FIFTH AMENDMENT
TO
CREDIT AGREEMENT
FIFTH AMENDMENT, dated as of August 28, 2003 (the "Amendment"), to
Credit Agreement dated June 30, 2000 (as amended, the "Agreement") by and
between AeroCentury Corp., a Delaware corporation ("AeroCentury"), the banking
institutions signatories hereto and such other institutions that hereafter
become a "Bank" pursuant to Section 10.4 hereof (collectively the "Banks" and
individually a "Bank") and National City Bank, a national banking association,
as agent for the Banks under this Agreement ("National City" which shall mean in
its capacity as agent unless specifically stated otherwise). All capitalized
terms used herein and not otherwise defined shall have the respective meanings
ascribed to them in the Agreement.
Preliminary Statement
WHEREAS, National City and AeroCentury, together with the other Banks,
desire to amend the Agreement in the manner hereinafter set forth; and
WHEREAS, Section 10.2 of the Credit Agreement requires that the written
consent of the Banks be obtained for certain amendments, modifications or
waivers contemplated herein.
NOW THEREFORE, in consideration of the premises and promises
hereinafter set forth and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Amendments to Agreement.
(a) Article 7 of the Agreement. The following section as set forth in Article 7
of the Agreement is hereby amended and restated in its entirety to be as
follows:
"7.1. Minimum Tangible Net Worth. Effective as of the Fiscal
Quarter ending June 30, 2003 through the Fiscal Quarter ending
March 31, 2004, the Tangible Net Worth will not at any time be
less than $15,500,000. Effective as of the Fiscal Quarter
ending June 30, 2004, the Tangible Net Worth will not at any
time be less than $16,000,000."
(b) Amended and Restated Exhibit D to the Agreement. Exhibit D to the Agreement
shall be and is hereby amended and restated in its entirety as attached hereto.
2. Representations and Warranties. AeroCentury hereby restates the
representations and warranties made in the Agreement, including but not limited
to Article 3 thereof, on and as of the date hereof as if originally given on
this date.
3. Covenants. AeroCentury hereby represents and warrants that it is in
compliance and has complied with each and every covenant set forth in the
Agreement (including this Amendment), including but not limited to Articles 5
and 6 thereof, on and as of the date hereof.
4. Waiver. With respect to the Fiscal Quarter ending as of June 30, 2003 only,
National City hereby waives the financial covenant requirement set forth in
Section 7.2 "Debt Service Coverage Ratio" which AeroCentury was required to
maintain so long as the Revolving Loan Commitments are in effect or any
Obligation remains unpaid or outstanding.
5. Affirmation. AeroCentury hereby affirms its absolute and unconditional
promise to pay to the Banks the Loans and all other amounts due under the
Agreement and any other Loan Document on the maturity dates(s) provided in the
Agreement or any other Loan Document, as such documents may be amended hereby.
6. Effect of Amendment. This Amendment amends the Agreement only to the extent
and in the manner herein set forth, and in all other respects the Agreement is
ratified and confirmed.
7. Counterparts. This Amendment may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
hereto were upon the same instrument.
Remainder of page intentionally left blank.
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment
to be duly executed by their duly authorized representatives as of the date
first above written.
AEROCENTURY CORP.
By ________________________
Name:
Title:
NATIONAL CITY BANK
By ________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
CALIFORNIA BANK & TRUST
By ________________________
Name:
Title:
EXHIBIT D
FORM OF COVENANT COMPLIANCE CERTIFICATE
Date: _________
COVENANT COMPLIANCE CERTIFICATE
The undersigned, the [chief executive or chief financial] Officer of
AeroCentury Corp. ("AeroCentury"), does hereby certify to National City Bank,
Agent (the "Bank"), as required by that certain Credit Agreement, dated June 28,
2000, by and between AeroCentury and the Bank (as amended, the "Agreement")
(terms not otherwise defined herein shall have the meanings given to such terms
in the Agreement), that as such officer he is authorized to execute this
Compliance Certificate (this "Certificate") on behalf of AeroCentury and does
further certify that:
1. AeroCentury has complied and is in compliance with all
covenants, agreements and conditions in the Agreement and each
of the other Loan Documents on the date hereof.
2. Each representation and warranty contained in the Agreement
and each of the other Loan Documents is true and correct on
the date hereof.
3. No Potential Default or Event of Default has occurred and is
continuing as of the date of this Compliance Certificate.
4. There has been no Material Adverse Change since [insert the
date of the most recent financial statements delivered to the
Bank pursuant to the terms of ss.5.1 of the Credit Agreement],
except as disclosed on the attached schedules.
5. The covenant compliance calculations set forth in
Attachment 1 hereto are true and correct on the dates
specified.
IN WITNESS WHEREOF, the undersigned has executed this Certificate in his
capacity as an officer of AeroCentury on this ___ day of ___________, _____.
AeroCentury Corp.
By:
--------------------------------------
Name:
Title:
COVENANT COMPLIANCE CALCULATIONS
AeroCentury Corp.
for the (quarter, year) ending _______
Section 7.1 MINIMUM TANGIBLE NET WORTH
REQUIREMENT: - The Tangible Net Worth will not at any time be less
than (i) $15,500,000, effective as of the Fiscal Quarter ending June
30, 2003 through the Fiscal Quarter ending March 31, 2004; and (ii)
$16,000,000, effective as of the Fiscal Quarter ending June 30, 2004.
Tangible Net Worth on [date] $
------------------
Total Assets $
less: Total Liabilities $
-------------------
Intangible Assets $
-------------------
Subtotal $
-----------------
Tangible Net Worth $
=================
Required Tangible Net Worth
(a) Fiscal Quarter ending June 30, 2003 through $15,500,000
Xxxxx 00, 0000
(x) Fiscal Quarter ending June 30, 2004 $16,000,000
Excess (deficiency) of Actual Tangible Net Worth $
compared with Required Tangible Net Worth -----------------
Section 7.2 EBITDA TO INTEREST RATIO
REQUIREMENT: - The ratio of EBITDA to Interest will not at any time be less than
2.25:1.
EBITDA
Net Income for the four $
Fiscal Quarters ended
---------------- -------------
Interest deducted with respect to + $
four Fiscal Quarters ended -------------
-----------
Taxes deducted with respect to + $
four Fiscal Quarters ended -------------
-----------
Depreciation deducted with respect to + $
four Fiscal Quarters ended -------------
-----------
Amortization deducted with respect to + $
four Fiscal Quarters ended -------------
------------
EBITDA for the four Fiscal Quarters just ended $
==============
Interest
Interest for the four Fiscal Quarters ended
------------------------- $
--------------
Interest $
==============
RATIO OF EBITDA TO INTEREST ___________
Section 7.3 RECOURSE FUNDED DEBT TO TANGIBLE NET WORTH
REQUIREMENT: - The ratio of Recourse Funded Debt (including Recourse
Funded Debt represented by the Notes) to Tangible Net Worth will not
at any time exceed 3.25:1.
Recourse Funded Debt on [date]: $
-------------------
Tangible Net Worth on [date] $
-------------------
RATIO OF RECOURSE FUNDED DEBT TO TANGIBLE NET WORTH
===================
Section 7.4 ABSENCE OF NET LOSS
REQUIREMENT: - AeroCentury Corp. will not suffer a consolidated net loss at any
time.
Net Income for the Fiscal Quarter ended $
--------------- ==================
Section 7.5 BORROWING BASE
REQUIREMENT: - The aggregate principal amount of Loans outstanding
shall not at any time exceed the Borrowing Base or the Aggregate
Revolving Loan Commitment, whichever is less; provided, however, that
this covenant shall not be deemed breached if, at the time such
aggregate amount exceeds said level, within three Business Days after
the earlier of the date AeroCentury first has knowledge of such
excess or the date of the next Borrowing Base Certificate disclosing
the existence of such excess, a prepayment of Loans shall be made in
an amount sufficient to assure continued compliance with this
covenant in the future.
Collateral Loan Value
Total Borrowing Base $
-------------
Maximum Loans
Aggregate Revolving Loan Commitment $ ,000,000
--
Credit Usage
Aggregate Loan Balance (principal) at date of certificate $
-------------
Collateral Loan Value exceeds Credit Usage $
-------------
Collateral Loan Value is less than Credit Usage $
-------------
