EXHIBIT 10.3
AMENDMENT AGREEMENT NO. 2 FOR
LEASE AGREEMENT AND
CERTAIN OTHER OPERATIVE AGREEMENTS
THIS AMENDMENT AGREEMENT is made and entered into as of the 31st of
May, 2000, by and among AVIATION SALES COMPANY, a Delaware corporation
("Aviation Sales"), as Construction Agent (the "Construction Agent"); AVIATION
SALES COMPANY, as Lessee (the "Lessee"); FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not individually, except as
expressly stated in the Operative Agreements, but solely as Owner Trustee under
the Aviation Sales Trust 1998-1 (the "Owner Trustee"); BANK OF AMERICA, N.A.,
d/b/a NationsBank, N.A., successor to NationsBank, National Association ("Bank
of America"), as a Holder and as a Lender; BANK OF AMERICA, N.A., d/b/a
NationsBank, N.A., successor to NationsBank, National Association, as
Administrative Agent (the "Agent"); each of the holders party to the Trust
Agreement (defined below) (the "Holders"); each of the Lenders party to the
Credit Agreement (defined below)(the "Lenders"); and each of the Guarantors
party to the Guaranty Agreement (defined below).
W I T N E S S E T H:
-------------------
WHEREAS, the Construction Agent, the Lessee, the Owner Trustee, the
Agent, the Lenders and the Holders have entered into the Participation Agreement
dated as of December 17, 1998 (as amended, the "Participation Agreement"); and
WHEREAS, the Owner Trustee, the Lenders and the Agent have entered into
the Credit Agreement dated as of December 17, 1998 (as amended, the "Credit
Agreement"); and
WHEREAS, the 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 Construction Agent and the Lessee have informed the Agent
and the Owner Trustee that construction of the Improvements at the Property
located in Miramar, Florida (the "Miramar Property") is substantially complete
and the Lessee has obtained a temporary certificate of occupancy for, and is in
fact occupying, the Miramar Property; and
WHEREAS, the parties hereto desire further to amend the Lease Agreement
and certain other Operative Agreements in the manner herein set forth effective
as of the date hereof;
NOW, THEREFORE, the Construction Agent, the Lessee, the Owner Trustee,
the Holders, the Agent and the Lenders do hereby agree as follows:
1. DEFINITIONS. The terms "Participation Agreement", "Credit
Agreement", "Trust Agreement", "Lease", "Lease Agreement", "Guaranty Agreement"
and "Guaranty" as used herein and in the Operative Documents (as defined in the
Participation Agreement) shall mean such agreements as hereby amended and
modified, and as further amended, modified, supplemented or restated from time
to time in accordance with the terms thereof. Unless the context otherwise
requires, all terms used herein without definition shall have the definition
provided therefor in the Participation Agreement.
2. AMENDMENTS TO PARTICIPATION AGREEMENT, CREDIT AGREEMENT AND TRUST
AGREEMENT -- ALLOCATED INTEREST AND ALLOCATED RETURN. Because the Lessee has
obtained a temporary certificate of occupancy for, and is occupying, the Miramar
Property, the parties agree that notwithstanding any provision to the contrary
contained in any Operative Agreement, from and after the date hereof, no Funding
shall be requested or made, and no proceeds of any Funding shall be used, to
fund any Allocated Interest or Allocated Return.
3. ADDITIONAL AMENDMENTS TO PARTICIPATION AGREEMENT. The Participation
Agreement is hereby amended, effective as of the date hereof, as follows:
(a) In addition to, and without limitation of, any other
condition to any Loan or Holder Funding set forth in the Participation
or any other Operative Agreement, the obligation of any Lender or
Holder to make any Loan or Holder Funding as of any date is further
subject to satisfaction of the following conditions precedent as of
each such date:
(i) No law, regulation, order, judgment or
decree of any Governmental Authority shall,
and the Agent shall not have received from
any Lender or Holder notice that, in the
judgment of such Lender or Holder,
litigation is pending or threatened which is
likely to, enjoin, prohibit or restrain, or
impose or result in the imposition of any
material adverse condition upon such
Lender's making of the requested Loan or
Holder Funding.
(ii) No event shall have occurred since the date
of this Amendment Agreement which has
resulted, or is reasonably likely to result,
in a Material Adverse Effect.
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(b) Each of Lessee and Construction Agent hereby authorizes
the Agent automatically to deduct from account numbered 003661088439
(which is maintained at Bank of America, N.A.) any Rent or other
amounts due from Lessee or the Construction Agent to any Person under
any Operative Agreement.
(c) Appendix A to the Participation Agreement is amended by
adding each of the following definitions, in the appropriate
alphabetical order; each of the following definitions of any term
replaces any previous definition of such term that may have appeared in
the Participation Agreement or any other Operative Agreement.
" 'ACCOMMODATION OBLIGATION' means any Contractual
Obligation, contingent or otherwise, of one Person with
respect to any Indebtedness, obligation or liability of
another, if the primary purpose or intent thereof by the
Person incurring the Accommodation Obligation is to provide
assurance to the obligee of such Indebtedness, obligation or
liability of another that such Indebtedness, obligation or
liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders
thereof will be protected (in whole or in part) against loss
in respect thereof including, without limitation, direct and
indirect guarantees, endorsements (except for collection or
deposit in the ordinary course of business), notes co-made or
discounted, recourse agreements, take-or-pay agreements,
keep-well agreements, agreements to purchase or repurchase
such Indebtedness, obligation or liability or any security
therefor or to provide funds for the payment or discharge
thereof, agreements to maintain solvency, assets, level of
income, or other financial condition, and agreements to make
payment other than for value received. The amount of any
Accommodation Obligation shall be equal to the amount of the
Indebtedness, obligation or liability so guaranteed or
otherwise supported; PROVIDED, that (i) if the liability of
the Person extending such guaranty or support is limited with
respect thereto to an amount less than the Indebtedness,
obligation or liability guaranteed or supported, or is limited
to recourse against a particular asset or assets of such
Person, the amount of the corresponding Accommodation
Obligation shall be limited (in the case of a guaranty or
other support limited by amount) to such lesser amount or (in
the case of a guaranty or other support limited by recourse to
a particular asset or assets) to the higher of the Fair Market
Value of such asset or assets at the date for determination of
the amount of the Accommodation Obligation or the value at
which such asset or assets would, in conformity with GAAP, be
reflected on or valued for the purposes of preparing a
consolidated balance sheet of such Person as at such
determination date; and (ii) if any obligation or liability is
guaranteed or otherwise supported jointly and severally by a
Person and others, then the amount of the obligation or
liability of such Person with respect to such guaranty or
other support to be included in the amount of such Person's
Accommodation Obligation shall be the whole principal amount
so guaranteed or otherwise supported."
" 'AEROCELL' means Aerocell Structures, Inc., an
Arkansas corporation."
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" 'AFFILIATE', as applied to any Person, means any
other Person that directly or indirectly controls, is
controlled by, or is under common control with, that Person.
For purposes of this definition, 'control' (including, with
correlative meanings, the terms 'controlling', 'controlled by'
and 'under common control with'), as applied to any Person,
means (i) the possession, directly or indirectly, of the power
to vote ten percent (10.0%) or more of the Securities having
voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of
voting Securities or by contract or otherwise, or (ii) the
ownership of (a) a general partnership interest or (b) a
limited partnership interest representing ten percent (10.0%)
or more of the outstanding limited partnership interests of a
Person."
" 'AMENDMENT EFFECTIVE DATE' shall mean May 31,
2000."
" 'AMENDMENT NO. 2' shall mean Amendment Agreement
No. 2 for Lease Agreement and certain other Operative
Agreements dated as of May 31, 2000, among the Construction
Agent, the Lessee, the Owner Trustee, the Agent, the Holders
and Lenders party thereto and the Guarantors party thereto."
" 'APEX' means Apex Manufacturing, Inc., an
Arizona corporation and wholly-owned Subsidiary of
Manufacturing."
" 'APPLICABLE BASE RATE MARGIN' shall mean as of any
date of determination (i) during the period commencing on the
Amendment Effective Date through the day on which the Agent
has received a true notice from the Lessee that the
Overadvance Amount is repaid in full, a per annum rate equal
to three percent (3.00%) (subject to the proviso set forth
below at the end of this definition), (ii) during the period
commencing on the day immediately succeeding the day on which
the Agent has received a true notice from the Lessee that the
Overadvance Amount has been repaid in full through the day on
which the Agent has received a true notice from the Lessee
that the Revolving Credit Commitments have been reduced to a
maximum of $250,000,000, a per annum rate equal to two and
one-half percent (2.50%) (subject to the proviso set forth at
the end of this definition), (iii) during the period
commencing on the day immediately succeeding the day on which
the Agent has received a true notice from the Lessee that the
Revolving Credit Commitments have been reduced to a maximum of
$250,000,000 through the day on which the Agent has received a
true notice from the Lessee that the Revolving Credit
Commitments have been reduced to a maximum of $200,000,000, a
per annum rate equal to two percent (2.00%) (subject to the
proviso set forth at the end of this definition), (iv) during
the period commencing on the day immediately succeeding the
day on which the Agent has received a true notice from the
Lessee that the Revolving Credit Commitments have been reduced
to a maximum of $200,000,000 through the date on which
Aviation Sales delivers to the Agent, the Lenders and the
Holders a Compliance Certificate, as and when required by
SECTION 28.1.1(D) of the Lease, with respect to the Fiscal
Quarter ending December 31, 2000, a per annum rate
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equal to one and three-quarters percent (1.75%), and (v)
thereafter, PROVIDED THAT the Revolving Credit Commitments do
not then exceed $250,000,000, the rate set forth below
opposite the then applicable Performance Level set forth
below:
PERFORMANCE LEVEL APPLICABLE BASE RATE MARGIN
----------------- ---------------------------
1 1.50%
2 1.75%
3 2.25%
PROVIDED, HOWEVER, THAT, notwithstanding the foregoing, in the
event the Revolving Credit Commitments exceed $250,000,000 on
July 31, 2000, the Applicable Base Rate Margin shall increase,
as of August 1, 2000 and each successive November 1, February
1, May 1 and August 1, by one-quarter of one percent (0.25%)
until such time as the Agent has received a true notice from
the Lessee that the Revolving Credit Commitments do not exceed
$250,000,000, whereupon the increases in the Applicable Base
Rate Margin made in compliance with this sentence shall
immediately terminate and the Applicable Base Rate Margin
shall be determined as set forth in CLAUSE (I), (II), (IV) or
(V) above, as applicable."
" 'APPLICABLE MARGIN' shall mean as of any date of
determination, (i) during the period commencing on the
Amendment Effective Date through the day on which the Agent
has received a true notice from the Lessee that the
Overadvance Amount has been repaid in full, a per annum rate
equal to four and one-half percent (4.50%) (subject to the
proviso set forth at the end of this definition), (ii) during
the period commencing on the day immediately succeeding the
day on which the Agent has received a true notice from the
Lessee that the Overadvance Amount has been repaid in full
through the day on which the Agent has received a true notice
from the Lessee that the Revolving Credit Commitments have
been reduced to a maximum of $250,000,000, a per annum rate
equal to four percent (4.00%) (subject to the proviso set
forth at the end of this definition), (iii) during the period
commencing on the day immediately succeeding the day on which
the Agent has received a true notice from the Lessee that the
Revolving Credit Commitments have been reduced to a maximum of
$250,000,000 through the day on which the Agent has received a
true notice from the Lessee that the Revolving Credit
Commitments have been reduced to a maximum of $200,000,000, a
per annum rate equal to three and one-half percent (3.50%)
(subject to the proviso set forth below), (iv) during the
period commencing on the day immediately succeeding the day on
which the Agent has received a true notice from the Lessee
that the Revolving Credit Commitments have been reduced to a
maximum of $200,000,000 through the date on which Aviation
Sales delivers to the Agent, the Lenders and the Holders a
Compliance Certificate, as and when required by SECTION
28.1.1(D) of the Lease, with respect to the Fiscal Quarter
ending December 31, 2000, a per annum rate equal to three and
one-quarter percent (3.25%), and (v) thereafter, PROVIDED THAT
the Revolving
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Credit Commitments do not then exceed $250,000,000, the rate
set forth below opposite the then applicable Performance Level
set forth below:
PERFORMANCE LEVEL APPLICABLE MARGIN
----------------- -----------------
1 3.00%
2 3.25%
3 3.75%
PROVIDED, HOWEVER, THAT, notwithstanding the foregoing, in the
event the Revolving Credit Commitments exceed $250,000,000 on
July 31, 2000, the Applicable Margin shall increase, as of
August 1, 2000 and each successive November 1, February 1, May
1 and August 1, by one-quarter of one percent (0.25%) until
such time as the Agent has received a true notice from the
Lessee that the Revolving Credit Commitments do not exceed
$250,000,000, whereupon the increases in the Applicable Margin
made in compliance with this sentence shall immediately
terminate and the Applicable Margin shall be determined as set
forth in CLAUSE (I), (II), (IV) or (V) above, as applicable."
" 'ASSET' means any Real Property or personal
property, plant, building, facility, structure, underground
storage tank or unit, Non-TROL Equipment, Inventory, General
Intangible, Receivable, or other asset owned, leased or
operated by Aviation Sales or any Guarantor or any Subsidiary
of Aviation Sales, as applicable, (including any surface water
thereon, and soil and groundwater thereunder)."
" 'BANKRUPTCY CODE' means Title 11 of the United
States Code (11 U.S.C.ss.ss.101 ET SEQ.), as amended from
time to time, and any successor statute."
" 'BEARINGS' means Aviation Sales Bearings Company, a
Delaware corporation and wholly-owned Subsidiary of
Distribution."
" 'BENEFIT PLAN' means a defined benefit plan as
defined in Section 3(35) of ERISA (other than a Multiemployer
Plan or Foreign Employee Benefit Plan) in respect of which
Aviation Sales, any Guarantor, any Subsidiary of Aviation
Sales or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an 'employer' as defined in
Section 3(5) of ERISA."
" 'BORROWING BASE CERTIFICATE' shall have the meaning
assigned thereto in the Existing Aviation Sales Credit
Agreement."
" 'CAPITAL EXPENDITURES' means, for any period, the
aggregate of all expenditures (whether payable in cash or
other Property 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
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purchase or development of computer software and systems, (B)
that portion of Capital Leases which is capitalized on the
consolidated balance sheet of the Parent 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 the Parent 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, (A) expenditures made in connection with
the replacement or restoration of Property, to the extent
reimbursed or financed from insurance or condemnation proceeds
not constituting Net Cash Proceeds of Sale and (B)
expenditures for leased Inventory."
" 'CAPITAL LEASE' means any lease of any property
(whether real, personal or mixed) by a Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease
on the balance sheet of that Person."
" 'CAPITAL STOCK' means, with respect to any Person,
any capital stock of such Person, regardless of class or
designation, and all warrants, options, purchase rights,
conversion or exchange rights, voting rights, calls or claims
of any character with respect thereto."
" 'CASH INTEREST EXPENSE' means, for any Person for
any period, 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 such Person and its Subsidiaries on all Hedge
Agreements and payments made by such Person and its
Subsidiaries on all Hedge Agreements other than the initial
payments made to enter into such Hedge Agreements) of such
Person and its Subsidiaries, which is payable in cash, all as
determined in conformity with GAAP."
" 'CARIBE' means Caribe Aviation, Inc., a Florida
corporation and wholly-owned Subsidiary of Aviation Sales
Maintenance, Repair & Overhaul Company, a Delaware corporation
and wholly-owned Subsidiary of Aviation Sales."
" 'CASH EQUIVALENTS' means (i) marketable direct
obligations issued or unconditionally guaranteed by the United
States government and backed by the full faith and credit of
the United States government; and (ii) domestic and Eurodollar
certificates of deposit and time deposits, bankers'
acceptances, commercial paper, and floating rate certificates
of deposit issued by any commercial bank organized under the
laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully
protected against currency fluctuations), which, at the time
of acquisition, are rated A-1 (or better) by Standard & Poor's
Rating Group, a division of XxXxxx-Xxxx, Inc., or P-1 (or
better) by Xxxxx'x Investors Services, Inc.; PROVIDED, THAT
(x) the maturities of such Cash Equivalents shall not exceed
one year and (y) such Cash Equivalents shall be maintained in
investment and other accounts of the
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Existing Credit Agent at Citibank or accounts at other
investment banks or financial institutions acceptable to the
Agent."
" 'CERCLA' means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42
U.S.C.ss.ss.9601 ET SEQ., any amendments thereto, any
successor statutes, and any regulations promulgated
thereunder."
" 'CHANGE OF CONTROL' means (i) with respect to
Aviation Sales, (a) the occurrence of a change in more than
fifty percent (50%) of the Parent Board or (b) any Person
acquiring, directly or indirectly, voting control of
thirty-five percent (35%) or more of the issued and
outstanding Capital Stock of Aviation Sales and (ii) with
respect to any Guarantor, Aviation Sales ceasing to own,
directly or indirectly, and retain voting control of all
issued and outstanding Capital Stock of such Guarantor, in the
case of any of (I)(A), (I)(B) or (II), without the prior
written consent of the Majority Lenders, which consent shall
not be unreasonably withheld."
" 'CITIBANK' means Citibank, N.A., a national banking
association."
" 'CITICORP' means Citicorp USA, Inc., a Delaware
corporation."
" 'CITICORP LOAN DOCUMENTS' means the 'Loan
Documents' as defined in the Existing Aviation Sales Credit
Agreement (as amended, modified or restated from time to
time)."
" 'CITICORP BORROWERS' means, collectively,
Distribution, Bearings, Leasing, Aerocell, Apex, Caribe,
Xxxxx-Xxxxx, Design, Triad International Maintenance
Corporation, a Delaware corporation, Whitehall Corporation, a
Delaware corporation, and TIMCO Engine."
" 'COMMISSION' means the Securities and Exchange
Commission and any Person succeeding to the functions
thereof."
" 'COMPLIANCE CERTIFICATE' shall have the meaning
assigned thereto in Section 28.1.1(d) of the Lease."
" 'CONSOLIDATED EBITDA' with respect to Aviation
Sales and its Subsidiaries for any period of computation
thereof, the SUM, without duplication, of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) taxes on
federal, state and local income deducted from Consolidated Net
Income, (iv) amortization, (v) depreciation, and (vi) any
other item that may be approved by the Agent and the Majority
Lenders (in their sole discretion), MINUS (vii) extraordinary
gains, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis."
" 'CONSOLIDATED FIXED CHARGE RATIO' means, with
respect to Aviation Sales and its Subsidiaries for any period
of computation thereof, the RATIO OF (a)
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the amount calculated as (i) Consolidated EBITDA MINUS (ii)
(without duplication) Capital Expenditures made in cash during
such period (iii) MINUS all taxes paid in cash during such
period by Aviation Sales and its Subsidiaries (net of tax
refunds received in cash during such period by Aviation Sales
and its Subsidiaries) TO (b) Consolidated Fixed Charges for
such period."
" '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
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
dividends and other distributions (other than distributions in
the form of capital stock of Aviation Sales) paid during such
period (regardless of when declared) on any shares of capital
stock of Aviation Sales then outstanding), all determined on a
consolidated basis in accordance with GAAP applied on a
Consistent Basis."
" 'CONTAMINANT' means any waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste,
petroleum or petroleum-derived substance or waste, radioactive
materials, asbestos (in any form or condition),
polychlorinated biphenyls (PCBs), or any constituent of any
such substance or waste, and includes, but is not limited to,
these terms as defined in federal, state or local laws or
regulations."
" 'CONTRACTUAL OBLIGATION', as applied to any Person,
means any provision of any Securities issued by that Person or
any indenture, mortgage, deed of trust, security agreement,
pledge agreement, guaranty, contract, undertaking, agreement
or instrument to which that Person is a party or by which it
or any of its properties is bound, or to which it or any of
its properties is subject."
" 'DESIGN' means Aircraft Interior Design, Inc., a
Florida corporation."
" 'DISTRIBUTION' means Aviation Sales Distribution
Company, a Delaware corporation and wholly-owned Subsidiary of
Aviation Sales."
" 'DOL' means the United States Department of Labor
and any Person succeeding to the functions thereof."
" 'ELIGIBLE INVENTORy' shall have the meaning
assigned thereto in the Existing Aviation Sales Credit
Agreement."
" 'ELIGIBLE RECEIVABLES' shall have the meaning as
assigned thereto in the Existing Aviation Sales Credit
Agreement."
" 'ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF
LAW' means all laws, rules, regulations and determinations of
any arbitrator, court or other Governmental Authority derived
from or relating to any federal, state or local
9
law, ordinance, rule, regulation, Permit, license or other
binding determination of any Governmental Authority relating
to, imposing liability or standards concerning, or otherwise
addressing, the environment, health and/or safety, including,
but not limited to the Clean Air Act, the Clean Water Act,
CERCLA, RCRA, any so-called 'Superfund' or 'Superlien' law,
the Toxic Substances Control Act, OSHA, and applicable public
health codes, each as from time to time in effect."
" 'ENVIRONMENTAL LIEN' means a Lien in favor of any
Governmental Authority for any (i) liabilities under any
Environmental, Health or Safety Requirement of Law, or (ii)
damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a
Contaminant into the environment."
" 'ENVIRONMENTAL PROPERTY TRANSFER ACTS' means any
applicable Requirement of Law that conditions, restricts,
prohibits or requires any notification or disclosure triggered
by the transfer, sale, lease or closure of any Asset or deed
or title for any Asset for environmental reasons, including,
but not limited to, any so-called 'Industrial Site Recovery
Acts' or 'Responsible Property Transfer Acts'."
" 'ERISA' means the Employee Retirement Income
Security Act of 1974, 29 U.S.C.ss.ss.1000 ET SEQ., any
amendments thereto, any successor statutes, and any
regulations or guidance promulgated thereunder."
" 'ERISA AFFILIATE' means (i) any corporation which
is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Internal Revenue
Code) as Aviation Sales or any Guarantor or any Subsidiary of
Aviation Sales; (ii) a partnership or other trade or business
(whether or not incorporated) which is under common control
(within the meaning of Section 414(c) of the Internal Revenue
Code) with Aviation Sales or any Guarantor or any Subsidiary
of Aviation Sales; and (iii) a member of the same affiliated
service group (within the meaning of Section 414(m) of the
Internal Revenue Code) as Aviation Sales or any Guarantor or
any Subsidiary of Aviation Sales; any corporation described in
CLAUSE (I) above or any partnership or trade or business
described in CLAUSE (II) above."
" 'EXISTING AVIATION SALES CREDIT AGREEMENT' shall
mean that certain Fourth Amended and Restated Credit Agreement
dated as of May 31, 2000, by and among the co-borrowers party
thereto, Aviation Sales, Citicorp USA, Inc. as agent, and the
lenders and issuing banks party thereto, without giving effect
to any subsequent amendment thereto."
" 'FAIR MARKET VALUE' means, with respect to any
asset, the value of the consideration obtainable in a sale of
such asset in the open market, assuming a sale by a willing
seller to a willing purchaser dealing at arm's length and
arranged in an orderly manner over a reasonable period of
time, each having reasonable
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knowledge of the nature and characteristics of such asset,
neither being under any compulsion to act, and, if in excess
of $250,000, as determined in an appraisal of such asset,
PROVIDED THAT for purposes of SECTION 28.3.2 of the Lease,
such appraisal was performed relatively contemporaneously with
such sale by an independent third party appraiser and the
basic assumptions underlying such appraisal have not
materially changed since the date thereof."
" 'FEDERAL RESERVE BOARD' means the Board of
Governors of the Federal Reserve System or any Governmental
Authority succeeding to its functions."
" 'FINANCE AFFILIATE' means Aviation Sales Finance
Company, a Delaware corporation and wholly-owned Subsidiary of
Aviation Sales."
" 'FINANCIAL STATEMENTS' means (i) statements of
income and retained earnings, statements of cash flow, and
balance sheets, (ii) such other financial statements as the
Parent and/or and its Subsidiaries shall routinely and
regularly prepare and (iii) such other financial statements as
the Agent or the Majority Lenders may from time to time
reasonably specify."
" 'FISCAL QUARTER' means a fiscal quarter in a Fiscal
Year."
" 'FISCAL YEAR' means the fiscal year of Aviation
Sales and its Subsidiaries for accounting and tax purposes,
which shall be the 52-week period ending on December 31 of
each calendar year."
" 'FOREIGN EMPLOYEE BENEFIT PLAN' means any employee
benefit plan as defined in Section 3(3) of ERISA which is
maintained or contributed to for the benefit of the employees
of Aviation Sales, any of its Subsidiaries, or any of its
ERISA Affiliates and is not covered by ERISA pursuant to ERISA
Section 4(b)(4)."
" 'FOREIGN SUBSIDIARY' means any Subsidiary of
Aviation Sales which is domiciled outside of the United States
of America and its states, districts and possessions."
" 'FOUR-QUARTER PERIOD' means any period of four
consecutive Fiscal Quarters."
" 'FUNDED DEBT' means, with respect to any Person,
(a) Indebtedness of such Person and its Subsidiaries for
borrowed money (determined in accordance with GAAP),
including, without limitation, Indebtedness under Capital
Leases, plus (b) the Property Cost under the Operative
Agreements."
" 'FUNDING DATE' means, with respect to any Loan, the
date of funding of such Loan."
" 'GAAP' means generally accepted accounting
principles set forth in the opinions and pronouncements of the
American Institute of Certified Public
11
Accountants' Accounting Principles Board and Financial
Accounting Standards Board or in such other statements by such
other entity as may be in general use by significant segments
of the accounting profession as in effect on the date hereof
(unless otherwise specified herein as in effect on another
date or dates)."
" 'GENERAL INTANGIBLES' means, with respect to any
Person, all of such Person's present and future (i) general
intangibles, (ii) rights, interests, choses in action, causes
of action, claims and other intangible property of every kind
and nature (other than Receivables), (iii) corporate and other
business records, (iv) loans, royalties, and other obligations
receivable, (v) trademarks, registered trademarks, trademark
applications, service marks, registered service marks, service
xxxx applications, patents, registered patents, patent
applications, trade names, rights of use of any name, labels,
fictitious names, inventions, designs, trade secrets, computer
programs, software, printouts and other computer materials,
goodwill, registrations, copyrights, copyright applications,
permits, licenses, franchises, customer lists, credit files,
correspondence, and advertising materials, (vi) customer and
supplier contracts, firm sale orders, rights under license and
franchise agreements, rights under tax sharing agreements, and
other contracts and contract rights, (vii) interests in
partnerships and joint ventures, (viii) tax refunds and tax
refund claims, (ix) right, title and interest under leases,
subleases, licenses and concessions and other agreements
relating to property, (x) deposit accounts (general or
special) with any bank or other financial institution, (xi)
credits with and other claims against third parties (including
carriers and shippers), (xii) rights to indemnification and
with respect to support and keep-well agreements, (xiii)
reversionary interests in pension and profit sharing plans and
reversionary, beneficial and residual interests in trusts,
(xiv) proceeds of insurance of which such Person is
beneficiary, (xv) letters of credit, guarantees, Liens,
security interests and other security held by or granted to
such Person, (xvi) uncertificated securities, and (xvii)
dividends and distributions and claims with respect to
dividends and distributions."
" 'GOVERNMENTAL AUTHORITY' means any nation or
government, any federal, state, local or other political
subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions
of or pertaining to government."
" 'HEDGE AGREEMENT' means any agreement, including,
without limitation, interest rate exchange, swap, collar or
cap agreement, interest rate future or option contract,
currency swap agreement, currency future or option contract,
and other similar agreement, evidencing an agreement or
arrangement intended to protect against fluctuation in
interest rates and/or foreign exchange rates, conversion rates
for conversion of foreign currencies to Dollars, or inability
of any foreign Person to transfer Dollars to a Person in the
United States."
" 'IMPERMISSIBLE REFERENCE' shall mean, relative to
the opinion or certification of any independent public
accountant as to any Financial Statement of any Person, any
qualification or exception to such opinion or certification
12
(a) which expresses concern about whether or
not such Person will be able to meet its obligations
as such become due, or otherwise will be able to
operate or conduct its business in the future, or
which otherwise expresses concerns of a "going
concern" nature about such Person;
(b) which relates to the limited scope of
examination of matters relevant to such financial
statement; or
(c) which relates to the treatment or
classification of any item in such Financial
Statement and which, as a condition to its removal,
would require an adjustment to such item the effect
of which would be to cause there to be a Default or
Event of Default under Article XVIII of the Lease."
" 'INDEBTEDNESS', as applied to any Person, means, at
any time, without duplication, (a) all indebtedness,
obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any
accrued interest, fees and charges relating thereto, (ii)
under profit payment agreements or in respect of obligations
to redeem, repurchase or exchange any Securities of such
Person or to pay dividends in respect of any stock, (iii) with
respect to letters of credit issued for such Person's account,
(iv) to pay the deferred purchase price of property or
services, except accounts payable and accrued expenses arising
in the ordinary course of business, (v) in respect of Capital
Leases, (vi) which are Accommodation Obligations or (vii)
under warranties and indemnities; (b) all indebtedness,
obligations or other liabilities of such Person or others
secured by a Lien on any property of such Person, whether or
not such indebtedness, obligations or liabilities are assumed
by such Person, all as of such time; (c) all indebtedness,
obligations or other liabilities of such Person in respect of
Hedge Agreements, net of liabilities owed to such Person by
the counterparties thereon; (d) all preferred stock subject
(upon the occurrence of any contingency or otherwise) to
mandatory redemption; (e) all ERISA obligations currently due
and payable; and (f) all contingent Contractual Obligations
with respect to any of the foregoing."
" 'INTERNAL REVENUE CODE' means the Internal Revenue
Code of 1986, as amended to the date hereof and from time to
time hereafter, any successor statute and any regulations or
guidance promulgated thereunder."
" 'INVENTORY' means, with respect to any Person, all
of such Person's present and future (i) inventory, (ii) goods,
merchandise and other personal property furnished or to be
furnished under any contract of service or intended for sale
or lease, and all consigned goods and all other items which
have previously constituted Non-Trol Equipment of such Person
but are then currently being held for sale or lease in the
ordinary course of such Person's business, (iii) raw
materials, work-in-process and finished goods, (iv) materials
and supplies of any
13
kind, nature or description used or consumed in such Person's
business or in connection with the manufacture, production,
packing, shipping, advertising, finishing or sale of any of
the property described in CLAUSES (I) through (III) above, (v)
goods in which such Person has a joint or other interest or
right of any kind (including, without limitation, goods in
which such Person has an interest or right as consignee), and
(vi) goods which are returned to or repossessed by such
Person; in each case whether in the possession of such Person,
a bailee, a consignee, or any other Person for sale, storage,
transit, processing, use or otherwise, and any and all
documents for or relating to any of the foregoing."
" 'INVESTMENT' means, with respect to any Person, (i)
any purchase or other acquisition by that Person of
Securities, or of a beneficial interest in Securities, issued
by any other Person, (ii) any purchase by that Person of all
or substantially all of the assets of a business conducted by
another Person, and (iii) any loan, advance (other than
deposits with financial institutions available for withdrawal
on demand, prepaid expenses, accounts receivable, advances to
employees and similar items made or incurred in the ordinary
course of business) or capital contribution by that Person to
any other Person, including all Indebtedness to such Person
arising from a sale of property by such Person other than in
the ordinary course of its business. The amount of any
Investment shall be the original cost of such Investment, plus
the cost of all additions thereto less the amount of any
return of capital or principal to the extent such return is in
cash with respect to such Investment without any adjustments
for increases or decreases in value or write-ups, write-downs
or write-offs with respect to such Investment."
" 'IRS' means the Internal Revenue Service and any
Person succeeding to the functions thereof."
" 'XXXXX-XXXXX' means AVS/Xxxxx-Xxxxx Machine
Company, a Delaware corporation and wholly-owned Subsidiary of
Manufacturing."
" 'LEASED INVENTORY' means aircraft spare parts
Inventory which is subject to any lease agreement or
arrangement."
" 'LEASING' means Aviation Sales Leasing Company, a
Delaware corporation and a wholly-owned Subsidiary of Aviation
Sales."
" 'LIABILITIES AND COSTS' means all liabilities,
obligations, responsibilities, losses, damages, personal
injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment, natural
resources or public health or welfare, costs and expenses
(including, without limitation, attorney, expert and
consulting fees and costs and fees and costs associated with
any investigation, feasibility or Remedial Action studies),
fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past,
present or future."
14
" 'LIEN' means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale or other title
retention agreement, deposit arrangement, security interest,
encumbrance (including, without limitation, easements,
rights-of-way, zoning restrictions and the like), lien
(statutory or other and including, without limitation, any
Environmental Lien), preference, priority or other security
agreement or preferential arrangement of any kind or nature
whatsoever in respect of any property of a Person, whether
granted voluntarily or imposed by law, and includes the
interest of a lessor under a Capital Lease or under any
financing lease having substantially the same economic effect
as any of the foregoing and the filing of any financing
statement or similar notice (other than a financing statement
filed by a 'true' lessor pursuant to ss. 9-408 of the Uniform
Commercial Code), naming the owner of such property as debtor,
under the Uniform Commercial Code or other comparable law of
any jurisdiction. Without limiting the generality of the
foregoing, with respect to any Property, "Lien" shall mean (a)
any of the Liens described in the preceding sentence, or (b)
any option with respect to such Property."
" 'MANUFACTURING' means Aviation Sales Manufacturing
Company, a Delaware corporation and wholly-owned Subsidiary of
Aviation Sales."
" 'MARGIN STOCK' means 'margin stock' as such term is
defined in Regulation U."
" 'MIS' means computerized management information
system for recording and maintenance of information regarding
purchases, sales, aging, categorization, and locations of
Inventory, creation and aging of Receivables, and accounts
payable (including agings thereof)."
" 'MR&O' means Aviation Sales Maintenance, Repair &
Overhaul Company, a Delaware corporation and wholly-owned
Subsidiary of Aviation Sales."
" 'MULTIEMPLOYER PLAN' means a 'multiemployer plan'
as defined in Section 4001(a)(3) of ERISA (other than a
Foreign Employee Benefit Plan) which is, or within the
immediately preceding six (6) years was, contributed to by
either Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate or in respect of which
Aviation Sales, any Guarantor, any Subsidiary of Aviation
Sales or any ERISA Affiliate has assumed any liability."
" 'NET CASH PROCEEDS OF SALE' means (i) proceeds
received by Aviation Sales or any Guarantor or any Subsidiary
of Aviation Sales in cash (including cash, equivalents readily
convertible into cash, and such proceeds of any notes received
as consideration or any other non-cash consideration) from the
sale, assignment or other disposition of (but not the lease or
license of) any Asset, other than sales permitted under
CLAUSES (C), (d)(ii)(A), and (E) of SECTION 28.3.2, net of (a)
the costs of sale, assignment or other disposition, (b) any
income, franchise, transfer or other tax liability arising
from such transaction and (c) amounts
15
applied to the repayment of Indebtedness (other than the
Obligations under the Existing Aviation Sales Credit
Agreement) secured by a Lien permitted by SECTION 28.3.3 on
the asset disposed of, if such net proceeds arise from any
individual sale, assignment or other disposition or from any
group of related sales, assignments or other dispositions; and
(ii) to the extent provided in SECTION 9.08 of the Existing
Aviation Sales Credit Agreement, proceeds of insurance on
account of the loss of or damage to any such Asset, and
payments of compensation for any such Asset taken by
condemnation or eminent domain."
" 'NON-TROL EQUIPMENT' means, with respect to any
Person, all of such Person's present and future (i) equipment,
including, without limitation, machinery, manufacturing,
distribution, selling, data processing and office equipment,
assembly systems, tools, molds, dies, fixtures, appliances,
furniture, furnishings, vehicles, vessels, aircraft, aircraft
engines, and trade fixtures, (ii) other tangible personal
property (other than such Person's Inventory), and (iii) any
and all accessions, parts and appurtenances attached to any of
the foregoing or used in connection therewith, and any
substitutions therefor and replacements, products and proceeds
thereof."
" 'OFFICER'S CERTIFICATE' means a certificate
executed on behalf of Aviation Sales by its chairman,
president, chief financial officer, or treasurer, or on behalf
of Aviation Sales and its Subsidiaries by Aviation Sales'
chairman, president, chief financial officer or treasurer."
" 'OPERATING LEASE' means, as applied to any Person,
any lease of any property (whether real, personal or mixed) by
that Person as lessee which is not a Capital Lease."
" 'ORGANIZATIONAL DOCUMENTS' means, with respect to
any corporation, limited liability company, or partnership (i)
the articles/certificate of incorporation (or the equivalent
organizational documents) of such corporation or limited
liability company, (ii) the partnership agreement executed by
the partners in the partnership, (iii) the by-laws (or the
equivalent governing documents) of the corporation, limited
liability company or partnership, and (iv) any document
setting forth the designation, amount and/or relative rights,
limitations and preferences of any class or series of such
corporation's Capital Stock or such limited liability
company's or partnership's equity or ownership interests."
" 'OSHA' means the Occupational Safety and Health Act
of 1970, 29 U.S.C.ss.ss.651 ET SEQ., any amendments thereto,
any successor statutes and any regulations or guidance
promulgated thereunder."
" 'OVERADVANCE AMOUNT' shall have the meaning
assigned thereto in the Existing Aviation Sales Credit
Agreement."
" 'PARENT BOARD' means Board of Directors of Aviation
Sales comprised of those Persons who are members of such Board
of Directors on the Effective Date
16
and identified on SCHEDULE 1.01.5 attached hereto and made a
part hereof and those members of such Board of Directors who
are elected as referenced in SECTION 12.01(O) of the Existing
Aviation Sales Credit Agreement."
" 'PBGC' means the Pension Benefit Guaranty
Corporation and any Person succeeding to the functions
thereof."
" 'PERFORMANCE LEVEL 1' shall mean that level of
financial performance of Aviation Sales and its Subsidiaries,
on a consolidated basis, measured as of the end of a Fiscal
Quarter, at which the Consolidated Funded Debt-to-EBITDA Ratio
of Aviation Sales for the then most recently ended
Four-Quarter Period is less than or equal to 4.5 to 1.0."
" 'PERFORMANCE LEVEL 2' shall mean that level of
financial performance of Aviation Sales and its Subsidiaries,
on a consolidated basis, measured as of the end of a Fiscal
Quarter, at which the Consolidated Funded Debt-to-EBITDA Ratio
of Aviation Sales for the then most recently ended
Four-Quarter Period is greater than 4.5 to 1.0 and less than
or equal to 5.0 to 1.0."
" 'PERFORMANCE LEVEL 3' shall mean that level of
financial performance of Aviation Sales and its Subsidiaries,
on a consolidated basis, measured as of the end of a Fiscal
Quarter, at which the Consolidated Funded Debt-to-EBITDA Ratio
of Aviation Sales for the then most recently ended
Four-Quarter Period is greater than 5.0 to 1.0."
" 'PERMITS' means any permit, approval, authorization
license, variance, or permission required from a Governmental
Authority or other Person under an applicable Requirement of
Law."
" 'PERMITTED EQUITY SECURITIES OPTIONS' means the
subscriptions, options, warrants, rights, convertible
securities and other agreements or commitments relating to the
issuance of equity Securities of the Parent identified as such
on SCHEDULE 1.01.6."
" 'PERSON' means any natural person, corporation,
limited liability company, limited partnership, general
partnership, joint stock company, joint venture, association,
company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity,
any other non-governmental entity, and any Governmental
Authority."
" 'PLAN' means an employee benefit plan defined in
Section 3(3) of ERISA (other than a Foreign Employee Benefit
Plan) in respect of which Aviation Sales, any Guarantor, any
Subsidiary of Aviation Sales or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an
'employer' as defined in Section 3(5) of ERISA or Aviation
Sales, any Guarantor, any Subsidiary of Aviation Sales or any
ERISA Affiliate has assumed any liability."
17
" 'PROJECTIONS' means the respective consolidated and
consolidating financial projections of (i) Aviation Sales and
its Subsidiaries and (ii) the Citicorp Borrowers and their
Subsidiaries (a) by business segment for each calendar month
during the period June - December 2000 and (b) for each of the
Fiscal Years ending in 2000, 2001 and 2002 (including, without
limitation, capital expenditure budget), in each instance,
together with related assumptions, prepared by Aviation Sales
and dated as of the Amendment Effective Date."
" 'RATIO OF SENIOR DEBT TO EBITDA' means, for any
period, the ratio of (i) the amount equal to the Consolidated
Funded Debt of Aviation Sales and its Subsidiaries MINUS the
principal amount outstanding under the Senior Subordinated
Notes calculated as of the last day of such period to (ii)
Consolidated EBITDA of Aviation Sales and its Subsidiaries for
such period."
" 'RCRA' means the Resource Conservation and Recovery
Act of 1976, 42 X.X.X.xx.xx. 6901 ET SEQ., any amendments
thereto, any successor statutes, and any regulations
promulgated thereunder."
" 'REAL PROPERTY' means, with respect to any Person,
all of such Person's present and future right, title and
interest (including, without limitation, any leasehold estate)
in (i) any plots, pieces or parcels of land, (ii) any
improvements, buildings, structures and fixtures now or
hereafter located or erected thereon or attached thereto of
every nature whatsoever (the rights and interests described in
CLAUSES (I) and (II) above being the 'Premises'), (iii) all
easements, rights of way, gores of land or any lands occupied
by streets, ways, alleys, passages, sewer rights, water
courses, water rights and powers, and public places adjoining
such land, and any other interests in property constituting
appurtenances to the Premises, or which hereafter shall in any
way belong, relate or be appurtenant thereto, (iv) all
hereditaments, gas, oil, minerals (with the right to extract,
sever and remove such gas, oil and minerals), and easements,
of every nature whatsoever, located in or on the Premises and
(v) all other rights and privileges thereunto belonging or
appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to or of
any of the rights and interests described in CLAUSES (III) and
(iv) above."
" 'RECEIVABLES' means, with respect to any Person,
all of such Person's present and future (i) accounts, (ii)
contract rights, chattel paper, instruments, documents,
deposit accounts, and other rights to payment of any kind,
whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and whether or
not earned by performance, (iii) any of the foregoing which
are not evidenced by instruments or chattel paper, (iv)
intercompany receivables, and any security documents executed
in connection therewith, (v) proceeds of any letters of credit
or insurance policies on which such Person is named as
beneficiary, (vi) claims against third parties for advances
and other financial accommodations and any other obligations
whatsoever owing to such Person, (vii) rights in and to all
security agreements, leases, guarantees, instruments,
securities, documents of title and other contracts securing,
18
evidencing, supporting or otherwise relating to any of the
foregoing, together with all rights in any goods, merchandise
or Inventory which any of the foregoing may represent, and
(viii) rights in returned and repossessed goods, merchandise
and Inventory which any of the same may represent, including,
without limitation, any right of stoppage in transit."
" 'REGULATION A' means Regulation A of the Federal
Reserve Board as in effect from time to time."
" 'REGULATION T' means Regulation T of the Federal
Reserve Board as in effect from time to time."
" 'REGULATION U' means Regulation U of the Federal
Reserve Board as in effect from time to time."
" 'REGULATION X' means Regulation X of the Federal
Reserve Board as in effect from time to time."
" 'RELEASE' means any release, spill, emission,
leaking, pumping, pouring, dumping, injection, deposit,
disposal, abandonment, or discarding of barrels, containers or
other receptacles, discharge, emptying, escape, dispersal,
leaching or migration into the indoor or outdoor environment
or into or out of any Asset, including the movement of
Contaminants through or in the air, soil, surface water,
groundwater or Asset."
" 'REMEDIAL ACTION' means actions required to (i)
clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (ii)
prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) investigate and
determine if a remedial response is needed and to design such
a response and post-remedial investigation, monitoring,
operation and maintenance and care."
" 'REPORTABLE EVENT' means any of the events
described in Section 4043(b) of ERISA and the regulations
promulgated thereunder as in effect from time to time other
than an event for which the thirty (30) day notice requirement
has been waived by the PBGC."
" 'REQUIREMENTS OF LAW' means, as to any Person, the
charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation, or
determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such
Person or any of its property is subject including, without
limitation, the Securities Act, the Securities Exchange Act,
Regulations T, U and X, ERISA, the Fair Labor Standards Act,
the Worker Adjustment and Retraining Notification Act,
Americans with Disabilities Act of 1990, and any certificate
of occupancy, zoning ordinance, building, environmental or
land use requirement or Permit or any Environmental, Health or
Safety Requirement of Law."
19
" 'RESTRICTED JUNIOR PAYMENT' means (i) any dividend
or other distribution, direct or indirect, on account of any
equity Securities of Aviation Sales or any Guarantor or any
Subsidiary of Aviation Sales now or hereafter outstanding,
(ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or
indirect, of any Securities of Aviation Sales or any Guarantor
or any Subsidiary of Aviation Sales now or hereafter
outstanding, (iii) any payment or prepayment of principal of,
premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for
rescission with respect to, any Indebtedness owing at any time
to any Affiliate of Aviation Sales or any Guarantor, (iv) any
payment made to redeem, purchase, repurchase or retire, or to
obtain the surrender of, any outstanding warrants, options or
other rights to acquire equity Securities of Aviation Sales or
any Guarantor or any Subsidiary of Aviation Sales now or
hereafter outstanding, and (v) any fees or other remuneration
paid to Aviation Sales, Finance Affiliate, Manufacturing, or
any Subsidiary of Aviation Sales by Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales."
" 'REVOLVING CREDIT COMMITMENTS' shall have the
meaning assigned thereto in the Existing Aviation Sales Credit
Agreement."
" 'SCHEDULED INTEREST PAYMENT DATE' shall mean (a) as
to any Eurodollar Loan (or Eurodollar Holder Funding), the
last day of the Interest Period applicable to such Eurodollar
Loan (or Holder Funding), and if such Interest Period is for
more than three months, at intervals of three months after the
first day of such Interest Period, and (b) as to any Base Rate
Loan (or Base Rate Holder Funding), the last Business Day of
each calendar quarter, and (c) as to any Loan (or Holder
Funding), the Maturity Date."
" 'SECURITIES' means any stock, shares, voting trust
certificates, limited partnership certificates, bonds,
debentures, notes or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in
general any instruments commonly known as 'securities',
including, without limitation, any 'security' as such term is
defined in Section 8-102 of the Uniform Commercial Code, or
any certificates of interest, shares, or participations in
temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or
acquire any of the foregoing, but shall not include the Notes
or the Certificates."
" 'SECURITIES ACT' means the Securities Act of 1933,
as amended from time to time, and any successor statute."
" 'SECURITIES EXCHANGE ACT' means the Securities
Exchange Act of 1934, as amended from time to time, and any
successor statute."
" 'SENIOR SUBORDINATED NOTES' means the 8-1/8% Senior
Subordinated Notes due 2008 in an aggregate principal amount
of up to $250,000,000 issued by
20
Aviation Sales under that certain Indenture dated as of
February 17, 1998, as the same may be amended or supplemented
with respect to the principal amount of Indebtedness issued
thereunder, between the Parent and SunTrust Bank, Central
Florida, National Association, as trustee."
" 'SENIOR SUBORDINATED NOTES GUARANTIES' means,
collectively, the unsecured guaranties of payment of the
Senior Subordinated Notes executed by Guarantors which are
Subsidiaries of Aviation Sales."
" 'SUPPLEMENTAL TERM LOAN' means that certain term
loan made by Citicorp USA, Inc. to the Citicorp Borrowers
pursuant to the Term Loan Note dated February 18, 2000, as
amended (the 'Supplemental Term Loan Note')."
" 'SUPPLEMENTAL TERM LOAN WARRANT' means that certain
Common Stock Warrant Certificate issued by Aviation Sales to
Citicorp USA, Inc., and Amendment No. 1 thereto dated May 31,
2000, which warrant certificate and amendment are in the form
attached hereto as EXHIBIT N."
" 'SUBSIDIARY' of a Person means any corporation,
limited liability company, general or limited partnership,
trust, or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar
functions with respect to such entity are at the time directly
or indirectly owned or controlled by such Person, one or more
of the other subsidiaries of such Person or any combination
thereof, or in the case of an entity which is a partnership,
of which such Person is a general partner."
" 'TANGIBLE NET WORTH' means the amount calculated as
(i) the consolidated net worth of Aviation Sales and its
Subsidiaries MINUS (ii) the consolidated intangibles of
Aviation Sales and its Subsidiaries including, without
limitation, goodwill, trademarks, tradenames, copyrights,
patents, patent applications, licenses and rights in any
thereof and other items treated as intangibles in accordance
with GAAP."
" 'TERMINATION EVENT' means (i) a Reportable Event
with respect to any Benefit Plan; (ii) the withdrawal of
Aviation Sales, any Guarantor, any Subsidiary of Aviation
Sales or any ERISA Affiliate from a Benefit Plan during a plan
year in which Aviation Sales, such Guarantor, such Subsidiary
or such ERISA Affiliate was a 'substantial employer' as
defined in Section 4001(a)(2) of ERISA or the cessation of
operations which results in the termination of employment of
20% of Benefit Plan participants who are employees of Aviation
Sales, any Guarantor, any Subsidiary of Aviation Sales or any
ERISA Affiliate; (iii) the imposition of an obligation on any
Borrower or any ERISA Affiliate under Section 4041 of ERISA to
provide affected parties written notice of intent to terminate
a Benefit Plan in a distress termination described in Section
4041(c) of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan; (v) any event or
condition which could reasonably be expected to constitute
21
grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Benefit Plan;
or (vi) the partial or complete withdrawal of Aviation Sales,
any Guarantor, any Subsidiary of Aviation Sales or any ERISA
Affiliate from a Multiemployer Plan."
" 'TEXAS TAX RESERVE' means, at any time, a reserve
in an amount equal to the taxes payable by Aviation Sales and
Guarantors under the statutes of the State of Texas with
respect to which a tax lien attaches to Property of Aviation
Sales and Guarantors located in the State of Texas pursuant to
ss.32.01 of the Texas Tax Code, which amount shall be
determined by Distribution as of the date of each Borrowing
Base Certificate and, if in excess of $200,000, disclosed by
Distribution thereon."
" 'WORKING CAPITAL' means, as at any date of
determination, the excess, if any, of (i) Aviation Sales' and
its Subsidiaries' consolidated current assets, except cash and
Cash Equivalents, over (ii) Aviation Sales' and its
Subsidiaries' consolidated current liabilities, except current
maturities of long-term debt, and current maturities of the
Revolving Credit Obligations (as defined in the Existing
Aviation Sales Credit Agreement) as of such date."
(d) The Participation Agreement is further amended by adding
the Schedules 1.01.5 and 1.01.6 to Participation Agreement that are
attached hereto.
4. AMENDMENTS TO SERIES A GUARANTY. Each Series A Guaranty Agreement is
hereby amended, effective as of the effective date hereof, as follows:
(a) In the first sentence of SECTION 2 of each Series A
Guaranty Agreement, the phrase "following the Completion of a Property
(the 'Completion Date')" is deleted.
(b) In the last sentence of SECTION 2 of each Series A
Guaranty Agreement, the phrase ", as of the Completion Date" is
deleted.
(c) In SECTION 3 of each Series A Guaranty Agreement, the
phrase ", on or after the Completion Date" is deleted.
(d) In the first sentence of SECTION 7 of each Series A
Guaranty Agreement, the phrase "on or after the Completion Date" is
deleted.
(e) In the last sentence of SECTION 9(A) of each Series A
Guaranty Agreement, the phrase "on or after the Completion Date" is
deleted.
(f) In the first sentence of SECTION 9(B) of each Series A
Guaranty Agreement, the phrase "ON OR AFTER THE COMPLETION DATE" is
deleted.
(g) In the first sentence of SECTION 10 of each Series A
Guaranty Agreement, the phrase "as of the Completion Date" is deleted
and the word "immediately" is inserted in its place.
22
(h) In accordance with the amendments described in paragraphs
3(a) through 3(g) above, the Guarantors' Obligations under each Series
A Guaranty are effective immediately, whether or not a Property has
been Completed.
5. AMENDMENTS TO LEASE AGREEMENT. Subject to the conditions hereof, the
Lease Agreement is hereby amended, effective as of the date hereof, as follows:
(a) The proviso in SECTION 3.1(A) of the Lease is amended to
provide that the obligation of the Lessee to pay Basic Rent with
respect to the Properties shall commence on the date hereof, and the
definition of "Basic Rent Commencement Date" in SECTION 3.1(A) of the
Lease is hereby amended to mean the date of this Amendment Agreement.
(b) The second sentence of SECTION 10.1(E) of the Lease is
amended to add the following clause at the end of such sentence: ", or
(iii) at any time upon the request of the Agent or the Lessor, such a
request pursuant to this clause (iii) not to be made more than once for
the same Property."
(c) Section 17.1 of the Lease is amended by deleting the comma
at the end of clause (p) and inserting in its "; or", and by inserting
the following clause (q) immediately after clause (p):
"(q) A Change of Control shall occur,"
(d) Article XVIII of the Lease is amended in its entirety, so
that as amended it reads as follows:
"ARTICLE XVIII
"28.1 REPORTING 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 Agreement have been terminated in accordance
with their terms, unless the Lessor and the Majority Lenders
shall otherwise consent in writing, Aviation Sales will, and
where applicable will cause each Subsidiary to:
"28.1.1 FINANCIAL STATEMENTS. Aviation Sales
shall maintain, and cause each of the other
Guarantors and each of the Subsidiaries of Aviation
Sales to maintain, a system of accounting established
and administered in accordance with sound business
practices to permit preparation of consolidated and
consolidating Financial Statements in conformity with
GAAP and each of the Financial Statements described
below shall be prepared from such system and records.
Aviation Sales shall deliver or cause to be delivered
to the Agent, the Lenders, the Holders and (upon
Lessor's request) the Lessor:
23
"(a) MONTHLY REPORTS. As soon as
practicable, and in any event within (i) thirty (30)
days after the end of each calendar month which is
not the last month of a Fiscal Quarter and (ii)
forty-five (45) days after the end of each calendar
month which is the last month of a Fiscal Quarter,
(A) the consolidated and consolidating balance sheets
of Aviation Sales and its Subsidiaries as at the end
of such period and (B) the related consolidated and
consolidating statement of income of Aviation Sales
and its Subsidiaries and consolidated statements of
shareholders' equity and cash flow of Aviation Sales
and its Subsidiaries, in each instance, for such
calendar month, setting forth in each case in
comparative form the corresponding figures with
respect to consolidated statements for the
corresponding calendar month referenced in the
business plan pertaining to such period certified by
the chief financial officer of Aviation Sales as
fairly presenting the consolidated and consolidating
financial position of Aviation Sales and its
Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the
calendar months indicated in accordance with GAAP,
subject to normal year end adjustments and excluding
footnotes.
"(b) QUARTERLY REPORTS. As soon as
practicable, and in any event within forty-five (45)
days after the end of each Fiscal Quarter in each
Fiscal Year, the consolidated and consolidating
balance sheets of Aviation Sales and its Subsidiaries
as at the end of such period and the related
consolidated and consolidating statement of income of
Aviation Sales and its Subsidiaries and consolidated
statements of shareholders' equity and cash flow of
Aviation Sales and its Subsidiaries, in each
instance, for such Fiscal Quarter, setting forth in
comparative form the corresponding figures with
respect to consolidated statements for the
corresponding period referenced in the business plan
pertaining to such period and the corresponding
figures from the financial forecast for the current
Fiscal Year delivered on the Amendment Effective Date
or pursuant to SECTION 28.1.1(F), as applicable,
certified by the chief financial officer of Aviation
Sales as fairly presenting the respective
consolidated and consolidating financial positions of
Aviation Sales and its Subsidiaries as at the dates
indicated and the results of their operations and
cash flow for the periods indicated in accordance
with GAAP, subject to normal year end adjustments and
excluding footnotes. Notwithstanding the foregoing,
in the event (i) the filing of Aviation Sales' Form
10-Q with the Commission with respect to any Fiscal
Quarter is delayed for any reason and Aviation Sales
has provided Agent with written notice of such delay
by the due date for the reports required for such
Fiscal Quarter under this CLAUSE (B) and (ii)
Aviation Sales shall deliver either the required
reports or interim good faith estimates of the
information required to be reported under this CLAUSE
(B) within fifty-five (55) days after the end of such
Fiscal Quarter, upon delivery of such required
reports or interim estimates within such period
Aviation Sales shall be deemed to have complied with
the
24
requirements of this CLAUSE (B) with respect to such
Fiscal Quarter; PROVIDED THAT Aviation Sales deliver
the required reporting substantially concurrently
with its filing of its Form 10-Q with the Commission.
"(c) ANNUAL REPORTS. As soon as practicable,
and in any event within ninety (90) days after the
end of each Fiscal Year, (i) the consolidated and
consolidating balance sheets of (A) Aviation Sales
and its Subsidiaries as at the end of such Fiscal
Year and (B) to the extent the same are routinely and
regularly prepared, each Guarantor and its
Subsidiaries as at the end of such Fiscal Year and
(ii) the related consolidated and consolidating
statements of income, shareholders' equity and cash
flow of (A) Aviation Sales and its Subsidiaries and
(B) to the extent the same are routinely and
regularly prepared, Leasing and its Subsidiaries and
each Guarantor and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form
the corresponding figures for the previous Fiscal
Year and the corresponding figures from the financial
forecast for the current Fiscal Year delivered on the
Amendment Effective Date or pursuant to SECTION
28.1.1(F), as applicable, and (iii) a report on such
consolidated Financial Statements of Aviation Sales
and its Subsidiaries of Xxxxxx Xxxxxxxx LLP or other
independent certified public accountants acceptable
to the Agent, which report shall be unqualified as to
the scope of the audit performed and as to the "going
concern" status of Aviation Sales and shall not
contain any other Impermissible Qualification and
shall state that such Financial Statements fairly
present the consolidated financial position of
Aviation Sales and its Subsidiaries and, to the
extent included in Aviation Sales' annual Financial
Statements, Leasing and its Subsidiaries and each
Guarantor and its Subsidiaries as at the dates
indicated and the results of their operations and
cash flow for the periods indicated in conformity
with GAAP applied on a basis consistent with prior
years (except for changes with which Xxxxxx Xxxxxxxx
LLP or any such other independent certified public
accountants, if applicable, shall concur and which
shall have been disclosed in the notes to the
Financial Statements) and that the examination by
such accountants in connection with such Financial
Statements has been made in accordance with generally
accepted auditing standards. Notwithstanding the
foregoing, in the event the filing of Aviation Sales'
annual report with the Commission with respect to any
Fiscal Year is delayed for any reason and Aviation
Sales has provided Agent with written notice of such
delay by the due date for the reports required for
such Fiscal Year under this CLAUSE (C), Aviation
Sales shall comply with the requirements of this
clause (c) if it delivers the required reports by the
earlier of (y) one hundred twenty (120) days after
the end of such Fiscal Year, or (z) substantially
concurrently with its filing of its annual report
with the Commission.
"(d) OFFICER'S CERTIFICATE. Together with
each delivery of any Financial Statement pursuant to
this SECTION 28.1.1, (i) an Officer's
25
Certificate on behalf of Aviation Sales substantially
in the form of EXHIBIT M attached hereto and made a
part hereof, addressed to the Agent, Lenders and
Holders, stating that the Person signatory thereto
has reviewed the terms of the Operative Agreements,
and has made, or caused to be made under his/her
supervision, a review in reasonable detail of the
transactions and financial condition of Aviation
Sales and its Subsidiaries during the accounting
period covered by such Financial Statements, that
such review has not disclosed the existence during or
at the end of such accounting period, and that such
Person does not have knowledge of the existence as at
the date of such Officer's Certificate, of any
condition or event which constitutes a Default or
Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period
of existence thereof and what action Aviation Sales,
any Guarantor, or any Subsidiary of Aviation Sales
has taken, is taking and proposes to take with
respect thereto; and (ii) a certificate (the
"Compliance Certificate"), signed by Aviation Sales'
and Distribution's chief financial officer, setting
forth calculations (with such specificity as the
Agent may reasonably request) for the period then
ended which demonstrate compliance, when applicable,
with the provisions of SECTION 28.4 (including
SECTIONS 28.4.1 THROUGH 28.4.8).
"(e) ACCOUNTANT'S STATEMENT AND PRIVITY
LETTER. Together with each delivery of the Financial
Statements referred to in SECTION 28.1.1(C), a
written statement, in form and substance satisfactory
to the Agent, of the firm of independent certified
public accountants giving the report thereon (i)
stating that their audit examination has included a
review of the terms of this Agreement as it relates
to accounting matters, (ii) stating whether, in
connection with their audit examination, any
condition or event which constitutes a Default or
Event of Default or has come to their attention, and
if such condition or event has come to their
attention, specifying the nature and period of
existence thereof; PROVIDED THAT such accountants
shall not be liable by reason of any failure to
obtain knowledge of any such condition or event that
would not be disclosed in the course of their audit
examination, and (iii) stating that based on their
audit examination nothing has come to their attention
which causes them to believe that the information
contained in either or both of the certificates
delivered therewith pursuant to SECTION 28.1.1(D) (as
the information contained in such certificates
relates to the covenants set forth in SECTIONS 28.4
(including SECTIONS 28.4.1 THROUGH 28.4.8) is not
correct or that the matters set forth in the
Compliance Certificate delivered therewith pursuant
to SECTION 28.1.1(D)(II) for the applicable Fiscal
Year are not stated in accordance with the terms of
this Agreement. The statement referred to above shall
be accompanied by (x) a copy of the management letter
or any similar report delivered to Aviation Sales or
any Guarantor or any Subsidiary of Aviation Sales or
to any officer or employee thereof by such
accountants in connection with such Financial
Statements, to the extent
26
then available, and (y) a letter in substantially the
form of EXHIBIT N attached hereto and made a part
hereof from Aviation Sales to such accountants
informing such accountants that the Lenders and
Holders are relying upon the Financial Statements
audited by such accountants and delivered to the
Agent, the Lenders and the Holders pursuant to
SECTION 28.1.1(C) and that a primary intent of
Aviation Sales in having such Financial Statements
audited is to induce the Lenders and Holders to
continue to make Loans and Holder Fundings under the
Operative Agreements. The Agent, each Lender and each
Holder may, with the written consent of Aviation
Sales (which consent shall not be unreasonably
withheld or delayed), communicate directly with such
accountants. Aviation Sales shall deliver to the
Agent, Lenders and Holders, as soon as the same is
available to it and in any event no later than
September 30 of each calendar year, the management
letter or any similar report delivered to Aviation
Sales or any Guarantor or any Subsidiary of Aviation
Sales or to any officer or employee thereof by Xxxxxx
Xxxxxxxx LLP with the Financial Statements of
Aviation Sales for the Fiscal Year ending December 31
of the preceding calendar year. To the extent a
management letter or any similar report referenced in
CLAUSE (X) is not delivered concurrently with the
aforesaid accountants' written statement, such letter
or report shall be delivered to the Agent, Lenders
and Holders no later than June 30 of the calendar
year immediately succeeding the Fiscal Year for which
such written statement is delivered, commencing with
the Fiscal Year ending in 2000.
"(f) BUDGETS; BUSINESS PLANS; FINANCIAL
PROJECTIONS.
"(i) GENERAL. As soon as practicable
and in any event not later than (A) January
31 of each calendar year for the Fiscal Year
ending in such calendar year, (1) a monthly
budget for Aviation Sales and its
Subsidiaries for such Fiscal Year; (2) an
annual business plan for Aviation Sales and
its Subsidiaries for such Fiscal Year,
substantially in the form of the business
plans heretofore delivered to the Agent, the
Lenders, and the Holders, accompanied by a
report reconciling all changes and
departures from the business plans delivered
to the Agent, the Lenders and the Holders
for the preceding Fiscal Year; and (3) a
plan and financial forecast, prepared in
accordance with Aviation Sales' and
Distribution's normal accounting procedures
applied on a consistent basis, and (B)
January 31 of each calendar year for the
Fiscal Year ending in such calendar year,
(1) an annual business plan for Aviation
Sales and its Subsidiaries for such Fiscal
Year, substantially in the form of the
business plans heretofore delivered to the
Agent, the Lenders and the Holders,
accompanied by a report reconciling all
changes and departures from the business
plans delivered to the Agent, the Lenders
and the Holders for the
27
preceding Fiscal Year; and (2) a plan and
financial forecast, prepared in accordance
with Aviation Sales' and Distribution's
normal accounting procedures applied on a
consistent basis, including, without
limitation, (I) forecasted consolidated and
consolidating balance sheets and statements
of cash flow of Aviation Sales and its
Subsidiaries for each Fiscal Year, (II)
forecasted consolidated and consolidating
balance sheets, statements of earnings and
retained earnings, and cash flow of Aviation
Sales and its Subsidiaries for and as of the
end of each fiscal quarter of the
immediately succeeding Fiscal Year and for
and as of the end of each Fiscal Year
thereafter, (III) the amount of forecasted
Capital Expenditures for such Fiscal Year,
and (IV) forecasted compliance with the
provisions of SECTION 28.4 (including
SECTIONS 28.4.1 THROUGH 28.4.8).
"(ii) QUARTERLY PROJECTIONS.
Quarterly, on the date Financial Statements
are required to be delivered pursuant to
SECTION 28.1.1(B) for the first three Fiscal
Quarters of a Fiscal Year and on the date
the plan and financial forecast is required
to be delivered pursuant to SECTION
28.1.1(F) for the last Fiscal Quarter of a
Fiscal Year, commencing with the due date
for Financial Statements for the Fiscal
Quarter ending June 30, 2000, a monthly
financial forecast for the four Fiscal
Quarters next succeeding such Fiscal Quarter
then most recently ended, prepared in
accordance with Aviation Sales' and
Distribution's normal accounting procedures
applied on a consistent basis, including,
without limitation, (i) forecasted
consolidated and consolidating balance
sheets and statements of cash flow of
Aviation Sales and its Subsidiaries for each
month of such four Fiscal Quarters, (ii)
forecasted consolidated and consolidating
balance sheets, statements of earnings and
retained earnings, and cash flow of Aviation
Sales and its Subsidiaries for and as of the
end of each month of such four Fiscal
Quarters, (iii) the amount of forecasted
Capital Expenditures for each month of such
four Fiscal Quarters, and (iv) forecasted
compliance with the provisions of SECTIONS
28.4 (including SECTIONS 28.4.1 THROUGH
28.4.8) for each of such four Fiscal
Quarters.
"(iii) CASH FLOW PROJECTIONS. On
Friday of each week, eight-week projected
cash flow statements of Aviation Sales and
its Subsidiaries, by week, in form and
substance satisfactory to the Agent and the
Majority Lenders.
"28.1.2 Borrowing Base Certificate;
Appraisals, Reports, Other Documents.
28
"(a) BORROWING BASE CERTIFICATE. Aviation
Sales shall provide the Agent, the Lenders and
Holders (i) on Wednesday of each calendar week, or if
a Wednesday is not a Business Day, the immediately
succeeding Business Day, with a Borrowing Base
Certificate for Eligible Receivables as of the
immediately preceding Friday, (ii) on a bi-weekly
basis, on Wednesday of the applicable week, or if a
Wednesday is not a Business Day, the immediately
succeeding Business Day, with a Borrowing Base
Certificate for Eligible Inventory of Distribution as
of the immediately preceding Friday, and (iii) on a
monthly basis, on the second Wednesday of each month,
or if a Wednesday is not a Business Day, the
immediately succeeding Business Day, with a Borrowing
Base Certificate for Eligible Inventory of Persons
other than Distribution as of the immediately
preceding month end, in each instance, together with
a calculation of the Texas Tax Reserve as of the date
thereof if such Texas Tax Reserve exceeds $200,000
and such supporting documents as the Agent deems
desirable, all certified as being true and correct by
the chief financial officer, chief executive officer,
or controller of Distribution.
"(b) APPRAISALS, CERTAIN REPORTS AND OTHER
DOCUMENTS. If Aviation Sales, Distribution or any
other Person shall obtain or deliver to the Existing
Credit Agent or any other lender under the Existing
Aviation Sales Credit Agreement (as amended from time
to time), any appraisal of the Inventory of Aviation
Sales, Distribution or any Citicorp Borrower or
Guarantor or any Subsidiary of Aviation Sales, then
Aviation Sales shall simultaneously deliver a copy of
such appraisal to the Agent, each Lender and each
Holder.
"(c) CERTAIN REPORTS AND OTHER DOCUMENTS.
Upon receipt by Aviation Sales, or any Guarantor or
any Subsidiary of Aviation Sales, of (i) any report
or other document pursuant to SECTION 6.01(J) of the
Existing Aviation Sales Credit Agreement or (ii) any
report or written recommendation created by an
independent consultant or other third party pursuant
to SECTION 9.06 of the Existing Aviation Sales Credit
Agreement, in each case Aviation Sales shall promptly
deliver a copy of such report or document to the
Agent.
"28.1.3 EVENTS OF DEFAULT. Promptly upon any
Authorized Officer or any of the chief executive
officer, chief operating officer, chief financial
officer, treasurer or controller of Aviation Sales
obtaining knowledge (a) of any condition or event
which constitutes a Default or Event of Default, or
becoming aware that any Lender, Holder, Lessor or the
Agent has given any notice with respect to a claimed
Default or Event of Default, (b) that any Person has
given any notice to Aviation Sales or any Guarantor
or any Subsidiary of Aviation Sales or exercised any
remedy with respect to a claimed default or event or
condition, or (c) of any condition or event which has
resulted, or is reasonably likely to result,
29
in a Material Adverse Effect or affect the value of,
or the Agent's or Lessor's interest in, any Property
in any material respect, Aviation Sales shall deliver
to the Agent, the Lenders and the Holders an
Officer's Certificate specifying (i) the nature and
period of existence of any such claimed default,
Default, Event of Default, condition or event, (ii)
the notice given or action taken by such Person in
connection therewith, and (iii) what action Aviation
Sales has taken, is taking and proposes to take with
respect thereto.
"28.1.4 LAWSUITS.
"(a) INSTITUTION OF PROCEEDINGS. Promptly
upon Aviation Sales or any Guarantor or any
Subsidiary of Aviation Sales obtaining knowledge of
the institution of, or written threat of, any action,
suit, proceeding, governmental investigation or
arbitration against or affecting Aviation Sales or
any Guarantor or any Subsidiary of Aviation Sales, or
any Asset or Property not previously disclosed, which
action, suit, proceeding, governmental investigation
or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental
investigations or arbitrations arising out of the
same general allegations or circumstances which
expose, in Aviation Sales' reasonable judgment,
Aviation Sales or any Guarantor or any Subsidiary of
Aviation Sales to liability in an amount aggregating
$1,000,000 or more (exclusive of claims covered by
insurance policies of Aviation Sales and Guarantors
and such Subsidiaries unless the insurers of such
claims have disclaimed coverage or reserved the right
to disclaim coverage on such claims), Aviation Sales
shall give written notice thereof to the Agent, the
Lenders and Holders and provide such other
information as may be reasonably available to enable
each Lender, each Holder and the Agent and its
counsel to evaluate such matters.
"(b) QUARTERLY REPORTS. As soon as
practicable and in any event within forty-five (45)
days after the end of each fiscal quarter of Aviation
Sales, it shall provide a written quarterly report to
the Agent, the Lenders and Holders covering the
institution of, or written threat of, any action,
suit, proceeding, governmental investigation or
arbitration (not previously reported) against or
affecting Aviation Sales, any Guarantor or any
Subsidiary of Aviation Sales, or any Property or
Asset not previously disclosed by Aviation Sales to
the Agent, the Lenders and Holders, and shall provide
such other information at such time as may be
reasonably available to enable each Lender, each
Holder and the Agent and its counsel to evaluate such
matters.
"(c) ADDITIONAL REPORTS UPON REQUEST. In
addition to the requirements set forth in clauses (a)
and (B) of this Section, Aviation Sales, upon the
request of the Agent or the Majority Lenders, shall
30
promptly give written notice of the status of any
action, suit, proceeding, governmental investigation
or arbitration covered by a report delivered pursuant
to either of such CLAUSES (A) or (B) and provide such
other information as may be reasonably available to
it to enable each Lender and Holder and the Agent and
its counsel to evaluate such matters.
"28.1.5 INSURANCE. As soon as practicable
and in any event by the last day of February in each
calendar year, Aviation Sales shall deliver to the
Agent, the Lenders and Holders (a) a report in form
and substance reasonably satisfactory to the Agent,
the Lenders and Holders outlining (i) all material
insurance coverage maintained as of the date of such
report by Aviation Sales and Guarantors and the
Subsidiaries of Aviation Sales and the duration of
such coverage and (ii) the claims and awards, if any,
made under such insurance for the twelve (12)
calendar month period then ending and (b) evidence
that all premiums with respect to such coverage have
been paid when due.
"28.1.6 ERISA NOTICES. Aviation Sales shall
deliver or cause to be delivered to the Agent and the
Lenders and Holders, at Aviation Sales' expense, the
following information and notices as soon as
reasonably possible, and in any event:
"(a) within ten (10) Business Days after
Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate knows or has
reason to know that a Termination Event has occurred,
a written statement of the chief financial officer of
Aviation Sales describing such Termination Event and
the action, if any, which Aviation Sales, any
Guarantor, any Subsidiary of Aviation Sales or any
ERISA Affiliate has taken, is taking or proposes to
take with respect thereto, and when known, any action
taken or threatened by the IRS, DOL or PBGC with
respect thereto;
"(b) within ten (10) Business Days after
Aviation Sales or any Guarantor or any Subsidiary of
Aviation Sales knows or has reason to know that an
assessment of a prohibited transaction excise tax
under Section 4975 of the Internal Revenue Code has
occurred, a statement of the chief financial officer
of Distribution describing such transaction and the
action which Aviation Sales, any Guarantor, any
Subsidiary of Aviation Sales or any ERISA Affiliate
has taken, is taking or proposes to take with respect
thereto;
"(c) within three (3) Business Days after
the filing of the same with the DOL, IRS or PBGC,
copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to
each Benefit Plan;
31
"(d) within three (3) Business Days after
receipt by Aviation Sales, any Guarantor, any
Subsidiary of Aviation Sales or any ERISA Affiliate
of each actuarial report for any Benefit Plan or
Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
"(e) within three (3) Business Days after
the filing of the same with the IRS, a copy of each
funding waiver request filed with respect to any
Benefit Plan and all communications received by
Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate with respect to
such request;
"(f) within three (3) Business Days after
the occurrence any material increase in the benefits
of any existing Benefit Plan or the establishment of
any new Benefit Plan or the commencement of
contributions to any Benefit Plan to which Aviation
Sales, any Guarantor, any Subsidiary of Aviation
Sales or any ERISA Affiliate was not previously
contributing, notification of such increase,
establishment or commencement;
"(g) within three (3) Business Days after
Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate receives notice
of the PBGC's intention to terminate a Benefit Plan
or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;
"(h) within three (3) Business Days after
Aviation Sales or any Guarantor or any Subsidiary of
Aviation Sales receives notice of any unfavorable
determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the
Internal Revenue Code, copies of each such notice and
letter;
"(i) within three (3) Business Days after
Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate receives notice
from a Multiemployer Plan regarding the imposition of
withdrawal liability, copies of each such notice;
"(j) within three (3) Business Days after
Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate fails to make a
required installment or any other required payment
under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment,
a notification of such failure; and
"(k) within three (3) Business Days after
Aviation Sales, any Guarantor, any Subsidiary of
Aviation Sales or any ERISA Affiliate knows (A) a
Multiemployer Plan has been terminated, (B) the
32
administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (C) the
PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a
Multiemployer Plan.
"For purposes of this SECTION 28.1.6, Aviation Sales,
each Guarantor, each Subsidiary of Aviation Sales and
each ERISA Affiliate shall be deemed to know all
facts known by the Administrator of any Plan of which
Aviation Sales, such Guarantor, such Subsidiary or
any ERISA Affiliate is the plan sponsor.
"28.1.7 ENVIRONMENTAL NOTICES.
"(a) Aviation Sales shall notify the Agent,
the Lenders and Holders in writing, promptly upon
Aviation Sales' learning thereof, of any:
"(i) notice or claim to the effect
that Aviation Sales or any Guarantor or any
Subsidiary of Aviation Sales is or may be
liable to any Person as a result of the
Release or threatened Release of any
Contaminant into the environment which could
reasonably result in an expenditure by
Aviation Sales and/or any Guarantor or any
Subsidiary of Aviation Sales over $500,000;
"(ii) notice that Aviation Sales or
any Guarantor or any Subsidiary of Aviation
Sales is subject to investigation by any
Governmental Authority evaluating whether
any Remedial Action is needed to respond to
the Release or threatened Release of any
Contaminant into the environment which could
reasonably result in an expenditure by
Aviation Sales and/or any Guarantor or any
Subsidiary of Aviation Sales over $500,000;
"(iii) notice that any Property or
other Asset is subject to an Environmental
Lien;
"(iv) notice to Aviation Sales or
any Guarantor or any Subsidiary of Aviation
Sales of any material violation of any
Environmental, Health or Safety Requirement
of Law;
"(v) condition which might
reasonably result in a material violation of
any Environmental, Health or Safety
Requirement of Law;
"(vi) commencement or threat of any
judicial or administrative proceeding
alleging a material violation by Aviation
Sales or any Guarantor or any Subsidiary of
Aviation Sales (or any
33
predecessor in interest thereof) of any
Environmental, Health or Safety Requirement
of Law;
"(vii) new or proposed changes to
any existing Environmental, Health or Safety
Requirement of Law that could result in a
Material Adverse Effect;
"(viii) any proposed acquisition of
stock, assets, real estate, or leasing of
property, or any other action by Aviation
Sales or any Guarantor or any Subsidiary of
Aviation Sales that could subject Aviation
Sales or any Guarantor or any Subsidiary of
Aviation Sales to environmental, health or
safety Liabilities and Costs which could
reasonably result in an expenditure by
Aviation Sales and/or any Guarantor or any
Subsidiary of Aviation Sales over $500,000;
or
"(ix) any filing or report made by
Aviation Sales or any Guarantor or any
Subsidiary of Aviation Sales with any
Governmental Authority with respect to any
unpermitted Release or threatened Release of
a Contaminant which could reasonably result
in an expenditure by Aviation Sales and/or
any Guarantor or any Subsidiary of Aviation
Sales over $500,000.
"(b) Within sixty (60) days after the end of
each Fiscal Year, Aviation Sales shall submit to the
Agent and the Lenders and Holders a report
summarizing the status of environmental, health or
safety compliance, hazard or liability issues
identified in notices required pursuant to SECTION
28.1.7(A), disclosed on SCHEDULE 28.1.7-B, or
identified in any notice or report required herein,
which report shall include, with respect to any Real
Property leased or acquired during the period covered
by such report, the results of an annual inspection
of the Asset with respect to whether it contains any
asbestos-containing material and, in the event any
Asset does contain any asbestos-containing material,
what actions will be taken to eliminate or remediate
the same.
"28.1.8 LABOR MATTERS. Aviation Sales shall
notify the Agent and the Lenders and Holders in
writing, promptly upon Aviation Sales' learning
thereof, of (i) any material labor dispute to which
Aviation Sales or any Guarantor or any Subsidiary of
Aviation Sales may become a party, including, without
limitation, any strikes, lockouts or other grievances
relating to Aviation Sales' or any Guarantor's or any
such Subsidiary's plants and other facilities and
(ii) any liability relating to its employees incurred
with respect to the closing of any plant or other
facility of Aviation Sales or any Guarantor or any
Subsidiary of Aviation Sales.
34
"28.1.9 SEC REPORTING. Promptly after the
same are available, Aviation Sales shall deliver to
the Agent, the Lenders and Holders copies of all
Financial Statements, reports and notices,
registration statements and proxy statements or other
filings, if any, sent or made available generally by
Aviation Sales and/or any Guarantor or any Subsidiary
of Aviation Sales to its respective Securities
holders or filed with the Commission or other
securities exchange.
"28.1.10 HEDGE AGREEMENTS. Aviation Sales
shall provide to the Agent, promptly upon the
execution by Aviation Sales or any Subsidiary of
Aviation Sales of any Hedge Agreement, written notice
of the notional amount thereof.
"28.1.11 OTHER REPORTS. Aviation Sales shall
deliver or cause to be delivered to the Agent, the
Lenders and Holders (a) all written notices and
statements of collateral described in or required by
the terms of any other Operative Agreement as and
when described therein, (b) copies of all press
releases made available generally by Aviation Sales
or any of its Subsidiaries to the public concerning
material developments in the business of such
Person(s), and (c) reports, if any, submitted to
Aviation Sales or any of its Subsidiaries or their
respective boards of directors by such Person's
independent public accountants, including, without
limitation, any management report prepared in
connection with the annual audit.
"28.1.12 NOTICE OF DEFAULT. Aviation Sales
shall deliver or cause to be delivered to the Agent
and Lenders and Holders written notice of the
occurrence of any breach or default under the terms
of the Citicorp Loan Documents, Senior Subordinated
Notes, Supplemental Term Loan Note, or other material
Contractual Obligation of Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales
promptly upon the occurrence thereof and, in any
event, concurrent with any notice thereof to the
obligees thereunder or within two (2) Business Day
after Aviation Sales or any Guarantor or any
Subsidiary of Aviation Sales receives notice thereof.
"28.1.13 OTHER INFORMATION. Promptly upon
receiving a request therefor from the Agent or the
Majority Lenders, Aviation Sales shall prepare and
deliver to the Agent and the Lenders and Holders such
other information with respect to Aviation Sales, the
Guarantors, the Subsidiaries of Aviation Sales or any
Property or other Asset, including, without
limitation, schedules identifying and describing any
Property or other Asset and any dispositions thereof,
as from time to time may be reasonably requested by
the Agent or the Majority Lenders.
35
"28.1.14 AMENDMENTS TO CITICORP LOAN
DOCUMENTS. Immediately upon execution thereof,
Aviation Sales shall deliver to the Agent, each
Lender and each Holder a copy of any amendment to any
Citicorp Loan Document.
"28.2 AFFIRMATIVE 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 will, and where applicable will cause each Subsidiary
to:
"28.2.1 EXISTENCE, ETC. Aviation Sales shall
at all times maintain, and cause each of its
Subsidiaries to maintain, its corporate existence and
preserve and keep, or cause to be preserved and kept,
in full force and effect their respective rights and
franchises material to their respective businesses.
"28.2.2 CORPORATE POWERS; CONDUCT OF
BUSINESS. Aviation Sales shall, and shall cause each
of its Subsidiaries to, qualify and remain qualified
to do business and maintain its good standing in each
jurisdiction in which the nature of its business and
the ownership of its Assets requires it to be so
qualified and in good standing.
"28.2.3 COMPLIANCE WITH LAWS, ETC. Aviation
Sales shall, and shall cause each of its Subsidiaries
to, (a) comply with all Requirements of Law and all
restrictive covenants affecting it or its business,
Assets or operations, and (b) obtain as needed all
Permits necessary for its operations and maintain
such Permits in good standing, except in the case
where noncompliance with either CLAUSE (A) or (b)
above is not reasonably likely to result in a
Material Adverse Effect.
"28.2.4 PAYMENT OF TAXES AND CLAIMS.
Aviation Sales shall, and shall cause each of its
Subsidiaries to, file all tax returns and reports as
and when required by the related Governmental
Authority and pay (a) all taxes, assessments and
other governmental charges imposed upon it or on any
of its Assets or in respect of any of its franchises,
business, income or Assets before any penalty or
interest accrues thereon and (b) all claims
(including, without limitation, claims for labor,
services, materials and supplies) for sums which have
become due and payable and which by law have or may
become a Lien (other than a Lien permitted by SECTION
28.3.3 upon any of the Assets of Aviation Sales or
any Subsidiary of Aviation Sales, prior to the time
when any penalty or fine shall be incurred with
respect thereto; PROVIDED, HOWEVER, that no such
taxes, assessments and governmental charges referred
to in CLAUSE (A) above or claims referred to in
CLAUSE (B) above need be paid if being contested in
good faith by
36
appropriate proceedings diligently instituted and
conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity
with GAAP shall have been made therefor.
"28.2.5 INSURANCE. Without limiting any
provision of Article XIV, Aviation Sales shall
maintain in full force and effect the insurance
policies and programs listed on SCHEDULE 7-G to
Amendment No. 2 or substantially similar policies and
programs or other policies and programs as are
acceptable to the Agent. Each such policy shall
contain endorsement, or an independent instrument
furnished to the Agent, providing that the insurance
companies will give the Agent at least thirty (30)
days' written notice before any such policy or
policies of insurance shall be altered adversely to
the interests of Aviation Sales, any Guarantor or any
Subsidiary of Aviation Sales or cancelled.
"28.2.6 INSPECTION OF PROPERTY; BOOKS AND
RECORDS; DISCUSSIONS. Aviation Sales shall permit,
and shall cause each of their respective Subsidiaries
to permit, any authorized representative(s)
designated by either the Agent or any Lender or
Holder to visit and inspect, whether by access to
Aviation Sales and its Subsidiaries' MIS or
otherwise, any of the Assets, to examine, audit,
check and make copies of Aviation Sales and its
Subsidiaries' financial and accounting records,
books, journals, orders, receipts and any
correspondence (other than privileged correspondence
with legal counsel) and other data relating to their
respective businesses or the transactions
contemplated hereby or referenced herein (including,
without limitation, in connection with environmental
compliance, hazard or liability, and quarterly (or
more often) examinations of the Properties by such
representatives designated by the Agent), and to
discuss their affairs, finances and accounts with
their management personnel and independent certified
public accountants, all upon reasonable written
notice and at such reasonable times during normal
business hours, as often as may be reasonably
requested. Each such visitation and inspection (i) by
or on behalf of any Lender or Holder shall be at such
Lender's or Holder's expense and (ii) by or on behalf
of the Agent shall be at the Lessee's expense.
Aviation Sales shall keep and maintain, and cause its
Subsidiaries to keep and maintain, in all material
respects on its MIS and otherwise proper books of
record and account in which entries in conformity
with GAAP shall be made of all dealings and
transactions in relation to its respective businesses
and activities, including, without limitation,
transactions and other dealings with respect to the
Properties. If an Event of Default has occurred and
is continuing and the Loans or Holder Fundings or
Lease obligations have been accelerated, upon the
Agent's request in connection with efforts to enforce
the rights and remedies of the Agent, the Lenders,
the Holders or the Lessor, Aviation Sales shall turn
over, and cause each of its Subsidiaries to turn
over, any such records requested by the Agent to the
Agent or its
37
representatives; PROVIDED, HOWEVER, that Aviation
Sales may, in its discretion, retain copies of such
records; and PROVIDED FURTHER that unless such
records relate to any Property, Aviation Sales and
its Subsidiaries may deliver copies (as opposed to
originals) of such records to the Agent or its
representatives.
"28.2.7 ERISA COMPLIANCE. Aviation Sales
shall, and shall cause each of the Guarantors and
each of the Subsidiaries of Aviation Sales and
its/their ERISA Affiliates to, establish, maintain
and operate all Plans to comply in all material
respects with the provisions of ERISA, the Internal
Revenue Code, all other applicable laws, and the
regulations and interpretations thereunder and the
respective requirements of the governing documents
for such Plans.
"28.2.8 MAINTENANCE OF PROPERTY. Aviation
Sales shall, and shall cause each of the Guarantors
and each of the Subsidiaries of Aviation Sales to,
maintain in all material respects all of its owned
and leased Assets in good, safe and insurable
condition and repair, and not permit, commit or
suffer any waste or abandonment of any such Assets
and from time to time shall make or cause to be made
all material repairs, renewal and replacements
thereof, including, without limitation, any capital
improvements which may be required; PROVIDED,
HOWEVER, that such Property may be altered or
renovated in the ordinary course of Aviation Sales'
or a Guarantor's or Subsidiary's business.
"28.2.9 CONDEMNATION. Immediately upon
Aviation Sales' learning of the institution of any
proceeding for the condemnation or other taking of
any of the owned or leased Real Property of Aviation
Sales or any Guarantor or any Subsidiary of Aviation
Sales, Aviation Sales shall notify the Agent of the
pendency of such proceeding, and (to the extent such
proceeding relates to any Property) permit the Agent
to participate in any such proceeding, and from time
to time will deliver to the Agent all instruments
reasonably requested by the Agent to permit such
participation.
"28.2.10. NEW SUBSIDIARIES. Promptly (and in
any event within 15 days) after the acquisition or
creation of any Domestic Subsidiary (other than an
Excluded Subsidiary), cause to be delivered to the
Agent for the benefit of itself, the Lenders, the
Holders and the Owner Trustee each of the following:
"(i) a Guaranty Agreement executed by such
Subsidiary substantially in the form of the Guaranty
Agreement (Series A Obligations) executed by the
Guarantors and the Agent on the Initial Closing Date;
38
"(ii) a Guaranty Agreement executed by such
Subsidiary substantially in the form of the Guaranty
Agreement (Lessee Obligations) executed by the
Guarantors (other than Aviation Sales) and the Lessor
on the Initial Closing Date;
"(iii) an opinion of outside counsel to such
Subsidiary (which counsel shall be acceptable to the
Agent) dated as of the date of delivery of the
Guaranty Agreements provided for in this SECTION
28.2(K) and addressed to the Agent, the Owner Trustee
and each of the Lenders, in form and substance
reasonably acceptable to the Agent (which opinion may
include assumptions and qualifications of similar
effect to those contained in the opinion of counsel
delivered by Akerman Senterfitt & Xxxxxx, P.A. on the
Initial Closing Date (the "Initial ASE Opinion")),
including opinions with respect to such Subsidiary
and each such Guaranty Agreement that are
substantively identical to the opinions set forth in
paragraphs 2, 3, 4, 5(a), 5(b), 5(c), 5(d), 5(e),
5(f) and 6 (on pages 5-7) of the Initial ASE Opinion;
"(iv) a certificate of the Secretary or an
Assistant Secretary of such Subsidiary in the form
attached as EXHIBIT E to the Participation Agreement
or in such other form as is reasonably acceptable to
the Agent attaching and certifying as to (A) the
resolutions of the Board of Directors (or, as
applicable, the partners, members or other equivalent
governing body) of such Subsidiary duly authorizing
the execution, delivery and performance by such
Subsidiary of each of the Operative Agreements to
which it is or will be a party, (B) its certificate
of incorporation (or other equivalent charter or
organizational documents), in each case certified as
of a recent date by the Secretary of State of the
State of its incorporation (or organization), (C) its
bylaws (or other equivalent documents relating to the
operation, governance or management of such
Subsidiary), and (D) the incumbency and signature of
persons authorized to execute and deliver on its
behalf the Operative Agreements to which it is a
party; and
"(v) a good standing certificate from the
appropriate officer of its state of incorporation (or
organization) and each state in which it is required
to be qualified to do business as to its good
standing in such state.
"28.2.11 JOINT VENTURE. Triad International
Maintenance Corporation ("TIMCO") shall cause
Xxxxxxxx/XXXXX Cargo Conversions, LLC, a North
Carolina limited liability company in which TIMCO
owns a fifty percent (50%) equity interest to
distribute fifty percent (50%) of its net income to
TIMCO at least quarterly and confirm its receipt of
such distribution to the Agent concurrently with
delivery by Aviation Sales of the financial reporting
required by SECTION 28.1.1(B).
39
"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 will not, nor will it permit any Subsidiary to:
"28.3.1 INDEBTEDNESS. Aviation Sales shall
not, nor shall it permit any of its Subsidiaries to,
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; and
"(b) Indebtedness permitted by Section 10.01
of the Existing Aviation Sales Credit Agreement.
"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), neither Aviation
Sales nor any Subsidiary of Aviation Sales shall
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 such Assets specifically
permitted by the terms of the Operative Agreements;
and
"(b) sales of Assets permitted by Section
10.02 of the Existing Aviation Sales Credit
Agreement.
"28.3.3 LIENS. Without limiting the
generality of any other restriction of Liens on any
Property, neither Aviation Sales nor any Subsidiary
of Aviation Sales shall directly or indirectly
create, incur, assume or permit to exist any Lien on
or with respect to any of their respective Assets
(other than the Properties) except:
"(a) Liens created pursuant to the Operative
Agreements; and
"(b) Liens permitted under Section 10.03 of
the Existing Aviation Sales Credit Agreement.
40
"28.3.4 . INVESTMENTS. Neither Aviation
Sales nor any Subsidiary of Aviation Sales shall
directly or indirectly make or own any Investment
except:
"(a) Investments permitted under Section
10.03 of the Existing Aviation Sales Credit
Agreement.
"Aviation Sales shall not form any direct Subsidiary
after the Amendment Effective Date or permit any of
its Subsidiaries or Guarantor to form any Subsidiary
except to the extent Investments therein are
permitted hereinabove. Neither Aviation Sales nor any
Subsidiary of Aviation Sales may make any Investment
in any Subsidiary of Leasing which is not a
Guarantor.
"28.3.5.ACCOMMODATION OBLIGATIONS. Neither
Aviation Sales nor any Subsidiary of Aviation Sales
shall directly or indirectly create or become or be
liable with respect to any Accommodation Obligation,
except:
"(a) Accommodation Obligations arising under
the Operative Agreements; and
"(b) Accommodation Obligations permitted
under Section 10.05 of the Existing Aviation Sales
Credit Agreement;
"Neither Aviation Sales nor any Subsidiary of
Aviation Sales shall incur any Accommodation
Obligation with respect to Indebtedness of any
Subsidiary of Leasing.
"28.3.6 RESTRICTED JUNIOR PAYMENTS. Aviation
Sales shall not, nor shall it permit any Subsidiary
of Aviation Sales to, declare or make any Restricted
Junior Payment, except:
"(a) Restricted Junior Payments permitted
under Section 10.06 of the Existing Aviation Sales
Credit Agreement.
"28.3.7 CONDUCT OF BUSINESS. Neither
Aviation Sales nor any Subsidiary of Aviation Sales
shall engage in any business other than (a) the
businesses engaged in by such Person on the Amendment
Effective Date and (b) any business or activities
which are substantially similar, related, incidental
or complimentary thereto.
"28.3.8 TRANSACTIONS WITH AFFILIATES.
Neither Aviation Sales nor any Subsidiary of Aviation
Sales shall directly or indirectly enter
41
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.
Neither Aviation Sales nor any Subsidiary of Aviation
Sales shall (a) enter into any merger or
consolidation, (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 28.3.2.
"28.3.10 SALES AND LEASEBACKS. Neither
Aviation Sales nor any Subsidiary of Aviation Sales
shall 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 MARGIN REGULATIONS; SECURITIES
LAWS. Neither Aviation Sales nor any Subsidiary of
Aviation Sales shall, nor shall Aviation Sales or any
Subsidiary of Aviation Sales permit any of its
Subsidiaries to, use all or any portion of the
proceeds of any credit extended under any Citicorp
Loan Agreement to purchase or carry Margin Stock.
42
"28.3.12 ERISA. Neither Aviation Sales nor
any Subsidiary of Aviation Sales shall:
"(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
"(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.
"28.3.13 ISSUANCE OF EQUITY SECURITIES.
Aviation Sales shall not permit any of its
Subsidiaries to issue any equity Securities.
43
"28.3.14 ORGANIZATIONAL DOCUMENTS. Neither
Aviation Sales nor any Subsidiary of Aviation Sales
shall, nor shall Aviation Sales or any Subsidiary of
Aviation Sales permit any of its Subsidiaries to,
amend, modify or otherwise change any of the terms or
provisions in any of (a) its Organizational Documents
as in effect on the Effective Date, except amendments
(i) to effect a change of name of such Person,
written notice of which change of name such Person
shall have provided the Agent within sixty (60) days
prior to the effective date of any such name change
or (ii) otherwise consented to by the Agent in
writing, (b) the agreements and instruments
evidencing loans and advances comprising intercompany
loans without the prior written consent of the Agent,
or (c) the Operative Agreements, the Citicorp Loan
Documents or agreements and instruments executed in
connection with the Senior Subordinated Notes.
"28.3.15 FISCAL YEAR. Aviation Sales shall
not, and shall not permit any of its Subsidiaries to,
change its fiscal year from the Fiscal Year.
"28.3.16 AVIATION SALES COVENANTS. Aviation
Sales shall not:
"(a) merge or liquidate with or into any
other Person and, 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 Distribution,
Leasing, Finance Affiliate, MR&O, Manufacturing,
Aviation Sales Property Management Corp., and
Aviation Sales Company FSC, Ltd., a Barbados
corporation.
"28.4 FINANCIAL COVENANTS. Aviation Sales covenants
and agrees that, until the obligations of the Lessee, the
Construction Agent and the Guarantors have been paid and
satisfied in full and the Operative Agreements have been
terminated in accordance with the terms thereof:
"28.4.1 MINIMUM CONSOLIDATED EBITDA.
Aviation Sales shall maintain Consolidated EBITDA,
determined as of the last day of each Fiscal Quarter
set forth below for the period then ending described
below, of at least the amount set forth below
opposite such date of determination:
44
MINIMUM
DETERMINATION DATE APPLICABLE PERIOD CONSOLIDATED EBITDA
------------------ ----------------- -------------------
June 30, 2000 January 1, 2000-- June 30, 2000 $27,000,000
September 30, 2000 January 1, 2000-- September 30, 2000 $43,000,000
December 31, 2000 January 1, 2000-- December 31, 2000 $60,000,000
"28.4.2 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"):
DETERMINATION DATE APPLICABLE PERIOD MAXIMUM AMOUNT
------------------ ----------------- --------------
June 30, 2000 January 1, 2000-- June 30, 2000 $13,000,000
September 30, 2000 January 1, 2000-- September 30, 2000 $16,500,000
December 31, 2000 January 1, 2000-- December 31, 2000 $19,000,000
March 31, 2001 Four-Quarter Period then ending $12,500,000
June 30, 2001 Four-Quarter Period then ending $12,500,000
September 30, 2001 Four-Quarter Period then ending $12,500,000
December 31, 2001 Four-Quarter Period then ending $12,500,000
March 31, 2002 Four-Quarter Period then ending $12,500,000
June 30, 2002 Four-Quarter Period then ending $12,500,000
Each September 30, Four-Quarter Period then ending $12,500,000
December 31, March 31
and June 30 thereafter
PROVIDED, HOWEVER, to the extent Aviation Sales and
its Subsidiaries have not made Capital Expenditures
in the amount permitted above for any given period
set forth above, Capital Expenditures in an amount
equal to 100% of the Maximum Amount of such Capital
Expenditures permitted but not made in such period
may be made in the immediately next succeeding period
in addition to any amounts permitted above for such
succeeding period; PROVIDED THAT to the extent
amounts carried forward from one period to the next
succeeding period are not expended in such period,
such surplus may not be carried forward to any other
succeeding period.
"28.4.3 CONSOLIDATED FIXED CHARGE RATIO.
Aviation Sales shall maintain a Consolidated Fixed
Charge Ratio for Aviation Sales and its Subsidiaries,
as determined as of the last day of each Fiscal
Quarter set forth below for the period then ending
described below, of at least the level set forth
below opposite such determination date:
45
DETERMINATION DATE APPLICABLE PERIOD MINIMUM RATIO
------------------ ----------------- -------------
June 30, 2000 January 1, 2000-- June 30, 2000 1.25 to 1.00
September 30, 2000 January 1, 2000-- September 30, 2000 1.25 to 1.00
December 31, 2000 January 1, 2000-- December 31, 2000 1.50 to 1.00
March 31, 2001 Four-Quarter Period then ending 1.75 to 1.00
June 30, 2001 Four-Quarter Period then ending 1.75 to 1.00
September 30, 2001 Four-Quarter Period then ending 1.75 to 1.00
December 31, 2001 Four-Quarter Period then ending 1.75 to 1.00
March 31, 2002 Four-Quarter Period then ending 2.00 to 1.00
June 30, 2002 Four-Quarter Period then ending 2.00 to 1.00
Each September 30, Four-Quarter Period then ending 2.00 to 1.00
December 31, March 31
and June 30 thereafter
"28.4.4 WORKING CAPITAL. Working Capital
shall be $325,000,000 at June 30, 2000 and thereafter
maintained, at all times during the term of this
Agreement, determined at the end of each Fiscal
Quarter commencing with the Fiscal Quarter ending
June 30, 2000, in a minimum amount of $300,000,000.
"28.4.5 MINIMUM TANGIBLE NET WORTH. Aviation
Sales shall maintain a Tangible Net Worth of Aviation
Sales and its Subsidiaries, of at least the amount
set forth below for the Fiscal Quarter ending during
the period set forth below opposite such amount.
46
FISCAL QUARTER ENDING MINIMUM TANGIBLE NET WORTH
--------------------- --------------------------
June 30, 2000 $142,500,000
September 30, 2000 $155,000,000
December 31, 2000 $155,000,000
March 31, 2001 $160,000,000
June 30, 2001 $160,000,000
September 30, 2001 $165,000,000
December 31, 2001 $165,000,000
March 31, 2002 $180,000,000
June 30, 2002 $190,000,000
Each September 30, The amount of Tangible Net Worth
December 31, March required to be maintained by this
31 and June 30 thereafter Section 28.4.5 as at the end of the
immediately preceding Fiscal
Quarter plus 85% of Consolidated
Net Income (with no reduction for
net losses during any period) for
the Fiscal Quarter ending on such
date
"28.4.6 LEVERAGE RATIO. Aviation Sales shall
maintain a ratio of Consolidated Funded Debt to
Consolidated EBITDA of Aviation Sales and its
Subsidiaries, determined as of the end of each Fiscal
Quarter ending on or after December 31, 2000, for the
Four-Quarter Period then ended, of not more than:
47
FOUR-QUARTER PERIOD ENDING MAXIMUM RATIO
-------------------------- -------------
December 31, 2000 5.75 to 1.00
March 31, 2001 5.50 to 1.00
June 30, 2001 5.25 to 1.00
September 30, 2001 4.75 to 1.00
December 31, 2001 4.50 to 1.00
March 31, 2002 4.50 to 1.00
June 30, 2002 4.25 to 1.00
Each September 30, December 31, 4.25 to 1.00
March 31 and June 30 thereafter
"28.4.7 RATIO OF SENIOR DEBT TO EBITDA.
Aviation Sales shall maintain a Ratio of Senior Debt
to EBITDA for Aviation Sales and its Subsidiaries,
determined as of the end of each Fiscal Quarter
ending on or after December 31, 2000, for the
Four-Quarter Period then ended, of not more than:
FOUR-QUARTER PERIOD ENDING MAXIMUM RATIO
-------------------------- -------------
December 31, 2000 3.25 to 1.00
March 31, 2001 3.00 to 1.00
June 30, 2001 2.75 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.25 to 1.00
March 31, 2002 2.25 to 1.00
June 30, 2002 2.00 to 1.00
Each September 30, December 31, 2.00 to 1.00
March 31 and June 30 thereafter
"28.4.8 AVIATION SALES AND SUBSIDIARIES. For
purposes of the covenants set forth in this SECTION
28.4, references to Aviation Sales and its
Subsidiaries shall be deemed to mean Aviation Sales
and its Subsidiaries on a consolidated basis.
"28.5 AMENDMENTS AND WAIVERS. Notwithstanding
anything contained in this Lease or any other Operative
Agreement to the contrary, no provision of Section 28.1, 28.2,
28.3 or 28.4 hereof may be amended, waived, discharged or
terminated except by an instrument in writing signed by the
Lessor and the Majority Lenders.
48
"28.6 ADDITIONAL COVENANTS. The covenants contained
in this Article XVIII are in addition to any covenants or
terms contained in any other provisions of this Lease or any
other Operative Agreement. Nothing contained in this Article
XVIII shall be deemed to limit the generality of any covenant
or term contained in any other provision of this Lease or any
other Operative Agreement.
"28.7 REFERENCES TO EXISTING AVIATION SALES CREDIT
AGREEMENT. The parties agree that to the extent any provision
of Section 28.3 (including without limitation Section 28.3.1,
28.3.2, 28.3.3, 28.3.4, 28.3.5 or 28.3.6 incorporates by
reference any provision of the Existing Aviation Sales Credit
Agreement:
(a) any reference (in any such provision of the
Existing Aviation Sales Credit Agreement) to
the "Borrowers" and "Guarantors" shall be
deemed to apply to Aviation Sales and its
Subsidiaries;
(b) any requirement (under any such provision of
the Existing Aviation Sales Credit
Agreement) that the consent or approval of
the "Agent" under such agreement be obtained
for any act or condition, shall be deemed to
require the consent or approval of the Agent
under the Operative Agreements; and
(c) any requirement (under any such provision of
the Existing Aviation Sales Credit
Agreement) that the consent or approval of
any lender under such agreement be obtained
for any act or condition, shall be deemed to
require the consent or approval of the
Majority Lenders under the Operative
Agreements."
(b) Exhibit C to the Lease Agreement is deleted.
(c) The Lease Agreement is further amended by adding the
Exhibits M and N and the Schedule 28.1.7-B that are attached hereto.
6. AGREEMENT AND CONFIRMATION BY GUARANTORS. Each of the undersigned
Guarantors has joined in the execution of this Amendment Agreement for the
purpose of (i) agreeing to the amendments to the Guaranty Agreement, the Lease
Agreement, the Participation Agreement, the Credit Agreement, the Trust
Agreements; and other Operative Agreements contained herein and (ii) confirming
its guarantee of payment of all Borrower's Liabilities (as defined in the Series
A Guaranty Agreement) and all Lessee's Liabilities (as defined in the Lessee
Guaranty Agreement).
7. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Lessee and the
Construction Agent hereby represent, warrant and covenant that:
49
(a) The representations and warranties made by the Lessee and
the Construction Agent in Section 7 (other than in Section 7.3(f)(i))
of the Participation Agreement are true on and as of the date hereof;
and the representations in warranties set forth in Section 7.3(f)(i) of
the Participation Agreement are true on and as of the date set forth in
such Section;
(b) (i) The audited consolidated financial statements of each
of the Construction Agent and the Lessee as at December 31, 1999,
copies of which have been furnished to the Agent and the Owner Trustee,
were prepared in accordance with GAAP and fairly present the financial
condition of each of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal year then ended and
(ii) the unaudited consolidated financial statements as at March 31,
2000, copies of which have been furnished to the Agent and the Owner
Trustee, were prepared in accordance with GAAP (subject to normal
year-end adjustments) and fairly present the financial condition of the
Construction Agent and the Lessee and their Subsidiaries on a
consolidated basis as of such date and their consolidated results of
operations for the fiscal quarter then ended. Complete and accurate
copies of the Projections (as defined in the Existing Aviation Sales
Credit Agreement) have been delivered to the Agent. The Projections are
reasonable based on the information available to Aviation Sales at the
time so furnished. 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 which, after
giving effect to this Amendment Agreement, constitutes a Default or an
Event of Default on the part of the Lessee or the Construction Agent or
any Guarantor or any Subsidiary of Aviation Sales under the
Participation Agreement or any other Operative Agreement, either
immediately or with the lapse of time or the giving of notice, or both.
Since April 15, 2000, there has occurred no event 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) Neither the Construction Agent nor the Agent is aware of
any change order, amendment or modification of the Construction Budget,
or amendment or modification to any Plans and Specifications for any
Property (collectively, "Change Orders") that has been adopted or is
planned, contemplated or under consideration, other than the Permitted
Change Orders (the "Permitted Change Orders") identified on Schedule
7-E and approved by the Agent, or the Submitted Change Orders (the
"Submitted Change Orders") identified on
50
such Schedule 7-E which have been or (on or prior to June 25, 2000)
will be submitted to Agent but which Submitted Change Orders remain
subject to the Agent's approval. Each of the Construction Agent and the
Lessee hereby covenants and agrees that unless it has obtained the
prior written consent of the Agent thereto, it will not (i) obtain,
permit or approve any Change Order (other than a Permitted Change Order
or, to the extent approved by the Agent, Submitted Change Order) with
respect to any Property, or (ii) perform or permit any work to be
performed at any Property that would involve any Change Order (other
than a Permitted Change Order or, to the extent approved by the Agent,
Submitted Change Order) or other deviation from the Construction
Budget, the Plans and Specifications or any construction contract with
respect to any Property, in each case as they exist on the date of this
Amendment Agreement and have been previously delivered to the Agent;
(f) If, the Lessor, the Lessee or the Construction Agent shall
receive, directly or indirectly, any rebate, return or credit of any
real or personal property tax, ad valorem tax, other Imposition or
water or sewer impact fee previously paid with respect to any Property,
and (i) such rebate, return or credit relates to a tax, Imposition or
fee paid with the proceeds of any Loan or Holder Funding, or (ii) such
rebate, return or credit is available because of the location of such
Property in a particular place, then, in either case, such Lessor, such
Lessee or such Construction Agent shall promptly pay the amount of such
rebate, return or credit to the Agent as a prepayment of the Loans and
Holder Fundings, and such amount shall be applied to reduce the
outstanding principal amount of Loans and Holder Fundings pro rata, and
accrued interest and Holder Yield on the amounts prepaid, in accordance
with the terms of the Credit Agreement and the Trust Agreement.
(g) SCHEDULE 7-G attached hereto accurately sets forth as of
the date hereof all insurance policies and programs currently in effect
with respect to the respective Assets and business of Aviation Sales
and each Guarantor and each Subsidiary of Aviation Sales, specifying
for each such policy and program, (i) the amount thereof, (ii) the
risks insured against thereby, (iii) the name of the insurer and each
insured party thereunder, (iv) the policy or other identification
number thereof, (v) the expiration date thereof, (vi) the annual
premium with respect thereto, and (vii) a list of claims and awards
made thereunder during the immediately preceding three (3) calendar
years. Aviation Sales has delivered to the Agent copies of all such
insurance policies. Such insurance policies and programs are currently
in full force and effect, in compliance with the requirements of
Article XIV and SECTION 28.2.5 of the Lease and are in amounts
sufficient to cover the replacement value of the respective Assets of
Aviation Sales and the Guarantors and the Subsidiaries of Aviation
Sales.
(h) SCHEDULE 7-H attached hereto (i) contains a diagram
indicating the corporate structure of Aviation Sales and each Person in
which Aviation Sales holds a direct or indirect partnership, joint
venture, or other equity interest and indicates the nature of such
interest with respect to each Person included in such diagram; and (ii)
accurately sets forth (A) the correct legal name of such Person, the
jurisdiction of its
51
incorporation or organization and the jurisdictions in which it is
qualified to transact business as a foreign corporation or otherwise,
and (B) the authorized, issued and outstanding shares or interests of
each class of equity Securities of Aviation Sales and each such Person,
and, with respect to Subsidiaries of Aviation Sales, the owners of such
shares or interests. None of such issued and outstanding Securities is
subject to any vesting, redemption, or repurchase agreement, and there
are no warrants or options (other than Permitted Equity Securities
Options) outstanding with respect to such Securities. The outstanding
Capital Stock of Aviation Sales, each Guarantor and each Subsidiary of
Aviation Sales is duly authorized, validly issued, fully paid and
nonassessable and (except for the Capital Stock of Aviation Sales) is
not Margin Stock, is free and clear of all Liens, except for Liens
granted pursuant to the Loan Documents, is not subject to any option or
purchase rights, conversion or exchange rights, call, commitment or
claim of any right, title or interest therein or thereto, and has been
issued in compliance with all applicable Requirements of Law.
(i) There is 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 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 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. All
pending litigation to which Aviation Sales or any Guarantor or any
Subsidiary of Aviation Sales is a party as of the Amendment Effective
Date is disclosed on SCHEDULE 7-I attached hereto and made a part
hereof.
This Amendment Agreement shall be deemed to be an Operating Agreement
and any violation of a covenant contained herein shall be a violation of an
Operative Agreement.
8. CONDITIONS PRECEDENT. The effectiveness of this Amendment Agreement
shall be subject to fulfillment of the following conditions precedent:
(a) The Agent shall have received on the date hereof, in form
and substance satisfactory to the Agent, the following:
(i) a fully-executed original of this Amendment
Agreement;
52
(ii) a fully-executed modification of the Memorandum
of Lease and Lease Supplement and Mortgage with respect to the
property in Miramar Florida (the "Miramar Property");
(iii) an opinion of outside counsel to the Lessee and
the Guarantors, addressed to the Agent, the Owner Trustee and
the Lenders and Holders;
(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
Agreement and each of the other Operative Agreements delivered
in connection with this Amendment Agreement to which such
Lessee or Guarantor is or will be a party, (B) the fact that
neither its certificate of incorporation nor its bylaws have
been changed from the versions that were certified and
delivered to the Agent on the Initial Closing Date (or if they
have been changed, such certificate of incorporation or
by-laws certified as of a recent date by the Secretary of
State of the State of its incorporation), and (C) the
incumbency and signature of persons authorized to execute and
deliver on its behalf this Amendment Agreement and each of the
other Operative Agreements delivered in connection with this
Amendment Agreement to which such Lessee or Guarantor is a
party; and
(v) a fee (the "Amendment Fee") in the amount of
$322,500, in immediately available funds, paid by the Lessee
or by the Borrower (using the proceeds of a Funding) to the
Agent; plus all other fees and amounts set forth in the
Closing Statement (defined below);
(vi) unaudited Financial Statements of Aviation Sales
and its Subsidiaries on a consolidated and consolidating basis
for the Fiscal Quarter ending March 31, 2000 and Compliance
Certificates for the Fiscal Year ending December 31, 1999 and
March 31, 2000;
(vii) a Borrowing Base Certificate (as defined in the
Existing Aviation Sales Credit Agreement) dated May 24, 2000;
(viii) an executed amendment and restatement of the
Existing Aviation Sales Credit Agreement (as in effect prior
to the effective date of this Amendment Agreement) in form and
substance satisfactory to the Agent, Lenders and Holders;
(ix) a Closing Statement (the "Closing Statement")
dated as of the Amendment Effective Date, signed by Lessee;
(x) a letter agreement dated as of the date hereof,
addressed to the Agent, each Lender, each Holder and the Owner
Trustee, executed by each of
53
Xxxxxxx/Aero Development Corp. ("Xxxxxxx") and Xxxxxxxx Corp.,
Inc. ("Xxxxxxxx"), in which (A) each of Xxxxxxx and Xxxxxxxx
represents and warrants to the addressees as of the date
hereof that it is not aware of any Change Order (as defined
above) (including without limitation any change order,
amendment or modification of the Construction Budget, or
amendment or modification to any Plans and Specifications for
any Property) that has been adopted or is planned,
contemplated or under consideration, other than the Permitted
Change Orders and Submitted Change Orders (as defined above);
and (B) each of Xxxxxxx and Xxxxxxxx covenants and agrees that
unless it has obtained the prior written consent of the Agent
thereto, it will not (i) obtain, permit or approve any Change
Order (other than a Permitted Change Order or, to the extent
approved by the Agent, a Submitted Change Order) with respect
to any Property, or (ii) perform or permit any work to be
performed at any Property that would involve any Change Order
(other than a Permitted Change Order or, to the extent
approved by the Agent, a Submitted Change Order) or other
deviation from the Construction Budget, the Plans and
Specifications or any construction contract with respect to
any Property, in each case as they exist on the date hereof
and have been previously delivered to the Agent;
(xi) (A) down-dating endorsements of the title
policies issued to the Owner Trustee and the Agent, with
respect to the Miramar Property, such endorsements reflecting
the transaction documents, as amended hereby, and showing no
additional exceptions to coverage, except as approved by the
Agent (in its sole discretion) and (B) down-dating
endorsements of such policies with respect to the Fundings in
April and May, 2000, showing no additional exceptions to
coverage except as approved by the Agent (in its sole
discretion);
(xii) any additional agreements, instruments or
documents which it may reasonably request in connection
herewith;
(b) The correctness in all material respects on the date
hereof of the representations and warranties of the Owner Trustee,
Construction Agent and the Lessee contained herein and in each of the
Operative Agreements;
(c) After giving effect to the waivers in Section 9 of this
Amendment Agreement, no Default or Event of Default shall have occurred
and be continuing on the date hereof;
(d) No material adverse change shall have occurred (as
certified to the Agent, the Lenders and the Holders by the respective
chief financial officers) in the business, assets, management,
operations, financial condition or prospects of Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales since March 31, 2000;
(e) (Except for the Supplemental Term Loan, the amendments and
standstill agreements that have previously been delivered to the Agent
with respect to "Predecessor Agreement" (as defined in the Existing
Aviation Sales Credit Agreement), and the
54
Supplemental Term Loan Warrants to purchase 129,000 shares of Aviation
Sales common stock for an aggregate purchase price of $129, which
warrants have been issued to Citicorp in connection with the
Supplemental Term Loan) since December 31, 1999, neither Aviation Sales
nor any Guarantor or any Subsidiary of Aviation Sales shall have (i)
entered into any material (as determined in good faith by the Agent)
commitment or transaction, including, without limitation, transactions
for borrowings and capital expenditures, which are not in the ordinary
course of such Person's business, except with respect to the
consummation of the transactions contemplated hereby, (ii) declared or
paid any distribution or dividend, (iii) established or assumed any
obligations with respect to compensation or employee benefit plans
other than plans with respect to the Permitted Equity Securities
Options (as defined in the existing Aviation Sales Credit Agreement),
or (iv) redeemed, repurchased, or issued any equity Securities;
(f) Since March 31, 2000, no permit, agreement, lease, or
license which, in the judgment of the Agent, is material to the
business, operations or employee relations of Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales, including without
limitation, any agreement relating to the Existing Aviation Sales
Credit Agreement or the Senior Subordinated Notes (as defined in the
Existing Aviation Sales Credit Agreement), shall have been terminated,
modified, revoked, breached, or declared to be in default, or if
breached or declared to be in default during such period, such breach
or default shall have been cured or waived on terms satisfactory to the
Agent and Lenders;
(g) 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
(h) None of the members of Aviation Sales' Board of Directors
as of March 31, 2000 shall have ceased acting as members of such Board
of Directors.
9. WAIVER. Subject to the terms and conditions of this Amendment
Agreement, the Lessor, the Agent, each Lender and each Holder waives the
specific Events of Default set forth in Schedule 9 attached hereto.
The waivers contained in this SECTION 9 are granted only for the
specific instances specified in Schedule 9 hereto 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 a Lease Event of Default or any other
Event of Default or otherwise enforce the terms of any Operative Agreement. Such
waivers are not intended to be nor shall they be construed to be a general
waiver or alteration of any of the terms or conditions of any Operative
Agreement.
10. 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
55
Owner Trustee's respective liability to pay or perform any obligations
pursuant to any of the Operative Agreements or any other documents
which evidence or secure any obligations owed under any Operative
Agreement. In consideration for the execution of this Amendment
Agreement, each of Aviation Sales and each of its Subsidiaries hereby
releases and forever discharges, Bank of America, the Agent, the
Lenders, the Holders and the Owner Trustee and all of their respective
officers, directors, employees, Affiliates and agents (collectively,
the "Released Parties") from any and all actions, causes of action,
debts, dues, claims, demands, liabilities and obligations of every kind
and nature, both in law and in equity, known or unknown, whether
heretofore or now existing, liquidated or unliquidated, matured or
unmatured, fixed or contingent (collectively, the "Release Claims"),
which might be asserted against any of the Released Parties. This
Release applies to all matters arising out of or relating to the
Operative Agreements, any Property, any obligations due under any of
the Operative Agreements and this Amendment Agreement, commitment
letters with respect to other loan facilities, and the lending and
borrowing relationships, and (to the extent any Release Claims relating
to such deposit relationships are now known to Aviation Sales or any of
its Subsidiaries) the deposit relationships, between Aviation Sales or
its Subsidiaries, and Bank of America, the Agent, the Lenders, the
Holders and the Owner Trustee, including the administration,
collateralization and funding thereof. Each of Aviation Sales and each
of its Subsidiaries further agrees not to bring any action in any
judicial, administrative or other proceeding against the Released
Parties, or any of them, alleging any such Release Claim or otherwise
arising in connection with any such Release Claim.
(b) It is the intent of the parties that except as otherwise
set forth herein, the foregoing release shall be effective as a full
and final accord and satisfaction of all claims hereby released and
each of Aviation Sales and each of its Subsidiaries hereby agrees,
represents and warrants that the matters released herein are not
limited to matters which are known or disclosed. In this connection,
each of Aviation Sales and each of its Subsidiaries hereby agrees,
represents and warrants that it realizes and acknowledges that factual
matters now existing and unknown to it may have given or may hereafter
give rise to Release Claims, which are presently unknown, unsuspected,
unliquidated, unmatured and/or contingent, and it further agrees,
represents and warrants that this release has been negotiated and
agreed upon in view of that realization. Nevertheless, Aviation Sales
and its Subsidiaries hereby intend to release, discharge and acquit the
Released Parties of and from any such unknown, unsuspected,
unliquidated, unmatured and/or contingent Release Claims, which are in
any way set forth in or related to the matters identified above in this
SECTION 10. Aviation Sales and its Subsidiaries hereby explicitly waive
the benefits of any common law or statutory rule with respect to the
release of such Release Claims.
(c) The acceptance and delivery of this Amendment Agreement by
the Agent on behalf of the Released Parties shall not be deemed or
construed as an admission of liability with respect to the Release
Claims or otherwise by the Released Parties, or any 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 10.
56
(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 10; (ii) such party has had
advice of counsel of its own choosing in negotiations for and the
preparation of this Amendment Agreement; and (iii) such party is fully
aware of the effect of releases such as that contained in this SECTION
10.
11. ENTIRE AGREEMENT. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, conditions, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as in this Amendment Agreement otherwise expressly stated, no representations,
warranties or commitments, express or implied, have been made by any other party
to the other. None of the terms or conditions of this Amendment Agreement may be
changed, modified, waived or canceled orally or otherwise, except by writing,
signed by all the parties hereto, specifying such change, modification, waiver
or cancellation of such terms or conditions, or of any proceeding or succeeding
breach thereof.
12. FULL FORCE AND EFFECT OF OPERATIVE AGREEMENTS. Except as hereby
specifically amended, modified or supplemented, the Participation Agreement, the
Lease, the Credit Agreement, the Trust Agreement, the Guaranty Agreements and
all of the other Operative Agreements are hereby confirmed and ratified in all
respects and shall remain in full force and effect according to their respective
terms.
13. COUNTERPARTS. This Amendment Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
57
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
AVIATION SALES COMPANY,
as Construction Agent
By:_____________________________________
Name:___________________________________
Title:__________________________________
AVIATION SALES COMPANY,
as Lessee
By:_____________________________________
Name:___________________________________
Title:__________________________________
FIRST SECURITY BANK, NATIONAL
ASSOCIATION
not individually, except as expressly stated
under the Operative Agreements, but solely
as Owner Trustee under the Aviation Sales
Trust 1998-1
By:_____________________________________
Name:___________________________________
Title:__________________________________
BANK OF AMERICA, N.A., as a Holder and as
a Lender
By:_____________________________________
Name:___________________________________
Title:__________________________________
BANK OF AMERICA, N.A., as Administrative
Agent
By:_____________________________________
Name:___________________________________
Title:__________________________________
SIGNATURE PAGE 1 OF 3
JOINDER BY GUARANTORS
The undersigned Guarantors hereby join in and consent to this Amendment
Agreement.
AVIATION SALES COMPANY
AVIATION SALES MANUFACTURING
COMPANY
AVIATION SALES PROPERTY
MANAGEMENT CORP.
AVIATION SALES FINANCE COMPANY
TIMCO ENGINE CENTER, INC.
AVS/XXXXX-XXXXX MACHINE COMPANY
APEX MANUFACTURING, INC.
AEROCELL STRUCTURES, INC.
AVIATION SALES DISTRIBUTION
SERVICES COMPANY
AVIATION SALES BEARINGS COMPANY
AVIATION SALES LEASING COMPANY
WHITEHALL CORPORATION
TRIAD INTERNATIONAL MAINTENANCE
CORPORATION (successor in
interest to Aero Corporation
and Aero Corp Macon, Inc.)
AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY
CARIBE AVIATION, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AERO HUSHKIT CORPORATION
HYDROSCIENCE, INC.
TIMCO ENGINEERED SYSTEMS, INC.
By:______________________________________
Name:____________________________________
Title:________________ of each of the foregoing
Guarantors
AVSRE, L.P.
By: Aviation Sales Property Management Corp.,
its general partner
By:__________________________________
Name:________________________________
Title:_______________________________
SIGNATURE PAGE 2 OF 3
AVIATION SALES SPS I, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
SIGNATURE PAGE 3 OF 3
