EXHIBIT 10.2
Amendment Agreement No. 4 for
Lease Agreement and
Certain Other Operative Agreements
THIS AMENDMENT AGREEMENT is made and entered into as of the 14th day of
November, 2000, by and among AVIATION SALES COMPANY, a Delaware corporation
("Aviation Sales"), as Construction Agent (the "Construction Agent"); AVIATION
SALES COMPANY, as Lessee (the "Lessee"); FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not individually, except as
expressly stated in the Operative Agreements, but solely as Owner Trustee under
the Aviation Sales Trust 1998-1 (the "Owner Trustee"); BANK OF AMERICA, N.A.,
d/b/a NationsBank, N.A., successor to NationsBank, National Association ("Bank
of America"), as a Holder and as a Lender; BANK OF AMERICA, N.A., d/b/a
NationsBank, N.A., successor to NationsBank, National Association, as
Administrative Agent (the "Agent"); each of the holders party to the Trust
Agreement (defined below) (the "Holders"); each of the Lenders party to the
Credit Agreement (defined below)(the "Lenders"); and each of the Guarantors
party to the Guaranty Agreement (defined below).
W I T N E S S E T H:
WHEREAS, the Construction Agent, the Lessee, the Owner Trustee, the
Agent, the Lenders and the Holders have entered into the Participation Agreement
dated as of December 17, 1998 (as amended, the "Participation Agreement"); and
WHEREAS, the Owner Trustee and the Lessee have entered into the Lease
Agreement dated as of December 17, 1998 (as amended, the "Lease" or "Lease
Agreement"); and
WHEREAS, Aviation Sales, Subsidiaries of Aviation Sales, and the Agent
have entered into the respective Guaranty Agreements (Series A Obligations)
dated as of December 17, 1998, February 18, 2000, March 31, 2000 or May 31,
2000, as the case may be, (collectively, as amended, the "Series A Guaranty
Agreement"); and the Subsidiaries of Aviation Sales and the Owner Trustee have
entered into the respective Guaranty Agreements (Lessee Obligations) dated as of
December 17, 1998 February 18, 2000, March 31, 2000 or May 31, 2000, as the case
may be, (collectively, as amended, the "Lessee Guaranty Agreement", and
collectively with the Series A Guaranty Agreement and any other Guaranty
Agreement (as defined in the Participation Agreement), the "Guaranty Agreement"
or "Guaranty"); and
WHEREAS, the parties hereto desire further to amend the Lease Agreement
and certain other Operative Agreements in the manner herein set forth effective
as of the date hereof;
NOW, THEREFORE, the Construction Agent, the Lessee, the Owner Trustee,
the Holders, the Agent and the Lenders do hereby agree as follows:
1. Definitions. The terms "Participation Agreement", "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
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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 Lease Agreement. Subject to the conditions hereof, the
Lease Agreement is hereby amended, effective as of September 30, 2000, as
follows:
(a) Section 28.1.1(f) of the Lease Agreement is amended by
adding the following provision as clause (iv) thereof:
"(iv) Updated Plans and Financial Forecasts.
By November 20, 2000, (A) an updated plan and
financial forecast consisting of a balance sheet,
income statement and statement of cash flows by month
for the last quarter of the Fiscal Year ending
December 31, 2000 and all of the Fiscal Year ending
December 31, 2001, for Aviation Sales and its
Subsidiaries, and (B) an updated plan and financial
forecast for the Fiscal Year ending December 31,
2002, including forecasted consolidated balance
sheet, income statement, and statement of cash flow
for Aviation Sales and its Subsidiaries for such
Fiscal Year."
(b) Section 28.4.1 of the Lease Agreement is amended in its
entirety so that as amended, it shall read as follows:
"28.4.1 Minimum Consolidated EBITDA.
Aviation Sales shall maintain Consolidated EBITDA,
determined as of the last day of each Fiscal Quarter
set forth below for the period then ending described
below, of at least the amount set forth below
opposite such date of determination:
<TABLE>
<CAPTION>
"Determination Date Applicable Period Minimum Consolidated EBITDA
------------------ ----------------- ---------------------------
<S> <C> <C>
June 30, 2000 January 1, 2000 - June 30, 2000 $17,000,000
September 30, 2000 January 1, 2000 - September 30, 2000 $14,000,000
December 31, 2000 January 1, 2000 - December 31, 2000 $26,500,000
March 31, 2001 April 1, 2000 - March 31, 2000 $22,000,000
June 30, 2001 July 1, 2000 - June 30, 2001 $33,500,000
September 30, 2001 October 1, 2000 - September 30, 2001 $42,500,000
December 31, 2001 January 1, 2001 - December 31, 2001 $50,000,000
March 31, 2002 April 1, 2001 - March 31, 2002 $57,500,000
June 30, 2002 July 1, 2001 - June 30, 2002 $62,500,000
September 30, 2002 October 1, 2001 - September 30, 2002 $68,000,000
December 31, 2002 January 1, 2001 - December 31, 2002 $72,500,000
</TABLE>
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<TABLE>
<S> <C> <C>
Each March 31, June 30, Four-Quarter Period then ending $72,500,000"
September 30 and December 31
thereafter
</TABLE>
(c) Section 28.4.5 of the Lease Agreement is amended in its
entirety so that as amended, it shall read as follows:
"28.4.5 Minimum Tangible Net Worth. Aviation
Sales shall maintain a Tangible Net Worth of Aviation
Sales and its Subsidiaries, of at least the amount
set forth below for the Fiscal Quarter ending during
the period set forth below opposite such amount.
<TABLE>
<CAPTION>
"Fiscal Quarter Ending Minimum Tangible Net Worth
--------------------- --------------------------
<S> <C>
June 30, 2000 $132,500,000
September 30, 2000 $ 56,000,000
December 31, 2000 $109,000,000
March 31, 2001 $109,000,000
June 30, 2001 $114,000,000
September 30, 2001 $118,000,000
December 31, 2001 $124,000,000
March 31, 2002 $133,000,000
June 30, 2002 $142,000,000
Each September 30, December 31, March The amount of Tangible Net Worth
31 and June 30 thereafter required to be maintained by this
Section 28.4.5 as at the end of the
immediately preceding Fiscal Quarter
plus 85% of Consolidated Net Income
(with no reduction for net losses
during any period) for the Fiscal
Quarter ending on such date"
</TABLE>
3. Approval of Certain Components in Calculations of Consolidated
EBITDA. The Lenders signatory hereto representing the Majority Lenders and the
Agent hereby confirm their approval, as required by clause (vi) of the
definition of "Consolidated EBITDA" in the Lease Agreement, of inclusion of the
items described on Exhibit B attached hereto and made a part hereof in the
calculation (as part of such clause (vi)) of Consolidated EBITDA for the periods
referenced on Exhibit B.
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4. Consent to Amendment to Revolving Credit Agreement. Effective as of
September 30, 2000 or November 14, 2000 (as the case may be, as set forth in
such amendment), subject to the Agent's receipt of the consent referenced in
Section 7(a)(vii) below on or before November 21, 2000, the parties signatory
hereto hereby consent to the amendment of the Existing Aviation Sales Credit
Agreement on the terms and conditions attached hereto as Exhibit A.
5. 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 Lease Agreement, the
Participation Agreement, 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).
6. Representations, Warranties and Covenants. The Lessee and the
Construction Agent hereby represent, warrant and covenant that:
(a) The representations and warranties made by the Lessee and
the Construction Agent in Section 7 (other than in Section 7.3(f)(i))
of the Participation Agreement are true on and as of the date hereof;
and the representations in warranties set forth in Section 7.3(f)(i) of
the Participation Agreement are true on and as of the date set forth in
such Section;
(b) (i) The audited consolidated financial statements of each
of the Construction Agent and the Lessee as at December 31, 1999,
copies of which have been furnished to the Agent and the Owner Trustee,
were prepared in accordance with GAAP and fairly present the financial
condition of each of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal year then ended and
(ii) the draft unaudited consolidated financial statements as at
September 30, 2000, copies of which have previously been furnished to
the Agent and the Owner Trustee, were prepared in accordance with GAAP
(subject to normal year-end adjustments) and fairly present the
financial condition of the Construction Agent and the Lessee and their
Subsidiaries on a consolidated basis as of such date and their
consolidated results of operations for the fiscal quarter then ended.
Neither Aviation Sales nor any Guarantor or any Subsidiary of Aviation
Sales has, as of the date hereof, any Accommodation Obligation,
contingent liability or liability for any taxes, long-term leases or
commitments, not disclosed in writing to the Agent, the Lenders and the
Holders prior to the date hereof.
(c) This Amendment Agreement constitutes the legal, valid and
binding obligation of Aviation Sales and the Guarantors and is
enforceable against Aviation Sales in accordance with its terms. Each
of the Participation Agreement and the Lease Agreement, as previously
executed, delivered and amended and as amended by this Amendment
Agreements, constitute legal, valid and binding obligations of Aviation
Sales and are enforceable against Aviation Sales in accordance with
their respective terms.
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(d) The business and properties of the Lessee and the
Construction Agent and the Guarantors and the Subsidiaries of Aviation
Sales are not, and since the Initial Closing Date have not been,
adversely affected in any substantial way as the result of any fire,
explosion, earthquake, accident, strike, lockout, combination of
workmen, flood, embargo, riot, activities of armed forces, war or acts
of God or the public enemy, or cancellation or loss of any major
contracts;
(e) No event has occurred and no condition exists which, after
giving effect to this Amendment Agreement, constitutes a Default or an
Event of Default on the part of the Lessee or the Construction Agent or
any Guarantor or any Subsidiary of Aviation Sales under the
Participation Agreement or any other Operative Agreement, either
immediately or with the lapse of time or the giving of notice, or both.
Since September 30, 2000, there has occurred no event with respect to
the Lessee, the Construction Agent or any Guarantor or any Subsidiary
of Aviation Sales which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
(f) (i) Each Property is Complete; (ii) there is no Lien on
any Property other than Liens in favor of the Lessor or the Agent (for
itself and on behalf of the Lenders and Holders) pursuant to the
Operative Agreements; and (iii) neither the Lessee nor the Construction
Agent shall request, or cause the Lessor to request, any additional
Funding under the Operative Agreements, without the prior written
consent of the Agent (which may be withheld in the Agent's sole
discretion).
This Amendment Agreement shall be deemed to be an Operative Agreement
and any violation of a covenant contained herein shall be a violation of an
Operative Agreement.
7. 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 or before November 21,
2000 (or such earlier date as may be set forth below), in form and
substance satisfactory to the Agent, the following:
(i) a fully-executed original of this Amendment
Agreement;
(ii) an opinion of outside counsel to the Lessee and
the Guarantors, addressed to the Agent, the Owner Trustee and
the Lenders and Holders, including without limitation an
opinion of such counsel with respect to non-contravention of
the Citicorp Loan Documents and agreements under which the
Senior Subordinated Notes have been issued, by this Amendment
Agreement and the instruments and documents executed by the
Lessee, Construction Agent and Guarantors in connection
herewith;
(iii) 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
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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;
(iv) a fee (the "Amendment Fee") in the amount of
$50,000, in immediately available funds, paid by the Lessee
(as described in Exhibit C) to the Agent on or before November
17, 2000; plus evidence of the payment of all other fees and
amounts set forth in Exhibit C attached hereto;
(v) an executed amendment to the Existing Aviation
Sales Credit Agreement (as in effect prior to the effective
date of this Amendment Agreement) in the form attached hereto
as Exhibit A or otherwise in form and substance satisfactory
to the Agent, Lenders and Holders;
(vi) evidence that any Lien on any Property in favor
of Stephen C. Pomeroy, Inc. has been released;
(vii) a written consent of the obligee parties to the
Existing Aviation Sales Credit Agreement to the terms of this
Amendment Agreement in form and substance satisfactory to the
Agent (which consent may be included in the amendment
agreement referred to in clause (v) above);
(viii) a down-dating endorsement of the title policy
issued to the Agent, with respect to the Property located in
Miramar, Florida, such endorsement showing no additional
exceptions to coverage, except as approved by the Agent (in
its sole discretion);
(ix) an opinion of outside counsel to the Lessee and
the Guarantors, addressed to the Agent, the Owner Trustee and
the Lenders and Holders, to the effect that the execution,
delivery and performance of this Amendment Agreement will not
affect the priority of any Lien in favor of the Owner Trustee
or the Agent (on behalf of itself, any Lender or any Holder)
that exists under the Operative Agreements (which opinion may
be included in the opinion referred to in clause (ii) above);
and
(x) any additional agreements, instruments or
documents which it may
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reasonably request in connection herewith;
(b) The correctness in all material respects on the date
hereof of the representations and warranties of the Owner Trustee,
Construction Agent and the Lessee contained herein and in each of the
Operative Agreements;
(c) No Default or Event of Default shall have occurred and be
continuing on the date hereof; and (after giving effect to this
Amendment Agreement and any amendment to the Citicorp Loan Documents)
as of the date hereof no "Event of Default" shall have occurred and be
continuing under the terms of Citicorp Loan Documents, the Norlease
Agreement or the Indenture under which the Senior Subordinated Notes
have been issued, as amended or supplemented through the date of this
Amendment Agreement and no "Change of Control" (as defined in such
Indenture) shall have occurred;
(d) No material adverse change shall have occurred (as
certified to the Agent, the Lenders and the Holders by the respective
chief financial officers) in the business, assets, management,
operations, financial condition or prospects of Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales since September 30, 2000;
(e) Since March 31, 2000, no permit, agreement, lease, or
license which, in the judgment of the Agent, is material to the
business, operations or employee relations of Aviation Sales or any
Guarantor or any Subsidiary of Aviation Sales, including without
limitation, any agreement relating to the Existing Aviation Sales
Credit Agreement or the Senior Subordinated Notes (as defined in the
Existing Aviation Sales Credit Agreement), shall have been terminated,
modified, revoked, breached, or declared to be in default, or if
breached or declared to be in default during such period, such breach
or default shall have been cured or waived on terms satisfactory to the
Agent and Lenders; and
(f) None of the members of Aviation Sales' Board of Directors
as of March 31, 2000 shall have ceased acting as members of such Board
of Directors.
8. Release.
(a) Aviation Sales and its Subsidiaries acknowledge that they
have no existing defense, counterclaim, offset, cross-complaint, claim
or demand of any kind or nature whatsoever that can be asserted to
reduce or eliminate all or any part of their or the Owner Trustee's
respective liability to pay or perform any obligations pursuant to any
of the Operative Agreements or any other documents which evidence or
secure any obligations owed under any Operative Agreement. In
consideration for the execution of this Amendment Agreement, each of
Aviation Sales and each of its Subsidiaries hereby releases and forever
discharges, Bank of America, the Agent, the Lenders, the Holders and
the Owner Trustee and all of their respective officers, directors,
employees, Affiliates and agents (collectively, the "Released Parties")
from any and all actions, causes of action, debts, dues, claims,
demands, liabilities and obligations of every kind and nature, both in
law and in equity, known or unknown, whether heretofore or now
existing,
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liquidated or unliquidated, matured or unmatured, fixed or contingent
(collectively, the "Release Claims"), which might be asserted against
any of the Released Parties. This Release applies to all matters
arising out of or relating to the Operative Agreements, any Property,
any obligations due under any of the Operative Agreements and this
Amendment Agreement, commitment letters with respect to other loan
facilities, and the lending and borrowing relationships, and (to the
extent any Release Claims relating to such deposit relationships are
now known to Aviation Sales or any of its Subsidiaries) the deposit
relationships, between Aviation Sales or its Subsidiaries, and Bank of
America, the Agent, the Lenders, the Holders and the Owner Trustee,
including the administration, collateralization and funding thereof.
Each of Aviation Sales and each of its Subsidiaries further agrees not
to bring any action in any judicial, administrative or other proceeding
against the Released Parties, or any of them, alleging any such Release
Claim or otherwise arising in connection with any such Release Claim.
(b) It is the intent of the parties that except as otherwise
set forth herein, the foregoing release shall be effective as a full
and final accord and satisfaction of all claims hereby released and
each of Aviation Sales and each of its Subsidiaries hereby agrees,
represents and warrants that the matters released herein are not
limited to matters which are known or disclosed. In this connection,
each of Aviation Sales and each of its Subsidiaries hereby agrees,
represents and warrants that it realizes and acknowledges that factual
matters now existing and unknown to it may have given or may hereafter
give rise to Release Claims, which are presently unknown, unsuspected,
unliquidated, unmatured and/or contingent, and it further agrees,
represents and warrants that this release has been negotiated and
agreed upon in view of that realization. Nevertheless, Aviation Sales
and its Subsidiaries hereby intend to release, discharge and acquit the
Released Parties of and from any such unknown, unsuspected,
unliquidated, unmatured and/or contingent Release Claims, which are in
any way set forth in or related to the matters identified above in this
Section 8. Aviation Sales and its Subsidiaries hereby explicitly waive
the benefits of any common law or statutory rule with respect to the
release of such Release Claims.
(c) The acceptance and delivery of this Amendment Agreement by
the Agent on behalf of the Released Parties shall not be deemed or
construed as an admission of liability with respect to the Release
Claims or otherwise by the Released Parties, or any of them, and the
Released Parties hereby expressly deny liability of any nature
whatsoever arising from or related to the subject of the release
contained in this Section 8.
(d) Each of Aviation Sales and each of its Subsidiaries hereby
agrees, represents and warrants that: (i) such party has not
voluntarily, by operation of law or otherwise, assigned, conveyed,
transferred or encumbered, either directly or indirectly, in whole or
in part, any right to or interest in any of the Release Claims
purported to be released by this Section 8; (ii) such party has had
advice of counsel of its own choosing in negotiations for and the
preparation of this Amendment Agreement; and (iii) such party is fully
aware of the effect of releases such as that contained in this Section
8.
9. Entire Agreement. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and
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supersedes any prior negotiations and agreements among the parties relative to
such subject matter. No promise, conditions, representation or warranty, express
or implied, not herein set forth shall bind any party hereto, and no one of them
has relied on any such promise, condition, representation or warranty. Each of
the parties hereto acknowledges that, except as in this Amendment Agreement
otherwise expressly stated, no representations, warranties or commitments,
express or implied, have been made by any other party to the other. None of the
terms or conditions of this Amendment Agreement may be changed, modified, waived
or canceled orally or otherwise, except by writing, signed by all the parties
hereto, specifying such change, modification, waiver or cancellation of such
terms or conditions, or of any proceeding or succeeding breach thereof.
10. 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.
11. 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:____________________________________
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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.
TIMCO ENGINEERED SYSTEMS, INC.
By:_______________________________________
Name:_____________________________________
Title:________________ of each of the foregoing
Guarantors
AVSRE, L.P.
By: Aviation Sales Property Management Corp.,
its general partner
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SIGNATURE PAGE 2 OF 3
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AVIATION SALES SPS I, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SIGNATURE PAGE 3 OF 3
