AMENDMENT NO. 1 TO BUSINESS LOAN AGREEMENT
This Amendment No. 1 to Business Loan Agreement (this "Amendment")
dated as of November ___, 1997 is made with reference to the Business Loan
Agreement dated as of November 27, 1996 is made between BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION ("BANK") and HAWKER PACIFIC, INC., a
California corporation ("BORROWER"). Borrower and bank hereby agree as
follows:
1. SECTION 1 - DEFINITIONS. Capitalized terms used in this
Amendment but not defined are used with the meanings set forth for those
terms in the Business Loan Agreement. In addition, the following additional
defined terms are added to Section 1 of the Business Loan Agreement:
"AMR PAYABLE" means Borrower's obligation to pay $2,854,372 to American
Airlines, Inc. for certain inventory acquired by Borrower pursuant to a
repair services agreement.
"QUALIFIED PUBLIC OFFERING" means a public offering of the common stock
of the Borrower which yields cash proceeds to the Borrower (net of
underwriting discounts and transactional expenses) of not less than
$17,000,000.
2. SECTION 11.4 - QUICK RATIO. The preamble to Section 11.4 of
the Business Loan Agreement is hereby amended to read in full as follows,
with such amendment to have retroactive effect to September 30, 1997:
"As of the last day of each calendar month ending during a period
described below, to maintain a ratio of (a) Quick Assets to (b) current
liabilities (excluding the current portion of long term debt, and
capital leases AND THE AMR PAYABLE, but including advances and
commercial Letters of Credit outstanding under Facility No. 1 to the
extent that the same exceed Borrower's aggregate cash, cash balances, and
short term cash investments) which is not less than the ratio set forth
opposite that calendar month:"
3. SECTION 12.15 - AMENDMENT TO CHANGE IN CONTROL. Section 12.15
of the Business Loan Agreement is hereby amended to read in full as follows:
"12.15 CHANGE IN CONTROL OR MANAGEMENT. Any of the following occurs:
(a) ▇▇▇▇▇▇▇ fails to own, beneficially and of record directly or
indirectly, and control the power to vote, at least 40% of the equity
interests in Borrower AT ANY TIME PRIOR TO THE OCCURRENCE OF A QUALIFIED
PUBLIC OFFERING; or
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(b) At any time prior to the merger of Borrower and AqHawk, AqHawk
fails to own 100% of the equity interest in Borrower; or
(c) The individuals owning equity interest in AqHawk, as described
in Schedule 1 (or, after the merger of Borrower and AqHawk, owning
equity interests in Borrower) collectively sell, assign or otherwise
transfer, either beneficially or of record, more than 10% of the total
equity interests in AqHawk (and/or Borrower), other than to members of
their immediate families or trusts for the benefit of members of their
immediate families, OR IN CONNECTION WITH (OR FOLLOWING) A QUALIFIED
PUBLIC OFFERING; or
(d) ▇▇▇▇▇ ▇▇▇▇▇▇ ceases to be actively involved on a full time basis
as an executive level employee of Borrower at any time during the two
year period following the Closing Date and a replacement acceptable to
Bank is not appointed (or another plan for replacement which is
acceptable to the Bank is not in place) within 90 days.
4. CONSENT TO ACQUISITION. Subject to the conditions precedent set
forth herein, the Bank hereby consents to the purchase, at any time following
the consummation of a Qualified Public Offering, by Borrower of the Landing
Gears Repair and Overhaul Business of British Airways Plc, substantially on
the terms set forth in the Letter of Intent therefor delivered to the Bank,
PROVIDED that (i) substantially all of the funds from such Qualified Public
Offering are use to partially finance the $22,000,000 purchase price for
such purchase, and (ii) Borrower has obtained financing for the balance of
such purchase which is reasonably acceptable to the Bank.
5. WAIVER RE EXCESS CASH FLOW. The Bank hereby agrees that it shall
not require the making of any payment by ▇▇▇▇▇▇▇ or Unique pursuant to
Section 2.3, clause (iv) of the Subordination Agreement by reason of Excess
Cash Flow (or any lack thereof) during Borrower's 1997 fiscal year. This
waiver is a one-time waiver only, and the Bank shall be free to request the
making of such payments with respect to any other fiscal year. It is agreed
that this waiver shall not be construed in derogation of the Guaranty issued
by Unique and ▇▇▇▇▇▇▇.
6. REPRESENTATION. No Default or Event of Default has occurred
under the Business Loan Agreement and remains continuing which is not cured
by this Amendment.
7. CONDITIONS. There shall be conditions precedent to the
effectiveness of this Agreement that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Unique Investment
Corporation shall have consented hereto.
8. EXPENSES. Borrower confirms its obligations to pay the reasonable
expenses of the Bank in connection with the preparation of this Amendment.
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9. CONFIRMATION. In all other respects, the terms of the Business
Loan Agreement and the instruments, documents and agreements executed in
connection therewith are hereby confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above by their duly authorized representatives.
BANK OF AMERICA NATIONAL HAWKER PACIFIC, INC., a
TRUST AND SAVINGS ASSOCIATION California corporation
By [ILLEGIBLE] By /s/ ▇▇▇▇▇ ▇▇▇▇
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Title Vice President Title CFO
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By By
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Title Title
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Consented to: Consented to:
UNIQUE INVESTMENT CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, individually
Title President
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