UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 29, 2005
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FIRST AVIATION SERVICES INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-21995 06-1419064
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(Commission File Number) (IRS Employer Identification No.)
15 Riverside Avenue
Westport, Connecticut 06880-4214
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(Address of Principal Executive Offices) (Zip Code)
(203) 291-3300
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On July 29, 2005, Aerospace Products International Inc., (the
"Borrower") a direct wholly-owned subsidiary of First Aviation Services, Inc.
(the "Registrant") entered into an Amended and Restated Commercial Revolving
Loan and Security Agreement (the "Agreement") with Hudson United Bank (the
"Lender"). On such date, the Registrant also entered into an Amended and
Restated Guaranty (the "Guaranty"), as Guarantor and on behalf of the Borrower,
with the Lender.
The Agreement is filed herewith as Exhibit 10.1 and is incorporated
by reference herein. The Guaranty is filed herewith as Exhibit 10.2 and is
incorporated by reference herein.
The facilities (as described below) created by the Agreement replace
the Borrower's previously existing $20 million revolving credit facility
scheduled to expire July 31, 2006, and the Guaranty replaces the guaranty that
existed on the previous credit facility. The Agreement extends the commitment
expiration date under the Agreement to September 1, 2007.
The Agreement provides for a 25 month senior revolving credit
facility ("Facility I") to the Borrower in the amount of $20,000,000, subject to
terms and conditions set forth in the Agreement. Facility I may be increased to
$25,000,000 in the event that the Borrower acquires any or all of the assets or
stock of another company unrelated to the Borrower, subject to the Lender's
approval. The proceeds of any loans made under Facility I will be used for
working capital purposes in the ordinary course of business of the Borrower.
The Agreement also provides for a one-time advance ("Facility II") in
an amount of up to $3,000,000, subject to borrowing availability. The advance
for Facility II is to be repaid over 60 months at a fixed rate determined at the
time of the drawdown of the advance. The proceeds of this advance under Facility
II will be used for the purpose of purchasing equipment and making leasehold
improvements to property which the Borrower may lease as its headquarters.
Facility I has an interest rate per annum of 150 basis points in
excess of the LIBOR Rate. Facility II has an interest rate per annum of 250
basis points above the rate for U.S. Treasury Securities adjusted to a constant
maturity of 5 years in effect as of the date of the advance under Facility II.
Other fees payable under the Agreement will be determined pursuant to the terms
set forth in the Agreement.
The Registrant will act as Guarantor with respect to the obligations
of the Borrower under the Agreement pursuant to the terms set forth in the
Agreement and in the Guaranty.
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The Agreement also contains certain affirmative, negative and
financial covenants customary for facilities of this type, including, furnishing
to the Lender periodic financial information of the Borrower and Guarantor, as
well as additional documentation including all reports, proxy statements,
management letters or press releases issued or filed with the Securities and
Exchange Commission, as the case may be; compliance with all laws and
regulations; maintaining proper insurance coverage; paying and discharging, at
or before maturity, material obligations and liabilities; maintenance of
corporate existence and ability to do business; limitations on capital
expenditures; limitations on ability to consolidate or merge, or sell, lease or
otherwise dispose all or substantially all of the Borrower's assets or any of
its capital stock; limitations on the incurrence of liens; limitations on the
incurrence of debt by the Borrower; and limitations on contingent liabilities,
loans or guaranties by the Borrower; limitations on dividends paid by the
Borrower.
The Agreement also contains certain events of default customary for
facilities of this type (with customary grace periods), including nonpayment of
principal, interest, fees or other amounts when due; inaccuracies of
representations and warranties; violations of covenants; the occurrence of
certain bankruptcy events; certain ERISA events; certain judgments; violation of
environmental regulations, or dissolution of the Borrower or Guarantor. Upon the
occurrence of an event of default, any outstanding loans under the Agreement may
be accelerated and/or the Lender's commitments may be terminated.
The Guaranty contains representations, covenants and warranties that
are typical for guaranties of this type, including the Guarantor providing
unconditional payment guaranties; restrictions on subrogation; access to records
and premises; limitations on ability of Guarantor or Borrower to consolidate or
merge, or sell, lease or otherwise dispose of all or substantially all of the
its assets or any of its capital stock; limitations on the incurrence of debt by
the Guarantor; and limitations on contingent liabilities, loans or guaranties by
the Guarantor. The Guaranty is a continuing guaranty and remains in full force
and effect until payment in full of the obligations under the Agreement and all
other amounts payable under the Guaranty.
In the ordinary course of business, the Lender, or their affiliates,
have or may have various relationships with the Borrower or Guarantor and its
subsidiaries involving the provision of a variety of financial services,
including cash management, commercial banking, investment banking, advisory or
other financial services, for which they received, or may receive, customary
fees and expenses.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under
an Off-Balance Sheet Arrangement of a Registrant
The disclosure required by this item is included in Item 1.01 and is
incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
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10.1 Amended and Restated Commercial Revolving Loan and Security
Agreement, dated as of July 29, 2005, entered into by Aerospace
Products International Inc., a direct wholly-owned subsidiary of
First Aviation Services, Inc. and Hudson United Bank.
10.2 Amended and Restated Guaranty, dated as of July 29, 2005, entered
into by First Aviation Services, Inc. (on behalf of Aerospace
Products International Inc., a direct wholly-owned subsidiary of
First Aviation Services, Inc.) and Hudson United Bank.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST AVIATION SERVICES INC.
By: /s/ Robert Costantini
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Name: Robert Costantini
Title: Chief Financial Officer
Date: August 4, 2005
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FIRST AVIATION SERVICES, INC.
EXHIBIT INDEX
Exhibit No. Description
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10.1 Amended and Restated Commercial Revolving Loan and Security
Agreement, dated as of July 29, 2005, entered into by Aerospace
Products International Inc., a direct wholly-owned subsidiary of
First Aviation Services, Inc. and Hudson United Bank.
10.2 Amended and Restated Guaranty, dated as of July 29, 2005, entered
into by First Aviation Services, Inc. (on behalf of Aerospace
Products International Inc., a direct wholly-owned subsidiary of
First Aviation Services, Inc.) and Hudson United Bank.
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