EXHIBIT 10.6
AMENDMENT NO. 4
AND CONSENT
Dated as of December 15, 1998
to
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
This Amendment No. 4 and Consent ("Agreement") dated as of December 15,
1998 is entered into among AVIATION SALES DISTRIBUTION SERVICES COMPANY, a
Delaware corporation ("ASDC"), AEROCELL STRUCTURES, INC., an Arkansas
corporation ("Aerocell"), AVS/▇▇▇▇▇-▇▇▇▇▇ MACHINE COMPANY, a Delaware
corporation ("▇▇▇▇▇-▇▇▇▇▇"), 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"), AERO CORPORATION, a
Florida corporation "Aero Florida"), and AERO CORP MACON, INC., a Delaware
corporation ("Aero Macon")(ASDC, Aerocell, ▇▇▇▇▇-▇▇▇▇▇, Whitehall, TIMCO, Apex,
Caribe, Design, Aero Florida and Aero Macon being collectively referred to as
the "Borrowers" and each individually, a "Borrower") and the "Lenders" (as
defined in the Credit Agreement identified below) signatory hereto. Capitalized
terms used herein without definition are used herein as defined in the Credit
Agreement.
PRELIMINARY STATEMENT:
WHEREAS, the Borrowers, Citicorp USA, Inc., as Agent, and certain
financial institutions, as Lenders and Issuing Bank, are parties to that certain
Third Amended and Restated Credit Agreement dated as of October 17, 1997, as
heretofore amended (the "Credit Agreement");
WHEREAS, Parent has heretofore (i) effected certain changes in its
corporate structure as permitted by certain consents heretofore delivered under
the terms of the Credit Agreement and that certain Amendment No. 2 and Consent
dated as of September 18, 1998 ("Amendment No. 2"), and (ii) incurred certain
Indebtedness under senior subordinated notes issued pursuant to a certain
Indenture dated as of February 17, 1998 (the "Indenture"), which Indebtedness is
guaranteed by the Borrowers and the Guarantors, as permitted by certain consents
heretofore delivered under the terms of the Credit Agreement;
WHEREAS, Parent intends to (i) effect certain additional changes in its
corporate structure pursuant to which it is intended that (a) Parent will form a
new Delaware corporation as a wholly-owned Subsidiary of Parent ("AVS Property
Management"), (b) Whitehall and AVS Property Management will organize a new
Delaware limited partnership ("AVSRE, Ltd.") in which Whitehall will hold a 99%
limited partnership interest and AVS Property Management will hold a 1% general
partnership interest, (c) Whitehall will transfer title to all of its Property
(real and personal) located in the State of Texas to AVSRE, Ltd., and (d) Aero
Florida and Aero Macon will merge with and into TIMCO and (ii) complete the
transfer of the issued and outstanding Capital Stock of Aero Hushkit Corporation
by Whitehall to Leasing Affiliate or a Subsidiary thereof as contemplated by the
consent granted in Amendment No. 2;
WHEREAS, Parent may issue additional senior subordinated notes under
the Indenture in an aggregate amount of up to $85,000,000 thereby increasing the
principal amount of Indebtedness outstanding under the Indenture to an aggregate
of up to $250,000,000, which increased Indebtedness will be guaranteed by the
Borrowers and Guarantors on the same terms and conditions that the Indebtedness
outstanding under the Indenture heretofore has been guaranteed thereby;
WHEREAS, Parent is entering into a certain synthetic lease transaction
pursuant to which Parent, the Borrowers and the Guarantors will be required to
execute and deliver certain unsecured guarantees of obligations incurred in
connection therewith;
WHEREAS, Parent requires Restricted Junior Payments from its
Subsidiaries to enable it to meet its obligations (i) with respect to
Indebtedness outstanding under the Indenture as the same may be amended or
supplemented to increase the Indebtedness issued thereunder as aforesaid and
(ii) under the lease agreement to be executed and delivered in connection with
the above-described synthetic lease transaction;
WHEREAS, Parent and the Borrowers have requested that the Credit
Agreement be amended to permit the foregoing and the transactions attendant to
the synthetic lease be afforded a consent by the Requisite Lenders;
WHEREAS, ASDC intends to transfer all of its Receivables existing on
December 31, 1998 to Aerocell in exchange for a promissory note payable by
Aerocell to ASDC and the Borrowers have requested the consent of the Requisite
Lenders to such transfer;
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WHEREAS, the parties hereto have agreed to amend the Credit Agreement
as set forth below in SECTION 1 and the Lenders a party hereto have agreed to
consent to certain matters as set forth below in SECTION 2, in each instance,
subject to the terms and conditions stated herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of December
15, 1998, 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 thereto:
"SENIOR SUBORDINATED NOTES" means the 8-1/8% Senior Subordinated Notes
due 2008 in an aggregate principal amount of up to $250,000,000 issued
by the Parent under that certain Indenture dated as of February 17,
1998, as the same may be amended or supplemented with respect to the
principal amount of Indebtedness issued thereunder, between the Parent
and SunTrust Bank, Central Florida, National Association, as trustee.
"SENIOR SUBORDINATED NOTES GUARANTIES" means, collectively, the
unsecured guaranties of payment of the Senior Subordinated Notes
executed by the Borrowers and Guarantors.
"TROL DOCUMENTS" means, collectively, the TROL Guaranties, TROL
Participation Agreement, TROL Lease, Agency Agreement between the
Parent, as construction agent and First Security Bank, National
Association, as owner trustee under the Aviation Sales Trust 1998-1, as
lessor, and Credit Agreement among First Security Bank, National
Association, as owner trustee for the Aviation Sales Trust 1998-1, as
borrower, the lender parties thereto and NationsBank, National
Association as administrative agent for such lender parties, in each
instance dated as of December 16, 1998.
"TROL GUARANTIES" means, collectively, (i) the unsecured guaranties of
payment of certain Indebtedness evidenced by Series A Notes issued by
First Security Bank, National Association, as trustee under Aviation
Sales Trust 1998-1, a trust formed under the laws of the State of
Florida, executed and delivered by Parent, Borrowers and all of the
other Subsidiaries of the Parent, with the exception of Aviation Sales
Company FSC, Ltd. and Aviation Sales SPS I, Inc., and (ii) the
unsecured guaranty of payment and performance of Parent's obligations
under the TROL Lease executed and delivered by the Borrowers and such
other Subsidiaries of the Parent, in each instance, in the form
attached hereto as EXHIBIT O and made a part hereof.
"TROL LEASE" means a lease agreement in the form attached hereto as
EXHIBIT P and made a part hereof entered into by and between Parent, as
lessee, and First Security
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Bank, National Association, as trustee under Aviation Sales Trust
1998-1, a trust formed under the laws of the State of Florida, as
lessor.
"TROL PARTICIPATION AGREEMENT" means an agreement in the form attached
hereto as EXHIBIT Q and made a part hereof executed and delivered by
Parent.
1.2 SECTION 10.05 is amended to delete CLAUSE (E) thereof in its
entirety and substitute the following therefor:
(e) Accommodation Obligations evidenced by the Senior Subordinated
Notes Guaranties and the TROL Guaranties; and
(f) in addition to the Accommodation Obligations permitted by CLAUSES
(A) through (E) above, other unsecured Accommodation Obligations in an
aggregate amount not to exceed $1,000,000 at any time outstanding.
1.3 SECTION 10.06 is amended to (i) delete the reference to
"Intentionally omitted" at CLAUSE (D) thereof and substitute the following
therefor:
(d) dividends or other distributions (directly or indirectly) from
Subsidiaries of the Parent to the Parent in such amounts and at such
times as are required to enable the Parent to meet (i) its obligations
under the Senior Subordinated Notes and (ii) its lease, guaranty, and
other obligations under the TROL Lease, the TROL Guaranty executed and
delivered by it, and the TROL Participation Agreement, respectively;
and
and (ii) to delete the proviso at the end of such SECTION 10.06 in its entirety
and substitute the following therefor:
PROVIDED, HOWEVER, the Restricted Junior Payments described in CLAUSES
(A), (D) and (E) above shall not be permitted after the occurrence and
during the continuance of an Event of Default or a Potential Event of
Default or if an Event of Default or a Potential Event of Default would
result therefrom.
1.4 SECTION 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 an assignment
of its leasehold interest under the TROL Lease to secure its
obligations under the TROL Documents.
1.5 SECTION 12.01(E) is amended to add the following as CLAUSE (IV)
thereof:
(iv) Any "Event of Default" as defined in the Indenture or any TROL
Document shall occur and be continuing.
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SECTION 2. CONSENTS AND WAIVER. The Lenders a party hereto hereby:
2.1 Consent to ASOC's transfer all of its Receivables existing on
December 31, 1998 to Aerocell in exchange for a promissory note payable by
Aerocell to ASOC; PROVIDED, THAT all Receivables transferred to Aerocell by ASOC
are transferred back to ASOC on or before January 5, 1999 subject to no Lien and
written confirmation thereof is delivered to the Agent on the date of such
transfer;
2.2 Consent to the completion of the transfer of the issued and
outstanding Capital Stock of Aero Hushkit Corporation by Whitehall to Leasing
Affiliate or a Subsidiary thereof as contemplated by the consent granted in
Amendment No. 2 by December 31, 1998 and waive any rights and remedies that
might otherwise arise under the terms of Amendment No. 2 with respect to the
failure to complete such transfer within the period required under the terms of
Amendment No. 2;
2.3 Consent to the formation of AVS Property Management by Parent as a
wholly-owned Subsidiary of the Parent and the formation by AVS Property
Management and Whitehall of AVSRE, Ltd., as a Delaware limited partnership with
Whitehall holding a 99% limited partnership interest therein and AVS Property
Management holding a 1% general partnership interest therein;
2.4 Consent to (a) the transfer by Whitehall of all of its right, title
and interest in and to all of its Property (real and personal) located in the
State of Texas to AVSRE, Ltd. in exchange for its partnership interest therein;
PROVIDED THAT all of the Lenders execute and deliver this Agreement as and when
provided in Section 3 below, and (b) the Investment by AVS Property Management
of an amount equal to 1% of the value of the aforesaid Property of Whitehall in
AVSRE, Ltd. in exchange for its partnership interest therein;
2.5 Consent to the merger of Aero Florida and Aero Macon with and into
TIMCO by December 31, 1998 and waive the requirement under SECTION 10.14 of the
Credit Agreement for sixty (60) days prior written notice of a change in the
name of TIMCO PROVIDED THAT any such change is made in connection with the
changes in corporate structure described in this Agreement and the Agent
receives written notice thereof at least five (5) Business Days prior to such
change becoming effective;
2.6 Consent to the Borrowers and Guarantors entering into the TROL
Guaranties notwithstanding any provision to the contrary contained in Credit
Agreement or the guaranty agreement executed and delivered to the Agent in
connection with any Guarantor's guarantee of payment and performance of the
Obligations;
2.7 Consent to the Parent's incurrence of up to $85,000,000 of
additional Indebtedness under the Indenture and the Borrowers' and Guarantors'
guarantee thereof; PROVIDED THAT the aggregate principal amount of Indebtedness
issued under the Indenture does not exceed $250,000,000; and
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2.8 Waive any rights and remedies that might otherwise arise under the
terms of the Credit Agreement or other Loan Document executed and delivered by
the Borrowers and Guarantors with respect to the making of a Restricted Junior
Payment to Parent to enable it to pay interest on the Senior Subordinated Notes
which was due August 15, 1998.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall become effective as of December 15, 1998, if, and only if
the Agent shall have received (i) on or before December 16, 1998, (a) a
facsimile or original executed copy of this Agreement executed by the Parent,
each Borrower and the Requisite Lenders (except with respect to the consent set
forth in Section 2.4(a) which requires the consent of all Lenders), (b) a
Reaffirmation Agreement, in form and substance satisfactory to the Agent,
executed by each of the Guarantors which are Subsidiaries of the Parent or a
Borrower, and (c) corporate resolutions and a secretary's certificate with
respect thereto for each of the Borrowers and Guarantors a party to this
Agreement or the aforesaid Reaffirmation Agreement authorizing the execution and
delivery of such agreements on behalf of such Persons, (ii) on December 17,
1998, a fully executed facsimile or original executed copy of an Intercreditor
Agreement in the form attached hereto as EXHIBIT 1 and made a part hereof and a
certificate, signed by the Chief Financial Officer of the Parent, in the form
attached hereto as EXHIBIT 2 and (iii) promptly upon the formation of AVS
Property Management and AVSRE, Ltd., guarantees of the Obligations and related
security agreements, mortgages, UCC financing statements, and other Loan
Documents as the Agent shall designate in substantially the form of the like
agreements executed and delivered by the Guarantors and the Borrowers executed
and delivered by AVS Property Management and AVSRE, Ltd.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
represent and warrant as follows:
4.1 This Agreement 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, except as
referenced in Sections 2.5 and 2.8 above, or would result from any of the
transactions contemplated by this Agreement.
4.3 Upon the effectiveness of this Agreement, 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 Agreement becomes effective (unless a representation and
warranty is stated to be given on and as of a specific date, in which case such
representation and warranty shall be true, correct and complete as of such
date).
SECTION 5. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
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5.1 Upon the effectiveness of this Agreement, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import shall mean and be a reference to the Credit Agreement, as amended
hereby, and each reference to the Credit Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.
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.
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5.3 The execution, delivery and effectiveness of this Agreement shall
not operate as a waiver of any right, power or remedy of any Lender or Issuing
Bank or the Agent under the Credit Agreement, the Notes or any of the other Loan
Documents, nor constitute a waiver of any provision contained therein, except as
specifically set forth herein.
SECTION 6. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 7. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 8. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement 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
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer Chief Financial Officer
AVS/▇▇▇▇▇-▇▇▇▇▇ MACHINE COMPANY WHITEHALL CORPORATION
By By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer Chief Financial Officer
TRIAD INTERNATIONAL MAINTENANCE APEX MANUFACTURING, INC.
CORPORATION
By By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer Chief Financial Officer
AIRCRAFT INTERIOR DESIGN, INC. CARIBE AVIATION, INC.
By By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer Chief Financial Officer
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AERO CORPORATION AERO CORP MACON, INC.
By By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer Chief Financial Officer
AVIATION SALES COMPANY
By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
CITICORP USA, INC. ▇▇▇▇▇▇ FINANCIAL, INC.
By By
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Shapleigh ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attorney-in-Fact Vice President
CONGRESS FINANCIAL CORPORATION NATIONAL CITY COMMERCIAL
FINANCE, INC.
By By
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Name: Name:
Title: Title:
FIRST UNION COMMERCIAL CREDIT LYONNAIS, ATLANTA
CORPORATION AGENCY
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By By
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▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President First Vice President & Manager
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IBJ ▇▇▇▇▇▇▇▇ BUSINESS CREDIT BANKBOSTON, N.A.
CORPORATION
By By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Executive Vice President Vice President
SUNTRUST BANK, MIAMI, N.A. BANKATLANTIC
By By
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▇▇▇▇▇ ▇. Fine ▇▇▇ ▇. ▇▇▇▇▇▇
Vice President Senior Vice President
THE INTERNATIONAL BANK OF NATIONAL BANK OF CANADA
MIAMI, N.A. A Canadian Chartered Bank
By By
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. D'Alto
Vice President Vice President
Trade Finance Division
By
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Vice President & Manager
MERCANTILE BUSINESS CREDIT, INC. CITIZENS BUSINESS CREDIT
COMPANY
By By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President Vice President
AMSOUTH BANK PNC BANK NATIONAL ASSOCIATION
By By
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attorney-in-Fact Vice President
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