Exhibit 10.2
Amendment and Consent Agreement No. 14 for
Lease Agreement and
Certain Other Operative Agreements
THIS AMENDMENT AND CONSENT AGREEMENT NO. 14 (this "Amendment") is made
and entered into as of the 12/th/ day of July, 2002, by and among TIMCO AVIATION
SERVICES, INC., a Delaware corporation (f/k/a Aviation Sales Company) ("Aviation
Sales"), as Construction Agent (the "Construction Agent"); TIMCO AVIATION
SERVICES, INC. (f/k/a Aviation Sales Company), as Lessee (the "Lessee"); XXXXX
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association,
f/k/a First Security Bank, National 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).
WITNESSETH:
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 Holders and the Owner Trustee have entered into the
Amended and Restated Trust Agreement dated as of December 17, 1998 (as amended,
the "Trust 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, 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, 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 parties hereto desire to amend the Participation
Agreement, the Lease Agreement, the Trust Agreement, the Credit Agreement and
certain other Operative Agreements and consent to execution and deliver of
certain agreements upon the terms herein set forth;
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", "Lease" and "Lease
Agreement" as used herein and in the Operative Agreements (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 therefore in the Participation Agreement.
2. Amendments to the Participation Agreement and the Lease Agreement.
The Participation Agreement and the Lease Agreement are hereby amended as
follows:
(a) The definitions of each of "Administrator", "Borrowing Base
Certificate", "Eligible Inventory", "Eligible Receivables", "Finance
Affiliate Indebtedness", "Leasing Affiliate Liabilities", "Net Cash
Proceeds of Sale" and "Working Capital" are deleted from Appendix A to
the Participation Agreement.
(b) The definition of "Aviation Sales" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it shall read as follows:
"'Aviation Sales' means TIMCO Aviation Services, Inc., a
Delaware corporation formerly known as Aviation Sales Company."
(c) The definition of "Basic Rent" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it shall read as follows:
"'Basic Rent', with respect to any date of determination,
shall mean the greater of (i) the sum of the Xxxxxxxxx Monthly
Payment actually received by the Agent plus the Applicable
Xxxxxxxxx Margin, or (ii) $210,000.00."
(d) The definition of "BofA Note" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it shall read as follows:
"'BofA Note' shall mean, collectively, the BofA Shareholder
Supported Note and the BofA 2002 Note."
(e) The definition of "BofA Intercreditor Agreement" in Appendix A
to the Participation Agreement is amended in its entirety, so that as
amended it shall read as follows:
"'BofA Intercreditor Agreement' shall mean, that certain
Amended and Restated Intercreditor Agreement dated as of July 12,
2002, to which Citicorp, as agent, and Bank of America, N.A. are
parties, acknowledged by the Citicorp Borrowers, the
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Guarantors (as defined in the Citicorp Loan Documents), and each other
guarantor of the BofA Note."
(f) The definition of "Capital Expenditures" in Appendix A to
the Participation Agreement is amended in its entirety, so that as
amended it shall read as follows:
" 'Capital Expenditures' shall mean, for any period, the
aggregate of all expenditures (whether payable in cash or
other Assets or accrued as a liability (but without
duplication)) during such period that, in conformity with
GAAP, are required to be included in or reflected by Aviation
Sales' or any of its Subsidiaries' fixed asset accounts as
reflected in any of their respective balance sheets; provided,
however, (i) Capital Expenditures shall include, whether or
not such a designation would be in conformity with GAAP, (A)
expenditures for the purchase or development of computer
software and systems, (B) that portion of Capital Leases which
is capitalized on the consolidated balance sheet of Aviation
Sales and its Subsidiaries and (C) expenditures for Non-TROL
Equipment which is purchased simultaneously with the trade-in
of existing Non-TROL Equipment owned by Aviation Sales or any
of its Subsidiaries, to the extent the gross purchase price of
the purchased Non-TROL Equipment exceeds the book value of the
Non-TROL Equipment being traded in at such time; and (ii)
Capital Expenditures shall exclude, whether or not such a
designation would be in conformity with GAAP, expenditures
made in connection with the replacement or restoration of
Assets, to the extent reimbursed or financed from insurance or
condemnation proceeds."
(g) The definition of "Cash Interest Expense" in Appendix A to
the Participation Agreement is amended in its entirety, so that amended
it shall be redefined as "Consolidated Cash Interest Expense" and as
amended it shall read as follows:
" 'Consolidated Cash Interest Expense' shall mean, with
respect to Aviation Sales and its Subsidiaries for any period
of computation thereof, total interest expense, whether paid or
accrued, but without duplication, (including the interest
component of Capital Leases but net of the difference between
payments received by Aviation Sales and its Subsidiaries on all
Hedge Agreements and payments made by Aviation Sales and its
Subsidiaries on all Hedge Agreements other than the initial
payments made to enter into such Hedge Agreements) of Aviation
Sales and its Subsidiaries, which is payable in cash, all as
determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
(h) The definition of "Citicorp Loan Documents" in Appendix A
to the Participation Agreement is amended in its entirety, so that as
amended it shall read as follows:
" 'Citicorp Loan Documents' shall mean the `Loan
Documents' as defined in the New Aviation Sales Credit
Agreement (as amended, modified or restated from time to
time)."
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(i) The definition of "Consolidated EBITDA" in Appendix A to
the Participation Agreement is amended in its entirety, so that as
amended it shall read as follows:
" 'Consolidated EBITDA' shall mean, with respect to
Aviation Sales and its Subsidiaries for any period of
computation thereof, the amount calculated, without
duplication, of (i) Consolidated Net Income, plus (ii)
depreciation and amortization expense of Aviation Sales and
its Subsidiaries, plus (iii) Consolidated Cash Interest
Expense, plus (iv) federal, state, and local income taxes
deducted from Consolidated Net Income in accordance with GAAP,
plus (v) any other items that may be approved by the Agent and
the Majority Lenders (in their sole discretion), minus (vi)
extraordinary gains, all as determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis."
(j) The definition of "Consolidated Fixed Charges" in Appendix
A to the Participation Agreement is amended in its entirety, so that as
amended it shall read as follows:
" 'Consolidated Fixed Charges' means, with respect to
Aviation Sales and its Subsidiaries for any period of
computation thereof, the sum, without duplication, of (i) the
aggregate amount of interest paid in cash on Indebtedness
(plus, without duplication, amounts paid under Hedge
Agreements) during such period (net of amounts under Hedge
Agreements and interest income, in each case actually
received, without duplication), (ii) the aggregate amount of
scheduled payments of principal of Funded Debt during such
period and (iii) all taxes paid in cash during such period
(net of tax refunds received in cash during such period, all
as determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis."
(k) The definition of "Consolidated Fixed Charge Ratio" in
Appendix A to the Participation Agreement in amended in its entirety,
so that as amended it shall read as follows:
" 'Consolidated Fixed Charge Ratio' shall mean, with
respect to Aviation Sales and its Subsidiaries, for any period
of computation thereof, the ratio of (a) the amount calculated
as (i) Consolidated EBITDA minus (ii) (without duplication)
Capital Expenditures made in cash during such period to (b)
Consolidated Fixed Charges for such period."
(l) The definition of "Xxxxxxxxx" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it shall read as follows:
" 'Xxxxxxxxx' means any of (a) Xxxxxxxxx Industries,
Inc. or (b) any permitted assignee of Xxxxxxxxx'x rights or
obligations under the Xxxxxxxxx Sublease (including, without
limitation, KIAC upon the Agent's consent to an assignment of
the Xxxxxxxxx Sublease to KIAC, and Xxxxxxxxx Aerospace upon
the Agent's consent to an assignment of the Xxxxxxxxx Sublease
to Xxxxxxxxx Aerospace)."
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(m) The definition of "Maturity Date" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it shall read as follows:
" `Maturity Date' shall mean June 30, 2005, or such
earlier date as the Lease may terminate."
(n) The definition of "Parent Board" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it shall read as follows:
" `Parent Board' shall mean the Board of Directors of
Aviation Sales comprised of those Persons who are members of
such Board of Directors on May 31, 2002 and identified on
Schedule 5 attached hereto and made a part hereof."
(o) The definition of "Permit" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it shall read as follows:
" `Permit' shall mean any permit, approval,
authorization, license, variance or permission required from a
Governmental Authority or other Person under applicable
Requirement of Law."
(p) The definition of "Permitted Equity Securities Options" in
Appendix A to the Participation Agreement is amended in its entirety,
so that as amended it shall read as follows:
" `Permitted Equity Securities Options" shall mean
the subscriptions, options, warrants, rights, convertible
securities and other agreements or commitments relating to the
issuance of equity Securities of Aviation Sales identified as
such on Schedule 6."
(q) The definition of "Principal Holder Amount Payment" in
Appendix A to the Participation Agreement is amended in its entirety,
so that as amended, it shall read as follows:
" `Principal Holder Amount Payment' shall mean:
(a) with respect to each Scheduled Interest Payment
Date (other than the Maturity Date), a monthly payment of
principal with respect to the Holder Fundings, which
payment shall be due on such date, in an amount equal to
(i) 3% multiplied by (ii) the excess of (A) the amount of
Basic Rent due on such date, over (B) the aggregate amount
of interest on Loans and Holder Yield accrued since the
immediately preceding Scheduled Interest Payment Date; and
(b) with respect to the Maturity Date, a payment of
the entire outstanding amount of Holder Fundings."
(r) The definition of "Principal Series A Loan Payment" in
Appendix A to the Participation Agreement is amended in its entirety,
so that as amended, it shall read as follows:
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" 'Principal Series A Loan Payment' shall mean:
(a) with respect to each Scheduled Interest
Payment Date, a monthly payment of principal with
respect to the Series A Loans, in an amount equal to
(i) 88% multiplied by (ii) the excess of (A) the
amount of Basic Rent due on such date, over (B) the
aggregate amount of interest on Loans and Holder
Yield accrued since the immediately preceding
Scheduled Interest Payment Date; and
(b) with respect to the Maturity Date, the
entire outstanding principal amount of Series A Loans."
(s) The definition of "Principal Series B Loan Payment"
in Appendix A to the Participation Agreement is amended in its
entirety, so that as amended, it shall read as follows:
" 'Principal Series B Loan Payment' shall mean:
(a) with respect to each Scheduled Interest
Payment Date, a monthly payment of principal with
respect to the Series B Loans, in an amount equal to
(i) 9% multiplied by (ii) the excess of (A) the
amount of Basic Rent due on such date, over (B) the
aggregate amount of interest on Loans and Holder
Yield accrued since the immediately preceding
Scheduled Interest Payment Date; and
(b) with respect to the Maturity Date, the entire
outstanding principal amount of Series B Loans."
(t) The definition of "Scheduled Interest Payment Date" in
Appendix A to the Participation Agreement is amended in its entirety,
so that as amended, it shall read as follows:
" 'Scheduled Interest Payment Date' shall mean as to
any Loan (or Holder Funding) the 17/th/ day of each calendar
month (or if the 17/th/ day of any calendar month is not a
Business Day, the next Business Day immediately following the
17/th/ day of such month) and the Maturity Date."
(u) The definition of "Senior Subordinated Notes" in
Appendix A to the Participation Agreement is amended in its entirety,
so that as amended, it shall read as follows:
" 'Senior Subordinated Notes' shall mean, collectively,
(i) the 8-1/8% Senior Subordinated Notes due 2008 issued by
Aviation Sales under that certain Indenture dated as of
February 17, 1998, and (ii) the 8% Senior Subordinated
Convertible PIK Notes due 2006 issued by Aviation Sales under
that certain Indenture dated as of February 28, 2002."
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(v) The definition of "Synthetic Lease Basic Rent" in
Appendix A to the Participation Agreement is amended it its
entirety, so that amended, it shall read as follows:
" `Synthetic Lease Basic Rent' shall mean, with
respect to any Person that is a lessee under any Synthetic
Lease Agreements, the rent paid by such Person under such
Agreement to the extent such rent is intended to repay, or
the amount of such rent is determined by reference to, any
interest on Indebtedness, or yield on equity, owed by the
lesser under such Synthetic Lease Agreements."
(w) The following definition of "Amendment No. 14" is
added to Appendix A to the Participation Agreement:
" `Amendment No. 14' shall mean that certain Amendment
and Consent Agreement No. 14 for Lease Agreement and Certain
Other Operative Agreements dated as of July 12, 2002, among
the Construction Agent, the Lessee, the Owner Trustee, Bank of
America as a Holder and Lender, the Agent, and the Guarantors
parties thereto."
(x) The following definition of "Applicable Xxxxxxxxx
Margin" is added to Appendix A of the Participation Agreement:
" `Applicable Xxxxxxxxx Margin' shall mean (a) $0.00
from the date of Amendment No. 14 through June 30, 2003; (b)
$20,000.00 from July 1, 2003 through June 30, 2004; and (c) $
25,000.00 at all times after June 30, 2004."
(y) The following definition of "BofA Documents" is added
to Appendix A of the Participation Agreement:
" `BofA Documents' shall mean, collectively, the BofA
Notes, the BofA Intercreditor Agreement, and other agreements,
instruments and documents executed and delivered to Bank of America,
N.A. in connection therewith which remain in effect of July 12, 2002 or
are thereafter executed, including, without limitation, guaranties of
the liabilities evidenced by the BofA Note."
(z) The following definition of "BofA Shareholder
Supported Note" is added to Appendix A of the Participation Agreement:
" `BofA Shareholder Supported Note' shall mean that
certain Replacement Term Loan Note dated July 12, 2002 in the principal
amount of $5,000,000 executed by the Citicorp Borrowers and payable to
Bank of America, N.A."
(aa) The following definition of "BofA 2002 Note" is added
to Appendix A of the Participation Agreement:
" `BofA 2002 Note' shall mean that certain Replacement
Term Loan Note dated July 12, 2002 in the principal amount of
$2,500,000 executed by the Citicorp Borrowers and payable to Bank of
America, N.A."
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(bb) The following definition of "Class Action Litigation"
is added to Appendix A of the Participation Agreement:
" `Class Action Litigation' shall mean the securities
class action litigation filed against Aviation Sales and
certain of its former directors and officers in the United
States District Court for the Southern District of Florida
(Case No. 99-2560-CIV-XXXXXX)."
(cc) The following definition of "Xxxxxxxxx Monthly Payment"
is added to Appendix A to the Participation Agreement:
" `Xxxxxxxxx Monthly Payment' shall mean a monthly
payment of rent pursuant to the Xxxxxxxxx Sublease of not less
than $229,167.00."
(dd) The following definition of "Xxxxxxxxx Aerospace" is
added to Appendix A to the Participation Agreement:
" `Xxxxxxxxx Aerospace' shall mean Xxxxxxxxx Aerospace,
LLC, a Delaware limited liability company."
(ee) The following definition of "KIAC" is added to
Appendix A of the Participation Agreement:
" `KIAC' shall mean KIAC, Inc., a Delaware
corporation."
(ff) The following definition of "Junior Subordinated Notes"
is added to Appendix A of the Participation Agreement:
" `Junior Subordinated Notes' shall mean the 8%
Junior Subordinated Convertible PIK Notes due 2007 to be
issued by Aviation Sales in connection with its settlement of
the Class Action Litigation and pursuant to terms no less
favorable to Aviation Sales and the Holders, Lenders and Owner
Trustee than the PIK Subordinated Debt outstanding under the
8% Senior Subordinated Convertible PIK Notes due 2006 issued
by Aviation Sales under that certain Indenture dated as of
February 28, 2002."
(gg) The following definition of "Junior Subordinated Notes
Guaranties" is added to Appendix A of the Participation Agreement:
" `Junior Subordinated Notes Guaranties' shall mean,
collective, the unsecured guaranties of payment of the Junior
Subordinated Notes executed by certain Subsidiaries of
Aviation Sales."
(hh) The following definition of "Xxxxxxx Documents" is
added to Appendix A of the Participation Agreement:
" `Xxxxxxx Documents" shall mean, collectively, the
Xxxxxxx Note, the Xxxxxxx Texas Transaction Documents, the Xxxxxxx
Release, the Xxxxxxx Intercreditor
8
Agreement, and other agreements, instruments, and documents executed
and delivered to or by Xxxxxx Xxxxxxx or Xxxxxx X. Xxxxxxx in
connection therewith."
(ii) The following definition of "Xxxxxxx Intercreditor
Agreement" is added to Appendix A of the Participation Agreement:
" `Xxxxxxx Intercreditor Agreement" shall mean that
certain Intercreditor Agreement, dated as of July 12, 2002, between
Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxx, the Owner Trustee, and the Agent,
and joined by Aviation Sales and certain Guarantors."
(jj) The following definition of "Xxxxxxx Note" is added to
Appendix A of the Participation Agreement:
" `Xxxxxxx Note' shall mean that certain Term Loan Note
dated July 12, 2002, in the principal amount of $1,000,000 executed by
the Citicorp Borrowers and payable to Xxxxxx Xxxxxxx and
Xxxxxx X. Xxxxxxx."
(kk) The following definition of "Xxxxxxx Release" is added
to Appendix A of the Participation Agreement:
" `Xxxxxxx Release' shall mean that certain Mutual
Release dated July 12, 2002, executed and delivered by Xxxxxx Xxxxxxx,
Xxxxxx X. Xxxxxxx, the Citicorp Borrowers and the Guarantors (as
defined in the Citicorp Loan Documents).
(ll) The following definition of "Xxxxxxx Texas Transaction
Documents" is added to Appendix A of the Participation Agreement:
" `Xxxxxxx Texas Transaction Documents' shall mean,
collectively, the agreements, instruments and documents identified on
Schedule 28.3.2-B."
(mm) The following definition of "Shareholder Guarantees" is
added to Appendix A of the Participation Agreement:
" `Shareholder Guarantees" shall mean those guarantees
of payment and performance of the BofA Note identified on Exhibit B to
the Shareholder Intercreditor Agreement."
(nn) The following definition of "Shareholder Intercreditor
Agreement" is added to Appendix A of the Participation Agreement:
" `Shareholder Intercreditor Agreement" shall mean that
certain Intercreditor Agreement dated as of July 12, 2002 to which
Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxx, Don. X. Xxxxxxx, LJH, Ltd., Xxxxx
Investments, Inc., are parties, acknowledged by the Citicorp Borrowers
and Guarantors (as defined in the Citicorp Loan Documents)."
(oo) The following definition of "Shareholder Security
Agreement" is added to Appendix A of the Participation Agreement:
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" `Shareholder Security Agreement" shall mean that certain
Security Agreement dated as of July 12, 2002 to which Xxxxxx Xxxxxxx,
Xxxxxx X. Xxxxxxx, Don. X. Xxxxxxx, LJH, Ltd., Xxxxx Investments, Inc.
(as secured parties) and the Citicorp Borrowers and Guarantors (as
defined in the Citicorp Loan Documents) (as grantors) are parties."
(pp) The following definition of "Shareholder Subrogation
Claims" is added to Appendix A of the Participation Agreement:
" `Shareholder Subrogation Claims" shall mean those claims
against the Citicorp Borrowers and Guarantors (as defined in the
Citicorp Loan Documents), if any, of Xxx X. Xxxxxxx, LJH, Ltd., and
/or Xxxxx Investments, Inc. arising in the event such Persons are
subrogated to the rights of Bank of America, N.A. with respect to
Indebtedness evidenced by the BofA Note by virtue of the performance
of their obligations under the Shareholder Guarantees."
(qq) The following definition of "New Aviation Sales Credit
Agreement" is added to Appendix A of the Participation Agreement:
" `New Aviation Sales Credit Agreement' shall mean that
certain Fifth Amended and Restated Credit Agreement, dated as of
July 12, 2002, by and among TIMCO Aviation Services, Inc., as
subsidiaries of TIMCO Aviation Services, Inc., borrowers, the
lenders party thereto from time to time, the issuing banks party
thereto from time to time, and Citicorp USA, Inc., as agent and
co-agent, and UPS Capital Corporation as co-agent."
(rr) The following definition of "PIK Subordinated Debt" is
added to Appendix A of the Participation Agreement:
" `PIK Subordinated Debt' shall mean Indebtedness
evidenced by the Junior Subordinated Notes and the 8% Senior
Subordinated Convertible PIK Notes due 2006 issued by Aviation
Sales under that certain Indenture dated as of February 28,
2002."
(ss) The following definition of "Subordinated Notes Documents"
is added to Appendix A of the Participation Agreement:
" `Subordinated Notes Documents' shall mean, collectively,
the Senior Subordinated Notes, Senior Subordinated Notes Junior
Guaranties, Junior Subordinated Notes, and Subordinated Notes
Guaranties and "Subordinated Notes Document" shall mean, any of
the same, individually."
(tt) The following Schedules (in the respective form and
substance attached hereto) are added to the Participation Agreement:
Schedule 5 and Schedule 6.
(uu) Section 2.2 of the Lease Agreement is amended by deleting
the phrase "July 31, 2002" and inserting in its place the phrase "June
30, 2005".
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(vv) Section 3.1(d) of the Lease Agreement is amended in its
entirety, so that as amended, it shall read as follows:
"(d) Any payment of rent due pursuant to the Xxxxxxxxx
Sublease (collectively, the "Sublease Rent") shall be paid by
Xxxxxxxxx directly to the Agent and shall be applied first, to the
payment of any Basic Rent then due and payable, and second, any
excess Sublease Rent shall be applied, on a pro rata basis with
respect to each Lender and Holder, to the outstanding principal
amount of the Loans and the Holder Fundings. Lessee shall instruct
Xxxxxxxxx to make each payment of Sublease Rent directly to the
Agent at such address or to such account via wire transfer as may
be specified by the Agent to the Lessee from time to time. In the
event the Lessee receives any Sublease Rent, the Lessee shall
immediately pay such amount over to the Agent."
(ww) Section 3.1 of the Lease Agreement is amended by adding a
new sub-section (e) as follows:
"(e) Any Basic Rent received by the Agent shall be applied
by the Agent to pay accrued interest on the Loans, accrued Holder
Yield, the outstanding principal amount of the Loans and Holder
Fundings, or any other obligations then due and payable under the
Operative Agreements, in such order as the Agent shall determine
in its sole discretion."
(xx) Section 3.1 of the Lease Agreement is amended by adding a
new sub-section (f) as follows:
"(f) Lessee shall be obligated for all Basic and
Supplemental Rent due and owing at any time pursuant to the terms
of this Lease, including but not limited to the difference between
the portion of the Xxxxxxxxx Monthly Payment actually received by
the Agent and the amount of Basic Rent then due. In the event that
any portion of a Xxxxxxxxx Monthly Payment or any other Rent or
other payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Agent, the Owner
Trustee, any Lender or Holder or the Lessee) to be repaid to a
trustee, receiver or any other Person, in connection with any
proceeding under the Bankruptcy Code or other debtor relief law or
otherwise, then the Lessee shall pay to the Agent upon demand any
amount so recovered from or repaid by the Agent, any Lender or any
Holder, plus interest thereon from the date of such demand to the
date such payment is made at the Base Rate."
(yy) Section 7.1(a) of the Lease Agreement is amended by deleting
clause (C) from the first sentence thereof and inserting in its place
the following: "and (C) all payments of Basic Rent shall be deemed to
be payments of interest to the extent applied to interest on Loans or
Holder Yield."
(zz) Section 17.1(n) of the Lease Agreement is amended in its
entirety, so that as amended it shall read as follows: "(n)
[Intentionally omitted];".
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(aaa) Section 17.1(v) of the Lease Agreement is amended in its
entirety, so that as amended it shall read as follows: "(v)
[Intentionally omitted]".
(bbb) Section 28.1.2 of the Lease Agreement is amended in its
entirety, so that as amended it shall read as follows: "28.1.2
[Intentionally omitted]."
(ccc) The last paragraph of Section 28.1.6 of the Lease Agreement
is amended by deleting the word "Administrator" and inserting in its
place the word "administrator".
(ddd) Section 28.3 of the Lease Agreement is amended in its
entirety, so that as amended, it shall read as follows:
"28.3 Negative Covenants. Until the obligations of the
Lessee, the Construction Agent and the Guarantors under the
Operative Agreements have been paid and satisfied in full and the
Operative Agreements have been terminated in accordance with the
terms thereof, unless the Lessor and the Majority Lenders shall
otherwise consent in writing, Aviation Sales shall not, nor shall
it permit any Subsidiary to:
28.3.1 Indebtedness. Directly or indirectly
create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any
Indebtedness, except:
(a) the obligations under the Operative
Agreements whether directly or through Accommodation
Obligations;
(b) Indebtedness existing on the date of
Amendment No. 14 as set forth on Schedule 28.3.l
hereto; provided that none of the instruments and
agreements evidencing or governing such Indebtedness
shall be amended, modified or supplemented after
such date in a way which would have the effect of
shortening the tenor of the obligations thereunder,
increasing the amount of such principal obligations,
increasing the pricing associated with such
obligations (other than payments of scheduled fees,
which fees do not exceed those generally paid in the
marketplace), accelerating the scheduled payments
due thereunder, or accelerating or increasing the
prepayment requirements thereunder without the prior
written consent of the Majority Lenders;
(c) any extensions, renewals, refundings or
replacement of any Indebtedness permitted by Section
28.3.1, provided that any such extension, renewal,
refunding or replacement is in an aggregate
principal amount not greater than the principal
amount of, and is on terms no less favorable to
Aviation Sales or the applicable Subsidiary than the
terms of, the Indebtedness so extended, renewed,
refunded or replaced;
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(d) the endorsement of negotiable
instruments for deposit or collection or similar
transactions in the ordinary course of business;
(e) Indebtedness for trade payables, wages
and other accrued expenses incurred in the ordinary
course of business, whether or not evidenced by
notes;
(f) Indebtedness under the Xxxxxxx Note,
the Junior Subordinated Notes and payment of
non-cash interest under the PIK Subordinated Debt,
and with respect to Shareholder Subrogation Claims,
whether directly or by Accommodation Obligation;
(g) to the extent permitted by Section 28.4
and in any event in an aggregate amount not to
exceed $6,000,000 at any time for Aviation Sales and
its Subsidiaries, Indebtedness of Aviation Sales and
its Subsidiaries with respect to Capital Leases
(other than the Lease to the extent the same is a
Capital Lease pursuant to GAAP) and purchase money
Indebtedness incurred to finance the acquisition of
fixed assets, and Indebtedness incurred to refinance
such Capital Leases and purchase money Indebtedness;
provided, however, prior to incurring Capital Lease
obligations owing to any one lessor or group of
affiliated or related lessors or purchase money
Indebtedness owing to any one holder or group of
affiliated or related holders thereof, which in
either case aggregate(s) more than $500,000,
Aviation Sales or any applicable Subsidiary of
Aviation Sales shall obtain from such lessor(s) or
holder(s) a duly executed intercreditor agreement in
form and substance satisfactory to the Agent;
(h) Indebtedness constituting Accommodation
Obligations permitted by Section 28.3.5;
(i) Indebtedness in respect of the Hedge
Agreements up to an aggregate notional amount (as
advised to the Agent by the counterparty(ies) to
Hedge Agreements and confirmed by Aviation Sales)
not to exceed $2,000,000;
(j) Indebtedness with respect to reasonable
warranties and indemnities made under any agreements
for asset sales permitted under Section 28.3.2 and
Contractual Obligations of Aviation Sales or its
Subsidiaries entered into in the ordinary course of
their respective businesses;
(k) Indebtedness in respect of taxes,
assessments, governmental charges and Claims for
labor, materials or supplies,
13
to the extent that payment thereof is not required
pursuant to Section 28.2.4;
(l) Indebtedness consisting of obligations
to make contributions to and payments of benefits
which, in each case, are not yet due, under any Plan
in existence as of July 12, 2002 as required by the
benefit commitments in such Plan as of July 12,
2002;
(m) Indebtedness under appeal bonds in
connection with judgments which do not result in a
Default or an Event of Default or any other breach
hereunder, provided that the aggregate amount of all
such Indebtedness does not exceed $2,000,000;
(n) Indebtedness arising from intercompany
loans from Aviation Sales or any Subsidiary to any
Subsidiary which is a Guarantor provided that such
Indebtedness is subordinated to the obligations
under the Operative Agreements on terms and subject
to agreements satisfactory to the Agent and the
Owner Trustee; and
(o) in addition to the Indebtedness
permitted by clauses (a) to (m) above, other secured
Indebtedness incurred by Aviation Sales and its
Subsidiaries in an aggregate amount not to exceed
$2,000,000 at any time outstanding.
28.3.2 Sales of Assets. (Without limiting the
generality of any provision of any Operative Agreement that
restricts any sale or other transfer of any Property
(including without limitation any Land, Improvements or
Equipment)) sell, assign, transfer, lease, convey or
otherwise dispose of any of its Assets, whether now owned
or hereafter acquired, or any income or profits therefrom,
or enter into any agreement to do so, except:
(a) any sale of Land, Improvements or
Equipment expressly permitted by the terms of the
Operative Agreements;
(b) dispositions of inventory in the
ordinary course of business;
(c) dispositions of obsolete or worn-out
equipment (other than any Equipment or Improvements)
in the ordinary course of business;
(d) Assets (other than any Property)
identified on Schedule 28.3.10 permitted to be sold
under Section 28.3.10;
(e) the sale of certain Assets (other than
any Property) identified on Schedule 28.3.2-A;
provided that no Default or Event of Default shall
then have occurred and be continuing and the
14
terms of such sale are those identified on Schedule
28.3.2-A or more favorable to Aviation Sales than
such terms;
(f) the sale of Investments in Cash
Equivalents permitted pursuant to Section 28.3.4(a);
(g) the transfer of the equipment (other
than any Property) identified in that certain Order
entered by the United States Bankruptcy Court
District of Delaware in Chapter 11 Case No. 02-10536
(MWF) on June 10, 2002 (the "Xxxxxxxxx Order") ,
with respect to the transaction described in that
certain Motion (the "Motion") Xxxxxxxxx Industries,
Inc., et al, Debtors for Entry of an Order Approving
the Post-Closing Resolution Agreement with Aviation
Sales Company [Docket no. 190] filed with the United
States Bankruptcy Court District of Delaware in
Chapter 11 Case No. 02-10536 (MFW) on June 6, 2002
pursuant to transactions which are the subject of
the Xxxxxxxxx Order and pertain to Aviation Sales
and its Subsidiaries in accordance with the terms of
the Xxxxxxxxx Order and the Post-Closing Resolution
Agreement attached as an exhibit to the Motion with
respect to which the Xxxxxxxxx Order was entered,
provided that (i) such transfer is completed by no
later than August 15, 2002, and (ii) the Xxxxxxxxx
Order shall have become final and no longer subject
to appeal on or before the date of such transfer;
and
(h) the transfer of the Assets (other than
any Property) identified on Schedule 28.3.2-B
attached hereto and made a party hereof in
connection with the satisfaction of certain
obligations and liabilities of certain Subsidiaries
of Aviation Sales identified on Schedule 28.3.2-B;
provided that such transfers are consummated as of
July 12, 2002.
(h) the sale of Assets (other than Assets
subject to clause (b) or (d) above and not to
include any Property) outside the ordinary course of
business for consideration not less than the Fair
Market Value thereof so long as the Fair Market
Value thereof does not exceed $500,000 in the
aggregate.
28.3.3 Liens. (Without limiting the generality
of any other restriction of Liens on any Property) directly
or indirectly create, incur, assume or permit to exist any
Lien on or with respect to any of their respective Assets
except:
(a) Liens created pursuant to the Operative
Agreements;
(b) Liens on Assets (other than any
Property) existing on the date hereof and listed on
Schedule 28.3.3, securing the
15
respective Indebtedness described on such Schedule;
and any extension, renewal and replacement of any
such Lien, provided that any such extension, renewal
or replacement shall be limited to the Assets
covered by the Lien prior to such extension, renewal
or replacement, and the obligations secured by any
such extension, renewal or replacement Lien shall be
in an amount not greater than the amount of the
original obligations secured by the Lien prior to
such extension, renewal or replacement;
(c) Permitted Liens;
(d) purchase money Liens (including the
interest of a lessor under a Capital Lease and Liens
to which any Asset is subject at the time of such
Person's purchase thereof) with respect to purchases
of fixed assets, securing an amount not to exceed
$1,000,000 in the aggregate at any time or from time
to time for Aviation Sales and its Subsidiaries;
provided that (A) such Liens shall not apply to any
Property, (B) such Liens shall not apply to any
Assets other than that purchased or subject to such
Capital Lease, and (C) with respect to Liens
securing Capital Lease obligations owing to any one
lessor or group of affiliated or related lessors or
purchase money Indebtedness owing to any one holder
or group of affiliated or related holders thereof,
which in either case aggregate(s) more than
$500,000, Aviation Sales or its Subsidiary shall
obtain from such lessor or holder a duly executed
intercreditor agreement in form and substance
satisfactory to the Agent and the Owner Trustee
prior to the granting any such Lien; and
(e) Liens created (i) pursuant to the
Shareholder Security Agreement on July 12, 2002, and
(ii) within thirty (30) days after July 12, 2002
against Real Property and interests in Real Property
which constitute Assets (other than any Property),
pursuant to mortgages and subject to the Shareholder
Intercreditor Agreement.
28.3.4 Investments. Directly or indirectly make
or own any Investment except:
(a) Investments existing on the date hereof
and listed on Schedule 28.3.4;
(b) Investments in Cash Equivalents; and
(c) to the extent they constitute Investments,
contributions to and payments of benefits under any
Plan in existence as of July 12, 2002 as required by
the benefit commitments in such Plan as of July 12,
2002.
16
Neither Aviation Sales nor any Subsidiary shall form any
direct Subsidiary after July 12, 2002 or permit any of its
Subsidiaries to form any Subsidiary except to the extent
Investments therein are permitted hereinabove. Neither
Aviation Sales nor any Subsidiary may make any Investment
in any Subsidiary of Aviation Sales Leasing Company which
is not a Guarantor.
28.3.5 Accommodation Obligations. Directly or
indirectly create or become or be liable with respect to
any Accommodation Obligation, except:
(a) Accommodation Obligations arising under the
Operative Agreements;
(b) Accommodation Obligations existing on the
date hereof and listed on Schedule 28.3.5; and any
extension, renewal and replacement of any such
Accommodation Obligation, provided that any such
extension, renewal or replacement shall be limited
to the Assets or obligations covered by the
Accommodation Obligation prior to such extension,
renewal or replacement, and the obligations
supported by such extension, renewal or replacement
Accommodation Obligation shall be an amount not
greater than the amount of the original obligations
supported by the Accommodation Obligation prior to
such extension, renewal or replacement;
(c) recourse obligations resulting from
endorsement of negotiable instruments for collection
in the ordinary course of its business;
(d) Accommodation Obligations evidenced by the
Junior Subordinated Notes Guaranties;
(e) unsecured Accommodation Obligations
incurred by Aviation Sales with respect to
Indebtedness of its Subsidiaries permitted under the
provisions of Section 28.3.1 (i) for borrowed money,
(ii) under Capital Leases or (iii) under any lease
of any property (whether real, person or mixed) by
such Subsidiary as lessee which is not a Capital
Lease; and
(f) in addition to the Accommodation
Obligations permitted by clauses (a) through (e)
above, other unsecured Accommodation Obligations of
Aviation Sales and its Subsidiaries in an aggregate
amount not to exceed $500,000 at any time
outstanding.
28.3.6 Restricted Junior Payments. Declare or make
any Restricted Junior Payment, except:
17
(a) dividends or other distributions (directly
or indirectly) from Subsidiaries of Aviation Sales
to Aviation Sales in such amounts and at such times
as are required to enable Aviation Sales to meet (i)
its obligations under the Senior Subordinated Notes
issued as 8-1/8% Senior Subordinated Notes due 2008,
(ii) its scheduled pre-default obligations for, and
pre-default mandatory prepayments of, principal and
interest pursuant to the Citicorp Loan Documents,
(iii) its obligations under the Supplemental Term
Loan Warrant, (iv) its obligations under the
Operative Agreements, and (v) its obligations for
taxes as and when payable; and
(b) fees and other remuneration paid to
Aviation Sales by any Guarantor in the ordinary
course of such Guarantor's business and otherwise
permitted under this Agreement.
28.3.7 Conduct of Business. Engage in any business
other than (a) the businesses engaged in by such Person on
the date of Amendment No. 14 and (b) any business or
activities which are substantially related, incidental or
complimentary thereto.
28.3.8 Transactions with Affiliates. Directly or
indirectly enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any
service) with any Affiliate of Aviation Sales, on terms
that are less favorable to Aviation Sales or such
Subsidiary than those that might be obtained in an arm's
length transaction at the time from Persons who are not
such an Affiliate. Nothing contained in this Section 28.3.8
shall prohibit (a) any transaction expressly permitted by
Section 28.3.6; (b) increases in compensation and benefits
for officers and employees of Aviation Sales or its
Subsidiaries which are customary in the industry; provided
that no Default or Event of Default has occurred and is
continuing; or (c) payment of customary officers' and
directors' indemnities.
28.3.9 Restriction on Fundamental Changes. (a)
Enter into any merger or consolidation, or (b) permit any
of its Subsidiaries to enter into any merger or
consolidation. Neither Aviation Sales nor any Subsidiary of
Aviation Sales shall liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution), or convey, lease,
sell, transfer or otherwise dispose of, in one transaction
or a series of transactions, all or substantially all of
its business or Assets, whether now or hereafter acquired,
except in connection with transactions permitted under
Section 28.3.2 or permit any of its Subsidiaries to (a)
liquidate, wind-up or dissolve (or suffer any liquidation
or dissolution) or (b) convey, lease, sell, transfer or
otherwise dispose of, in one transaction or a series of
transactions, all or substantially all of their respective
businesses or Assets, whether now or hereafter acquired,
except in connection with transactions permitted under
Section
18
28.3.2. Notwithstanding the foregoing, Aviation Sales
Leasing Company may be dissolved following the expiration
of the lease agreement identified on Schedule 28.3.9
attached hereto and made a part hereof; provided that no
Default or Event of Default shall then have occurred and be
continuing and such dissolution is effected promptly
following filing of the tax returns identified on Schedule
28.3.9.
28.3.10 Sales and Leasebacks. Except with respect to
Assets (other than any Property) identified on Schedule
28.3.10, become liable, directly, by assumption or by
Accommodation Obligation, with respect to any lease,
whether an Operating Lease or a Capital Lease, of any Asset
(whether real or personal or mixed) which it (a) sold or
transferred or is to sell or transfer to any other Person,
or (b) intends to use for substantially the same purposes
as any other Asset which has been or is to be sold or
transferred by it to any other Person, in either instance,
in connection with such lease.
28.3.11 ERISA.
(a) Engage in any prohibited transaction
described in Sections 406 of ERISA or 4975 of the
Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption
has not been previously obtained from the DOL;
(b) permit to exist any accumulated funding
deficiency (as defined in Sections 302 of ERISA and
412 of the Internal Revenue Code), with respect to
any Benefit Plan, whether or not waived;
(c) fail, or permit any ERISA Affiliate to
fail, to pay timely required contributions or annual
installments due with respect to any waived funding
deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate
to terminate, any Benefit Plan which would result in
any liability of any Borrower or any ERISA Affiliate
under Title IV of ERISA;
(e) fail to make any contribution or payment
to any Multiemployer Plan which Aviation Sales, any
Guarantor, any Subsidiary of Aviation Sales or any
ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or
any law pertaining thereto;
(f) fail, or permit any ERISA Affiliate to
fail, to pay any required installment or any other
payment required under Section 412 of the Internal
Revenue Code on or before the due date for such
installment or other payment; or
19
(g) amend, or permit any ERISA Affiliate to
amend, a Benefit Plan resulting in an increase in
current liability for the plan year such that
Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate is required
to provide security to such Plan under Section
401(a)(29) of the Internal Revenue Code;
if such event results, either singly or in the
aggregate, after taking into account all other such
events and any liabilities associated therewith, in
an aggregate liability of Aviation Sales and its
Subsidiaries in excess of $500,000.
28.3.12 Issuance of Equity Securities. Permit any
of its Subsidiaries to issue any equity Securities.
28.3.13 Organizational Documents. Amend, modify or
otherwise change any of the terms or provisions in any of
(a) its Organizational Documents as in effect on the
Amendment Effective Date, except for amendments to effect a
change of name of a Guarantor (other than Aviation Sales),
written notice of which change of name shall have been
provided to the Agent and Owner Trustee not more than sixty
(60) days and not less than thirty (30) days prior to the
effective date of any such name change, (b) the agreements
and instruments evidencing loans and advances comprising
intercompany loans, in each case without the prior written
consent of the Agent and Owner Trustee, or (c) the BofA
Documents or the Subordinated Notes Documents.
28.3.14 Fiscal Year. Change its fiscal year from
the Fiscal Year.
28.3.15 Aviation Sales Covenants. In the case of
Aviation Sales:
(a) merge or liquidate with or into any other
Person, if as a result thereof and after giving effect
thereto, Aviation Sales is not the surviving Person;
(b) repurchase or redeem any of its Capital Stock
other than as required with respect to the Permitted Equity
Securities Options; or
(c) engage in any business other than that of
acting as a holding company for AVS/M-1, Inc., Aviation
Sales Leasing Company, Triad International Maintenance
Corporation; Aerocell Structures, Inc., Aircraft Interior
Design, Inc., TIMCO Engine Center, Inc., AVS/CAI, Inc.,
Whitehall Corporation and Aviation Sales Property
Management Corp.
20
28.3.16 Burdensome Agreements. Enter into any Contractual
Obligation (other than this Lease or any other Operative Agreement)
that (a) limits the ability (i) of any Subsidiary to make Junior
Restricted Payments to the Lessee or any Guarantor or to otherwise
transfer property to the Lessee or any Guarantor, (ii) of any
Subsidiary to guarantee the obligations of the Lessee under the
Operative Agreements, or (iii) of the Lessee to create, incur, assume
or suffer to exist the Liens under the Operative Agreements on any of
the Property."
(ddd) Section 28.4.3 of the Lease Agreement is amended in its entirety, so
that as amended, it shall read as follows:
"28.4.3 Consolidated Fixed Charge Ratio. Permit the Consolidated
Fixed Charge Ratio during any period set forth below to be less than the
ratio set forth opposite such period:
Applicable Period Minimum
Consolidated Fixed
Charge Ratio
January 1, 2002-- June 30, 2002 1.10 to 1.00
January 1,2002-- September 30, 2002 1.10 to 1.00
Four-Quarter Period ending December 31, 2002 1.10 to 1.00
Each Four-Quarter Period ending on a date after 1.10 to 1.00"
December 31, 2002
(eee) Section 28.4.4 of the Lease Agreement is amended in its entirety, so
that as amended, it reads as follows:
"28.4.4 Minimum Tangible Net Worth. Permit the Tangible Net Worth of
Aviation Sales and its Subsidiaries, at any time during any period set
forth below, to be less than the amount set forth below opposite such
period:
Applicable Period Minimum Tangible Net
Worth
Fiscal Quarter ending June 30, 2002 $2,250,000
Fiscal Quarter ending September 30, 2002 $1,994,000
Fiscal Quarter ending December 31, 2002 $1,656,000
Fiscal Quarter ending March 31, 2003 $1,345,000
Fiscal Quarter ending June 30, 2003 $1,016,000
Fiscal Quarter ending September 30, 2003 $ 660,000
At all times after September 30, 2003 $ 13,000"
(fff) Section 28.4.5 of the Lease Agreement is amended in its entirety, so
that as amended, it reads as follows:
21
"28.4.5 Capital Expenditures. Aviation Sales 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"):
Applicable Period Maximum Amount
Fiscal Year ending December 31, 2002 $2,330,000
Fiscal Year ending December 31, 2003 $3,500,000
Fiscal Year ending December 31, 2004 $3,500,000"
(ggg) Section 28.7 is deleted from the Lease Agreement.
(hhh) The following Schedules (in the respective form and
substance attached hereto) are added to the Lease Agreement: Schedule
28.3.1, 28.3.2-A, 28.3.2-B, 28.3.3, 28.3.4, 28.3.5, 28.3.9, 28.3.10 and
28.3.14.
(iii) Section 8.1(b) of the Credit Agreement is amended in its
entirety, so that as amended it shall read as follows:
"(b) Except as otherwise set forth in Section 2.6(b),
payments and other amounts received by the Administrative Agent from
time to time in accordance with the terms of subparagraph (a) shall
be applied to accrued interest on the Loans and Holder Yield,
outstanding principal of the Loans and Holder Fundings and any other
obligations under the Operative Agreements, in such order as the
Administrative Agent shall determine in its sole discretion."
3. Consent. Subject to the conditions set forth in this
Amendment, the Owner Trustee, the Agent, the Lenders and the Holders
consent to the execution and delivery by Xxxxxxxxx, KIAC, Xxxxxxxxx
Aerospace and Aviation Sales of each of the following documents: (a) an
amendment to the Xxxxxxxxx Sublease in the form of Exhibit B attached
hereto (the "Sublease Amendment"); (b) an Amended and Restated
Subordination, Non-Disturbance and Attornment Agreement among the
Agent, Bank of America, the Owner Trustee and Xxxxxxxxx, in the form of
Exhibit C attached hereto (the "Amended and Restated SNDA"); (c) a
Subordination, Non-Disturbance and Attornment Agreement among the
Agent, Bank of America, the Owner Trustee and Xxxxxxxxx Aerospace, in
substantially the same form as Exhibit D attached hereto (the
"Xxxxxxxxx Aerospace SNDA"); (d) an assignment to KIAC of Xxxxxxxxx'x
rights and obligations under the Amended Xxxxxxxxx Sublease, which
assignment shall be in the form of Exhibit E-1 attached hereto (the
"Sublease Assignment"), and (e) an assignment to Xxxxxxxxx Aerospace of
KIAC's rights and obligations under the Amended Xxxxxxxxx Sublease in
the form of Exhibit E-2 attached hereto (the "Second Sublease
Assignment"), which consent shall be effective and deemed given only
upon the receipt by the Agent, simultaneously with such assignment, of
(i) the chattel paper original of the fully-executed Sublease
Amendment; (ii) evidence of the assumption by Xxxxxxxxx (under the
Bankruptcy Code) of the Xxxxxxxxx Sublease as amended by the Sublease
Amendment
22
(the "Amended Xxxxxxxxx Sublease"); (iii) a fully-executed original of the
Amended and Restated SNDA; (iv) a fully-executed original of the Xxxxxxxxx
Aerospace SNDA; (v) the chattel paper original of the Sublease Assignment
and the Second Sublease Assignment and evidence of the consummation of the
transactions contemplated thereby; and (vi) a copy of a final,
non-appealable order of the court in the bankruptcy proceeding filed by
Xxxxxxxxx, et al., Case No. 02-10536, in the United States Bankruptcy
Court, District of Delaware, which order effectively approves each of the
Sublease Amendment, Xxxxxxxxx'x assumption of the Amended Xxxxxxxxx
Sublease, and the Sublease Assignment. Until such time as the delivery of
the documents and evidence required by clauses (i)-(vi) above are delivered
to the Agent, and are determined to be satisfactory to the Agent and the
Owner Trustee, and evidence satisfactory to the Agent of the payment of all
taxes due and owning has been delivered, the consent contained in the
Section 3 will not be effective.
4. 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 of the Participation Agreement (other than
those representations and warranties made with respect to Section 7.3(g)
thereof) are true on and as of the date hereof with the same effect as
though made on and as of the date hereof (except to the extent that the
representations and warranties expressly relate to an earlier date, in
which case such representations and warranties are true as of such date
except that the direct and indirect Subsidiaries of the Lessee and the
Construction Agent are as set forth in Schedule 7 attached hereto).
(b) The audited consolidated financial statements of each of the
Construction Agent and the Lessee as of December 31, 2001, 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. Neither Aviation Sales nor any
Guarantor or any Subsidiary of Aviation Sales has as of the date 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) 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;
(d) No event has occurred and no condition exists on the date hereof
which, after giving effect to this consent and waiver agreement and the
consent of the lenders under the Citicorp Loan Documents, constitutes or
will constitute 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
23
Agreement, either immediately or with the lapse of time or the giving of
notice, or both. Since December 31, 2001, no event has occurred with
respect to the Lessee, the Construction Agent or any Guarantor or any
Subsidiary of Aviation Sales which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
(e) There is as of the date hereof no action, suit, proceeding, claim,
investigation or arbitration before or by any Governmental Authority or
private arbitrator pending or, to the knowledge of Aviation Sales,
threatened against Aviation Sales, any Guarantor or any Subsidiary of
Aviation Sales or any of their respective Assets (i) challenging the
validity or the enforceability of any of the Operative Agreements, (ii)
which will, or is reasonably likely to, result in any Material Adverse
Effect, or (iii) under the Racketeering Influenced and Corrupt
Organizations Act or any similar federal or state statute or law under any
jurisdiction outside of the United States where such Person is a defendant
in a criminal indictment that provides for the forfeiture of assets to any
Governmental Authority as a criminal penalty. There is as of the date
hereof no material loss contingency within the meaning of GAAP which has
not been reflected in the Financial Statements of Aviation Sales and its
Subsidiaries. Neither Aviation Sales nor any Guarantor or any Subsidiary of
Aviation Sales is as of the date hereof subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order
of any nature, decree, rule or regulation of any court or Governmental
Authority which will, or is reasonably likely to, result in a Material
Adverse Effect.
(f) The Lessee shall pay to the Agent a restructuring fee of
$225,000.00, which shall be payable in twelve (12) monthly installments of
$18,750.00 each, payable on the 17th day of each month commencing July 17,
2002. Failure to make each payment on the date due and payable shall be an
immediate Event of Default.
This Amendment shall be deemed to be an Operative Agreement and any
violation of a covenant contained herein shall be a violation of an Operative
Agreement.
5. Conditions. The effectiveness of this Amendment shall be subject to
fulfillment of the following conditions:
(a) The Agent shall have received on the date hereof, in form and
substance satisfactory to the Agent, the following:
(i) a fully-executed original of this Amendment;
(ii) evidence of the payment of all fees and amounts set forth in
Exhibit A attached hereto;
(iii) 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 noncontravention of the Citicorp Loan Documents and agreements
under which the Senior Subordinated Notes have been issued, by this Consent
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
Consent Agreement will not affect the
24
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 (iii)(A) above);
(iv) 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 and each of the other
Operative Agreements delivered in connection with this Amendment 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 certified and delivered to the Agent on the Initial
Closing Date (or if the certificate of incorporation has been changed, such
certificate of incorporation certified as of a recent date by the Secretary
of State of the State of its incorporation or, if the by-laws have been
changed, such by-laws certified by the secretary of the Lessee or the
applicable Guarantor), and (C) the incumbency and signature of persons
authorized to execute and deliver on its behalf this Amendment and each of
the other Operative Agreements delivered in connection with this Amendment
to which such Lessee or Guarantor is a party;
(v) a fully-executed original of an amendment to the Intercreditor
Agreement between the Agent and Citicorp, in the form of Exhibit F attached
hereto;
(vi) a fully-executed original of the Xxxxxxx Intercreditor
Agreement;
(vii) the payment of $19,022.10, representing the prepayment of the
July installment of the restructuring fee described in Section 5(f) of
Amendment No. 7 (which fee is separate from and in addition to the
Restructuring Fee described in this Amendment);
(viii) an executed Fourth Modification to Mortgage and Seventh
Amendment to Memorandum of Lease, dated as of July 12, 2002, in the form of
Exhibit G attached hereto, acceptable to the Agent and the Owner Trustee;
(ix) evidence satisfactory to the Agent and the Owner Trustee of the
dissolution of Aviation Sales Finance Company, Aviation Sales Maintenance,
Repair & Overhaul Company, Aero Hushkit Corporation and Aviation Sales SPS
I, Inc.;
(x) copies of the fully executed BofA Documents;
(xi) copies of the fully executed Xxxxxxx Documents;
(xii) a copy of the fully executed New Aviation Sales Credit
Agreement, and all exhibits and schedules thereto;
25
(xiii) any additional agreements, instruments or documents which
it may reasonably request in connection herewith;
(b) The correctness in all material respects 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 material adverse change shall have occurred in the business,
assets, management, operations, financial condition or prospects of
Aviation Sales or any Guarantor or any Subsidiary of Aviation Sales since
December 31, 2001;
(d) Since December 31, 2001, 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, 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;
(e) Lenders and Holders shall have reviewed all litigation pending or
threatened against Aviation Sales or any Guarantor or any Subsidiary of
Aviation Sales and determined to their satisfaction that no Material
Adverse Effect will, or is reasonably likely to, result from the existence
thereof; and
(f) None of the members of Aviation Sales' Board of Directors as of
December 31, 2000 (except Xxxx Xxxxx, Xxxxxx Xxxxx and Xxxxxx Xxxxxx),
shall have ceased acting as members of such Board of Directors.
6. 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,
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 Consent 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,
26
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. Without limiting the
generality of the foregoing, Aviation Sales and its Subsidiaries release
any claims they may have for any overpayment of interest or Rent prior to
the date hereof, and agree that any such claim shall be deemed a Release
Claim for the purpose of this Agreement.
(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
5. 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 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 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 6.
(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 6; (ii) such party has had advice of counsel of its own
choosing in negotiations for and the preparation of this Consent Agreement;
and (iii) such party is fully aware of the effect of releases such as that
contained in this Section 6.
7. Entire Agreement. This Amendment 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 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 may
27
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.
8. Full Force and Effect of Operative Agreements. Except as hereby
specifically amended, modified or supplemented, the Participation Agreement, the
Lease 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.
9. Limited Consent. The consent contained herein is limited as specified
herein, and is granted only for the specific instances specified herein. In no
event shall the consent contained herein constitute a waiver of any existing or
future default or Event of Default, and shall not in any manner create a course
of dealing or otherwise impair the future ability of the Agent, the Owner
Trustee, the Lender or the Holders to declare a default or otherwise enforce the
terms of any Operative Agreement.
10. Counterparts. This Amendment 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.]
28
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
TIMCO AVIATION SERVICES, INC. (f/k/a Aviation
Sales Company), as Construction Agent
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Treasurer
------------------------------
TIMCO AVIATION SERVICES, INC. (f/k/a Aviation
Sales Company), as Lessee
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Treasurer
------------------------------
XXXXX FARGO BANK NORTHWEST, 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: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Treasurer
------------------------------
BANK OF AMERICA, N.A., as a Holder and as a
Lender
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Treasurer
------------------------------
BANK OF AMERICA, N.A., as Administrative
Agent
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Treasurer
------------------------------
SIGNATURE 1 OF 3
JOINDER BY GUARANTORS
The undersigned Guarantors hereby join in and consent to this Amendment.
TIMCO AVIATION SERVICES, INC. (f/k/a Aviation
Sales Company),
AVS/M-1, INC. (formerly AVIATION SALES
MANUFACTURING COMPANY)
AVIATION SALES PROPERTY MANAGEMENT CORP.
TIMCO ENGINE CENTER, INC.
AVS/M-2, INC (formerly AVS/XXXXX-XXXXX
MACHINE COMPANY
AVS/M-3, INC. (formerly APEX MANUFACTURING, INC.)
AEROCELL STRUCTURES, INC.
AVIATION SALES DISTRIBUTION SERVICES COMPANY
AVIATION SALES LEASING COMPANY
WHITEHALL CORPORATION
TRIAD INTERNATIONAL MAINTENANCE CORPORATION
(successor in interest to Aero Corporation and
Aero Corp Macon, Inc.)
AIRCRAFT INTERIOR DESIGN, INC.
HYDROSCIENCE, INC.
TIMCO ENGINEERED SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------
Title: Treasurer of each of the foregoing
-----------------
Guarantors
AVSRE, L.P.
By: Aviation Sales Property Management Corp.,
its general partner
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------------
Title: Treasurer
----------------------------------
SIGNATURE PAGE 2 OF 3
AVS/CAI, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Treasurer
------------------------------
SIGNATURE PAGE 3 OF 3
