, as such agreement may be amended, modified or restated
from time to time."
" 'Xxxxxxxxx Sublease' shall mean that certain Lease
dated December 1, 2000, between Aviation Sales and Xxxxxxxxx,
a copy of which is attached as Exhibit B to Amendment No. 5,
as such Lease may be amended, modified or restated from time
to time."
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(d) The definition of "Operative Agreements" in Appendix A to the
Participation Agreement is amended by inserting the phrase "the Assignment
of Sublease," immediately after "the Letter of Credit,".
3. Amendments to Credit Agreement. Subject to the conditions hereof,
the Credit Agreement is hereby amended, effective as of the date hereof, as
follows:
(a) Section 6(k) of the Credit Agreement is amended by deleting the
phrase "or any sublease by Lessee permitted under Section 25.2(b) of the
Lease".
4. Amendments to Lease Agreement. Subject to the conditions hereof, the
Lease Agreement is hereby amended, effective as of the date hereof, as follows:
(a) Section 17.1 of the Lease Agreement is amended by deleting the
word "or" at the end of subsection (o); deleting the comma at the end of
subsection (p) and replacing it with a semi-colon; and inserting the
following subsections (q) - (t) immediately after subsection (p):
"(q) the failure of the Lessee to give notice to the Agent and
the Lessor of any "Event of Default" (as defined in the Xxxxxxxxx
Sublease) within five (5) Business Days of the Lessee obtaining
notice or actual knowledge of such "Event of Default";
"(r) the Xxxxxxxxx Sublease shall be amended, modified,
supplemented or restated in any respect without the prior written
consent of the Agent (in its sole discretion);
"(s) Xxxxxxxxx or the Lessee shall contend (or any court or
Governmental Authority shall determine): (i) that the Xxxxxxxxx
Sublease is not a "true lease" or "operating lease", or (ii) that
the Xxxxxxxxx Sublease constitutes a loan agreement, sale agreement,
finance lease or capital lease, or (iii) that the Xxxxxxxxx Sublease
otherwise effectuates a sale, finance lease or capital lease of any
Equipment, any Improvement, or any portion of any Property; or
"(t) the Lessee shall otherwise sell any Equipment, any
Improvement or any other Property (whether pursuant to the Xxxxxxxxx
Sublease or otherwise),"
5. Proposed Transactions involving the Lessee, certain of its
Subsidiaries, Xxxxxxxxx and KAV. Aviation Sales has informed the Owner Trustee,
the Agent, the Lenders and the Holders of the desire of Aviation Sales 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:
(a) Joint Venture.
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(i) Aviation Sales 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 the Lessee 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 (the "Operating Agreement"),
(ii) Aviation Sales and Xxxxxxxxx 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 Aviation Sales 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.
(b) 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), to Distribution, and Aerocell
Structures, Inc. ("Aerocell") will transfer title to the inventory
identified on Schedule 6.14(b) to the Inventory Purchase Agreement 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 the "Citicorp Consent"
(defined below) 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 letter agreements dated November 14, 2000 and
November 17, 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 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
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"Adjusted Book Value" of the "Purchased Inventory", as more
particularly described below,
(iii) Aviation Sales 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 xxxx "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 letter agreements dated November 14, 2000,
November 17, 2000 and December 1, 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 in Section 5(c) below), wherever located on the "Closing
Date" (as defined in the Xxxxxxxxx Purchase Agreement) other than (1)
those assets described on Exhibit D to the Citicorp Consent, (2) the
inventory being sold to KAV under the Inventory Purchase Agreement, and
(3) the equipment described on Exhibit E to the Citicorp Consent, which
equipment 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 dated as of December 1, 2000 (the
"Equipment Lease"), all of Distribution's equipment and (c) lease to
Xxxxxxxxx, pursuant to the terms of that certain Lease dated as of
December 1, 2000 (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 "Realty" and "Included
Personal Property" 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) Pursuant to the Xxxxxxxxx Sublease, Aviation Sales will
sublease a portion of the Property located in Miramar, Florida (the
"Miramar Property") to Xxxxxxxxx and, in connection therewith, inter
alia, the letter of credit support for the transactions under the TROL
Documents will be reduced to $9,000,000, and Aviation Sales will assign
its rights under the Xxxxxxxxx Sublease to the Lessor and the Agent
(for itself and on behalf of the Lenders and the Holders).
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 assets on
the terms provided therein) are hereinafter referred to as the
"Distribution Asset Lease". The sublease of a portion of the Miramar
Property under the Xxxxxxxxx Sublease and the assignments of the
Xxxxxxxxx Sublease under the Assignment of Sublease 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
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Purchase Agreement and the Inventory Purchase Agreement are hereinafter
referred to collectively as the "Transferred Assets".
(c) 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:
(i) The purchase price under the Xxxxxxxxx Purchase Agreement
is cash and assumption of certain liabilities of Distribution and the
cash portion thereof is to be estimated two days prior to the Closing
Date (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.
(ii) 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) $20,000,000 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;
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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 subject to
the Equipment Lease is 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 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 30 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 30 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:
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x Xxxxxxxxx will sublease the subject portion of the
Miramar Property for a monthly "Minimum Rental"
amount as described on Schedule B to the Xxxxxxxxx
Sublease.
6. Consent to Xxxxxxxxx Sublease. Subject to the conditions set forth
in this Amendment Agreement, the parties hereto consent to the Lessee entering
into the Xxxxxxxxx Sublease in the form attached hereto as Exhibit B, provided
that
(a) Lessee shall remain fully liable for all obligations (including
without limitation all Rent and other obligations with respect to any Property
(or portion thereof) subject to the Xxxxxxxxx Sublease and any other Properties)
under the Lease, each Lease Supplement and the other Operative Agreements;
(b) the Xxxxxxxxx Sublease shall not in any way discharge or diminish
any of Lessee's obligations to Lessor under the Lease and Lessee shall remain
directly and primarily liable under the Lease as to the Property (or portion
thereof) so sublet;
(c) each insurance policy carried by Lessee pursuant to Article XIV of
the Lease shall be endorsed to name Xxxxxxxxx as an additional insured with
respect to that portion of the Property sublet to Xxxxxxxxx;
(d) the Owner Trustee and the Agent (for itself and on behalf of the
Lenders and Holders) shall retain first, priority perfected Liens in any
Equipment, Improvements and Property that may be subject to the Xxxxxxxxx
Sublease; and
(e) pursuant to the Assignment of Lease, the Lessee shall assign to the
Lessor and the Agent, and the Lessor shall assign to the Agent, all of the
Lessee's right, title and interest in, to and under the Xxxxxxxxx Sublease.
7. Consent to Certain Proposed Transactions. Subject to the conditions
set forth in this Amendment Agreement, the parties hereto further 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 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 in Section 5(c) 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 Xxxxxxxxx Sublease and the
Assignment of Sublease, respectively;
(c) application of the Net Cash Proceeds of Sale received by
Distribution with respect to the Distribution Asset Sales as follows:
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(i) that portion thereof which is equal to the amount of
"Availability" (as defined in the Existing Aviation
Sales Credit Agreement) under the "Borrowing Base"
(as defined in the Existing Aviation Sales Credit
Agreement) attributable to the subject assets
included in the Distribution Asset Sales to be
applied to payment of the "Revolving Loans" (as
defined in the Existing Aviation Sales Credit
Agreement) as a mandatory prepayment thereof;
(ii) $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
(iii) 100% of the amount of such Net Cash Proceeds of Sale
remaining after the applications described in items
(i) and (ii) above to payment of the Revolving Loans
as a mandatory prepayment thereof;
and concurrent permanent reduction of the Revolving Credit Commitments to
$84,000,000,
(d) a reduction in the amount of the "Interest Reserve" (as defined in
the Existing Aviation Sales Credit Agreement) 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 (c) hereinabove, from $2,000,000
to $500,000,
(e) the issuance of the KAV Letter of Credit under the Existing
Aviation Sales Credit Agreement and the amendment of the Letter of Credit to
reduce the face amount thereof from $12,000,000 to $9,000,000 in connection with
the Miramar Transaction;
(f) dividends being paid in cash to Aviation Sales by the Citicorp
Borrowers in such amounts as are required to effect the AVS/KAV Joint Venture
Investment and the AVS/KAV Joint Venture Loans;
(g) the transfer of Xxxxx & Xxxxxxx engine, model JT89-15, serial
number 695432 by Distribution to Timco Engine Centers, Inc.; and
(h) the amendment to Intercreditor Agreement described in Section 11
below.
8. Consent to Amendment to Revolving Credit Agreement. Effective as of
the date hereof, subject to the Agent's receipt of the consent referenced in
Section 11(a)(vi) below on or before the date hereof, the parties signatory
hereto hereby consent to the amendment of the Existing Aviation Sales Credit
Agreement on the terms and conditions attached hereto as Exhibit A ("The
Citicorp Amendment").
9. Agreement and Confirmation by Guarantors. Each of the undersigned
Guarantors has joined in the execution of this Amendment Agreement for the
purpose of (i) agreeing to the amendments to the Lease Agreement, the Credit
Agreement, the Participation Agreement, and other Operative Agreements contained
herein and (ii) confirming its guarantee of payment of all Borrower's
Liabilities (as defined in the Series A Guaranty Agreement) and all Lessee's
Liabilities (as defined in the Lessee Guaranty Agreement).
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10. Representations, Warranties and Covenants. The Lessee and the
Construction Agent hereby represent, warrant and covenant that:
(a) The representations and warranties made by the Lessee and
the Construction Agent in Section 7 (other than in Section 7.3(f)(i))
of the Participation Agreement are true on and as of the date hereof;
and the representations in warranties set forth in Section 7.3(f)(i) of
the Participation Agreement are true on and as of the date set forth in
such Section;
(b) (i) The audited consolidated financial statements of each
of the Construction Agent and the Lessee as at December 31, 1999,
copies of which have been furnished to the Agent and the Owner Trustee,
were prepared in accordance with GAAP and fairly present the financial
condition of each of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal year then ended and
(ii) the unaudited consolidated financial statements as at September
30, 2000, copies of which have previously been furnished to the Agent
and the Owner Trustee, were prepared in accordance with GAAP (subject
to normal year-end adjustments) and fairly present the financial
condition of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal quarter then ended.
Neither Aviation Sales nor any Guarantor or any Subsidiary of Aviation
Sales has, as of the date hereof, any Accommodation Obligation,
contingent liability or liability for any taxes, long-term leases or
commitments, not disclosed in writing to the Agent, the Lenders and the
Holders prior to the date hereof.
(c) This Amendment Agreement constitutes the legal, valid and
binding obligation of Aviation Sales and the Guarantors and is
enforceable against Aviation Sales in accordance with its terms. Each
of the Participation Agreement and the Lease Agreement, as previously
executed, delivered and amended and as amended by this Amendment
Agreements, constitute legal, valid and binding obligations of Aviation
Sales and are enforceable against Aviation Sales in accordance with
their respective terms.
(d) The business and properties of the Lessee and the
Construction Agent and the Guarantors and the Subsidiaries of Aviation
Sales are not, and since the Initial Closing Date have not been,
adversely affected in any substantial way as the result of any fire,
explosion, earthquake, accident, strike, lockout, combination of
workmen, flood, embargo, riot, activities of armed forces, war or acts
of God or the public enemy, or cancellation or loss of any major
contracts;
(e) No event has occurred and no condition exists which, after
giving effect to this Amendment Agreement, constitutes a Default or an
Event of Default on the part of the Lessee or the Construction Agent or
any Guarantor or any Subsidiary of Aviation Sales under the
Participation Agreement or any other Operative Agreement, either
immediately or with the lapse of time or the giving of notice, or both.
Since September 30, 2000, there has occurred no event with respect to
the Lessee, the Construction Agent
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or any Guarantor or any Subsidiary of Aviation Sales which has
resulted, or is reasonably likely to result, in a Material Adverse
Effect.
(f) Each of the statements set forth in Section 5 above
(including without limitation, each statement set forth in the
subsection 5(a) ("Joint Venture"), subsection 5(b) ("Asset
Dispositions"), and subsection 5(c) ("Purchase Price and Payment
Terms")) is true and correct in all respects, and does not fail to
include any material fact necessary (in light of the circumstances
surrounding this Amendment Agreement and the transactions described
herein) in order to make any such statement contained in Section 5 not
misleading.
This Amendment Agreement shall be deemed to be an Operative Agreement
and any violation of a covenant contained herein shall be a violation of an
Operative Agreement.
11. Conditions Precedent. The effectiveness of this Amendment Agreement
shall be subject to fulfillment of the following conditions precedent:
(a) The Agent shall have received on or before the date hereof, in
form and substance satisfactory to the Agent, the following:
(i) a fully-executed original of this Amendment Agreement;
(ii) an opinion of outside counsel to the Lessee and the
Guarantors, addressed to the Agent, the Owner Trustee and the Lenders
and Holders, including without limitation (A) an opinion of such
counsel with respect to non-contravention of the Citicorp Loan
Documents and agreements under which the Senior Subordinated Notes have
been issued, by this Amendment Agreement and the instruments and
documents executed by the Lessee, Construction Agent and Guarantors in
connection herewith, and (B) an opinion to the effect that the
execution, delivery and performance of this Amendment Agreement, the
Xxxxxxxxx Sublease, the Equipment Sublease, any leasehold mortgage
granted by Xxxxxxxxx to any of its lenders or any other security in any
of the assets of Xxxxxxxxx that may be granted by Xxxxxxxxx to any of
its lenders, will not affect the priority of any Lien in favor of the
Owner Trustee or the Agent (on behalf of itself, any Lender or any
Holder) that exists under the Operative Agreements (which opinion may
be included in the opinion referred to in clause (ii) above);
(iii) a certificate of the Secretary or an Assistant Secretary
of each of the Lessee and each Guarantor in such form as is reasonably
acceptable to the Agent attaching and certifying as to (A) the
resolutions of the Board of Directors of Lessee or such Guarantor (as
the case may be) duly authorizing the execution, delivery and
performance by Lessee or such Guarantor (as the case may be) of this
Amendment Agreement and each of the other Operative Agreements
delivered in connection with this Amendment Agreement to which such
Lessee or Guarantor is or will be a party, (B) the fact that neither
its certificate of incorporation nor its bylaws have been changed from
the versions that were
12
certified and delivered to the Agent on the Initial Closing Date (or if
they have been changed, such certificate of incorporation or by-laws
certified as of a recent date by the Secretary of State of the State of
its incorporation), and (C) the incumbency and signature of persons
authorized to execute and deliver on its behalf this Amendment
Agreement and each of the other Operative Agreements delivered in
connection with this Amendment Agreement to which such Lessee or
Guarantor is a party;
(iv) a fee (the "Amendment Fee") in the amount of $150,000, in
immediately available funds, paid by the Lessee (as described in
Exhibit C) to the Agent; plus evidence of the payment of all other fees
and amounts set forth in Exhibit C attached hereto;
(v) an executed amendment to the Existing Aviation Sales
Credit Agreement (as in effect prior to the effective date of this
Amendment Agreement) in the form attached hereto as Exhibit A or
otherwise in form and substance satisfactory to the Agent, Lenders and
Holders;
(vi) a written consent of the obligee parties to the Existing
Aviation Sales Credit Agreement to the terms of this Amendment
Agreement in form and substance satisfactory to the Agent (which
consent may be included in the amendment agreement referred to in
clause (v) above) (the "Citicorp Consent");
(vii) a down-dating endorsement of the title policy issued to
the Agent, with respect to the Property located in Miramar, Florida,
such endorsement showing no additional exceptions to coverage, except
as approved by the Agent (in its sole discretion);
(viii) the original of the amendment to the Letter of Credit;
(ix) fully-executed originals (and a copy of the recorded
version) of the Assignment of Sublease by the Lessee and by the Owner
Trustee, and a fully executed and recorded modification of Mortgage and
amendment to Memorandum of Lease with respect to the Miramar Property;
(x) the fully-executed chattel paper original of the Xxxxxxxxx
Sublease, certified as true, correct and complete by the Secretary or
Assistant Secretary of the Lessee;
(xi) a copy of the Equipment Sublease, certified as true,
correct and complete by the Secretary or Assistant Secretary of the
Lessee;
(xii) such fully-executed UCC financing statements, naming the
Lessee as debtor, the Owner Trustee as secured party, and the Agent as
assignee, as the Agent may deem necessary or appropriate to perfect the
security interests granted
13
to the Owner Trustee and assigned to the Agent pursuant to the
Assignment of Sublease;
(xiii) such fully-executed UCC financing statements, naming
the Lessee as debtor and the Agent as secured party, as the Agent may
deem necessary or appropriate to perfect the security interests granted
by the Lessee directly the Agent pursuant to the Assignment of
Sublease;
(xiv) such fully-executed UCC financing statements, naming the
Owner Trustee as debtor and the Agent as secured party, as the Agent
may deem necessary or appropriate to perfect the security interests
granted by the Owner Trustee the Agent pursuant to the Assignment of
Sublease;
(xv) a copy of the fully-executed and recorded memorandum of
the Xxxxxxxxx Sublease;
(xvi) a copy of a fully executed Subordination and
Non-Disturbance Agreement among Bank of America, as agent under the
Xxxxxxxxx Loan Documents, the Owner Trustee and Xxxxxxxxx;
(xvii) a fully-executed amendment to the Intercreditor
Agreement dated as of December 17, 1998, among Citicorp, the Agent and
the Owner Trustee, and joined by the Lessee and its Subsidiaries;
(xviii) copies of the articles of incorporation and bylaws of
Xxxxxxxxx, certified by its Secretary or Assistant Secretary;
(xix) copies of the organizational documents (including
without limitation, any articles of organization and operating
agreement) of KAV, certified by an officer or other Person duly
authorized to do so;
(xx) copies of a fully-executed Landlord's Waiver by the Owner
Trustee relating to the inventory of KAV;
(xxi) copies of the fully executed Xxxxxxxxx Loan Documents;
(xxii) copies of the fully-executed KAV Loan Documents;
(xxiii) copies of the fully-executed agreements and documents
described on Exhibit I to the Citicorp Consent;
(xxiv) any additional agreements, instruments or documents
which it may reasonably request in connection herewith;
14
(b) The correctness in all material respects on the date
hereof of the representations and warranties of the Owner Trustee,
Construction Agent and the Lessee contained herein and in each of the
Operative Agreements;
(c) No Default or Event of Default shall have occurred and be
continuing on the date hereof; and (after giving effect to this
Amendment Agreement and any amendment to the Citicorp Loan Documents)
as of the date hereof no "Event of Default" shall have occurred and be
continuing under the terms of Citicorp Loan Documents, the Norlease
Agreement or the Indenture under which the Senior Subordinated Notes
have been issued, as amended or supplemented through the date of this
Amendment Agreement and no "Change of Control" (as defined in such
Indenture) shall have occurred;
(d) No material adverse change shall have occurred (as
certified to the Agent, the Lenders and the Holders by the respective
chief financial officers) in the business, assets, management,
operations, financial condition or prospects of Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales since September 30, 2000;
(e) Since March 31, 2000, no permit, agreement, lease, or
license which, in the judgment of the Agent, is material to the
business, operations or employee relations of Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales, including without
limitation, any agreement relating to the Existing Aviation Sales
Credit Agreement or the Senior Subordinated Notes (as defined in the
Existing Aviation Sales Credit Agreement), shall have been terminated,
modified, revoked, breached, or declared to be in default, or if
breached or declared to be in default during such period, such breach
or default shall have been cured or waived on terms satisfactory to the
Agent and Lenders;
(f) None of the members of Aviation Sales' Board of Directors
as of March 31, 2000 shall have ceased acting as members of such Board
of Directors;
(g) Neither the Transferred Assets nor any assets subject to
the License Agreement, the Xxxxxxxxx Purchase Agreement, the Equipment
Lease, the Xxxxxxxxx Real Property Lease or the Inventory Purchase
Agreement shall include any Equipment, any Inventory, any other
Property or any proceeds of any Equipment, Inventory or other Property;
(h) With respect to the consent set forth in Section 7(f)
above, the aggregate amount of such cash dividends shall not exceed
$500,000;
(i) The above-described transfers of the Transferred Assets
shall have been consummated on or before December 1, 2000; and
(j) All conditions to the effectiveness of the Citicorp
Consent shall have been satisfied or waived by the required parties
thereto.
15
12. Release.
(a) Aviation Sales and its Subsidiaries acknowledge that they
have no existing defense, counterclaim, offset, cross-complaint, claim
or demand of any kind or nature whatsoever that can be asserted to
reduce or eliminate all or any part of their or the Owner Trustee's
respective liability to pay or perform any obligations pursuant to any
of the Operative Agreements or any other documents which evidence or
secure any obligations owed under any Operative Agreement. In
consideration for the execution of this Amendment Agreement, each of
Aviation Sales and each of its Subsidiaries hereby releases and forever
discharges, Bank of America, the Agent, the Lenders, the Holders and
the Owner Trustee and all of their respective officers, directors,
employees, Affiliates and agents (collectively, the "Released Parties")
from any and all actions, causes of action, debts, dues, claims,
demands, liabilities and obligations of every kind and nature, both in
law and in equity, known or unknown, whether heretofore or now
existing, liquidated or unliquidated, matured or unmatured, fixed or
contingent (collectively, the "Release Claims"), which might be
asserted against any of the Released Parties. This Release applies to
all matters arising out of or relating to the Operative Agreements, any
Property, any obligations due under any of the Operative Agreements and
this Amendment Agreement, commitment letters with respect to other loan
facilities, and the lending and borrowing relationships, and (to the
extent any Release Claims relating to such deposit relationships are
now known to Aviation Sales or any of its Subsidiaries) the deposit
relationships, between Aviation Sales or its Subsidiaries, and Bank of
America, the Agent, the Lenders, the Holders and the Owner Trustee,
including the administration, collateralization and funding thereof.
Each of Aviation Sales and each of its Subsidiaries further agrees not
to bring any action in any judicial, administrative or other proceeding
against the Released Parties, or any of them, alleging any such Release
Claim or otherwise arising in connection with any such Release Claim.
(b) It is the intent of the parties that except as otherwise
set forth herein, the foregoing release shall be effective as a full
and final accord and satisfaction of all claims hereby released and
each of Aviation Sales and each of its Subsidiaries hereby agrees,
represents and warrants that the matters released herein are not
limited to matters which are known or disclosed. In this connection,
each of Aviation Sales and each of its Subsidiaries hereby agrees,
represents and warrants that it realizes and acknowledges that factual
matters now existing and unknown to it may have given or may hereafter
give rise to Release Claims, which are presently unknown, unsuspected,
unliquidated, unmatured and/or contingent, and it further agrees,
represents and warrants that this release has been negotiated and
agreed upon in view of that realization. Nevertheless, Aviation Sales
and its Subsidiaries hereby intend to release, discharge and acquit the
Released Parties of and from any such unknown, unsuspected,
unliquidated, unmatured and/or contingent Release Claims, which are in
any way set forth in or related to the matters identified above in this
Section 12. Aviation Sales and its Subsidiaries hereby explicitly waive
the benefits of any common law or statutory rule with respect to the
release of such Release Claims.
(c) The acceptance and delivery of this Amendment Agreement by
the Agent on behalf of the Released Parties shall not be deemed or
construed as an admission of liability with respect to the Release
Claims or otherwise by the Released Parties, or any
16
of them, and the Released Parties hereby expressly deny liability of
any nature whatsoever arising from or related to the subject of the
release contained in this Section 12.
(d) Each of Aviation Sales and each of its Subsidiaries hereby
agrees, represents and warrants that: (i) such party has not
voluntarily, by operation of law or otherwise, assigned, conveyed,
transferred or encumbered, either directly or indirectly, in whole or
in part, any right to or interest in any of the Release Claims
purported to be released by this Section 12; (ii) such party has had
advice of counsel of its own choosing in negotiations for and the
preparation of this Amendment Agreement; and (iii) such party is fully
aware of the effect of releases such as that contained in this Section
12.
13. Entire Agreement. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, conditions, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as in this Amendment Agreement otherwise expressly stated, no representations,
warranties or commitments, express or implied, have been made by any other party
to the other. None of the terms or conditions of this Amendment Agreement may be
changed, modified, waived or canceled orally or otherwise, except by writing,
signed by all the parties hereto, specifying such change, modification, waiver
or cancellation of such terms or conditions, or of any proceeding or succeeding
breach thereof.
14. Full Force and Effect of Operative Agreements. Except as hereby
specifically amended, modified or supplemented, the Participation Agreement, the
Lease, the Credit Agreement, the Trust Agreement, the Guaranty Agreements and
all of the other Operative Agreements are hereby confirmed and ratified in all
respects and shall remain in full force and effect according to their respective
terms.
15. Counterparts. This Amendment Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
17
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
AVIATION SALES COMPANY,
as Construction Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
AVIATION SALES COMPANY,
as Lessee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
FIRST SECURITY BANK, NATIONAL
ASSOCIATION
not individually, except as
expressly stated under the Operative
Agreements, but solely as Owner
Trustee under the Aviation Sales
Trust 1998-1
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
BANK OF AMERICA, N.A., as a Holder
and as a Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
BANK OF AMERICA, N.A., as
Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SIGNATURE PAGE 1 OF 3
JOINDER BY GUARANTORS
The undersigned Guarantors hereby join in and consent to this Amendment
Agreement.
AVIATION SALES COMPANY
AVIATION SALES MANUFACTURING
COMPANY
AVIATION SALES PROPERTY
MANAGEMENT CORP.
AVIATION SALES FINANCE COMPANY
TIMCO ENGINE CENTER, INC.
AVS/XXXXX-XXXXX MACHINE COMPANY
APEX MANUFACTURING, INC.
AEROCELL STRUCTURES, INC.
AVIATION SALES DISTRIBUTION
SERVICES COMPANY
AVIATION SALES BEARINGS COMPANY
AVIATION SALES LEASING COMPANY
WHITEHALL CORPORATION
TRIAD INTERNATIONAL MAINTENANCE
CORPORATION (successor in interest to Aero
Corporation and Aero Corp Macon, Inc.)
AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY
CARIBE AVIATION, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AERO HUSHKIT CORPORATION
HYDROSCIENCE, INC.
TIMCO ENGINEERED SYSTEMS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
----------------- of each of
the foregoing Guarantors
AVSRE, L.P.
By: Aviation Sales Property Management
Corp., its general partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SIGNATURE PAGE 2 OF 3
AVIATION SALES SPS I, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SIGNATURE PAGE 3 OF 3
