EXHIBIT 4.7
AMENDMENT NO. 1
DATED AS OF AUGUST 20, 1998
to
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF FEBRUARY 10, 1998
This Amendment No. 1 (this "Amendment"), dated as of August 20, 1998, is
among AAR CORP. (the "Borrower"), the Lenders party to the Credit Agreement
(defined below) and The First National Bank of Chicago, as Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain Second Amended and Restated Credit Agreement dated as of February 10,
1998 (as heretofore amended, the "Credit Agreement") and the other Loan
Documents referred to therein; and
WHEREAS, the Borrower, the Lenders and the Agent desire to amend the
Credit Agreement in order to amend certain provisions thereof;
NOW, THEREFORE, in consideration of the premises and the undertakings set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement.
2. AMENDMENT. The Credit Agreement is hereby amended as follows:
(a) The following new definition of "Consolidated Net Worth" is
hereby added to Article I of the Credit Agreement in the appropriate
alphabetical order:
"Consolidated Net Worth" means, as of any date of
determination, the consolidated stockholders' equity of the
Borrower and its Subsidiaries determined in accordance with
Agreement Accounting Principles.
(b) The definition of "Consolidated Secured Liabilities" contained
in Article I of the Credit Agreement is hereby amended by deleting the
phrase "clauses (a), (d), (e), (f) and (h)" contained therein and
inserting in lieu thereof the phrase "clauses (a), (d), (e), (f), (h) and
(k)"
(c) The definition of "Consolidated Tangible Net Worth" contained
in Article I of the Credit Agreement is hereby amended by deleting it in
its entirety and inserting in lieu thereof the following:
"Consolidated Tangible Net Worth" means, as of any date of
determination, the sum of (a) Consolidated Net Worth, less
consolidated Intangible Assets, plus (b) Subordinated Debt. For
purposes of this definition "Intangible Assets" means the amount
(to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months after
the acquisition of such business) subsequent to May 31, 1998 in
the book value of any asset owned by the Borrower or a
Consolidated Subsidiary and (ii) all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, organization
or developmental expenses and other intangible items, for purposes
of this clause (ii), in each case, to the extent such items are
disclosed as separate line items on the Borrower's financial
statements required under Section 6.1
(d) The definition of "Contingent Obligation" contained in
Article I of the Credit Agreement is hereby amended by inserting the
following at the end of such definition (prior to the period):
"; but does not include: (a) Contingent Obligations
resulting from endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
the Borrower's and each Subsidiary's business, (b) Contingent
Obligations by the Borrower of any Subsidiary's Indebtedness
(including, for the avoidance of doubt, obligations arising out of
overdraft and similar cash management facilities) permitted to
exist pursuant to this Agreement and any Subsidiary's obligations
for Rentals permitted by Section 6.18, and (c) any obligations in
connection with transactions described in Section 6.13(f)."
(e) The definition of "Indebtedness" contained in Article I of the
Credit Agreement is hereby amended by deleting the phrase "clauses (a),
(d), (e), (f) and (h)" contained therein and inserting in lieu thereof
the phrase "clauses (a), (d), (e), (f), (h) and (k)"
(f) Section 6.13 of the Credit Agreement is hereby amended by
adding a new clause (f) as follows:
"(f) Any transfer of an interest in accounts or notes
receivable on a limited recourse basis, PROVIDED that such
transfer qualifies as a sale under Agreement Accounting Principles
and that the amount of such financing does not exceed $50,000,000
at any one time outstanding."
(g) Section 6.14 of the Credit Agreement is hereby amended by
(i) renumbering clause (k) thereof as clause (l); (ii) deleting from such
clause (l) the phrase "clauses (a) through (j)" and inserting in lieu
thereof the phrase "clauses (a) through (k)"; and (iii) adding a new
clause (k) as follows:
(k) Any Acquisition that after giving effect thereto does
not cause the sum of (i) Consolidated Funded Debt PLUS (ii) the
aggregate amount of Contingent Obligations of the Borrower and its
Subsidiaries to exceed 55% of Consolidated Total Capitalization.
(h) Section 6.15 of the Credit Agreement is hereby amended by
deleting it in its entirety and inserting in lieu thereof the phrase
"Intentionally Omitted."
(i) Section 6.16 of the Credit Agreement is hereby amended by
adding a new clause (k) as follows:
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"(k) Liens incurred in connection with any transfer of an
interest in accounts or notes receivable which is permitted
pursuant to Section 6.13(f)."
(j) Section 6.22 of the Credit Agreement is hereby amended by
deleting it in its entirety and inserting in lieu thereof the following:
6.22. CONSOLIDATED NET WORTH. The Borrower will maintain at
all times Consolidated Net Worth in an amount not less than the
sum of (a) $260,000,000 plus (b) the net cash proceeds received by
the Borrower from the sale of any of its capital stock on or after
May 31, 1998 plus (c) an amount equal to the aggregate of
one-third of Consolidated Net Income earned during each of its
fiscal years beginning with its fiscal year commencing June 1,
1998, said fiscal years to be taken as one accounting period minus
(d) amounts (not to exceed $10,000,000 in the aggregate for the
purposes of this covenant) either used for the purchase or
retirement of the Borrower's capital stock or representing the
after tax write-down of assets and associated costs on or after
May 31, 1998.
(k) Section 6.23 of the Credit Agreement is hereby amended by
deleting it in its entirety and inserting in lieu thereof the phrase
"Intentionally Omitted."
(l) Section 6.25 of the Credit Agreement is hereby amended by
deleting the percentage "50%" contained therein and inserting in lieu
thereof the percentage "60%."
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent and
the Lenders to enter into this Amendment, the Borrower hereby represents and
warrants to the Agent and the Lenders as of the date of this Amendment that:
(a) There exists no Default or Unmatured Default and the execution
of this Amendment shall not create a Default or Unmatured Default.
(b) The representations and warranties contained in Article V of
the Credit Agreement are true and correct as of the date of this
Amendment.
4. LEGAL EXPENSES. The Borrower agrees to reimburse the Agent for
reasonable legal fees and expenses incurred by attorneys for the Agent (who may
be employees of the Agent) in connection with the preparation, negotiation and
consummation of this Amendment and the transactions contemplated herein.
5. RATIFICATION OF CREDIT AGREEMENT. Except as specifically provided
herein, all of the terms and conditions of the Credit Agreement shall remain in
full force and effect and the Credit Agreement as amended hereby is agreed to,
ratified and confirmed by the Borrower, the Agent and the Lenders in all
respects.
6. MISCELLANEOUS.
(a) This Amendment may be executed in counterparts and by the
different parties hereto on separate counterparts each of which, when so
executed and delivered, shall be deemed an original, and all of which
taken together shall constitute one and the same agreement.
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(b) This Amendment shall be effective as of the date first above
written: PROVIDED, THAT, the Agent has received executed counterparts of
this Amendment from the Borrower, the Agent and the Lenders.
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have executed
this Amendment as of the date first above written.
AAR CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Title: VICE PRESIDENT
-------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
INDIVIDUALLY AND AS AGENT
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Title: Vice President
-------------------------
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SECOND AMENDMENT TO
THE CREDIT AGREEMENT
THIS SECOND AMENDMENT TO THE SECOND AMENDED AND RESTATED
CREDIT AGREEMENT (THIS "AMENDMENT") IS MADE AND DATED AS
OF JANUARY 25, 2002 AMONG AAR CORP., A DELAWARE
CORPORATION ("BORROWER"), THE LENDERS PARTY HERETO
("LENDERS"), AND BANK ONE, NA, (F.K.A., THE FIRST
NATIONAL BANK OF CHICAGO) AS AGENT (IN SUCH CAPACITY,
"AGENT"), AND AMENDS THAT CERTAIN SECOND AMENDED AND
RESTATED CREDIT AGREEMENT DATED AS OF FEBRUARY 10, 1998
AMONG THE BORROWER, THE LENDERS AND THE AGENT, AS
AMENDED BY A FIRST AMENDMENT TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT DATED AS OF AUGUST 20, 1998
(AS SO AMENDED, THE "CREDIT AGREEMENT").
WHEREAS, AAR, the Lenders and the Agent are parties to the Credit Agreement and
the other Loan Documents referred to therein; and
WHEREAS, AAR, the Lenders and the Agent desire to amend the Credit Agreement in
order to amend certain provisions thereof.
NOW, THEREFORE, in consideration of the premises and the undertakings set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree that effective as of the date
hereof, the Credit Agreement is amended as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Credit Agreement.
1. AMENDMENT. The Credit Agreement is hereby amended as follows:
(a) Section 2.4, Fees shall be amended and read as follows:
2.4 FEES. The Borrower agrees to pay to the Agent, for the ratable
account of the Lenders, a facility fee on the amount of the Aggregate
Commitment, for the period from the date hereof to and including the
Revolving Credit Termination Date, payable quarterly in advance on the
date of this Agreement and on each Payment Date hereafter, equal to
(x) 0.35% per annum at all times when the Borrower has an Investment
Grade Rating and (y) 0.425% at all times when the Borrower does not have
an Investment Grade Rating.
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(b) Section 6.22, Consolidated Net Worth shall be amended and read as
follows:
6.22 CONSOLIDATED NET WORTH. The Borrower will maintain at all times
Consolidated Net Worth in an amount not less than the sum of (a)
$260,000,000 plus (b) the net cash proceeds received by the Borrower from
the sale of any of its capital stock on or after May 31, 1998 plus (c) an
amount equal to the aggregate of one-third of Consolidated Net Income
earned during each of its fiscal years beginning with its fiscal year
commencing June 1, 1998, said fiscal years to be taken as one accounting
period minus (d) amounts (not to exceed $30,000,000 in the aggregate for
the purposes of this covenant) either used for the purchase or retirement
of the Borrower's capital stock or representing the after tax write-down
of assets and associated costs on or after May 31, 1998.
(c) Section 6.26, Fixed Charge Coverage Ratio shall be amended and read
as follows:
6.26. FIXED CHARGE COVERAGE RATIO. The Borrower will maintain a
Fixed Charge Coverage Ratio of not less than 1.20:1.00 as of the last day
of each fiscal quarter of the Borrower commencing on the quarter ended
August 31, 2002 and thereafter. The Fixed Charge Coverage Ratio shall be
determined based on four of the previous five fiscal quarters of the
Borrower that occurred immediately prior to the calculation date, at the
Borrower's option, except that for the quarter ended August 31, 2002, the
Fixed Charge Coverage Ratio may be determined solely on that quarter's
results if the result is greater than four of the previous five fiscal
quarters results.
(d) The Revolving Credit Termination Date will be extended to
February 9, 2004.
(e) The definition of Revolving Credit Termination Balance shall be
amended and read as follows:
"Revolving Credit Termination Balance" means zero at the close of
business on the Revolving Credit Termination Date.
(f) The definition of Eurodollar Rate shall be amended and read as
follows:
"Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Eurodollar Interest Period, the sum of (i) the
quotient of (a) the Eurodollar Base Rate applicable to such
Eurodollar Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Eurodollar
Interest Period, plus (ii) the Applicable Margin. As used in this
definition, "Applicable Margin" means (x) when the Borrower has an
Investment Grade Rating, 1.25% at all times when the Obligations
are less than or equal to 60% of the Aggregate Commitment, and
2.00% at all times when the Obligations exceed 60% of the
Aggregate Commitment, and (y) when the Borrower does not have an
Investment Grade Rating, 1.525% at all times when the Obligations
are less than
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or equal to 60% of the Aggregate Commitment, and 2.275% at all
times when the Obligations exceed 60% of the Aggregate Commitment.
The Eurodollar Rate shall be rounded to the next higher multiple
of 1/16 of 1% if the rate is not such a multiple.
(g) The definition of Facility Termination Date shall be amended and
read as follows:
"Facility Termination Date" means the Revolving Credit Termination
Date.
(h) The definition of Aggregate Commitment shall be amended and read as
follows:
"Aggregate Commitment" means (i) $40,000,000 through the end of
business on June 29, 2002, (ii) $35,000,000 from June 30, 2002 through
the end of business on December 30, 2002, (iii) $30,000,000 from December
31, 2002 through the end of business on June 29, 2003, (iv) $25,000,000
from June 30, 2003 through the end of business on December 30, 2003, and
(v) $20,000,000 thereafter; provided, however, that in the event the
Borrower's total aggregate committed credit facilities from all lenders
(including the Lenders) exceeds $125 million, the Aggregate Commitment
will be reduced such that the Borrower's total aggregate committed credit
facilities from all lenders (including the Lenders) shall not exceed $125
million.
(i) Section 2.6 shall be amended and read as follows:
2.6. RATABLE LOANS. Each Advance hereunder shall consist of Loans
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment. In the event the
Borrower desires an advance that brings the aggregate principal Dollar
Amount of all Advances then outstanding in excess of $5 million at any
time after November 30, 2001, the Advance hereunder related to such
desired amount shall be in proportion to the ratio that the Aggregate
Commitment bears to the total aggregate commitments (including the
Aggregate Commitment) from all lenders providing Borrower an unsecured
committed credit facility equal to or greater than $20 million (but in
all cases including the unsecured committed amount provided under the
Bank of America Agreement, and the LaSalle Agreement), and Borrower shall
obtain pro-rata borrowings from such other lenders to obtain the total
desired advance.
(j) Insert a new definition to read as follows:
"LaSalle Agreement" means the Revolving Loan Agreement dated as of
April 11, 2001 between the Borrower and LaSalle Bank National
Association, as the same may from time to time be amended, supplemented
or otherwise modified, and including any replacement unsecured credit
facility between the Borrower and LaSalle Bank National Association.
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(k) Insert a Section 9.16 to read as follows:
9.16. MOST FAVORED PRICING/COVENANT PROVISION. The Borrower
agrees that the Facility Fee, interest rates, and covenants hereunder
shall be automatically modified to reflect any similar facility fee,
interest rate or covenant set forth in the Bank of America Agreement, the
LaSalle Agreement or any other unsecured credit facility entered into
with another lender, but only to the extent that said fee or interest
rate is higher or said covenant is more restrictive than as set forth in
this Agreement.
2. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent and the
Lenders to enter into this Amendment, AAR hereby represents and warrants to
the Agent and the Lenders as of the date of this Amendment that:
(a) There exists no Default or Unmatured Default and the execution of
this Amendment shall not create a Default or Unmatured Default.
(b) The representations and warranties contained in Article V of the
Credit Agreement are true and correct as of the date of this Amendment.
4. LEGAL EXPENSES. AAR agrees to reimburse the Agent for reasonable legal fees
and expenses incurred by attorneys for the Agent (who may be employees of the
Agent) in connection with the preparation, negotiation and consummation of this
Amendment and the transactions contemplated herein.
5. RATIFICATION OF CREDIT AGREEMENT. Except as specifically provided herein,
all of the terms and conditions of the Credit Agreement shall remain in full
force and effect and the Credit Agreement as amended hereby is agreed to,
ratified and confirmed by AAR, the Agent and the Lenders in all respects.
6. MISCELLANEOUS.
(a) This Amendment may be executed in counterparts and by the different
parties hereto on separate counterparts each of which, when so executed
and delivered, shall be deemed an original, and all of which taken
together shall constitute one and the same agreement.
(b) This Amendment shall be effective as of the date first above written;
provided, that, the Agent has received executed counterparts of this
Amendment from AAR, the Agent and the Lenders.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment to
the Credit Agreement as of the date first written above.
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AAR CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx [SEAL]
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
BANK ONE, NA
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: XXXXXX X. XXXXX
------------------------
Title: Senior Vice President
-----------------------
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