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Exhibit 10
AMENDMENT NO. 2
Dated as of November 25, 1997
to
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 12, 1996
This Amendment No. 2 ("Amendment") dated as of November 25,
1997 is entered into among the "Borrowers" (as defined below) and the "Lenders"
(as defined in the Credit Agreement identified below). Capitalized terms used
herein without definition are used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, Banner Aerospace, Inc., a Delaware corporation
("Banner") and Burbank Aircraft Supply, Inc., a Delaware corporation
("Burbank"), as borrowers, certain financial institutions as Lenders, and
Citicorp USA, Inc., as Administrative Agent, are parties to that certain Second
Amended and Restated Credit Agreement dated as of December 12, 1996, as
heretofore amended (the "Credit Agreement");
WHEREAS, Banner and Burbank have requested a certain increase
in the Revolving Credit Commitments under the Credit Agreement and the
amendment of certain provisions of the Credit Agreement pertaining to the
advance rate against Inventory, the determination of Revolving Credit
Availability, Capital Expenditure limitations, the definition of Permitted
Engine Leases and the covenant limiting Investments;
WHEREAS, the Subsidiaries of Banner and Burbank which have
heretofore been Guarantors will become borrowers and joint and several obligors
with Banner and Burbank under the Credit Agreement; and
WHEREAS, subject to the terms and conditions stated herein,
the Borrowers and the Lenders have agreed to amend the Credit Agreement as set
forth below;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Amendments to the Credit Agreement. Effective as
of November 25, 1997, subject to the satisfaction of the conditions precedent
set forth in Section 2 hereof, the Credit Agreement is hereby amended as
follows:
1.1 Section 1.01 is amended to delete the definitions of
"Borrower", "Borrowers", "Borrowing Base", "Commercial Letter of Credit",
"Concentration Account", "Concentration Account Agreement", "Effective Date",
"Guarantors", "Net Cash Proceeds of Equity Securities or Indebtedness",
"Permitted Engine Leases", "Projections", "Revolving Credit Availability",
"Revolving Credit Commitment", "Revolving Credit Commitments", and "Standby
Letter of Credit" in their entirety and substitute the following therefor:
"Borrowers" means, collectively, Banner Aerospace, Inc., a Delaware
corporation; Burbank Aircraft Supply, Inc., a Delaware corporation;
▇▇▇▇▇ Industries, Inc., a Connecticut corporation; Aerospace Bearing
Support, Inc., a California corporation; Aircraft Bearing Corporation,
a California corporation; Banner Aerospace Services, Inc., an Ohio
corporation; Banner Aerospace-Singapore, Inc., a Delaware corporation;
Banner Distribution, Inc., a Delaware corporation; D A C
International, Inc., a Texas corporation; Dallas Aerospace, Inc., a
Texas corporation; Georgetown Jet Center, Inc., a Delaware
corporation; Harco, Inc., a Delaware corporation; Matrix Aviation,
Inc., a Kansas corporation; Nasam, Incorporated, a California
corporation; PacAero, a California corporation; ▇▇ ▇▇▇▇▇▇▇ Aerospace,
Inc., a Missouri corporation; Professional Aircraft Accessories, Inc.,
a Florida corporation; Professional Aviation
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Associates, Inc., a Georgia corporation; Solair, Inc., a Florida
corporation; and Burbank Aircraft International, Inc., a Delaware
corporation; and "Borrower" means each of the foregoing, individually.
"Borrowing Base" means, as of any date of determination, an amount
(designated as such on the Borrowing Base Certificate dated as of such
date of determination) equal to the sum of (i) eighty percent (80%) of
the face amount of Eligible Receivables, plus (ii) sixty-five percent
(65%) of (a) the Total Book Value of Inventory (other than the Airbus
Inventory if the same is subject to a Lien granted to or in favor of,
or retention of title by, any Person other than the Administrative
Agent) minus (b) the Texas Tax Reserve.
"Commercial Letter of Credit" means any documentary letter of credit
issued by an Issuing Bank pursuant to Section 3.01 for the account of
any Borrower, or for the account of any Subsidiary of any Borrower if
the Borrowers are jointly and severally liable for reimbursement of
amounts drawn under such letter of credit issued for the account of
such Subsidiary, which is drawable upon presentation of documents
evidencing the sale or shipment of goods purchased by a Borrower or
such Subsidiary in the ordinary course of its business.
"Concentration Account" means, collectively, the depository account of
the Borrowers maintained at Citibank in New York, New York, or such
other financial institution designated for such purpose by the
Administrative Agent into which collections of Receivables, other
proceeds of Collateral and other amounts are transferred pursuant to
the terms of the Collection Account Agreements or otherwise as
described in Section 4.04.
"Concentration Account Agreement" means a written agreement,
substantially in the form attached hereto as EXHIBIT C-2 with such
modifications as the Administrative Agent, from time to time, deems
acceptable, among the Borrowers, the Administrative Agent, and
Citibank.
"Effective Date" means November 25, 1997.
"Guarantors" means Subsidiaries of a Borrower executing and delivering
a guaranty of payment and performance of all or any portion of the
Obligations; and "Guarantor" means any of the Guarantors,
individually.
"Net Cash Proceeds of Issuance of Equity Securities or Indebtedness"
means (i) net cash proceeds (including cash, equivalents readily
convertible into cash, and such proceeds of any notes received as
consideration or any other non-cash consideration) received by any
Borrower or any Subsidiary of any Borrower at any time after the
Closing Date on account of the issuance of (a) equity Securities of
any Borrower or any Subsidiary of any Borrower (other than (1) Capital
Stock of a Subsidiary issued to a Borrower or to a Subsidiary of a
Borrower, (2) Capital Stock issued pursuant to Permitted Equity
Securities Options or similar employee options established after the
Closing Date and (3) the Preferred Stock) or (b) Indebtedness (other
than Indebtedness permitted under Section 10.01) of any Borrower or
any Subsidiary of any Borrower, in each case net of all transaction
costs and underwriters' discounts with respect thereto; and (ii)
proceeds received by either Banner or Burbank at any time after the
Closing Date as a contribution to its capital on account of the
issuance of equity Securities of such Borrower.
"Permitted Engine Leases" means leases of (i) rotables by any of the
Borrowers; (ii) tools, test cells and like equipment by Dallas
Aerospace, Inc. which are required for joint venture activities of
Dallas Aerospace, Inc. with M&M Aircraft Services for the overhauling
of CFM56 engines; and (iii) Engines by Dallas Aerospace, Inc., in each
instance with respect to the property described in clauses (i),
(ii),and (iii), either (a) sold to financial institutions reasonably
acceptable to the Administrative Agent by Dallas Aerospace, Inc. or
another Borrower, as applicable, as permitted under Section 10.11, or
(b) leased from financial institutions reasonably acceptable to the
Administrative Agent under Operating Leases having Dallas Aerospace,
Inc. or another Borrower, as applicable, as lessee, and such financial
institutions, as lessors.
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"Projections" means the financial projections and assumptions prepared
by the Borrowers dated October 9, 1997 and attached hereto as EXHIBIT
H.
"Revolving Credit Availability" means the amount by which the lesser of
(a) the Revolving Credit Commitments at such time and
(b) the Borrowing Base at such time minus the outstanding
principal balance of the Term Loans at such time minus the
outstanding principal balance of the Tranche B Term Loans at
such time minus the outstanding principal balance of the
Tranche C Term Loans at such time
exceeds the sum of (1) the Revolving Credit Obligations at such time
plus (2) the outstanding balance of Protective Advances at such time,
plus (3) the outstanding balance of the Swing Loans at such time.
"Revolving Credit Commitment" means, with respect to any Lender, the
obligation of such Lender to make Revolving Loans and to participate
in Letters of Credit pursuant to the terms and conditions of this
Agreement, in an aggregate amount at any time outstanding which shall
not exceed the principal amount set forth opposite such Lender's name
under the heading "Revolving Credit Commitment" on SCHEDULE 1.01.12
attached hereto and made a part hereof or on the signature page of the
Assignment and Acceptance by which it became a Lender, as modified
from time to time pursuant to the terms of this Agreement or to give
effect to any applicable Assignment and Acceptance, and "Revolving
Credit Commitments" means the aggregate principal amount of the
Revolving Credit Commitments of all the Lenders, the maximum amount of
which shall be $121,500,000, as reduced from time to time pursuant to
Section 4.01.
"Standby Letter of Credit" means any letter of credit issued by an
Issuing Bank pursuant to Section 3.01 for the account of any Borrower,
or for the account of any Subsidiary of any Borrower if the Borrowers
are jointly and severally liable for reimbursement of amounts drawn
under such letter of credit issued for the account of such Subsidiary,
which is not a Commercial Letter of Credit.
1.2 References in the Credit Agreement to (i) "either
Borrower" shall be deemed to be references to "any Borrower", (ii) "either of
them" with reference to the Borrowers shall be deemed to be references to "any
of them", and (iii) "neither Borrower" shall be deemed to be references to "no
Borrower".
1.3 Requirements in the Credit Agreement for (i) notices to
be given to the Borrowers shall be deemed to be complied with if notice is
given to Banner and (ii) approvals of the Borrowers shall be deemed to be
complied with if approval is given by Banner on behalf of the Borrowers.
1.4 Section 2.02(b) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(b) Notice of Borrowing. When the Borrowers desire to borrow under
this Section 2.02, they shall deliver to the Administrative Agent a
Notice of Borrowing, signed by each of them, (i) on the Effective
Date, in the case of a Borrowing of Revolving Loans on the Effective
Date, (ii) no later than 11:00 a.m. (New York time) on the proposed
Funding Date therefor, in the case of a Borrowing of Base Rate Loans
after the Effective Date, and (iii) no later than 12:00 noon (New York
time) at least three (3) Business Days in advance of the proposed
Funding Date therefor, in the case of a Borrowing of Eurodollar Rate
Loans. Such Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount of the
proposed Borrowing, (iii) the Revolving Credit Availability as of the
date of such Notice of Borrowing, (iv) whether the proposed Borrowing
will be of Base Rate Loans or Eurodollar Rate Loans, (v) in the case
of Eurodollar Rate Loans, the requested Eurodollar Interest Period and
(vi) the Borrowers' instructions for the disbursement of the proceeds
of the proposed Borrowing. In lieu of delivering such a Notice of
Borrowing (except with respect to a Borrowing of Revolving Loans on
the Effective Date), the
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Borrowers may give the Administrative Agent telephonic notice of any
proposed Borrowing by the time required under this Section 2.02(b), if
the Borrowers confirm such notice by delivery of the required Notice
of Borrowing to the Administrative Agent by facsimile transmission
promptly, but in no event later than 5:00 p.m. (New York time) on the
same day, the original of which facsimile copy shall be delivered to
the Administrative Agent within three (3) days after the date of such
transmission. Any Notice of Borrowing (or telephonic notice in lieu
thereof) given pursuant to this Section 2.02(b) shall be irrevocable.
1.5 Article III is amended to delete the provisions of
Section 3.02 thereof in their entirety and substitute the following therefor:
3.02. Transitional Provisions. SCHEDULE 3.02 contains a schedule of
letters of credit issued prior to November 25, 1997 by an Issuing Bank
for the account of Banner, Burbank, or a Subsidiary of Banner or
Burbank, which continue outstanding as of November 25, 1997. Such
letters of credit shall constitute Letters of Credit issued pursuant
to Article III and be subject to the provisions of this Agreement and
the Borrowers shall be jointly and severally liable for Reimbursement
Obligations associated therewith. The undrawn face amount of such
Letters of Credit have been included in the calculation of Letter of
Credit Obligations and all liabilities of the Borrowers with respect
to such Letters of Credit constitute Obligations.
and to add the following as Section 3.06:
3.06 Authority of Banner to Bind Borrowers. Each of the Borrowers
hereby irrevocably expressly authorizes Banner to execute and deliver
to the Administrative Agent or Issuing Bank on behalf of all of the
Borrowers applications for Letters of Credit to be issued under this
Credit Agreement, Reimbursement Agreements relating thereto, and all
other agreements, documents, instruments and Loan Documents required
to be executed and delivered in connection with such Letters of Credit
and, thereby, to fully bind each of the Borrowers with respect to the
Obligations evidenced thereby, jointly and severally.
1.6 Section 7.01(h) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(h) Financial Position. Copies of Banner's audited financial
statements for the Fiscal Year ended March 31, 1997 have been
delivered to the Administrative Agent and the Lenders on or before the
Effective Date. All Financial Statements included in such materials
were prepared in all material respects in conformity with GAAP, except
as otherwise noted therein, and fairly present in all material
respects the respective consolidated financial positions, and the
consolidated results of operations and cash flows for each of the
periods covered thereby of the Borrowers and their Subsidiaries as at
the respective dates thereof. No Borrower and no Subsidiary of any
Borrower has any Accommodation Obligation, contingent liability or
liability for any taxes, long-term leases or commitments not reflected
in the audited Financial Statements delivered to the Administrative
Agent on or prior to the Effective Date as aforesaid, which will have
or are reasonably likely to result in a Material Adverse Effect. The
Projections delivered to the Administrative Agent and Lenders were, as
of the Effective Date, reasonable based on reasonable assumptions and
other information available to the Borrowers as of the Effective Date.
1.7 Section 7.01(cc) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(cc) FAA Registration. Solair, Inc., Dallas Aerospace, Inc., D A C
International, Inc., and Georgetown Jet Center, Inc. are the only
Borrowers as of the Effective Date that own any Aircraft, Airframes or
jet Engines and Engines rated 750 or more take-off horsepower and are
the only Borrowers as of the Effective Date whose Inventory and
Equipment are subject to Federal Aviation Administration registration
requirements. As of the Effective Date, no Subsidiary of any Borrower
which is not a Borrower (i) owns any Aircraft,
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Airframes or jet Engines and Engines rated 750 or more take-off
horsepower or (ii) owns Inventory or Equipment subject to Federal
Aviation Administration registration requirements.
1.8 Section 8.03 and Section 8.04 are each amended to delete
the reference therein to "the treasurer of Burbank" and to substitute therefor
a reference to "the treasurer of any other Borrower".
1.9 Section 10.02 is amended to (i) delete the provisions of
clause (b) thereof in their entirety and substitute the following therefor:
(b) the transfer of Property (i) from a Subsidiary of a Borrower to
such Borrower or (ii) from a Subsidiary of a Borrower to another
Subsidiary of such Borrower; provided that the Subsidiary transferee
is a Guarantor or a Borrower;
and (ii) delete the provisions of clause (g) thereof in their entirety.
1.10 Section 10.03 is amended to delete the provisions of
clauses (i) and (j) in their entirety and substitute the following therefor:
(i) Liens granted to the lessors under the Permitted Engine Leases
against the rights of Dallas Aerospace, Inc. or another Borrower, as
applicable, under subleases of Engines and other property which are
the subject of the respective lessors' Permitted Engine Leases, to
Persons other than a Borrower or Subsidiary of a Borrower;
(j) Liens granted by Borrowers or Guarantors against accounts which
they are permitted to establish and maintain under Sections 4.04 and
10.16 without being subject to Collection Account Agreements to secure
Contractual Obligations with respect to credit card purchases;
provided that the amount on deposit in such accounts of any Borrower
or any Guarantor shall be no more than $75,000 in the aggregate at any
given time and such Borrower or Guarantor shall have identified such
account(s) and Contractual Obligations to the Administrative Agent in
writing promptly upon entering into the same; and
1.11 Section 10.04 is amended to delete the provisions of
clauses (d), (g), and (h) in their entirety and substitute the following
therefor:
(d) Investments by a Borrower in its Subsidiaries which, if in the
form of Intercompany Debt, would be permitted under Section 10.01(i);
(g) Investments (i) by Dallas Aerospace, Inc. in a joint venture with
M&M Aircraft Services, Inc. for the purpose of extending the engine
overhauling capabilities of Dallas Aerospace, Inc. to CFM56 engines;
provided that either (A) such Investments are in the form of Permitted
Engine Leases and the amount of such Investments does not exceed
$10,000,000 in the aggregate or (B) such Investments are in the form
of Accommodation Obligations in support of lease financing provided to
such joint venture, the aggregate amount of which Accommodation
Obligations shall not exceed $4,000,000; and (ii) by Burbank in a
joint venture with Xian Aircraft Corp. for the purpose of selling
hardware in the Peoples Republic of China; provided that the aggregate
amount of such Investments by Burbank shall not exceed $1,000,000;
(h) Investments of amounts not to exceed the amounts described on
SCHEDULE 1.01.5 in the respective Permitted Acquisitions and newly
formed Subsidiaries to effect the respective Permitted Acquisitions;
and
1.12 Section 10.05 is amended to add the following as clause
(g) thereof
(g) the guarantee by Banner of obligations in connection with lease
financing provided to the joint venture permitted under Section
10.04(g) in which Dallas Aerospace, Inc. shall have made Investments
permitted by Section 10.04(g); provided that such guaranteed
obligations do not exceed $4,000,000 at any time outstanding;
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and to change the designation "(g)" as to the final clause of Section 10.05 to
"(h)".
1.13 Section 10.10 is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
10.10. Restriction on Fundamental Changes. No Borrower shall, nor
shall any Borrower permit any of its Subsidiaries to, (a) enter into
any merger or consolidation, or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of such Person's business or
Property, whether now or hereafter acquired, except for (i) the merger
of a Subsidiary of a Borrower with and into a Borrower, (ii) the
merger of a Borrower (other than Banner) with and into another
Borrower, and (iii) the merger of a Guarantor with and into another
Guarantor or (b) acquire by purchase or otherwise, all or
substantially all of the business, property or assets of, or Capital
Stock or other evidence of beneficial ownership of, any Person, except
for acquisitions which are Permitted Acquisitions or joint ventures in
which Investments are permitted under Section 10.04.
1.14 Section 10.16 is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
10.16 Bank Accounts. No Borrower shall, nor shall any Borrower
permit any of its Subsidiaries to, establish or maintain any deposit
account into which collections of Receivables and proceeds of other
Collateral are deposited other than (a) the deposit accounts
identified on SCHEDULE 10.16 attached hereto which are subject to
Collection Account Agreements, (b) deposit accounts existing as of the
Effective Date or established after the Effecitve Date in which
amounts on deposit do not exceed $2,000,000 in the aggregate at any
time and which are not subject to Collection Account Agreements, and
(c) deposit accounts established after the Effective Date with respect
to which Banner gives the Administrative Agent prior written notice of
such establishment and delivers to the Administrative Agent an
executed Collection Account Agreement concurrently with such deposit
account being established.
1.15 Section 11.05 is amended to delete only the tabular
provision as to "Period" and "Maximum Amount" set forth therein in its entirety
and substitute the following therefor:
Period Maximum Amount
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4/1/95 - 3/31/96 $10,000,000
4/1/96 - 3/31/97 $ 5,500,000
4/1/97 - 3/31/98 $ 5,000,000
and each fiscal
year thereafter
1.16 Section 13.09(d) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(d) Subordination of Liens. Each Lender and Issuing Bank hereby
authorizes and directs the Administrative Agent to subordinate the
Liens granted to the Administrative Agent for the benefit of the
Holders against (i) the interest of Dallas Aerospace, Inc. in Engines
complete as equipped and of Dallas Aerospace, Inc. or another
Borrower, as applicable, in other property which are the subject of
Permitted Engine Leases to the Liens permitted under Section 10.03(f)
and the rights of Dallas Aerospace, Inc. under leases or subleases of
Engines and of Dallas Aerospace, Inc. or another Borrower, as
applicable, under leases or subleases of other property which are the
subject of Permitted Engine Leases to the Liens permitted under
Section 10.03(i) and (ii) Airbus Inventory to the purchase money Liens
with respect
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thereto permitted under Section 10.03(d), in each case, on terms and
conditions satisfactory to the Administrative Agent.
1.17 Article XV is amended to (i) delete the provisions of
Section 15.07(c)(i) thereof in its entirety and substitute the following
therefor:
(i) release of (A) any Borrower or any Guarantor or (B) all or a
substantial part of the Collateral, other than as provided in Section
13.09(c);
and (ii) add the following provision as Section 15.23:
15.23. Obligations of Borrowers Joint and Several. Each of
the Borrowers agrees that it shall be jointly and severally liable for all of
the Obligations. Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by
the Lenders and Issuing Banks under this Agreement, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in consideration of the
undertakings of each of the Borrowers to accept joint and several liability for
the obligations of each of them. Each of the Borrowers jointly and severally
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other Borrowers with
respect to the payment and performance of all of the Obligations, it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each of the Borrowers without preferences or distinction
among them. If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event, the other Borrowers will make such payment with respect to, or
perform, such Obligation. The obligations of each Borrower under the provisions
of this Section 15.23 constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Agreement or
any other circumstances whatsoever. Except as otherwise expressly provided
herein, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any Loan made, or Letter of Credit issued, under
this Agreement, notice of occurrence of any Event of Default, or of any demand
for any payment under this Agreement, notice of any action at any time taken or
omitted by any Lender or Issuing Bank under or in respect of any of the
Obligations, any requirement of diligence and, generally, all demands, notices
and other formalities of every kind in connection with this Agreement. Each
Borrower hereby assents to, and waives notice of, any extension or postponement
of the time for the payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
any Lender or Issuing Bank at any time or times in respect of any default by
any Borrower in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by any Lender in respect of any of the Obligations, and the taking,
addition, substitution or release, in whole or in part, at any time or times,
of any security for any of the Obligations or the addition, substitution or
release, in whole or in part, of any Borrower. Without limiting the generality
of the foregoing, each Borrower assents to any other action or delay in acting
or failure to act on the part of any Lender, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or
to comply fully with applicable laws, or regulations thereunder, which might,
but for the provisions of this Section 15.23, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of its
obligations under this Section 15.23, it being the intention of each Borrower
that, so long as any of the Obligations remain unsatisfied, the obligations of
such Borrower under this Section 15.23 shall not be discharged except by
performance and then only to the extent of such performance. The Obligations
of each Borrower under this Section 15.23 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or any
Lender. The joint and several liability of the Borrowers hereunder shall
continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, membership,
constitution or place of formation of any Borrower or any Lender or Issuing
Bank. The provisions of this Section 15.23 are made for the benefit of the
Holders and their respective successors and assigns, and may be enforced by any
such Person from time to time against any of the Borrowers as often as occasion
therefor may arise and without requirement on the part of any Holder first to
marshal any of its claims or to exercise any of its rights against any of the
other
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Borrowers or to exhaust any remedies available to it against any of the other
Borrowers or to resort to any other source or means of obtaining payment of any
of the Obligations or to elect any other remedy. The provisions of this
Section 15.23 shall remain in effect until all the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Holder upon the insolvency, bankruptcy
or reorganization of any of the Borrowers, or otherwise, the provisions of this
Section 15.23 will forthwith be reinstated in effect, as though such payment
had not been made. Notwithstanding any provision to the contrary contained
herein or in any other of the Loan Documents, to the extent the joint
obligations of a Borrower shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each Borrower hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the federal Bankruptcy Code). The Borrowers
hereby agree, as among themselves, that if any Borrower shall become an Excess
Funding Borrower (as defined below), each other Borrower shall, on demand of
such Excess Funding Borrower (but subject to the next sentence hereof and to
clause (B) below), pay to such Excess Funding Borrower an amount equal to such
Borrower's Pro Rata Share (as defined below and determined, for this purpose,
without reference to the properties, assets, liabilities and debts of such
Excess Funding Borrower) of such Excess Payment (as defined below). The
payment obligation of any Borrower to any Excess Funding Borrower under this
Section 15.23 shall be subordinate and subject in right of payment to the prior
payment in full of the Obligations of such Borrower under the other provisions
of this Agreement, and such Excess Funding Borrower shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such Obligations. For purposes hereof, (i) "Excess Funding
Borrower" shall mean, in respect of any Obligations arising under the other
provisions of this Agreement (hereafter, the "Joint Obligations"), a Borrower
that has paid an amount in excess of its Pro Rata Share of the Joint
Obligations; (ii) "Excess Payment" shall mean, in respect of any Joint
Obligations, the amount paid by an Excess Funding Borrower in excess of its Pro
Rata Share of such Joint Obligations; and (iii) "Pro Rata Share", for the
purposes of this Section 15.23, shall mean, for any Borrower, the ratio
(expressed as a percentage) of (A) the amount by which the aggregate present
fair saleable value of all of its assets and properties exceeds the amount of
all debts and liabilities of such Borrower (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Borrower hereunder) to (B) the amount by which the aggregate present fair
saleable value of all assets and other properties of such Borrower and all of
the other Borrowers exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Borrower and the other Borrowers
hereunder) of such Borrower and all of the other Borrowers, all as of the
Effective Date.
1.18 All Exhibits and Schedules are deleted in their entirety
and the Exhibits and Schedules attached hereto and made a part hereof shall be
substituted therefor.
SECTION 2. Conditions Precedent to Effectiveness of this
Amendment. This Amendment shall become effective as of November 25, 1997, if,
and only if the Administrative Agent shall have received (a) on or before
November 21, 1997, a facsimile or original executed copy of this Amendment
executed by the Borrowers and the Lenders, (b) on November 25, 1997, for the
accounts of (i) the respective Lenders, a fee in the amount of one-eighth of
one percent (0.125%) of their respective Commitments immediately prior to this
Amendment becoming effective and (ii) the respective Lenders whose Revolving
Credit Commitments are increased upon this Amendment becoming effective, a fee
in the amount of one-quarter of one percent (0.25%) of the amount by which
their respective Revolving Credit Commitments increase, (c) on November 25,
1997, the fees described in and payable for the account of the Administrative
Agent under that certain letter agreement among Banner, Burbank, and the
Administrative Agent dated October 31, 1997, and (d) on or before November 25,
1997, all of the agreements, documents and instruments relating to the loan and
other credit transactions contemplated by the Credit Agreement and this
Amendment described in the List of Closing Documents attached hereto as EXHIBIT
A, each duly executed where appropriate and in form and substance satisfactory
to the Administrative Agent; without limiting the foregoing, the Borrowers
hereby direct their counsel, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., to prepare and deliver to
the Administrative Agent, the Co-Agents, the Lenders, the Issuing Banks and
Sidley & Austin the opinion referred to in such List of Closing Documents.
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SECTION 3. Representations and Warranties. Borrowers hereby
represent and warrant as follows:
3.1 The Credit Agreement, as amended by this Amendment,
constitutes the legal, valid and binding obligations of each of the Borrowers
and is enforceable against each of the Borrowers in accordance with its terms.
3.2 No Event of Default or Potential Event of Default exists
or would result from any of the transactions contemplated by this Amendment.
3.3 Upon the effectiveness of this Amendment, Banner and
Burbank hereby reaffirm all covenants, representations and warranties made by
them, respectively, in the Credit Agreement to the extent the same are not
amended hereby and each Borrower hereby agrees that all covenants,
representations and warranties in the Credit Agreement, as amended by this
Amendment, shall be deemed to have been remade, or made, as applicable, by such
Borrower as of the date this Amendment becomes effective.
SECTION 4. Reference to and Effect on the Credit Agreement.
4.1 Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import shall mean and be a reference to the Credit Agreement, as
amended hereby, and each reference to the Credit Agreement in any other
document, instrument or agreement executed and/or delivered in connection with
the Credit Agreement shall mean and be a reference to the Credit Agreement as
amended hereby.
4.2 Except as specifically amended above or otherwise
terminated in writing concurrently with this Amendment becoming effective, the
Credit Agreement, the Notes and all other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
4.3 The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of any
Lender or Issuing Bank or the Administrative Agent under the Credit Agreement,
the Notes or any of the other Loan Documents, nor constitute a waiver of any
provision contained therein, except as specifically set forth herein.
SECTION 5. Administrative Agent Direction. The
Administrative Agent is hereby authorized and directed by the Lenders and
Issuing Banks, upon this Amendment becoming effective, to execute, on behalf of
the Lenders and Issuing Bank, and deliver to those Borrowers which have
heretofore been Guarantors in consideration of their having executed and
delivered this Amendment and, by the terms hereof, become Borrowers jointly and
severally liable for the Obligations, a release of the obligations of such
Borrowers under the Guaranties heretofore executed and delivered by them.
SECTION 6. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 7. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of New York.
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SECTION 8. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
Borrowers:
----------
BANNER AEROSPACE, INC. BURBANK AIRCRAFT SUPPLY, INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
▇▇▇▇▇ INDUSTRIES, INC. AEROSPACE BEARING SUPPORT,
INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
AIRCRAFT BEARING CORPORATION BANNER AEROSPACE-SINGAPORE,
INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
BANNER AEROSPACE SERVICES, BANNER DISTRIBUTION, INC.
INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
BURBANK AIRCRAFT D A C INTERNATIONAL, INC.
INTERNATIONAL, INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
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DALLAS AEROSPACE, INC. GEORGETOWN JET CENTER, INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
HARCO, INC. MATRIX AVIATION, INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
NASAM INCORPORATED PACAERO
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
▇▇ ▇▇▇▇▇▇▇ AEROSPACE, INC. PROFESSIONAL AIRCRAFT
ACCESSORIES, INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
PROFESSIONAL AVIATION SOLAIR, INC.
ASSOCIATES, INC.
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
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Lenders:
--------
CITICORP USA, INC. PNC BANK, NATIONAL ASSOCIATION
By By
--------------------------- --------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attorney-in-Fact Vice President
THE LONG-TERM CREDIT BANK OF CREDIT AGRICOLE INDOSUEZ
JAPAN, LTD.
By By
--------------------------- --------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Senior Vice President First Vice President
NATIONSBANK, N.A. SANWA BUSINESS CREDIT
CORPORATION
By By
--------------------------- --------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President Vice President
THE FIRST NATIONAL BANK OF THE SUMITOMO BANK, LIMITED
CHICAGO
By By
--------------------------- --------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President Vice President
By
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President & Manager
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BANK POLSKA KASA OPIEKI, ▇.▇. ▇▇▇▇▇▇▇ AMERICA PRIME RATE
TRUST
By By
--------------------------- --------------------------
Hussein H. El-▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President Portfolio Analyst
DEUTSCHE FINANCIAL SERVICES, ▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
INC. RATE FUND, INC.
By By
--------------------------- --------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE ML CBO IV (CAYMAN) LTD.
PORTFOLIO By Protective Asset
Management Company, as
Collateral Manager
By By
--------------------------- --------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Signatory Executive Vice President
THE ING CAPITAL SENIOR SECURED KZH-SOLEIL CORPORATION
HIGH INCOME FUND, L.P.
By ING Capital Advisors, Inc.
By By
--------------------------- --------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name:
Vice President & Portfolio Title:
Manager
Issuing Bank:
------------
CITIBANK, N.A.
By
---------------------------
Name:
Attorney-in-Fact
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