SIXTH AMENDMENT TO CREDIT AGREEMENT
This Sixth Amendment is made as of the 1st day of February,
1997 by and between FIELDS AIRCRAFT SPARES INCORPORATED, a California
corporation (the "Borrower"), and NORWEST BUSINESS CREDIT, INC., a Minnesota
corporation (the "Lender").
RECITALS
The Borrower and the Lender have entered into the Credit and
Security Agreement dated as of February 9, 1995 and amended by the First
Amendment to Credit Agreement dated November 21, 1995, by the Second Amendment
to Credit Agreement dated February 29, 1996, by the Third Amendment to Credit
Agreement dated June 30, 1996, by the Fourth Amendment to Credit Agreement dated
August 16, 1996 and by the Fifth Amendment to Credit Amendment dated January 1,
1997 (as amended, the "Credit Agreement").
The Borrower may request certain advances from the Lender from
time to time pursuant to the Credit Agreement, and the Lender may, in its
discretion, choose to make loans to the Borrower pursuant to the Credit
Agreement. The Lender may demand repayment of the loans at any time pursuant to
the terms of the Credit Agreement.
The loan advances under the Credit Agreement are evidenced by
the Borrower's demand promissory note dated as of February 9, 1995, in the
maximum principal amount of Ten Million Dollars ($10,000,000) and payable to the
order of the Lender (the "Note").
All indebtedness of the Borrower to the Lender is secured
pursuant to the terms of the Credit Agreement and all other Security Documents
as defined therein (collectively, the "Security Documents") and is guaranteed
pursuant to the unconditional guaranties of the Corporate Guarantors defined
therein and is further guaranteed pursuant to the validity guaranties of the
Individual Validity Guarantors (collectively, the "Validity Guarantors").
The Borrower has requested that certain amendments be made to
the Credit Agreement, which the Lender is willing to make pursuant to the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, it is agreed as follows:
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1. Definitions and Amendments.
(a) Terms used in this Sixth Amendment which are defined in
the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.
(b) The term "Net Investment Proceeds" is hereby defined to
mean the proceeds received by the Borrower from any advance, loan,
extension of credit or capital contribution to, or any sale or
commitment to sell any stocks, bonds, notes, debentures or other
securities of or any other investment in, the Borrower (each such
transaction, an "Investment"), net of reasonable expenses incurred by
the Borrower in connection with said Investment.
(c) The definition of the term "Borrowing Base" is hereby
amended as follows: "Borrowing Base" means, at any time and
subject to change from time to time in the Lender's sole discretion,
the lesser of:
(i) $6,100,000 provided, however, that the Borrowing
Base (i) shall be decreased by the amount of Net Investment
Proceeds received by the Borrower on or after February 1, 1997
on each day of receipt of any of said proceeds, provided that
in any event the Borrowing Base shall be decreased by no less
than $450,000 on or before March 31, 1997, and (ii) shall
further be decreased by $250,000 on the first day of April,
1997 and on the same day of each successive month thereafter;
or
(d) the sum of:
(i) the lesser of (A) 75% of Eligible Accounts or (B)
$6,100,000; provided, however, that such maximum amount of
Eligible Accounts (i) shall be reduced by the amount of Net
Investment Proceeds received by the Borrower on or after
February 1, 1997 on each day of receipt of any said proceeds,
provided that in any event the maximum amount of Eligible
Accounts shall be reduced by no less than $450,000 on or
before March 31, 1997, and (ii) shall further be reduced by
$250,000 on the first day of April, 1997 and on the same day
of each successive month thereafter; plus
(ii) the lesser of (A) 50% of Eligible Inventory or
(B) $5,800,000; provided, however, that such maximum amount of
Eligible Inventory shall be reduced by $100,000 on the first
day of March, 1997 and on the same day of each successive
month thereafter, plus
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(iii) $250,000.
(e) Section 2.12 Fees is hereby amended by adding the
following subsection (f) at the end thereof:
(f) The Borrower agrees to pay to Lender daily a fee
in the amount of $1,000 for each day during February, 1997
when the Borrowing Base has not been reduced upon the receipt
of Net Investment Proceeds to or below $5,900,000 and for each
day during March, 1997 when the Borrowing Base has not been
reduced upon the receipt of Net Investment Proceeds to or
below $5,650,000. Such daily fee shall be payable commencing
on February 3, 1997 and continuing until the Borrowing Base
has been so reduced during February 1997 and commencing March
1, 1997 until the Borrowing Base has been so reduced during
March 1997.
(f) Section 6.10 Lockbox; Collateral Account is hereby
amended by adding the following subsection (c) at the end
thereof:
(c) The Borrower agrees to deposit in the Collateral
Account or, at the Lender's option, to deliver to the Lender
all Net Investment Proceeds which the Borrower may receive,
immediately upon receipt thereof, in the form received, except
for the Borrower's endorsement when deemed necessary. Until
delivered to the Lender or deposited in the Collateral
Account, no Net Investment Proceeds shall be commingled with
any other funds or property of the Borrower. All Net
Investment Proceeds deposited in the Collateral Account shall
be subject to the provisions set forth in Section 6.10(b)
above applicable to any other amount deposited in the
Collateral Account. Upon receipt of any Net Investment
Proceeds, the Borrower shall promptly provide a report to the
Lender describing the terms of the Investment giving rise to
such Net Investment Proceeds and itemizing all expenses paid
out of the proceeds of such Investment, together with such
further information as the Lender may in its discretion
require.
2. No Other Amendments. Except as explicitly amended by this
Sixth Amendment, all of the terms and conditions of the Credit Agreement shall
remain in full force and effect and shall apply to any advance thereunder.
3. Conditions. This Sixth Amendment shall be effective (the
"Effective Date") upon receipt by the Lender of an executed original hereof,
together with each of the following, each in substance and form acceptable to
the Lender in its sole discretion:
(a) The Acknowledgement and Agreement of Corporate Guarantors
and the Acknowledgment and Agreement of Validity Guarantors set forth
at the end of this Sixth Amendment, duly executed by each of the
Corporate Guarantors and Individual Validity Guarantors, respectively.
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(b) Supplemental Secretary's Certificate certifying (i) the
resolutions of the board of directors of the Borrower approving the
execution and delivery of this Sixth Amendment and the performance by
the Borrower of its obligation under the Sixth Amendment and the Credit
Agreement as amended hereby, (ii) that the Articles of Incorporation
and the Bylaws of the Borrower which were certified and delivered to
the Lender pursuant to the Certificate of Secretary Borrower dated
February 9, 1995 continue in full force and effect and have not been
altered, amended or revised, and (iii) the signatures of the officers
and agents of the Borrower authorized to execute and deliver this Sixth
Amendment and other instruments, agreements and certificates, including
Advance requests, on behalf of the Borrower.
(c) Payment of the fees and expenses required to be paid
by the Borrower under Paragraph 8.
(d) Such other documents as the Lender in its sole
discretion may require.
4. Representations and Warranties.
The Borrower hereby represents and warrants to the Lender as follows:
(a) The Borrower has all requisite power and authority to
execute this Sixth Amendment and to perform all of its obligations
hereunder and under the Credit Agreement as amended hereby, and this
Sixth Amendment has been duly executed and delivered by the Borrower
and constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.
(b) The execution, delivery and performance by the Borrower of
this Sixth Amendment has been duly authorized by all necessary
corporate action and does not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, (ii) violate any
provision of any law, rule or regulation or of any order, writ,
injunction or decree presently in effect, having applicability to the
Borrower, or the Articles of Incorporation or By-Laws of the Borrower,
or (iii) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its
properties may be bound or affected.
(c) All of the representations and warranties contained in
Article V of the Credit Agreement, as amended by this Sixth Amendment,
are correct on and as of the date hereof and on the Effective Date, as
though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date.
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5. References. Upon the Effective Date, all references in the
Credit Agreement to "this Agreement" shall be deemed to refer to the Credit
Agreement as amended hereby; and any and all references in the Security
Documents to the Credit Agreement shall be deemed to refer to the Credit
Agreement as amended hereby.
6. No Waiver. The Borrower acknowledges and agrees that the execution
of this Sixth Amendment and any documents related hereto shall not be deemed to
be a waiver of any Default or Event of Default under the Credit Agreement or
breach, default or event of default under any Security Document or other
document held by the Lender, whether or not known to the Lender and whether or
not existing on the date of this Sixth Amendment.
7. Release. The Borrower hereby absolutely and unconditionally releases
and forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower has had, now has or
has made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Sixth Amendment, whether such claims, demands
and causes of action are matured or unmatured or known or unknown.
8. Expenses. The Borrower hereby reaffirms its agreement under the
Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Credit Agreement, the
Security Documents and all other documents contemplated thereby, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrower specifically
agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Sixth Amendment and the documents and instruments incidental hereto. The
Borrower hereby agrees that the Lender may, at any time or from time to time in
its sole discretion and without further authorization by the Borrower, make a
loan to the Borrower under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses.
9. Counterparts. This Sixth Amendment, the Acknowledgement and
Agreement of Corporate Guarantors and the Acknowledgment and Agreement of
Validity Guarantors may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Amendment to be duly executed as of the day and year first above written.
BORROWER:
FIELDS AIRCRAFT SPARES INCORPORATED (SEAL)
By:______________________________________
Its:_____________________________________
LENDER:
NORWEST BUSINESS CREDIT, INC. (SEAL)
By:_____________________________________
Its:____________________________________
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