Amendment Agreement No. 4 to Lease Agreement and Related Operative Agreements among Aviation Sales Company, First Security Bank, and Bank of America
Summary
This agreement, dated November 14, 2000, amends the existing Lease Agreement and related operative agreements among Aviation Sales Company, First Security Bank (as Owner Trustee), Bank of America (as Lender and Agent), and other involved parties. The amendment updates financial reporting requirements, adjusts minimum financial covenants such as EBITDA and tangible net worth, and approves certain items for EBITDA calculation. It also provides consent to amend a related revolving credit agreement. Guarantors confirm their ongoing guarantees under the revised terms. The changes are effective as of specified dates in 2000 and 2001.
EX-10.2 3 0003.txt 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 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:
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(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.
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. 3 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. 4 (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 5 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 6 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, 7 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 8 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.] 9 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:____________________________________ 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 AVIATION SALES SPS I, INC. By:_______________________________________ Name:_____________________________________ Title:____________________________________ SIGNATURE PAGE 3 OF 3
