FIFTH CHANGE IN TERMS AGREEMENT
Exhibit 4.1
THIS FIFTH CHANGE IN TERMS AGREEMENT (this “Change in Terms”), is made and entered into
effective as of November 10, 2006, by and between AirNet Systems, Inc., an Ohio corporation
(“Borrower”) and The Huntington National Bank, a national banking association, with a banking
office at 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, in its capacity as administrative agent
(“Agent”) for and on behalf of the Lenders from time to time party to the Credit Agreement
described below. Each capitalized term used but not otherwise defined herein shall have the meaning
ascribed to it in the Credit Agreement.
BACKGROUND INFORMATION
A. Pursuant to the Amended and Restated Credit Agreement dated as of May 28, 2004 (as
amended by the First Change in Terms, the Second Change in Terms, the Third Change in Terms, and
the Fourth Change in Terms, and as the same may be further amended, modified, supplemented,
extended, restated or replaced from time to time, the “Credit Agreement”) among Borrower, the
Lenders, and the Agent, the Lenders agreed to provide certain credit facilities to the Borrower
(collectively, the “Loans”).
B. Borrower and Agent entered into a certain Change in Terms Agreement dated November 12,
2004, pursuant to which certain terms and provisions of the Credit Agreement were modified (the
“First Change in Terms”).
C. Borrower and Agent entered into a certain Second Change in Terms Agreement dated March 24,
2005, pursuant to which certain terms and provisions of the Credit Agreement were further modified
(the “Second Change in Terms”).
D. Borrower and Agent entered into a certain Third Change in Terms Agreement dated November
21, 2005, pursuant to which certain terms and provisions of the Credit Agreement were further
modified (the “Third Change in Terms”).
E. Borrower and Agent entered into a certain Fourth Change in Terms Agreement dated March 28,
2006, pursuant to which certain terms and provisions of the Credit Agreement were further modified
(the “Fourth Change in Terms”).
F. Borrower, having failed to comply with the financial covenants required pursuant to Section
6.24 of the Credit Agreement, has requested that Agent waive the Default existing under the Credit
Agreement as a result of Borrower’s failure to maintain such financial covenants, and acting upon
the authority of the Required Lenders, Agent has agreed to do so on certain conditions, including
without limitation, that Borrower enter into this Change in Terms.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, Agent
and Borrower hereby agree as follows:
1. Change in Terms. The Credit Agreement, and, to the extent applicable, the other Loan
Documents, are hereby modified to provide as follows:
(a) The definition of “Consolidated EBIT,” as set forth in Section 1.1 of the
Credit Agreement, is hereby revised and replaced in its entirety by the following:
“Consolidated EBIT” means, with respect to any period, Consolidated
Net Income plus, (a) to the extent deducted from revenues in determining
Consolidated Net Income, (i) Consolidated Interest Expense, (ii) income tax
expense, calculated for the Borrower and its Subsidiaries on a consolidated
basis, and (iii) extraordinary losses (determined in accordance with
Agreement Accounting Principles) incurred other than in the ordinary course
of business, calculated for the Borrower and its Subsidiaries on a
consolidated basis, plus (b) for the fiscal quarter ending September 30,
2006 only, an amount equal to $24,560,000.00 (which reflects the non-cash
impairment charge recognized by Borrower in the fiscal quarter ending
September 30, 2006), minus, to the extent included in Consolidated Net
Income, extraordinary gains (determined in accordance with Agreement
Accounting Principles) realized other than in the ordinary course of
business, calculated for the Borrower and its Subsidiaries on a consolidated
basis.
(b) The definition of “Consolidated EBITDA,” as set forth in Section 1.1 of the
Credit Agreement, is hereby revised and replaced in its entirety by the following:
“Consolidated EBITDA” means with respect to any period, Consolidated
Net Income plus, (a) to the extent deducted from revenues in determining
Consolidated Net Income, (i) Consolidated Interest Expense, (ii) income tax
expense, calculated for the Borrower and its Subsidiaries on a consolidated
basis, (iii) depreciation, calculated for the Borrower and its Subsidiaries
on a consolidated basis, (iv) amortization, calculated for the Borrower and
its Subsidiaries on a consolidated basis; and (v) extraordinary losses
(determined in accordance with Agreement Accounting Principles) incurred
other than in the ordinary course of business, calculated for the Borrower
and its Subsidiaries on a consolidated basis, plus (b) for the fiscal
quarter ending September 30, 2006 only, an amount equal to $24,560,000.00
(which reflects the non-cash impairment charge recognized by Borrower in the
fiscal quarter ending September 30, 2006), minus, to the extent included in
Consolidated Net Income, extraordinary gains (determined in accordance with
Agreement Accounting Principles) realized other than in the ordinary course
of business, calculated for the Borrower and its Subsidiaries on a
consolidated basis.
(c) The Aggregate Revolving Commitment is hereby reduced to $15,000,000, and, as a
result of the foregoing reduction, (i) the Revolving Commitment of HNB shall hereafter be
$9,375,000, (ii) the Revolving Commitment of JPMorgan Chase Bank, N.A., successor by merger
to Bank One, N.A. (Main Office Columbus) shall hereafter be $5,625,000, and (iii) the
amounts set forth on the signature pages to the Credit Agreement shall be replaced with the
foregoing amounts.
(d) Section 6.24.3 of the Credit Agreement is hereby revised and replaced in its
entirety by the following:
“Section 6.24.3 Minimum Tangible Net Worth. The Borrower will at all
times maintain Consolidated Tangible Net Worth of not less than (i) as of
Borrower’s fiscal year-end 2006, $30,000,000.00, and (ii) as of the last day
of each of Borrower’s fiscal years thereafter, that amount which is equal to
the sum of the minimum Consolidated Tangible Net Worth required to be
maintained by Borrower in accordance with this Section as of the last day of
Borrower’s prior fiscal year, and 50% of Consolidated Net Income for such
prior fiscal year; provided that if such Consolidated Net Income is negative
in any fiscal year, the amount added in the subsequent fiscal year shall be
zero.
(e) The Borrower has, with the consent of Agent and the Lenders, changed the name of
its Subsidiary, Jetride, Inc., an Ohio corporation (“Jetride”), to 7250 STARCHECK, INC.
Each reference in the Loan Documents to Jetride shall mean 7250 STARCHECK, INC., an Ohio
corporation formerly known as Jetride, Inc., and the obligations of such entity under the
Loan Documents, including without limitation,
the Subsidiary Guaranty and the Security Agreements, as applicable, shall continue in
full force and effect notwithstanding said name change.
2. Truth of Representations and Warranties; No Defaults. Borrower hereby represents
and warrants that the following are true and correct as of the date of this Change in Terms:
(a) After giving effect to that certain letter agreement (herein, the “Waiver”) dated
of even date herewith by and among Borrower, the Guarantors and Agent and the waiver
provided therein, the representations and warranties of Borrower and the Guarantors
contained in the Loan Documents to which each is a party are true and correct on and as of
the date of this Change in Terms as if made on and as of such date, unless stated to relate
to a specific earlier date;
(b) No event or condition exists which constitutes a breach, Default or Unmatured
Default under the Loan Documents;
(c) All financial information heretofore provided to Agent and/or the Lenders in
connection with the indebtedness made pursuant to the Loan Documents is true, accurate and
complete in all material respects;
(d) Neither this Change in Terms nor any other document, certificate or written
statement furnished to Agent and/or the Lenders in connection with the indebtedness
evidenced and secured by the Loan Documents contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements contained herein
and therein not misleading;
(e) Borrower and the Guarantors have full power and authority (i) to execute, deliver
and perform, or to acknowledge and agree to the terms and provisions of, this Change in
Terms, as applicable, and (ii) to incur the obligations provided for herein, all of which
have been duly authorized by all necessary and proper corporate and limited liability
company action, as applicable;
(f) No consent, waiver or authorization of, or filing with, any person or any
governmental authority is required to be made or obtained by Borrower or the Guarantors in
connection with the borrowings under the Loan Documents, or the execution, delivery,
performance, validity or enforceability of this Change in Terms;
(g) This Change in Terms and the Loan Documents constitute the legal, valid and binding
obligation of Borrower and the Guarantors enforceable against them in accordance with the
terms hereof and thereof, as applicable; and
(h) The execution and delivery by Borrower and the Guarantors of this Change in Terms
and the performance by Borrower and the Guarantors of the Loan Documents to which each is a
party, as modified by this Change in Terms and by the Waiver: (i) do not and will not
violate any law or regulation; (ii) do not and will not violate any order, decree or
judgment by which Borrower or the Guarantors, as applicable, are bound; (iii) do not and
will not violate or conflict with, result in a breach of or constitute (with notice, lapse
of time, or otherwise) a default under any material agreement, mortgage, indenture or other
contractual obligation to which Borrower or any of the Guarantors is a party, or by which
Borrower’s or any of the Guarantors’ properties are bound; and (iv) do not and will not
result in the creation or imposition of any lien upon any property or assets of Borrower or
any of the Guarantors.
3. Ratification of Loan Documents. This Change in Terms constitutes only a
modification of the Credit Agreement and the other Loan Documents and Borrower hereby acknowledges,
ratifies and confirms all of the provisions thereof, except as herein expressly modified, including
provision for the acceleration of the maturity of the Loans, and for the enforcement by Agent
and/or the Lenders of all remedies any of them may have according to law. In addition, Borrower
acknowledges, ratifies and confirms any and all security interests previously granted in connection
with the Loans as continuing in full force and effect.
4. No Course of Dealing; Waiver. Borrower expressly acknowledges and agrees that the
execution of this Change in Terms shall not constitute a waiver of, and shall not preclude the
exercise of, any right, power or remedy granted to Agent and/or the Lenders in the Loan Documents,
or as provided by law, except to the extent expressly provided herein. No previous modification,
extension or compromise entered into with respect to any indebtedness of Borrower to Agent and/or
the Lenders shall constitute a course of dealing or be inferred or construed as constituting an
express or implied understanding to enter into any future modification, extension or compromise,
whether or not the same was in writing. No past, present or future delay on the part of Agent
and/or any Lender in exercising any right, power or remedy shall operate as a waiver thereof, or
otherwise prejudice Agent’s or any Lender’s rights, powers or remedies.
5. Promise to Pay. Borrower hereby covenants and promises to pay to the order of
Agent, the unpaid principal balance of the Loans, together with interest as provided in the Credit
Agreement and the other Loan Documents, and hereby promises to perform all of the covenants,
conditions, stipulations and agreements as contained in the Loan Documents and in any other
document or instrument executed in connection therewith or referencing the same (as modified by
this Change in Terms).
6. Setoffs, Claims and Defenses. Borrower hereby certifies that, as of the date
hereof, it has no setoffs, counter-claims or other defenses of any nature whatsoever to the payment
of any part of the obligations owed to Agent and/or any Lender as of the date of execution of this
Change in Terms.
7. Governing Law. This Change in Terms shall be interpreted and construed in
accordance with and governed by the laws of the State of Ohio (without respect to conflict of law
principles). Further, the parties hereto intend that this Change in Terms shall be in compliance
with all applicable laws and shall be enforceable in accordance with its terms. If any provision
of this Change in Terms shall be illegal or unenforceable with respect to the Loan Documents, such
provision shall be deemed cancelled to the extent necessary, but the remaining provisions shall not
be affected hereby.
8. Further Assurances. Borrower and the Guarantors further agree to execute and
deliver any and all further documents and to take any and all other steps or actions reasonably
deemed necessary by Agent to effectuate this Change in Terms.
9. Affirmation of Other Obligors. Upon the request of Agent, Borrower shall obtain
the acknowledgment and acceptance by each other party obligated in any way with respect to the
Loans or otherwise in connection with the credit extended pursuant to the Credit Agreement,
including, without limitation, the Guarantors and any other guarantor, co-borrower, pledgor or
other accommodation party or party granting collateral security for the Loans and other obligations
under the Loan Documents and otherwise, that the obligations and agreements of each such party to
the Lenders and/or the Agent under the Loan Documents, as applicable, or otherwise, shall continue
in full force and effect with respect to the indebtedness evidenced and secured by the Loan
Documents, irrespective of any modification made in this Change in Terms, which acknowledgement and
acceptance shall be in a writing executed by each such party and satisfactory to Agent.
10. Acknowledgment by Lenders. This Change in Terms shall only be effective upon the
acknowledgment, consent and acceptance by the Required Lenders, which acknowledgement, consent and
acceptance shall be evidenced by execution of this Change in Terms by Lenders constituting the
Required Lenders.
11. Successors and Assigns. This Change in Terms shall be binding upon the parties
hereto and their respective successors and assigns, and shall inure to the benefit of Agent and its
successors and assigns.
12. Costs and Expenses. Borrower also agrees to reimburse Agent for all costs and
expenses incurred in the preparation, execution and delivery of this Change in Terms, including
reasonable attorneys’ fees.
13. Titles and Headings. The titles and headings herein are intended to promote
convenience and are not a part of this Change in Terms for purposes of interpreting and applying
the provisions hereof.
14. Counterparts. This Change in Terms may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any of the parties hereto may
execute this Change in Terms by signing any such counterpart. This Change in Terms shall be
effective when it has been executed by Borrower, Agent, the Required Lenders and the Guarantors.
15. WAIVER OF JURY TRIAL. BORROWER, GUARANTORS AND AGENT HEREBY WAIVE TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS CHANGE IN
TERMS OR ANY OF THE LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
16. Confession of Judgment. Borrower and each Guarantor hereby irrevocably authorize
any attorney-at-law, including any attorney-at-law employed or retained by Agent to appear for it
in any action on this Change in Terms or any of the Loan Documents at any time after the same
becomes due as herein or therein provided in any court of record situated in the county where this
warrant was signed (being Franklin County, Ohio), or in the county where each Borrower or such
Guarantor, as the case may be, then resides or can be found, to waive the issuing and service of
process, and confess a judgment in favor of the holder of this Change in Terms and any such Loan
Documents against Borrower and/or such Guarantor, as the case may be, for the amount that may then
be due, with interest at the rate(s) provided for herein, together with the costs of suit, and to
waive and release all errors in said proceedings and the right to appeal from the judgment
rendered. Borrower and each Guarantor consents to the jurisdiction and venue of such court.
Borrower and each Guarantor waive any conflict of interest that any attorney-at-law employed or
retained by Agent may have in confessing judgment hereunder and consents to the payment of a legal
fee to any attorney-at-law confessing judgment hereunder.
IN WITNESS WHEREOF, Borrower and Agent have caused this Change in Terms to be executed
effective as of the day and year first above written.
| By: | /s/ Xxxx X. Xxxxxxxxxxx | ||
| Xxxx X. Xxxxxxxxxxx, Chief Executive Officer | |||
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
AGENT:
The Huntington National Bank,
a national banking association, as Agent
The Huntington National Bank,
a national banking association, as Agent
| By: | /s/ Xxxx X. Xxxxxxxx | ||
| Xxxx X. Xxxxxxxx, Vice President | |||
[acknowledgement of Lenders contained on next page]
ACKNOWLEDGMENT OF LENDERS
The undersigned Lenders hereby acknowledge, consent to, and accept all of the provisions of
the foregoing Change in Terms.
| The Huntington National Bank, a national banking association |
||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Xxxx X. Xxxxxxxx, Vice President | ||||
| JPMorgan Chase Bank, N.A., a national banking association and successor by merger to Bank One, N.A. (Main Office Columbus) |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Xxxxxx Xxxxxxxx, Senior Vice President | ||||
[signatures continue on following pages]
ACKNOWLEDGMENT OF GUARANTORS
The undersigned Guarantors hereby acknowledge, accept and agree to each of the provisions of
the foregoing Change in Terms and ratify and confirm that all of the provisions of the Loan
Documents to which each such Guarantor is a party, including, without limitation, the Subsidiary
Guaranty, the Fast Forward Guaranty, the Timexpress Guaranty, as applicable, and the Security
Agreements, and all obligations and liabilities of each such Guarantor in favor of Agent and/or the
Lenders thereunder and otherwise, and all liens, security and other interests granted thereby,
shall continue and remain in full force and effect, irrespective of any provision of the above
Change in Terms, the Waiver, or any other or future modification of the Loan Documents or the terms
of the credit extended, evidenced and secured thereby.
GUARANTORS:
7250 STARCHECK, INC.,
an Ohio corporation formerly known as Jetride, Inc.
an Ohio corporation formerly known as Jetride, Inc.
| By: | /s/ Xxxx X. Xxxxxxxxxxx | ||
| Xxxx X. Xxxxxxxxxxx, President | |||
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
Float Control, Inc., a
Michigan corporation
Michigan corporation
| By: | /s/ Xxxx X. Xxxxxxxxxxx | |||
| Xxxx X. Xxxxxxxxxxx, President | ||||
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
[signatures continue on following pages]
AirNet Management, Inc., an
Ohio corporation
Ohio corporation
| By: | /s/ Xxxx X. Xxxxxxxxxxx | ||
| Xxxx X. Xxxxxxxxxxx, President | |||
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
Fast Forward Solutions, LLC, an
Ohio limited liability company
Ohio limited liability company
| By: | /s/ Xxxx X. Xxxxxxxxxxx | ||
| Xxxx X. Xxxxxxxxxxx, President | |||
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
xxxxxxxxxx.xxx, inc. an
Ohio corporation
Ohio corporation
| By: | /s/ Xxxx X. Xxxxxxxxxxx | ||
| Xxxx X. Xxxxxxxxxxx, President | |||
WARNING — BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
