EIGHTH AMENDMENT TO CREDIT AGREEMENT
This EIGHTH AMENDMENT TO CREDIT AGREEMENT is made as of the
_____ day of March, 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 the
Credit Agreement dated June 30, 1996, by the Fourth Amendment to Credit
Agreement dated August 16, 1996, by the Fifth Amendment to Credit Amendment
dated January 1, 1997, by the Sixth Amendment to Credit Agreement dated February
1, 1997 and by the Seventh Amendment to Credit Agreement dated __________, 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 "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.
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NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, it is agreed as follows:
1. Definitions and Amendments.
(a) Terms used in this Eighth Amendment which are defined in
the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.
(b) 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) $6,131,000 provided, however, that the Borrowing
Base (a) shall be decreased by $25,000 on each of April 1 and
May 1, 1997, and (b) shall further be decreased by $100,000 on
the first day of June, 1997 and on the same day of each
successive month thereafter;
or
(c) the sum of:
(i) the lesser of (A) 75% of Eligible Accounts or (B)
$6,131,000, provided, however, that such maximum amount of
Eligible Accounts (1) shall be reduced by $25,000 on each of
April 1 and May 1, 1997, and (2) shall further be reduced by
$100,000 on the first day of June, 1997 and on the same day of
each successive month thereafter; plus
(ii) the lesser of (A) 50% of Eligible Inventory or
(B) $5,500,000; provided, however, that such maximum amount of
Eligible Inventory shall be reduced by $100,000 on the first
day of April 1997 and on the same day of each successive month
thereafter, plus
(iii) $250,000.
(d) Section 2.12 "Fees" is hereby amended so that
subsections (e) reads as follows:
(e) Commencing March 25, 1997, the Borrower agrees to
pay the Lender monthly in advance an accommodation fee of
$7,500; provided, however, the Lender agrees that payment of
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the accommodation fee otherwise due on March 25, 1997 may be
deferred until the earlier of (i) April 24, 1997 or (ii) the
date the Obligations are paid in full.
2. Amendment Fee. Borrower agrees to pay a fully earned, non-refundable
fee of Two Thousand Five Hundred Dollars ($2,500) in consideration of this
Eighth Amendment; provided, however, the Lender agrees that payment of this fee
may be deferred until the earlier of (i) April 24, 1997 or (ii) the date the
Obligations are paid in full.
3. No Other Amendments. Except as explicitly amended by this
Eighth 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.
4. Conditions. This Eighth 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 Eighth Amendment, duly executed by each of the
Corporate Guarantors and Individual Validity Guarantors, respectively.
(b) Payment of the fees and expenses required to be paid
by the Borrower under Paragraph 9 hereof.
(c) Supplement Secretary's Certificate certifying (i) the
Resolutions of the Board of Directors of the Borrower approving the
execution and delivery of this Eighth Amendment and the performance by
the Borrower of its Obligations under the Eighth Amendment and the
Credit Agreement as amended hereby, (ii) that the Articles of
Incorporation and the By-Laws of the Borrower which were certified and
delivered to the Lender pursuant to the Certificate of Secretary of
Borrower dated February 9, 1995 continue in full force and effect and
have not been altered, amended or revised, and (iii) the signature of
the officers and agents of the Borrower authorized to execute and
deliver this Eighth Amendment and other instruments, agreement and
certificates, including advance requests, on behalf of the Borrower.
(d) Such other documents as the Lender in its sole
discretion may require.
5. Representations and Warranties.
The Borrower hereby represents and warrants to the Lender as follows:
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(a) The Borrower has all requisite power and authority to
execute this Eighth Amendment and to perform all of its obligations
hereunder and under the Credit Agreement as amended hereby, and this
Eighth 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 Eighth 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 Eighth 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.
6. 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.
7. No Waiver. The Borrower hereby acknowledges and agrees that the
execution of this Eighth 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 Eighth Amendment.
8. 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,
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omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Eighth Amendment, whether such claims, demands
and causes of action are matured or unmatured or known or unknown.
9. 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
Eighth 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.
10. Fees Due Upon Payment. The Borrower hereby acknowledges its
obligations pursuant to Section 2.5 and 2.12(d) of the Credit Agreement to pay
the fees described in such Sections which are due upon payment of all other
Obligations and termination of the Credit Agreement; provided, however that
notwithstanding the terms of such Sections the aggregate fees payable thereunder
shall not exceed $125,000.
11. Counterparts. This Eight 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.
IN WITNESS WHEREOF, the parties hereto have caused this Eighth
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)
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By:__________________________________________
Its:_________________________________________
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