SUPPLEMENT #7 TO MASTER LOAN AGREEMENT
SUPPLEMENT #7 TO MASTER LOAN AGREEMENT
Date of Supplement: February 3, 2020
THIS SUPPLEMENT #7 TO MASTER LOAN AGREEMENT (this “Supplement”) is made and entered into by Lender and Borrowers as of the date written above pursuant to the Master Loan Agreement by and between Lender and Borrowers dated June 24, 2019 (the “Master Loan Agreement”).
This Supplement constitutes a Supplement under the Master Loan Agreement and is hereby made a part of the Master Loan Agreement. All capitalized terms herein not otherwise defined herein shall have the meaning ascribed to them in the Master Loan Agreement. The credit facility described in this Supplement is governed by and shall be construed and administered in accordance with the terms and conditions of the Master Loan Agreement and this Supplement.
To the extent any term or condition of this Supplement is inconsistent with any term or condition in the Master Loan Agreement or in any Supplement dated prior to this Supplement, the terms and conditions of this Supplement shall control. Except as specifically amended hereby, all terms and conditions of the Master Loan Agreement and all prior Supplements remain in effect.
In consideration of the mutual covenants contained herein and in the Master Loan Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. | DEFINITIONS. |
As used in this Supplement, the following terms have the following meanings:
“Term Loan F” means an extension of credit to Borrowers by Lender pursuant to this Supplement.
“Term Loan F Maturity Date” means the first to occur of: (1) February 1, 2025; and (2) the date on which Term Loan F is accelerated as provided hereunder, in Term Note F or in the Master Loan Agreement.
“Term Note F” means the Promissory Note of Borrowers in the form of Exhibit A to be executed concurrently with this Supplement.
2. | THE CREDIT FACILITY; BORROWING PROCEDURES; INTEREST RATE; and PAYMENTS. |
2.1 | Credit Facility. Lender shall make a term loan to the Borrowers, on the Closing Date, in an amount equal to Eight Million Five Hundred Thousand Dollars ($8,500,000.00) (“Term Loan F”), subject to the terms and conditions hereof and of the Master Loan Agreement. Term Loan F shall be evidenced by Term Note F, be payable in accordance with the terms of Term Note F and be made by disbursement of Loan |
proceeds when and as directed by Borrowers. Amounts borrowed and repaid under the Term Loan F may not be reborrowed.
2.2 | Borrowing Procedures. The entire amount of Term Loan F is to be advanced in one single advance on the Closing Date. |
2.3 | Interest Rate. The unpaid principal balance of Term Loan F outstanding from time to time shall bear interest for the period commencing on the Closing Date of Term Loan F until such Loan is paid in full. Term Loan F shall accrue interest at a variable rate equal to the LIBOR Rate plus 3.75% per annum and such rate shall be adjusted on the 1st day of each month. |
2.4 | Payments. Borrowers shall make the following payments on Term Loan F during the following periods: |
(a) | Sixty (60) consecutive monthly payments of accrued unpaid interest, commencing on March 1, 2020, and continuing on the 1st day of each successive month thereafter; |
(b) | Sixty (60) consecutive monthly payments of principal commencing on March 1, 2020, and continuing on the 1st day of each successive month thereafter, each in an amount equal to One Hundred Forty-One Thousand Six Hundred Sixty-Six and 66/100 Dollars ($141,666.66); and |
(c) | A final payment of all outstanding principal and accrued and unpaid interest together with such other amounts as shall then be due and owing from Borrowers to Lender under the Term Loan F on the Term Loan F Maturity Date. |
2.5 | Fees. |
(a) | On or before the Closing Date, Borrowers shall pay to Lender a fee in the amount of Thirty-Four Thousand Dollars ($34,000.00). |
2.6 | Use of Loan Proceeds. Borrowers shall only use the proceeds of Term Loan F to acquire aircraft engines described in the Aircraft Assets Security Agreement (attached hereto as Exhibit B (“AASA”). |
3. | CONDITIONS FOR BORROWING. |
In addition to all conditions to borrowing set forth in Section 5.1 of the Master Loan Agreement, Lender’s obligation to make the Loan described in this Supplement is subject to the satisfaction or waiver by Lender in writing on or before the Closing Date of such Loan of the following conditions:
3.1 | Lender shall have received the following, all in form, detail and content satisfactory to Lender: |
(a) | Term Note F duly executed by both Borrowers. |
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(b) | The fee due under Section 2.5 hereof. |
(c) | AASA, properly executed by Borrowers, together with any and all other documents or instruments Lender reasonably deems necessary to grant to Lender and perfect a first position Lien in the collateral described therein. |
(d) | Evidence in a form reasonably acceptable to Lender that, prior to or concurrently with the execution of this Supplement, CAL acquired the collateral described in the AASA, and such is owned free and clear of all liens, claims and encumbrances. |
(e) | Evidence in a form reasonable acceptable to Lender that CAS has obtained the insurance required under Section 15 of the AASA and has otherwise complied with the terms of such section. |
(f) | Evidence in a form reasonably acceptable to Lender that Borrowers have the due power and authority to execute and perform this Supplement, Term Note F and the AASA. |
(g) | Documents by CAS affirming the Assignment of Life Insurance Policy as Collateral (Policy Number AD20430869 issued by ReliaStar Life Insurance Company in the amount of $2,000,000), which was executed on May 5, 2017, including, but not limited to, an Affirmation of Assignment of Life Insurance Policy as Collateral identical in form to that attached hereto as Exhibit C. |
4. | AFFIRMATIVE COVENANTS. |
In addition to all affirmative covenants set forth in Section 6 of the Master Loan Agreement, each Borrower covenants that it will, until Lender’s commitment to extend credit under this Supplement and all Permitted Swap Agreements relating to the credit facility extended under this Supplement have terminated or expired and the promissory note evidencing the credit facility extended under this Supplement, and all fees and expenses payable in connection with the credit facility extended under this Supplement have been paid in full:
4.1 | Quarterly Rolling Cash Flow Coverage Ratio. Maintain, as of the last day of each fiscal quarter, a Quarterly Rolling Cash Flow Coverage Ratio of not less than 1.25 to 1.0. Lender may determine compliance with this Quarterly Cash Flow Coverage Ratio covenant at any time. |
4.2 | Tangible Net Worth. Maintain a Tangible Net Worth of at least Fifteen Million Dollars ($15,000,000.00) at all times. Lender may determine compliance with this Tangible Net Worth covenant at any time. |
5. | NEGATIVE COVENANTS. |
In addition to all negative covenants set forth in Section 7 of the Master Loan Agreement, each Borrower covenants that, without the prior written consent of Lender, Borrowers will not, until
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Lender’s commitment to extend credit under this Supplement and all Permitted Swap Agreements relating to the credit facility extended under this Supplement have terminated or expired and the promissory note evidencing the credit facility extended under this Supplement, and all fees and expenses payable in connection with the credit facility extended under this Supplement, have been paid in full:
5.1 [Intentionally Omitted]
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IN WITNESS WHEREOF, the Parties have executed this Supplement as of the date first written above.
BORROWERS: LENDER:
CONTRAIL AVIATION SUPPORT, LLC OLD NATIONAL BANK
By: By:
Xxxxxx Xxxx Xxxxx Xxxxx
Its: CEO Its: SVP
CONTRAIL AVIATION LEASING, LLC
By:
Xxxxxx Xxxx
Its: CEO
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