EXHIBIT 10.2
AMENDMENT, CONSENT AND WAIVER AGREEMENT NO. 16 FOR
LEASE AGREEMENT AND
CERTAIN OTHER OPERATIVE AGREEMENTS
THIS AMENDMENT, CONSENT AND WAIVER AGREEMENT NO. 16 (this "Agreement")
is made and entered into as of the 14th of May, 2003, 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"); BANC OF
AMERICA STRATEGIC SOLUTIONS, INC. ("BASSI"), as a Holder and as a Lender; BANK
OF AMERICA, N.A. ("Bank of America"), 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 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, May 31, 2000
or October 11, 2002, 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, May 31, 2000 or October
11, 2002, 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, certain Events of Default have occurred and are continuing,
and the Lessee has requested that the Owner Trustee, the Holders, the Agent and
the Lenders waive those Events of Default as described herein;
WHEREAS, the Lessee has requested that the Agent, the Owner Trustee,
the Holders and the Lenders consent to certain items as more specifically
described herein;
WHEREAS, the parties hereto desire to amend the Participation
Agreement, the Lease Agreement and the Credit Agreement in the manner herein set
forth; and
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, the Lease Agreement
and the Credit Agreement. The Participation Agreement, the Lease Agreement and
the Credit Agreement are hereby amended as follows effective as of the date
hereof (except as otherwise expressly set forth below):
(a) The following definition of "Amendment No. 16 is
added to Appendix A to the Participation Agreement:
" 'Amendment No. 16' shall mean that certain
Amendment, Consent and Waiver Agreement No. 16 for
Lease Agreement and Certain Other Operative
Agreements dated as of May 14, 2003, among the
Construction Agent, the Lessee, the Owner Trustee,
Bank of America Strategic Solutions as a Holder and a
Lender, the Agent and the Guarantors parties
thereto."
(b) The following definition of "Citicorp Amendment No.
4" is added to Appendix A to the Participation Agreement:
" 'Citicorp Amendment No. 4' shall mean that
certain Amendment No. 4, Consent and Limited Waiver
dated as of May 14, 2003 to the New Aviation Sales
Credit Agreement."
(c) The following definition of "Covington, Kentucky
Sale" is added to Appendix A to the Participation Agreement:
" 'Covington, Kentucky Sale' shall mean the
sale by AVS/M-2, Inc. to LJH, Ltd. of the real
property in Covington, Kentucky described in Exhibit
A to Amendment No. 16, for a cash purchase price
sufficient to result in Net Cash Proceeds of Sale of
not less than $450,000 and
2
otherwise on terms and conditions satisfactory to the
Agent, the Owner Trustee, the Holders and the
Lenders."
(d) The following definition of "Goodyear Facility" is
added to Appendix A to the Participation Agreement:
" 'Goodyear Facility' shall mean Triad
International Maintenance Corporation's facility
located on the real property known as Hangers 18 and
52 and additional land located at the Phoenix
Goodyear Airport in Goodyear, Arizona which real
property is subleased from LJH, Ltd."
(e) The following definition of "LJH Note Documents" is
added to Appendix A to the Participation Agreement:
" 'LJH Note Documents' shall mean the LJH
Note, the guaranty agreement executed by the Citicorp
Borrowers and guarantors party to the Citicorp Loan
Documents (other than the Lessee) with respect
thereto, the Shareholder Security Agreement and any
other agreements, documents and instruments executed
in connection with any of the foregoing."
(f) The following definition of "PIK Subordinated Debt"
is added to Appendix A to the Participation Agreement:
" 'PIK Subordinated Debt' means Indebtedness
evidenced by (i) those certain 8% Junior Subordinated
Convertible PIK Notes due 2007 issued by the Lessee in
connection with its settlement of securities class action
litigation filed against the Lessee and certain of its former
directors and officers in the United States District Court of
the Southern District of Florida (Case No. 99-2560-CIV-MERENO)
and pursuant to terms no less favorable to the Lessee, the
Agent, the Owner Trustee, the Holders and the Lenders than
that portion of the PIK Subordinated Debt outstanding under
the 8% Senior Subordinated Convertible PIK Notes due 2006
issued by the Lessee under that certain Indenture dated as of
February 28, 2002, (ii) the 8% Senior Subordinated Convertible
PIK Notes due 2006 issued by the Lessee under that certain
Indenture dated as of February 28, 2002, and (iii) the LJH
Note."
(g) The definition of "LJH Intercreditor Agreement" in
Appendix A to the Participation Agreement is amended in its
entirety, so that as amended it shall read as follows:
" 'LJH Intercreditor Agreement' shall mean
that certain Amended and Restated Intercreditor
Agreement dated as of May 14, 2003, by and between
the Agent, the Owner Trustee and LJH, Ltd., and
acknowledged by the Lessee and the Subsidiary
Guarantors."
(h) The definition of "LJH Note" 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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" 'LJH Note' shall mean that certain Term
Promissory Note in the original principal amount of
$7,350,000 dated as of May 14, 2003 executed by the
Lessee in favor of LJH, Ltd., together with all
increases thereon or additional notes issued in
respect of (i) an increase in the purchase price for
certain Inventory acquired by LJH, Ltd. from Aviation
Management Systems, Inc. and sold by LJH, Ltd. to
Triad International Maintenance Corporation in
accordance with the terms and subject to the
conditions contained in Citicorp Amendment No. 4 or
(ii) accrued interest on such Term Promissory Note
and on such additional notes (all of which shall be
payable in kind but not in cash), in each case the
obligations of which are subordinated in right of
payment to the obligations under the Operative
Agreements pursuant to the terms of the LJH Note and
the LJH Intercreditor Agreement, together with the
side letter dated as of May 14, 2003 between Aviation
Sales, Triad International Maintenance Corporation
and LJH. Ltd. with respect to the increases in the
principal amount described in clause (ii) above,
which letter is attached as Exhibit F to Amendment
No. 16."
(i) The definition of "Shareholder Security Agreement" in
Appendix A to the Participation Agreement is amended in its
entirety, so that as amended it shall read as follows:
" 'Shareholder Security Agreement' shall
mean that certain Amended and Restated Security
Agreement dated as of May 14, 2003 to which Xxx X.
Xxxxxxx and LJH, Ltd. (as secured parties) and the
Citicorp Borrowers and guarantors party to the
Citicorp Loan Documents (as grantors) are parties."
(j) The definition of "Shareholder Subrogation Claims" in
Appendix A to the Participation Agreement is amended in its
entirety, so that as amended it shall read as follows:
" 'Shareholder Subrogation Claims' shall
means those claims against the Citicorp Borrowers and
Guarantors, if any, of Xxx X. Xxxxxxx and LJH, Ltd.
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."
(k) The definition of "Tangible Net Worth" in Appendix A
to the Participation Agreement is amended in its entirety, so
that as amended it shall read as follows:
" 'Tangible Net Worth' shall mean the amount
calculated as (i) the consolidated net worth of the
Lessee and its Subsidiaries minus (ii) the
consolidated Intangibles of the Lessee and its
Subsidiaries including, without limitation, goodwill,
trademarks, tradenames, copyrights, patents, patent
applications, licenses and rights in any thereof and
other items
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treated as intangibles in accordance with GAAP. For
purposes of determination of Tangible Net Worth, the
PIK Subordinated Debt shall be deemed to be equity so
long as no interest with respect thereto has been
paid in cash."
(l) The definition of "Keepwell Agreement" in Appendix A
to the Participation Agreement is deleted in its entirety.
(m) Schedule 1.01.6 (Permitted Equity Securities Options)
to the Participation Agreement is hereby amended and replaced
in its entirety by the schedule attached hereto as Exhibit B.
(n) Section 17.1 of the Lease Agreement is hereby
amended:
(i) to delete the "." at the end of subsection
(v) thereof and to substitute a ";" in lieu thereof,
and to add a new subsection (w) to read in its
entirety as follows:
"(w) at any time, for any reason, any holder
of any Indebtedness evidenced by the LJH Note
Documents shall initiate any action contrary to the
terms of the LJH Intercreditor Agreement or raise any
defense to any of the terms thereof."
(ii) to add the following sentence at the of such
section:
"Notwithstanding anything contained in this
Section 17.1 to the contrary, no Event of Default
shall be deemed to have occurred due solely to the
occurrence of any breach, default or event of default
or any other condition under any Citicorp Loan
Document, unless any of the same causes or results in
an acceleration of any Indebtedness arising under the
Citicorp Loan Documents (whether such acceleration
occurs automatically or upon notice from any
holder(s) of such Indebtedness or any representative
of such holder(s))."
(o) Section 28.1.1(a)(B) of the Lease Agreement is
amended to delete the following phrase immediately prior to
the period at the end thereof:
", together with a calculation in reasonable
detail of the amount of the "Xxxxx Xxxx Shortfall"
(as defined in the Keepwell Agreement) for such month
and a reconciliation of such amount with the
financial statements delivered pursuant to this
Section 28.1.1(a) for such month and, in the case of
such financial statements for October 2002, a
statement of the transaction costs associated with
the acquisition of Xxxxx"
(p) Section 28.1.12 of the Lease Agreement is amended as
follows:
(i) to delete in its entirety the following
parenthetical phrase therein: "(including, without limitation,
all additional or substitute notes delivered due to
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the making of payments under the Keepwell Agreement as
described in the definition of LJH Note)"; and
(ii) to delete each reference therein to "LJH
Note" in its entirety and to substitute in lieu thereof a
reference to "LJH Note Documents".
(q) Section 28.1.14 of the Lease Agreement is amended to
delete the reference therein to "LJH Note" in its entirety and
to substitute in lieu thereof a reference to "LJH Note
Documents".
(r) Section 28.3.1(f) of the Lease Agreement is amended
and restated in its entirety to read as follows:
"(f) Indebtedness (i) under the LJH Note
Documents (provided, that no payments in respects of
the LJH Note Documents shall be made except as
expressly permitted by the LJH Intercreditor
Agreement), (ii) under the Junior Subordinated Notes,
(iii) in respect of non-cash interest under the PIK
Subordinated Debt, and (iv) with respect to
Shareholder Subrogation Claims, in each case whether
directly or by Accommodation Obligation;"
(s) Section 28.3.2(e) of the Lease Agreement is amended
to insert the following phrase at the beginning thereof: "(i)
the Covington, Kentucky Sale, provided, that (A) such sale is
in accordance with the terms of the Citicorp Loan Documents,
and (B) no Event of Default shall have occurred and be
continuing; and (ii)".
(t) Section 28.3.3 of the Lease Agreement is amended to
delete in its entirety the reference to "on July 15, 2002" and
substitute in lieu thereof "on or prior to May 14, 2003".
(u) Section 28.3.6(a) of the Lease Agreement is hereby
amended to delete the reference therein to "LJH Note" in its
entirety and to substitute in lieu thereof a reference to "LJH
Note Documents".
(v) Section 28.4.2 of the Lease Agreement is hereby
deleted in its entirety.
(w) Section 28.4.3 of the Lease Agreement is amended and
restated effective as of March 31, 2003 in its entirety to
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:
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Minimum
Consolidated Fixed
Applicable Period Charge Ratio
----------------- ------------------
One Fiscal Quarter period ending March 31, 2003 1.10 to 1.00
Two Fiscal Quarter period ending June 30, 2003 1.10 to 1.00
Three Fiscal Quarter period ending September 30, 2003 1.10 to 1.00
Each Four-Quarter Period ending on a date on or after
December 31, 2003 1.10 to 1.00"
(x) Section 28.4.4 of the Lease Agreement is amended and
restated effective as of March 31, 2003 in its entirety to
read 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:
Minimum Tangible
Applicable Period Net Worth
----------------- ----------------
Fiscal Quarter ending March 31, 2003 $ (8,113,000)
Fiscal Quarter ending June 30, 2003 $ (5,277,000)
Fiscal Quarter ending September 30, 2003 $ (9,395,000)
Fiscal Quarter ending December 31, 2003 $ (13,423,000)
At all times after December 31, 2003 $ 13,000"
(y) Section 6(f)(iii) of the Credit Agreement is amended
and restated in its entirety to read as follows:
"(iii) [Intentionally deleted]."
3. Consent. Effective upon the satisfaction of the conditions
precedent set forth in Section 6 hereof, the Agent, the Owner Trustee, the
Lenders and the Holders hereby consent to:
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(a) the execution of the LJH Note Documents, in substantially
the forms of Exhibit C attached hereto and the cancellation of the LJH
Note (as previously defined in the Participation Agreement prior to
being redefined herein);
(b) the amendment and restatement of the LJH Intercreditor
Agreement;
(c) Triad International Maintenance Corporation's sublease of
the Goodyear Facility from LJH, Ltd. pursuant to a sublease in
substantially the form of Exhibit D attached hereto, provided that all
amounts required to be paid by Triad International Maintenance
Corporation under such sublease shall not exceed the sum of (i) amounts
payable by LJH, Ltd. under its lease with the City of Phoenix, Arizona
(a true and complete copy of which is attached hereto as Exhibit E),
and (ii) reimbursements for improvements to the Goodyear Facility made
by LJH, Ltd. in an aggregate amount not to exceed $100,000 (such
reimbursements to be paid in 36 equal monthly installments).
The consents contained in this Section 3 are granted only for
the specific instances described herein and are not intended to create
a course of dealing or otherwise impair the future ability of the
Lessor, the Agent, any Lender or any Holder to declare an Event of
Default or otherwise enforce the terms of any Operative Agreement. The
consents contained in this Section 3 are limited to those instances
described in paragraphs (a) through (e) of this Section.
4. Waiver. Effective upon the satisfaction of the conditions
precedent set forth in Section 6 hereof, the Agent, the Owner Trustee, the
Holders and the Lenders hereby waive:
(a) the Events of Default arising under Section 28.4 of
the Lease due to the failure of the Lessee to comply with the following
financial covenants for the Fiscal Quarter ended December 31, 2002 (or
the Four Quarter Period ended December 31, 2002, as applicable): the
(i) minimum Consolidated EBITDA covenant, (ii) the maximum Capital
Expenditures covenant, (iii) the minimum Consolidated Fixed Charge
Ratio covenant, and (iv) the minimum Tangible Net Worth covenant,
(b) the Event of Default arising under Section 28.1.1 of
the Lease due to the failure of the Lessee to timely deliver the
financial statements dated as of December 31, 2002 required thereby and
to deliver a report from KPMG Peat Marwick LLP on the consolidated
financial statements dated as of December 31, 2002 of the Lessee not
containing a "going concern" qualification; and
(c) the Events of Default arising under Section 17.1(q)
of the Lease due to the failure of the Lessee to give notice to the
Agent and the Owner Trustee of the Events of Default described in
clauses (a) and (b) above; and
(d) the rights and remedies of the Agent, the Owner
Trustee, the Lenders and the Holders arising due to the Events of
Default described in clauses (a), (b) and (c) above.
The waivers contained in this Section 4 are granted only for the
specific instances described herein and are not intended to create a course of
dealing or otherwise impair the future ability of the Lessor, the Agent, any
Lender or any Holder to declare an Event of Default or
8
otherwise enforce the terms of any Operative Agreement. The waivers contained in
this Section 4 are limited to those Events of Default described in paragraphs
(a), (b) and (c) of this Section. No such waiver contained in this Section 4 is
intended to be nor shall it be construed to be a general waiver of any other
Event of Default or an alteration of any of the terms or conditions of any
Operative Agreement.
5. 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).
(b) The Financial Statements for the Fiscal Year ended
December 31, 2002, 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 Aviation Sales and its
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 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) 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 waiver agreement and the
Citicorp Waiver (defined below), 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 Agreement,
either immediately or with the lapse of time or the giving of notice,
or both. Since December 31, 2002, 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) No event of default or default has occurred and is
continuing under the terms of (i) any of the Citicorp Loan Documents
(after giving effect to the Citicorp Waiver), (ii) the Senior
Subordinated Notes or any of the agreements and documents executed with
respect to the Senior Subordinated Notes or under which the Senior
Subordinated Notes have been issued, (iii) the BofA Note or any of the
agreements and
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documents executed with respect to the BofA Note, or (iv) the Junior
Subordinated Notes (as defined in the Citicorp Loan Documents) or any
of the agreements and documents executed with respect to the Junior
Subordinated Notes or under which the Junior Subordinated Notes have
been issued.
(f) 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.
(g) In the event that the Property is not sold prior to
July 31, 2003 in accordance with the terms of the Operative Agreements,
the Lessee agrees that the Agent may order an Appraisal of the Property
for its benefit and the benefit of the Lenders and the Holders, and the
Lessee shall pay all costs and expenses associated with such Appraisal.
This 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.
6. Conditions. The effectiveness of this Agreement 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 Agreement;
(ii) a fully executed original of the LJH
Intercreditor Agreement (as redefined herein);
(iii) the payment of a $40,000 amendment fee to
the Agent;
(iv) evidence of the payment of all fees and
amounts set forth in Exhibit G attached hereto;
(v) a copy of an amendment, waiver and consent
executed by the required lenders under the Citicorp Loan
Agreement (the "Citicorp Amendment"),
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in form and substance satisfactory to the Agent, and all
documents required to be delivered prior to the effectiveness
of the Citicorp Amendment; and
(vi) a fully executed copy of each of the LJH
Note Documents;
(vii) 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;
(viii) all agreements, documents and instruments
delivered to the obligees under the BofA Note and the
guaranties executed and delivered in connection therewith as a
result of the LJH Note Documents or this Agreement, in form
and substance satisfactory the Agent;
(ix) the annual report, financial statements,
report of KPMG Peat Marwick LLP and other reports for Fiscal
Year ended December 31, 2002 required to be delivered pursuant
to Section 28.1.1 of the Lease Agreement (after giving effect
to the waiver with respect thereto in Section 4(b) above);
(x) 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, the 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, 2002;
(d) Since December 31, 2002, 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;
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(e) 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.
7. 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 Agreement, each of Aviation
Sales and each of its Subsidiaries hereby releases and forever
discharges, BASSI, 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, between Aviation Sales or its Subsidiaries, and BASSI,
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
12
Section 7. 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 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 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 7.
(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 7; (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
7.
6. Entire Agreement. This 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 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 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.
7. Full Force and Effect of Operative Agreements. 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.
8. Counterparts. This 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.
[Signatures appear on following pages.]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement 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/
-----------------------------------------------
Name:______________________________________________
Title:_____________________________________________
TIMCO AVIATION SERVICES, INC. (f/k/a Aviation
Sales Company),
as Lessee
By: /s/
-----------------------------------------------
Name:______________________________________________
Title:_____________________________________________
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/
-----------------------------------------------
Name:______________________________________________
Title:_____________________________________________
BANC OF AMERICA STRATEGIC SOLUTIONS, INC.,
as a Holder and as a Lender
By: /s/
-----------------------------------------------
Name:______________________________________________
Title:_____________________________________________
BANK OF AMERICA, N.A., as Administrative
Agent
By: /s/
-----------------------------------------------
Name:______________________________________________
Title:_____________________________________________
SIGNATURE PAGE 1 OF 3
JOINDER BY GUARANTORS
The undersigned Guarantors hereby join in and consent to this Agreement.
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.)
TMAS/ASI, INC. (formerly 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/
-----------------------------------------------
Name:______________________________________________
Title:____________________ of each of the foregoing
Guarantors
AVSRE, L.P.
By: Aviation Sales Property Management Corp.,
its general partner
By: /s/
----------------------------------------
Name:_______________________________________
Title:______________________________________
SIGNATURE PAGE 2 OF 3
AVS/CAI, INC.
By: /s/
-----------------------------------------------
Name:______________________________________________
Title:_____________________________________________
XXXXX MANUFACTURING COMPANY, INC.
By: /s/
-----------------------------------------------
Name:______________________________________________
Title:_____________________________________________
SIGNATURE PAGE 3 OF 3
