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AMENDMENT NO. 1
Dated as of March 31, 1997
to
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 12, 1996
This Amendment No. 1 ("Amendment") dated as of March 31, 1997
is entered into among BANNER AEROSPACE, INC., a Delaware corporation
("Banner"), BURBANK AIRCRAFT SUPPLY, INC., a Delaware corporation ("Burbank"),
and the "Lenders" (as defined in the Credit Agreement identified below) of
Banner and Burbank signatory hereto. Capitalized terms used herein without
definition are used herein as defined in the Credit Agreement.
PRELIMINARY STATEMENT:
WHEREAS, Banner and 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 (the "Credit Agreement");
WHEREAS, the terms of the Credit Agreement contemplated the
issuance of the Preferred Stock on or before March 31, 1997 and repayment of
the ▇▇▇▇▇▇▇▇▇ Subordinated Debt from the proceeds of the Preferred Stock as
conditions precedent to the making of the Tranche C Term Loans and Banner has
advised the Administrative Agent of an unanticipated delay in the issuance of
Preferred Stock;
WHEREAS, the Borrowers are desirous of making a Borrowing of
Tranche C Term Loans on March 31, 1997;
WHEREAS, the Borrowers have requested the amendment of certain
provisions of the Credit Agreement necessitated by the aforesaid delay in
issuance of the Preferred Stock; and
WHEREAS, subject to the terms and conditions stated herein,
Borrowers and the Lenders signatory hereto, constituting at least the Requisite
Lenders and all Tranche C Term 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 March 31, 1997, subject to the satisfaction of the conditions precedent set
forth in Section 3 hereof, the Credit Agreement is hereby amended as follows:
1.1 Section 1.01 is amended to delete the definition of
"Preferred Stock Issue Date" and delete the definitions of
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"▇▇▇▇▇▇▇▇▇ Subordinated Debt", "Funded Debt", "Preferred Stock", and "Revolving
Credit Availability" in their entirety and substitute the following therefor:
"▇▇▇▇▇▇▇▇▇ Subordinated Debt" means unsecured subordinated
Indebtedness of Banner issued to RHI in a principal amount not to
exceed $30,000,000 plus deferred interest and fees pursuant to a
certain Subordinated Loan Agreement to be entered into between Banner
and RHI in form and substance satisfactory to the Administrative Agent
and including, without limitation, terms and conditions set forth in
EXHIBIT D attached hereto and made a part hereof, the proceeds of
which are used to consummate the Permitted Acquisitions and provide
working capital for the Persons making such acquisitions or acquired
in such acquisitions, the Borrowers and Subsidiaries of the Borrowers.
"Funded Debt" means, for any period, the Indebtedness of the Borrowers
and their Subsidiaries for borrowed money (determined in accordance
with GAAP), including, without limitation, Indebtedness under Capital
Leases, during such period; provided, however, that "Funded Debt"
shall be deemed to include the ▇▇▇▇▇▇▇▇▇ Subordinated Debt only from
and after September 30, 1997.
"Preferred Stock" means Convertible Preferred Stock issued by Banner
subject to terms and conditions substantially similar to, or more
advantageous to Banner than, those set forth on SCHEDULE 1.01.11 and
such other terms and conditions as are determined acceptable by the
Administrative Agent in its reasonable discretion.
"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 plus (i) $10,000,000, if the
Preferred Stock has not been issued and the date of
determination of "Revolving Credit Availability" occurs during
the period commencing on the Effective Date and ending on
March 30, 1997, or (ii) $15,000,000, during the period
commencing on March 31, 1997 and ending on December 11, 1998
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
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the Swing Loans at such time.
1.2 Section 2.01(b) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(b) Notice of Borrowing. The Borrowers shall deliver to the
Administrative Agent a Notice of Borrowing with respect to the Tranche
C Term Loans, signed by Banner, no later than (i) 11:00 a.m. (New York
time) on the proposed Funding Date therefor, in the case of a
Borrowing of Base Rate Loans, and (ii) 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 aggregate amount of the
Tranche C Term Loans being requested, (ii) the proposed Funding Date
therefor, which shall be a Business Day, and (iii) instructions for
the disbursement of the proceeds of the Tranche C Term Loans. Any
Notice of Borrowing given pursuant to this Section 2.01(b) shall be
irrevocable.
1.3 Section 4.01(b)(i) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(i) Net Cash Proceeds of Sale. Within three (3) Business Days after
receipt by either Borrower or any Subsidiary of a Borrower of any Net
Cash Proceeds of Sale, the Borrowers shall make or cause to be made a
mandatory prepayment of the Obligations in an amount equal to one
hundred percent (100%) of such Net Cash Proceeds of Sale which, when
combined with all other Net Cash Proceeds of Sale received in the same
Fiscal Year, exceeds $150,000 in the aggregate; provided, however,
that notwithstanding the foregoing, (A) one-third of the Net Cash
Proceeds of Sale from the sale of Real Property of ▇▇▇▇▇ Industries,
Inc. located in Suffield, Connecticut shall be required to be remitted
as a mandatory prepayment of the Obligations, (B) that portion of the
Net Cash Proceeds of Sale from the sale of Real Property of Matrix
Aviation, Inc. located in Wichita, Kansas which exceeds $150,000
shall be required to be remitted as a mandatory prepayment of the
Obligations, and (C) no portion of the Net Cash Proceeds of Sale from
the sale of Banner's Investment in Capital Stock, and warrants for
Capital Stock, of Interactive Flight Technologies, Inc. shall be
required to be remitted as a mandatory prepayment of the Obligations.
1.4 Section 6.03 is amended to delete the provisions of
clause (b) thereof in their entirety and substitute the following therefor:
(b) ▇▇▇▇▇▇▇▇▇ Subordinated Debt. Banner shall have received
$28,000,000 in proceeds of ▇▇▇▇▇▇▇▇▇ Subordinated
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Debt.
and to delete the provisions of clause (c)(ii) thereof in their entirety.
1.5 Article IX is amended to add the following provision as
Section 9.18:
9.18 Proceeds of Preferred Stock. Promptly after its receipt
of the net cash proceeds of the Preferred Stock, Banner shall use such net cash
proceeds to repay, in full, the ▇▇▇▇▇▇▇▇▇ Subordinated Debt and cause the
Subordinated Loan Agreement, note issued thereunder, and all other agreements
and instruments evidencing the ▇▇▇▇▇▇▇▇▇ Subordinated Debt, or under which the
same was issued, to be terminated and cancelled.
1.6 Section 10.02(h) is amended to delete the provisions
thereof in their entirety and substitute the following therefor:
(h) the sale of Capital Stock, and warrants for Capital Stock, of
Interactive Flight Technologies, Inc. held by Banner;
SECTION 2. Waiver. Concurrently with this Amendment becoming
effective, the parties hereto waive the requirements of Section 15.01(b)(ii)
with respect to the assignment by Citicorp USA, Inc. of a $15,000,000 interest
in its Tranche C Term Loan Commitment to KZH Holding Corporation.
SECTION 3. Conditions Precedent to Effectiveness of this
Amendment. This Amendment shall become effective as of March 31, 1997, if, and
only if (a) the Administrative Agent shall have received on or before March 28,
1997, a facsimile or original executed copy of this Amendment executed by the
Borrowers, Lenders representing at least the Requisite Lenders, and all Tranche
C Term Lenders, and (b) the Administrative Agent shall have received on March
31, 1997, a certificate signed by the Vice President-Finance of Banner
certifying that Banner has received proceeds of ▇▇▇▇▇▇▇▇▇ Subordinated Debt in
the amount of $6,000,000, in addition to the $22,000,000 in principal of
▇▇▇▇▇▇▇▇▇ Subordinated Debt outstanding on March 17, 1997.
SECTION 4. Representations and Warranties. Borrowers hereby
represent and warrant as follows:
4.1 This Amendment and the Credit Agreement as previously
executed and delivered and as amended hereby constitute legal, valid and
binding obligations of the Borrowers and are enforceable against the Borrowers
in accordance with their terms.
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4.2 No Event of Default or Potential Event of Default exists
or would result from any of the transactions contemplated by this Amendment.
4.3 Upon the effectiveness of this Amendment, the Borrowers
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 agree that all such covenants, representations and warranties shall
be deemed to have been remade as of the date this Amendment becomes effective
(unless a representation and warranty is stated to be given on and as of a
specific date, in which case such representation and warranty shall be true,
correct and complete as of such date).
SECTION 5. Reference to and Effect on the Credit Agreement.
5.1 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.
5.2 Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in full force
and effect and are hereby ratified and confirmed.
5.3 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 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.
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.
BANNER AEROSPACE, INC. BURBANK AIRCRAFT SUPPLY, INC.
By By
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance Vice President
CITICORP USA, INC. PNC BANK, NATIONAL ASSOCIATION
By By
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attorney-in-Fact Vice President
THE LONG-TERM CREDIT BANK OF CAISSE NATIONALE DE CREDIT
JAPAN, LTD., CHICAGO BRANCH AGRICOLE
By By
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▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Vice President & Deputy First Vice President
General Manager
NATIONSBANK, N.A. SANWA BUSINESS CREDIT
CORPORATION
By By
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President Vice President
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THE FIRST NATIONAL BANK OF THE SUMITOMO BANK, LIMITED
CHICAGO
By By
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director Vice President
By
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President & Manager
BANK POLSKA KASA OPIEKI, ▇.▇. ▇▇▇▇▇▇▇ AMERICA PRIME RATE
TRUST
By By
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Hussein H. El-▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President Portfolio Analyst
DEUTSCHE FINANCIAL SERVICES, ▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
INC. RATE FUND, INC.
By By
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE PROTECTIVE LIFE INSURANCE
PORTFOLIO COMPANY
By Protective Asset
Management, L.L.C.
By By
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Signatory Executive Vice President
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THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By ING Capital Advisors, Inc.
By
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President & Portfolio
Manager
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