UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
MARCH 27, 2000
DATE OF FILING OF FORM 8-K
FEBRUARY 18, 2000
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
COMMISSION FILE NUMBER 1-11775
AVIATION SALES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-0665658
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
6905 NW 25TH STREET
MIAMI, FLORIDA 33122
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(305) 592-4055
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
UPDATE ON THE COMPANY'S OUTLOOK FOR ITS 1999 FINANCIAL RESULTS
On March 20, 2000, Aviation Sales Company (the "Company") issued a
press release updating the market on the Company"s outlook for its 1999
financial results. A copy of the press release is attached to this Form 8-K as
Exhibit 99.1.
TERM LOAN NOTE
On February 18, 2000, the Company's subsidiaries that are the Borrowers
under the Company's existing senior credit facility executed a Term Loan Note in
favor of Citicorp USA, Inc. in the face amount of $15.5 million ("Term Loan").
Repayment of the Term Loan was guaranteed by the Company and by substantially
all of the other subsidiaries of the Company. The Term Loan bears interest at
the rate of 12% per annum, is due on February 17, 2001 (the "Maturity Date") and
is secured by a second lien upon the assets securing the Company's existing
senior credit facility.
In connection with the Term Loan, the Company issued a Common Stock
Warrant Certificate ("Warrant") to Citicorp USA, Inc., a Delaware corporation
("Holder"), that grants to the Holder the right to acquire 129,000 shares of the
Company's Common Stock, par value $.001 per share ("Warrant Shares"),
exercisable in whole or in part at any time from February 18, 2000 until
December 31, 2005 at an exercise price of $.001 per share ("Exercise Price"). If
the Term Loan Note is not repaid in full, the Warrant entitles the Holder to
require the Company, subsequent to July 31, 2000 and subject to a vesting
schedule, to repurchase the Warrant or the Warrant Shares issued pursuant to the
Warrant.
The foregoing is a summary of certain information contained in the
above-referenced documents. Reference is made to the more detailed information
contained in such documents, which are attached to this Form 8-K as Exhibits
10.1 and 10.2.
AMENDMENT NO. 1 TO TROL FINANCING
On February 18, 2000, the Company entered into an agreement amending
its existing tax retention operating lease financing pursuant to the terms of an
Amendment No. 1 to the Participation Agreement between the Company as
Construction Agent and Lessee, First Security Bank, National Association, as
Owner Trustee ("Trustee"), certain other banks and other lending institutions as
the holders and lenders, and Bank of America, N.A., d/b/a NationsBank, N.A.,
successor to NationsBank, National Association, as Administrative Agent, dated
as of February 18, 2000 ("Amendment No. 1 to TROL Financing"). Under the terms
of Amendment No. 1 to TROL Financing, the amount of the total financing will be
increased, in the aggregate, from $35,513,700 to $40,000,000 ("Initial
Increase") and from $40,000,000 to $43,000,000 ("Second Increase"), subject to
certain contingencies. The amount of the Trustee's obligations under the
Amendment No. 1 to TROL Financing, which are guaranteed by the Company and
substantially all of its subsidiaries, will
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increase from $31.2 million to $35.2 million in connection with the Initial
Increase, and from $35.2 million to $37.8 million in connection with the Second
Increase. In connection with the Initial Increase, the Company has increased the
letter of credit in favor of the Trustee to $12 million.
The foregoing is a summary of certain information contained in the
above-referenced document. Reference is made to the more detailed information
contained in such document, which is attached to this Form 8-K as Exhibit 10.3.
AMENDMENT TO THE COMPANY"S SENIOR CREDIT FACILITY
On February 18, 2000, the Company entered into an agreement amending
its existing senior credit facility pursuant to the terms of an Amendment No. 8
and Waiver to Third Amended and Restated Credit Agreement dated as of October
17, 1997 (the "Eighth Amendment to Credit Facility Agreement"). Under the terms
of the Eighth Amendment to Credit Facility Agreement, the Company's existing
credit facility was amended to permit the Term Loan and to make other changes to
the Company"s amended credit facility.
The foregoing is a summary of certain information contained in the
above-referenced document. Reference is made to the more detailed information
contained in such document, which is attached to this Form 8-K as Exhibit 10.4.
AMENDMENT TO RIGHTS AGREEMENT AND STANDSTILL AGREEMENT WITH LACY HARBER
The Company has entered into a Standstill Agreement (the "Standstill
Agreement") with LJH Corporation ("LJH"), which is wholly-owned by Mr. Lacy J.
Harber of Dennison, Texas, and Mr. Harber, that limits for a period of five
years the number of shares of common stock of the Company that Mr. Harber and
LJH (together) are authorized to acquire. The Standstill Agreement permits Mr.
Harber and LJH (together) to acquire up to 25% of the issued and outstanding
shares of common stock of the Company. The Agreement permits Mr. Harber and LJH,
together, to nominate one candidate (currently Roy T. Rimmer) for election to
the Board of Directors of the Company as long as Mr. Harber and LJH together own
at least 8% of the outstanding shares of common stock of the Company. Mr. Harber
and LJH have also agreed that during the term of the Standstill Agreement they
will not engage in certain activities without approval of a majority of the
Company's disinterested board members.
The Rights Agreement, dated as of November 1, 1999, between the Company
and Continental Stock Transfer & Trust Company, as rights agent, relating to the
Company's Stockholders' Rights Plan, has been amended consistent with the terms
of the Standstill Agreement. This amendment will not trigger the exercise of any
rights under the Rights Agreement and no rights will be distributed in
connection therewith.
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The foregoing is a summary of certain information contained in the
above-referenced documents. Reference is made to the more detailed information
contained in such documents, which are attached to this Form 8-K as Exhibits
10.5 and 10.6.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
----------- -----------
10.1 Term Loan Note, dated February 18, 2000
10.2 Common Stock Warrant Certificate
10.3 Amendment Agreement No. 1 for Participation
Agreement between the Company as
Construction Agent and Lessee, First
Security Bank, National Association, as
Owner Trustee, the Various Banks and other
lending institutions as the holders and
lenders, and NationsBank, National
Association, as Administrative Agent, dated
as of February 18, 2000
10.4 Amendment No. 8 and Waiver, dated February
18, 2000, to Third Amended and Restated
Credit Agreement
10.5 Standstill Agreement between the Company,
LJH Corporation and Lacy J. Harber
10.6 Amendment No. 1 to Rights Agreement
99.1 Press Release Issued by the Company on
March 20, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AVIATION SALES COMPANY
/s/ DALE S. BAKER
------------------------
Dale S. Baker, President
Date: March 24, 2000
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
- - ------- -----------
10.1 Term Loan Note, dated February 18, 2000
10.2 Common Stock Warrant Certificate
10.3 Amendment Agreement No. 1 for Participation Agreement between the
Company as Construction Agent and Lessee, First Security Bank,
National Association, as Owner Trustee, the Various Banks and
other lending institutions as the holders and lenders, and
NationsBank, National Association, as Administrative Agent, dated
as of February 18, 2000
10.4 Amendment No. 8 and Waiver, dated February 18, 2000, to Third
Amended and Restated Credit Agreement
10.5 Standstill Agreement between the Company, LJH Corporation and Lacy
J. Harber
10.6 Amendment No. 1 to Rights Agreement
99.1 Press Release Issued by the Company on March 20, 2000
EXHIBIT 10.1
TERM LOAN NOTE
February 18, 2000
FOR VALUE RECEIVED, the undersigned, AVIATION SALES
DISTRIBUTION SERVICES COMPANY, a Delaware corporation, AEROCELL STRUCTURES,
INC., an Arkansas corporation, AVS/KRATZ-WILDE MACHINE COMPANY, a Delaware
corporation, WHITEHALL CORPORATION, a Delaware corporation, TRIAD INTERNATIONAL
MAINTENANCE CORPORATION, a Delaware corporation, APEX MANUFACTURING, INC., an
Arizona corporation, CARIBE AVIATION, INC., a Florida corporation, AIRCRAFT
INTERIOR DESIGN, INC., a Florida corporation, AVIATION SALES LEASING COMPANY, a
Delaware corporation, TIMCO ENGINE CENTER, INC., a Delaware corporation (the
"Borrowers"), HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY to the order of
Citicorp USA, Inc. (the "Lender"), the principal amount of $15,500,000.00
(Fifteen Million, Five Hundred Thousand and no/100 Dollars) on the earliest to
occur (the "Maturity Date") of (i) February 17, 2001, (ii) the date on which
that certain Third Amended and Restated Credit Agreement dated as of October 17,
1997 among the Borrowers, the Lender, the other financial institutions from time
to time a party thereto as Lenders and Issuing Banks, and Citicorp USA, Inc., a
Delaware corporation, as Agent for the Lenders and Issuing Banks, as in effect
on, and amended through, the date hereof (the "Credit Agreement") is further
amended and restated in its entirety, and (iii) the date on which the
"Obligations" (as defined in the Credit Agreement) are repaid in full.
The Borrowers further, jointly and severally, promise to pay
interest on the unpaid principal amount of the indebtedness evidenced hereby
from the date advanced until such principal amount is paid in full, at the per
annum rate of twelve percent (12.0%). Accrued interest shall be payable, in
arrears, on the first day of each calendar month (for the immediately preceding
calendar month) commencing on the first such day following the date hereof and,
if not theretofore paid in full, on the Maturity Date. Notwithstanding the
foregoing, effective immediately upon the occurrence of an Event of Default, and
for as long thereafter as such Event of Default shall be continuing unwaived,
the principal balance outstanding hereunder, shall bear interest at the per
annum rate of fourteen percent (14.0%).
The Borrowers further, jointly and severally, agree and
covenant, that (i) proceeds of the loan advanced under this Term Loan Note shall
be used solely to repay Revolving Loans outstanding on the date hereof under the
Credit Agreement and hereby direct the Lender to disburse such proceeds directly
to the account specified in the Credit Agreement for payment of such Revolving
Loans and (ii) immediately upon the receipt by the Borrowers or any "Guarantor"
(as defined in the Credit Agreement) of any "Net Cash Proceeds of Sale" (as
defined in the Credit Agreement) with respect to the assets and property
identified on Exhibit A attached hereto and made a part hereof, to make or cause
to be made a mandatory prepayment of the principal indebtedness evidenced by
this Term Loan Note in an amount equal to the amount by which such Net Cash
Proceeds of Sale exceed the sum of (a) the amount by which the aggregate
principal of the Revolving Loans exceeds (1) the Maximum Revolving Credit Amount
MINUS (2) the Letter of Credit Obligations, PLUS (b) the amount by which that
portion of the Designated Prepayments arising from such Net Cash Proceeds of
Sale exceeds that portion of the Borrowing Base allocable to such property (or,
in the event of a sale of Capital Stock, the property of the issuer of such
Capital Stock) as of the date of such prepayment.
All payments of principal and interest in respect of this Term
Loan Note shall be made to the Lender in lawful money of the United States of
America in same day funds on the date due at New York, New York to such account
of the Lender at Citibank, N.A. as the Lender may designate. Funds received by
the Lender as aforesaid no later than 1:00 p.m. (New York time) on any given
Business Day shall be credited against payment to be made that day and funds
received by the Lender after that time shall be deemed to have been paid on the
next succeeding Business Day. Business Day shall mean a day in the applicable
local time which is not a Saturday or Sunday or a legal holiday and on which
banks are not required or permitted by law or other governmental action to close
in New York, New York. All payments made on account of principal hereof and
interest thereon shall be recorded by the Lender on its books and records.
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Each of the Borrowers hereby represents and warrants to the
Lender that the execution, delivery and performance of this Term Loan Note by
the Borrowers and the other agreements and documents executed and delivered in
connection herewith by the Borrowers and certain affiliates of the Borrowers
(collectively, the "Guaranty and Collateral Documents") do not and will not (i)
conflict with the "Organizational Documents" (as defined in the Credit
Agreement) or by-laws of any Borrower or affiliate a party to any of the
Guaranty and Collateral Documents, (ii) constitute a tortious interference with
any "Contractual Obligation" (as defined in the Credit Agreement) of any
Borrower or affiliate a party to such Guaranty and Collateral Documents, 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" (as defined in
the Credit Agreement) or Contractual Obligation of any Borrower or affiliate a
party to such Guaranty and Collateral Documents, or require termination of any
such Contractual Obligation, (iii) result in or require the creation or
imposition of any lien whatsoever upon any property or assets of any Borrower or
affiliate a party to such Guaranty and Collateral Documents, other than the
liens contemplated by the Credit Agreement and "Loan Documents" (as defined in
the Credit Agreement), or require any approval of the shareholders of any
Borrower or affiliate a party to such Guaranty and Collateral Documents.
Each Borrower has the requisite power and authority to
execute, deliver and perform this Term Loan Note and the other agreements and
documents executed and delivered by it in connection herewith and each of the
affiliates of the Borrowers a party to the Guaranty and Collateral Documents has
the requisite power and authority to execute, deliver and perform such Guaranty
and Collateral Documents. The execution, delivery and performance of this Term
Loan Note and the Guaranty and Collateral Documents 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 affiliate
thereof a party to the Guaranty and Collateral Documents are necessary to
consumamte such transactions. This Term Loan Note and each of the Guaranty and
Collateral Documents have been duly executed and delivered on behalf of the
Borrowers and their affiliates a party thereto and constitute such person's
legal, valid and binding obligation, enforceable against such person in
accordance with its terms.
Each of the following occurrences shall constitute an Event of
Default under this Term Loan Note: (i) the Borrowers shall fail to pay when due
any principal of or interest on the indebtedness evidenced by this Term Loan
Note in accordance with the terms hereof, and (ii) there shall occur any "Event
of Default" (as defined in, and set forth pursuant to Section 12.01 of, the
Credit Agreement).
Upon the occurrence of an Event of Default described in
Section 12.01(f), 12.10(g) or 12.01(h) of the Credit Agreement, the unpaid
principal amount evidenced by this Term Loan Note shall become, and upon the
occurrence and during the continuance of all other Events of Default, such
unpaid principal amount may be declared by the Lender to be, due and payable.
The indebtedness evidenced by this Term Loan Note is secured
pursuant to the terms of that certain Collateral Document Amendment of even date
herewith between the Borrowers and certain affiliates of the Borrowers, as
grantors, Citicorp USA, Inc., a Delaware corporation, in its capacity as agent,
as grantee, and the Lender.
The Borrowers, jointly and severally, agree upon demand to
pay, or reimburse the Lender for, all of the Lender's reasonable internal and
external audit, legal, appraisal, valuation, filing, document duplication and
reproduction and investigation expenses and for all other out-of-pocket costs
and expenses of every type and nature (including, without limitation, the
reasonable fees, expenses and disbursements of Sidley & Austin, local legal
counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers, and other consultants and agents) incurred by the Lender
in connection with (i) the preparation, negotiation, and execution of this Term
Loan Note and the agreements and documents executed and delivered in connection
therewith and the Lender's periodic reviews and audits of the Borrowers and
guarantors of the indebtedness evidenced hereby; (ii) the preparation,
negotiation, execution and interpretation of this Term Loan Note and the
agreements and documents executed and delivered in connection therewith; (iii)
the creation, perfection or protection of the liens securing this Term Loan Note
(including, without limitation, any reasonable fees and expenses for local
counsel in various jurisdictions); (iv) consultation with attorneys in
connection therewith and with respect to the Lender's rights and
responsibilities under this Term Loan Note and the agreements and documents
executed and delivered in connection therewith; (v) the protection, collection
or enforcement of any of the obligations evidenced hereby or by such other
agreements and documents; (vi) the commencement, defense or intervention in any
court proceeding relating in any way to such
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obligations, any security therefor, any Borrower, any guarantor thereof, this
Term Loan Note or any of such other agreements and documents; (vii) the response
to, and preparation for, any subpoena or request for document production with
which the Lender is served or deposition or other proceeding in which the Lender
is called to testify, in each case, relating in any way to such obligations, any
security therefor, any Borrower, any guarantor thereof, this Term Loan Note or
any of such other agreements and documents; and (viii) any amendments, consents,
waivers, assignments, restatements, or supplements to this Term Loan Agreement
or any of such agreements and documents and the preparation, negotiation, and
execution of the same.
The Borrowers, jointly and severally, further agree to pay or
reimburse the Lender, upon demand, for all out-of-pocket costs and expenses,
including, without limitation, reasonable attorneys' fees (including allocated
costs of internal counsel and costs of settlement) incurred by the Lender after
the occurrence of an Event of Default (i) in enforcing this Term Loan Note and
the agreements and documents executed and delivered in connection therewith and
the security therefor or exercising or enforcing any other right or remedy
available by reason of such Event of Default; (ii) in connection with any
refinancing or restructuring of the credit arrangements provided under this Term
Loan Note in the nature of a "work-out" or in any insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in any litigation or
in filing a petition, complaint, answer, motion or other pleadings in any legal
proceeding relating to the obligations evidenced hereby, any Borrower, any
guarantor thereof, or security therefor and related to or arising out of the
transactions contemplated hereby or by any of the agreements and documents
executed in connection herewith; and (iv) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise) described in CLAUSES
(I) through (III) above.
The Borrowers, jointly and severally, further agree (a) to
indemnify and hold harmless the Lender and each of its officers, directors,
employees, attorneys and agents (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses (other than loss of
profits), damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever and including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of (i) this Term Loan Note or the agreements and documents
executed and delivered in connection therewith, the making of the loan evidenced
hereby, the management of such loan, the use or intended use of the proceeds of
such loan, or any of the other transactions contemplated by any of the
agreements and documents executed and delivered in connection herewith, or (ii)
any liabilities and costs relating to any violation by any Borrower or
guarantor, or their respective predecessors-in-interest, of any environmental,
health or safety requirements of law, the past, present or future operations of
any Borrower or guarantor, or any of their respective predecessors-in-interest,
or, the past, present or future environmental, health or safety condition of any
respective past, present or future property of such persons, the presence of
asbestos-containing materials at any respective past, present or future property
of such persons, or the release or threatened release of any contaminant into
the environment by any Borrower or guarantor, or their respective
predecessors-in-interest, or the release or threatened release of any
contaminant into the environment from or at any facility to which any Borrower
or guarantor, or their respective predecessors-in-interest, sent or directly
arranged the transport of any contaminant (collectively, the "Indemnified
Matters"); PROVIDED, HOWEVER, the Borrowers shall have no obligation to an
Indemnitee hereunder with respect to Indemnified Matters caused by or resulting
from the willful misconduct or gross negligence of such Indemnitee, as
determined by a final, non-appealable order of a court of competent jurisdiction
and (b) not to assert any claim against any of the Indemnified Parties on any
theory of liability for special, indirect, consequential or punitive damages
arising out of, or in any way in connection with, the loans made hereunder or
the transactions evidenced by the agreements and documents executed and
delivered in connection herewith, and/or any other matters governed by this Term
Loan Note and such other agreements and documents. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, each Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees. The Lender agrees to notify the
Borrowers of the institution or assertion of any Indemnified Matter, but the
parties hereto hereby agree that the failure to so notify the Borrowers shall
not release any Borrower from its obligations hereunder, except to the extent of
any material increase in the liabilities of such Borrower hereunder directly
resulting from such failure to receive notice from such Indemnitees.
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Any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, sent by facsimile
transmission or courier service or United States certified mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of a facsimile transmission, or four (4) Business Days after deposit in
the United States mail with postage prepaid and properly addressed. For the
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided herein) shall be as set forth below:
If to the Borrowers:
c/o Aviation Sales Company
6905 N.W. 25th Street
Miami, Florida 33122
Attn: Dale S. Baker
Telecopy: 305-599-6626
with a copy to:
Akerman Senterfitt & Eidson, P.A.
SunTrust International Center
28th Floor
One S.E. 3rd Avenue
Miami, Florida 33131-1704
Attn: William C. Arnhols
Telecopy: 305-374-5095
If to the Lender:
Citicorp USA, Inc.
399 Park Avenue
6th Floor, Zone 4
New York, New York 10043
Attn: Shapeligh B. Smith
Telecopy: 212-793-1290
with a copy to:
Sidley & Austin
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
Attn: DeVerille A. Huston
Telecopy: 312-853-7036
or, as to each party, at such other address as may be designated by such party
in a written notice to all of the other parties to this Agreement.
Demand, presentment, diligence, protest and notice of
nonpayment are hereby waived by the Borrowers.
This Term Loan Note shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lender. The rights
hereunder of the Borrowers, or any interest therein, may not be assigned without
the written consent of the Lender.
No failure or delay on the part of the Lender in the exercise
of any power, right or privilege under this Term Loan Note shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or
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further exercise thereof or of any other right, power or privilege. All rights
and remedies existing under this Term Loan Note are cumulative with and not
exclusive of any rights or remedies otherwise available.
THE LENDER AND EACH OF THE BORROWERS IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK,
NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN
SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED
TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH
THIS TERM LOAN NOTE OR ANY OTHER LOAN DOCUMENT, WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
EACH BORROWER IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, INC.,
1633 BROADWAY, NEW YORK, NEW YORK 10019 AS ITS AGENT (THE "PROCESS AGENT") FOR
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
EACH OF THE LENDER AND THE BORROWERS AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
EACH BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
EACH BORROWER AGREES THAT THE LENDER SHALL HAVE THE RIGHT TO
PROCEED AGAINST SUCH BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE THE LENDER TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE LENDER. EACH BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE LENDER TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF THE LENDER. EACH BORROWER WAIVES ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE LENDER MAY COMMENCE A
PROCEEDING DESCRIBED IN THIS SECTION.
EACH BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE PROCESS AGENT OR SUCH BORROWER'S NOTICE ADDRESS SPECIFIED BELOW, SUCH
SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. EACH BORROWER
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET
FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO BRING
PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
EACH OF THE LENDER AND BORROWERS IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT. ANY OF THE BORROWERS OR LENDER MAY FILE AN ORIGINAL OR A COPY OF
THIS TERM LOAN NOTE WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
THIS TERM LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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Each Borrower represents and warrants to the Lender that it
has discussed this Term Loan Note with its counsel.
Each of the Borrowers agrees that it shall be jointly and
severally liable for all of the indebtedness evidenced by this Term Loan Note.
Each of the Borrowers is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Lender
hereunder, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of each of the Borrowers to
accept joint and several liability for the obligations of each of them. Each of
the Borrowers jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers with respect to the payment and performance
of all of the indebtedness evidenced hereby, it being the intention of the
parties hereto that all of such indebtedness shall be the joint and several
obligations of each of the Borrowers without preferences or distinction among
them. If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of such indebtedness as and when due or to perform
any of the agreements contained herein in accordance with the terms thereof,
then in each such event, the other Borrowers will make such payment with respect
to, or perform, such agreement. The obligations of each Borrower under the
provisions hereof constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Term Loan
Note or any other circumstances whatsoever. Except as otherwise expressly
provided herein, each Borrower hereby waives notice of acceptance of its joint
and several liability, notice of the advance of the principal amount of the loan
made hereunder, notice of occurrence of any Event of Default, or of any demand
for any payment under this Term Loan Note, notice of any action at any time
taken or omitted by the Lender under or in respect of any of the obligations
hereunder, any requirement of diligence and, generally, all demands, notices and
other formalities of every kind in connection with this Term Loan Note. Each
Borrower hereby assents to, and waives notice of, any extension or postponement
of the time for the payment of any of such obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Lender at any time or times in respect of any default by any Borrower in the
performance or satisfaction of any term, covenant, condition or provision of
this Term Loan Note, any and all other indulgences whatsoever by the Lender in
respect of any of such obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
such obligations or the addition, substitution or release, in whole or in part,
of any Borrower. Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on the part of
the Lender, including, without limitation, any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with the applicable
laws or regulations thereunder which might, but for the provisions of this
paragraph, afford grounds for terminating, discharging or relieving such
Borrower, in whole or in part, from any of its obligations hereunder, it being
the intention of each Borrower that, so long as any of the obligations evidenced
by this Term Loan Note remain unsatisfied, the obligations of such Borrower
under this paragraph shall not be discharged except by performance and then only
to the extent of such performance. The obligations of each Borrower under this
paragraph shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any Borrower or the Lender. The joint and several liability of
the Borrowers hereunder shall continue in full force and effect notwithstanding
any absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Borrower or the Lender.
The provisions of this paragraph are made for the benefit of the Lender and its
successors and assigns, and may be enforced by any such person from time to time
against any of the Borrowers as often as occasion therefor may arise and without
requirement on the part of any such person first to marshal any of its claims or
to exercise any of its rights against any of the other Borrowers or to exhaust
any remedies available to it against any of the other Borrowers or to resort to
any other source or means of obtaining payment of any of the indebtedness
evidenced hereto or to elect any other remedy. The provisions of this paragraph
shall remain in effect until all the indebtedness evidenced hereby shall have
been paid in full or otherwise fully satisfied. If at any time, any payment, or
any part thereof, made in respect of any of such indebtedness, is rescinded or
must otherwise be restored or returned by the Lender upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise, the
provisions of this paragraph will forthwith be reinstated in effect, as though
such payment had not been made. Notwithstanding any provision to the contrary
contained herein, to the extent the joint obligations of a Borrower shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each Borrower
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
federal Bankruptcy Code). The Borrowers hereby agree, as among themselves, that
if any Borrower shall become an Excess Funding
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Borrower (as defined below), each other Borrower shall, on demand of such Excess
Funding Borrower (but subject to the next sentence hereof and to subsection (B)
below), pay to such Excess Funding Borrower an amount equal to such Borrower's
Pro Rata Share (as defined below and determined, for this purpose, without
reference to the properties, assets, liabilities and debts of such Excess
Funding Borrower) of such Excess Payment (as defined below). The payment
obligation of any Borrower to any Excess Funding Borrower under this paragraph
shall be subordinate and subject in right of payment to the prior payment in
full of the indebtedness of such Borrower under the other provisions of this
Term Loan Note, and such Excess Funding Borrower shall not exercise any right or
remedy with respect to such excess until payment and satisfaction in full of all
of such obligations. For purposes hereof, (i) "Excess Funding Borrower" shall
mean, in respect of any obligations arising under the other provisions of this
Term Loan Note (hereafter, the "Joint Obligations"), a Borrower that has paid an
amount in excess of its Pro Rata Share of the Joint Obligations; (ii) "Excess
Payment" shall mean, in respect of any Joint Obligations, the amount paid by an
Excess Funding Borrower in excess of its Pro Rata Share of such Joint
Obligations; and (iii) "Pro Rata Share", for the purposes of this paragraph,
shall mean, for any Borrower, the ratio (expressed as a percentage) of (A) the
amount by which the aggregate present fair saleable value of all of its assets
and properties exceeds the amount of all debts and liabilities of such Borrower
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Borrower hereunder) to (B) the amount by
which the aggregate present fair saleable value of all assets and other
properties of such Borrower and all of the other Borrowers exceeds the amount of
all of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Borrower and
the other Borrowers hereunder) of such Borrower and all of the other Borrowers,
all as of the date hereof.
IN WITNESS WHEREOF, each of the Borrowers has caused this Term
Loan Note to be executed and delivered by its duly authorized officer as of the
day and year first above written.
AVIATION SALES DISTRIBUTION AEROCELL STRUCTURES, INC.
SERVICES COMPANY
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Executive Vice President Title:
AVS/KRATZ-WILDE MACHINE COMPANY WHITEHALL CORPORATION
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
TRIAD INTERNATIONAL MAINTENANCE APEX MANUFACTURING, INC.
CORPORATION
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
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AIRCRAFT INTERIOR DESIGN, INC. CARIBE AVIATION, INC.
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
AVIATION SALES LEASING COMPANY TIMCO ENGINE CENTER, INC.
By__________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
8
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED,
TRANSFERRED, ASSIGNED, OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. AVIATION SALES COMPANY (THE "COMPANY"), WILL TRANSFER
SUCH WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF ONLY
UPON RECEIPT OF AN OPINION OF COUNSEL OR OTHER EVIDENCE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE COMPANY, THAT THE REGISTRATION PROVISIONS OF SUCH ACT HAVE
BEEN COMPLIED WITH OR THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH
TRANSFER WILL NOT VIOLATE ANY APPLICABLE STATE SECURITIES LAWS.
COMMON STOCK WARRANT CERTIFICATE
AVIATION SALES COMPANY
For the Purchase of 129,000 Shares
of Common Stock of Aviation Sales Company
At $.001 Per Share
FOR VALUE RECEIVED, Citicorp USA, Inc., a Delaware corporation, or its
registered assign(s) (the holder hereof at the applicable time being referred to
herein as the "Holder"), is hereby granted the right to purchase from AVIATION
SALES COMPANY, a Delaware corporation (the "Company"), ONE HUNDRED TWENTY NINE
THOUSAND (129,000) shares (the "Warrant Shares," as adjusted from time to time
in accordance with Section 2 hereof) of the Company's Common Stock, par value
$.001 per share (the "Common Stock"), at a purchase price of ONE TENTH OF ONE
CENT ($.001) per share (as adjusted from time to time in accordance with Section
2 hereof, the "Exercise Price"), exercisable in whole or in part at any time and
from time to time, from February 18, 2000 until 5:00 p.m. on December 31, 2005
(the "Exercise Period"), on the terms and conditions set forth in this Warrant
(this "Warrant").
I. EXERCISE
1.1 EXERCISE OF WARRANT. This Warrant may be exercised, in whole or in
part, at any time or from time to time during the Exercise Period, by (i)
surrendering this Warrant Certificate, with the form of exercise notice attached
hereto as EXHIBIT A duly executed by the Holder, to the Company at its principal
office, and (ii) making payment to the Company of the aggregate Exercise Price
for the applicable Warrant Shares in cash, by certified check, bank check or
wire
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transfer to an account designated by the Company. Upon any partial exercise of
this Warrant, the Company shall promptly issue to the Holder for the Holder's
surrendered Warrant Certificate a replacement Warrant Certificate identical in
all respects to this Warrant Certificate, except that the number of Warrant
Shares shall be reduced accordingly.
1.2 ISSUANCE OF WARRANT SHARES. The Warrant Shares purchased shall be
issued as of the close of business on the date on which all actions required to
be taken by the Holder and all payments required to be received by the Company,
pursuant to Section 1.1, shall have been so taken and received. Certificates for
the Warrant Shares so purchased shall be delivered, to the extent possible, in
such denomination or denominations as the Holder shall reasonably request and
shall be registered in the name of the Holder or such other name or names as
shall be designated by the Holder, and shall be delivered to the Holder or such
other person to as soon as practicable after this Warrant is surrendered and the
Exercise Price is received, but in any event within 5 business days thereafter.
1.3 LEGEND. The certificates representing the Warrant Shares shall bear
the following legend unless and until the Company shall have received a
no-action letter from the Securities and Exchange Commission, an opinion of
counsel, or other evidence, in form and substance reasonably satisfactory to the
Company, that such legend is not required in order to ensure compliance with the
Securities Act:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF
ANY COUNTRY AND/OR STATE WITH RESPECT THERETO, OR IN ACCORDANCE WITH AN
OPINION OF COUNSEL OR OTHER EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
II. ADJUSTMENTS TO WARRANT.
The number of Warrant Shares for which this Warrant is exercisable, the
number of Warrant Shares with respect to which the Put is exercisable on a
particular date, the Exercise Price and the Put Price shall be subject to
adjustment from time to time as set forth below.
2.1 STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If the Company
shall, at any time or from time to time: (a) make (or fix a record date for the
holders of shares of its Common Stock entitled to receive) a dividend payable
in, or other distribution of, additional shares of Common Stock, (b) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or (c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then (i) the number of Warrant Shares issuable
upon the exercise of this Warrant immediately prior to the occurrence of any
such event shall be adjusted so that the Holder of this Warrant upon exercise on
or after that date shall be entitled to receive the aggregate number of Warrant
Shares that the Holder of this Warrant would
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have owned and been entitled to receive as a result of such event had this
Warrant been exercised immediately prior thereto, and (ii) the Exercise Price
and the Put Price in effect immediately prior to such event shall each be
adjusted by multiplying such Exercise Price and Put Price by a fraction, the
numerator of which is the aggregate number of Warrant Shares purchasable upon
exercise of this Warrant immediately prior to such event and the denominator of
which is the aggregate number of Warrant Shares purchasable upon exercise of
this Warrant immediately thereafter.
2.2 DIVIDENDS AND DISTRIBUTIONS OTHER THAN IN COMMON STOCK OR CASH. If
the Company shall, at any time or from time to time, make (or fix a record date
for the holders of shares of its Common Stock entitled to receive) a dividend or
other distribution payable in securities or assets of the Company or in the
securities of any subsidiary of the Company (other than shares of Common Stock
or cash), then lawful and adequate provision shall be made so that the Holder of
this Warrant shall be entitled to receive upon exercise of this Warrant, for the
aggregate Exercise Price in effect prior thereto, in addition to the number of
Warrant Shares immediately theretofore issuable upon exercise of this Warrant,
the kind and number of securities or assets of the Company or securities of any
subsidiary of the Company that the Holder would have owned and been entitled to
receive had this Warrant been exercised immediately prior to that date.
2.3 CASH DIVIDENDS AND DISTRIBUTIONS. If the Company shall, at any time
or from time to time, make (or fix a record date for the holders of shares of
its Common Stock entitled to receive) a dividend payable in, or other
distribution of, cash, then the number of Warrant Shares issuable upon the
exercise of this Warrant, for the aggregate Exercise Price in effect prior
thereto, immediately prior to the occurrence of any such event shall be
increased by: (i) the amount of the dividend the Holder of this Warrant would
have received had the Holder exercised its Warrant immediately prior to the
record date or occurrence of such event, divided by (ii) the average price of
the Company's Common Stock for the five consecutive trading days on the New York
Stock Exchange ("NYSE") immediately preceding the record date (the "Fair
Value").
2.4 REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If any
of the following transactions (each, a "Special Transaction") shall become
effective: (a) a capital reorganization, whether by reclassification, exchange,
substitution or otherwise (other than a stock or cash dividend, subdivision,
combination or other distribution provided for elsewhere in this Section 2), (b)
a consolidation or merger of the Company with another entity, or (c) a sale or
conveyance of all or substantially all of the Company's assets; then the Holder
of this Warrant shall thereafter have the right to purchase and receive upon
exercise of this Warrant, in lieu of the Warrant Shares immediately theretofore
issuable upon exercise of this Warrant, for the aggregate Exercise Price in
effect immediately prior to such consummation, such shares of stock, other
securities, cash or other assets as may be issued or payable in and pursuant to
the terms of such Special Transaction to the holders of shares of Common Stock
for which this Warrant could have been exercised immediately prior to such
Special Transaction. In case of any such reorganization, reclassification,
merger, consolidation or disposition of assets, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
this Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such modifications as may be reasonably
deemed appropriate (as determined by resolution of
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the Board of Directors of the Company) in order to provide for adjustments of
any shares of the common stock of such successor or acquiring corporation for
which this Warrant thus becomes exercisable, which modifications shall be as
equivalent as practicable to the adjustments provided for in this Section 2.4.
The foregoing provisions of this Section 2.4 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or dispositions of
assets.
2.5 NOTICE. In the event that:
(a) the Company shall fix a record date for the holders of
shares of its Common Stock for the purpose of entitling them to receive
any dividend or other distribution of shares of Common Stock or other
securities of the Company; or
(b) the Company shall enter into any agreement or adopt any
plan for a capital reorganization of the Company, the consolidation or
merger of the Company with or into another entity, or the sale or
conveyance of all or substantially all of the assets of the Company to
another entity; or
(c) the Company shall adopt any plan for or otherwise shall
become subject to any voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(d) the Company shall propose to take any other action that
would require an adjustment pursuant to Sections 2.1 through 2.4,
then, and in each such case, the Company shall mail or cause to be mailed to the
Holder of this Warrant a notice stating, as the case may be: (i) the date on
which a record is to be fixed for the purpose of such dividend or distribution,
and stating the amount and character of such dividend or distribution, or (ii)
the date on which such reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up or other action is to become effective,
and the time, if any, to be fixed, as to which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up or other action. Such notice
shall be mailed at least 10 days prior to the date therein specified and this
Warrant may be exercised prior to said date during the Exercise Period, although
the failure to provide or to timely provide such notice shall not affect the
Company's right to conclude such transaction.
2.6 FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of shares of Common Stock upon the exercise of this Warrant. If any
fraction of a share of Common Stock would be issuable upon the exercise of this
Warrant, the Company shall, in lieu of such issuance, purchase such fraction for
an amount in cash equal to the current value of such fraction, computed on the
basis of the Fair Value.
2.7 EFFECT OF ABANDONMENT OF PLAN TO MAKE DISTRIBUTION. If the Company
shall fix a record date for the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution and shall, thereafter and
before the distribution to shareholders thereof, abandon its plan to pay or
deliver such dividend or distribution, then thereafter no adjustment
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<PAGE>
shall be required by reason of the taking of such record date and any such
adjustment previously made in respect thereof shall be rescinded and annulled.
2.8 CERTIFICATE AS TO ADJUSTMENTS. In the event of an adjustment in the
number of Warrant Shares and the number of Warrant Shares with respect to which
the Put is exercisable on any particular date, in the Exercise Price or in the
Put Price, the Company will deliver to the Holder a certificate reflecting such
adjustment in accordance with the terms of this Warrant.
2.9 NO OTHER ADJUSTMENTS REQUIRED. In case any event shall occur as to
which Sections 2.1 through 2.4 are not strictly applicable but as to which the
failure to make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles hereof then, in each such case, there shall be made such appropriate
adjustment, if any, on a basis consistent with the essential intent and
principles established herein, as shall be necessary to preserve the purchase
rights represented by the Warrant.
2.10 CERTAIN LIMITATIONS. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction that, by reason
of any adjustment hereunder, would cause the Exercise Price to be less than the
par value (if any) per share of the Common Stock unless the Company first
reduces the par value of the Common Stock to be less than the Exercise Price
that would result from such transaction.
2.11 RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH
OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY. From and after the date hereof, the
Company shall at all times reserve and keep available for issuance upon the
exercise of the Warrant such number of its authorized but unissued shares of
Common Stock, free from preemptive rights, as will be sufficient to permit the
exercise in full of the Warrant. All shares of Common Stock issuable pursuant to
the terms hereof, when issued upon exercise of this Warrant with payment
therefor in accordance with the terms hereof, shall be duly and validly issued
and fully paid and nonassessable, not subject to preemptive rights and shall be
free and clear of any mortgage, pledge, deed of trust, lien, charge, encumbrance
or security interest of any kind.
Before taking any action that would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any governmental authority.
If any shares of Common Stock required to be reserved for issuance upon
exercise of this Warrant require registration or qualification with any
governmental authority under any federal or state law before such shares may be
so issued, the Company will in good faith and as expeditiously as possible and
at its expense endeavor to cause such shares to be duly registered.
III. RIGHTS OF THE HOLDER
3.1 NO RIGHTS AS SHAREHOLDER. The Holder shall not, solely by virtue of
this Warrant and prior to the issuance of the Warrant Shares upon due exercise
hereof, be entitled to any rights of a shareholder in the Company.
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IV. TRANSFER OR LOSS OF WARRANT.
4.1 TRANSFER. Subject to compliance with federal and state securities
laws, the Holder may sell, assign, transfer or otherwise dispose of all or any
portion of this Warrant and the holders of the Warrant Shares acquired upon any
exercise hereof may sell, assign, transfer or otherwise dispose of all or any
portion of such Warrant Shares at any time and from time to time. Upon the sale,
assignment, transfer or other disposition of all or any portion of this Warrant,
the Holder shall deliver to the Company a written notice of such in the form
attached hereto as EXHIBIT B duly executed by Holder which includes the identity
and address of any purchaser, assignor or transferee.
4.2 LOSS. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification or bond, and upon surrender and cancellation of
this Warrant, if mutilated, the Company shall execute and deliver a new Warrant
of like tenor and date.
V. REPURCHASE BY THE COMPANY OF WARRANT OR WARRANT SHARES.
5.1. OBLIGATION TO REPURCHASE WARRANT OR WARRANT SHARES. The Holder of
this Warrant and the holders of Warrant Shares issued upon exercise of this
Warrant shall have the right to require the Company to repurchase this Warrant
or such Warrant Shares in accordance with the terms of this Section 5 hereof
(such rights are sometimes referred to herein as a "Put"). Subject to the
satisfaction of the conditions set forth in Section 5.3, the Company shall, upon
written notice from the Holder or the holders of Warrant Shares (the "Repurchase
Notice"), repurchase, on the date and in the manner set forth in Sections 5.2
and 5.3 below, from such holder:
(i) all or the portion of this Warrant designated in such
notice for an amount determined by multiplying (A) the number of
Warrant Shares then purchasable upon exercise of this Warrant (or the
portion thereof designated by the Holder to be repurchased in such
notice) by (B) the difference between $8.50 (the "Put Price" as
adjusted from time to time in accordance with Section 2 hereof) and the
per share Exercise Price; and/or
(ii) the number of Warrant Shares held by such holder and
designated in such notice at the Put Price.
Nothing herein shall preclude the exercise by the Holder of any portion
of this Warrant exercisable at any time prior to any repurchase hereunder.
5.2. PAYMENT OF REPURCHASE PRICE. The Put Price for any repurchase of
this Warrant or Warrant Shares pursuant to this Section 5 shall be payable in
cash within one (1) day following the date of receipt by the Company of the
Repurchase Notice. On the date of any repurchase of any portion of this Warrant
pursuant to this Section 5, the Holder shall assign to the Company this Warrant
or portion thereof being repurchased, as the case may be, without any
representation or warranty (except as to title and the absence of liens), by the
surrender of this Warrant to the Company against payment of the Repurchase Price
therefor. On the date of any
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repurchase pursuant to this Section 5 of any Warrant Shares issued upon the
exercise hereof, the holder thereof shall transfer to the Company the Warrant
Shares being repurchased, without representation or warranty (except as to title
and the absence of liens), by the surrender of a certificate or certificates
representing such shares duly endorsed for transfer or accompanied by a
duly-executed stock power against payment of the Put Price therefor. Payment of
the Put Price shall be made by wire transfer to an account in a bank located in
the United States designated by the Holder or such holder of Warrant Shares for
such purpose. If less than all of this Warrant is being repurchased, the Company
shall cancel such Warrant and issue in the name of, and deliver to, the Holder
hereof a new Warrant for the portion not being repurchased, and if less than all
the Warrant Shares represented by any certificate are being repurchased, the
Company shall issue a new certificate to the holder representing the shares not
being repurchased.
5.3. CONDITIONS TO PUT. Neither the Holder nor the holders of Warrant
Shares may exercise the Put prior to July 31, 2000. The Put may be exercised by
the Holder or the holders of Warrant Shares (i) with respect to a portion of
this Warrant representing the right to purchase up to 40,000 Warrant Shares or
such number of Warrant Shares, on or after July 31, 2000 and prior to February
17, 2001 (the "Maturity Date"), if and only if the indebtedness under the Term
Loan Note of even date herewith payable to Citicorp USA, Inc. by certain
subsidiaries of the Company (the "Term Loan") is not paid in full on July 31,
2000, (ii) with respect to a portion of this Warrant representing the right to
purchase up to 84,000 Warrant Shares LESS that portion of this Warrant and/or
number of Warrant Shares with respect to which the Holder has exercised the Put
pursuant to clause (i) above or such number of Warrant Shares, on or after
September 30 and prior to the Maturity Date, 2000, if and only if the
indebtedness under the Term Note is not paid in full on September 30, 2000 and
(iii) with respect to a portion of this Warrant representing the right to
purchase up to 129,000 Warrant Shares LESS that portion of this Warrant and/or
number of Warrant Shares with respect to which the Holder has exercised the Put
pursuant to clause (i) or (ii) above or such number of Warrant Shares, on or
after December 31, 2000 and prior to the Maturity Date, if and only if the
indebtedness under the Term Note is not paid in full on December 31, 2000. The
portion of this Warrant and the number of Warrant Shares with respect to which
the Put is exercisable pursuant to the preceding sentence shall be adjusted from
time to time in accordance with Section 2 hereof.
VI. REGISTRATION RIGHTS.
6.1 REGISTRATION. The Company shall, as expeditiously as is possible,
but in any event no later than April 30, 2000, file a Registration Statement
under the Securities Act registering all of the Warrant Shares to the extent
required to permit the disposition of the Warrant Shares so registered, and
shall use its best efforts to cause such Registration Statement to become
effective as soon as possible thereafter. The Company shall cause the
Registration Statement registering the Warrant Shares to remain effective until
at least March 1, 2001.
6.2 INCIDENTAL REGISTRATION. If the Company at any time proposes to
file on its behalf and/or on behalf of any of its security holders (the
"demanding security holders") a Registration Statement under the Securities Act
on any form (other than a Registration Statement on Form S-4 or S-8 or any
successor form for securities to be offered in a transaction of the type
referred to in Rule 145 under the Securities Act or to employees of the Company
pursuant to any employee benefit plan, respectively) for the general
registration of securities to be sold for cash
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with respect to the Common Stock or any other class of equity security (as
defined in Section 3(a)(11) of the Exchange Act) of the Company, it will give
written notice to the Holder and the holders of Warrant Shares at least 15 days
before the initial filing with the Securities and Exchange Commission (the
"Commission") of such Registration Statement, which notice shall set forth the
intended method of disposition of the securities proposed to be registered by
the Company. The notice shall offer to include in such filing the aggregate
number of Warrant Shares, and the number of shares of Common Stock for which
this Warrant is exercisable, as the holders of such Warrant Shares and/or the
Holder may request.
Notwithstanding the foregoing, no piggyback registration rights shall
be available if a shelf registration statement with respect to the Warrant
Shares is then in effect.
The Holder and the holders of Warrant Shares shall advise the Company
in writing within 15 days after the date of receipt of such offer from the
Company, setting forth the amount of Warrant Shares for which registration is
requested. The Company shall thereupon include in such filing the number of
Warrant Shares for which registration is so requested, subject to the next
sentence, and shall use its best efforts to effect registration under the
Securities Act of such shares. If the managing underwriter of a proposed public
offering shall advise the Company in writing that, in its opinion, the
distribution of the Warrant Shares requested to be included in the registration
concurrently with the securities being registered by the Company or such
demanding security holder would materially and adversely affect the distribution
of such securities by the Company or such demanding security holder, then all
selling security holders (including any demanding security holder who initially
requested such registration), shall reduce the amount of securities each
intended to distribute through such offering on a pro rata basis. Except as
otherwise provided in Section 6.4, all expenses of such registration shall be
borne by the Company.
6.3 REGISTRATION PROCEDURE. If the Company is required by the
provisions of this Section 6 to effect the registration of any of its securities
under the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration
Statement with respect to such securities and use its best efforts to
cause such Registration Statement to become and remain effective for a
period of time required for the disposition of such securities by the
holders thereof, but, except as set forth in Section 6.1, not to exceed
180 days;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities
covered by such Registration Statement until the earlier of such time
as all of such securities have been disposed of in a public offering or
the expiration of such Registration Statement as permitted under
paragraph (a) above;
(c) furnish to the holders of such securities such number of
copies of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with
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the requirements of the Securities Act, and such other documents, as
such holders may reasonably request;
(d) use its best efforts to register or qualify the securities
covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions within the United States and Puerto
Rico as the holders of such securities shall request (PROVIDED,
HOWEVER, that the Company shall not be obligated to qualify as a
foreign corporation to do business under the laws of any jurisdiction
in which it is not then qualified or to file any general consent to
service or process), and do such other reasonable acts and things as
may be required of it to enable such holders to consummate the
disposition in such jurisdiction of the securities covered by such
Registration Statement;
(e) furnish, at the request of the holders of such securities,
on the date that the Warrant Shares are delivered to the underwriters
for sale pursuant to such registration or, if such Warrant Shares are
not being sold through underwriters, on the date that the Registration
Statement with respect to such Warrant Shares becomes effective, (1) an
opinion, dated such date, of the independent counsel representing the
Company for the purposes of such registration, addressed to the
underwriters, if any, and if the Warrant Shares are not being sold
through underwriters, then to such holders, in customary form and
covering matters of the type customarily covered in such legal
opinions; and (2) a comfort letter dated such date, from the
independent certified public accountants of the Company, addressed to
the underwriters, if any, and if the Warrant Shares not being sold
through underwriters, then to such holders and, if such accountants
refuse to deliver such letter to such holders, then to the Company in a
customary form and covering matters of the type customarily covered by
such comfort letters as the underwriters or such holders shall
reasonably request;
(f) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of such securities; and
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, but not
later than 18 months after the effective date of the Registration
Statement, an earnings statement covering a period of at least 12
months beginning after the effective date of such Registration
Statement, which earnings statements shall satisfy the provisions of
Section 11(a) of the Securities Act.
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Section 6 in respect of the securities which
are to be registered at the request of the holders of such securities that such
holders shall furnish to the Company such information regarding the securities
held by such holders and the intended method of disposition thereof as the
Company shall reasonably request and as shall be required in connection with the
action taken by the Company.
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<PAGE>
6.4 EXPENSES. All expenses incurred in complying with Section 6,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of Securities
Dealers), printing expenses, fees and disbursements of counsel for the Company,
expenses of any special audits incident to or required by any such registration
and expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 6.3(d), shall be paid by the Company, except
that the Company shall not be liable for any fees, discounts or commissions to
any underwriter in respect of the Warrant Shares sold by each such holder.
6.5 INDEMNIFICATION AND CONTRIBUTION. (a) In the event of any
registration of any of the Warrant Shares under the Securities Act pursuant to
this Section 6, the Company shall indemnify and hold harmless the holders of
Warrant Shares, each such holder's directors and officers, and each other person
(including each underwriter) who participated in the offering of such Warrant
Shares and each other person, if any, who controls each such holder or such
participating person within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which the holder or
any such director or officer or participating person or controlling person may
become subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any alleged untrue statement of any
material fact contained, on the effective date thereof, in any Registration
Statement under which such securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or (ii) any alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse the holder or such director, officer
or participating person or controlling person for any legal or any other
expenses reasonably incurred by the holder or such director, officer or
participating person or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any alleged
untrue statement or alleged omission made in such Registration Statement,
preliminary prospectus, prospectus or amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
holder specifically for use therein. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of any such
holder of Warrant Shares or such director, officer or participating person or
controlling person, and shall survive the transfer of such securities by such
holder.
(b) Each holder of Warrant Shares, by acceptance thereof, agrees to
indemnify and hold harmless the Company, its directors and officers and each
other person, if any, who controls the Company within the meaning of the
Securities Act against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or any such person
may become subject under the Securities Act or any other statute or at common
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon information in writing provided
to the Company by such holder specifically for use in the following documents
and contained, on the effective date thereof, in any Registration Statement
under which securities were registered under the Securities Act at the request
of such holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or
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<PAGE>
supplement thereto, but in an amount not to exceed the net proceeds received by
such holder in the offering.
(c) If the indemnification provided for in this Section 6 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. The liability of any holder of Warrant Shares
hereunder shall not exceed the net proceeds received by it in the offering.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.5(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
6.6 TERMINATION OF RESTRICTIONS. Notwithstanding any other provision of
this Warrant, the legend requirements of Section 1.3 shall terminate as to any
particular Warrant Shares when and so long as such security shall have been
effectively registered under the Securities Act and disposed of pursuant
thereto. Whenever the restrictions imposed by Section 1.3 shall terminate as to
any Warrant Shares, as hereinabove provided, the holder thereof shall be
entitled to receive from the Company, at the Company's expense, a new
certificate representing such Warrant Shares not bearing the restrictive legend
set forth in Section 1.3.
6.7 LISTING ON SECURITIES EXCHANGE. So long as any shares of Common
Stock shall be listed on a securities exchange, the Company shall, at its
expense, list thereon, maintain and, when necessary, increase such listing of,
all shares of Common Stock issued or, to the extent permissible under the
applicable securities exchange rules, issuable upon the exercise of this
Warrant.
6.8 SELECTION OF MANAGING UNDERWRITERS. The managing underwriter or
underwriters for any offering of Warrant Shares to be registered pursuant to
Section 6.1 shall be selected by the holders of Warrant Shares and shall be
reasonably acceptable to the Company.
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VII. MISCELLANEOUS.
7.1 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), or guaranteed overnight
delivery, to the Company at the address at which its principal business office
is located from time to time, and to the Holder at the address set forth in the
books of the Company.
7.2 EXPENSES; TAXES. All shares of Common Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable, issued without violation of any preemptive rights
and free and clear of any mortgage, pledge, deed of trust, lien, charge,
encumbrance or security interest of any kind. The Company shall pay all expenses
in connection with, and all taxes and other governmental charges that may be
imposed with respect to any such stock issuance or transfer (other than taxes on
the income of any holder of Warrant Shares or any such holder's franchise
taxes), unless such tax or charge is imposed by applicable law upon such holder,
in which case such taxes or charges shall be paid by such holder, and the
Company shall reimburse such holder therefor on an after-tax basis; provided
that such holder shall be required to pay any taxes with respect to any transfer
of such Common Stock to any other person.
7.3 NO IMPAIRMENT; REGULATORY COMPLIANCE COOPERATION; FURTHER
ASSURANCES. The Company shall not by any action, including, without limitation,
amending its charter documents or through any reorganization, reclassification,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other similar voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value (if any) of any
shares of Common Stock issuable upon the exercise of this Warrant above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, free and clear of any
mortgage, pledge, deed of trust, lien, charge, encumbrance or security interest
of any kind, (c) obtain all such authorizations, exemptions or consents from any
governmental authority as may be necessary to enable the Company to perform its
obligations under this Warrant and (d) execute, acknowledge and deliver such
other further agreements, instruments and documents and do such further acts as
may be necessary to preserve and maintain in full force and effect this Warrant
and the rights of the Holder herein and to carry out more effectively the
provisions and purposes of this Warrant.
7.4 AMENDMENT; WAIVER. This Warrant Certificate may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by the Company and the Holder. No failure to exercise, and no delay in
exercising, any right, power or privilege under this Warrant Certificate shall
operate as a waiver, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude the exercise of any other right, power or
privilege. No waiver of any breach of any provision shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision,
nor shall any waiver be
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<PAGE>
implied from any course of dealing between the Company and the Holder. No
extension of time for performance of any obligations or other acts hereunder or
under any other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts.
7.5 HEADINGS. The headings contained in this Warrant Certificate are
for convenience of reference only and are not to be given any legal effect and
shall not affect the meaning or interpretation of this Warrant Certificate.
7.6 GOVERNING LAW; INTERPRETATION. This Warrant Certificate shall be
construed in accordance with and governed for all purposes by the laws of the
State of [Florida].
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed and delivered as of the day and year first above written.
AVIATION SALES COMPANY
By:_____________________________
Harold M. Woody
Executive Vice President
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EXHIBIT A
EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
The undersigned registered owner of the attached Warrant Certificate
irrevocably exercises this Warrant for the purchase of the number of shares of
Common Stock, par value $.001 per share ("Common Stock"), of Aviation Sales
Company (the "Company"), as is set forth below, and herewith makes payment
therefor, all at the price and on the terms and conditions specified in the
attached Warrant Certificate and requests that certificates for the shares of
Common Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to the person
specified below whose address is set forth below, and, if such shares of Common
Stock shall not include all of the shares of Common Stock now and hereafter
issuable as provided in the attached Warrant Certificate, then the Company shall
promptly issue to the undersigned a new Warrant Certificate of like tenor and
date for the balance of the shares of Common Stock issuable thereunder.
Date: ____________________
Amount of Shares Purchased: ______________
Aggregate Purchase Price: $_____________
Printed Name of Registered Holder: ____________
Signature of Registered Holder: ____________
NOTICE: The signature on this Exercise Notice must correspond with the name as
written upon the face of the attached Warrant Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Stock Certificates to be issued and registered in the following name, and
delivered to the following address:
(Name)
(Street Address)
(City) (State) (Zip Code)
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EXHIBIT B
ASSIGNMENT NOTICE
[To be executed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the person named below, whose address is set forth below, the rights
represented by the attached Warrant Certificate to purchase the number of shares
of Common Stock, par value $.001 per share ("Common Stock"), of Aviation Sales
Company (the "Company"), as is set forth below, to which the attached Warrant
Certificate relates, and appoints _____________________________ attorney to
transfer such rights on the books of the Company with full power of substitution
in the premises. If such shares of Common Stock of the Company shall not include
all of the shares of Common Stock now and hereafter issuable as provided in the
attached Warrant Certificate, then the Company shall promptly issue to the
undersigned a new Warrant Certificate of like tenor and date for the balance of
the Common Stock issuable thereunder.
Date: ____________________
Amount of Shares Purchased: ______________
Aggregate Purchase Price: $_____________
Printed Name of Registered Holder: ______________
Signature of Registered Holder: ______________
NOTICE: The signature on this Assignment Notice must
correspond with the name as written upon the face of
the attached Warrant Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
Warrant Certificate for transferred Warrants to be issued and registered in the
following name, and delivered to the following address:
(Name)
(Street Address)
(City) (State) (Zip Code)
15
EXHIBIT 10.3
AMENDMENT AGREEMENT NO. 1 FOR
PARTICIPATION AGREEMENT
AND CERTAIN OTHER OPERATIVE AGREEMENTS
THIS AMENDMENT AGREEMENT is made and entered into as of the 18th day of
February, 2000, by and among AVIATION SALES COMPANY, a Delaware corporation
("Aviation Sales"), as Construction Agent (the "Construction Agent"); AVIATION
SALES COMPANY, as Lessee (the "Lessee"); FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not individually, except as
expressly stated in the Operative Agreements, but solely as Owner Trustee under
the Aviation Sales Trust 1998-1 (the "Owner Trustee"); BANK OF AMERICA, N.A.,
d/b/a NationsBank, N.A., successor to NationsBank, National Association ("Bank
of America"), as a Holder and as a Lender; BANK OF AMERICA, N.A., d/b/a
NationsBank, N.A., successor to NationsBank, National Association, as
Administrative Agent (the "Agent"); each of the holders party to the Trust
Agreement (defined below) (the "Holders"); and each of the Lenders party to the
Credit Agreement (defined below)(the "Lenders").
W I T N E S S E T H:
WHEREAS, the Construction Agent, the Lessee, the Owner Trustee, the
Agent, the Lenders and the Holders have entered into the Participation Agreement
dated as of December 17, 1998 (the "Participation Agreement"); and
WHEREAS, the Owner Trustee, the Lenders and the Agent have entered into
the Credit Agreement dated as of December 17, 1998 (the "Credit Agreement"); and
WHEREAS, the Holders and the Owner Trustee have entered into the
Amended and Restated Trust Agreement dated as of December 17, 1998 (the "Trust
Agreement"); and
WHEREAS, the Owner Trustee and the Construction Agent have entered into
the Agency Agreement dated as of December 17, 1998 (the "Agency Agreement"); and
WHEREAS, the Owner Trustee and the Lessee have entered into the Lease
Agreement dated as of December 17, 1998 (the "Lease" or "Lease Agreement"); and
WHEREAS, Aviation Sales, Subsidiaries of Aviation Sales, and the Agent
have entered into the Guaranty Agreement (Series A Obligations) dated as of
December 17, 1998 (the "Series A Guaranty Agreement"); and the Subsidiaries of
Aviation Sales and the Owner Trustee have entered into the Guaranty Agreement
(Lessee Obligations) dated as of December 17, 1998 (the "Lessee Guaranty
Agreement"); and
WHEREAS, the parties hereto desire to amend the Participation
Agreement, the Credit Agreement and the Trust Agreement and certain other
Operative Agreements in the manner herein set forth effective as of the date
hereof;
<PAGE>
NOW, THEREFORE, the Construction Agent, the Lessee, the Owner Trustee,
the Holders, the Agent and the Lenders do hereby agree as follows:
1. DEFINITIONS. The terms "Participation Agreement", "Credit
Agreement", "Trust Agreement", "Agency Agreement", "Lease" and "Lease Agreement"
as used herein and in the Operative Documents (as defined in the Participation
Agreement) shall mean such agreements as hereby amended and modified, and as
further amended, modified, supplemented or restated from time to time in
accordance with the terms thereof. Unless the context otherwise requires, all
terms used herein without definition shall have the definition provided therefor
in the Participation Agreement.
2. AMENDMENTS TO PARTICIPATION AGREEMENT. Subject to the conditions
hereof, the Participation Agreement is hereby amended, effective as of the date
hereof, as follows:
(a) Section 5.3(b)(xxii) of the Participation Agreement is
amended in its entirety, so that as amended it reads as follows:
"(xxii) The Agent shall have received an Appraisal of
such Property showing that such Property has a value at least
equal to $37,500,000; and"
(b) Section 5.4(e) of the Participation Agreement is amended
in its entirety, so that as amended it reads as follows:
"(e) with respect to each Initial Construction
Funding, the Agent and Owner Trustee shall have received a
copy of the Construction Budget for the completion of
Improvements to which such Funding relates, which Construction
Budget shall indicate a total Property Cost for such
Improvements, the Land on which such Improvements are to be
constructed, and all Transaction Expenses in connection
therewith, of not more than $43,000,000."
(c) The first sentence of Section 5.6 of the Participation
Agreement is amended, so that as amended the sentence will read as
follows: "On the Completion Date for each Property, the Construction
Agent shall deliver to the Agent and the Owner Trustee an Officer's
Certificate in the form attached hereto as EXHIBIT B specifying (a) the
Completion Date for the construction of Improvements at the Property,
and (b) the aggregate Property Cost of the Property."
(d) Section 10.3(g) of the Participation Agreement is amended
in its entirety, so that as amended it reads as follows:
"(g) The Lessee and the Construction Agent agree that
the aggregate Property Cost of each Property shall at all
times be less than $43,000,000."
(e) Section 10.3(h)(i) of the Participation Agreement is
amended by deleting the amount "$7,995,200" and inserting in its place
"$7,995,200 prior to March 1, 2000, or $12,00,000 at any time on or
after March 1, 2000".
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(f) Section 10.4(h) is further amended by adding the following
sentence at the end of such Section: "The parties hereto agree that the
failure to increase the amount of the Letter of Credit to $12,000,000
by March 1, 2000, or at any time to maintain the Letter of Credit in
the amount required by this Section 10.3(h), shall constitute an
immediate and automatic Lease Event of Default, Credit Agreement Event
of Default and Agency Agreement Event of Default)".
(g) Schedule 1 to the Participation Agreement is replaced in
its entirety by the Schedule 1 to Participation Agreement attached
hereto.
(h) Exhibit A to the Participation Agreement is replaced in
its entirety by the Exhibit A to Participation Agreement attached
hereto.
(i) Exhibit B to the Participation Agreement is replaced in
its entirety by the Exhibit B to Participation Agreement attached
hereto.
(j) Paragraph 5 of Exhibit J to the Participation Agreement is
amended by deleting the phrase "invoice __________ for payment" and
inserting in its place the phrase "invoice the Agent for payment."
(k) The following definition of "Amendment No. 1" is added to
Appendix A to the Participation Agreement, at the appropriate place in
such Appendix based on alphabetical order:
"'Amendment No. 1' shall mean that certain Amendment
Agreement No. 1 for Participation Agreement and Certain Other
Operative Agreements dated as of February 18, 2000 among the
Construction Agent, the Lessee, the Owner Trustee, the Agent,
and the Holders and Lenders party thereto".
(l) The definition of "Aviation Sales Credit Agreement Event
of Default" in Appendix A to the Participation Agreement is amended by
deleting the phrase "or any New Facility" from the third line thereof,
and deleting the phrase "or New Facility" from the fifth and eighth
lines thereof.
(m) The definition of "Construction Budget" in Appendix A to
the Participation Agreement is amended by adding the following sentence
immediately after such definition: "The initial Construction Budget for
the Property located in Miramar, Florida is attached as Exhibit K to
Amendment No. 1."
(n) The following definition of "Excluded Subsidiaries" is
added to Appendix A to the Participation Agreement, at the appropriate
place in such Appendix based on alphabetical order:
" 'Excluded Subsidiaries' shall have the meaning
assigned thereto in Exhibit D to the Lease Agreement."
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(o) The definition of "Guaranty Agreement" and "Guaranty" in
Appendix A to the Participation Agreement is amended in its entirety,
so that as amended it reads as follows:
"'Guaranty Agreement' or 'Guaranty' shall mean,
collectively, (a) the Guaranty Agreement (Series A
Obligations) dated as of the Initial Closing Date among each
Guarantor and the Agent, (b) the Guaranty Agreement (Lessee
Obligations) dated as of the Initial Closing Date among each
Guarantor (other than Aviation Sales) and the Lessor, and (c)
any other Guaranty Agreement by any Guarantor in favor of the
Lessor, the Agent, the Lenders and the Holders, as each such
agreement may be amended, supplemented, restated or modified
from time to time in accordance with the terms thereof."
(p) The definition of "Guarantors" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it reads as follows:
"'Guarantors' shall mean, collectively, Aviation
Sales and each of the Domestic Subsidiaries of Aviation Sales
other than Excluded Subsidiaries."
(q) The definition of "Letter of Credit" in Appendix to the
Participation Agreement is amended in its entirety, so that as amended
it reads as follows:
"'Letter of Credit' shall mean that certain standby
letter of credit dated as of the Initial Closing Date issued
by Citibank, N.A. ("Citibank") in favor of the Lessor and the
Agent (for itself and on behalf of the Series A Lenders) and
securing the obligations of the Lessee and the Construction
Agent under the Operative Agreements, as such letter of credit
may be amended, modified, restated or supplemented from time
to time by a letter of credit issued by Bank of America or
Citibank in favor of the Lessor and the Agent (for itself and
on behalf of the Series A Lenders)."
(r) Clause (b) of the definition of "Maximum Amount" in
Appendix A to the Participation Agreement is amended, so that as
amended such clause reads as follows:
"(b) the accreted value (calculated at a rate of
Seven and 702/1000 percent (7.702%) per annum) of any payments
previously made by the Construction Agent or the Lessee
regarding any and all Construction Period Properties and not
reimbursed; PLUS"
(s) The definition of "Scheduled Interest Payment Date" in
Appendix A to the Participation Agreement is amended in its entirety,
so that as amended it reads as follows:
"'Scheduled Interest Payment Date' shall mean (a) as
to any Eurodollar Loan (or Eurodollar Holder Funding), on the
last Business Day of the calendar month that includes the last
day of the Interest Period applicable to such Eurodollar Loan
(or Holder Funding), and (b) as to any Base Rate Loan (or Base
Rate Holder Funding), the last Business Day of each calendar
quarter, and (c) as to any Loan (or Holder Funding), the
Maturity Date."
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(t) The definition of "Tangible Personal Property" is deleted
from Appendix A to the Participation Agreement.
(u) The definition of "Total Commitment" in Appendix A to the
Participation Agreement is amended in its entirety, so that as amended
it reads as follows:
"'Total Commitment' shall mean (a) with respect to
the Series A Loans, $37,840,000, and (b) with respect to the
Series B Loans, $3,870,000; PROVIDED, HOWEVER, that until the
Agent receives the Letter of Credit in the amount of
$12,000,000 pursuant to SECTION 10.3(H)(I), the 'Total
Commitment' shall mean (y) with respect to the Series A Loans,
$31,252,056, and (z) with respect to the Series B Loans,
$3,196,233; and PROVIDED FURTHER that upon the Agent's receipt
of such Letter of Credit in the amount of $12,000,000, until
the Series A Guaranty Cap (as defined in Amendment No. 1) is
no longer in effect and no longer limits any Guarantors'
Obligations (as set forth in Section 8 of Amendment No. 1),
Aviation Sales has obtained from the Existing Credit Agent and
required lenders under the Existing Aviation Sales Credit
Agreement, as amended, all necessary consents to such
elimination of the Series A Guaranty Cap, and any Defaults or
Events of Default (including "Standstill Events") referred to
in the Standstill Letter (as defined in Amendment No. 1) have
been permanently waived or cured, the 'Total Commitment' shall
mean (I) with respect to the Series A Loans, $35,200,000, and
(II) with respect to the Series B Loans, $3,600,000."
(u) The definition of "Total Holder Commitment" in Appendix A
to the Participation Agreement is amended in its entirety, so that as
amended it reads as follows:
"'Total Holder Commitment' shall mean $1,290,000;
PROVIDED, HOWEVER, that until the Agent receives the Letter of
Credit in the amount of $12,000,000 pursuant to SECTION
10.3(H)(I), the 'Total Holder Commitment' shall mean
$1,065,411; and PROVIDED FURTHER that upon the Agent's receipt
of such Letter of Credit in the amount of $12,000,000, until
the Series A Guaranty Cap (as defined in Amendment No. 1) is
no longer in effect and no longer limits any Guarantors'
Obligations (as set forth in Section 8 of Amendment No. 1),
Aviation Sales has obtained from the Existing Credit Agent and
required lenders under the Existing Aviation Sales Credit
Agreement, as amended, all necessary consents to such
elimination of the Series A Guaranty Cap, and any Defaults or
Events of Default (including "Standstill Events") referred to
in the Standstill Letter (as defined in the Standstill Letter)
have been permanently waived or cured, the 'Total Holder
Commitment' shall mean $1,200,000."
3. AMENDMENTS TO CREDIT AGREEMENT. Subject to the conditions hereof,
the Credit Agreement is hereby amended, effective as of the date hereof, as
follows:
(a) Section 2.3(c) of the Credit Agreement is amended in its
entirety, so that as amended it reads as follows:
5
<PAGE>
"(c) The aggregate amount of any borrowing
constituting Eurodollar Loans and Eurodollar Holder Fundings
and any conversion thereof shall be in an amount of at least
$100,000."
(b) The last sentence of Section 2.7 of the Credit Agreement
is deleted and the following sentence is inserted in its place:
"Pursuant to the terms of the Participation Agreement, the
Borrower shall be deemed to have delivered such a notice upon
the delivery by the Construction Agent or the Lessee of a
notice in substantially the form of Exhibit L to Amendment No.
1. All or any part of outstanding Eurodollar Loans or Base
Rate Loans may be converted as provided herein, PROVIDED that
(i) no Base Rate Loan may be converted into a Eurodollar Loan
when any Event of Default has occurred and is continuing, (ii)
no Base Rate Loan may be converted into a Eurodollar Loan
which matures after the Maturity Date, (iii) during the
Commitment Period such conversion may only occur on the first
day of an Interest Period permitted pursuant to the terms of
SECTION 2.3 hereof and (iv) such notice of conversion shall
contain an election by the Borrower of an Interest Period for
such Eurodollar Loan to be created by such conversion and such
Interest Period shall be in accordance with the terms of the
definition of the term 'Interest Period' as set forth in
Appendix A to the Participation Agreement and PROVIDED,
FURTHER, that with respect to each conversion or continuation
of any Eurodollar Rate Loan, (y) if the Borrower shall fail to
give any required notice, such Loan shall be automatically
continued as a Eurodollar Rate Loan having a one-month
Interest Period, or (z) if continuation of any Eurodollar Rate
Loan is not permitted pursuant to the preceding provision,
such Loan shall be automatically converted to a Base Rate Loan
on the last day of such then expiring Interest Period."
(c) Schedule 1.2 to the Credit Agreement is replaced in its
entirety by the Schedule 1.2 to Credit Agreement attached hereto.
4. AMENDMENTS TO TRUST AGREEMENT. Subject to the conditions hereof, the
Trust Agreement is hereby amended, effective as of the date hereof, as follows:
(a) The last sentence of Section 3.8 of the Trust Agreement is
deleted and the following sentence is inserted in its place:
"Pursuant to the terms of the Participation Agreement, the
Borrower shall be deemed to have delivered such a notice upon
the delivery by the Construction Agent or the Lessee of a
notice in substantially the form of Exhibit L to Amendment No.
1. All or any part of outstanding Eurodollar Holder Fundings
or Base Rate Holder Fundings may be converted as provided
herein, PROVIDED that (i) no Base Rate Holder Funding may be
converted into a Eurodollar Holder Funding when any Event of
Default has occurred and is continuing, (ii) no Base Rate
Holder Funding may be converted into a Eurodollar Holder
Funding which matures after the Maturity Date, (iii) during
the Commitment Period such conversion may only occur on the
first day of an Interest Period permitted pursuant to the
terms of SECTION 3.1 and (iv) such notice of conversion shall
contain an election by the Borrower of an Interest Period
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<PAGE>
for such Eurodollar Holder Funding to be created by such
conversion and such Interest Period shall be in accordance
with the terms of the definition of the term 'Interest Period'
as set forth in Appendix A to the Participation Agreement and
PROVIDED, FURTHER, that with respect to each conversion or
continuation of any Eurodollar Rate Holder Funding, (y) if the
Borrower shall fail to give any required notice, such Holder
Funding shall be automatically continued as a Eurodollar Rate
Holder Funding having a one-month Interest Period, or (z) if
continuation of any Eurodollar Rate Holder Funding is not
permitted pursuant to the preceding provision, such Holder
Funding shall be automatically converted to a Base Rate Holder
Funding on the last day of such then expiring Interest
Period."
(b) Exhibit A to the Trust Agreement is replaced in its
entirety by the Exhibit A to Trust Agreement attached hereto.
5. AMENDMENTS TO AGENCY AGREEMENT. Subject to the conditions hereof,
the Agency Agreement is hereby amended, effective as of the date hereof, as
follows:
(a) Section 3.2(a)(ii) of the Agency Agreement is amended by
deleting clause (C) thereof and inserting in its place the following:
"(C) result in the aggregate Construction Budget (as amended,
modified or revised) for any Property being larger than 100%
of the initial Construction Budget delivered to the Agent with
respect to such Property (prior to any amendments,
modifications or revisions); provided that in the case of the
Property located in Miramar, Florida, the initial Construction
Budget is deemed to be the Construction Budget attached as
Exhibit K to Amendment No. 1; and provided further that
nothing contained in this clause (C) shall be deemed to
increase the Commitment of any Lender or the Holder Commitment
of any Holder."
6. AMENDMENTS TO LEASE AGREEMENT. Subject to the conditions hereof, the
Lease Agreement is hereby amended, effective as of the date hereof, as follows:
(a) Section 28.1(a) of the Lease is amended by adding the
following sub-sections (vi) and (vii) at the end of such section:
"(vi) BORROWING BASE CERTIFICATES, NOTICES AND WAIVER
REQUESTS. Promptly (and in any event within five days after
the delivery thereof to the Existing Credit Agent or any
lender with respect to any Indebtedness), a copy of any
borrowing base certificate, notice, waiver request or any
other document or information that the Lessee or any of its
Subsidiaries may deliver to the Existing Credit Agent or any
such other lender or creditor.
"(vii) OTHER INFORMATION. Promptly such other
information concerning the business, operations, properties,
prospects or financial condition of Aviation Sales or any
Subsidiary as the Agent, the Lessor or the Majority Lenders
may reasonably request from time to time. "
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<PAGE>
(b) Section 28.2 of the Lease is amended by adding the
following subparagraphs (i) and (j) immediately after subparagraph (h):
"(i) NEW SUBSIDIARIES. Promptly (and in any event
within 15 days) after the acquisition or creation of any
Domestic Subsidiary (other than an Excluded Subsidiary), cause
to be delivered to the Agent for the benefit of itself, the
Lenders, the Holders and the Owner Trustee each of the
following:
"(i) a Guaranty Agreement executed by such
Subsidiary substantially in the form of the Guaranty
Agreement (Series A Obligations) executed by the
Guarantors and the Agent on the Initial Closing Date;
"(ii) a Guaranty Agreement executed by such
Subsidiary substantially in the form of the Guaranty
Agreement (Lessee Obligations) executed by the
Guarantors (other than Aviation Sales) and the Lessor
on the Initial Closing Date;
"(iii) an opinion of outside counsel to such
Subsidiary (which counsel shall be acceptable to the
Agent) dated as of the date of delivery of the
Guaranty Agreements provided for in this SECTION
28.2(K) and addressed to the Agent, the Owner Trustee
and each of the Lenders, in form and substance
reasonably acceptable to the Agent (which opinion may
include assumptions and qualifications of similar
effect to those contained in the opinion of counsel
delivered by Akerman Senterfitt & Eidson, P.A. on the
Initial Closing Date (the "Initial ASE Opinion")),
including opinions with respect to such Subsidiary
and each such Guaranty Agreement that are
substantively identical to the opinions set forth in
paragraphs 2, 3, 4, 5(a), 5(b), 5(c), 5(d), 5(e),
5(f) and 6 (on pages 5-7) of the Initial ASE Opinion;
"(iv) a certificate of the Secretary or an
Assistant Secretary of such Subsidiary in the form
attached as EXHIBIT E to the Participation Agreement
or in such other form as is reasonably acceptable to
the Agent attaching and certifying as to (A) the
resolutions of the Board of Directors (or, as
applicable, the partners, members or other equivalent
governing body) of such Subsidiary duly authorizing
the execution, delivery and performance by such
Subsidiary of each of the Operative Agreements to
which it is or will be a party, (B) its certificate
of incorporation (or other equivalent charter or
organizational documents), in each case certified as
of a recent date by the Secretary of State of the
State of its incorporation (or organization), (C) its
bylaws (or other equivalent documents relating to the
operation, governance or management of such
Subsidiary, and (D) the incumbency and signature of
persons authorized to execute and deliver on its
behalf the Operative Agreements to which it is a
party; and
"(v) a good standing certificate from the
appropriate officer of its state of incorporation (or
organization) and each state in which it is required
to be qualified to do business as to its good
standing in such state."
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<PAGE>
"(j) AVAILABILITY UNDER REVOLVING CREDIT FACILITY. The
Borrower shall at all times (until the Letter of Credit in the amount
of $12,000,000 is issued and delivered to the Agent in accordance with
Section 10.1(h) of the Participation Agreement) maintain at least
$4,004,800 of unused availability under the revolving credit facility
established by the Existing Aviation Sales Credit Agreement, as
amended."
(b) Section 28.3(a) of the Lease is amended by deleting the
word "and" at the end of subparagraph (i), deleting the period at the
end of subparagraph (ii), inserting in place of such period a
semi-colon followed by the word "and", and adding the following
subparagraph (iii) at the end of such Section:
"(iii) Indebtedness of the Lessee under unsecured
Accommodation Obligations of the Lessee that relate to
Indebtedness (the "Underlying Indebtedness") of its
Subsidiaries, PROVIDED that the Underlying Indebtedness of the
respective Subsidiaries (A) is permitted under SECTION 10.01
of the Existing Aviation Sales Credit Agreement and (B)
constitutes Indebtedness for borrowed money or Indebtedness
arising under Capital Leases or Operating Leases."
(c) The Lease is further amended by adding the following
Sections 28.5, 28.6 and 28.7 at the end of Article XVIII thereof:
"28.5 AMENDMENTS AND WAIVERS. Notwithstanding
anything contained in this Lease or any other Operative
Agreement to the contrary, no provision of Section 28.1, 28.2,
28.3 or 28.4 hereof may be amended, waived, discharged or
terminated except by an instrument in writing signed by the
Lessor and the Majority Lenders.
"28.6 ADDITIONAL COVENANTS. The covenants contained
in this Article XVIII are in addition to any covenants or
terms contained in any other provisions of this Lease or any
other Operative Agreement. Nothing contained in this Article
XVIII shall be deemed to limit the generality of any covenant
or term contained in any other provision of this Lease or any
Operative Agreement.
"28.7 DEFINITIONS. Capitalized terms used in this
Article XVIII (including Sections 28.1, 28.2, 28.3, 28.4,
28.5, 28.6 and 28.7 hereof) shall have the respective meanings
assigned thereto in Exhibit D to this Lease, or if not defined
therein, then the meanings otherwise assigned thereto in this
Lease, or if not defined therein, then the meanings assigned
thereto in the Participation Agreement. The definitions set
forth in Exhibit D hereto shall apply only to the provisions
of this Article XVIII, and shall not apply to any other
provisions of this Lease or any other Operative Agreement
(except to the extent such other provisions may refer to or
incorporate any provision of this Article XVIII).
(d) The Lease Agreement is further amended by adding the
Exhibit D to Lease Agreement that is attached hereto.
7. MOST FAVORABLE COVENANTS. The parties agree that, if any
Indebtedness (or any document evidencing any Indebtedness) to which Aviation
Sales or any of its Subsidiaries is a party
9
<PAGE>
contains any covenants (the "Other Covenants") which are more restrictive (in
any respect) on Aviation Sales or any Subsidiary (or more protective of any
lender or creditor relating to such Indebtedness) than the covenants contained
in Article XVIII of the Lease, then upon the request of the Agent, any such
Other Covenant shall be deemed to be added immediately to the covenants set
forth in Article XVIII, and the parties shall promptly take any action
(including without limitation executing and delivering any amendment to the
Lease) which the Agent may deem appropriate to add any such Other Covenant to
Article XVIII of the Lease.
8. TEMPORARY CAP ON GUARANTORS' OBLIGATIONS UNDER GUARANTY AGREEMENT
(SERIES A OBLIGATIONS). Prior to March 31, 2000, the Guarantors' Obligations of
each Guarantor under any Guaranty Agreement (Series A Obligations) shall be
limited to an amount (the "Series A Guaranty Cap") equal to $36,252, 056
principal amount of Borrower's Liabilities (as defined therein), plus interest
on such principal amount and related fees and expenses. At any time on or after
March 31, 2000, the Series A Guaranty Cap shall no longer be in effect, and this
Amendment Agreement shall no longer impose any limit on the Guarantors'
Obligations of any Guarantor under any Guaranty Agreement (Series A
Obligations).
9. RESTRICTION ON FUNDINGS. The parties agree that until the Agent
receives the Letter of Credit in the amount of $12,000,000 pursuant to Section
10.3(h)(i) of the Participation Agreement, neither the Owner Trustee nor the
Construction Agent may request or receive, and the Lenders and Holders shall not
be required to make, any Funding under the Operative Agreements (other than a
Funding the proceeds of which are used solely to pay Transaction Expenses in
connection with this Amendment Agreement).
10. AGREEMENT AND CONFIRMATION BY GUARANTORS. Each of the undersigned
Guarantors has joined in the execution of this Amendment Agreement for the
purpose of (i) agreeing to the amendments to the Participation Agreement, the
Credit Agreement, the Trust Agreements and other Operative Agreements contained
herein and (ii) confirming its guarantee of payment of all Borrower's
Liabilities (as defined in the Series A Guaranty Agreement) and all Lessee's
Liabilities (as defined in the Lessee Guaranty Agreement).
11. REPRESENTATIONS AND WARRANTIES. The Lessee and the Construction
Agent hereby certify that:
(a) The representations and warranties made by the Lessee and
the Construction Agent in Section 7 (other than in Section 7.3(f)(i))
of the Participation Agreement are true on and as of the date hereof;
and the representations in warranties set forth in Section 7.3(f)(i) of
the Participation Agreement are true on and as of the date set forth in
such Section;
(b) (i) The audited consolidated financial statements of each
of the Construction Agent and the Lessee as at December 31, 1998,
copies of which have been furnished to the Agent and the Owner Trustee,
were prepared in accordance with GAAP and fairly present the financial
condition of each of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal year then ended and
(ii) the unaudited consolidated financial statements as at September
30, 1999, copies of which have been furnished to the Agent and
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<PAGE>
the Owner Trustee, were prepared in accordance with GAAP (subject to
normal year-end adjustments) and fairly present the financial condition
of the Construction Agent and the Lessee and their Subsidiaries on a
consolidated basis as of such date and their consolidated results of
operations for the fiscal quarter then ended.
(c) There has been no material change in the condition,
financial or otherwise, of the Lessee or the Construction Agent since
the Initial Closing Date, other than changes in the ordinary course of
business, none of which has been a material adverse change;
(d) The business and properties of the Lessee and the
Construction Agent are not, and since the Initial Closing Date have not
been, adversely affected in any substantial way as the result of any
fire, explosion, earthquake, accident, strike, lockout, combination of
workmen, flood, embargo, riot, activities of armed forces, war or acts
of God or the public enemy, or cancellation or loss of any major
contracts;
(e) (Other than the "Standstill Events", as defined in the
Standstill, Waiver and Consent Letter dated February __, 2000, among
Aviation Sales, Bank of America and the Owner Trustee (the "Standstill
Letter")) no event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby, constitutes a
Default or an Event of Default on the part of the Lessee or the
Construction Agent under the Participation Agreement or any other
Operative Agreement, either immediately or with the lapse of time or
the giving of notice, or both;
(f) Exhibit M attached to this Amendment Agreement identifies
each item of Equipment that has been or will be acquired by the Owner
Trustee (or the Construction Agent on behalf of the Owner Trustee);
(g) Aviation Sales has complied with all terms of the
Subordinated Notes (defined below) and the Note Indenture (defined
below), including without limitation having made the full payment on
the Senior Notes that was required on February 15, 2000. For the
purposes of this Section:
"Note Indenture" means the Indenture dated as of
February 17, 1998 by and among Aviation Sales, certain
guarantors and SunTrust Bank Central Florida, National
Association, as Trustee, as amended; and
"Subordinated Notes" means the 8-1/8% Senior
Subordinated Notes issued pursuant to the Note Indenture in an
original aggregate principal amount of $165,000,000 and all
additional Senior Subordinated Notes which may be issued
pursuant to the Note Indenture in an aggregate principal
amount of up to $85,000,000";
(h) The $43,000,000 initial Construction Budget attached
hereto as Exhibit K is adequate to ensure the Completion of the Miramar
Property (including all Improvements thereon) in accordance with the
Plans and Specifications prior to the Construction Period Termination
Date; and all of the budget amounts and categories set forth in such
Construction Budget are accurate and complete in all respects.
11
<PAGE>
12. CONDITIONS PRECEDENT. The effectiveness of this Amendment Agreement
shall be subject to fulfillment of the following conditions precedent:
(a) The Agent shall have received on the date hereof, in form and
substance satisfactory to the Agent, the following:
(i) a fully-executed original of this Amendment Agreement and
replacement Notes and Holder Certificate, reflecting the amended
Commitments and Holder Commitment (in substitution for the Notes and
Holder Certificate previously issued to Bank of America);
(ii) a fully-executed amended and restated Mortgage Instrument
with respect to the Property in Miramar, Florida (the "Miramar
Property");
(iii) a fully-executed modification of the Memorandum of Lease
and Lease Supplement with respect to the Miramar Property;
(iv) a fully-executed notice of future advance with respect to
the Miramar Property;
(v) an endorsement to the title insurance policies with
respect to the Miramar Property, reflecting the amended documents and
the increased amounts of Commitments and Holder Commitments;
(vi) an opinion of outside counsel to the Lessee and the
Guarantors, addressed to the Agent, the Owner Trustee and the Lenders;
(vii) a certificate of the Secretary or an Assistant Secretary
of each of the Lessee and each Guarantor in such form as is reasonably
acceptable to the Agent attaching and certifying as to (A) the
resolutions of the Board of Directors of Lessee or such Guarantor (as
the case may be) duly authorizing the execution, delivery and
performance by Lessee or such Guarantor (as the case may be) of this
Amendment Agreement and each of the other Operative Agreements
delivered in connection with this Amendment Agreement to which such
Lessee or Guarantor is or will be a party, (B) the fact that neither
its certificate of incorporation nor its bylaws have been changed from
the versions that were certified and delivered to the Agent on the
Initial Closing Date (or if they have been changed, such certificate of
incorporation or by-laws certified as of a recent date by the Secretary
of State of the State of its incorporation), and (C) the incumbency and
signature of persons authorized to execute and deliver on its behalf
this Amendment Agreement and each of the other Operative Agreements
delivered in connection with this Amendment Agreement to which such
Lessee or Guarantor is a party;
(viii) payment by the Lessee of all fees required by that
certain letter agreement dated as of February 18, 2000 between the
Lessee and the Agent, and that certain invoice dated February __, 2000,
from Banc of America Securities LLC to Aviation Sales, and accepted by
Dale S. Baker, as Chairman of the Board, President and Chief Executive
Offficer of Aviation Sales;
12
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(ix) evidence of an irrevocable written request by the Lessee
to Citibank that the Letter of Credit be increased to $12,000,000 by
March 1, 2000;
(x) a fully executed amendment to the Intercreditor Agreement;
(xi) a fully executed Standstill Letter, and the satisfaction
of the conditions to effectiveness of the Standstill Letter; and
(xii) any additional agreements, instruments or documents
which it may reasonably request in connection herewith;
(b) The correctness in all material respects on the date hereof of the
representations and warranties of the Owner Trustee, Construction Agent and the
Lessee contained herein and in each of the Operative Agreements; and
(c) No Default or Event of Default shall have occurred and be
continuing on the date hereof (except the Standstill Events).
13. RELEASE. Aviation Sales and its Subsidiaries acknowledge that they
have no existing defense, counterclaim, offset, cross-complaint, claim or demand
of any kind or nature whatsoever that can be asserted to reduce or eliminate all
or any part of their or the Owner Trustee's respective liability to pay or
perform any obligations pursuant to any of the Operative Agreements or any other
documents which evidence or secure any obligations owed under any Operative
Agreement. In consideration for the execution of this Amendment Agreement,
Aviation Sales and its Subsidiaries hereby release and forever discharge, Bank
of America, the Agent, the Lenders, the Holders and the Owner Trustee and all of
their respective officers, directors, employees, affiliates and agents
(collectively, the "Released Parties") from any and all actions, causes of
action, debts, dues, claims, demands, liabilities and obligations of every kind
and nature, both in law and in equity, known or unknown, now existing
(collectively, the "Release Claims"), which might be asserted against any of the
Released Parties. This Release applies to all matters arising out of or relating
to the Operative Agreements, any Property, any obligations due under any of the
Operative Agreements and this Amendment Agreement, commitment letters with
respect to other loan facilities, and the lending and borrowing relationships,
and (to the extent any Release Claims relating to such deposit relationships are
now known to Aviation Sales or any of its Subsidiaries) the deposit
relationships, between Aviation Sales or its Subsidiaries, and Bank of America,
the Agent, the Lenders, the Holders and the Owner Trustee, including the
administration, collateralization and funding thereof.
14. ENTIRE AGREEMENT. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, conditions, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as in this Amendment Agreement otherwise expressly stated, no representations,
warranties or commitments, express or implied, have been made by any other party
to the other. None of the terms or conditions of this Amendment Agreement may be
changed, modified, waived or canceled orally or otherwise, except by writing,
signed by all the
13
<PAGE>
parties hereto, specifying such change, modification, waiver or cancellation of
such terms or conditions, or of any proceeding or succeeding breach thereof.
15. FULL FORCE AND EFFECT OF OPERATIVE AGREEMENTS. Except as hereby
specifically amended, modified or supplemented, the Participation Agreement, the
Lease, the Credit Agreement, the Trust Agreement, the Guaranty Agreements and
all of the other Operative Agreements are hereby confirmed and ratified in all
respects and shall remain in full force and effect according to their respective
terms.
16. COUNTERPARTS. This Amendment Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
AVIATION SALES COMPANY,
as Construction Agent
By:
--------------------------------------------
Name:
Title:
AVIATION SALES COMPANY,
as Lessee
By:
--------------------------------------------
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
not individually, except as
expressly stated under the Operative
Agreements, but solely as Owner
Trustee under the Aviation Sales
Trust 1998-1
By:
--------------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as a Holder and as a Lender
By:
--------------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as Administrative Agent
By:
--------------------------------------------
Name:
Title:
SIGNATURE PAGE 1 OF 3
<PAGE>
JOINDER BY GUARANTORS
The undersigned Guarantors hereby join in and consent to this Amendment
Agreement.
AVIATION SALES COMPANY
AVIATION SALES MANUFACTURING COMPANY
AVIATION SALES PROPERTY MANAGEMENT CORP.
AVIATION SALES FINANCE COMPANY
TIMCO ENGINE CENTER, INC.
AVS/KRATZ-WILDE MACHINE COMPANY
APEX MANUFACTURING, INC.
AEROCELL STRUCTURES, INC.
AVIATION SALES DISTRIBUTION
SERVICES COMPANY
AVIATION SALES BEARINGS COMPANY
AVIATION SALES LEASING COMPANY
WHITEHALL CORPORATION
TRIAD INTERNATIONAL MAINTENANCE
CORPORATION (SUCCESSOR IN
INTEREST TO AERO CORPORATION
AND AERO CORP MACON, INC.)
AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY
CARIBE AVIATION, INC.
AIRCRAFT INTERIOR DESIGN, INC.
AERO HUSHKIT CORPORATION
HYDROSCIENCE, INC.
AVIATION SALES SPS I, INC.
By:
--------------------------------------------
Name:
Title:________ of each of the foregoing Guarantors
SIGNATURE PAGE 2 OF 3
<PAGE>
AVSRE, L.P.
BY: AVIATION SALES PROPERTY MANAGEMENT CORP.,
ITS GENERAL PARTNER
By:
------------------------------------------
Name:
Title:
SIGNATURE PAGE 3 OF 3
EXHIBIT 10.4
AMENDMENT NO. 8 AND WAIVER
Dated as of February 18, 2000
to
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
This Amendment No. 8 and Waiver (the "Amendment") dated as of
February 18, 2000 is entered into among AVIATION SALES DISTRIBUTION SERVICES
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"), TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation ("TIMCO"), APEX MANUFACTURING, INC., an Arizona corporation
("Apex"), CARIBE AVIATION, INC., a Florida corporation ("Caribe"), AIRCRAFT
INTERIOR DESIGN, INC., a Florida corporation ("Design"), AVIATION SALES LEASING
COMPANY, a Delaware corporation ("Leasing"), TIMCO ENGINE CENTER, INC., a
Delaware corporation ("TIMCO Engine"), AVIATION SALES COMPANY, a Delaware
corporation ("Parent"), and the "Lenders" (as defined in the Credit Agreement
identified below) a party hereto. Capitalized terms used herein without
definition are used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, ASOC, Aerocell, Kratz-Wilde, Whitehall, TIMCO, Apex,
Caribe, and Design, as Borrowers, 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 (the "Credit Agreement");
WHEREAS, the Borrowers have requested a $15,500,000 term loan
in addition to the Revolving Loans available under the terms of the Credit
Agreement and Citicorp USA, Inc. has agreed to provide such term loan to the
Borrowers on the terms and conditions set forth in EXHIBIT A attached hereto and
made a part hereof;
WHEREAS, the Lenders party hereto have consented to the
aforesaid additional extension of credit on the terms and conditions set forth
below; and
WHEREAS, in consideration of the foregoing, the parties hereto
have agreed to amend the Credit Agreement as set forth below in SECTION 1,
subject to the terms and conditions stated in this Amendment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
<PAGE>
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of
February 18, 2000, subject to the satisfaction of the conditions precedent set
forth in SECTION 3 hereof, the Credit Agreement is hereby amended as follows:
1.1 SECTION 1.01 is amended to add the following definitions:
"Standstill Letter" means that certain Standstill Letter dated
January 31, 2000 executed and delivered to Parent and the Borrowers by
the Lenders.
"Supplemental Term Loan" means that certain term loan made by Citicorp
USA, Inc., to the Borrowers pursuant to the Term Loan Note dated
February 18, 2000, a copy of which is attached as EXHIBIT A to
Amendment No. 8 and Waiver dated as of February 18, 2000 to this
Agreement.
1.2 SECTION 2.05 is amended to add the following provision at
the end thereof:
In no event shall proceeds of the Loans be used, directly or
indirectly, to provide a deposit in escrow or otherwise or cash
collateral for any obligation under the TROL Documents or any letter of
credit issued in support thereof which is not a Letter of Credit or to
make any payment of Indebtedness incurred under or in connection with
the TROL Documents other than obligations incurred under the TROL Lease
in the ordinary course of business of Parent.
1.3 SECTION 3.01(A) is amended to delete the word "or" at the
end of CLAUSE (III) thereof, delete the "." at the end of CLAUSE (IV) thereof
and substitute therefor a "; and", and add the following clauses at the end
thereof:
(v) for the purpose of supporting, directly or indirectly, Indebtedness
under the TROL Documents or incurred in connection with the development
of and construction on the Property financed thereunder other than the
Letter of Credit outstanding as of February 18, 2000 and an amendment
thereto or additional Letter of Credit issued on or after March 1, 2000
providing for additional support for Indebtedness under the TROL
Documents in an amount not to exceed $4,004,800, subject to all of the
other conditions of this Agreement and the Standstill Letter.
1.4 SECTION 8.03 is amended to (i) delete the provisions of
CLAUSE (A) thereof in their entirety and substitute the following therefor:
(a) Borrowing Base Certificate. ASOC shall provide the Agent and the
Revolving Lenders (i) on Wednesday of each calendar week commencing on
February 23, 2000, or if a Wednesday is not a Business Day, the
immediately succeeding Business Day, with a Borrowing Base Certificate
for Eligible Receivables as of the immediately preceding Friday, (ii)
on a bi-weekly basis, on Wednesday of the applicable week, commencing
on February 23, 2000, or if a Wednesday is not a Business Day, the
immediately succeeding Business Day, with a Borrowing Base Certificate
for Eligible Inventory of ASOC as of the immediately preceding Friday,
and (iii) on a monthly basis, commencing on March 8, 2000 and
continuing on the second Wednesday of each month thereafter, or if a
Wednesday is not a Business Day, the immediately succeeding Business
Day, with a
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Borrowing Base Certificate for Eligible Inventory of Persons other than
ASOC as of the immediately preceding month end, in each instance,
together with a calculation of the Texas Tax Reserve as of the date
thereof if such Texas Tax Reserve exceeds $200,000 and such supporting
documents as the Agent deems desirable, all certified as being true and
correct by the chief financial officer, chief executive officer, or
controller of ASOC.
and (ii) add the following provision at the end of CLAUSE (B) thereof:
Notwithstanding the foregoing, Parent and the Borrowers shall engage an
independent appraiser satisfactory to the Agent by no later than
February 18, 2000 to prepare an appraisal of ASOC's Inventory and
Inventory of such other Borrowers and their respective Subsidiaries as
the Agent shall require on a basis satisfactory to the Agent and shall
cooperate fully with such appraiser to enable it to complete and
deliver the resultant appraisal to the Agent and Lenders by no later
than March 15, 2000.
1.5 SECTION (A) 10.01(C) is amended to delete the reference
thereat to "Intentionally omitted." and substitute the following therefor:
(c) Indebtedness incurred with respect to the Supplemental Term Loan,
whether directly or by Accommodation Obligation;
1.6 SECTION (A) 10.03(E) is amended to delete the reference
thereat to "Intentionally omitted." and substitute the following therefor:
(e) Liens securing the Indebtedness permitted under SECTION (A)
10.01(C) pursuant to the Collateral Documents Amendment, a copy of
which is attached as EXHIBIT A to Amendment No. 8 and Waiver dated as
of February 18, 2000 to this Agreement;
1.7 SECTION (A) 10.05(D) is amended to delete the reference
thereat to "Intentionally omitted." and substitute the following therefor:
(d) Accommodation Obligations with respect to Indebtedness permitted
under SECTION (A) 10.01(C) pursuant to the Guaranty, a copy of which is
attached as EXHIBIT A to Amendment No. 8 and Waiver dated as of
February 18, 2000 to this Agreement;
1.8 SECTION (B) 10.17(F) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(f) grant or suffer to exist any Lien against any property or asset of
the Parent other than Liens securing the Obligations and the Parent's
guarantee of the Indebtedness of the Borrowers with respect to the
Supplemental Term Loan and an assignment of its leasehold interest
under the TROL Lease to secure its obligations under the TROL
Documents.
1.9 SCHEDULE 1.01.3 is hereby deleted in its entirety and the
Schedule 1.01.3 attached hereto and made a part hereof substituted therefor.
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SECTION 2. WAIVER.
2.1 The Issuing Bank and Lenders signatory hereto hereby waive
their rights to the application of the "Excess Designated Prepayment" (as
defined below) which are payable pursuant to SECTION 4.01(B)(I) and as provided
in SECTION 4.01(B)(IV) of the Credit Agreement to Revolving Loans owing to such
Lenders and Letter of Credit Obligations (or required to be deposited as Cash
Collateral in respect of Letter of Credit Obligations) as provided in SECTION
4.01(B)(VII) or SECTION 4.02(B)(II) of the Credit Agreement; PROVIDED THAT the
Excess Designated Prepayment is remitted to Citicorp USA, Inc. for application
on the Supplemental Term Loan concurrently with the balance of such Net Cash
Proceeds of Sale being remitted to the Agent for application (i) FIRST, to the
amount by which the aggregate principal of the Revolving Loans exceeds (a) the
Maximum Revolving Credit Amount MINUS (b) the Letter of Credit Obligations and
(ii) THEN, under SECTION 4.01(B)(VII).
2.2 For purposes of Section 2.1 above, the term"Excess
Designated Prepayment" means the amount by which Net Cash Proceeds of Sale of
the property identified on EXHIBIT B attached hereto and made a part hereof
exceed the sum of (i) the amount by which the aggregate principal of the
Revolving Loans exceeds (a) the Maximum Revolving Credit Amount MINUS (b) the
Letter of Credit Obligations, PLUS (ii) the amount by which that portion of the
Designated Prepayments arising from such Net Cash Proceeds of Sale exceeds that
portion of the Borrowing Base allocable to such property (or, in the event of a
sale of Capital Stock, the property of the issuer of such Capital Stock) as of
the date of such prepayment.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
AMENDMENT. This Amendment shall become effective as of February 18, 2000, if,
and only if the Agent shall have received:
(a) a facsimile or original executed copy of this Amendment executed by
the Parent, each Borrower, the Issuing Bank and Lenders constituting at
least the Requisite Lenders;
(b) the written consent of the beneficiaries of the TROL Guaranties to
the incurrence of the Indebtedness with respect to the Supplemental
Term Loan permitted by SECTION (A) 10.01(C), as amended hereby;
(c) an opinion of counsel to the Borrowers and Parent with respect to
non-contravention of the TROL Documents and agreements under which the
Senior Subordinated Notes have been issued;
(d) a Borrowing Base Certificate dated as of February 11, 2000; and
(e) all instruments and agreements required to perfect Liens against
all Property included on the February 15, 2000 Borrowing Base
Certificate, in proper form for recordation, signed by the appropriate
Borrower.
SECTION 4. REPRESENTATIONS AND WARRANTIES; ACKNOWLEDGMENT. The
Borrowers hereby represent and warrant as follows:
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<PAGE>
4.1 This Amendment and the Credit Agreement as previously
executed and delivered and as amended hereby constitute legal, valid and binding
obligations of the Borrowers and are enforceable against the Borrowers in
accordance with their terms.
4.2 No Event of Default or Potential Event of Default exists,
other than as referenced in that certain Waiver and Consent Letter dated
December 27, 1999 or otherwise heretofore disclosed by Parent to the Agent and
Lenders, or would result from any of the transactions contemplated by this
Amendment. No event of default or default has occurred and continues unwaived
under the terms of any of the TROL Documents, except as described in that
certain Standstill, Waiver and Consent Letter attached hereto as EXHIBIT C and
made a part hereof, or any of the agreements and documents executed with respect
to the Senior Subordinated Notes or under which the Senior Subordinated Notes
have been issued. The Borrowers hereby acknowledge that the Agent, Lenders and
Issuing Bank have reserved all rights with respect to Events of Default and
Potential Events of Default existing as of the date of this Amendment, subject
only to the agreement of the Lenders to continue providing financing
accommodations under the Credit Agreement on the conditions set forth in that
certain Standstill Letter dated January 31, 2000.
4.3 Upon the effectiveness of this Amendment, each Borrower
hereby reaffirms all covenants, representations and warranties made by it in the
Credit Agreement to the extent the same are not amended hereby and agree that
all such covenants, representations and warranties shall be deemed to have been
remade as of the date this Amendment 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).
SECTION 5. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
5.1 Upon the effectiveness of this Amendment, 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 hereby, 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.
5.2 Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
5.3 The execution, delivery and effectiveness of this
Amendment 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, except as specifically set forth herein.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment 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
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<PAGE>
this Amendment by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment.
SECTION 7. GOVERNING LAW. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 8. HEADINGS. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
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 DISTRIBUTION AEROCELL STRUCTURES, INC.
SERVICES COMPANY
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Executive Vice President Title:
AVS/KRATZ-WILDE MACHINE COMPANY WHITEHALL CORPORATION
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
TRIAD INTERNATIONAL MAINTENANCE APEX MANUFACTURING, INC.
CORPORATION
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
AIRCRAFT INTERIOR DESIGN, INC. CARIBE AVIATION, INC.
By___________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
6
<PAGE>
AVIATION SALES COMPANY AVIATION SALES LEASING COMPANY
By__________________________ By________________________
Harold M. Woody Harold M. Woody
Title: Title:
REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK
7
<PAGE>
TIMCO ENGINE CENTER, INC.
By__________________________
Harold M. Woody
Title:
CITICORP USA, INC. HELLER FINANCIAL, INC.
as Agent and Lender
By___________________________ By__________________________
Name: Name:
Title: Title:
NATIONAL CITY COMMERCIAL CITIBANK, N.A.
FINANCE, INC. as Issuing Bank
By____________________________ By__________________________
Name: Name:
Title: Title:
FIRST UNION COMMERCIAL CREDIT LYONNAIS, NEW YORK
CORPORATION BRANCH
By___________________________ By__________________________
Name: Name:
Title: Title:
IBJ WHITEHALL BUSINESS CREDIT BANKBOSTON, N.A.
CORPORATION
By__________________________ By__________________________
Name: Name:
Title: Title:
8
<PAGE>
SUNTRUST BANK, MIAMI, N.A. BANKATLANTIC
By_________________________ By_________________________
Name: Ana C. Bolduc
Title: Senior Vice President
THE INTERNATIONAL BANK OF NATIONAL BANK OF CANADA
MIAMI, N.A. A Canadian Chartered Bank
By_________________________ By_________________________
Caridad C. Errazquin Frank H. D'Alto
Vice President Vice President
Trade Finance Division
By_________________________
Michael S. Bloomenfeld
Vice President & Manager
MERCANTILE BUSINESS CREDIT, INC. CITIZENS BUSINESS CREDIT
COMPANY
By_________________________ By_________________________
Steven C. Gonzalez John Atanasoff
Assistant Vice President Vice President
AMSOUTH BANK PNC BANK NATIONAL ASSOCIATION
By__________________________ By_________________________
Name: Name:
Title: Title:
9
EXHIBIT 10.5
AGREEMENT
THIS AGREEMENT, dated as of this the 10th day of March, 2000 (the
"AGREEMENT"), by and among AVIATION SALES COMPANY, a Delaware corporation (the
"COMPANY"), LJH, Corporation, a Texas corporation, of which Lacy J. Harber is
the sole stockholder ("LJH CORP."), for so long as Lacy J. Harber shall
beneficially own 100% of the capital stock of LJH, and LACY J. HARBER
("HARBER"), an individual and resident of the State of Texas (Harber and LJH
Corp., and their respective affiliates and associates, are hereinafter referred
to collectively as the "HARBER GROUP").
WHEREAS, the Board of Directors of the Company (the "BOARD") has agreed
to amend ("AMENDMENT NO. 1 TO RIGHTS AGREEMENT") its Rights Agreement dated
November 1, 1999 (as amended by Amendment No. 1 to Rights Agreement, the "RIGHTS
AGREEMENT") to permit the Harber Group to beneficially own up to, but not more
than, twenty five percent (25%) of the issued and outstanding shares of common
stock of the Company, par value $0.001 per share (the "COMMON STOCK"), without
triggering the distribution of rights under the Rights Agreement;
WHEREAS, the Board has approved the transactions contemplated by
Amendment No. 1 to Rights Agreement and this Agreement upon the terms and
conditions contained therein and herein;
WHEREAS, the parties hereto believe that it is desirable to establish
certain provisions with respect to the shares of Common Stock which may be
acquired by, or which are currently held by the Harber Group;
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein shall have the
following meanings:
"13D/G GROUP" shall mean two or more persons acting together for the
purpose of acquiring, holding, voting or disposing of Company Voting Securities,
which persons would be required under the Exchange Act to file a statement on
Schedule 13D or 13G with the SEC as a "person" within the meaning of Section
13(d)(3) of the Exchange Act if such person beneficially owned sufficient
securities to require such a filing under the Exchange Act.
"AFFILIATE" of any person shall mean any person directly or indirectly
controlling, or controlled by such person or under common control with such
person. For purposes of this Agreement, (i) members of the Harber Group, on the
one hand, and the Company (and its affiliates), on the other, shall not be
deemed to be affiliates of each other and (ii) Roy T. Rimmer Jr. ("RIMMER")
shall not be deemed to be an affiliate of the Company (and its affiliates).
"AGENTS" shall have the meaning set forth in Section 3.3.
<PAGE>
"AMENDMENT NO. 1 TO RIGHTS AGREEMENT" shall have the meaning set forth
in the Recitals.
"ASSOCIATE" shall mean any person having a business, financial or
familial relationship that might reasonably be expected to affect the
individual's judgment with respect to matters in which a member of the Harber
Group might be interested; solely for purposes of this Agreement and the Rights
Agreement, (i) Rimmer shall be deemed to be an "associate" of Harber and of LJH
Corp. (and thereby a member of the Harber Group), and (ii) the members of the
Harber Group, on the one hand, and the Company, on the other hand, shall not be
deemed to be associates of each other. The term "ASSOCIATED" shall have a
correlative meaning.
"BENEFICIAL OWNERSHIP" shall have the meaning ascribed to such term
pursuant to Regulation 13D-G of the Exchange Act.
"BENEFICIALLY OWN" shall mean, with respect to any security, having
direct or indirect (including through any subsidiary or affiliate) "beneficial
ownership" of such security, as determined pursuant to Rule 13d-3 under the
Exchange Act.
"BOARD" shall have the meaning set forth in the Recitals.
"CHANGE IN CONTROL PROPOSAL" shall have the meaning set forth in
Section 3.2.
"COMBINED VOTING POWER" shall mean, at any measurement date, the total
number of votes of Company Voting Securities which could have been cast in an
election of directors of the Company had a meeting of the stockholders of the
Company been duly held based upon a record date as of the measurement date if
all Company Voting Securities then outstanding and entitled to vote at such
meeting were present and voted to the fullest extent possible at such meeting.
"COMMON STOCK" shall have the meaning set forth in the Recitals.
"COMPANY" shall have the meaning set forth in the Recitals.
"COMPANY VOTING SECURITIES" shall mean, collectively, Common Stock, any
preferred stock of the Company that is entitled to vote generally for the
election of directors, any other class or series of Company securities that is
entitled to vote generally for the election of directors and any other
securities, warrants or options or rights of any nature (whether or not issued
by the Company) that are convertible into, exchangeable for, or exercisable for
the purchase of, or otherwise give the holder thereof any rights in respect of,
Common Stock, or any other class or series of Company securities that is
entitled to vote generally for the election of directors.
"DIRECTOR" shall mean a member of the Board.
"DISINTERESTED DIRECTOR" shall mean a director of the Company who (i)
is not an employee of the Company, (ii) is not serving as a director of the
Company as a nominee of the Harber Group pursuant to Section 3.10, and (iii) is
not an affiliate or associate of the Harber Group.
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"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"GROUP" shall mean a "group" as such term is used in Section 13(d)(3)
of the Exchange Act.
"HARBER" shall have the meaning set forth in the Recitals.
"HARBER GROUP" shall have the meaning set forth in the Recitals.
"LJH CORP." shall have the meaning set forth in the Recitals.
"PERSON" shall mean any individual, corporation, partnership, limited
partnership, limited liability company, joint venture, trust, unincorporated
organization, other form of business, or legal entity or government authority.
"RIGHTS AGREEMENT" shall have the meaning set forth in the Recitals.
"SEC" shall mean the Securities and Exchange Commission.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
2.1. The Harber Group represents and warrants to the Company as
follows:
(a) LJH Corp. is a validly existing corporation under the laws
of the State of Texas and has the full legal right, power and authority to enter
into this Agreement and perform its obligations hereunder.
(b) Harber is an individual having the full legal right, power
and authority to enter into this Agreement and perform his respective
obligations hereunder.
(c) This Agreement has been duly authorized, executed and
delivered by each of Harber and LJH Corp. and constitutes the legally valid and
binding agreement of each of Harber and LJH Corp., enforceable against each of
them in accordance with the terms hereof.
(d) Neither the execution and delivery of this Agreement by
each of Harber and LJH Corp. nor the performance of their respective obligations
hereunder will conflict with or result in a breach of or constitute a default
under any law, rule, regulation, judgment, order or decree of any court,
arbitrator or governmental agency or instrumentality, or of any agreement or
instrument to which any member of the Harber Group is bound or affected or of
any organizational documents of each such member.
(e) Except for the 2,037,200 shares of Common Stock
beneficially owned by LJH Corp. as of March 8, 2000, and the 55,000 shares of
Common Stock beneficially owned by Rimmer (through options received from the
Company exercisable for Company Voting Securities, shares of Common Stock
acquired upon exercise of such stock options or shares of Common Stock
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<PAGE>
beneficially owned through Producers Pipeline Corporation ("PPC")), as of the
date hereof, no shares of Company Voting Securities are beneficially owned by
any member of the Harber Group.
(f) Other than this Agreement and the other agreements
contemplated hereby, no member of the Harber Group has any agreement,
arrangement or understanding with any other person or group who is not a member
of the Harber Group with respect to acquiring, holding, voting or disposing of
Company Voting Securities.
2.2. The Company represents and warrants to the Harber Group as
follows:
(a) The Company is a validly existing corporation under the
laws of the State of Delaware and has the power and authority to enter into this
Agreement and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legally valid and binding agreement
of the Company, enforceable against the Company in accordance with the terms
hereof.
(c) Neither the execution and delivery of this Agreement nor
the performance of its obligations hereunder will conflict with or result in a
breach of or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or of any agreement or instrument to which the Company is bound
or affected or of any organizational documents of the Company.
SECTION 3. COVENANTS WITH RESPECT TO COMPANY VOTING SECURITIES.
3.1. ACQUISITION OF COMPANY VOTING SECURITIES.
(a) Except as specifically set forth in this Agreement, until
the termination of this Agreement, no member of the Harber Group shall, directly
or indirectly, acquire, offer to acquire, agree to acquire, become the
beneficial owner of or obtain any rights in respect of any Company Voting
Securities, by purchase or otherwise, or take any action in furtherance thereof.
(b) No member of the Harber Group shall, prior to March 10,
2005, directly or indirectly acquire, offer to acquire, agree to acquire, become
the beneficial owner of or obtain any rights in respect of any Company Voting
Securities, by purchase or otherwise, or take any action in furtherance thereof,
if the effect of such acquisition, agreement or other action would be (either
immediately or upon consummation of any such acquisition, agreement or other
action, or upon the expiration of any period of time provided in any such
acquisition, agreement or other action) to increase the aggregate beneficial
ownership of Company Voting Securities by the Harber Group to such number of
Company Voting Securities that represents or possesses greater than 25.0% of the
Combined Voting Power of Company Voting Securities; PROVIDED, HOWEVER, that
shares of Common Stock beneficially owned by Rimmer solely through the grant of
stock options by the Company to Rimmer as a Director of the Company shall be
excluded from such percentage. Notwithstanding the foregoing maximum percentage
limitation, (A) no member of the Harber Group shall be obligated to dispose of
any Company Voting Securities beneficially owned in violation of such maximum
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percentage limitation if, and solely to the extent that, its beneficial
ownership is or will be increased solely as a result of a repurchase, redemption
or other acquisition of any Company Voting Securities by the Company or any of
its subsidiaries, and (B) the foregoing maximum percentage limitation shall not
prohibit any purchase of Company Voting Securities by any member of the Harber
Group directly from the Company (including pursuant to the exercise of stock
options, rights, subscription rights or standby purchase obligations in
connection with rights offerings by the Company), PROVIDED such purchase is
approved by a majority of the Disinterested Directors.
3.2. TAKEOVER PROPOSALS BY THE HARBER GROUP. No member of the Harber
Group shall make or submit a proposal to the Company to beneficially own or
become the beneficial owner of thirty five percent (35%) or more of the Combined
Voting Power of Company Voting Securities (a "CHANGE IN CONTROL PROPOSAL");
PROVIDED, HOWEVER, that a Change In Control Proposal shall not be prohibited if
a confidential Change In Control Proposal is presented to and approved by a
majority of the Disinterested Directors after such Disinterested Directors have
received from a nationally recognized investment banking firm, an opinion that
the Change In Control Proposal is fair to the stockholders of the Company other
than the Harber Group.
3.3. DISPOSITION OF COMPANY VOTING SECURITIES AND OTHER RELATED
MATTERS.
(a) No member of the Harber Group shall, directly or
indirectly, sell, transfer any beneficial interest in or otherwise dispose of
any Company Voting Securities, other than to another member of the Harber Group,
except:
(i) for open market sales effected through the New
York Stock Exchange (or any successor thereto);
(ii) in a transaction or series of related
transactions that would result in a transfer to any
person or group of no greater than 3.0% of the
Combined Voting Power of Company Voting Securities;
or
(iii) in a transaction or series of related
transactions that would result in a transfer to any
person or group that, to the knowledge of the Harber
Group at the time of such transaction, upon
consummation of such sale, transfer or disposition,
would, directly or indirectly, have beneficial
ownership of or the right to acquire beneficial
ownership of such number of Company Voting Securities
that represent no greater than 5.0% of the Combined
Voting Power of Company Voting Securities.
Except with respect to the transactions effected in accordance with Subsection
3.3(a)(i) hereof, the members of the Harber Group shall, as appropriate, request
all purchasers of Company Voting Securities (or rights, options or warrants to
purchase any such shares) from any of them in negotiated transactions, and all
underwriters, placement agents or brokers ("AGENTS") for any public offerings or
open market transactions involving Company Voting Securities (or rights, options
or warrants to purchase any such shares), to represent and warrant that the
requirements of this Section 3.3(a) have been satisfied with respect to such
transactions, such representations by Agents to be qualified to the best of such
Agents' knowledge. Nothing in this Subsection 3.3 shall be construed to prohibit
any
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BONA FIDE pledge or hypothecation of Company Voting Securities by any member of
the Harber Group.
(b) Proposed transfers of Company Voting Securities by members
of the Harber Group that are not in compliance with this Subsection 3.3 shall be
of no force or effect.
3.4. PROXY SOLICITATIONS, ETC. No member of the Harber Group shall
solicit proxies, assist, encourage or participate with any other person in any
way, directly or indirectly, in the solicitation of proxies, become a
"participant" in a "solicitation," or assist any "participant" in, a
"solicitation" (as such terms are defined in Rule 14a-1 of Regulation 14A under
the Exchange Act), in each case in opposition to the recommendation of a
majority of the Board, or submit any proposal for the vote of stockholders of
the Company, or recommend or request or induce or attempt to induce any other
person to take any such actions, or seek to advise, encourage or influence any
other person with respect to the voting of Company Voting Securities.
3.5. NO VOTING TRUSTS, POOLING AGREEMENTS, OR FORMATION OF "GROUPS" No
member of the Harber Group shall grant a proxy to any person with respect to
Company Voting Securities (other than to Rimmer), or form, join in or in any
other way participate in any partnership, pooling agreement, syndicate, voting
trust or other "group," including a 13D/G Group, other than to or with any
member of the Harber Group, with respect to Company Voting Securities, or enter
into any agreement (other than this Agreement) or arrangement or otherwise act
in concert with any other person or group (other than a group comprised
exclusively of the Harber Group), for the purpose of acquiring, holding, voting
or disposing of Company Voting Securities.
3.6. AFFILIATE TRANSACTIONS. No member of the Harber Group shall engage
in any transaction with the Company without the prior approval of a majority of
the Disinterested Directors; PROVIDED that the foregoing provision shall not
apply to (i) transactions contemplated by any other agreement as in effect on
the date hereof or any amendment thereto and disclosed herein, (ii) transactions
regarding the purchase or sale of goods or services, in each case, in the
ordinary course of business (including, without limitation, pursuant to joint
venture agreements) which are fair to the Company pursuant to guidelines set
forth by of the Board and approved by a majority of the Disinterested Directors,
or (iii) any compensation which may be paid to Rimmer solely in his capacity as
a Director of the Company and on the same basis as is paid to other Directors of
the Company.
3.7. NO SOLICITATION OF BIDDERS. No member of the Harber Group shall
directly or indirectly assist, solicit, encourage or induce any person to bid
for, submit a proposal for or acquire any outstanding Company Voting Securities.
3.8. NON-CIRCUMVENTION. No member of the Harber Group or any affiliate
or associate of any such member shall take any action, alone or in concert with
any other person or group, to seek control of the Company or otherwise seek to
circumvent the limitations of the provisions of this Agreement without the prior
approval of a majority of the Disinterested Directors. Without limiting the
generality of the foregoing, no member of the Harber Group shall (i) present to
the Company or to any third party any proposal that can reasonably be expected
to result in a change of control of the Company or in any increase beyond the
percentage specified in Subsection 3.1 in the Combined
6
<PAGE>
Voting Power of Company Voting Securities beneficially owned in the aggregate by
the Harber Group, (ii) publicly suggest or announce its willingness or desire to
engage in a transaction or group of transactions or have another person engage
in a transaction or group of transactions that would result in a change of
control of the Company or in any increase beyond the percentage specified in
Subsection 3.1 in the Combined Voting Power of Company Voting Securities
beneficially owned in the aggregate by the Harber Group, (iii) initiate,
request, induce or attempt to induce or give encouragement to any other person
to initiate any proposal that can reasonably be expected to result in a change
of control of the Company or in any increase beyond the percentage specified in
Subsection 3.1 in the Combined Voting Power of Company Voting Securities
beneficially owned in the aggregate by the Harber Group, or (iv) publicly
request, suggest, propose or announce its desire to amend or obtain a waiver of
any provision of this Agreement. Each of Harber and LJH Corp. agrees to use its
best efforts to ensure that each member of the Harber Group (as such may be
constituted from time to time) complies with the provisions of this Agreement as
if each member of the Harber Group were a signatory hereto and that the failure
by any member of the Harber Group to comply with the provisions of this
Agreement shall be deemed to be a breach hereof by Harber and LJH Corp.
3.9. CONFIDENTIAL MATERIAL.
(a) DEFINITIONS. For purposes of this Section:
(i) The term "CONFIDENTIAL MATERIAL" means all
information, whether oral written or otherwise (including any information
furnished prior to the execution of this Agreement), furnished or otherwise
disclosed by the Company to any member of the Harber Group or any Representative
(as defined below), and all notes, reports, analyses, compilations, studies and
other materials prepared by the Harber Group or any Representative (in whatever
form maintained, whether documentary, computer storage or otherwise) containing
or based upon, in whole or in part, any such information. The term "Confidential
Material" does not include information which is or becomes generally available
to the public other than as a result of a disclosure by any member of the Harber
Group or any Representative (as defined below) or becomes available to any
member of the Harber Group or any Representative on a nonconfidential basis from
any source that is not known by such member of the Harber Group or such
Representative to be bound by an obligation of confidentiality to the Company.
(ii) The term "REPRESENTATIVE" shall mean any and all
partners, directors, officers, employees, agents, prospective financing sources,
affiliates, associates or representatives (including representatives of
advisors) of any member of the Harber Group who needs to know such information
for the purpose of facilitating the transactions contemplated by this Agreement.
(b) Each member of the Harber Group and each Representative
shall preserve the confidentiality of the Confidential Material and shall not
disclose any of the Confidential Material in any manner whatsoever; PROVIDED,
HOWEVER, that (i) any member of the Harber Group may make any disclosure of such
information to which the Company gives its prior written consent, and (ii) any
of such information may be disclosed to a Representative who needs to know, and
who is informed of the confidential nature of the Confidential Material and of
the terms of this Subsection 3.9 and who agrees to keep such information
confidential. In any event, the Harber Group shall inform any
7
<PAGE>
Representative which has, or will have, access to any or all of the Confidential
Material, of the existence and content of this Agreement and shall take all
reasonable action necessary to cause such Representative to observe the
confidentiality requirements of this Agreement. In any event, each member of the
Harber Group shall be responsible for any breach of this Agreement by any
Representative.
(c) If any member of the Harber Group or any Representative is
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand, any informal or
formal investigation by any government or governmental agency or authority or
otherwise) to disclose any Confidential Material or such person's opinion,
judgment, view or recommendation concerning the Company as developed from the
Confidential Material, the Harber Group agrees (i) to immediately notify the
Company in writing of the existence, terms and circumstances surrounding such a
request, (ii) to consult with the Company on the advisability of taking legally
available steps to resist or narrow such request and shall exercise its best
efforts to obtain reliable assurance that confidential treatment required hereby
will be accorded such Confidential Material, and (iii) if disclosure of such
information is required, to furnish only that portion of the Confidential
Material which, in the opinion of counsel to the Harber Group, the Harber Group
is legally compelled to disclose, and to cooperate with any action by the
Company to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be accorded the Confidential Material.
(d) Harber hereby acknowledges on behalf of himself and all
members of the Harber Group (and agrees to advise any Representative and members
of the Harber Group who are informed in accordance with the terms of this
Subsection 3.9 as to the matters which are the subject of this Subsection 3.9),
that the United States securities laws prohibit any person who has received from
an issuer material, non-public information, including certain information that
may be part of the Confidential Material, while such information is non-public,
from purchasing or selling securities of such issuer or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.
3.10. VOTING OF COMPANY VOTING SECURITIES AND OTHER RELATED MATTERS.
(a) Each member of the Harber Group that is a holder of record
of Company Voting Securities shall be present, and each member of the Harber
Group that is a beneficial owner of Company Voting Securities shall cause the
holder of record to be present, in person or by proxy, at all meetings of the
stockholders of the Company so that all Company Voting Securities owned of
record or beneficially by the Harber Group may be counted for the purpose of
determining the presence of a quorum at such meetings.
(b) As long as the members of the Harber Group beneficially
own in the aggregate at least 8.0% of the outstanding shares of Common Stock,
the Harber Group shall have the right to designate one individual for nomination
as a director of the Company (which such individual shall be reasonably
acceptable to the Board); PROVIDED that no individual who is an officer,
director, partner or principal stockholder of any significant competitor of the
Company or any of its subsidiaries shall be eligible to serve as a director;
PROVIDED, HOWEVER, that at any time when the Harber Group and its affiliates
shall no longer beneficially own at least 5% of the outstanding shares
8
<PAGE>
of Common Stock, the Harber Group shall not have the right to nominate any
individual to serve as a director of the Company, the Harber Group's rights
under this Subsection 3.10 shall terminate, and the Harber Group shall cause its
designee to resign forthwith such that no designee of the Harber Group remains
on the Board.
(c) The Company agrees to use its best efforts, to cause to be
elected to the Board one nominee of the Harber Group (subject to Subsection
3.10(b) above). The Company shall take all necessary or appropriate action to
assist in the nomination and election as a director the person designated by the
Harber Group and entitled to election to the Board pursuant to the provisions of
this Subsection 3.10.
3.11. WAIVER OF REQUIREMENTS.
Notwithstanding anything in this Section 3 to the contrary,
any of the terms of Subsections 3.1 through Subsection 3.10 may be waived, in
whole or in part and as to particular transactions or matters or as to one or
more members of the Harber Group, if (a) in the case of a waiver of an
obligation of a member of the Harber Group, a majority of the Disinterested
Directors shall have approved such waiver in accordance with applicable law, or
(b) in the case of a waiver of an obligation of the Company provided for the
benefit of a member of the Harber Group, such member of the Harber Group shall
have consented in writing to such waiver.
3.12. TERMINATION OF RESTRICTIONS. The restrictions on disposition
contained in Section 3 shall terminate upon, and shall not apply to, any of the
following events:
(a) the Company, with the approval of a majority of the
Disinterested Directors, shall enter into an agreement with any person or group
providing for an offer to be made to purchase 50% or more shares of Common Stock
or all or substantially all of the assets of the Company; or
(b) the Company, with the approval of a majority of the
Disinterested Directors, shall enter into an agreement calling for the merger or
consolidation of the Company with or into any other person in which (i) the
Company's outstanding capital stock shall be converted into cash or other
property, (ii) a majority of the outstanding voting stock of the surviving
corporation immediately following such merger or consolidation will not be owned
by persons who were stockholders of the Company immediately before the merger or
consolidation, and (iii) notice of a meeting of shareholders of the Company
called to consider such agreement shall be given.
SECTION 4. TERM OF AGREEMENT; CERTAIN PROVISIONS REGARDING TERMINATION.
Unless this Agreement specifically provides for earlier termination
with respect to any particular right or obligation, this Agreement shall
terminate if the Harber Group shall, at any time (in compliance with this
Agreement), sell or otherwise dispose of or cease to own any Company Voting
Securities so that the Harber Group beneficially owns, in the aggregate less
than 8% of all shares of Common Stock.
9
<PAGE>
SECTION 5. REMEDIES.
Each respective member of the Harber Group and the Company acknowledge
and agree that (i) the provisions of this Agreement are reasonable and necessary
to protect the proper and legitimate interests of the parties hereto, and (ii)
the parties would be irreparably damaged in the event any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to preliminary and permanent injunctive relief to prevent breaches of
the provisions of this Agreement by the other parties without the necessity of
proving actual damages or of posting any bond, and to enforce specifically the
terms and provisions hereof, which rights shall be cumulative and in addition to
any other remedy to which the parties may be entitled hereunder or at law or
equity.
SECTION 6. GENERAL PROVISIONS.
6.1. CHOICE OF LAW; FORUM SELECTION. This Agreement shall be
construed, interpreted and the rights of the parties determined in accordance
with the laws of the State of Delaware without reference to the choice of laws
provisions thereof. Each of the parties to this Agreement hereby irrevocably and
unconditionally (i) agrees to be subject to, and hereby consents and submits to,
the jurisdiction of the Court of Chancery of the State of Delaware for any
litigation arising out of or relating to this Agreement, (ii) waives any
objection to the laying of venue of any such litigation in the Court of Chancery
of the State of Delaware, and (iii) agrees not to plead or claim in the Court of
Chancery of the State of Delaware that such litigation brought therein has been
brought in an inconvenient forum. Each of the parties to this Agreement hereby
appoints RL&F Service Corp., One Rodney Square, 10th and King Streets, P.O. Box
551, Wilmington, DE 19899 as its agent for service of process in the State of
Delaware and agrees to service of process in any litigation arising out of or
relating to this Agreement by service upon such agent or by certified mail,
return receipt requested, postage prepaid to it at its address for notice as
provided in this Agreement.
6.2. ADDITIONAL PARTIES; JOINT AND SEVERAL OBLIGATIONS. All of the
obligations of the Harber Group and its members hereunder shall be joint and
several. Each affiliate of a member of the Harber Group that shall become or
have the right to become the beneficial owner, within the meaning and scope of
Section 3 hereof, of Company Voting Securities shall, promptly upon becoming
such owner or holder, execute and deliver to the Company a joinder agreement,
agreeing to be legally bound by this Agreement as an original signatory as a
member of the Harber Group; PROVIDED that failure to execute such agreement
shall not excuse such person's non-compliance with any provision of this
Agreement. No member of the Harber Group shall transfer Company Voting
Securities to any of its affiliates not already a party hereto unless the
transferee shall agree to be bound by this Agreement in the manner specified
above in this Subsection 6.2.
6.3. NOTICES. All notices, consents, requests, instructions, approvals
and other communications provided for herein and all legal process in regard
hereto shall be in writing and shall be decreed to be validly given, made or
served when delivered personally, transmitted by telex or telecopier, or
deposited in the U.S. mail, postage prepaid, for delivery by express, registered
or certified mail, or delivered to a recognized overnight courier service,
addressed as follows:
If to the Company:
10
<PAGE>
Aviation Sales Company
6905 Northwest 25th Street
Miami, Florida 33122
Attention: Chairman and President
Fax Number: Supplied Separately
With a copy to:
Philip B. Schwartz, Esq.
Akerman, Senterfitt & Edison, P.A.
One Southeast Third Avenue
28th Floor, Sun Trust International Center
Miami, Florida 33131
Fax Number: Supplied Separately
If to Harber or any member of the Harber Group:
Lacy J. Harber
LJH, Corporation
377 Neva Lane
Dennison, Texas 75020
Fax Number: Supplied Separately
With a copy to:
Mark Lehman, Esq.
Lehman, Jensen & Donahue
620 Judge Building
8 East Broadway
Salt Lake City, Utah 84111-2204
Fax Number: Supplied Separately
or to such other address as may be specified in a notice given pursuant to this
Subsection. All such notices and communications shall be deemed to have been
duly given: At the time delivered by hand, if personally delivered; five (5)
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back if telexed; when receipt acknowledged, if telecopied; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery. The parties may change the address to
which notices are to be given by giving five (5) days' prior notice of such
change in accordance herewith.
6.4. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The parties hereto agree that they will use
their best efforts at all times to support and defend this Agreement.
11
<PAGE>
6.5. AMENDMENTS, WAIVERS. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed by each party hereto; PROVIDED that no such amendment or waiver by the
Company shall be effective without the approval of a majority of the
Disinterested Directors. No failure or delay by any party hereto in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
6.6. DESCRIPTIVE HEADINGS. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement. Reference in this Agreement to Sections or
Subsections are to Sections of Subsections of this Agreement. All pronouns and
any variations thereof refer to the masculine, feminine or neuter, singular or
plural, as the identity of the applicable person or persons may require.
6.7. ENTIRE AGREEMENT: AMENDMENT. This Agreement and the other
instruments and agreements referred to herein embody the entire agreement of the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements with respect thereto.
6.8. COUNTERPARTS. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, bears the signatures of
each of the parties hereto. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against the party whose
signature appears thereon, or on whose behalf such counterpart is executed, but
all of which taken together shall be one and the same agreement.
6.9. NO PARTNERSHIP. No partnership, joint venture or joint undertaking
is intended to be, or is, formed between the parties hereto or any of them by
reason of this Agreement or the transactions contemplated herein.
6.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and assigns of the
parties hereto. All of the terms, covenants and agreements contained in this
Agreement are solely for the benefit of the parties hereto, and their respective
successors and assigns, and no other parties (including, without limitation, any
other stockholder or creditor of the Company, or any director, officer or
employee of the Company) are intended to be benefitted by, or entitled to
enforce, this Agreement.
[SIGNATURE PAGE FOLLOWS]
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto intending to be legally bound
have duly executed this Agreement, all as of the day and year first above
written.
LACY J. HARBER
By:
----------------------------------------------
Name: Lacy J. Harber
LJH, CORPORATION
By:
----------------------------------------------
Name: Lacy J. Harber
Title: President
AVIATION SALES COMPANY
By:
----------------------------------------------
Name:
Title: Chairman of the Board of Directors
and President
13
EXHIBIT 10.6
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
THIS AMENDMENT NO. 1 TO RIGHTS AGREEMENT (this "AMENDMENT") is made and
entered into as of this 14th day of March, 2000 between AVIATION SALES COMPANY,
a Delaware corporation (the "COMPANY"), and CONTINENTAL STOCK TRANSFER & TRUST
COMPANY, as Rights Agent (the "RIGHTS AGENT").
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement dated as of November 1, 1999 (the "Rights Agreement"); and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
may in its sole and absolute discretion, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of the Rights Agreement in
any respect without the approval of the holders of the Rights (as defined in the
Rights Agreement);
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. AMENDMENT OF SECTION 1(AA). Section 1(aa) of the Rights Agreement is
hereby amended and restated in its entirety to read as follows:
"'Significant Holder' shall refer to each of (i) Robert Alpert and any
Affiliate or Associate thereof (collectively, "Alpert"), for so long as
Alpert is the Beneficial Owner of no more than 25% of the issued and
outstanding Common Stock, and (ii) LJH, Corporation, a Texas
corporation ("LJH"), for so long as Lacy J. Harber shall beneficially
own 100% of the capital stock of LJH, Lacy J. Harber and any Affiliate
or Associate thereof (including, without limitation and solely for
purposes of this Agreement, Roy T. Rimmer and any Affiliate or
Associate thereof) (collectively, "Harber"), for so long as Harber is
the Beneficial Owner of no more than 25% of the issued and outstanding
Common Stock; PROVIDED, HOWEVER, that shares of Common Stock
beneficially owned by Roy T. Rimmer solely through the grant of stock
options (or upon the exercise thereof) by the Company to Roy T. Rimmer
as a member of the board of directors of the Company shall be excluded
from the calculation of such percentage; PROVIDED, FURTHER, that at the
time the Agreement, dated as of March 10, 2000, by and among the
Company, Lacy J. Harber and LJH, is terminated or expires in accordance
with the terms thereof, Harber shall thereupon, and without any further
action whatsoever, no longer be a "Significant Holder" for purposes of
this Agreement."
2. BINDING EFFECT. This Amendment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
3. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
4. GOVERNING LAW. This Amendment shall be governed by, and interpreted
in accordance with, the laws of the State of Delaware, without regard to
principles of conflict of laws.
<PAGE>
5. EFFECTIVENESS. Except as amended hereby, the Rights Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.
[SIGNATURE PAGE FOLLOWS]
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
AVIATION SALES COMPANY
By:
---------------------------------------
Name: Dale S. Baker
Title: Chairman of the Board of Directors
and President
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, Rights Agent
By:
---------------------------------------
Name:
Title:
3
EXHIBIT 99.1
Company Press Release
Aviation Sales Company Updates Market On Outlook for Its 1999 Financial Results
MIAMI--(BUSINESS WIRE)--March 20, 2000--Aviation Sales Company (NYSE:AVS - news)
today updated the market regarding the outlook for its 1999 financial results.
The Company announced that while its 1999 financial statements are still being
audited, the Company has determined that it will take charges amounting to
approximately $72 million in the fourth quarter of 1999. The charges primarily
relate to the carrying value of certain of the Company's assets and a change in
the accounting treatment of several transactions as more particularly described
below. These charges include a reduction in the carrying value of the Company's
inventory at December 31, 1999 of approximately 8%, or $26.1 million, primarily
relating to inventory held for sale by the Company's redistribution operations,
a $9.8 million write-down in the carrying value of the four A-300 aircraft owned
by the Company, an $8.6 million write-down of capitalized costs previously
expended relating to the development of a new software system which has not been
implemented and will not be completed, a $6.7 million addition to reserves for
doubtful accounts receivable, a write-off of financing costs relating to a new
credit facility which did not close, an increase in accrued expenses relating to
the runoff of one of the Company's health insurance plans, increased
professional fees and the write-off of miscellaneous deposits and other assets
which have been determined not to be collectible. Substantially all of these
charges are non-cash items.
The Company also announced that in early February 2000, the Company's Board of
Directors organized a special committee to review certain allegations regarding
the Company's accounting and sales practices. The Committee has retained outside
professionals to conduct an investigation of these matters, which is currently
ongoing. The Company has identified nine 1999 transactions and one 1998
transaction arising in the Company's redistribution operations, some or all of
which potentially should not have been reflected as sales under generally
accepted accounting principles. All of the 1999 transactions being reviewed in
the aggregate represent approximately $30 million of revenues and $6.8 million
of gross margin (approximately 4.5% of anticipated 1999 revenue and gross
margin). The 1998 transaction represents an aggregate of $12.0 million of
revenues and $3.1 million of gross margin (approximately 2.4% of 1998 revenue
and gross margin). The Company is currently considering whether the impact of
these transactions will warrant restatement of its prior period financial
statements.
The Company anticipates that it will release its 1999 results of operations in
early April and the Company does not intend to comment further regarding these
matters until that time.
As a result of the recording of the charges described above, the Company
believes that it will not be in compliance at December 31, 1999 with the
financial covenants contained in the credit agreements with its senior lenders.
The Company's lenders have recently agreed to forbear in regard to these
covenant violations and other matters until March 31, 2000 and the Company is
currently in negotiation with its lenders seeking both waivers of these defaults
(or an extension of the forbearance period) and a new credit facility. There can
be no assurance that this will occur, and the failure to obtain continued
forbearance from its lenders and ultimately a new credit facility would likely
have a material adverse effect upon the Company.
<PAGE>
The Company is taking actions designed to reduce its debt through sales of its
assets, including the potential sale of its manufacturing operations or other
assets. The Company also continues its efforts to sell or lease the four A-300
aircraft which it owns and to bring down inventory levels at its redistribution
operations, and thereby to reduce its debt through that process.
The Company also reported that an amended complaint has been filed in the
previously announced securities class action against the Company and certain of
its current and former officers, as well as against the Company's auditors. The
amended complaint alleges violations of Sections 11 and 15 of the Securities Act
of 1933 in connection with the Company's June 1999 public offering, and alleges
violations of Sections 10(b) and 20(a) of, and Rule 10b-5 under, the Securities
Exchange Act of 1934. Among other matters, the amended complaint alleges that
the Company's reported financial results were materially misleading and violated
generally accepted accounting principles. The amended complaint seeks damages
and certification of two classes, one consisting of purchasers of the Company's
common stock in the June 1999 public offering and one consisting of purchasers
of the Company's common stock during the period between March 26, 1998 and
January 28, 2000.
The Company believes the allegations contained in the amended complaint to be
without merit and it intends to vigorously defend the suit. There can be no
assurance as to the outcome of the lawsuit or its impact upon the Company.
Aviation Sales Company is a leading independent provider of fully integrated
aviation maintenance and inventory services, including aircraft heavy
maintenance, component repair and overhaul, leasing, the distribution of
aircraft spare parts and the manufacture of new components for major commercial
airlines, original equipment manufacturers and maintenance and repair
facilities.
This release contains certain forward-looking statements that are made pursuant
to the safe harbor provisions of the Private Securities Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties,
which may cause the Company's actual results in future periods to differ
materially from forecasted results. A number of factors, including those
identified below, could adversely affect the Company's ability to obtain these
results: available capital to continue to support and further expand the
Company's operations, the Company's ability to acquire adequate inventory and to
obtain favorable pricing for such inventory, competitive pricing for the
Company's products and services, increased competition in the aircraft spare
parts redistribution and MRO markets, the ability to consummate suitable
acquisitions, the continuing ability to effectively integrate acquisitions,
economic factors which affect the airline industry, and changes in government
regulations. Certain of these risks are described in the Company's filings with
the Securities and Exchange Commission (SEC). Copies of the Company's SEC
filings are available from the SEC or may be obtained upon request from the
Company. The Company does not undertake any obligation to update the information
contained herein, which speaks only as of this date.
CONTACT:
Morgen-Walke Associates
Jennifer Angell, 212/850-5645
[email protected]
