ELEVENTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
ELEVENTH AMENDMENT, dated as of November 9, 2005 (this "Amendment"), to Credit
Agreement dated June 30, 2000 (as amended, the "Agreement") by and between
AeroCentury Corp., a Delaware corporation ("AeroCentury"), the banking
institutions signatories hereto and such other institutions that hereafter
become a "Bank" pursuant to Section 10.4 of the Agreement (collectively the
"Banks" and individually a "Bank") and National City Bank, a national banking
association, as Agent for the Banks under the Agreement ("National City" which
shall mean in its capacity as Agent unless specifically stated otherwise). All
capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Agreement.
Preliminary Statement
WHEREAS, National City and AeroCentury, together with the other Banks,
desire to amend the Agreement in the manner hereinafter set forth, including,
among other things, extending the Maturity Date to October 31, 2007;
WHEREAS, Section 10.2 of the Credit Agreement requires that the written
consent of National City and the Banks be obtained for certain amendments,
modifications or waivers contemplated herein.
NOW THEREFORE, in consideration of the premises and promises
hereinafter set forth and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Amendments to Agreement.
(a) Section 1.1. The following definitions as set forth in their respective
alphabetical order in Section 1.1 of the Agreement are hereby amended and
restated in their entirety:
"Net Worth" shall mean the sum of capital stock, plus
paid-in-capital, plus retained earnings, plus the portion of
unsecured subordinated debt which is due and payable after the
Revolver Termination Date, minus the net worth of any Unrestricted
Subsidiaries.
"Recourse Funded Debt" shall mean (i) all indebtedness, liabilities,
and obligations, now existing or hereafter arising, for money
borrowed by AeroCentury on a recourse basis whether or not evidenced
by any note, indenture, or agreement (including, without limitation,
the Note, any indebtedness for money borrowed from an Affiliate and
all outstanding letters of credit) and (ii) all indebtedness of
others for money borrowed (including indebtedness of an Affiliate)
with respect to which AeroCentury has become liable on a recourse
basis by way of a guarantee or indemnity. For the avoidance of
doubt, Recourse Funded Debt shall not include unsecured Subordinated
Debt.
(b) Section 2.1. The Revolver Termination Date of "November 9, 2005" as set
forth on the fourth line of Section 2.1(a) of the Agreement shall be and
hereby is amended to "October 31, 2007."
(c) Article 7 - Financial Covenants. The following sections as set forth in
Article 7 of the Agreement are hereby amended and restated in their
entirety as follows:
Section 7.1. Minimum Tangible Net Worth. Tangible Net Worth will not
at any time be less than the sum of (i) $16,000,000, (ii) 50% of Net
Income for each Fiscal Quarter ending after September 30, 2005,
without deduction for net losses, (iii) 50% of the net proceeds from
any sale of equity securities after the date of this Agreement, (iv)
50% of the fair value of any equity securities issued after the date
of this Agreement in connection with any acquisition permitted
hereunder or by waiver hereto and (v) 100% of any subordinated debt
investment.
Section 7.2. EBITDA to Interest Ratio. The ratio of EBITDA to
Interest as at the end of any Fiscal Quarter and for the period of
such Fiscal Quarter will not be less than 2.25:1.0; provided,
however, that if AeroCentury raises unsecured Subordinated Debt of at
least $10,000,000 during any Fiscal Quarter, the ratio of EBITDA to
Interest as at the end of such Fiscal Quarter and as at the end of
any Fiscal Quarter thereafter, and for the period of such Fiscal
Quarters so long as unsecured Subordinated Debt in the principal
amount of at least $10,000,000 remains outstanding, will not be less
than 1.80:1.0.
Section 7.3. Recourse Funded Debt to Tangible Net Worth. The ratio of
Recourse Funded Debt to Tangible Net Worth will not at each Fiscal
Quarter end exceed 3.25:1.0.
Section 7.4. Absence of Net Loss. AeroCentury will not suffer a
consolidated net loss at the end of any Fiscal Quarter, beginning
with the Fiscal Quarter ended December 31, 2005, as measured on a
consecutive, four-quarter basis.
(d) Amended and Restated Schedule 2 to the Agreement. Effective as of the
date hereof, Schedule 2 to the Agreement shall be and is hereby amended and
restated in its entirety as attached hereto as Attachment A.
(e) Amended and Restated Covenant Compliance Certificate. Effective as of
the date hereof, the Covenant Compliance Certificate attached as Exhibit D
to the Agreement shall be and is hereby amended and restated in its
entirety as attached hereto as Attachment B.
2. Representations and Warranties. Except as otherwise disclosed herein,
AeroCentury hereby restates the representations and warranties made in the
Agreement, including, but not limited to, Article 3 thereof, on and as of
the date hereof as if originally given on this date.
3. Covenants. AeroCentury hereby represents and warrants that it is in
compliance and has complied with each and every covenant set forth in the
Agreement, as amended by this Amendment, including, but not limited to,
Articles 5 and 6 thereof, on and as of the date hereof.
4. No Default or Event of Default. No Potential Default or Event of Default
under the Agreement has occurred and is continuing.
5. Effectiveness Conditions. This Amendment shall be effective upon completion
of the following conditions precedent (all documents to be in form and
substance satisfactory to National City and the Banks, and dated the date
hereof):
a. execution and delivery of this Amendment; and
b. delivery of an Officer's Certificate;
c. execution and delivery of such other documents, instruments and
agreements as National City and the Banks shall reasonably request in
connection with the foregoing matters.
6. Affirmation. AeroCentury hereby affirms its absolute and unconditional
promise to pay to the Banks the Loans and all other amounts due under the
Agreement and any other Loan Document on the maturity dates(s) provided in
the Agreement or any other Loan Document, as such documents may be amended
hereby.
7. Effect of Amendment. This Amendment amends the Agreement only to the extent
and in the manner herein set forth, and in all other respects the Agreement
is ratified and confirmed.
8. Counterparts. This Amendment may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the
signatures hereto were upon the same instrument.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment
to be duly executed by their duly authorized representatives as of the date
first above written.
AEROCENTURY CORP.
By ________________________
Name:
Title:
NATIONAL CITY BANK
By ________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
CALIFORNIA BANK & TRUST
By ________________________
Name:
Title:
FIRST BANK DBA
FIRST BANK & TRUST
By ________________________
Name:
Title:
ATTACHMENT A
SCHEDULE 2
APPLICABLE MARGINS, COMMITMENT FEE
Advances under the Revolving Credit shall carry an interest rate based on the
Borrower's ratio of Total Funded Recourse Indebtedness to Tangible Net Worth
("Total Funded Recourse Debt to TNW"), as outlined below:
Ratio of Funded
Debt to Tangible Alternate Base LIBO Commitment
Net Worth Rate Margin Rate Margin Fee
> 3.00 ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇ bp
>= 2.00 but <= 3.00 ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇ bp
< 2.00 ▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇ bp
The Commitment Fee is computed based upon the applicable Commitment Fee rate on
the average daily unused portion of the Revolving Credit Loan that is due and
payable quarterly in arrears.
ATTACHMENT B
EXHIBIT D
COVENANT COMPLIANCE CERTIFICATE
The undersigned, the [chief executive or chief financial] Officer of
AeroCentury Corp. ("AeroCentury"), does hereby certify to National City Bank,
Agent (the "Bank"), as required by that certain Credit Agreement, dated June 28,
2000, by and between AeroCentury and the Bank, as amended (the "Agreement")
(terms not otherwise defined herein shall have the meanings given to such terms
in the Agreement), that as such officer he is authorized to execute this
Compliance Certificate (this "Certificate") on behalf of AeroCentury and does
further certify that:
AeroCentury has complied and is in compliance with all covenants, agreements and
conditions in the Agreement and each of the other Loan Documents on the date
hereof.
Each representation and warranty contained in the Agreement and each of the
other Loan Documents is true and correct on the date hereof.
No Potential Default or Event of Default has occurred and is continuing as of
the date of this Compliance Certificate.
There has been no Material Adverse Change since [insert the date of the most
recent financial statements delivered to the Bank pursuant to the terms of
section 5.1 of the Credit Agreement], except as disclosed on the attached
schedules.
The covenant compliance calculations set forth in Attachment 1 hereto are true
and correct on the dates specified.
IN WITNESS WHEREOF, the undersigned has executed this Certificate in his
capacity as an officer of AeroCentury on this _____ day of _________, ______.
AEROCENTURY CORP.
By:
Name:
Title:
Attachment 1 to the
Covenant Compliance Certificate
AEROCENTURY CORP.
COVENANT COMPLIANCE CALCULATIONS
For the period ending _______
Section 7.1 MINIMUM TANGIBLE NET WORTH
REQUIREMENT: - Minimum Tangible Net Worth will not at any time be
less than the sum of (i) $16,000,000, (ii) 50% of Net Income for each
Fiscal Quarter ending after September 30, 2005, without deduction for
net losses, (iii) 50% of the net proceeds from any sale of equity
securities after the date of this Agreement, (iv) 50% of the fair
value of any equity securities issued after the date of this
Agreement in connection with any acquisition permitted hereunder or
by waiver hereto and (v) 100% of any subordinated debt investment.
Tangible Net Worth on [date]
Capital Stock $
Paid-In Capital +
Retained Earnings +
Unsecured Subordinated Debt due after the Revolver
Termination Date +
Subtotal
less: Net Worth of Unrestricted Subsidiaries $
Tangible Net Worth $
Required Tangible Net Worth
(i) $16,000,000 $16,000,000
(ii) 50% of Net Income +
(iii) 50% of net proceeds from any sale of equity +
securities
(iv) 50% of the fair value of any equity +
securities issued after the date of this
Agreement in connection with any
permitted acquisition.
(v) 100% of any subordinated debt
Required Tangible Net Worth $
Excess (deficiency) of Actual Tangible Net Worth $
compared with Required Tangible Net Worth
Section 7.2 EBITDA TO INTEREST RATIO
REQUIREMENT: - The ratio of EBITDA to Interest as at the end of any
Fiscal Quarter and for the period of such Fiscal Quarter will not be
less than 2.25:1.0; provided, however, that if AeroCentury raises
unsecured Subordinated Debt of at least $10,000,000 during any Fiscal
Quarter, the ratio of EBITDA to Interest as at the end of such Fiscal
Quarter and as at the end of any Fiscal Quarter thereafter, and for
the period of such Fiscal Quarters so long as unsecured Subordinated
Debt in the principal amount of at least $10,000,000 remains
outstanding, will not be less than 1.80:1.0.
EBITDA
Net Income for the $
Fiscal Quarter ended ___________
Interest deducted with respect to + $
the Fiscal Quarter ended ___________
Taxes deducted with respect to + $
the Fiscal Quarter ended ___________
Depreciation deducted with respect to + $
the Fiscal Quarter ended ___________
Amortization deducted with respect to + $
Fiscal Quarter ended ___________
EBITDA for the Fiscal Quarter ended ___________ $
Interest
Interest for the Fiscal Quarter ended __________ $
Interest $
RATIO OF EBITDA TO INTEREST ___________
Section 7.3 RECOURSE FUNDED DEBT TO TANGIBLE NET WORTH
REQUIREMENT: - The ratio of Recourse Funded Debt (including Recourse
Funded Debt represented by the Notes) to Tangible Net Worth will not
at any time exceed 3.25:1.
Recourse Funded Debt on [date]: $
Tangible Net Worth on [date] $
RATIO OF RECOURSE FUNDED DEBT
TO TANGIBLE NET WORTH
Section 7.4 ABSENCE OF NET LOSS
REQUIREMENT: - AeroCentury will not suffer a consolidated net loss at
the end of any Fiscal Quarter, beginning with the Fiscal Quarter
ended December 31, 2005, as measured on a consecutive, four-quarter
basis.
Net Income for the Fiscal $
Quarter ended ___________, as
measured on a consecutive four-quarter basis
