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EXHIBIT 10.1
FIRST AMENDMENT OF 1998 TO CREDIT AGREEMENT
AND
OTHER LOAN DOCUMENTS
THIS FIRST AMENDMENT OF 1998 TO CREDIT AGREEMENT AND OTHER LOAN
DOCUMENTS (the "Amendment") is made and dated as of the 1st day of April, 1998,
by and among SANWA BANK CALIFORNIA ("Sanwa"), MELLON BANK, N.A. and BANKBOSTON,
N.A., as the current Lenders under the Credit Agreement referred to below (and
as the term "Lender" and capitalized terms not otherwise defined herein are used
in the Credit Agreement), SANWA, as Agent for the Lenders, and MERCURY AIR
GROUP, INC., a New York corporation (the "Company").
RECITALS
A. Pursuant to that certain Credit Agreement dated as of March
14, 1997, by and among the Agent, the Lenders and the Company (the "Credit
Agreement"), the Lenders agreed to extend credit to the Company on the terms and
subject to the conditions set forth therein.
B. The Company, the Agent and the Lenders have agreed to amend
the Credit Agreement in certain respects as set forth more particularly below.
NOW, THEREFORE, in consideration of the above Recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Bond Financing Letter of Credit Facility. To reflect the agreement
of the parties to provide for the issuance of the Bond Financing Letter of
Credit under separate credit facility documentation, effective as of the
Effective Date (as defined in Paragraph 10 below):
(a) Paragraph 4(c) of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:
"4(c) [INTENTIONALLY OMITTED.]"
(b) All references in the Credit Agreement to the "Bond Financing
Letter of Credit" are hereby deleted and references to "Letters of Credit"
contained in the Credit Agreement and the other Loan Documents shall be deemed
to be references to "Standard Letters of Credit" only.
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(c) The schedule of Other Permitted Debt attached to the Credit
Agreement as Exhibit H is hereby amended and restated in its entirety and
replaced by the schedule attached hereto as Replacement Exhibit H.
(d) Paragraph 12(p) of the Credit Agreement is hereby amended to
add the following phrase at the end of the parenthetical set forth therein: "and
as provided in the Bond Financing Reimbursement Agreement".
(e) Paragraph 13(e) is hereby amended to read in its entirety as
follows:
"13(e) There shall occur an Event of Default under (and as
the term 'Event of Default' is defined in) the Bond Financing
Reimbursement Agreement or the Company or any Subsidiary shall
default in any payment of principal or interest on any Indebtedness
(other than the Obligations and the L/C Obligations (as defined in
the Bond Financing Reimbursement Agreement)) in an aggregate amount
in excess of $1,000,000.00 or any other event shall occur, the effect
of which is to permit such Indebtedness to be declared or otherwise
to become due prior to its stated maturity; or"
(f) New definitions of "Bond Financing Reimbursement Agreement"
and "New 1998 Bond Financing Letter of Credit" are hereby added to Paragraph 16
of the Credit Agreement, in correct alphabetical order, to read in their
entirety as follows:
"Bond Financing Reimbursement Agreement" shall mean that
certain Reimbursement Agreement dated as of April 1, 1998 by and
among Sanwa, as "Agent," the Lenders hereunder as the "Credit Support
Providers," BankBoston, N.A., as "Issuing Bank", and the Company, as
the account party with respect to the letter of credit issued
pursuant thereto, as the same may be amended, extended or replaced
from time to time."
"New 1998 Bond Financing Letter of Credit" shall mean the
letter of credit issued for the account of the Company pursuant to
the Bond Financing Reimbursement Agreement, as the same may be
amended, extended and replaced from time to time."
(g) Paragraphs 12(i) and 12(m) of the Credit Agreement are hereby
amended to replace the reference to "Bond Financing Letter of Credit" set forth
therein immediately prior to the Effective Date with a reference to "New 1998
Bond Financing Letter of Credit".
2. Participation in Credit Facilities. To reflect the agreement of the
parties hereto that all Lenders hereunder be "Credit Support Providers" and hold
an equivalent "Percentage Share" under (and as those terms are defined in) the
Bond Financing Reimbursement Agreement, on and after the Effective Date, any
financial institution which is or subsequently becomes a "Lender" under the
Credit Agreement, whether by way of assignment from an existing Lender or
otherwise, shall concurrently execute such documents, instruments and agreements
as are deemed necessary or appropriate by the Agent to assume a "Percentage
Share" under the Bond
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Financing Reimbursement Agreement equal to such Person's Percentage Share under
the Credit Agreement.
3. Collateralization of Obligations. To reflect the agreement of the
parties hereto that the Obligations under the Credit Agreement and the L/C
Obligations under (as that term is defined in) the Bond Financing Reimbursement
Agreement be at all times either unsecured or equally and ratably secured, the
Company hereby agrees to execute such documents, instruments and agreements in
connection with the provision of collateral security under either of the Credit
Agreement or the Bond Financing Reimbursement Agreement as may be deemed
necessary or appropriate by the Agent to assure such that the Lenders and the
Credit Support Providers hold any and all Liens pro rata and pari passu.
4. Reduction in Availability. To reflect the agreement of the parties
hereto that the credit limits currently contained in the Credit Agreement be
reduced to reflect the issuance of the New 1998 Bond Financing Letter of Credit
under the Bond Financing Reimbursement Agreement, effective as of the Effective
Date:
(a) The definition of "Revolving Loan Credit Limit" set forth in
Paragraph 16 of the Credit Agreement is hereby amended to read in its entirety
as follows:
"Revolving Loan Credit Limit" shall mean at any date
$18,600,000.00, as such amount may be increased or decreased by
written agreement of the Agent, the Company and one hundred percent
(100%) of the Lenders and as such amount shall be permanently
decreased on the Conversion Date by the dollar amount of the
convertible Term Loan made on such Conversion Date."
(b) Paragraph 6(e) of the Credit Agreement is hereby amended to
renumber subparagraphs (2) and (3) as subparagraphs (3) and(4), respectively,
and to add a new subparagraph (2) to read in its entirety as follows:
"(2) The Company shall prepay the outstanding principal
balance of the Leasehold Improvement Term Loan in full on or before
the date of issuance of the New 1998 Bond Financing Letter of Credit,
the Company acknowledging that funds prepaid may not be reborrowed
under Paragraph 2 hereof."
(c) In addition to the prepayment set forth in new subparagraph
(2) to Paragraph 6(e) of the Credit Agreement, on the Effective Date the Company
shall prepay Loans outstanding such that the aggregate amount of Loans
outstanding shall not exceed availability as reduced hereby.
5. Aero Freightways Transaction. Effective as of the Effective Date
the Agent and the Lenders consent to the acquisition by the Company of Aero
Freightways, Inc. described more particularly on Schedule 1 attached hereto and
waive any Event of Default or Potential Default
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which may be deemed to exist under Paragraph 12(d) of the Credit Agreement as a
direct result thereof.
6. Additional Subsidiaries. To reflect the acquisitions by the Company
of Xxxx Xxxxx & Associates and Aero Freightways, Inc., the schedule of
Subsidiaries attached to the Credit Agreement as Exhibit E is hereby amended and
restated in its entirety and replaced with the schedule attached hereto as
Replacement Exhibit E.
7. Required Guaranties. To reflect the requirement of the Agent and
the Lenders that unless such requirement is waived by one hundred percent (100%)
of the Lenders, each U.S. domestic Subsidiary of the Company must execute and
deliver a Guaranty and be a "Guarantor" for all purposes of the Credit Agreement
and the other Loan Documents, effective as of the Effective Date:
(a) Paragraph 8(a) of the Credit Agreement is hereby amended to
read in its entirety as follows:
"8(a) Guaranties. As credit support for the Obligations,
except to the extent such requirement is waived by one hundred
percent (100%) of the Lenders, the Company shall cause each now
existing and each hereafter created or acquired U.S. domestic
Subsidiary of the Company to execute and deliver to the Agent for the
benefit of the Lenders a credit guaranty in the form of that attached
hereto as Exhibit A (each, a "Guaranty" and, collectively, the
"Guaranties").
(b) The definition of "Guarantors" set forth in Paragraph 16 of
the Credit Agreement is hereby amended to read in its entirety as follows:
"Guarantors" shall mean, collectively and severally, each of
the Subsidiaries of the Company which executes and delivers a
Guaranty as required pursuant to Paragraph 8(a) above."
(c) Each of the Lenders, by executing this Amendment, hereby
waives the requirement that Mercury Environmental and Scientific Services, Inc.,
a California corporation, and AEG Finance Corporation, each a U.S. domestic
Subsidiary of the Company, execute and deliver a Guaranty pursuant to Paragraph
8(a) of the Credit Agreement.
8. No Arbitration. To reflect the agreement of the parties to delete
the requirement that any dispute among the parties be resolved through
arbitration, Paragraph 15(m) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"15(m) [INTENTIONALLY OMITTED.]"
9. Reaffirmation of Guaranties. By executing this Amendment as
provided below, each Guarantor acknowledges the terms and conditions agreed to
by the Company, the Agent and
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the Lenders under this Amendment, and affirms and agrees that (a) the execution
and delivery by the Company and the performance of its obligations under this
Amendment shall not in any manner or to any extent affect any of the obligations
of such Guarantor or the rights of the Agent or the Lenders under the Guaranty
executed by such Guarantor or any other document or instrument made or given by
such Guarantor in connection therewith, (b) the term "Obligations" as used in
the Guaranties includes, without limitation, the Obligations of the Company
under the Credit Agreement as amended hereby, and (c) each Guaranty remains in
full force and effect.
10. Effective Date. This Amendment shall be effective as of the date
(the "Effective Date") that there has been delivered to the Agent:
(a) A copy of this Amendment, duly executed by each party hereto
and acknowledged by each of the Guarantors;
(b) Evidence satisfactory to the Agent and each of the Lenders
that the Bond Financing Reimbursement Agreement has been or will concurrently
with the execution and delivery of this Amendment be executed and delivered by
the Company and the other parties thereto; and
(c) Such corporate resolutions, incumbency certificates and other
authorizing documentation as the Agent may request.
11. Representations and Warranties. The Company hereby represents and
warrants to the Agent and the Lenders that at the date hereof and at and as of
the Effective Date:
(a) The Company has the corporate power and authority and the
legal right to execute, deliver and perform this Amendment and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Amendment. This Amendment has been duly executed and delivered on behalf
of the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
(b) Both prior to and after giving effect hereto: (1) the
representations and warranties of the Company contained in the Credit Agreement
and the other Loan Documents are accurate and complete in all respects, and (2)
there has not occurred an Event of Default or Potential Default.
12. No Other Amendment. Except as expressly amended hereby, the Loan
Documents shall remain in full force and effect as written and amended to date.
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13. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the day and year first above written.
MERCURY AIR GROUP, INC.,
a New York corporation
By_________________________________
Name_______________________________
Title______________________________
SANWA BANK CALIFORNIA, as Agent and
as a Lender
By_________________________________
Name_______________________________
Title______________________________
MELLON BANK, N.A., as a Lender
By_________________________________
Name_______________________________
Title______________________________
BANKBOSTON, N.A., as a Lender
By_________________________________
Name_______________________________
Title______________________________
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ACKNOWLEDGED AND AGREED TO this ___ day of March, 1998:
EXCEL CARGO, INC.
By_________________________________
Name_______________________________
Title______________________________
FLORACOOL, INC.
By_________________________________
Name_______________________________
Title______________________________
HERMES AVIATION, INC.
By_________________________________
Name_______________________________
Title______________________________
MAYTAG AIRCRAFT CORPORATION
By_________________________________
Name_______________________________
Title______________________________
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MERCURY AIR CARGO, INC.
By_________________________________
Name_______________________________
Title______________________________
VULCAN AVIATION, INC.
By_________________________________
Name_______________________________
Title______________________________
XXXXXXX FLYING SERVICE, INC.
By_________________________________
Name_______________________________
Title______________________________
XXXX XXXXX & ASSOCIATES, INC.
By_________________________________
Name_______________________________
Title______________________________
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SCHEDULE 1
DESCRIPTION OF AERO FREIGHTWAYS, INC. ACQUISITION
[TO B SUPPLIED BY THE COMPANY]
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