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Exhibit 10.1
THIRD AMENDMENT
THIS THIRD AMENDMENT (this "Amendment") dated as of September 30 ,
2000, to the Credit Agreement referenced below, is by and among AVTEAM, INC., a
Florida corporation, the Subsidiaries of the Borrower identified as Guarantors
on the signature pages hereto, the lenders identified herein, and Bank of
America, N.A., a national banking association formerly known as NationsBank,
N.A., as Administrative Agent. Terms used herein but not otherwise defined
herein shall have the meanings provided to such terms in the Credit Agreement.
Recitals
A. A $70 million credit facility has been extended pursuant to the
terms of that Credit Agreement dated as of April 30, 1998 (as amended and
modified, the "Credit Agreement") among the Borrower, the Subsidiaries of the
Borrower identified as Guarantors therein, the Lenders identified therein, and
NationsBank, N.A. (now known as Bank of America, N.A.), as Administrative Agent.
B. The Borrower has requested the Lenders to consent to certain
modifications to the Credit Agreement and grant waivers of certain covenant
violations.
C. The requested modifications and waivers require the consent of the
Required Lenders.
D. The Required Lenders have agreed to the requested modifications and
waivers on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing Recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendments. The Credit Agreement is amended in the following
respects:
(a) Interest Rates. Notwithstanding any provision of Section 2.1(c)
of the Credit Agreement or any other provisions of the Credit Agreement or the
other Credit Documents to the contrary, as of October 1, 2000, (i) interest on
all Loans made on and after such date and until the Obligations are paid in
full, and all other amounts owing under the Credit Agreement or under the other
Credit Documents, shall bear interest at the Base Rate plus the Applicable
Percentage, (ii) all Eurodollar Loans outstanding on such date shall be
converted to Base Rate Loans as of the last day of the applicable Eurodollar
Interest Period with respect thereto, (iii) following such conversion, no
further Eurodollar Loans shall be made, and (iv) the "Applicable Percentage"
under the Credit Agreement shall be, and remain until the Obligations are paid
in full, (A) 2.0%, in case of Base Rate Loans, (B) 3.50%, in the case of Letter
of Credit Fees, and (C) 0.50%, in the case of the Commitment Fee. This Amendment
shall not modify in any way those provisions of the Credit Agreement or other
Credit Documents establishing the Default Rate of interest on the Loans and any
other amounts owing under the Credit Agreement or under the other Credit
Documents upon the occurrence, and
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during the continuance, of an Event of Default, all of which provisions shall
remain in full force and effect.
(b) Minimum Consolidated Net Sales. There shall be added to Section
7.9 of the Credit Agreement a new subsection (g) to read as follows:
(g) Minimum Consolidated Net Sales. The cumulative amount of
consolidated net sales and revenues of the Consolidated Group, as
determined in accordance with GAAP, for the months of October, November
and December, 2000, shall not be less than the respective minimum
amounts set forth below:
<TABLE>
<CAPTION>
Cumulative
Month Minimum Amount
-------------- -----------------
<S> <C>
October, 2000 $ 3,180,000
November, 2000 $ 8,669,000
December, 2000 $18,314,000
</TABLE>
2. Reserves Against Borrowing Base. Notwithstanding any provision of
the Credit Agreement or any of the other Credit Documents to the contrary, the
Administrative Agent reserves the right, in its sole discretion, to add reserves
against the Borrowing Base based on the results of the Appraisal and the Field
Exam (as such terms are hereinafter defined).
3. Covenant Compliance Waiver. Lenders hereby waive Borrower's
noncompliance as of September 30, 2000 with the financial covenants set forth in
Sections 7.9(b), 7.9(c), 7.9(d) and 7.9(f) of the Credit Agreement
(collectively, the "Financial Covenants"). Nothing herein shall be deemed a
waiver of Borrower"s compliance with the Financial Covenants at December 31,
2000 or at any time thereafter.
4. Financial Advisor. Notwithstanding the waiver contained in Section 3
of this Amendment, until February 15, 2001, and thereafter until such time as
the Borrower delivers to the Lenders quarterly financial statements which
demonstrate complete compliance with the Financial Covenants, the Borrower will
continue to retain the services of a financial advisor, reasonably acceptable to
the Lenders, to advise the Borrower with respect to preparation and presentation
of its financial reporting to the Lenders under Sections 7.1 and 7.2 of the
Credit Agreement.
5. Amendment Fee. In consideration of the above amendments and the
Financial Covenant waivers provided herein, the Borrower shall pay to the
Administrative Agent, for the ratable benefit of the Lenders who execute a
counterpart of this Amendment, an amendment fee of $200,000 (the "Amendment
Fee"), the first installment of which shall be $125,000, payable on or before
October 31, 2000. If Borrower fails to timely pay such first installment, the
waivers of Borrower's non-compliance with the Financial Covenants shall be
deemed not to have been given and shall be of no force or effect. The balance of
the Amendment Fee (i.e., $75,000) shall be due and payable on January 31, 2001
unless, prior to that date, the Borrower has entered into a letter of
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intent or binding agreement for the sale of the Borrower's business in a bona
fide arm's length transaction, which transaction provides for the repayment in
full of all Obligations, a copy of which letter of intent or agreement shall
have been furnished to the Administrative Agent by the Borrower. Such sale may
take the form of a business combination, a purchase of substantially all of
Borrower's assets (including the shares of subsidiaries) or purchase of a
controlling interest in the Borrower's outstanding common stock.
6. Field Examination; Inventory Appraisal. The Administrative Agent (or
its agents) has commenced a field exam of the inventory and the accounts
receivables systems, processes and controls of the Credit Parties (the "Field
Exam"). The Credit Parties agree to cooperate fully with the Administrative
Agent (and its agents) in the conduct of the Field Exam, providing reasonable
access to all personnel, books and records and facilities of the Credit Parties
necessary for the conduct of the Field Exam. The Credit Parties shall promptly
pay upon demand all reasonable costs, expenses and fees incurred by the
Administrative Agent and any of its agents and designees related thereto. The
Administrative Agent, on behalf of the Lenders, has engaged an appraiser to make
a recertification of an appraisal completed on June 12, 2000 by Aviation Asset
Management, Inc. of the inventory of the Credit Parties (current fair market
value and one-year orderly liquidation value) (the "Appraisal"). The Credit
Parties agree to cooperate fully with the Administrative Agent and the appraiser
in the conduct of the Appraisal, providing reasonable access to all personnel,
books and records and facilities of the Credit Parties necessary for the conduct
of the Appraisal. The Credit Parties shall promptly pay upon demand all
reasonable costs, expenses, and fees incurred by the Administrative Agent and
any of its agents and designees related thereto; provided, however, that the
aggregate fee relating thereto (exclusive of costs and expenses) shall not
exceed $50,000.
7. Weekly Reporting. The Borrower shall furnish to the Administrative
Agent on a weekly basis (but not later than Wednesday of each week with regard
to the immediately preceding week) a report of all sales, cash receipts, cash
disbursements, inventory purchases, agings of accounts receivable and accounts
payable, schedule of Revenue Producing Equipment and schedule of Engines on
Hand. The obligation to furnish these reports shall continue until the
Obligations are paid in full. A violation of this covenant shall be an Event of
Default unless cured within three (3) Business Days after Borrower receives
notice of such violation from the Administrative Agent.
8. Consultant to Lenders. The Administrative Agent has engaged
Pricewaterhouse Coopers, LLC (the "Consultant") to serve as a consultant and
financial advisor to the Administrative Agent and the Lenders with regard to
analyzing and examining various aspects of the Borrower"s business. The Borrower
shall continue to provide the Consultant reasonable access to all business
records, facilities and appropriate personnel and professionals of the Credit
Parties, including without limitation the Borrower"s accountants and auditors,
to facilitate the Consultant"s review and analysis. The Credit Parties shall
promptly pay upon demand all reasonable costs, expenses and fees of the
Consultant as and when incurred by the Administrative Agent.
9. Effectiveness of Amendment. This Amendment shall be effective as of
the date hereof upon (i) it being executed and delivered by the Borrower to the
Administrative Agent, (ii) the execution and delivery to the Administrative
Agent of counterpart copies hereof executed by the
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Required Lenders, and (iii) receipt by the Administrative Agent of evidence of
payment of all fees and expenses of the Administrative Agent in connection with
this Amendment, including without limitation the fees and disbursements of
special counsel to the Lenders.
10. No Other Amendments. Except as modified hereby, all of the terms
and provisions of the Credit Agreement and the other Credit Documents (including
schedules and exhibits thereto) shall remain in full force and effect.
11. Representations and Warranties of Credit Parties. Each Credit Party
hereby represents and warrants that (a) after giving effect to this Amendment,
each of the representations and warranties contained in the Credit Agreement and
the other Credit Documents are true and correct as of the date hereof (except
those which expressly relate to an earlier period), (b) except as set forth on
Schedule 1 to this Amendment, no Credit Party is in default under or with
respect to any Contractual Obligation (including, without limitation, any
Operating Lease or any Capital Lease), and (c) no Credit Party has any claims,
counterclaims, offsets or defenses to the Credit Documents and the performance
of its obligations thereunder, including but not limited to the repayment of the
Obligations.
12. Acknowledgment and Consent of Guarantors; Reaffirmations. Each of
the Guarantors (i) acknowledges and consents to all of the terms and conditions
of this Amendment, (ii) affirms all of its obligations under the Credit
Documents and (iii) agrees that this Amendment and all documents executed in
connection herewith do not operate to reduce or discharge the Guarantors"
obligations under the Credit Agreement or the other Credit Documents.
13. Release of Administrative Agent and Lenders. In consideration of
the Lenders" willingness to enter into this Amendment, each of the Credit
Parties hereby releases the Administrative Agent, the Lenders, and the
Administrative Agent"s and the Lender"s respective officers, employees,
representatives, agents, counsel, trustees and directors from any and all
actions, causes of action, claims, demands, damages and liabilities of whatever
kind or nature, in law or in equity, now known or unknown, suspected or
unsuspected, to the extent that any of the foregoing arises from any action or
failure to act on or prior to October 31, 2000.
14. Expenses of Administrative Agent. The Borrower agrees to pay upon
demand all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, execution and delivery of this Amendment,
including without limitation the reasonable fees and expenses of Stearns Weaver
Miller Weissler Alhadeff & Sitterson, P.A.
15. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and it shall not be necessary in making proof of this Amendment to
produce or account for more than one such counterpart.
16. Governing Law. This Amendment shall be deemed to be a contract made
under, and for all purposes shall be construed in accordance with, the laws of
the State of Florida.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Third Amendment to be duly executed and delivered as of the date first
above written.
BORROWER: AVTEAM, INC.
a Florida corporation
By: /s/
-----------------------------------------
Name:
---------------------------------------
Title:
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GUARANTORS: AVTEAM AVIATION FIELD SERVICES, INC.
a Florida corporation
By: /s/
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Name:
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Title:
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LENDERS: BANK OF AMERICA, N.A., a national banking association
formerly known as NationsBank, N.A., individually in its
capacity as a Lender and in its capacity as Administrative
Agent
By: /s/
-----------------------------------------
Name:
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Title:
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[Lenders" signatures continue on following page]
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SOUTHTRUST BANK
By: /s/
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Name:
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Title:
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NATIONAL CITY BANK OF KENTUCKY
By: /s/
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Name:
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Title:
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NATIONAL BANK OF CANADA
By: /s/
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Name:
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Title:
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BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/
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Name:
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Title:
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WILLIAM E. SIMON & SONS SPECIAL SITUATION PARTNERS, L.P.
(by assignment from CITIZENS BANK OF MASSACHUSETTS, as
successor to USTRUST)
By: /s/
-----------------------------------------
Name:
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Title:
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BANK LEUMI LE-ISRAEL B.M. MIAMI AGENCY
By: /s/
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Name:
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Title:
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Schedule 1 to Third Amendment
Defaults Under Contractual Obligations
