SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) SEPTEMBER 22, 1998
AVIATION SALES COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 1-11775 65-0665658
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
6905 NW 25TH STREET, MIAMI, FL 33122
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 592-4055
N/A
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(FORMER NAME OR FORMER ADDRESS; IF CHANGED SINCE LAST REPORT)
Page 1 of 6 pages.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 22, 1998 (the "Closing Date"), a wholly-owned subsidiary
of Aviation Sales Company, a Delaware corporation (the Company"), Aviation Sales
Maintenance, Repair & Overhaul Company, a Delaware corporation (the "Buyer"),
closed its previously announced acquisition of Triad International Maintenance
Corporation, a Delaware corporation ("TIMCO"), pursuant to a Stock Purchase
Agreement dated August 10, 1998 (the "Purchase Agreement") by and among the
Buyer, Primark Corporation, a Michigan corporation (the "Seller") and its
wholly-owned subsidiary, TIMCO. Pursuant to the Purchase Agreement, Buyer
purchased from Seller all of the outstanding common stock of TIMCO for a
purchase price of $70.0 million in cash. The acquisition was financed from the
Company's bank lines of credit (see below). The purchase price was determined in
arms-length negotiations between the Company and the Seller. Additionally, as
part of the transaction, the Buyer agreed to guaranty certain industrial revenue
bond financing incurred in connection with the development of TIMCO's Greensboro
operating facilities, in the approximate amount of $11.4 million. Additionally,
as a closing adjustment, the Seller contributed approximately $8.0 million to
TIMCO.
TIMCO, based in Greensboro, North Carolina, operates an FAA licensed
aircraft repair station specializing in the maintenance, repair and overhaul
("MR&O") of narrowbody and widebody aircraft. Pursuant to the terms of the
Purchase Agreement, the Seller has agreed that for a period of five years
following the Closing Date, the Seller and its subsidiaries will not engage,
directly or indirectly, in the aircraft MR&O business.
The assets of TIMCO acquired in connection with the Purchase Agreement
included all rights, titles and interests of TIMCO in and to (i) all real
property, buildings and improvements leased or used by TIMCO, (ii) fixed assets
owned, leased or otherwise used by TIMCO, including equipment, (iii) inventory,
and (iv) contracts, agreements and leases of personal property. For the
foreseeable future, the Company intends to utilize such assets in connection
with the business of TIMCO.
The foregoing is a summary of certain information contained in the
Purchase Agreement, as amended. Reference is made to the more detailed
information contained therein and attached hereto as Exhibits 2.1 and 2.2.
ITEM 5. OTHER EVENTS.
On September 18, 1998, the Company entered into an agreement with
several financial institutions amending its existing credit facility pursuant to
the terms of an Amendment No. 2 And Consent to Third Amended And Restated Credit
Facility dated as of October 17, 1997 (the "Amendment to Credit Facility
Agreement"). Under the terms of the Amendment to Credit Facility Agreement, the
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Company's existing credit facility was amended to provide the Company with a
$200.0 million revolving loan and letter of credit facility, subject to an
availability calculation based on an eligible borrowing base (the "Amended
Credit Facility"). The eligible borrowing base includes certain receivables and
inventories of the Company, including the receivables and inventory of TIMCO.
The letter of credit portion of the Amended Credit Facility is subject to a
$30.0 million sublimit, with the imposition of certain borrowing criteria based
upon the satisfaction of certain debt ratios.
The interest rate on the Amended Credit Facility is, at the option of
the Company, (a) prime plus a margin, or (b) LIBOR plus a margin, where the
respective margin determination is made upon the Company's financial performance
over a 12 month period (ranging from 0.0% to 1.0% in the event prime is
utilized, or 1.125% to 2.5% in the event LIBOR is utilized). At September 18,
1998, the margin was 0.5% for prime rate loans and 2.0% for LIBOR rate loans.
The Amended Credit Facility terminates on July 31, 2002. The Amended
Credit Facility contains financial and other covenants and mandatory prepayment
events, as defined. At September 18, 1998, the Company was in compliance with
all covenants of the Amended Credit Facility. The Amended Credit Facility is
secured by a lien on substantially all of the assets of the Company, including
the assets of TIMCO. At October 6, 1998, $135,541,412 was outstanding under the
Amended Credit Facility.
The foregoing is a summary of certain information contained in the
Amendment to the Credit Facility Agreement. Reference is made to the more
detailed information contained in such document, which is attached hereto as
Exhibit 10.1.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Financial statements of the business acquired shall
be provided pursuant to an amendment to this Form
8-K.
(b) PRO FORMA FINANCIAL INFORMATION.
Pro forma financial information shall be provided
pursuant to an amendment to this Form 8-K.
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
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2.1 Stock Purchase Agreement dated August 10,
1998 by and among Aviation Sales Maintenance,
Repair & Overhaul Company, Primark Corporation
and Triad International Maintenance
Corporation.
2.2 First Amendment to Stock Purchase Agreement
dated September 22, 1998.
10.1 Amendment No. 2 and Consent dated as of
September 18, 1998 to the Third Amended and
Restated Credit Agreement dated as of October
17, 1997 among Aviation Sales Operating
Company, Aerocell Structures, Inc., AVS/Kratz-
Wilde Machine Company, Whitehall Corporation,
Triad International Maintenance Corporation,
Aviation Sales Company, Citicorp Securities,
Inc., as arranger and Citicorp USA, Inc., as
agent.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
October 7, 1998 AVIATION SALES COMPANY
By: /S/ JOSEPH E. CIVILETTO
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Joseph E. Civiletto, Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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2.1 Stock Purchase Agreement dated August 10, 1998 by and among
Aviation Sales Maintenance, Repair & Overhaul Company,
Primark Corporation and Triad International Maintenance
Corporation.
2.2 First Amendment to Stock Purchase Agreement dated September
22, 1998.
10.1 Amendment No. 2 and Consent dated as of September 18, 1998
to the Third Amended and Restated Credit Agreement dated as
of October 17, 1997 among Aviation Sales Operating Company,
Aerocell Structures, Inc., AVS/Kratz-Wilde Machine Company,
Whitehall Corporation, Triad International Maintenance
Corporation, Aviation Sales Company, Citicorp Securities,
Inc., as arranger and Citicorp USA, Inc., as agent.
EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into on August 10, 1998, by and among Aviation Sales Maintenance, Repair &
Overhaul Company, a Delaware corporation ("Buyer"), Primark Corporation, a
Michigan corporation ("Seller") and Triad International Maintenance Corporation,
a Delaware corporation ("Company").
RECITALS
Through its wholly-owned subsidiary, the Company, Seller is engaged in
the business (the "Business") of maintaining, repairing and overhauling aircraft
and aircraft components primarily at certain leased facilities located at
Greensboro, North Carolina (the "Facility").
Buyer wishes to purchase and Seller wishes to sell all of the
outstanding capital stock of the Company on the terms and conditions set forth
in this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
1.1 PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to sell, transfer, convey and assign to Buyer,
and Buyer hereby agrees to purchase from Seller, on and as of the Closing Date
(as hereinafter defined), 850 shares of the Company's common Stock, par value
$0.01 per share (the "Shares"), free and clear of all liens and other
encumbrances.
ARTICLE II
PURCHASE PRICE
2.1 PURCHASE PRICE. As the sole consideration for the sale and transfer
of the Shares and the covenants, undertakings and agreements of the Seller made
herein, Buyer shall pay to Seller Seventy Million Dollars ($70,000,000) (the
"Purchase Price").
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2.2 METHOD AND TIMING OF PAYMENT. Buyer shall pay the Purchase Price at
Closing by wire transfer of immediately available funds to an account designated
in writing by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as expressly set forth in the Disclosure Schedule attached
hereto, Seller and the Company, jointly and severally, represent and warrant to
Buyer that the representations and warranties set forth in this Article III are
true and correct as of the date of this Agreement; provided that the
representations and warranties of Seller, except those representations and
warranties of Seller set forth in Sections 3.2, 3.4, 3.5 and 3.18, are qualified
as to Seller's knowledge. In this Agreement, any reference to any event, change,
condition or effect being "material" with respect to any entity or group of
entities means any material event, change, condition or effect related to the
financial condition, assets, business, or results of operations of such entity
or group of entities. In this Agreement, any reference to a "Material Adverse
Effect" with respect to any entity or group of entities means any event, change
or effect that is materially adverse to the financial condition, assets,
business, or results of operations of such entity and its subsidiaries, taken as
a whole.
3.1 ORGANIZATION, STANDING, ETC. The Company is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority to enter into
and perform its obligations under this Agreement. The Company is duly qualified
to do business in, and is in good standing under the laws of, each state in
which the conduct of the Business requires such qualification and where failure
to so qualify would have a Material Adverse Effect on the Company. True, correct
and complete copies of the Certificate of Incorporation and Bylaws of the
Company and the minutes of meetings of the Board of Directors and shareholders
of the Company have heretofore been made available to the Buyer.
3.2 AUTHORIZATION OF AGREEMENT. This Agreement and each of the
agreements delivered by Seller pursuant to this Agreement constitute the valid
and binding obligations of the Seller enforceable against Seller in accordance
with their respective terms and are effective to transfer to Buyer the Shares.
This Agreement has received all necessary approvals of Seller's board of
directors and any other required corporate approvals of Seller and the Company.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) violate the Seller's Certificate of
Incorporation or Bylaws; or (ii) except as set forth in Section 3.2 of the
Disclosure Schedules result in a violation or breach of, or constitute a default
under, or require a payment under, any indenture, promissory note or other
material contract, to which the Company is a party or by which any of the
Company's property is bound; or (iii) violate any order, writ, injunction,
decree, rule or regulation, applicable to the Company other than, in the case of
clauses (ii) and (iii), any such violations, breaches, modifications,
rescissions, defaults or payments that, individually or in the aggregate, would
not have Material Adverse Effect on the Company or prevent the consummation of
the transactions contemplated hereby.
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3.3 LITIGATION. Except as disclosed in Section 3.3 of the Disclosure
Schedule, there are no claims, actions, suits, proceedings, arbitrations, or, to
the Seller's or the Company's knowledge, investigations or inquiries pending
before any court or governmental body or agency or any private arbitration
tribunal or involving the Company and its assets, nor to the Seller's or the
Company's knowledge, are any such proceedings, actions, suits, claims, or
arbitrations threatened against the Company that would have a Material Adverse
Effect on the Company or prevent the consummation of the transactions
contemplated hereby.
3.4 FINANCIAL STATEMENTS.
(a) Seller and Company have delivered to Buyer the (i) audited
balance sheet of the Company as of each of December 31, 1996 and 1997, and the
related audited statements of income of the Company for the years ending
December 31, 1996 and 1997, in each case audited by Deloitte & Touche LLP,
independent certified public accountants, and (ii) the unaudited balance sheet
of the Company as of June 30, 1998, and the related unaudited statements of
income for the six-month period then ended together with corresponding
information from the six months of the prior year (collectively, the "Financial
Statements"). The Financial Statements have been prepared from the books and
records of the Company and are complete in all material respects, and present
fairly the financial position, results of operations, cash flows and changes in
shareholders' equity of Company at the respective dates and for the respective
periods indicated therein in accordance with generally accepted accounting
principles applied on a consistent basis. The books and records of the Company
fairly reflect in all material respects all of its transactions, properties,
assets and liabilities.
(b) Since December 31, 1997 and except as set forth in Section
3.4 of the Disclosure Schedule, there has been no material adverse change in the
financial condition, assets, business, or results of operations of the Company,
and the Company and the Business have been operated only in the ordinary course
consistent with past practice.
(c) The Company does not have any liabilities or obligations,
whether accrued, absolute, contingent or otherwise, except (a) to the extent
reflected or taken into account in the June 30, 1998 Balance Sheet ("Current
Balance Sheet") and not heretofore paid or discharged, (b) liabilities incurred
in the ordinary course of business consistent with past practice since the date
of the Current Balance Sheet (none of which relates to breach of contract,
breach of warranty, tort, infringement or violation of law, or which arose out
of any action, suit, claim, governmental investigation or arbitration
proceeding), (c) normal accruals, reclassifications, and audit adjustments which
would be reflected on an audited financial statement and which would not be
material in the aggregate, (d) liabilities incurred in the ordinary course of
business prior to the date of the Current Balance Sheet which, in accordance
with GAAP consistently applied, were not recorded thereon, and (e) liabilities,
if any which may accrue in the future by reason of the litigation matters
described in Section 3.3 of the Disclosure Schedule. For purposes of this
Agreement, "Indebtedness" shall mean the aggregate amount of indebtedness for
borrowed money (including accrued but unpaid interest),
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whether owed to a bank or any other person (including Seller), remaining
payments on capitalized equipment leases and remaining payments on covenants not
to compete.
3.5 TAXES
(a) Except as set forth in Section 3.5 of the Disclosure
Schedule, as of the time of Closing: (i) the Company has, or the Seller and its
affiliates (including the Company) have, filed or will cause to be filed, within
the time and within the manner prescribed by law, all federal, state and local
and foreign Income Tax Returns which are required to be filed by or with respect
to the Company and such Tax Returns reflect accurately in all material respects
the liabilities of the Company and (ii) to the knowledge of the Seller, the
Seller and its affiliates (including the Company) have, filed or will cause to
be filed, within the time and within the manner prescribed by law, all federal,
state and local and foreign Tax Returns relating to taxes other than Income
Taxes which are required to be filed by or with respect to the Company and such
Tax Returns (other than Income Tax Returns) reflect accurately in all material
respects the liabilities of the Company;
(b) Except as set forth in Section 3.5 of the Disclosure
Schedule: (i) the Company has, or the Seller and its affiliates (including the
Company) have, within the time prescribed by law paid (and until the Closing
Date will, within the time prescribed by law, pay) all federal, state and local
and foreign Income Taxes that are due and payable as shown on the Income Tax
Returns; and (ii) to the knowledge of the Seller, the Company has, or the Seller
and its affiliates (including the Company) have, within the time prescribed by
law paid (and until the Closing Date will, within the time prescribed by law,
pay) all federal, state and local and foreign Taxes other than Income Taxes on
income that are due and payable as shown on the Income Tax Returns;
(c) The Company has no material liens with respect to Taxes
upon any of its properties or assets.
(d) Except as set forth in Section 3.5 of the Disclosure
Schedule, the Company does not have in effect as of the date of this Agreement,
or will not have in effect, as of the Closing Date, any waiver or extension of
any statute of limitations with respect to Taxes.
(e) Except as set forth in Section 3.5 of the Disclosure
Schedule, the Company does not have a federal, state, local or foreign audit or
other administrative proceeding or court proceeding presently pending or
threatened with regard to any Tax Returns for the Company.
(f) Except as set forth in Section 3.5 of the Disclosure
Schedule, neither the Seller nor the Company is a party to any agreement
providing for the allocation or sharing of Taxes.
(g) The Company has not been a member of an affiliated or
consolidated group (or similar state or local filing group) other than any group
in which the Seller is the common parent.
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(h) The Company is an includible corporation (within the
meaning of Section 1504 of the Code) on a federal consolidated Income Tax Return
with the Seller as the common parent. Any reference in this Agreement to a Tax
Return of the Company includes a reference to a consolidated, combined or
unitary or other similar Income Tax Return filed by the Seller or any other
person or entity which includes in whole or in part the results of the Company.
(i) The Company does not own any corporate subsidiaries
including, but not limited to, any includible corporation (within the meaning of
Section 1504 of the Code) on a federal consolidated Income Tax Return with
Seller as the common parent.
(j) Seller is the common parent of an affiliated group (as
defined in Section 1504 of the Code) and files a federal consolidated Income Tax
Return for the affiliated group. The Company is included as a member filing
under such consolidated federal Income Tax Return. Such a consolidated federal
Income Tax Return including the Company as a member will be filed for the tax
year of Seller ending on or after the Closing Date.
(k) The Company does not own any interests in a limited
liability company, partnership, business trust or similar entity.
(l) Except as set forth in Section 3.5 of the Disclosure
Schedule, the Financial Statement for the period ending June 30, 1998, reflect:
(i) all liabilities for Income Taxes accrued but unpaid as of such date, whether
or not an Income Tax Return was due, or the Income Tax was required to be paid,
on or before June 30, 1998, and (ii) with respect to Taxes other than Income
Taxes, to the knowledge of the Seller, all liabilities for Taxes accrued but
unpaid as of such date, whether or not a Tax Return was due, or the Tax was
required to be paid on or before June 30, 1998;
(m) After June 30, 1998, and on or before the Closing Date,
the liability of the Company for Taxes shall be incurred in the ordinary course
of business consistent with past practices.
(n) Except as set forth in Section 3.5 of the Disclosure
Schedule: (i) the Company has not been subject to a claim made by a taxing
authority taxing income in a jurisdiction where the Company does not file Income
Tax Returns that the Company is or may be subject to Income Taxes assessed by
such jurisdiction, and (ii) to the knowledge of the Seller, the Company has not
been subject to a claim made by a taxing authority in a jurisdiction where the
Company does not file Tax Returns (other than Income Tax Returns) that the
Company is or may be subject to Taxes (other than Income Taxes) assessed by such
jurisdiction.
(o) Except as set forth in Section 3.5 of the Disclosure
Schedule: (i) with respect to Income Taxes, the Company has not been subject to
a deficiency or proposed adjustment for any amount of Income Taxes asserted or
assessed by any taxing authority against the Company which has not been settled
or otherwise resolved or not reflected in the Financial Statements; and (ii)
with respect to any Taxes other than Income Taxes, to the knowledge of the
Seller, the Company has not
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been subject to a deficiency or proposed adjustment for any amount of Taxes
(other than Income Taxes) asserted or assessed by any taxing authority against
the Company which has not been settled or otherwise resolved or not reflected in
the Financial Statements; and
(p) The Company does not file, nor is it required to file, a
consolidated, combined or unitary or other similar state Income Tax Return
including the Seller or any other person or entity and which includes, or will
include, in whole or in part the results of the Company for any period on or
before the Closing Date.
3.6 INVENTORY AND RECEIVABLES.
(a) Except to the extent of any provision or reserve in
relation to a particular item or category or inventory included in the Current
Balance Sheet of the Company, as of the Closing Date:
(i) All inventory of finished goods have been
produced in the ordinary course of conduct of the business;
(ii) All inventory of raw materials and components
and services from third parties have been acquired in the ordinary
course of conduct of the business, and have the necessary traceability
such that they are in full compliance with all applicable FAR's and
existing Company traceability requirements; and
(iii) All of the inventory of the Company is in good
and saleable condition, and subject to such reasonable allowances with respect
thereto as set forth on the books and records of the Company which are
maintained in accordance with GAAP.
(b) All of the accounts receivables of the Company as of the
Closing Date ("Receivables") (i) will have arisen in the ordinary course of the
conduct of the Business; and (ii) will be subject to no prior assignment, claim,
lien or security interest.
(c) All of the Receivables (as hereinafter defined) are valid
and legally binding, represent bona fide transactions and arose in the ordinary
course of business of the Company. For purposes of this Agreement, the term
"Receivables" means all receivables of the Company, including all trade account
receivables, unbilled accounts receivable, arising from the provision of
services, sale of inventory, notes receivable, and insurance proceeds
receivable.
3.7 REAL PROPERTY. Schedule 3.7 (the "Property Schedule") sets forth
all of the leases (the "Leases") under which the Facility is leased to the
Company, and any other lease to which the Company is a party, including, as to
each such lease, the name of the lease, the name of the holder of the lessor's
interest (the "Landlord"), the date of the lease, including all amendments
thereto and the address of the property leased, together with such other
information as may be necessary to identify the leased premises. The Facility
comprises most of the real property used to operate the
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Business as currently conducted. The Company does not hold fee title to any part
of the Facility or any other real property. Except as set forth in Section 3.7
of the Disclosure Schedule:
(a) Each Lease is in full force and effect, is enforceable in
accordance with its terms, except as to enforceability that may be limited by
bankruptcy, insolvency, reorganization or similar laws and general equitable
principles, and has not been amended, modified or supplemented except as listed
on Schedule 3.7 hereto.
(b) Neither the Company nor, to the Company's knowledge, the
Landlord, is in default of its obligation under the Leases and there has not
occurred any event which, with the passage of time or giving of notice or both,
constitutes: (i) a default under the Leases defined as Facility Leases in
Section 3.7 of the Disclosure Schedules or (ii) a material default under any
other Leases.
(c) Seller has made available to Buyer true and complete
copies of all the Leases.
(d) With respect to leased premises subject to each Lease
("Leased Premises"):
(i) The Company has valid leasehold interests in the
Leased Premises, free and clear of any Liens, covenants and easements
or title defects of any nature whatsoever;
(ii) The improvements or portions thereof located on
the Leased Premises that are used in the business of the Company are
each in good repair and condition, normal wear and tear excepted, and
are in the aggregate sufficient to satisfy the Company's current normal
business activities as conducted thereat, including for use as an
aviation hanger;
(iii) Each of the Leased Premises (a) has such access
to public roads and airport runways (in the case of the Facility
premises) as is sufficient to satisfy the current normal transportation
requirements of the Company's business as presently conducted at such
parcel; and (b) is served by all utilities in such quantity and quality
as are sufficient to satisfy the current normal business activities as
conducted at such parcel; and
(iv) The Company has not received notice of (a) any
condemnation proceeding with respect to any portion of the Leased
Premises or any access thereto, and, to the knowledge of the Seller and
the Company, no such proceeding is contemplated by any governmental
authority; or (b) any special assessment which may affect any of the
Leased Premises, and, to the knowledge of the Seller and the Company,
no such special assessment is contemplated by any governmental
authority.
3.8 PROPERTY. The Company has good and marketable title to all personal
property which is reflected on the Company's statement of financial condition as
of June 30, 1998, or acquired after such date and on or prior to the Closing
Date, except as disclosed in Section 3.8 of the Disclosure Schedule and except
for personal property disposed of in the ordinary course of business. All such
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personal property is in good and serviceable condition, reasonable wear and tear
excepted and has, if applicable, been maintained substantially in accordance
with manufacturer's representations and warranties. The assets of the Company as
reflected on the Current Balance Sheet and the Leased Premises constitute, in
the aggregate, all of the assets and properties necessary for the conduct of the
business of the Company in the manner in which and to the extent to which such
business is currently being conducted. No adjustments are required to the books
and records of the Company to reflect the fair market value of its assets. No
current supplier to the Company of items essential to the conduct of its
business has threatened to terminate its business relationship with it for any
reason. Neither the Company nor the Seller has any direct or indirect interest
in any customer, supplier or competitor of any of the Company, or in any person
from whom or to whom the Company leases real or personal property. No officer,
director or shareholder of the Company, nor any person related by blood or
marriage to any such person, nor any entity in which any such person owns any
beneficial interest, is a party to any Contract or transaction with the Company
or has any interest in any property used by the Company.
3.9 MARKS, INTELLECTUAL PROPERTY. Section 3.9 of the Disclosure
Schedule contains a complete and correct list of (1) all Supplemental Type
Certifications ("STCs") owned by the Company in connection with the Business,
and (2) all patents, patent applications, trademarks, trade names, service
marks, trademark and service mark registrations, maskworks and registered
copyrights owned by Company (the "Intellectual Property"). None of the past or
present employees, officers or directors of the Company or Seller has any rights
in any of the Intellectual Property. Except as disclosed in Section 3.9 of the
Disclosure Schedule, Company has not granted any license or other rights to any
of the STCs or the Intellectual Property.
3.10 EMPLOYEE MATTERS. (a) The Company is not a party to or bound by
any collective bargaining agreement or any other agreement with a labor union,
and except as set forth on Section 3.10 of the Disclosure Schedule, to the
Company's knowledge there has been no effort by any labor union during the 24
months prior to the date hereof to organize any employees of the Company into
one or more collective bargaining units. To the Company's knowledge, there is no
pending or threatened labor dispute, strike or work stoppage which affects or
which may affect the business of the Company or which may interfere with its
continued operations. Neither the Company nor any agent, representative or
employee thereof has within the last 24 months committed any unfair labor
practice as defined in the National Labor Relations Act, as amended, and there
is no pending or threatened charge or complaint against either of the Companies
by or with the National Labor Relations Board or any representative thereof. The
Seller is not aware that any executive or key employee or group of employees has
any plans to terminate his, her or their employment with the Company as a result
of the transactions contemplated hereby. Section 3.10 of the Disclosure Schedule
sets forth a true and complete list of all employee benefit plans or
arrangements provided by the Company. The Company has provided Buyer full and
complete copies of, and access to such plans and arrangements and all state and
federal filings with respect thereto. Except as set forth in Section 3.10 of the
Disclosure Schedule, the Company maintains no other employee benefit plans or
arrangements with respect to the employees of the Company.
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(b) QUALIFIED PLANS. With respect to each employee benefit plan
intended to qualify under Code Section 401(a) or 403(a) (i), the Internal
Revenue Service has issued a favorable determination letter, true and correct
copies of which have been furnished to Buyer, that such plans are qualified and
exempt from federal income taxes; (ii) no such determination letter has been
revoked nor has revocation been threatened, nor has any amendment or other
action or omission occurred with respect to any such plan since the date of its
most recent determination letter or application therefor in any respect which
would adversely affect its qualification or materially increase its costs; (iii)
no such plan has been amended in a manner that would require security to be
provided in accordance with Section 401(a)(29) of the Code; (iv) no reportable
event (within the meaning of Section 4043 of ERISA) has occurred, other than one
for which the 30-day notice requirement has been waived; (v) as of the Closing
Date, the present value of all liabilities that would be "benefit liabilities"
under Section 4001(a)(16) of ERISA if benefits described in Code Section
411(d)(6)(B) were included will not exceed the then current fair market value of
the assets of such plan (determined using the actuarial assumptions used for the
most recent actuarial valuation for such plan); (vi) all contributions to, and
payments from and with respect to such plans, which may have been required to be
made in accordance with such plans and, when applicable, Section 302 of ERISA or
Section 412 of the Code, have been timely made; and (vii) all such contributions
to the plans, and all payments under the plans (except those to be made from a
trust qualified under Section 401(a) of the Code) and all payments with respect
to the plans (including, without limitation, PBGC (as defined below) and
insurance premiums) for any period ending before the Closing Date that are not
yet, but will be, required to be made are properly accrued and reflected on the
Current Balance Sheet (other than routine claims for benefits under the terms of
such plans), to the extent required by GAAP.
(c) MULTIEMPLOYER PLANS. With respect to any multiemployer plan to
which the Company is obligated to contribute, as described in Section 4001(a)(3)
of ERISA ("MPPA Plan") (i) all contributions required to be made with respect to
employees of the Company have been timely paid; (ii) the Company has not
incurred and is not expected to incur, directly or indirectly, any withdrawal
liability under ERISA with respect to any such plan (whether by reason of the
transactions contemplated by the Agreement or otherwise); (iii) Section 3.10 of
the Disclosure Schedule sets forth (A) the withdrawal liability under ERISA to
each MPPA Plan, (B) the date as of which such amount was calculated, and (C) the
method for determining the withdrawal liability; and (iv) no such plan is (or is
expected to be) insolvent or in reorganization and no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists or is expected to exist with respect to any such
plan.
(d) WELFARE PLANS. Except as set forth at Item 14 of Section 3.10 of
the Disclosure Schedules, (i) the Company is not obligated under any employee
welfare benefit plan as described in Section 3(1) of ERISA ("Welfare Plan") to
provide medical or death benefits (other than routine claims for benefits under
the terms of its health insurance plan) with respect to any employee or former
employee of the Company or its predecessors after termination of employment
except as required by COBRA; (ii) the Company has complied with the notice and
continuation coverage requirements of Section 4980B of the Code and the
regulations thereunder with respect to each Welfare Plan that is, or was during
any taxable year for which the statute of limitations on the
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assessment of federal income taxes remains, open, by consent or otherwise, a
group health plan within the meaning of Section 5000(b)(1) of the Code; and
(iii) there are no reserves, assets, surplus or prepaid premiums under any
Welfare Plan which is an employee benefit plan. The consummation of the
transactions contemplated by this Agreement will not entitle any individual to
severance pay payable by the Company, and, will not accelerate the time of
payment or vesting, or increase the amount of compensation, due to any
individual from the Company.
(e) CONTROLLED GROUP LIABILITY. Neither the Company nor any entity that
would be aggregated with it under Code Section 414(b), (c), (m) or (o): (i) has
ever terminated or withdrawn from any employee benefit plan under circumstances
resulting (or expected to result) in liability to the Pension Benefit Guaranty
Corporation ("PBGC"), the fund by which the employee benefit plan is funded, or
any employee or beneficiary for whose benefit the plan is or was maintained
(other than routine claims for benefits); (ii) has any assets subject to (or
expected to be subject to) a lien for unpaid contributions to any employee
benefit plan; (iii) has failed to pay premiums to the PBGC when due; (iv) is
subject to (or expected to be subject to) an excise tax under Code Section 4971;
(v) has engaged in any transaction which would give rise to liability under
Section 4069 or Section 4212(c) of ERISA; or (vi) has violated Code Section
4980B or Section 601 through 608 of ERISA.
(f) OTHER LIABILITIES. Except as set forth in Item 8 of Section 3.10
and Items 35 through 39 of Section 3.15 of the Disclosure Schedules, (i) the
Company is not obligated to pay separation, severance, termination or similar
benefits solely as a result of any transaction contemplated by this Agreement or
solely as a result of a "change of control" (as such term is defined in Section
280G of the Code); (ii) all required or discretionary (in accordance with
historical practices) payments, premiums, contributions, reimbursements, or
accruals for all periods ending prior to or as of the Closing Date shall have
been made or properly accrued on the Current Balance Sheet or will be properly
accrued on the books and records of the Company as of the Closing Date to the
extent required by GAAP; and (iii) none of the employee benefit plans has any
unfunded liabilities which are not reflected on the Current Balance Sheet or the
books and records of the Company and which are required by GAAP to be so
reflected, other than for routine claims under the terms of such plans.
3.11 CONSENTS. Except as set forth in Section 3.11 of the Disclosure
Schedule and, except for (i) in connection, or in compliance, with the
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the Securities Act of 1933 (the "Securities Act") and
the Securities Exchange Act of 1934 (the "Exchange Act"), (ii) applicable
requirements of the NYSE, and (iii) such other consents, orders, authorizations,
regulations, declarations and filings, the failure of which to be obtained or
made would not, individually or in the aggregate, have a Material Adverse Effect
on the Company, or prevent the consummation of any of the transactions
contemplated hereby, there is no consent, approval, order, or authorization of,
or registration, declaration or filing with, or payment to, any governmental
authority or any other third party on the part of the Seller or the Company
required in connection with the valid execution, delivery and performance by
Seller of this Agreement, the transfer of the Shares and the consummation of the
transactions contemplated herein by Seller.
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3.12 COMPLIANCE WITH LAWS. Except as set forth in Section 3.12 of the
Disclosure Schedule, the Company has complied and is in compliance with all
applicable laws, statutes, orders, rules, regulations and requirements
promulgated by governmental or other authorities, including without limitation:
(i) those relating to the Business and the Facility, and (ii) the Foreign
Corrupt Practices Act; other than those instances of non-compliance which would
not have a Material Adverse Effect on the Company, and no claims have been made
by any governmental regulatory agency or other person or entity to the contrary.
The Company maintains all permits, licenses, certificates, approvals and
authorizations of and registrations with and under all federal, state, local and
foreign laws, authorities and agencies as are required for the operation of the
Business ("Permits"), including without limitation the occupancy of the
Facility, except where the failure to maintain the same would not have a
Material Adverse Effect on the Company, and, to the Sellers knowledge: (i) each
such Permit is in full force and effect, (ii) there is no violation of any such
permit, and (iii) no proceeding is pending or, to the knowledge of the Seller
and the Company, threatened seeking the revocation or limitation of any such
Permit.
3.13 TRANSACTIONS WITH INTERESTED PERSONS. Neither Seller, nor to the
Company's knowledge any officer, director or employee of the Seller or Company
owns, directly or indirectly, on an individual or joint basis, any material
interest in, or serves as an officer, director or employee of, any customer,
competitor or supplier of the Company, or any corporation, partnership, trust or
other entity or organization which has a material contract or arrangement with
Company. Section 3.13 of the Disclosure Schedule sets forth the services
provided to the Company by Seller.
3.14 ENVIRONMENTAL MATTERS.
(a) To Seller's knowledge, except as set forth in Section 3.14
of the Disclosure Schedule and except as would not reasonably be expected to
have a Material Adverse Effect, (i) the Company is in compliance with all
applicable Environmental Laws; (ii) the Company has obtained all permits,
licenses and other authorizations that are required under applicable
Environmental Laws relating to the protection of the environment; and (iii) the
Company is in compliance with the terms and conditions under which such permits,
licenses and other authorizations were issued or granted.
(b) To Seller's knowledge, except as set forth in Section 3.14
of the Disclosure Schedule and except as could not reasonably be expected to
have a Material Adverse Effect, (i) the Company has not generated, used,
transported, treated, stored, released or disposed of, or has suffered or
permitted anyone else to generate, use, transport, treat, store, release or
dispose of any Hazardous Material (as defined below) in violation of any
Environmental Laws; (ii) there has not been any generation, use, transportation
, treatment, storage, release or disposal of any Hazardous Material in
connection with the conduct of the business of any Company which has resulted in
a release or a disposal into the environment of any Hazardous Material; and
(iii) no asbestos or polychlorinated biphenyl is located at the Facilities.
(c) For purposes of this Section 3.14, (i) "Hazardous
Material" shall mean and include any hazardous waste, hazardous material,
hazardous substance, petroleum product, oil, toxic
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substance, pollutant, contaminant, or other substance which may pose a threat to
the environment or to human health or safety, as defined or regulated under any
Environmental Law; (ii) "Environmental Law" shall mean any environmental or
health and safety-related law, regulation, rule, ordinance, or by-law at the
federal, state, or local level, whether existing as of the date hereof, or
previously enacted.
3.15 CONTRACTS. Section 3.15 of the Disclosure Schedule sets forth a
complete list of all material agreements, contracts and leases to which the
Company is a party or by which any of the assets of the Company are bound (the
"Contracts"), including without limitation all customer agreements, sales
representation and distribution agreements, lease agreements and joint product
development or marketing agreements. Except as set forth in Section 3.15 of the
Disclosure Schedule, each of the Contracts is in full force and effect and
enforceable in accordance with its terms. The Company and all other parties to
such Contracts have performed in all material respects all obligations required
to be performed by them to date and neither the Company nor, to the knowledge of
the Seller, any other party to any such Contracts is in default in any material
respect thereunder nor has there occurred any other event which, with the
passage of time or giving of notice or both, would constitute a default
thereunder. True and complete copies of the Contracts have heretofore been made
available to the Buyer and, except as set forth therein, the Contracts have not
been amended or modified. For purposes of this Section 3.15, only those
Contracts with customers and suppliers which have generated or are reasonably
expected to generate in 1997, 1998 and 1999 annual payments in excess of
$500,000 need be disclosed. The Buyer acknowledges that certain of the contracts
set forth on Section 3.15 of the Disclosure Schedule are below the threshold set
forth above and that no representation or warranty is provided that all
contracts below such threshold have been included.
3.16 INSURANCE. Section 3.16 of the Disclosure Schedule contains a list
of all policies of insurance showing the policy number, name of carrier, type of
coverage, term, expiration date and premium which are maintained by the Company.
All such policies are in full force and effect and all premiums with respect
thereto have been timely paid. Neither Seller nor the Company has received any
notice that material changes are required in the conduct of the Business as a
condition to the continuation of coverage or renewal of any such policy. All
such policies are and will remain in full force and effect up to the Closing
Date. The Company has not failed to give, in a timely manner, any notice
required under any of the Insurance Policies to preserve its rights thereunder
and the Company and the Seller have no knowledge of any uninsured claims or
losses.
3.17 BROKERS. No agent, broker, investment banker, or other person
acting under the authority of the Seller is or will be entitled to any broker's
or finder's fee or any other commission or similar fee directly or indirectly
from Company or Buyer or any affiliate of the Buyer as a result of this
Agreement. The Seller shall pay the fee of BT Alex. Brown or any affiliate of BT
Alex.
Brown.
3.18 COMPANY CAPITALIZATION. The authorized capital of the Company
consists of 1,000 shares of common stock, $0.01 par value per share, of which
only the Shares are issued and
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outstanding. Each of the Shares is validly issued, fully paid and
non-assessable. Other than a pledge of the shares to Mellon Bank, N.A., the
Seller is the direct owner of all interests, both legal and equitable, in the
Shares, free and clear of any liens, restrictions, encumbrances, and charges,
with full power, right and authority to sell and deliver the Shares to Buyer
pursuant to this Agreement. Upon delivery of the Shares, Buyer will receive good
and marketable title thereto and all equity interests in the Company, free and
clear of all liens, encumbrances, restrictions, charges and claims whatsoever
(other than any restrictions pursuant to the Securities Act of 1933 as amended
to the date hereof). There is no preemptive, subscription, option, warrant, call
right, right of first refusal agreement or commitment relating to the issuance,
sale, delivery or transfer by the Company or Seller of shares of capital stock
of the Company or of any other securities, or instruments convertible into
securities, of the Company. The Company does not directly or indirectly have an
equity ownership interest in any person, corporation or other entity.
3.19 PERSONS AUTHORIZED TO ACT. Section 3.19 of the Disclosure Schedule
lists all of the respective officers and directors of the Company; all bank
accounts of the Company; and each person authorized to draw on each such
account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION, STANDING, ETC. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has all
requisite corporate power and authority to enter into and perform its
obligations under this Agreement.
4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and performance
of this Agreement by Buyer and the consummation of the transactions contemplated
hereby by Buyer, including, without limitation, the payment of the Purchase
Price, have been duly and validly authorized by all necessary corporate
proceedings of the Buyer. This Agreement has been duly and validly executed by
Buyer. This Agreement and each of the other agreements delivered by Buyer
pursuant to this Agreement constitute the valid and binding obligations of the
Buyer, enforceable against Buyer in accordance with their respective terms.
4.3 BROKERS. No agent, broker, investment banker or other Person acting
under the authority of the Buyer is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly from
Seller or any affiliate of the Seller as a result of this Agreement.
4.4 INVESTMENT INTENT. The Shares are being purchased for Buyer's own
account for investment only and Buyer has no present intention of resale or
other distribution of the Shares except
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in compliance with applicable securities laws. Buyer acknowledges that, in
reliance on the foregoing representation, the Shares have not been registered
under the Securities Act of 1933, as amended, or the securities act or Blue Sky
laws of any state. Buyer has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
purchase of the Shares, provided that the foregoing shall not in any way affect
the representations and warranties included herein.
ARTICLE V
COVENANTS OF THE BUYER
5.1 EFFORTS TO CLOSING. Buyer agrees to use reasonable and proper
efforts to bring about its timely performance of this Agreement.
5.2 HART-SCOTT-RODINO; OTHER CONSENTS.
(a) Buyer and Seller shall use mutually best efforts to submit
to the United States Department of Justice and the United States Federal Trade
Commission not later than 5 business days after the date of this Agreement all
of the forms and information applicable to this transaction required under the
HSR Act and will use commercially reasonable efforts to respond promptly to any
request by them for additional information. Buyer shall pay all filing fees
required with respect to submission of such HSR applications.
(b) Buyer shall use commercially reasonable efforts to assist
Seller to obtain the approvals and consents on Schedule 6.5.
(c) Buyer shall use commercially reasonable efforts to secure
the approval for the release of the Seller from its obligations under (i) that
certain Guaranty Agreement dated September 20, 1994 by the Seller in favor of
Piedmont Triad Airport Authority (the "Authority") with respect to obligations
of the Company under the 1994 Lease (as defined in Section 3.7 of the Disclosure
Schedules); (ii) an Assignment and Assumption Agreement dated July 28, 1992
between Primark Storage Leasing Corporation, as Assignor, and the Seller, as
Assignee, pursuant to which the Seller assumed the obligations of Assignor under
a certain Guaranty Agreement dated as of November 1, 1989 under the 1989 Lease
(as defined in Section 3.7 of the Disclosure Schedules); (iii) an Amended and
Restated Guaranty and Suretyship Agreement dated as of September 25, 1992 by the
Seller in favor of Mellon Bank, N.A. and Amendment to Stock Pledge Agreements
and to Guaranty and Suretyship Agreements dated as of November 10, 1994 among
the Seller, JMS Companies, Inc., and Mellon Bank, N.A.; (iv) a Guaranty
Agreement dated July 28, 1992 by the Seller in favor of Capital Associates
International, Inc.; and (v) any contracts with respect to the Company's or the
Seller's obligations under any lease or other agreement with the Authority or
other party, relating to the Authority's Special Facility Revenue Bonds (Triad
International Maintenance Corporation Project), Series 1989 (the "Bonds"),
including but not limited to any agreements with Mellon Bank, N.A. as
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to the issuance or securing of any letters of credit related to the Facility
Leases, and the full substitution of the Buyer for Seller thereunder. Buyer and
Seller will use commercially reasonable efforts to amend any agreements
concerning the Bonds such that Seller's ownership in the Company, Seller's
financial condition, or Seller's acts or omissions shall not have any effect
upon the Bonds or on any letter of credit related to or securing repayment of
the Bonds. Seller shall pay all costs associated with the release of Seller and
the Company from any obligations to Mellon Bank and the Capital Associates
International lease, and Buyer and Seller shall each pay 50% of the costs
associated with the approval of the release of the Seller with respect to any
obligations under the Bonds or the Facility Leases.
(d) Buyer shall maintain in effect for not less than five (5)
years from the Closing Date, aviation liability and products and completed
operations insurance coverage substantially similar to the coverage currently
maintained by the Company. Such coverage shall be maintained with a reputable
insurance company and shall be comparable, in scope and limits, to the Company's
existing policy. Buyer further agrees that Seller shall be named as additional
insured on this coverage. Buyer shall provide Seller at the Closing a
certificate of insurance evidencing such coverage. The covenants and agreements
of Buyer under this Section 5.2 shall survive the Closing.
(e) The Buyer shall pay, or cause to be paid, in same day
funds by wire transfer to an account specified by Seller, $5.0 million in the
event that the Closing does not occur by October 15, 1998 because the Buyer has
not obtained financing sufficient to consummate the transactions contemplated by
the Agreement and the Seller is not otherwise in material breach of the
Agreement. Such payment shall be made no later than 3 business days following
such date.
(f) If this Agreement or the transactions contemplated hereby
are terminated (other than as contemplated in Sections 5.2(e), 6.3 and 8.2(d))
for failure by Seller to fulfill a Closing condition set forth in Section
8.1(a), (b), (f), (h), (i), (j) or (k), then Seller shall promptly (and in any
event within 3 business days after such event) pay to Buyer by wire transfer in
immediately available funds all reasonable out-of-pocket expenses and fees of
Buyer incurred by the Buyer or on its behalf in connection with the transactions
contemplated by this Agreement and the negotiation, preparation, execution or
performance of this Agreement but in no event shall such payment exceed
$500,000.
(g) If this Agreement or the transactions contemplated hereby
are terminated (other than as contemplated in Sections 5.2(e), 6.3 and 8.2(d))
for failure by Buyer to fulfill a Closing condition set forth in Section 8.2(a)
or (b), then Buyer shall promptly (and in any event within 3 business days after
such event ) pay to Seller by wire transfer in immediately available funds all
reasonable out-of-pocket expenses and fees of Seller incurred by the Seller or
on its behalf in connection with the transactions contemplated by this Agreement
and the negotiation, preparation, execution or performance of this Agreement,
but in no event shall such payment exceed $500,000.
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ARTICLE VI
COVENANTS OF THE SELLER AND COMPANY
6.1 CONDUCT OF BUSINESS PENDING CLOSING. Except as Buyer may otherwise
consent in writing, prior to the Closing Seller will cause the Company to, and
Company shall operate the Business in the usual, regular, and ordinary manner,
and, to the extent consistent with such operation, use its commercially
reasonable efforts to (i) preserve its present business organization intact;
(ii) keep available the services of its present officers and employees; (iii)
preserve its present business relationship with customers, suppliers and others
having business dealings with it and (iv) repair and maintain the Facility in
the ordinary course of its business consistent with past practices. Without
limiting the generality of the foregoing, except as Buyer may otherwise consent
in writing, prior to the Closing, Company shall not: (a) enter into any material
contracts or materially modify or cancel any material existing Contracts, except
in the ordinary course of business consistent with past practices; (b) become
indebted to any person other than Seller or its affiliates or become obligated
to guaranty any indebtedness of any person; (c) make any material change in any
management or supervisory personnel, except in the ordinary course of business;
(d) enter into any contract of employment with, or increase the compensation
paid or payable to, or enter into any new arrangements with, any of the
officers, employees or agents of the Business or pay or become committed to pay
any of the foregoing any bonuses or other special compensation other than in the
ordinary course of the Company's business; (e) alter or revise the accounting
principles and procedures heretofore employed with respect to the Business,
except as required by changes in U.S. generally accepted accounting principles;
(f) accelerate any progress or other billings to customers; (g) modify in any
material respect the frequency or volume of material purchases with respect to
the Business; (h) offer any discounts (whether for early payment or otherwise)
to customers with respect to or waive payment of any accounts receivable owing
to the Business, without the prior written consent of Buyer; (i) make any single
capital expenditure in an amount exceeding $50,000, or any series of related
capital expenditures which in the aggregate exceed $100,000 that are not
contemplated by the capital expenditure plans previously provided to Buyer; (j)
sell, transfer, assign, dispose, encumber or grant a license with respect to,
its assets other than in the ordinary course of business; (k) incur any
extraordinary charges or expenses or engage in transactions outside the ordinary
course of business; (l) pay any dividends or make any other distributions of
funds or assets to Seller or its affiliates; (m) engage in transactions with
Seller or its affiliates except in accordance with existing agreements and
policies disclosed on Schedule 6.1; (n) issue any shares of stock or other
security or grant any stock option or right to purchase shares of capital stock
or issue any security or grant any stock option or right to purchase shares of
capital stock or issue any security convertible into shares of capital stock of
the Company; (o) incur any obligation or liability material to the Company; (p)
cancel or fail to renew any existing insurance coverage (provided that 15 days
before renewing any insurance coverage, Seller shall provide Buyer written
notice of such renewal); (q) amend or otherwise modify the Certificate of
Incorporation or Bylaws of the Company; (r) merge or consolidate the Company
with any other corporation or acquire all or substantially all of the stock or
business of another person, corporation or other entity; or (s) enter into an
agreement to do any of the foregoing.
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6.2 ACCESS TO INFORMATION. Prior to the Closing, Seller and the Company
will grant full access to the books, records, management and facilities of the
Business to Buyer and its legal counsel and other consultants and advisers,
including environmental consultants.
6.3 OTHER NEGOTIATIONS, ETC.. Prior to the Closing or the termination
of this Agreement in accordance with Section 8.2, neither Seller nor the Company
nor any of their respective employees, officers, shareholders, representatives
or agents (including brokers, finders, accountants, attorneys or trustees
representing any of them or any related party) shall solicit or encourage
inquiries or proposals with respect to, furnish any information relating to, or
participate in any negotiations or discussions concerning, any acquisition or
purchase of all or any substantial part of the Shares, Company or the Business
other than as herein contemplated. In the event the Seller refuses to close the
transaction contemplated hereby (for any reason except a breach by Buyer of the
conditions to closing set forth herein) and thereafter Seller closes upon the
sale of a substantial portion of the shares of the outstanding capital stock of
the Company (including by way of merger) or a sale of a substantial portion of
the assets of the Company to a third party, then, in such event, Seller shall
immediately pay to Buyer a fee in the amount of $5.0 million, which amount shall
be paid by wire transfer on the date the Company or the Seller enters into an
agreement with respect to such sale. Additionally, upon execution of this
Agreement, the Seller will discontinue all negotiations with respect to the sale
of the Company or its assets which are currently ongoing.
6.4 EFFORTS TO CLOSING. Seller agrees to use commercially reasonable
and proper efforts to bring about its timely performance of this Agreement.
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6.5 HART-SCOTT-RODINO; OTHER CONSENTS.
(a) Seller shall submit to the United States Department of
Justice and the United States Federal Trade Commission not later than 5 business
days after the date of this Agreement all of the forms and information
applicable to this transaction required under the HSR Act and will use
commercially reasonable efforts to respond promptly to any request by them for
additional information.
(b) Seller shall use commercially reasonable efforts to obtain
the approvals and consents listed on Schedule 6.5
6.6 DUE DILIGENCE REVIEW AND ENVIRONMENTAL ASSESSMENT. Buyer shall be
entitled to continue to conduct prior to Closing a due diligence review of the
assets, properties, books and records of the Company (including a review of any
such assets, properties, Aviation Permits and records (including audits and
actions) regulated by and relationships with the Federal Aviation
Administration) and an environmental assessment of the Leased Premises
(hereinafter referred to as "Environmental Assessment"). The Environmental
Assessment may include, but not be limited to, a physical examination of the
Leased Premises, and any structures, facilities, or equipment located thereon,
soil samples, ground and surface water samples, storage tank testing, review of
pertinent records, documents, and Licenses of the Company. The Company shall
provide Buyer or its designated agents or consultants with the access to such
property which Buyer, its agents or consultants require to conduct the
Environmental Assessment. The Buyer agrees that it will not have the right to
terminate this Agreement as a result of matters discovered in its diligence
review or environmental assessment unless based upon such information the Buyer
is otherwise permitted to terminate this Agreement pursuant to Section 9.2(b)
hereof.
ARTICLE VII
TAX COVENANTS
7.1 TAX RETURNS
(a) Seller will prepare and file, or cause to be prepared and
filed, Income Tax Returns of the Company with respect to any Pre-Closing Period.
In order to assist the Seller in the preparation of all Income Tax Returns that
the Seller is required to prepare, the Buyer will prepare (or cause the Company
to prepare in accordance with prior practices) and deliver to the Seller, as
soon as reasonably practical after their receipt of a request therefore from the
Seller, all data (including but not limited to the annual tax reporting package)
regarding the Company, reasonably requested by the Seller, that is necessary to
prepare any Income Tax Returns and properly report the operations of the Company
thereon.
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(b) The Company will prepare and file, or cause to be prepared
and filed, all Tax Returns (other than Income Tax Returns) due on or before the
Closing Date.
(c) The Buyer will prepare and file, or cause to be prepared
and filed, all Tax Returns of the Company with respect to any Post-Closing
Period.
(d) In accordance with Treas. Reg. ss.1.1502-76(b), the income
of the Company through the Closing Date shall be included on the federal
consolidated Income Tax Return of Seller, including any income attributable to
the Section 338(h)(10) election specified in Section 7.3 of this Agreement. No
party shall make an election with respect to Taxes on any Tax Return to be
prepared and filed by a party in accordance with this Section 7.1, other than
the Section 338(h)(10) election, without the consent of the other party if the
making of such election would, or could, have an adverse effect on the other
party.
(e) On the Closing Date, all Tax sharing agreements and
arrangements between (i) the Company on the one hand and (ii) the Seller, or any
of the Seller's subsidiaries or affiliates (other than the Company), on the
other hand, shall be terminated and have no further effect for any taxable year
or period (whether a past, present or future year or period), including for any
Tax attributable to the Section 338(h)(10) election, and no additional payments
shall be made thereunder on or after the Closing Date in respect of a
redetermination of Tax liabilities or otherwise.
7.2 PAYMENT OF TAXES. The Seller will pay, or cause to be paid, all
Income Taxes of the Company for Pre-Closing Periods, including all Income Taxes,
attributable to the making of the Section 338(h)(10) election or comparable
election under any state or local law. Buyer will pay, or will cause to be paid,
all Income Taxes for all taxable periods which do not constitute Pre-Closing
Periods.
7.3 SECTION 338(H)(10) ELECTION. The Seller and Buyer agree to make an
election under Section 338(h)(10) of the Internal Revenue Code of 1986, as
amended (the "Code"), with respect to the Company, and any comparable election
under state or local Income Tax law and the Seller and Buyer shall cooperate in
the completion and timely filing of such elections in accordance with the
provisions of Treasury Regulation ss.1.338(h)(10)-1 (or any comparable
provisions of state or local Income Tax law) or any successor provision. Within
ninety (90) days after the Closing Date, Buyer shall deliver to Seller a
completed Form 8023 and required schedules thereto as well as any applicable
state or local forms (the "Section 338 Forms"). Buyer shall act in good faith to
(i) determine and agree upon the amount of the modified aggregate deemed sales
price ("MADSP") (within the meaning to Treas. Reg. ss.1.338(h)(10)-1(f) and (ii)
agree upon the proper allocations (the "Allocations") of the MADSP among the
assets of the Company in accordance with Treas. Reg. ss.1.338(h)(10)-1(f). The
allocation of the Purchase Price among the assets of the Company shall be made
in accordance with Code Section 338 and Treasury Regulations thereunder and any
comparable provisions of state or local Income Tax law, as appropriate. If the
Section 338 Forms are correct and complete in the reasonable determination of
Seller, the Seller shall, report, act, file in all respects and for all purposes
consistent with such Section 338 Forms and shall execute and deliver to Buyer
such
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Section 338 Forms. "Section 338 Forms" shall mean all returns, documents,
statements, and other forms that are required to be submitted to any federal,
state, county, or other local taxing authority in connection with a 338(h)(10)
election, including, without limitation, any "Statement of Section 338 Election"
and IRS Form 8023 (together with any schedules or attachments thereto) that are
required pursuant to Treasury Regulations. The Buyer shall be responsible for
the preparation and filing of the Section 338 election.
7.4 TRANSFER TAXES. The Seller and Buyer will pay, on an equal basis,
for all sales, use, transfer, stamps, conveyance, value added or similar
transfer Tax imposed on the Seller by any governmental authority with respect to
the transfer of the Shares. If either party pays 100 percent of such a transfer
Tax, the other party shall reimburse the first party 50 percent of such Tax.
7.5 PURCHASE PRICE ADJUSTMENT. All indemnity payments made by Seller
under this Agreement shall be treated as Purchase Price adjustments for tax
purposes.
7.6 DEFINITIONS.
(a) POST-CLOSING PERIOD. The Post-Closing Period shall mean
a Tax period ending after the Closing Date.
(b) PRE-CLOSING PERIOD. The Pre-Closing Period shall mean a
Tax period ending on or prior to the Closing Date.
(c) INCOME TAX. The term Income Tax shall mean, for purposes
of this Agreement, all income (including withholding tax on gross income),
alternative minimum and franchise tax, levies or other assessments imposed by
the United States, any state, county, or local government, or a foreign country
and such term shall include any interest, penalties or additions attributable to
such tax.
(d) TAX. The term Tax shall mean for purposes of this
Agreement all taxes, charges, fees, levies, penalties or other assessments
imposed by any federal, state, local or foreign taxing authority, including but
not limited to, income, gross receipts, excise, property, sales, use, transfer,
franchise, payroll, withholding, social security or other taxes, including any
interest, penalties or additions attributable thereto.
(e) TAX RETURN. The term Tax Return shall mean, for purposes
of this Agreement, any return, report, information return or other document
(including any schedule or attachment thereto) with respect to Taxes.
(f) INCOME TAX RETURN The term Income Tax Return shall mean
any return, declaration, report, claim for refund, or information return or
statement relating to Income Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
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(g) PURCHASE PRICE. The term Purchase Price shall have the
meaning ascribed to it in Article 2.1 of this Agreement
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER. The
obligations of the Buyer under this Agreement are subject to satisfaction, on or
before the Closing Date, of each of the following conditions unless waived in
writing by Buyer:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Seller contained in this Agreement shall
be true in all material respects (except those that are already qualified as to
materiality, which shall be true in all respects) on and as of the Closing Date
with the same effect as if they were made on and as of the Closing Date, except
as affected by transactions contemplated hereby and except that any such
representation and warranty made as of a specified date other than the date of
this Agreement shall have been true in all material respects on and as of such
date.
(b) PERFORMANCE OF AGREEMENTS. Seller shall have delivered the
documents required by Section 9.3(a) hereof and Seller shall have performed in
all material respects all obligations and agreements and complied in all
material respects with all covenants contained in this Agreement or in any
document delivered in connection herewith which are to be performed and complied
with by it on or before the Closing Date and all documents and agreements
required to be delivered pursuant to Section 8 at or prior to Closing shall have
been so delivered.
(c) FACILITY CONSENT. An estoppel certificate addressed to
Buyer and consent for the transfer of the Shares required from the Authority and
from First Union National Bank of North Carolina, as Trustee under the Bond
Order for the Bonds, shall have been received by Seller in form and substance
reasonably satisfactory to Buyer.
(d) OTHER CONSENTS. The Company and Buyer shall have received
the consents set forth in Section 3.11 of the Agreement (and in Section 3.11 of
the Disclosure Schedule).
(e) NO ADVERSE LITIGATION. There shall not be pending or
threatened any action or proceeding by or before any court or other governmental
body which shall seek to restrain, prohibit, invalidate or collect a material
amount of damages arising out of, the transactions contemplated hereby.
(f) RELEASES. The Seller shall deliver to Buyer a release (the
"Release") in such form as is reasonably satisfactory to Buyer releasing all
claims of any nature against the Company, if any, and any claims arising out of
the transactions contemplated by this Agreement. The Seller shall
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deliver a release in favor of the Company from Mellon Bank, releasing it from
all obligations whatsoever the Company may have to Mellon Bank.
(g) EMPLOYMENT AGREEMENTS. At the Closing Date: (i) Charles
Bell and Brian McCarthy shall have entered into employment agreements with the
Company, and (ii) at least five of the following seven persons shall have
entered into employment agreements with the Company: Lon Chaney, Dick Horn, Jon
Eichten, Jim Pardetto, Jack Raia, Rick Salanitri and Kit Basler. The form of
such employment agreement and the terms thereof shall be reasonably satisfactory
to the Buyer. Additionally, such employment agreements shall modify the Change
of Control Compensation Agreements and the payment terms of the Company's EVA
Plan to the extent reasonably acceptable to the Buyer.
(h) INDEBTEDNESS. At the Closing, the Company shall not have
any Indebtedness. For purposes of this Section 8.1(h) only, the term
Indebtedness shall exclude: (i) Basic Project Rent due under the 1989 Lease and
payments on capitalized equipment leases, and (ii) trade payables and accrued
expenses incurred in the ordinary course of business. At the Closing, the Seller
shall deliver a certificate to Buyer to such effect.
(i) WORKING CAPITAL AND NET WORTH. As of the Closing Date, the
"adjusted working capital" of the Company shall not be less than $26,754,000
(the "Minimum Adjusted Working Capital") and the "adjusted net worth" of the
Company shall not be less than $43,590,000 (the "Minimum Adjusted Net Worth").
For purposes of illustrating the parties' intent as to how Minimum Adjusted
Working Capital and Minimum Adjusted Net Worth shall be calculated for purposes
of this Section 8.1(i), Section 8.1(i) of the Disclosure Schedules to the
Agreement contains the computation of the Company's adjusted working capital and
adjusted net worth at June 30, 1998, which computations set forth the categories
of assets and liabilities which shall be considered in making these computations
and the methodology by which these computations shall be made. In that regard,
cash and the amount recorded as customer deposits in the Company's financial
statements determined in a manner consistent with past practices shall be
included for purposes of determining the Minimum Adjusted Net Worth, and shall
be excluded for purposes of determining Minimum Adjusted Working Capital.
Additionally, for purposes of making both the computation of adjusted working
capital and adjusted net worth, the following adjustments shall be made: (i) the
current and deferred portion of all federal and state income tax assets and
liabilities shall be excluded, and (ii) the Company's debt to Seller shall be
excluded. Seller agrees that to the extent that the Minimum Adjusted Working
Capital and Minimum Adjusted Net Worth thresholds set forth above are not met on
the Closing Date, that Seller will remit cash to Company so that the
above-described thresholds will be satisfied at the Closing Date. Similarly, if
the adjusted working capital exceeds the Minimum Adjusted Net Working Capital on
the Closing Date, Buyer shall remit the additional amount to Seller. The net
amount, if any, of the preceding two payments is referred to as the "Adjustment
Payment". The payments made by Seller under Section 8.1(j) shall be considered
for purposes of computing whether the Minimum Adjusted Net Worth threshold has
been satisfied.
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Three days prior to the Closing, Seller shall deliver a certificate to
Buyer with respect to the Company's estimated compliance on the date which is
five days prior to the Closing Date with the above-described Minimum Adjusted
Working Capital and Minimum Adjusted Net Worth tests, which certificate shall
set forth with specificity the calculations on a line item basis consistent with
the methodology set forth herein and in Section 8.1(i) of the Disclosure
Schedules, and which certificate shall be updated with good faith estimated
computations as of the Closing Date. On that date which is ten days subsequent
to the Closing, Seller shall deliver to Buyer a final certificate of compliance
with respect to the Company's adjusted net worth and adjusted net working
capital as of the Closing Date. Buyer shall have the right to inspect the
Company's records with respect to verifying the accuracy of the information
contained in the pre-closing and the closing certificates, and Seller shall have
the right to inspect the Company's records with respect to preparing the post
closing final certificate. The parties shall in good faith seek to reach
agreement as to the adjusted net worth and adjusted net working capital of the
Company at the Closing and ten days thereafter. If agreement on such matters
cannot be reached at the Closing: (i) Seller shall place in escrow at Closing
with Buyer's counsel an amount equal to the difference between Buyer's and
Seller's determination of Adjustment Payment if the payment is to be made to the
Buyer according to such computations, or (ii) Buyer shall place in escrow at
Closing with Seller's outside counsel an amount equal to the difference between
Buyer's and Seller's determination of the Adjustment Payment if the payment is
to be made to the Seller according to such computations, to be held until such
dispute is resolved (and if the parties are unable to agree on the final
computations ten days later but the amount in dispute has changed, the parties
shall in good faith make joint instructions to the escrow agent to adjust the
amount in escrow consistent with the claims of the parties). In the event of a
continuing dispute concerning the final certificate of compliance, the
information regarding these computations shall be submitted to a nationally
known mutually agreeable accounting firm for resolution, and the determination
of such accounting firm on the issue shall be binding and conclusive on the
parties. In that regard, each party shall provide such accounting firm with
information regarding its view of these computations, and shall have the right
to discuss the accountant's determination with the accountant. Seller and Buyer
shall each pay 50% of the fees of the accounting firm for such determination.
(j) CUSTOMER DEPOSITS. On or before the Closing Date, Seller
will remit to Company in cash an amount equal to any customer deposits which
were recorded on the Company's Current Balance Sheet (at June 30, 1998), along
with an amount equal to any customer deposits received by the Company subsequent
to June 30, 1998, less amounts recorded on the Company's financial statements
against customer deposits for specific services to which such customer deposits
related to the extent such services were provided during the period between June
30, 1998 and the Closing Date ("Customer Deposits"), determined in a manner
consistent with the Company's historic methodology of accounting for such
amounts. Customer Deposits required to be remitted to the Company under this
section shall not affect the Company's adjusted working capital for purposes of
determining whether the Company has met the Minimum Adjusted Working Capital
threshold on the Closing Date.
Three days prior to the Closing, Seller shall deliver a certificate to
Buyer with respect to the Company's estimated Customer Deposits (and the
services provided which were applied against
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Customer Deposits during periods subsequent to June 30, 1998), which certificate
shall reflect information as of the date which is five days prior to the Closing
Date and which certificate shall be updated at the Closing with good faith
estimated computations as of the Closing Date. On that date which is ten days
subsequent to the Closing, Seller shall deliver to Buyer a final certificate of
compliance with respect to the status of the customer deposits as of the Closing
Date. Buyer shall have the right to inspect the Company's records to verify the
accuracy of the information contained in the pre-closing and closing
certificates, and Seller shall have the right to inspect the Company's records
with respect to preparing the post closing final certificate. The parties shall
in good faith seek to reach agreement as to the Customer Deposits at the
Closing. If agreement on such matters cannot be reached, Seller shall place in
escrow at Closing with Buyer's counsel an amount equal to the difference between
Buyer's and Seller's determination of Customer Deposits, to be held until such
dispute is resolved. In the event of such a dispute, the information shall be
submitted to a nationally known mutually agreeable accounting firm for
resolution, and the determination of such accounting firm on the issue shall be
binding and conclusive on the parties. In that regard, each party shall provide
such accounting firm with information regarding its view of these computations,
and shall have the right to discuss the accountant's determination with the
accountant. Seller and Buyer shall each pay 50% of the fees of the accounting
firm for such determination.
(k) ADDITIONAL PAYMENT. On the Closing Date, Seller shall
remit to the Company $1.0 million. The payment required to be made hereunder
shall not affect and shall not be taken into account in determining the
Company's adjusted net worth and adjusted working capital as of the Closing Date
for purposes of determining whether Company has met the Minimum Adjusted Net
Worth and the Minimum Adjusted Working Capital thresholds on the Closing Date.
(l) MATERIAL ADVERSE CHANGE. The Company shall not have
suffered a material adverse change in its financial condition, assets, business,
or results of operations, taken as a whole.
8.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER. The
obligations of the Seller under this Agreement are subject to the satisfaction,
on or before the Closing Date, of each of the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Buyer contained in this Agreement shall be
true in all material respects (except those that are already qualified as to
materiality, which shall be true in all respects) on the Closing Date with the
same effect as if they were made on the Closing Date, except as affected by
transactions contemplated hereby and except that any such representation and
warranty made as of a specified date other than the date of this Agreement shall
have been true in all material respects on and as of such date.
(b) PERFORMANCE OF AGREEMENTS. Buyer shall have performed in
all material respects all obligations and agreements and complied in all
material respects with all covenants contained in this Agreement or in any
document delivered in connection herewith to be performed
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and complied with by it on or before the Closing Date and all documents and
agreements required to be delivered pursuant to Section 8 at or prior to Closing
shall have been so delivered.
(c) INJUNCTION. No injunction against the transactions
contemplated by this Agreement shall exist.
(d) RELEASE OF SHARES. Mellon Bank, N.A., as collateral agent,
shall have released its lien upon the Shares, and shall have delivered the
Shares to the Seller on or before October 15, 1998. In the event the Buyer is
not in default under this agreement, and Seller fails to close because the Bank
will not release the Shares (and the Buyer is not otherwise in material breach
of this Agreement), as liquidated damages the Seller shall pay to the Buyer the
sum of $5.0 million, and the parties shall have no further liability to the
other. Any amount due hereunder shall be paid within three business days after
October 15, 1998 by wire transfer to the Buyer.
(e) GOVERNMENTAL APPROVALS. All governmental filings and
approvals (or lapse of waiting periods and any extensions thereof) necessary for
the transfer of the Shares shall have been made or obtained (or shall have
occurred), including under the HSR Act.
ARTICLE IX
CLOSING
9.1 CLOSING. The transactions contemplated by this Agreement are to be
closed, and all deliveries to be made at such time in connection therewith are
to be made, at the offices of the Seller, on the day following satisfaction of
all conditions precedent, or such other place or date as may be agreed upon by
Seller and Buyer (said closing and the close of business on the date thereof
herein referred to as the "Closing" and the "Closing Date", respectively). The
parties shall use their commercially reasonable efforts to close the
transactions contemplated by this Agreement on or before September 30, 1998.
9.2 TERMINATION.
(a) BY EITHER PARTY. This Agreement may be terminated at the
option of either party if, notwithstanding the provisions of Section 9.1, the
Closing shall not have occurred by October 15, 1998; provided that neither Buyer
nor Seller may exercise such termination right under this Subsection if its
willful breach of this Agreement has prevented consummation of the transactions
contemplated herein.
(b) BY BUYER. By Buyer, at any time before the Closing by
written notice to Seller, if Seller fails to perform its obligations and
agreements hereunder and such failure is not cured within 10 business days of
notice thereof by Buyer provided, however, that as long as Seller is using
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its best efforts to cure such failure, then Buyer may not terminate this
Agreement pursuant to this Section 9.2(b) for a period of 30 calendar days after
notice of the default.
(c) BY SELLER. By Seller, at any time before the Closing by
written notice to Buyer, if Buyer fails to perform its obligations and
agreements hereunder and such failure is not cured within 10 business days of
notice thereof by Seller, provided, however, that as long as Buyer is using its
best efforts to cure such failures, then Seller may not terminate this Agreement
pursuant to this Section 9.2(c) for a period of 30 calendar days after notice of
the default.
9.3 DELIVERIES.
(a) SELLER'S DELIVERIES TO BUYER. At the Closing, subject to
the provisions hereof, Seller will deliver to Buyer:
(i) Certificates representing the Shares duly
endorsed in blank or accompanied by stock powers duly executed in
blank, and any other documents as are required to transfer to Buyer
good and marketable title to such Shares free and clear of all liens
and otherwise in accordance with the terms hereof (other than any
restrictions imposed pursuant to the Securities Act of 1933, as
amended);
(ii) Copies of the approvals and consents required
under Section 6.5;
(iii) The directors and shareholders minute books and
the stock register of the Company;
(iv) A certificate of good standing for Seller and
the Company issued by the Secretary of State of their respective states
of incorporation, as of a date reasonably close to the Closing Date,
certifying that each such corporation is in good standing upon the
records of its office;
(v) A certificate of an authorized office of the
Seller, dated the Closing Date, certifying as to the satisfaction of
the conditions set forth in Sections 8.1(a) and (b) and as to copies of
the Certificate of Incorporation and Bylaws of the Company, and as to
corporate resolutions and incumbency;
(vi) Such other instruments and documents as are (i)
required by any other provisions of this Agreement, or (ii) reasonably
necessary in the opinion of the Buyer to effect performance of this
Agreement by Seller; and
(vii) An opinion of Michael R. Kargula, General
Counsel to Seller, in form and substance reasonably satisfactory to
Buyer.
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(b) BUYER'S DELIVERIES TO SELLER. At the Closing, subject to
the provisions hereof, Buyer will deliver to Seller:
(i) The Purchase Price payable under Section 2.1;
(ii) A certificate of an authorized officer of the
Buyer, dated the Closing Date, certifying as to the satisfaction of the
conditions set forth in Sections 8.2(a) and (b); and
(iii) An opinion of Akerman, Senterfitt & Eidson,
P.A., counsel to Buyer, in form and substance reasonably satisfactory
to Seller.
9.4 SURVIVAL OF OBLIGATIONS. All representations, warranties,
covenants, obligations and agreements of the parties contained in this Agreement
or in any instrument, certificate, opinion or other writing provided for herein,
shall not survive the Closing of this transaction; provided however, that
Sellers representations set forth: (i) in Sections 3.2, 3.5 (other than with
respect to income taxes), 3.10, 3.18 and 7.2, and the certificate provided for
under Section 8.1(h), (i) and (j) hereof, shall survive for a period of 18
months from the Closing Date, and (ii) in Sections 3.5 and 7.2 (both with
respect to income taxes) shall survive for a period of 36 months from the
Closing Date.
ARTICLE X
POST-CLOSING OBLIGATIONS
10.1 ASSURANCES. If at any time either of the parties hereto shall
consider or be advised that any further assignments, conveyances, novations or
assurances are necessary or desirable to carry out the provisions hereof and the
transactions contemplated herein, the appropriate parties hereto shall execute
and deliver, or cause to be executed and delivered, any and all proper deeds,
assignments and assurances, and do or cause to be done all things necessary or
proper to carry out fully the provisions hereof. Seller shall promptly notify
and provide to Buyer any correspondence or other communications received by
Seller after the Closing relating to the Business, including without limitation
any requests for proposals or requests for quotations.
10.2 COVENANT NOT TO COMPETE.
(a) For a period of five (5) years after the Closing Date,
Seller and its subsidiaries shall not, anywhere or at any place throughout the
world (i) directly or indirectly engage in the business of maintaining,
repairing or overhauling aircraft; (ii) have any direct or indirect interest
(including corporate shareholdings or other business agreements or obligations)
in any business that engages in the business of maintaining, repairing or
overhauling aircraft, excluding ownership of not more than 5% of the shares of a
publicly held corporation if such ownership does not involve any managerial
responsibility or direct or indirect involvement in the operation of such
business; or (iii) consult with or otherwise advise, directly or indirectly, any
person, firm or business that directly or
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indirectly engages in the business of maintaining, overhauling or repairing
aircraft. Notwithstanding the foregoing, Seller may sell software to businesses
which maintain, overhaul or repair aircraft so long as such software is not
directly or indirectly related to the TIMIS system software. Seller shall at
Closing assign to Company whatever rights it has in the TIMIS system software;
(b) Seller acknowledges that, in the event of any breach of or
default by Seller under this Section 10.2, Buyer will suffer irreparable and
ongoing harm which, while substantial, will not be fully compensable by monetary
damages. As a consequence, Seller expressly agrees that the remedies at law for
any breach or threatened breach by Seller would be inadequate and that, in
addition to any other remedies Buyer may have, Buyer shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damages.
ARTICLE XI
INDEMNIFICATION
11.1 INDEMNITY BY BUYER. Buyer agrees to indemnify, hold harmless and
defend Seller and its directors, officers, employees, affiliates, agents,
successors and assigns from and against any and all claims, causes of action,
liabilities, damages, losses, judgments, and the costs and expenses incident to
any of the foregoing, including but not limited to reasonable attorneys' fees,
the costs and expenses of enforcing this indemnification, costs of
investigations and to stay any judgments or perfect any appeals (collectively,
to the extent not covered by the Seller's insurance coverage, "Losses")
resulting from:
(a) the breach of any representation or warranty made by Buyer
in this Agreement or any document delivered pursuant to this Agreement,
(b) the breach or default in the performance or observance by
Buyer of any of the covenants or other obligations which it is to perform or
observe hereunder,
(c) a breach by the Company from and after the Closing Date of
any of its obligations under any of the documents referred to in Section 5.2(c),
(d) any Losses incurred by Seller that result from the
operations of the Company after the Closing Date; and
(e) any and all amounts paid by, or any liability, obligation
or other Losses incurred by, Seller under, in connection with, arising out of,
or based upon the guarantees set forth in Section 5.2(c) of this Agreement, to
the extent such guarantees are not released and this transaction closes and only
to the extent such guarantees relate to the obligations of the Company in
respect to events occurring subsequent to the Closing Date.
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11.2 INDEMNITY BY SELLER. Subject to Section 11.3 of this Agreement,
Seller and the Company, jointly and severally agree to indemnify, hold harmless
and defend Buyer and its affiliates and related corporations, and their
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, causes of action, liabilities, damages, losses,
judgments, and the costs and expenses incident to any of the foregoing,
including but not limited to reasonable attorneys' fees, the costs and expenses
of enforcing this indemnification, costs of investigations and the cost of any
bonds necessary to stay any judgments or perfect any appeals (collectively, to
the extent not covered by the Buyer's insurance coverage, "Losses") resulting
from:
(a) the breach of any representation or warranty made by
Seller or the Company in this Agreement or any document delivered pursuant to
this Agreement, and
(b) the breach or default in the performance or observance by
Seller or the Company of any of the covenants or other obligations which Seller
is to perform or observe hereunder (including the accuracy at the Closing Date
of the statements contained in the Certificate described in Sections 8.1(h), (i)
and (j) hereunder).
The Company's indemnity pursuant to this Section 11.2 shall terminate
at the Closing and Seller shall thereafter have no right of contribution or
subrogation against the Company.
11.3 LIMITATION ON INDEMNITY. Seller shall not have any obligation to
indemnify Buyer and Buyer shall not have any obligation to indemnify Seller,
unless the aggregate cumulative total of all Losses incurred by Buyer or Seller,
as the case may be, exceeds $1.0 million, whereupon Buyer or Seller, as the case
may be, shall be entitled to indemnification for all of such Losses but only to
the extent that the aggregate cumulative total of such Losses exceeds $1.0
million; provided, however, that this limitation on liability shall not apply
indemnification for Seller's non compliance with the requirements of Sections
8.1(h), (i), (j) and (k) hereunder. Notwithstanding any other provision of this
Agreement, the total maximum aggregate indemnification for all claims shall not
exceed $10 million from the Seller or the Buyer.
11.4 NOTICE OF CLAIM. If either Buyer, on the one hand, or Seller, on
the other hand (the "Claimant"), desires to make a claim (a "Claim") against the
other (the "Indemnitor") under this Article 11, the Claimant shall give written
notice to the Indemnitor setting forth the amount, nature and circumstances of
the Claim. The failure to give such notice shall relieve the Indemnitor of its
indemnification obligations contained herein solely to the extent that failure
to give such notice actually prejudices the rights of Indemnitor. In the event
of the assertion by any third party of any claim with respect to which either
Buyer or Seller is entitled to indemnification hereunder, the Indemnitor upon
written acknowledgment of its obligation to indemnify Claimant with respect to
such matter shall have the right to, and at the request of the Claimant shall,
assume the defense of such claim at its own expense, subject to the right of the
Claimant to participate in the defense of such matter at its own expense and
with counsel of its own choice. The Indemnitor shall not have the right to
settle any such claim without the consent of the Claimant, which consent shall
not be unreasonably
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withheld, if such settlement would result in a liability or cost to the Claimant
or, when the Buyer is the Claimant, would adversely affect the operation of the
Business.
ARTICLE XII
MISCELLANEOUS
12.1 WAIVER. No purported waiver by either party of any default by the
other party of any term or provision contained herein shall be deemed to be a
waiver of such term or provision unless the waiver is in writing and signed by
the waiving party. No such waiver shall in any event be deemed a waiver of any
subsequent default under the same or any other term or provision contained
herein. No right or remedy conferred by this Agreement or legally available is
intended to be exclusive of any other right or remedy, and each such right or
remedy is cumulative and in addition to every other such right or remedy.
12.2 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties concerning the subject matter of this
Agreement and incorporates all prior negotiations and understandings. There are
no covenants, promises, agreements, conditions or understandings, either oral or
written, between them relating to the subject matter of this Agreement other
than those set forth herein. No representation or warranty has been made by or
on behalf of either party to this Agreement (or any officer, director, employee
or agent thereof) to induce the other party to enter into this Agreement or to
abide by or consummate any transactions contemplated by any terms of this
Agreement, except representations and warranties expressly set forth herein. No
alteration, amendment, change or addition to this Agreement shall be binding
upon either party unless in writing and signed by the party to be charged.
12.3 CONFIDENTIALITY; PUBLICITY. From and after the date hereof and
prior to the Closing Date, nothing herein shall prohibit the Seller or the Buyer
from making any disclosure of the transactions contemplated hereby; provided,
however, to the extent that such disclosure is in writing, the Seller and the
Buyer agree to notify the other party of the contents of said disclosure prior
to its release. Except as may be required by law or as otherwise permitted or
expressly contemplated herein, no party hereto or their respective Affiliates,
employees, agents and representatives shall disclose to any third party this
Agreement or the subject matter or terms hereof, without the prior consent of
the other parties hereto.
12.4 JOINT PREPARATION. This Agreement is to be deemed to have been
prepared jointly by the parties hereto and any uncertainty or ambiguity existing
herein, if any, shall not be interpreted against either party, but shall be
interpreted according to the application of the rules of interpretation for
arm's length agreements.
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<PAGE>
12.5 KNOWLEDGE. "To Seller's Knowledge" and words of similar import
relating to the knowledge of Seller shall mean and be limited to, the actual
(but not constructive or imputed), independent, knowledge of Joseph E. Kasputys,
Stephen H. Curran, Michael R. Kargula, Patrick G. Richmond, and William J.
Swift, who have made reasonable written inquiry of Charles H. Bell, Richard Horn
and Christopher Basler as to the accuracy of the representations and warranties
in this Agreement.
12.6 NO PARTNERSHIP. Nothing contained in this Agreement shall be
deemed or construed by the parties hereto or by any third person, corporation or
other entity to create the relationship of principal and agent or of partnership
or of joint venture.
12.7 SUCCESSOR. Each and all of the provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto, and except as
otherwise specifically provided in this Agreement, their respective successors
and assigns; provided, however, that neither party hereto may assign this
Agreement or any rights hereunder without the written consent of the other.
Notwithstanding the foregoing, Buyer may assign this Agreement to any parent
corporation, subsidiary or other affiliate of the Buyer without the consent of
the Seller; provided, however, no such agreement shall relieve Buyer of its
obligations under this Agreement.
12.8 NOTICES. Any consent, waiver, notice, demand, request or other
instrument required or permitted to be given under this Agreement shall be in
writing and be deemed to have been properly given when delivered in person, four
business days after sent by certified or registered United States mail, return
receipt requested, postage prepaid or one business day after being sent by (a)
national prepaid overnight delivery service, or (b) telecopy or other facsimile
transmission (followed with hard copy sent by national prepaid overnight
delivery service), addressed:
31
<PAGE>
If to Seller:
Primark Corporation
1000 Winter Street, Suite 4300N
Waltham, MA 02154
Attention: J.E. Kasputys
Fax: 781 890 6187
and
Primark Corporation
1000 Winter Street, Suite 4300N
Waltham, MA 02154
Attention: M.R. Kargula
Fax: 781 890 6190
and if to Buyer:
Aviation Sales Maintenance, Repair & Overhaul Company
6905 N.W. 25th Street
Miami, Florida 33122
Attention: President
Fax: (305) 599 6610
with copies to:
Aviation Sales Company
6905 N.W. 25th Street
Miami, Florida 33122
Attention: Dale Baker, Chairman and CEO
Fax: (305) 599 6610
and
Akerman, Senterfitt & Eidson, P.A.
One S.E. Third Avenue, Suite 2800
Miami, Florida 33131
Attn: Philip B. Schwartz, Esq.
Fax: (305) 374-5095
Notice of change of address will be effective only upon receipt.
32
<PAGE>
12.9 CAPTIONS. The captions and Section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe or describe the scope or intent of the provisions of this
Agreement.
12.10 PARTIAL INVALIDITY. If any term or provision of this Agreement or
the application thereof to any person, corporation or other entity or
circumstance, shall be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to persons, corporations
or other entities or circumstances, other than those as to which it is held
invalid, shall both be unaffected thereby and each term or provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by law.
12.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
12.12 THIRD PARTIES. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give any person, corporation or other
entity other than the parties hereto and their successors and assigns, any
rights or remedies under or by reason of this Agreement.
12.13 DISCLOSURE. Information disclosed in any Schedule of this
Agreement shall be deemed disclosed in all schedules of this Agreement.
12.14 INTERCOMPANY ACCOUNTS AND OBLIGATIONS. On or prior to Closing,
Seller shall cause all intercompany accounts (including, without limitation, all
debt of the Company owing to Seller ("Intercompany Debt") and all income tax
related accounts, all of which shall be deemed to be intercompany accounts for
the purposes of this Agreement) and all other agreements, understandings and/or
obligations between the Company, on the one hand, and the Seller or any of its
affiliates on the other hand, to be canceled as of the Closing Date. To the
extent that any Intercompany Debt remains unpaid on the date immediately
preceding the Closing Date, such unpaid amount shall be transferred to the
equity account of the Company. In addition, Seller has the right and may from
time to time, prior to Closing, cause the Company to distribute all cash
holdings to Seller; provided however, that this right shall not affect Seller's
obligations under Subsections 8.1(i), (j) and (k) hereof, and further provided
that the only assets Seller shall have the right to cause the Company to
distribute during the period between the date of this Agreement and the Closing
Date is cash.
12.15 EXPENSES. Each party hereto shall pay its own expenses, including
attorneys and accounting fees, incurred in connection with the transaction
described herein. In the event of any litigation with respect to this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees and costs.
Seller shall pay Company's legal and investment banking out of pocket expenses
with respect to the transaction contemplated by the Agreement.
12.16 GOVERNING LAW. This Agreement shall be governed and construed by
the provisions hereof and in accordance with the laws of Massachusetts, without
reference to its conflicts of laws principles.
33
<PAGE>
[SIGNATURES ON NEXT PAGE]
34
<PAGE>
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
TRIAD INTERNATIONAL MAINTENANCE
CORPORATION
By: /S/ JOSEPH E. KASPUTYS
-----------------------------------------
Its: CHAIRMAN
PRIMARK CORPORATION
By: /S/ JOSEPH E. KASPUTYS
-----------------------------------------
Its: CHAIRMAN, PRESIDENT & CEO
AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY
By: /S/ DALE S. BAKER
-----------------------------------------
Its: PRESIDENT
GUARANTY
Aviation Sales Company, a Delaware corporation, hereby guarantees the
performance by Aviation Sales Maintenance, Repair & Overhaul Company of its
obligations under this Stock Purchase Agreement.
AVIATION SALES COMPANY
By: /S/ DALE S. BAKER
-----------------------------------------
Its: CHAIRMAN, PRESIDENT & CEO
35
EXHIBIT 2.2
FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (the "Agreement") is
made and entered into on September 22, 1998, by and among Aviation Sales
Maintenance, Repair & Overhaul Company, a Delaware corporation ("Buyer"),
Primark Corporation, a Michigan corporation ("Seller") and Triad International
Maintenance Corporation, a Delaware corporation ("Company").
PRELIMINARY STATEMENT
A. The parties entered into a Stock Purchase Agreement dated August 10,
1998 ("Stock Purchase Agreement").
B. The parties desire to amend the Stock Purchase Agreement to clarify
the survival of certain representations, warranties, covenants and obligations
subsequent to the closing of the Stock Purchase Agreement.
TERMS
NOW THEREFORE, for Ten ($10.00) dollars and for other good and valuable
considerations, the receipt and sufficiency of which is hereby conclusively
acknowledged, the parties agree as follows:
1. Section 9.4 of the Stock Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"SURVIVAL OF OBLIGATIONS. Except for the covenants, agreements
and acknowledgments and indemnities set forth in Sections
5.2(c) and 5.2(d) and in Articles X and XI of this Stock
Purchase Agreement, all representations, warranties,
covenants, obligations and agreements of the parties contained
in this Agreement or in any instrument, certificate, opinion
or other writing provided for herein, shall not survive the
Closing of this transaction; PROVIDED HOWEVER, that Seller's
representations set forth: (i) in Sections 3.2, 3.5 (other
than with respect to income taxes), 3.10, 3.18 and 7.2, and
the certificate provided for under Section 8.1(h), (i) and (j)
hereof, shall survive for a period of 18 months from the
Closing Date, and (ii) in Sections 3.5 and 7.2 (both with
respect to income taxes) shall survive for a period of 36
months from the Closing Date."
2. Except as expressly amended above, all other terms and provisions of
the stock
<PAGE>
Purchase Agreement shall remain in full force and affect.
Executed as of September 22 , 1998.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
TRIAD INTERNATIONAL MAINTENANCE
CORPORATION
By: /s/ JOSEPH E. KASPUTYS
---------------------------------
Its: CHAIRMAN
PRIMARK CORPORATION
By: /s/ JOSEPH E. KASPUTYS
---------------------------------
Its: CHAIRMAN, PRESIDENT & CFO
AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY
By: /s/ JOSEPH E. CIVILETTO
---------------------------------
Its: VICE PRESIDENT & CFO
AVIATION SALES COMPANY
By: /s/ JOSEPH E. CIVILETTO
---------------------------------
Its: VICE PRESIDENT & CFO
EXHIBIT 10.1
AMENDMENT NO. 2
AND
CONSENT
Dated as of September 18, 1998
to
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
This Amendment No. 2 and Consent ("Agreement") dated as of
September 18, 1998 is entered into among AVIATION SALES OPERATING COMPANY, a
Delaware corporation ("ASOC"), AEROCELL STRUCTURES, INC., an Arkansas
corporation ("Aerocell"), AVS/KRATZ-WILDE MACHINE COMPANY, a Delaware
corporation ("Kratz-Wilde") (ASOC, Aerocell and Kratz-Wilde being collectively
referred to as the "Existing Borrowers" and each, individually, an "Existing
Borrower"), WHITEHALL CORPORATION, a Delaware corporation ("Whitehall"), TRIAD
INTERNATIONAL MAINTENANCE CORPORATION, a Delaware corporation ("TIMCO" and,
together with the Existing Borrowers and Whitehall, the "Borrowers" and each
individually, a "Borrower") and the "Lenders" (as defined in the Credit
Agreement identified below) signatory hereto. Capitalized terms used herein
without definition are used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, Borrowers, Aviation Sales Company, a Delaware
corporation (the "Parent"), Citicorp USA, Inc., as Agent, and certain financial
institutions as Lenders and Issuing Banks, are parties to that certain Third
Amended and Restated Credit Agreement dated as of October 17, 1997, as
heretofore amended as of March 31, 1998 (the "Credit Agreement");
WHEREAS, Borrowers have informed the Agent that Aviation Sales
Maintenance, Repair & Overhaul Company, a Delaware corporation and wholly-owned
subsidiary of the Parent ("MR&O"), has entered into that certain Stock Purchase
Agreement dated as of August 10, 1998 (as amended by First Amendment to Stock
Purchase Agreement dated September 18, 1998) with Primark Corporation, a
Michigan corporation ("Primark"), and TIMCO, a true and correct copy of which is
attached hereto as ANNEX I (the "Purchase Agreement"), pursuant to which, among
other things, MR&O has agreed to purchase from Primark, and Primark has agreed
to sell to MR&O, all of the issued and outstanding capital stock of TIMCO for
$70,000,000 in cash (the "Purchase"), and the Parent has guaranteed the
performance of MR&O's obligations under the Purchase Agreement (the "Guaranty");
AVS Amendment No. 2
<PAGE>
WHEREAS, Borrowers have requested that the Lenders (i) agree
to amend the Credit Agreement to increase the Revolving Credit Commitments by
$108,571,428.60 to $200,000,000, (ii) consent to the Purchase and Guaranty
pursuant to the terms and conditions of the Purchase Agreement, (iii) consent to
the use by Borrowers of the proceeds of a $70,000,000 Borrowing of Revolving
Loans under the Credit Agreement for application by Borrowers to the payment of
the cash consideration due Primark upon consummation of the Purchase pursuant to
the terms of the Purchase Agreement (the "Acquisition Funding"), (iv) agree to
amend the letter of credit sublimit to permit the issuance by the Issuing Bank
of Standby Letters of Credit as security for obligations relative to certain
special facility revenue bonds pertaining to TIMCO's Greensboro, North Carolina
facility and (v) add each of TIMCO and Whitehall Corporation, a Delaware
corporation and wholly-owned subsidiary of MR&O, as "Borrowers" under and as
defined in the Credit Agreement; and
WHEREAS, subject to the terms and conditions stated herein,
the Borrowers and the Lenders have agreed to the consents and amendments
described in SECTIONS 1 and 2 hereof;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. CONSENT TO THE PURCHASE AND RELATED MATTERS.
Effective as of September 22, 1998, and subject to the satisfaction of the
conditions precedent set forth in SECTION 3 hereof, the Lenders hereby consent
to:
(a) MR&O's consummation of the Purchase, and Parent's granting
the Guaranty, pursuant to the terms and conditions of the Purchase
Agreement (without giving effect to any amendments or modifications
thereof which have not been approved in writing by the Requisite
Lenders as defined in the Credit Agreement after giving effect to the
amendments to the definition of "Requisite Lenders" set forth in
SECTION 2 hereof; all further references in this Agreement to the
Purchase Agreement being construed to mean the Purchase Agreement as so
constituted), notwithstanding the provisions of SECTIONS 10.04, 10.05
or 10.08 of the Credit Agreement;
(b) use by Borrowers of the proceeds of a $70,000,000
Borrowing of Revolving Loans under the Credit Agreement on the date
hereof for application by Borrowers to the payment of the cash
consideration due Primark upon consummation of the Purchase pursuant to
the terms of CLAUSE (A) of this section, notwithstanding the provisions
of SECTIONS 2.05, 10.04 or 10.08 of the Credit Agreement; and
AVS Amendment No. 2 2
<PAGE>
(c) the transfer by (i) AVS Manufacturing & Repair Company of
all of the issued and outstanding Capital Stock of Caribe Aviation,
Inc., a Florida corporation to MR&O, (ii) AVS Manufacturing & Repair
Company of all of the issued and outstanding Capital Stock of Aerocell
to MR&O, and (iii) Whitehall of all of the issued and outstanding
Capital Stock of Aero Hushkit Corporation, a Delaware corporation, to
Leasing Affiliate or a Subsidiary thereof and the modification of
SCHEDULE 7.01-C to the Credit Agreement to give effect to such
transfers.
SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of
September 22, 1998, and subject to the satisfaction of the conditions precedent
set forth in SECTION 3 hereof, the Credit Agreement is hereby amended as
follows:
(a) the introductory paragraph of the Credit Agreement is
deleted in its entirety and replaced with the following provision:
This Third Amended and Restated Credit Agreement
dated as of October 17, 1997 (as amended, supplemented or modified from
time to time, the "Agreement") is entered into among Aviation Sales
Operating Company, a Delaware corporation ("ASOC"), Aerocell
Structures, Inc., an Arkansas corporation ("Aerocell"), AVS/Kratz-Wilde
Machine Company, a Delaware corporation ("Kratz-Wilde"), Whitehall
Corporation, a Delaware corporation ("Whitehall"), and Triad
International Maintenance Corporation, a Delaware corporation ("TIMCO")
(ASOC, Aerocell, Kratz-Wilde, Whitehall and TIMCO being collectively
referred to as the "Borrowers" and each, individually, as a
"Borrower"), Aviation Sales Company, a Delaware corporation (the
"Parent"), the institutions from time to time a party hereto as
Lenders, whether by execution of this Agreement or an Assignment and
Acceptance, the institutions from time to time a party hereto as
Issuing Banks, whether by execution of this Agreement or an Assignment
and Acceptance, Citicorp Securities, Inc., a Delaware corporation, in
its capacity as arranger, and Citicorp USA, Inc., a Delaware
corporation, in its capacity as agent for the Lenders and the Issuing
Banks hereunder (in such capacity, the "Agent").
(b) SECTION 1.01 of the Credit Agreement is further amended to
delete, in its entirety, the definition of "BORROWING BASE" and to replace such
definition with the following definition:
"BORROWING BASE" means, as of any date of
determination, an amount equal to the sum of:
AVS Amendment No. 2 3
<PAGE>
(i) seventy-five percent (75%) of the face amount of Eligible
Receivables of ASOC, Aerocell, Kratz-Wilde, Distribution, and Apex (net
of maximum discounts, allowances, retainage and any other amounts
deferred with respect thereto), PLUS
(ii) eighty-five percent (85%) of the face amount of Eligible
Receivables of Caribe, TIMCO and the Whitehall Subsidiaries (net of
maximum discounts, allowances, retainage and any other amounts deferred
with respect thereto), PLUS
(iii) fifty percent (50%) of the face amount of earned, but unbilled
for periods less than ninety-one (91) days, Receivables of TIMCO and
the Whitehall Subsidiaries (net of maximum discounts, allowances,
retainage and any other amounts deferred with respect thereto), PLUS
(iv) up to forty percent (40%) of the value of Eligible Inventory of
Aerocell, Kratz-Wilde, Caribe, Apex, TIMCO and the Whitehall
Subsidiaries, in each case as set forth on the Borrowing Base
Certificate, PLUS
(v) (a) during the period commencing on September 22, 1998 and ending
on March 21, 1999, up to the respective percentages of the value of
Eligible Inventory included in Inventory Asset Group A, Inventory Asset
Group B, and Inventory Asset Group C, in each case as set forth on the
Borrowing Base Certificate, or (b) from and after March 22, 1999, the
lesser of (1) up to the respective percentages of the value of Eligible
Inventory included in Inventory Asset Group A, Inventory Asset Group B,
and Inventory Asset Group C, in each case as set forth on the Borrowing
Base Certificate, or (2) seventy percent (70%) of the appraised value
of Eligible Inventory included in Inventory Asset Group A, Inventory
Asset Group B and Inventory Asset Group C, in each case as set forth in
appraisals prepared in form and substance and by appraisers
satisfactory to the Requisite Lenders on an orderly liquidation basis
consistent with that methodology used in preparation of the Appraisals,
PLUS
(vi) fifty percent (50%) of the appraised fair market value of
Kratz-Wilde's owned Real Property, PLUS
(vii) sixty percent (60%) of the appraised orderly liquidation value of
Kratz-Wilde's owned Equipment.
For purposes of this definition, (1) Eligible Receivables and Eligible
Inventory, in each case and as of any date of determination, shall be
determined after deduction of all Eligibility Reserves then effective
with respect to such items, (2) the value referenced in CLAUSES (IV)
and (V)
AVS Amendment No. 2 4
<PAGE>
shall be determined on the bases described in the Borrowing Base
Certificate as reflected on the books and records of the Borrowers, the
Whitehall Subsidiaries or Distribution, as applicable, and (3) the
advance rates applicable under CLAUSE (I) with respect to Eligible
Receivables of Apex and Caribe, CLAUSE (II), CLAUSE (III), and CLAUSE
(IV) with respect to Eligible Inventory of Caribe, Apex, TIMCO and the
Whitehall Subsidiaries, (and the related provisions of the form of
Borrowing Base Certificate) shall be subject to adjustment
(increase/decrease but in no event in the case of CLAUSES (I) or (II)
below 75%) and modification by the Agent on or before March 22, 1999 by
written notice to the Borrowers and Lenders dependent upon the results
of the Agent's audit of the Receivables and Inventory of Caribe, Apex,
TIMCO and the Whitehall Subsidiaries. In each instance, the amounts
described hereinabove shall be designated as such on the Borrowing Base
Certificate dated as of such date of determination.
(c) SECTION 1.01 of the Credit Agreement is further amended to
add the reference ", Caribe, Apex, the Whitehall Subsidiaries" after each
reference to the term "Borrowers", to add the reference ", Caribe, Apex,
Whitehall Subsidiary" after each reference to the term "Borrower", and to add
the reference ", Caribe's, Apex's, Whitehall Subsidiary's" after each reference
to the term "Borrower's", in each case in the definitions of "ELIGIBLE
INVENTORY" and "ELIGIBLE RECEIVABLES" set forth in such section.
(d) SECTION 1.01 of the Credit Agreement is further amended to
delete the figure "$131,428,571.40" which appears in the definition of
"REVOLVING CREDIT COMMITMENT" in such section and to replace such figure with
the figure "$200,000,000."
(e) SECTION 1.01 of the Credit Agreement is further amended to
(i) delete, in their entirety, each of the definitions of "BASE RATE MARGIN",
"ELIGIBILITY RESERVES", "EURODOLLAR RATE MARGIN", "PERFORMANCE LEVEL 1",
"PERFORMANCE LEVEL 2", "PERFORMANCE LEVEL 3", "PERFORMANCE LEVEL 4",
"PERFORMANCE LEVEL 5" and "PERFORMANCE LEVEL 6", and to replace such definitions
with the following definitions:
"BASE RATE MARGIN" means, as of any date of
determination, a per annum rate equal to the rate set forth below
opposite the then applicable Performance Level set forth below:
PERFORMANCE LEVEL BASE RATE MARGIN
----------------- ----------------
1 0.000%
2 0.000%
3 0.000%
4 0.250%
AVS Amendment No. 2 5
<PAGE>
5 0.500%
6 0.750%
7 1.000%
; PROVIDED, HOWEVER, THAT, notwithstanding the foregoing, the Base Rate
Margin shall be 0.500% at all times during the period commencing
September 22, 1998 and ending December 31, 1998.
"ELIGIBILITY RESERVES" means, as of three (3)
Business Days after the date of written notice of any determination
thereof to the Borrowers by the Agent, or to the Borrowers and the
Agent by the Requisite Revolving Lenders, such amounts as the Agent, or
the Requisite Revolving Lenders, as the case may be, in the exercise of
its or their reasonable credit judgment, may from time to time
establish against the gross amounts of Eligible Inventory and unbilled
Receivables of TIMCO and the Whitehall Subsidiaries to reflect material
changes in risks or contingencies arising after the Effective Date
which may affect such items.
"EURODOLLAR RATE MARGIN" means, as of any date of
determination, a per annum rate equal to the rate set forth below
opposite the then applicable Performance Level set forth below:
PERFORMANCE LEVEL EURODOLLAR RATE MARGIN
----------------- ----------------------
1 1.125%
2 1.250%
3 1.500%
4 1.750%
5 2.000%
6 2.250%
7 2.500%
; PROVIDED, HOWEVER, THAT, notwithstanding the foregoing, the
Eurodollar Rate Margin shall be 2.000% at all times during the period
commencing September 22, 1998 and ending December 31, 1998.
"PERFORMANCE LEVEL 1" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is less than or equal to 2.75 to
1.0.
"PERFORMANCE LEVEL 2" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of
AVS Amendment No. 2 6
<PAGE>
the Parent for the then most recently ended four (4) fiscal quarter
period of ASOC is greater than 2.75 to 1.0 and less than or equal to
3.25 to 1.0.
"PERFORMANCE LEVEL 3" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 3.25 to 1.0 and
less than or equal to 3.75 to 1.0.
"PERFORMANCE LEVEL 4" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 3.75 to 1.0 and
less than or equal to 4.25 to 1.0.
"PERFORMANCE LEVEL 5" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 4.25 to 1.0 and
less than or equal to 4.75 to 1.0.
"PERFORMANCE LEVEL 6" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 4.75 to 1.0 and
less than or equal to 5.25 to 1.0.
"PERFORMANCE LEVEL 7" means that level of financial
performance of the Parent, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of
the Parent to EBITDA of the Parent for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 5.25 to 1.0.
(ii) add the following provision as clause (5) at the end of the definition of
"Eligible Inventory":
(5) goods constituting "Scrap/Out of Date Material",
and (iii) add the following provision at the end of the definitions of
"Requisite Lenders" and "Requisite Revolving Lenders", respectively:
AVS Amendment No. 2 7
<PAGE>
Notwithstanding the foregoing, in no event shall the Requisite Lenders
or Requisite Revolving Lenders be comprised of less than two (2)
Lenders at any time.
(f) SECTION 1.01 of the Credit Agreement is further amended to
add each of the following definitions to such section in the appropriate
alphabetical location:
"APEX" means Apex Manufacturing, Inc., an Arizona
corporation and wholly-owned Subsidiary of AVS Manufacturing & Repair
Company, a Delaware corporation and wholly-owned Subsidiary of Parent.
"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 Parent.
"WHITEHALL SUBSIDIARIES" means, collectively, Aero
Corporation, a Florida corporation, and Aero Corp Macon, Inc., a
Delaware corporation, in each case for so long as such entities
constitute wholly-owned, direct Subsidiaries of Whitehall.
(g) SECTION 3.01(A)(II) of the Credit Agreement is amended to
delete the figure "$15,000,000" which appears in CLAUSE (A)(I) thereof and to
replace such figure with the figure "$30,000,000."
(h) SECTION 8.03 of the Credit Agreement is amended to add the
language ", Caribe, Apex, the Whitehall Subsidiaries" after each reference in
the last sentence of such section to "the Borrowers".
(i) SECTION 11.04 of the Credit Agreement is amended to delete
in their entirety CLAUSES (II) and (III) of such section and to replace such
clauses with the following clauses:
(ii) the period commencing on January 1, 1998 and ending on
December 31, 1998 aggregating more than $17,000,000,
(iii) the period commencing on January 1, 1999 and ending on
December 31, 1999 aggregating more than $14,400,000,
(iv) the period commencing on January 1, 2000 and ending on
December 31, 2000 aggregating more than $12,200,000,
(v) the period commencing on January 1, 2001 and ending on
December 31, 2001 aggregating more than $7,300,000, or
AVS Amendment No. 2 8
<PAGE>
(vi) any Fiscal Year ending after 2001 in excess of $7,400,000
in the aggregate;
(j) SECTION 15.07(C) of the Credit Agreement is amended to
delete the references therein to "Borrowing Base" and "Borrowing Base
Certificate" and to replace such references with references to "Borrowing Base
(except to the extent modified by the Agent as anticipated by the text of such
definition set forth in this Agreement with the consent of the Requisite
Lenders)" and "Borrowing Base Certificate" (except to the extent modified by the
Agent as anticipated by the text of the definition of Borrowing Base set forth
in this Agreement)", respectively.
(k) The Credit Agreement is further amended to delete in their
entirety (i) all of the schedules thereto and to replace such schedules,
respectively, with the corresponding schedules attached to this Agreement as
ANNEX II and (ii) Exhibit B and to replace such Exhibit with the Exhibit B
attached to this Agreement as ANNEX III.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
AMENDMENT. The provisions of SECTIONS 1 and 2 of this Agreement shall become
effective on September 22, 1998, if, and only if, each of the following
conditions shall have been satisfied on or before such date:
(a) the Agent shall have received a facsimile or original
executed copy of this Agreement executed by each Borrower, Guarantor and Lender;
(b) the Agent shall have received each of the agreements,
documents, instruments, certificates and opinions set forth in ANNEX IV hereto
(except to the extent indicated on such annex as permitted to be delivered at a
later date), in each case in form and substance acceptable to the Agent and the
Lenders;
(c) the Agent shall have received evidence satisfactory to it
that the Purchase has been consummated in accordance with the terms and
conditions of the Purchase Agreement;
(d) no Event of Default or Potential Event of Default shall
have occurred and be continuing as of the date all other conditions set forth in
this SECTION 3 shall have been satisfied;
(e) no law, regulation, order, judgment or decree of any
Governmental Authority shall, and the Agent shall not have received any notice
that litigation is pending or threatened which is likely to, (i) enjoin,
prohibit or restrain (A) this Agreement from becoming effective or the making of
the Acquisition Funding or (B) the consummation of the Purchase or (ii) result
in a Material Adverse Effect;
AVS Amendment No. 2 9
<PAGE>
(f) no material adverse change shall have occurred in the
operations, assets, financial condition or prospects of Parent, TIMCO, any
Borrower or Leasing Affiliate since December 31, 1997, and the Agent and the
Lenders shall be satisfied that no such material adverse change shall result
from the consummation of the Purchase;
(g) all of the representations and warranties contained in
SECTION 7.01 of the Credit Agreement, SECTION 4 of this Agreement, and in each
of the other Loan Documents, shall be true and correct in all material respects
on and as of the date hereof and on and as of the date of the Acquisition
Funding except for such representations and warranties which are expressly made
only as of a particular earlier date or dates;
(h) there shall have been paid to the Agent, for the account
of the Lenders, Issuing Banks, and the Agent, as applicable, all fees and
expenses due and payable on or before the date of the Acquisition Funding in
connection with the execution and delivery of this Agreement, including, without
limitation, the fees payable in accordance with the terms of that certain Fee
Letter of even date herewith among the Borrowers and Citicorp;
(i) the Agent shall have received evidence satisfactory to it
that, after giving effect to the consummation of the Purchase and the
Acquisition Funding, each Borrower and Guarantor is Solvent; and
(j) all filings have been made and all actions have been
taken, as determined to be necessary or desirable by the Agent, to create and
perfect the Agent's lien on and security interest in substantially all of the
property and equity interests of TIMCO as security for the Obligations, and the
Agent shall have received evidence satisfactory to it that such liens and
security interests are senior in priority to all other liens and security
interests except as permitted by the terms of the Credit Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The
Borrowers hereby represent and warrant as follows:
(a) This Agreement, the Credit Agreement as previously
executed and delivered and as amended hereby, and each of the Loan Documents,
constitute legal, valid and binding obligations of the Borrowers and the
Guarantors named as parties thereto and are enforceable against the Borrowers
and Guarantors, as applicable, in accordance with their terms.
(b) No Event of Default or Potential Event of Default exists
or would result from any of the transactions contemplated by this Agreement or
the Purchase Agreement.
AVS Amendment No. 2 10
<PAGE>
(c) Each of the representations and warranties contained in
the Purchase Agreement are true and correct in all material respects as of the
date hereof and as of the date of the Acquisition Funding, and, as of such
dates, each of the parties to the Purchase Agreement have substantially
performed all covenants, duties and undertakings required of such parties as of
such dates pursuant to the terms of the Purchase Agreement. All conditions
precedent to, and all consents necessary to permit, the consummation of the
Purchase pursuant to the Purchase Agreement have been satisfied or delivered, or
waived with the prior written consent of the Requisite Lenders (defined as
amended by this Agreement), and no action has been taken by any competent
authority which restrains, prevents or imposes material adverse conditions upon,
or seeks to restrain, prevent or impose material adverse conditions upon, the
consummation of the Purchase or the Acquisition Funding. As of the date of the
Acquisition Funding, the Purchase has been consummated.
(d) TIMCO is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. TIMCO is duly
qualified to do business and is in good standing under the laws of the State of
North Carolina and each other jurisdiction in which failure to be so qualified
and in good standing will result, or is reasonably likely to result, in a
Material Adverse Effect. As of the date hereof, TIMCO has no Subsidiaries.
(e) The execution, delivery, performance and filing or
recording, as the case may be, of each of the Purchase Agreement and the
agreements or documents which are required to be executed, filed or recorded by
or on behalf of the Borrowers and the Guarantors in connection with the Purchase
(collectively, together with the Purchase Agreement, the "Purchase Documents")
and the consummation of the transactions contemplated thereby are within each
such Person's, as applicable, corporate powers, have been duly authorized by all
necessary corporate action and such authorization has not been rescinded. No
other corporate action or proceedings on the part of any Borrower or Guarantor
are necessary to consummate such transactions.
(f) The execution, delivery and performance of each of the
Purchase Documents to which any Borrower or any Guarantor is a party do not and
will not (i) conflict with the Organizational Documents of any such Person, (ii)
to the best of each Borrower's and each Guarantor's knowledge, constitute a
tortious interference with any Contractual Obligation of any Person or conflict
with, result in a breach of or constitute (with or without notice or lapse of
time or both) a default under any Requirement of Law or Contractual Obligation
of any Borrower or any Guarantor or require termination of any Contractual
Obligation, the consequences of which violation, breach, default or termination,
singly or in the aggregate, will result, or is reasonably likely to result, in a
Material Adverse Effect or may
AVS Amendment No. 2 11
<PAGE>
subject the Agent, any of the Lenders or any of the Issuing Banks to any
liability, (iii) result in or require the creation or imposition of any Lien
whatsoever upon any of the Property or assets of a Borrower or such Guarantor,
other than Liens contemplated by the Loan Documents, or (iv) require any
approval of the shareholders of such Person which has not been obtained.
(g) Except as set forth in the Purchase Agreement, the
execution, delivery and performance of each of the Purchase Documents to which
any Borrower or any Guarantor is a party do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by any Governmental Authority, except filings, consents or notices which
have been made, obtained or given.
(h) Complete and accurate copies of the following financial
statements, materials and other information have been delivered to the Agent:
(i) a pro forma balance sheet, as estimated as of September 30, 1998, of the
consolidated results and operations of the Parent and its Subsidiaries combined
with the consolidated results and operations of Whitehall and its Subsidiaries
and of TIMCO as of such date (the "Pro Forma"), (ii) projected balance sheets,
statements of income and statements of cash flow for the combined, consolidated
operations of the Parent and its Subsidiaries, Whitehall and its Subsidiaries
and TIMCO, for the fiscal year ending 1998 (the "Projections"), (iii) the
audited financial statements of Whitehall and its Subsidiaries for the fiscal
year ended on December 31, 1997, (iv) the audited financial statements of TIMCO
for the fiscal year ended on December 31, 1997, (v) the interim unaudited
financial statements of Whitehall and its Subsidiaries for its fiscal quarter
ending June 30, 1998 and of TIMCO for the fiscal quarter ending June 30, 1998.
All such historical financial statements were prepared in all material respects
in conformity with GAAP, except as otherwise noted therein, and fairly present
in all material respects the respective financial positions, and the results of
operations and cash flows for each of the periods covered thereby of the
applicable Person as at the respective dates thereof.
(i) The Pro Forma fairly presents on a PRO FORMA basis the
consolidated and consolidating financial condition of the Parent and its
Subsidiaries as of the date of the Acquisition Funding, after giving effect to
the Purchase and the acquisition by merger of Whitehall and its Subsidiaries,
and reflects on a PRO FORMA basis those liabilities reflected in the notes
thereto and resulting from consummation of such transactions and related
transaction costs. The Projections and the assumptions expressed in the Pro
Forma are reasonable based on the information avail able to the Parent at the
time so furnished.
(j) 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
AVS Amendment No. 2 12
<PAGE>
any Borrower, threatened against any Borrower or any Guarantor or any of their
respective Property challenging the validity or the enforceability of the
Purchase or any Purchase Document.
(k) After giving effect to the Purchase and the Acquisition
Funding, each Borrower and each Guarantor is Solvent.
(l) Each of the representations and warranties contained in
the Credit Agreement and each other Loan Document are true and correct in all
material respects as of the date hereof and as of the date of the Acquisition
Funding (in each case after giving effect to the amendments set forth in SECTION
2 of this Agreement), except for such representations and warranties which are
expressly made only as of a particular earlier date or dates.
SECTION 5. PRO RATA OUTSTANDINGS. On the date of the
Acquisition Funding, the Lenders whose Pro Rata Shares are increased as a result
of the amendments effected pursuant to this Agreement shall fund such amounts
(in addition to their Pro Rata Shares of the Borrowings being made on such date)
to the Lenders whose Pro Rata Shares are decreased by such amendments in amounts
and to such Lenders as is necessary to cause all of the Lenders' outstanding
Loans and interests in Letters of Credit to be proportionate to their respective
Pro Rata Shares as modified pursuant to this Agreement. Such fundings shall
constitute assignments of portions of the Loans and interests in Letters of
Credit in accordance with the Credit Agreement notwithstanding any terms or
conditions therein to the contrary.
SECTION 6. REAFFIRMATION. Each Borrower and Guarantor hereby
reaffirms all covenants, representations and warranties made by it in the Credit
Agreement and in each other Loan Document to which it is a party (as amended
hereby) and agree that all such covenants, representations and warranties shall
be deemed to have been remade as of the date this Agreement becomes effective
(unless a representation and warranty is stated to be given on and as of a
specific date, in which case such representation and warranty shall be true,
correct and complete as of such date). Each Borrower and Guarantor hereby
reaffirms and ratifies each grant of security granted by such Person pursuant to
each Loan Document to which it is a party, and each payment, guaranty and
performance obligation thereunder after giving effect to this Agreement, the
Purchase and the Acquisition Funding.
SECTION 7. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Agreement, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import shall mean and be a reference to the Credit Agreement, as
amended
AVS Amendment No. 2 13
<PAGE>
hereby, and each reference to the Credit Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.
(b) Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in full force and
effect.
(c) The execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy of any
Lender or Issuing Bank or the Agent under the Credit Agreement, the Notes or any
of the other Loan Documents, nor constitute a waiver of any provision contained
therein.
SECTION 8. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 10. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
SECTION 11. NOTICE. Pursuant to SECTION 15.08 of the Credit
Agreement, the Borrowers hereby give notice to the Agent, Lenders and Issuing
Bank that the notice address for the Borrowers and Parent is hereby changed from
that appearing in the Credit Agreement to:
6905 N.W. 25th Street
Miami, Florida 33122-1898
Attn: Chief Financial Officer
Telecopier No. (305) 599-6610
with a copy to:
Akerman, Senterfitt & Eidson, P.A.
One Southeast Third Avenue
28th Floor
Miami, Florida 33131-1704
Attn: Philip B. Schwartz
Telecopier No. (305) 374-5095
AVS Amendment No. 2 14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
AVIATION SALES OPERATING COMPANY
AEROCELL STRUCTURES, INC.
AVS/KRATZ-WILDE MACHINE COMPANY
WHITEHALL CORPORATION,
as Borrowers September 18, 1998
By___________________________
Joseph E. Civiletto
Vice President
TRIAD INTERNATIONAL MAINTENANCE CORPORATION,
as a Borrower September 22, 1998
By____________________________
Joseph E. Civiletto
Vice President
AVS Amendment No. 2 15
<PAGE>
AVIATION SALES COMPANY
AVIATION SALES LEASING COMPANY
AVIATION SALES FINANCE COMPANY
AVIATION SALES BEARINGS COMPANY
AVIATION SALES MAINTENANCE REPAIR & OVERHAUL COMPANY
CARIBE AVIATION, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AERO CORPORATION
AERO HUSHKIT CORPORATION
AERO CORP MACON, INC.
HYDROSCIENCE, INC.
AVIATION SALES MANUFACTURING & REPAIR COMPANY
APEX MANUFACTURING, INC.,
as Guarantors
By___________________________
Joseph E. Civiletto
Vice President
CITICORP USA, INC. HELLER FINANCIAL, INC.
By___________________________ By_________________________
Shapleigh B. Smith Name:
Attorney-in-Fact Title:
CONGRESS FINANCIAL CORPORATION NATIONAL CITY COMMERCIAL
FINANCE, INC.
By____________________________ By_________________________
Name: Name:
Title: Title:
FIRST UNION COMMERCIAL CORPORATION
By___________________________
Name:
Title:
AVS Amendment No. 2 16
<PAGE>
ANNEX I
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
PURCHASE AGREEMENT AND FIRST AMENDMENT
Attached
AVS Amendment No. 2
<PAGE>
ANNEX II
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
SUBSTITUTED SCHEDULES
Attached
AVS Amendment No. 2
<PAGE>
SCHEDULE 1.01.9
dated September 18, 1998
to
Third Amended and Restated Credit Agreement
dated as of October 17, 1997, as amended
COMMITMENTS(1)
LENDER REVOLVING CREDIT COMMITMENT
------ ---------------------------
CITICORP USA, INC. $129,895,238.11
HELLER FINANCIAL, INC. $ 18,285,714.28
NATIONAL CITY COMMERCIAL
FINANCE, INC. $ 12,190,476.19
CONGRESS FINANCIAL CORPORATION $ 14,628,571.42
FIRST UNION COMMERCIAL
CORPORATION $ 25,000,000.00
---------------
TOTAL $200,000,000.00
- ----------
(1) As of the date hereof, all Term Loans and Revolving Loans under the
Acquisition Subfacility have been repaid in full and the Lenders have no further
commitments with respect to such Loans.
AVS Amendment No. 2
<PAGE>
ANNEX III
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
SUBSTITUTED EXHIBIT B
Attached
AVS Amendment No. 2
<PAGE>
ANNEX IV
to
Amendment No. 2 and Consent
Dated as of September 18, 1998
LIST OF CLOSING DOCUMENTS
Attached
AVS Amendment No. 2
