SEVENTH AMENDMENT AND AGREEMENT
SEVENTH AMENDMENT AND AGREEMENT, dated as of October 28, 1998
(this "SEVENTH AMENDMENT"), to the Existing Credit Agreement (as
hereinafter defined), by and among INTERNATIONAL AIRLINE SUPPORT GROUP,
INC., a Delaware corporation (the "BORROWER"), and BNY FINANCIAL
CORPORATION, a New York corporation (the "Lender").
RECITALS
The Borrower and the Lender have entered into the Existing Credit
Agreement, pursuant to which the Lender is providing to the Borrower (i) a
$13,000,000.00 revolving credit facility, (ii) a $3,000,000.00 term loan
facility, (iii) a $3,750,000.00 term loan facility, (iv) a $1,500,000.00
term loan facility, (v) a $1,600,000.00 term loan facility and (vi) a
$1,000,000.00 revolving credit facility which are secured by accounts
receivable, inventory and other collateral of the Borrower. The Borrower
has requested that the Lender provide a letter of credit facility in the
amount of $2,000,000.00 (x) to provide for the satisfaction of certain
obligations of Air 41 LLC, a Delaware limited liability company ("AIR 41 ")
50 % of which is beneficially owned by the Borrower, under that certain
Secured Loan Agreement, made as of September 16, 1998, between Finova
Capital Corporation and Air 41 (the "SECURED LOAN AGREEMENT"), (y) to
assist the Borrower from time to time in importing goods and inventory and
(z) otherwise to provide assurance to third parties of payment of the
Borrower's obligations thereto. Subject to the terms and conditions
hereof, the Lender is willing to provide to Borrower the Letter of Credit
Facility (as defined below).
In consideration of the foregoing and of the mutual covenants and
undertakings herein contained, the parties hereto hereby agree that the
Existing Credit Agreement is amended as hereinafter provided.
ARTICLE I
Definitions
1. DEFINITIONS. (a) In addition to the definitions set forth
in the heading and the recitals to this Seventh Amendment, the following
definitions shall apply to this Seventh Amendment:
"AGREEMENT": means the Existing Credit Agreement as amended by
this Seventh Amendment.
"EXISTING CREDIT AGREEMENT": means the Credit Agreement, dated as
of September 30, 1996, between the Borrower and the Lender, as amended by
the First Amendment, Waiver and Agreement, dated as of March 24, 1997,
between the Borrower and the Lender, the Second Amendment and Agreement,
dated as of September 9, 1997, between the Borrower and the Lender, the
Third Amendment and Agreement, dated as of October 15, 1997, between the
Borrower and the Lender, the Fourth Amendment and Agreement, dated as of
February 4, 1998 between the Borrower and the Lender, the Fifth Amendment,
dated as of July 16, 1998, between the Borrower and the Lender, and the
Sixth Amendment, dated as of May 30, 1998, between the Borrower and the
Lender, as the same may have been further amended, supplemented or modified
from time to time up to but not including the effectiveness of this Seventh
Amendment.
"SEVENTH AMENDMENT DOCUMENTS": this Seventh Amendment and any
other agreements, instruments and documents executed or delivered pursuant
to or in connection with this Seventh Amendment and the transactions
contemplated thereby.
(b) Unless otherwise indicated, capitalized terms that are used
but not defined herein shall have the meanings ascribed to them in the
Existing Credit Agreement.
ARTICLE II
Representations
1. REPRESENTATIONS. The Borrower hereby represents and
warrants as follows:
(a) It (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has
the power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (iii) is duly qualified and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification and (iv) is in compliance with all Requirements of Law except
to the extent that the failure to comply therewith reasonably could not, in
the aggregate, be expected to have a Material Adverse Effect.
(b) It has the power and authority, and the legal right, to
make, deliver and perform this Seventh Amendment and the other Seventh
Amendment Documents to which it is a party and to borrow under the
Agreement and has taken all necessary action to authorize the borrowings on
the terms and conditions of the Agreement and this Seventh Amendment and to
authorize the execution, delivery and performance of the Seventh Amendment
Documents to which it is a party. No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
under the Agreement or with the execution, delivery, performance, validity
or enforceability of the Seventh Amendment Documents to which it is a
party. Each Seventh Amendment Document to which the Borrower is a party
has been or will be duly executed and delivered on behalf of the Borrower.
Each Seventh Amendment Document to which the Borrower is a party when
executed and delivered will constitute a legal, valid and binding
obligation of the Borrower enforceable against it in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(c) The conditions contained in Article IV hereof have been
satisfied.
(d) Each of the Credit Documents is on the date hereof in full
force and effect.
(e) The Secured Loan Agreement is on the date hereof in full
force and effect and no Default (as defined therein) or Event of Default
(as defined therein) has occurred and is continuing on the date hereof.
ARTICLE III
Amendments to Existing Credit Agreement
1. AMENDMENTS TO SECTION 1. (a) Section 1.1 of the Existing
Credit Agreement is hereby amended by inserting the following new
definitions therein in alphabetical order:
"AGGREGATE OUTSTANDING REVOLVER EXTENSIONS OF CREDIT": at any
time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolver Advances then outstanding and (b) the Letter of Credit
Liabilities then outstanding.
"GOODS": as defined in Section 2.6(g).
"DOCUMENTS": as defined in Section 2.6(g).
"LETTER OF CREDIT": as defined in Section 2.6.
"LETTER OF CREDIT DOCUMENTS" shall mean the collective reference
to each Letter of Credit and any other agreements, instruments, guarantees
or other documents (whether general in application or applicable only to
such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter
of Credit or (b) any collateral security for any such obligations, as each
may be modified and supplemented and in effect from time to time.
"LETTER OF CREDIT FACILITY": at any time, the obligation of the
Lender to join in applications for a Letter of Credit and/or guarantee
payment or performance thereunder in an aggregate principal amount at any
one time outstanding not to exceed $2,000,000.00, as such obligation may be
reduced from time to time in accordance with the provisions of this
Agreement.
"LETTER OF CREDIT LIABILITY": in respect of any Letter of Credit
at any time, the sum, without duplication at any time, of (a) the undrawn
face amount of such Letter of Credit at such time, PLUS (b) the aggregate
unpaid principal amount of all obligations of the Borrower at such time due
and payable in respect of all drawings made under such Letter of Credit.
"REIMBURSEMENT OBLIGATIONS": the obligations of the Borrower to
reimburse amounts paid by the Lender in respect of the Letters of Credit,
including without limitation all amounts due or which may become due under
the Letters of Credit, guarantees or any drafts or acceptances thereunder;
all amounts charged or chargeable to the Borrower or to the Lender by any
bank, other financial institution or correspondent bank which opens, issues
or is involved with such Letters of Credit; any other bank charges; fees
and commissions; duties and taxes; costs of insurance; all such other
charges and expenses which may pertain either directly or indirectly to
such Letters of Credit, drafts, acceptances, guarantees or to the goods or
documents relating thereto, and the Lender's charges as herein provided.
"SEVENTH AMENDMENT": that certain Seventh Amendment and
Agreement, dated as of October ___, 1998, between the Borrower and the
Lender.
"SEVENTH AMENDMENT DOCUMENTS": the Seventh Amendment and any
other agreements, instruments and documents executed or delivered pursuant
to or in connection with the Seventh Amendment and the transactions
contemplated thereby.
"SEVENTH AMENDMENT EFFECTIVE DATE": the date on which all of the
conditions precedent to the effectiveness of the Seventh Amendment set
forth in Article IV of the Seventh Amendment are first satisfied or waived.
(b) The definition of the term "Available Revolver Facility" in
Section 1.1 of the Existing Credit Agreement is hereby deleted in its
entirety and replaced with the following:
""AVAILABLE REVOLVER FACILITY": at any time, an amount equal to
the excess, if any, of (a) the Revolver Facility over (b) the Aggregate
Outstanding Revolver Extensions of Credit."
(c) The definition of the term "Credit Documents" in Section 1.1 of
the Existing Credit Agreement is hereby deleted in its entirety and
replaced with the following:
"CREDIT DOCUMENTS": this Agreement, the First Amendment, the
Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth
Amendment, the Sixth Amendment, the Seventh Amendment, the Letter of Credit
Documents, the Security Documents, each Consent and Agreement, Term Note A,
Term Note B, Term Note C, Term Note D, any Revolver Note and any other
documents, agreements or instruments executed and delivered to the Lender
pursuant to Section 6.11."
(d) The definition of the term "Facilities" in Section 1.1 of the
Existing Credit Agreement is hereby deleted in its entirety and replaced by
the following:
"FACILITIES": the collective reference to the Revolver Facility,
the Open Purchasing Revolver Facility, the Letter of Credit Facility, the
Term Loan A Facility, the Term Loan B Facility, the Term Loan C Facility
and the Term Loan D Facility."
(e) The definition of the term "Obligations" in Section 1.1 of the
Existing Credit Agreement is hereby amended by inserting the words "and the
Reimbursement Obligations" in the fifth line of said definition after the
words "on the Loans" and before the comma (,) immediately following such
words.
(f) The definition of the term "Revolver Facility" in Section 1.1 of
the Existing Credit Agreement is hereby deleted in its entirety and
replaced with the following:
""REVOLVER FACILITY" the obligation of the Lender to make
Revolver Advances to the Borrower under Section 2.l(a) hereof and or to
join in applications for Letter of Credits and/or guarantee payment or
performance thereunder in an aggregate principal amount at any one time
outstanding not to exceed $13,000,000.00, as such obligation may be reduced
from time to time in accordance with the provisions of this Agreement."
2. AMENDMENTS TO SECTION 2. (a) Section 2.l(a) is hereby amended by
deleting the first sentence thereof in its entirety and replacing it with
the following:
"Subject to the terms and conditions hereof, the Lender agrees in
its reasonable discretion to make revolving credit loans ("REVOLVER
ADVANCES") to the Borrower from time to time during the period commencing
with and including the Closing Date and ending with the termination of this
Agreement in an aggregate principal amount at any one time outstanding
which, when added to the then outstanding Letter of Credit Liabilities,
shall not exceed the lesser of the Revolver Facility then in effect and the
Revolver Borrowing Base then in effect."
(b) Section 2 of the Existing Credit Agreement is hereby amended by
incorporating at the end thereof the following section:
"2.6 LETTER OF CREDIT FACILITY. Subject to the terms and
conditions hereof, and in the Lender's sole and absolute discretion, the
Lender, upon the request of the Borrower from and after the Seventh
Amendment Effective Date, may from time to time apply for, join in the
application for, or guarantee payment or performance of, one or more
letters of credit (each, a "LETTER OF CREDIT") and any drafts or
acceptances thereunder; PROVIDED, HOWEVER, without in any way limiting the
discretion of the Lender, that in no event shall (i) the aggregate amount
of the Letter of Credit Liabilities, PLUS the aggregate principal amount of
the Revolver Advances then outstanding exceed at any time the lesser of the
Revolver Facility and the Revolver Borrowing Base as in effect at such
time, (ii) the face amount of any Letter of Credit be less than $50,000.00,
or (iii) the expiration date of any Letter of Credit extend beyond the
earlier of (x) the fifth Business Day preceding the Termination Date and
(y) the date twelve months following the date of such issuance, unless the
Lender has approved such expiry date in writing (but never beyond the fifth
Business Day prior to the Termination Date), PROVIDED, HOWEVER, that each
Letter of Credit may be automatically extendible for periods of up to one
year (but never beyond the fifth Business Day preceding the Termination
Date) so long as such Letter of Credit provides that the Lender retains an
option satisfactory to the Lender to terminate such Letter of Credit prior
to each extension date. The following additional provisions shall apply to
each Letter of Credit:
(a) The amount and extent of each Letter of Credit and the terms
and conditions thereof and of any drafts or acceptances thereunder, shall
in all respects be determined solely by or with the consent of the Lender
in its sole and absolute discretion and shall be subject to change,
modification and revision by the Lender, at any time and from time to time.
(b) On each day during which any Letter of Credit is
outstanding, the Revolver Facility shall be deemed to be utilized (in
addition to the aggregate amount of all Revolver Advances then outstanding)
for all purposes hereof in an amount equal to the then aggregate undrawn
face amounts of all Letters of Credit then outstanding.
(c) The Borrower hereby unconditionally agrees to pay and
reimburse the Lender on demand for the amount of each payment made by the
Lender to the issuer of a Letter of Credit or otherwise constituting a
Reimbursement Obligation, together with interest thereon at the ABR Rate
from the date payment was made to the date on which payment is demanded by
the Lender. Any such payment due from the Borrower and not paid on the
required date shall bear interest at rates specified in Section 3.l(c).
The Lender is hereby authorized, but shall not be obligated, to make any
such payment to itself on behalf of the Borrower in whole or in part by
making a Revolver Advance or by otherwise charging the account of the
Borrower.
(d) Borrower shall pay to the Lender monthly in advance in
respect of each Letter of Credit a letter of credit commission in an amount
(not less than $500) equal to (x) one quarter of one percent (1/4%) per
month on the face amount of such Letter of Credit, either opened or amended
(as to expiry date or dollar amount) for the entire term of such Letter of
Credit (including for the purposes hereof the term of any time draft
thereunder payable after the expiry thereof); or (y) five sixteenths of one
percent (5/16%) per month for each month (or partial month) during the term
of such Letter of Credit (including for the purposes hereof the term of any
time draft thereunder payable after the expiry thereof) during which the
Loans bear interest at the rate set forth in Section 3. 1 (b). Upon and
after the occurrence of an Event of Default, such commission shall be
increased by an amount equal to one sixth of one percent (1/6%) per month.
(e) All Reimbursement Obligations shall be repaid to the Lender
solely in Dollars.
(f) All Letters of Credit used to assist the Borrower in
importing goods and inventory shall be opened to cover actual importation
of goods and inventory solely for the Borrower's account, and said goods
will not be sold or transferred, other than to customers in the ordinary
course of business, without our specific, prior written consent.
(g) In addition to any indemnification hereunder, the Borrower
unconditionally agrees to indemnify the Lender and hold the Lender harmless
from and against any and all loss, claim or liability arising from any
transactions, occurrences, errors or omissions relating to any Letter of
Credit; the goods acquired thereunder (the "Goods"); the documents
evidencing the Goods (the "Documents"); any discrepant or nonconforming
provisions thereof; steamship or airway guaranties, releases, indemnities
or delivery orders or similar documents; any drafts or acceptances; and all
Reimbursement Obligations hereunder, including, but not limited to, any
such loss, claim or liability due to any action, errors or omissions
attributable to the issuer, the Lender, any other entity, or any other
cause. The Borrower's unconditional obligation to the Lender hereunder
shall not be modified or diminished for any reason or in any manner
whatsoever. The Borrower agrees that any charges made by the Lender for
the Borrower's account shall be conclusive on the Lender and may be repaid
by the creation by Lender of a Revolver Advance or otherwise charged to the
Borrower's account.
(h) The Lender shall not be responsible for: the existence,
character, quality, quantity, condition, packing, value or delivery of the
goods purporting to be represented by any Documents; any difference or
variation in the character, quality, quantity, condition, packing, value or
delivery of the goods from that expressed in the Documents; the validity,
sufficiency, or genuineness of any Documents or of any endorsements
thereon, even if such Documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; any discrepant or
nonconforming provisions in any Documents; the time, place, manner or order
in which shipment is made; partial or incomplete shipment, or failure or
omission to ship any or all of the goods referred to in any Letter of
Credit or Documents; any deviation from instructions; delay, default, or
fraud by the shipper and/or anyone else in connection with the Goods or the
shipping thereof; or any breach of contract between the shipper or vendors
and the Borrower. Furthermore, without being limited by the foregoing, the
Lender shall not be responsible for any act or omission taken or made in
good faith with respect to or in connection with any of the Goods or the
Documents.
(i) The Borrower agrees that any action taken by the Lender, or
any action taken by the issuer if taken in good faith, under or in
connection with any Letter of Credit, the guarantees, the drafts or
acceptances, or the Goods or the Documents, shall be binding on the
Borrower and shall not put the Lender in any resulting liability to the
Borrower. In furtherance thereof, the Lender shall have the full right and
authority to take any of the following actions in the name of the Lender or
the Borrower (and the Borrower agrees that it shall not have the right to
take any such action without the Lender's express endorsement in writing):
to clear and resolve any questions of non-compliance of Documents; to give
any instructions as to acceptance or rejection of any Documents or Goods;
to execute any and all applications for steamship or airways guarantees,
releases, indemnities or delivery orders or similar documents; to grant any
extensions of the maturity of, time of payment for, or time of presentation
of, any drafts, acceptances, or documents; and to agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the
terms or conditions of any of the applications, Letters of Credit, drafts
or acceptances, all in the Lender's sole name; and the issuer shall be
entitled to comply with and honor any and all such documents or
instructions executed by or received solely from the Lender, all without
any notice to or any consent from the Borrower.
(j) The Borrower agrees that any necessary import, export or
other licenses or certificates for the import or handling of the Goods will
have been promptly procured; all foreign and domestic governmental laws and
regulations in regard to the shipment and importation of the Goods, or the
financing thereof will have been promptly and fully compiled with; and any
certificates in that regard that the Lender may at any time request will be
promptly furnished. In this connection, the Borrower warrants and
represents that all shipments made under any such Letter of Credit will be
in accordance with the governmental laws and regulations of the countries
in which the shipments originate and terminate, and are not prohibited by
any such laws and regulations. The Borrower assumes all risk and liability
for, and agrees to pay and discharge, all present and future local, state,
federal or foreign taxes, duties or levies. Any embargo, restriction,
laws, customs or regulations of any country, state, city or other political
subdivision, where the Goods are or may be located, or wherein payments are
to be made, or wherein drafts may be drawn, negotiated, accepted, or paid,
shall be solely the Borrower's risk, liability and responsibility.
(k) Any rights, remedies, duties or obligations granted or
undertaken by the Borrower to the issuer in any application for any Letter
of Credit, or any standing agreement relating to any Letter of Credit or
otherwise, shall be deemed to have been granted to the Lender and apply in
all respects to the Lender and shall be in addition to any rights,
remedies, duties or obligations contained herein.
(1) The obligations of the Borrower under this Agreement and any
Letter of Credit Document to reimburse the Lender for a payment made by the
Lender to the issuer of a Letter of Credit or otherwise constituting a
Reimbursement Obligation, and to repay any Revolver Advance made in respect
thereof, shall be unconditional and irrevocable, and shall be paid strictly
in accordance with the terms of this Agreement and each such other Letter
of Credit Document under all circumstances, including the following: (i)
any lack of validity or enforceability of this Agreement or any Letter of
Credit Document; (ii) the existence of any claim, setoff, defense or other
right that the Borrower may have at any time against any issuer,
beneficiary, or any transferee of the Letter of Credit (or any Person for
whom any such issuer, beneficiary or any such transferee may be acting),
the Lender or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by the Letter of Credit Documents
or any unrelated transaction; (iii) any draft, demand, certificate or other
document presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect, or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under the Letter of Credit, or any defense based upon the failure
of any drawing under the Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; or (iv) any other circumstance
or happening whatsoever, whether or not similar to any of the foregoing,
including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower. To the extent that any
provision of any Letter of Credit Document is inconsistent with the
provisions of this Section 2.6, the provisions of this Section 2.6 shall
control."
3. AMENDMENTS TO SECTION 3. (a) Section 3.1(b) of the Existing
Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"(b) If on any five Business Days (whether or not
consecutive) occurring in any calendar month the sum of the amount of
Revolver Advances outstanding on each
such
Business Day and the Letter of Credit Liabilities outstanding on each
such Business Day exceeds the lesser of the Revolver Borrowing Base
and the Revolver Facility as in effect for each such Business Day with
the permission of the Lender pursuant to Section 3.3(c), then the
average daily balance of all Loans outstanding on each day during such
month shall bear interest at the then applicable Interest Rate
pursuant to Section 3.1(a) above, plus a per annum rate of one-half of
one percent (0.50 %)."
(b) Section 3.3(a) of the Existing Credit Agreement is hereby
amended by deleting the first sentence thereof in its entirety and
replacing it with the following:
"If on any date on which a Borrowing Base Certificate is
required to be delivered pursuant to Section 6.2(c), the sum of the
aggregate outstanding principal amount of the Revolver Advances as of
such date and the Letter of Credit Liabilities as of such date exceeds
the Revolver Borrowing Base, the Borrower shall prepay the Revolver
Advances and deposit cash collateral in respect of the Letter of
Credit Liabilities in accordance with paragraph (f) of this Section
3.3 in an aggregate amount equal to such excess no later than the
Business Day immediately following the date of delivery of such
Borrowing Base Certificate."
(c) Section 3.3(e) of the Existing Credit Agreement is hereby
deleted in its entirety and replaced by the following:
"(e) Unless the Lender otherwise agrees, the Borrower shall
prepay the Revolver Advances and deposit cash collateral in respect of
the Letter of Credit Liabilities in accordance with paragraph (f) of
this Section 3.3 in an aggregate amount equal to 100% of the Net
Proceeds of any sale, lease, assignment, exchange or other disposition
for cash of any asset or group of assets (including, without
limitation, insurance proceeds paid as a result of any destruction,
casualty or taking of any property of the Borrower), other than
Approved Aircraft and the Real Estate of the Borrower upon which its
principal executive offices are located on the Closing Date, not made
in the ordinary course of business by the Borrower, in any such case
no later than three Business Days following receipt by the Borrower of
such proceeds, together with accrued interest to such date on the
amount prepaid; PROVIDED that no such prepayment or cash collateral
deposit shall be required pursuant to this Section 3.3(e) unless the
aggregate amount of such Net Proceeds received by the Borrower and not
previously applied to prepayment of the Revolver Advances is at least
$100,000. Nothing in this Section 3.3(e) shall be construed to
derogate any restriction or limitation contained in any Credit
Document imposed on any transaction of the types described in this
Section 3.3(e), including without limitation the restrictions set
forth in Sections 7.2, 7.5, and 7.6 hereof.
(d) Section 3.3 of the Existing Credit Agreement is hereby
amended by incorporating at the end thereof the following section:
"(f) All cash collateral in respect of Letter of Credit
Liabilities required under Section 3.3(a), Section 3.3(e) and Section
8 hereof, shall be deposited by the Borrower in a cash collateral
account opened by the Lender. The Borrower hereby grants to the
Lender, for the benefit of the issuer, a security interest in such
cash collateral to secure all obligations of the Borrower under this
Agreement and the other Credit Documents. Amounts held in such cash
collateral account shall be applied by the Lender to the payment of
Reimbursement Obligations, and the unused portion thereof after all
Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other Obligations of the Borrower. After
all such Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations shall have been satisfied and all
other Obligations of the Borrower shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to
the Borrower. The Borrower shall execute and deliver to the Lender,
for the account of the issuer, such further documents and instruments
as the Lender may request to evidence the creation and perfection of
the within security interest in such cash collateral account."
(e) Section 3.13 of the Existing Credit Agreement is hereby
amended by (i) inserting the words "or applications or guarantees made,
joined in or issued by the Lender in connection with Letters of Credit" in
the fifth line thereof immediately after the words "against Loans made by
the Lender" and before the words "or impose on the Lender", and (ii)
inserting the words "or such applications or guarantees" in the sixth line
thereof immediately after the word "Loans" and before the words "or the
performance by the Lender", and (iii) inserting the words "or making,
joining in or issuing such applications or guarantees or" at the beginning
of the eighth line thereof immediately before the words "otherwise
performing its obligations hereunder".
4. AMENDMENT TO SECTION 4. Section 4 of the Existing Credit
Agreement is hereby amended by deleting the first sentence thereof in its
entirety and replacing it with the following:
"To induce the Lender to enter into this Agreement, to make the
Loans and to apply for, join in the application for, or guarantee payment
or performance of Letters of Credit, the Borrower hereby represents and
warrants to the Lender that:
5. AMENDMENT TO SECTION 5. The last sentence of Section 5.2 of
the Existing Credit Agreement is hereby amended by inserting the words "and
Letter of Credit issued on behalf of" into the first line thereof
immediately after the words "Each borrowing by" and before the words "the
Borrower hereunder".
6. AMENDMENTS TO SECTION 8. (a) Section 8(a) of the Existing
Credit Agreement is hereby amended by inserting the words "or any
Reimbursement Obligation" into the first line thereof immediately after the
words "on any Loan" and before the words "or any other amount".
(b) Section 8 of the Existing Credit Agreement is hereby amended
by inserting the words "(including, without limitations all amounts of the
Letter of Credit Liabilities, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) into each of the fourth and ninth lines of the flush text of
the first paragraph thereof (which immediately succeeds Event of Default
(i)) immediately after the words "this Agreement" and before the words "and
the other" in each such line.
(c) Section 8 of the Existing Credit Agreement is hereby amended
by incorporating therein after the first paragraph thereof the following
paragraph:
"With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall
at such time deposit in a cash collateral account in accordance with
the provisions of Section 3.3(f) an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit."
ARTICLE IV
Conditions to Effectiveness
This Seventh Amendment, and the modifications to the Credit
Agreement provided for herein, shall become effective on the date (the
"SEVENTH AMENDMENT EFFECTIVE DATE") on which all of the following
conditions have been (or are concurrently being) satisfied:
1. This Seventh Amendment shall have been executed and
delivered by each party hereto.
2. The Lender shall have received executed legal opinions of
King & Spalding, special counsel to the Borrower, in form and substance
satisfactory to the Lender and taking into account this Seventh Amendment
and the matters contemplated hereby. Such legal opinion shall cover such
matters incident to the transactions contemplated by this Seventh Amendment
as the Lender may reasonably require.
3. The Lender shall have received a copy, in form and substance
reasonably satisfactory to the Lender, of the corporate resolutions of the
Borrower, authorizing the Letter of Credit Facility and the execution,
delivery and performance of this Seventh Amendment, certified by the
Secretary or an Assistant Secretary of the Borrower as of the Seventh
Amendment Effective Date, which certificates shall state that the
resolutions or authorizations thereby certified have not been amended,
modified, revoked or rescinded as of the date of such certificate.
4. The Lender shall have received a certificate of the
Secretary or an Assistant Secretary of the Borrower, dated the Seventh
Amendment Effective Date, as to the incumbency and signature of the
officer(s) of the Borrower executing this Seventh Amendment and any
certificate or other document to be delivered by it pursuant hereto,
together with evidence of the incumbency of such Secretary or Assistant
Secretary.
5. The Lender shall have received certificates from the
Borrower, stating that its Governing Documents have not been amended since
September 30, 1996.
6. The Lender shall have received copies of certificates dated
as of a recent date from the Secretary of State or other appropriate
authority of such jurisdiction, evidencing the good standing of the
Borrower in the State of its organization and in each State where the
ownership, lease or operation of property or the conduct of business
requires it to qualify as a foreign corporation or other entity except
where the failure to so qualify would not have a Material Adverse Effect.
7. Each of the representations and warranties made by the
Borrower in or pursuant to the Credit Documents shall be true and correct
in all material respects on and as of the Seventh Amendment Effective Date
as if made on and as of such date (except to the extent the same relate to
another, earlier date, in which case they shall be true and correct in all
material respects as of such earlier date).
8. No Default or Event of Default shall have occurred and be
continuing.
9. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Seventh Amendment, the Existing Credit Agreement, the
Credit Agreement and the other Credit Documents shall be reasonably
satisfactory in form and substance to the Lender, and the Lender shall have
received such other documents in respect of any aspect or consequence of
the transactions contemplated hereby or thereby as it shall reasonably
request.
10. The Lender shall have received each additional document,
instrument, legal opinion or item of information reasonably requested by
the Lender, including, without limitation, a copy of any debt instrument,
security agreement or other material contract to which the Borrower is to
be a party.
ARTICLE V
Miscellaneous
1. PAYMENT OF EXPENSES. Without limiting its obligations under
Section 9.5 of the Existing Agreement, the Borrower agrees to pay or
reimburse the Lender for all of its reasonable costs and expenses incurred
in connection with this Seventh Amendment and the other Seventh Amendment
Documents, including, without limitation, the reasonable costs and expenses
of Cadwalader, Xxxxxxxxxx & Xxxx, counsel to the Lender, and expressly
acknowledge that their obligations hereunder constitute "Obligations"
within the meaning of the Existing Credit Agreement.
2. NO OTHER AMENDMENTS; CONFIRMATION. Except as expressly
amended, modified and supplemented hereby and by the documents related
hereto, the provisions of the Existing Credit Agreement and the other
Credit Documents shall remain in full force and effect.
3. ACKNOWLEDGMENT. The Borrower hereby consents to the
execution and delivery of this Seventh Amendment and each of the other
Seventh Amendment Documents to which Borrower is a party and reaffirms its
obligations under the Credit Documents.
4. GOVERNING LAW; COUNTERPARTS. (a) This Amendment and the
rights and obligations of the parties hereto shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New
York.
(b) This Amendment may be executed by one or more of the parties
hereto on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
A set of the counterparts of this Amendment signed by all the parties shall
be lodged with the Borrower and the Lender. This Amendment may be
delivered by facsimile transmission of the relevant signature pages hereof.
[SIGNATURE PAGE FOLLOWS]
1
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
INTERNATIONAL AIRLINE SUPPORT
GROUP, INC.
By ________________________________
Name:
Title:
BNY FINANCIAL CORPORATION
By ________________________________
Name:
Title:
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
INTERNATIONAL AIRLINE SUPPORT
GROUP, INC.
By ________________________________
Name:
Title:
BNY FINANCIAL CORPORATION
By ________________________________
Name:
Title:
