1
EXHIBIT 10.7
FIRST AMENDMENT TO
WARRANT AGREEMENT OF
NATIONAL AIRMOTIVE CORPORATION
FIRST AMENDMENT (the "Amendment") dated June 13, 1996 between National
Airmotive Corporation, a California corporation (the "Company"), as issuer and
as Warrant Agent, and Canpartners Investments IV, LLC, a California limited
liability company ("Warrant Holder"), as assignee of Canpartners Investments
III, L.P., a California limited partnership.
PRELIMINARY STATEMENTS:
(1) The Company and Canpartners Investments III, L.P., a California
limited partnership ("Canyon"), entered into the Warrant Agreement dated June 1,
1995 (the "Warrant Agreement"), pursuant to which the Company issued to the
Warrant Holder warrants to purchase 283,849 shares of the Common Stock, $0.01
par value (the "Common Stock"), of the Company at a price of $.35 per share,
with such number of shares and the price per share subject to adjustment as set
forth in the Warrant Agreement. Canyon has assigned its interest in the Warrant
Agreement and the Warrant to the Warrant Holder.
(2) Section 8 of the Warrant Agreement provides for a reduction in the
number of shares of Common Stock purchasable upon exercise of the Warrants if a
loan made to the Company pursuant to a separate Loan and Security Agreement
dated June 1, 1995 (the "Loan Agreement") is paid in full prior to July 5,
1996.
(3) The Loan Agreement is being amended and modified as of the date hereof
and, in conjunction with such amendment and in consideration of the promises
and covenants provided in such amendment, the Company and the Warrant Holder
have agreed to amend the terms of the Warrant Agreement as hereinafter set
forth.
SECTION 1. GENERAL. Capitalized terms used in this Amendment without
definition shall have the meanings prescribed for such terms in the Warrant
Agreement.
SECTION 2. AMENDMENT TO THE WARRANT AGREEMENT. Subject to the satisfaction
of the conditions precedent set forth in Section 3 hereof and effective as of
the date hereof:
(a) The conditions of Section 8 of the Warrant Agreement shall be
and hereby are deemed to have been satisfied and the number of shares of
Common Stock purchasable upon exercise of the Warrants shall be and hereby
are reduced by 83,485 so that a total of 200,364 shares of Common Stock are
purchasable upon exercise of the Warrants, as such number may be adjusted
pursuant to the provisions of Section 6.3 of the Warrant Agreement.
1
2
(b) Section 1.3 of the Warrant Agreement shall be amended to
include the Chief Operating Officer and the Chief Financial Officer as
officers authorized to execute a Warrant on behalf of the Company and, as
amended, shall read as follows:
"1.3 FORM OF WARRANTS. The text of Warrants and of the form
of election to purchase Warrant Shares (the "Purchase Form") shall
be substantially as set forth in Exhibit A attached hereto. Each
Warrant shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive Officer, President, Chief
Operating Officer, Chief Financial Officer or one of its Vice
Presidents, under its corporate seal reproduced thereon, and
attested by its Secretary or an Assistant Secretary.
A Warrant shall be dated as of the date of countersignature
thereof by the Company upon initial issuance."
SECTION 3. CONDITIONS PRECEDENT. Section 2 of this Amendment shall become
effective when, and only when, the Company and the Warrant Holder shall have
executed and delivered this Amendment and all of the following shall have been
received by the Warrant Holder:
(a) An executed copy of the First Amendment to the Loan Agreement,
which shall be in form and substance satisfactory to the Warrant Holder, as
evidenced by the Warrant Holder's execution thereof.
(b) Payment of $1,000,000 in conjunction with the First Amendment
to the Loan Agreement in partial prepayment of the promissory note.
(c) Payment by the Company of all fees and expenses owed to the
Warrant Holder pursuant to the Shareholders Agreement, the Loan Agreement
or the First Amendment to the Loan Agreement.
(d) A copy of a permit issued by the California Department of
Corporations, certified by an officer of the Company, qualifying the
modification of the Loan.
(e) A new Warrant issued to the Warrant Holder for the purchase of
200,364 shares of common stock of the Company, subject to adjustment as
provided in the Warrant Agreement, and the existing Warrant No. 1 is
surrendered to the Company.
2
3
SECTION 4. REFERENCE TO AND EFFECT ON THE WARRANT AGREEMENT.
(a) Upon the effectiveness of Section 2 of this Amendment, on and
after the date thereof, each reference in the Warrant Agreement to "this
Agreement," "hereunder," "hereof," or words of like import referring to the
Warrant Agreement shall mean and be a reference to the Warrant Agreement as
amended hereby.
(b) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any default or any other right, power or
remedy of the Warrant Holder under the Warrant Agreement nor constitute a
waiver of any provision of the Warrant Agreement, except to the extent
specified in Section 2 above.
SECTION 5. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of California, without giving
effect to principles of conflict of laws. The parties hereto agree to submit to
the jurisdiction of the Courts of the State of California in any action or
proceeding arising out of or relating to this Amendment or the Warrant
Agreement, as amended.
SECTION 6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
SECTION 7. CAPTIONS. The captions of the Sections of this Amendment have
been inserted for convenience only and shall have no substantive effect.
3
4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day, month and year first above written.
THE COMPANY:
NATIONAL AIRMOTIVE CORPORATION,
a California Corporation
By:
-----------------------------
Title:
-----------------------------
THE WARRANT AGENT:
NATIONAL AIRMOTIVE CORPORATION,
a California Corporation
By:
-----------------------------
Title:
-----------------------------
THE WARRANT HOLDER:
CANPARTNERS INVESTMENTS IV, LLC
a California limited liability company
By:
-----------------------------
Title:
-----------------------------
Address:
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
4
