THIRD AMENDMENT TO CREDIT AGREEMENT
This Amendment is made as of the ____ day of June, 1996 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 and the Second Amendment
to Credit Agreement dated February 29, 1996, (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 Third 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 "Floating Rate" is hereby
amended to mean an annual rate equal to the sum of the Base Rate plus
five and one-half percent (5.5%), which Floating Rate shall change when
and as the Base Rate changes. Provided however, if and only if
Borrower's Net Worth increases by $5,000,000 over its Net Worth as of
June 30, 1996, exclusive of Net Earnings or Net Losses for the period
commencing June 30, 1996 and ending on the date of determination, then
the Floating Rate shall mean an annual rate equal to the sum of the
Base Rate plus four and one-half percent (4.5%), which Floating Rate
shall change when and as the Base Rate changes.
(c) Section 2.12 Fees, is hereby amended as follows:
(i) The Borrower hereby agrees to pay the Lender a
fully earned and non-refundable origination fee of $150,000,
due and payable upon the execution of this Agreement (of which
$100,000 has been paid to Lender prior to the execution
hereof).
(ii) Commencing April 1, 1995, the Borrower hereby
agrees to pay the Lender, in advance quarterly audit fees of
$1,500 per quarter, together with any out of pocket expenses
incurred by Lender in connection with any audits or
inspections by the Lender of any collateral or the operations
or business of the Borrower.
(iii) The Borrower hereby agrees to (a) reimburse the
Lender for all wire transfer charges and automated
clearinghouse charges and to (b) pay overadvance charges of
One Thousand Dollars ($1,000) per day.
(iv) The Borrower agrees to pay to Lender annually,
commencing with the fiscal year ending December 31, 1995, upon
delivery of its audited financial statements delivered in
accordance with Section 6.1 hereof, a fee equal to 2% of the
Gross Profit in excess of $2,000,000, as shown on such
financial statements, provided, however, that such fee shall
in no event be less than $50,000 nor more than $150,000.
(v) Commencing July 25, 1996, the Borrower hereby
agrees to pay the Lender monthly in advance an accommodation
fee of $7,500. This accommodation fee will be increased to
$15,000 per month beginning October 25, 1996. Provided
however, if and only if Borrower's Net Worth increases by
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$5,000,000 over its Net Worth as of June 30, 1996, exclusive
of Net Earnings or Net Losses for the period commencing June
30, 1996 and ending on the date of determination, then the
accommodation fee shall be decreased to zero as of such date
of determine but without adjustment or proration to any fee
previously paid.
2. No Other Amendments. Except as explicitly amended by this
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 Third 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 Guarantors set
forth at the end of this Amendment, duly executed by each of the
Guarantors.
(b) Supplemental Secretary's Certificate certifying (i) the
resolutions of the board of directors of the Borrower approving the
execution and delivery of this Amendment, (ii) the fact that the
Articles of Incorporation and the Bylaws of the Borrower, which were
certified and delivered to the Lender pursuant to the Certificate of
the Borrower's Secretary dated as of February 9, 1995 in connection
with the execution and delivery of the Credit Agreement continue in
full force and effect and have not been amended or otherwise modified
except as set forth in the Certificate to be delivered, and (iii)
certifying that the officers and agents of the Borrower who have been
certified to the Lender, pursuant to the Certificate of the Borrower's
Secretary dated as of February 9, 1995, as being authorized to sign and
to act on behalf of the Borrower continue to be so authorized or
setting forth the sample signatures of each of the officers and agents
of the Borrower authorized to execute and deliver this Third Amendment
and all other documents, agreements and certificates on behalf of the
Borrower.
(c) Current certificates issued by the Secretary of State of
the state of incorporation of each of Borrower and the Corporate
Guarantors, certifying that each of the Borrower and the Corporate
Guarantors, respectively, is in compliance with all corporate
organizational requirements of such state.
(d) UCC financing statements duly executed by FIG sufficient
to perfect the security interests granted under the Guarantors'
Security Agreement.
(e) Current searches of appropriate filing offices showing
that (i) no state or federal tax liens have been filed and remain in
effect against the Borrower or any Corporate Guarantor, (ii) no
financing statements have been filed and remain in effect against the
Borrower or any Corporate Guarantor, except those financing statements
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relating to liens permitted pursuant to Section 7.1 of the Credit
Agreement and those financing statements filed by the Lender, and (iii)
the Lender has duly filed all financing statements necessary to perfect
the Security Interests granted under the Credit Agreement or the
security interests granted under the Guarantors' Security Agreement, to
the extent the Security Interests or such other security interest are
capable of being perfected by filing.
(f) An opinion of counsel to the Borrower and each of the
Corporate Guarantors, addressed to the Lender.
(g) A supplemental certificate of the Secretary or an
Assistant Secretary of each of the Corporate Guarantors, certifying as
to (i) the resolutions of the directors and, if required, the
shareholders of such Corporate Guarantor, authorizing the execution and
delivery of the Acknowledgment and Agreement of Guarantor and the UCC
financing statements referred to herein, (ii) the articles of
incorporation and the bylaws of such Corporate Guarantor, and (iii) the
signatures of the officers or agents of such Corporate Guarantor
authorized to execute and deliver the Acknowledgement and Agreement of
Guarantor and the UCC financing statements on behalf of such Corporate
Guarantor.
(h) Such other documents as the Lender in its sole discretion
may require.
4. Representations and Warranties.
(a) The Borrower has all requisite power and authority to
execute this Third Amendment and to perform all of its obligations
hereunder, and this 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 Amendment have been duly authorized by all necessary corporate
action and do 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 are correct on and as of the date
hereof 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 execution of this Third 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 Third 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 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
Third 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 Third Amendment and the Acknowledgement and
Agreement of 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 Third
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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