AMENDMENT NO. 1
dated as of November 29, 1999
to
CREDIT AGREEMENT
Dated as of April 20, 1999
THIS AMENDMENT NO. 1 ("Amendment") is entered
into as of November 29, 1999 by and among The Fairchild
Corporation, a Delaware corporation (the "Borrower"),
and the institutions identified on the signature pages
hereof as Lenders. Capitalized terms used herein but
not defined herein shall have the meanings provided in
the Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Borrower and the Lenders and
Issuing Banks are parties to that certain Credit
Agreement dated as of April 20, 1999 (together with the
Exhibits and Schedules thereto, the "Credit
Agreement"), pursuant to which the Lenders and Issuing
Banks have agreed to provide certain financial
accommodations to the Borrower; and
WHEREAS, the Borrower has requested the
consent of the Collateral Agent to certain actions not
otherwise permitted under Article X of the Credit
Agreement and certain amendments to Article X of the
Credit Agreement and the Collateral Agent has
identified certain provisions of the Credit Agreement
which require clarification and amendment;
NOW, THEREFORE, in consideration of the
premises set forth above, the terms and conditions
contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
1. Amendment to Credit Agreement. Effective
as of November 29, 1999, upon satisfaction of the
conditions precedent set forth in Section 3 below, the
Credit Agreement is hereby amended as follows:
1.1 Section 1.01 is amended to delete the
definitions
of "Banner Companies", "Net Cash Proceeds of Sale", and
"Net Cash Proceeds of Sale of Banner Companies" in
their entirety and substitute the following therefor:
"Banner Companies" means , collectively, Banner
and those Persons and investments in Persons
identified on Schedule 1.01.5 under the heading
"Banner Aerospace, Inc." and their respective
Capital Stock and assets; and "Banner Company"
means any of the Banner Companies, individually.
"Net Cash Proceeds of Sale" means:
i) cash proceeds (including cash, equivalents
readily convertible into cash, and such proceeds
of any notes received as consideration or any
other non-cash consideration) from the sale,
assignment or other disposition of (but not the
lease or license of) any
Property other than sales of property permitted under
Sections 10.02(d) and 10.09, net of
(a) the costs of sale, assignment or other
disposition,
(b) any income, franchise, transfer or other tax
liability
arising from such transaction and (c) amounts
applied to the repayment of Indebtedness (other
than the Obligations) secured by a Lien permitted
by Section 10.03 on the asset disposed of,
whether such net proceeds arise from any individual
sale, assignment or other disposition or from any group
of related sales, assignments or other dispositions
received by:
(1) the Borrower or any Restricted
Subsidiary other than proceeds of sales of
Permitted Dispositions, provided however that
sales of Technologies Companies and Banner
Companies shall be subject to the provisions of
clauses (2) and (3) below;
(2) the Borrower, any Restricted Subsidiary,
or the Technologies Companies upon the completion
of full liquidation of all Technologies Companies;
and
(3) the Borrower, any Restricted Subsidiary or
any Banner Company (whether or not a Restricted
Subsidiary) as Net Cash Proceeds of Sale of Banner
Companies net of the amount of Net Cash Proceeds
of Sale of Banner Companies required to be paid
under Section 4.01(b)(i)(B); and
(ii) to the extent provided in Section 9.07(b),
proceeds of insurance on account of the loss of or
damage to any such Property or Properties, and payments
of compensation for any such Property or Properties
taken by condemnation or eminent domain.
"Net Cash Proceeds of Sale of Banner Companies" means
cash proceeds (including cash, equivalents readily
convertible into cash, and such proceeds of any notes
received as consideration or any other non-cash
consideration) from the sale, assignment or other
disposition of (but not the lease or license of) any
Property or Capital Stock of the Banner Companies, or
any of them, other than sales of property permitted
under Sections 10.02(d) and 10.09, net of (a) the costs
of sale, assignment or other disposition, (b) any
income, franchise, transfer or other tax liability
arising from such transaction and (c) amounts applied
to the repayment of Indebtedness (other than the
Obligations) secured by a Lien permitted by Section
10.03 on the asset disposed of, whether such net
proceeds arise from any individual sale, assignment or
other disposition or from any group of related sales,
assignments or other dispositions.
and to add the following definitions thereto:
"Farmingdale Guaranty"means that certain Guaranty
executed and delivered by the Borrower in favor of
Morgan Guaranty Trust Company of New York in connection
with the Indebtedness incurred by Warthog, Inc., as the
owner of the Farmingdale Property, and permitted under
Section 10.01(f).
"Farmingdale Security Instrument"means that certain
Mortgage and Security Agreement of even date with the
Farmingdale Guaranty executed and delivered by Warthog,
Inc., as the owner of the Farmingdale Property, in
connection with the
Indebtedness permitted under Section 10.01(f) in
favor of
Morgan Guaranty Trust Company of New York.
1.2 Section 4.01(b)(i)(B) and (C) are amended to
delete the provisions thereof in their entirety and
substitute the following therefor:
(B) The Borrower shall make or cause to be made a
mandatory prepayment of the Obligations upon the
Borrower's or any Subsidiary of the Borrower's
receipt of Net Cash Proceeds of Sale of Permitted
Dispositions and Net Cash Proceeds of Sale of
Banner Companies in an amount equal to (1) one
hundred percent (100%) of the first $25,000,000 of
Net Cash Proceeds of Sale of Permitted
Dispositions and Net Cash Proceeds of Sale of
Banner Companies received and (2) fifty percent
(50%) of the next $50,000,000 of Net Cash Proceeds
of Sale of Permitted Dispositions and Net Cash
Proceeds of Sale of Banner Companies received.
(C) Notwithstanding the foregoing, upon the
written request of the Borrower to the Collateral
Agent that the mandatory prepayment with respect
to Net Cash Proceeds of Sale of Banner Companies
otherwise required under Section 4.01(b)(i)(A) and
(B) be waived, an amount equal to such Net Cash
Proceeds of Sale of Banner Companies so received
shall be remitted to the Collateral Agent for
deposit in the Cash Collateral Account and the
Collateral Agent shall hold the same in such Cash
Collateral Account (absent the occurrence of any
Event of Default) until the earlier to occur of
(Y) the date which is 225 days after the
Borrower's or any of its Subsidiaries' receipt of
such Net Cash Proceeds of Sale of Banner Companies
or (Z) the date on which the Requisite Lenders
shall have authorized the release of the amount so
deposited (or a portion thereof) to the Borrower.
In the event the amount so deposited to the Cash
Collateral Account has not been released to the
Borrower as referenced in clause (Z) above, the
Collateral Agent shall withdraw such amount from
the Cash Collateral Account on the date specified
in clause (Y) above and apply the same as set
forth in Section 4.01(b)(vii).
1.3 Section 8.01(c) is amended to delete the reference
therein to "Exhibit I" and substitute therefore a reference
to "Exhibit J".
1.4 Section 10.01(c) is amended to delete the language
"Indebtedness arising from the following intercompany
loans:" in its entirety and substitute therefor the language
"Indebtedness arising from the following intercompany loans
and other actions:", to delete the word "and" at the end of
clause (iv) thereof, and add the following as clause (vi)
and clause (vii) thereof:
(vi) intercompany loans made after the Closing Date to
Banner Capital Ventures, Inc., a Delaware corporation
and Wholly-Owned Subsidiary of RHI, in addition to
Permitted Existing Investments in Banner Capital
Ventures, Inc., in an aggregate amount not to exceed
$1,000,000; and
(vii) the payment by any Subsidiary of the Borrower of
dividends or other distributions on its Capital Stock
which are permitted under Section 10.05(a);
1.5 Section 10.01(f) is amended to delete the
reference therein to "October 3, 1999" and substitute
therefor "January 31, 2000".
1.6 Section 10.04 is amended to (i) delete the
provisions of clause (d) thereof in their entirety and
substitute the following therefor:
(d) Investments made by the Borrower and Restricted
Subsidiaries in connection with acquisitions of assets
or equity Securities of any Person (other than the
Technologies Companies) in an aggregate amount not to
exceed:
(i) $17,500,000 in cash or assumed Indebtedness until
such time as the outstanding principal balance of the
Term Loans has been reduced by $25,000,000 in the
aggregate under Section 4.01(b)(vii) from Net Cash
Proceeds of Sale of Permitted Dispositions and Net Cash
Proceeds of Sale of Banner Companies or
(ii) thereafter (and when combined with Investments
made as permitted under the foregoing clause (i),
Investments made as permitted under clauses (j) and (k)
below, and Indebtedness incurred as permitted under
Section 10.01(c)(vi)), $35,000,000 in cash or assumed
Indebtedness;
provided that :
(A) no Event of Default or Potential Event of Default
has occurred and is continuing unwaived or, after
giving effect to the making of any such Investment, no
Potential Event of Default or Event of Default would
occur and
(B) on a pro forma basis, determined for the four (4)
Fiscal Quarters immediately preceding any such
Investment, giving effect to such Investment as though
it occurred at the commencement of such four (4) Fiscal
Quarter period, no breach of any covenant included in
Article XI would have occurred;
and provided further that the aforesaid limitations
specified in clauses (i) and (ii) above shall:
(1) be increased by the amount of the Net Cash
Proceeds of Sale of Permitted Dispositions (other
than Net Cash Proceeds of Sale received in
connection with the sale or other disposition of
Capital Stock of WatkinsJohnson Company held by
the Borrower or any Subsidiary of the Borrower)
net of the amount of such Net Cash Proceeds of
Sale of Permitted Dispositions applied to the
Obligations as provided under Section 4.01(b)(vii)
and
(2) include payments of cash made to Robert
Edwards in accordance with the Third Amendment and
Plan of Merger dated as of September 17, 1998 by
and among the Borrower, Special-T Fasteners, Inc.,
and Robert Edwards, executed and delivered in
connection with the Borrower's acquisition of
Special-T Fasteners, Inc., and any related
agreement entered into after the Closing Date,
only to the extent the same exceed $2,000,000 in
the aggregate;
(ii) delete the word "and" at the end of clause (h) thereof,
(iii) delete the "." at the end of clause (i) thereof and
substitute a ";" therefor, and (iv) add the following
clauses
(j),(k), and (l) thereto:
(j) Investments by the Borrower or Subsidiaries of
the
Borrower in the form of loans or advances to employees of
the
Borrower and its Subsidiaries in an aggregate amount
not to exceed $750,000 at any time outstanding;
provided that the same are evidenced by promissory
notes delivered to the Collateral Agent as part of the
Collateral;
(k) Investments in the form of capital contributions
by
the Borrower, directly or through Wholly-Owned
Subsidiaries of the Borrower, in Banner Investments UK
in an amount not to exceed $3,000,000 in the
aggregate; provided that no Event of Default shall
have occurred and be continuing unwaived;
(l) Investments in the form of intercompany loans
permitted under Section 10.01 and not otherwise
prohibited by this Section 10.04.
1.7 Section 10.05(a) is amended to insert after
the
words "dividends or distributions" therein the phrase ",
whether in cash or evidenced by a promissory note,".
1.8 Section 10.06(a)(ii) is amended to delete the word
"and" before clause (D) thereof and delete the provisions of
clause (D) thereof in their entirety and substitute the
following therefor:
(D) any Technologies Company with or into any other
Technologies Company or any Person which is not an
Affiliate of the Borrower; and (E) any Subsidiary of
the Borrower not described in clauses (A), (B), (C) or
(D) above with and into any other such Subsidiary of
the Borrower; provided that the prior written consent
thereto of the Collateral Agent has been obtained; and
1.9 Section 10.14 is amended to delete the references
therein to "Subsidiaries" and substitute therefor references
to "Restricted Subsidiaries".
1.10 Section 12.01 is amended to add the following
provision thereto as clause (o):
(o) Farmingdale Guaranty. A demand shall have been made on
the
Borrower under the Farmingdale Guaranty or the
obligations guaranteed under the Farmingdale Guaranty
shall, as a result of a breach or default under clauses
(a), (b), (c), (d), (e), (f), (g), (i), (k), (m), (o),
(p) or (t) of Section 4.3 of the Farmingdale
Security Instrument or of Section 8.2 of the
Farmingdale Security Instrument or a breach or default
under clause (h), (j), (l), (n), (q), (r) or (v) of
Section 4.3 of the Farmingdale Security Instrument or
the Farmingdale Property, or any part thereof,
becoming an asset in a voluntary bankruptcy or
insolvency proceeding, include the unpaid balance of
the "Debt" as defined in the Farmingdale Security
Instrument.
1.11 Schedules 1.01.4, 1.01.5 and 1.01.8 are deleted
in their entirety and Schedules 1.01.4, 1.01.5 and 1.01.8
attached hereto and made a part hereof substituted
therefor. The Borrower is hereby authorized and directed to
update Schedule 1.01.4 as and when Investments or transfers
are made in accordance with the terms of the Credit
Agreement which would render such Schedule incomplete or
inaccurate in any respect and to deliver copies of such
updates of Schedule 1.01.4 to the
Collateral Agent and Lenders promptly after the making of
any such Investments or transfers, whereupon the updated
Schedule will be substituted for the prior Schedule as part
of the Credit Agreement.
2. Collateral Agent Consents. The Collateral
Agent hereby consents to the following:
a. As required by Section 10.02(b)(ii), the
transfer of Kaynar Technologies Ltd., a U.K.
company ("Kaynar UK") or its Subsidiary, Recoil
(Europe) Ltd., a U.K. company ("Recoil"), to
Camloc (U.K.) or liquidation or dissolution of
Kaynar UK and/or Recoil into Camloc (U.K.);
b. As required by Section 10.04, the
formation of a new Wholly-Owned Subsidiary of
Banner Energy Corporation of Kentucky, Inc.
under the laws of Delaware and the name
Fairchild Environmental Liability Management,
Inc. ("ELMI"), the Capital Stock of which will
consist of 1,000 authorized, issued and
outstanding shares of common stock and 1,000
authorized, issued and outstanding shares of
preferred stock subject to the terms described
on Schedule 2-B attached hereto and made a part
hereof ; provided that such Capital Stock held
by the Borrower or any Restricted Subsidiary is
pledged as part of the Collateral and ELMI
becomes a Guarantor, whereupon the Borrower
causes the same to execute and deliver the Loan
Documents required under Section 9.14;
c. As required by Section 10.02(b)(ii), the
transfer of the Property described on Schedule
2-C attached hereto and made a part hereof by
Banner Energy Corporation of Kentucky, Inc., a
Subsidiary of the Borrower, to ELMI;
d. As required by Section 10.04, the formation
under the laws of Delaware by FHC of two new
WhollyOwned Subsidiaries; provided that,
promptly upon formation of the same, they
become Guarantors, whereupon the Borrower
causes the same to execute and deliver the Loan
Documents required under Section 9.14 and
provided further that such Subsidiaries
otherwise comply with all applicable provisions
of the Credit Agreement;
e. As required by Section 10.06(a)(ii), the
merger of Technico S.A. with and into Societe
Nouvelle DEB SA.
3. Conditions to Effectiveness. The provisions
of this Amendment shall become effective as of November 29,
1999, upon receipt by the Collateral Agent, by no later than
5:00 p.m. (New York time) on December 1, 1999, of executed
counterparts of this Amendment signed on behalf of the
Borrower, the Requisite Lenders, and the Collateral Agent.
4. Representations, Warranties and Covenants.
4.1 The Borrower hereby represents and warrants
that this Amendment and the Credit Agreement, as amended
hereby, constitute the legal, valid and binding obligations
of the Borrower and are enforceable against the Borrower in
accordance with their terms.
4.2 The Borrower hereby represents and warrants
that, before
and after giving effect to this Amendment, no Event of
Default or Potential Event of Default has occurred and is
continuing.
4.3 The Borrower hereby reaffirms all
agreements, covenants, representations and warranties made
in the Credit Agreement, to the extent the same are not
amended hereby, and made in the other Loan Documents to
which it is a party; and agrees that all such agreements,
covenants, representations and warranties shall be deemed
to have been remade as of the effective date of this
Amendment. To the extent the Credit Agreement is amended
hereby to modify or add agreements, covenants and/or
representations and warranties, such agreements, covenants
and/or representations and warranties are made as of the
date on which this Amendment becomes effective with respect
thereto.
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.
5.2 Except as specifically amended above, the
Credit Agreement shall remain in full force and effect, and
is hereby ratified and confirmed.
5.3 The execution, delivery, and effectiveness of this
Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of the
Collateral Agent or Lenders, or constitute a waiver of any
provision of any of the Loan Documents.
6. Governing Law. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
7. 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.
8. Counterparts. This Amendment may be executed
by one or more of the parties hereto on any number of
separate counterparts, each of which shall be deemed an
original and all of which, taken together, shall be deemed
to constitute one and the same instrument. Delivery of an
executed counterpart of this Amendment by facsimile
transmission shall be effective as delivery of a manually
executed counterpart hereof.
IN WITNESS WHEREOF, this Amendment has been duly
executed as of the day and year first above written.
THE FAIRCHILD CORPORATION CITICORP USA, INC.,
as
Collateral Agent
By: Karen L. Schneckenburger By: Suzanne Crymes
Vice President & Treasurer Vice
President
Lenders:
ALLIANCE INVESTMENT AVALON CAPITAL LTD.
OPPORTUNITIES FUND, L.L.C.
By_________________________
By_____________________
BANK OF AMERICA, N.A. BOEING CAPITAL
CORPORATION
By: Michael R. Heredia By: Daniel
O. Anderson
Senior Vice President
Vice-
President-Commercial
CIBC, INC.
CITIBANK, N.A.
By: Koren Volk By:
Claudio Phillips
Authorized Signatory
Vice
President/Managing Director
CITICORP, USA, INC. COMPAGNIE
FINANCIERE
DE
CIC ET DE
L'UNION
EUROPEENNE
By: Suzanne Crymes By: Brian
O'Leary
Vice President Vice
President
By: Sean
Mounier
First
Vice President
CREDIT AGRICOLE INDOSUEZ CREDIT SUISSE
FIRST BOSTON
By: Raymond A. Feelkenberg By: Bill
O'Daly
Vice President Vice
President
Senior Relationship Manager
By: Gerard M. Russell By: Joel
Glodowski
Vice President, Manager
Managing Director
CRESCENT/MACH I PARTNERS, L.P. FLOATING
RATE
PORTFOLIO
By__________________________
By____________________________
Name: Name:
Title: Title:
HIGHLAND CLO 1999-1 LTD. HIGHLAND
LEGACY
LIMITED
By___________________________ By:
James
Bondero
Name:
President
Title:
KZH SHOSHONE LLC KZH
WATERSIDE LLC
By: Peter Ching By: Peter
Chin
Authorized Agent
Authorized Agent
MERRILL LYNCH PRIME RATE MERRILL
LYNCH SENIOR
FLOATING
PORTFOLIO RATE
FUND, INC.
By___________________________
By____________________________
Name: Name:
Title: Title:
MERILL LYNCH SENIOR FLOATING ML CBO IV
(CAYMAN) LTD.
RAE FUND II, INC. By
Highland Capital
Management Company
as Collateral
Manager
By___________________________ By:
James Bondero
Name:
President
Title:
MORGAN STANLEY DEAN WITTER NATEXIS BANK
By: Sheila Finnerty By: Peter
J. van Tulder
Vice President
President and
Manager
Multinational Group
By: Christine
Dirringer
Assistant
Treasurer
NUVEEN SENIOR FLOATING RATE OAK MOUNTAIN
LIMITED
FUND
By: Lisa M. Mincheski
By_____________________________
Managing Director Name:
Title:
PROVIDENT BANK OF MARYLAND
RIGGS BANK
By: Robert L. Smith By: Douglas
H. Klamfoth
Vice President Vice
President
SENIOR DEBT PORTFOLIO SRV-HIGHLAND,
INC.
By Boston Management and Research By
Highland Capital
Management, as
as Investment Adviser
Investment Advisor
By___________________________ By:
Kelly C. Walker
Name: Vice
President
Title:
THE FIRST NATIONAL BANK OF TYLER
TRADING, INC.
CHICAGO
By___________________________ By_____________________________
Name: Name:
Title: Title:
VAN KAMPEN FLOATING RATE VAN KAMPEN PRIME RATE INCOME
PORTOFOLIO TRUST
By: Darvin D. Pierce By: Darvin D. Pierce
Vice President Vice President
SEQUILS I, LTD.
By__________________________
Name:
Title:
CERTIFICATE OF INCORPORATION OF
FAIRCHILD ENVIRONMENTAL LIABILITY MANAGEMENT, INC.
FIRST. The name of the Corporation is Fairchild
Environmental Liability Management, Inc.
SECOND. The address of the registered office of the Corporation
in the State of Delaware is Corporation Trust Center, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801. The name
of its registered agent at such address is The Corporation Trust
Company.
THIRD. The nature of the business or purpose to be conducted
or promoted by the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH. The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is
1,100 shares, consisting of 1,000 shares of Common Stock, par
value $1.00 per share, and 100 shares of Preferred Stock, par
value $1.00 per share.
The following is a statement of the designations, preferences,
voting powers, qualifications, and special or relative rights or
privileges in respect of each class of capital stock of the
Corporation.
A. COMMON STOCK
1. General. There shall be one class of common stock
of the Corporation (the "Common Stock"). The voting dividend and
liquidation rights of the holders of the Common Stock are subject
to and qualified by the rights of the holders of outstanding
shares of Preferred Stock of any class or series as may be
designated herein or by the Board of Directors of the
Corporation.
2. Voting. The Common Stock shall have one vote per
share, and, except as may be otherwise provided in this Article
FOURTH or by law, the Common Stock shall vote as a single class
on all actions to be taken by the stockholders of the
Corporation.
3. Dividends. Dividends may be declared and paid on
the Common Stock from funds lawfully available therefor as and
when determined by the Board of Directors and subject to any
preferential dividend rights of any then outstanding Preferred
Stock.
4. Liquidation. Upon the dissolution or liquidation
of the Corporation, whether voluntary or involuntary, holders of
Common Stock will be entitled to receive all assets of the
Corporation available for distribution to its stockholders,
subject to any preferential, and participation rights of any then
outstanding Preferred Stock.
B. PREFERRED STOCK
1. Number of Shares. There shall be one class of
Preferred Stock of the Corporation (the "Preferred Stock").
2. Voting. Except as may be otherwise provided by
law, the Preferred Stock shall be non-voting stock.
3. Dividends. The holders of Preferred Stock shall be
entitled to receive a cumulative dividend at the rate of eight
percent (8%) of the issue price per annum. The Corporation shall
not declare or pay any dividend or distribution on the Common
Stock, or redeem or purchase any shares of Common Stock (except
dividends or other distributions payable solely in Common Stock),
unless and until all cumulative dividends on the Preferred
accrued to the date of such payment or distribution to holders of
Common Stock have been declared and paid in full.
4. Liquidation. (a) Upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary, the holders of the shares of Preferred Stock shall
be entitled, before any distribution or payment is made upon any
stock ranking on liquidation junior to the Preferred Stock, to be
paid any amount equal to the fair market value of such Preferred
Stock, but not, in any event, more than $300 per share or less
than 1.00 per share, plus any other dividends accrued but unpaid
thereon, computed to the date payment thereof, such amount
payable with respect to one share of Preferred Stock being
sometimes referred to as the "Liquidation Preference Payment" and
with respect to all shares of Preferred Stock being sometimes
referred to as the "Liquidation Preference Payments." The
Liquidation Preference Payment shall equal the book value for
each share of Preferred Stock on the date of the liquidation,
dissolution or winding up of the Corporation. The book value of
each share of Preferred Stock shall be equal to the net assets of
the Corporation divided by the number of shares of capital stock,
all of which shall be deemed to be a single class of stock. Such
book value shall be determined from the books of the Corporation
in accordance with generally accepted accounting principles,
consistently applied, and adjusted upward or downward, as the
case may be, to the extent necessary to:
(i) value any debt obligations of affiliated
corporations to the Corporation at an amount equal to the unpaid
principal amount of such obligations;
(ii) provide an accrual and reserve for the
Corporation's Liability assigned from affiliated corporations and
assumed by the Corporation at an amount determined by the
Corporation;
(iii) provide appropriate accruals and
reserves for all taxes (including, but not limited to, all taxes
based on income); bonuses and other employee compensation
(including, but not limited to, compensation payable after the
end of the then-current fiscal year); reserves for contingent
liability and such other reserves as the Board of Directors may
deem proper; and such other items of income and expense
attributable to any period prior to the date as of which the
determination is made as the Board of Directors may deem proper;
(iv) exclude any value for goodwill relating to
the business of the Corporation or any of its subsidiaries or
affiliates;
(v) reflect the book value (as adjusted in the
manner set forth in this subparagraph) of any subsidiary of the
Corporation;
(vi) provide for the effect on book value of the
exercise of outstanding options, warrants or other rights to
acquire any capital stock of the Corporation;
(v) reflect corrections or errors.
If, upon such liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, the assets to be
distributed amount the holders of Preferred Stock shall be
insufficient to permit payment to the holders of such Preferred
Stock of the amount distributable as aforesaid, then the entire
assets of the Corporation to be so distributed shall be
distributed ratably among the holders of Preferred Stock.
(b) Written notice of such liquidation, dissolution or
winding up, stating a payment date, the amount of the Liquidation
Preference Payments, and the place where such payments shall be
payable, shall be delivered in person, mailed by certified or
registered mail, return receipt requested, or sent by telecopier
of telex, not less than 20 days prior to the payment date stated
therein, to the holders of record of Preferred Stock, such notice
to be addressed to each such holder at its address as shown on
the books of the Corporation. The consolidation or merger of the
Corporation into or with any other entity or entities which
results in the exchange of outstanding shares of the Corporation
for securities or other consideration issued or paid or caused to
be issued or paid by any such entity or affiliate thereof (other
than a merger to reincorporate the Corporation in a different
jurisdiction), and the sale, lease, abandonment, transfer, or
other disposition by the Corporation of all or substantially all
its assets, shall be deemed to be a liquidation, dissolution, or
winding up of the Corporation within the meaning of the
provisions of this paragraph 4.
FIFTH. The Corporation is to have perpetual existence.
SIXTH. In furtherance and not in limitation of the
powers conferred by the laws of the State of Delaware:
A. The Board of Directors of the Corporation is expressly
authorized to adopt, amend, or repeal the By-Laws of the
Corporation.
B. Election of Directors need not be by written ballot
unless the By-Laws of the Corporation shall so provide.
C. The books of the Corporation may be kept at such place
within or without the State of Delaware as the By-Laws of the
Corporation may provide or as may be designated from time to time
by the Board of Directors of the Corporation.
SEVENTH. The Corporation eliminates the personal liability of
each member of its Board of Directors to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as
a director, provided, however, that, to the extent provided by
applicable law, the foregoing shall not eliminate the liability
of a director (i) for any breach of such director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts and
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174
of Title 8 of the Delaware Code or (iv) for any transaction from
which such director derived an improper personal benefit. No
amendment to or repeal of this provision shall apply to or have
any effect on the liability or alleged liability of any director
for or with respect to any acts or omissions of such director
prior to such amendment or repeal.
EIGHTH: The Corporation reserves the right to amend or repeal
any provision contained in this Certificate of Incorporation, in
any manner now or hereafter prescribed by statute, and all rights
conferred upon a stockholder herein are granted subject to this
reservation.
NINTH: Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them
and/or between this Corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of
Delaware may, upon the application of this Corporation or of any
creditor or stockholder thereof or on the application of any
receiver or receivers appointed for this Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on
the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code, order a meeting of
the creditors or class of creditors, and/or the stockholders or
class of stockholders of this Corporation, as the case may be, to
be summoned in such manner as said court directs. If a majority
in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to
any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement ,
the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of
creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as
the case may be, and also on this Corporation.
IN WITNESS WHEREOF, the undersigned have executed this
Certificate this 2nd day of December, 1999.
By: Donald E. Miller
Sole Incorporator
Schedule 1.01.4 to Credit Agreement Dated as of April 20, 1999
OPERATING UNITS
Fairchild Fasteners Group
Special-T Fasteners, Inc., a Delaware corporation Kaynar
Technologies Inc., a Delaware corproation
Kaynar Technologies Ltd., a U.K. corporation Recoil (Europe)
Ltd., a U.K. corporation
KTI Femipari Kft, a Hungarian corporation
M&M Machine & Tool Co., a Delaware corporation
KTI International Sales Corp., a Barbados corporation Marcliff
Corporation, a Delaware corporation
Marson Creative Fastener, Inc., a Delaware corporation
Recoil Holdings, Inc., a Delaware corporation
Recoil PTY, an Australian corporation
Recoil Inc., a Delaware corporation
Recoil Australia Holdings, Inc., a Delaware corporation Recoil
Pte Ltd., a Singapore corporation
Recoil Marketing BVBA, a Belgium corporation
Recoil Thailand, a Thai corporation
Fairchild Holding Corp., a Delaware corporation, manufacturing
plants in California and sales offices throughout the U.S.
Mairoll, Inc., a Delaware corporation, manufacturing plant in
California until it is dividended up to Fairchild Holding Corp.
Fairchild Fasteners Europe - Camloc GmbH, a German corporation
Camloc (U.K.) Ltd., a U.K. corporation, U.K. customer team
located in sales office in Leicester, England
Fairchild Fasteners Europe - VSD GmbH, a German corporation
Fairchild Fasteners Europe - Simmonds S.A.R.L., a French
corporation
SNEP SA, a French corporation
Simmonds S.A., a French corporation Mecaero SNC, a French
corporation
Transfix S.A., a French corporation
Eurosim Componentes Mecanicos de Seguranca, Lda., a Portugese
corporation
Simmonds Mecaero Fasteners, Inc., a Delaware corporation
Fairchild AS+C oHG Aviation Supply + Consulting (GmbH & Co.), a
German partnership
Fairchild Technologies Optical Disc Equipment Group GmbH, a
German corporation, after the Optical Disc assets are transferred
and sold (see footnote 1 below)
Fairchild Fasteners Corp.
Technico SA
Societe Nouvelle DEB SA
SCI de La Praz
Gas Spring Division
Camloc (U.K.) Ltd., a U.K. corporation, Gas Spring Division
Fairchild Technologies Group
Fairchild Technologies USA, Inc., a California corporation
Fairchild Technologies Optical Disc Equipment Group GmbH, a
German corporation1
Convac France S.A., a French corporation
Fairchild Technologies Europe Limited, a U.K. corporation
Fairchild Technologies Korea Limited, a Korean corporation
Fairchild Technologies Semiconductor Equipment Group GmbH, a German corporation
Fairchild Germany, Inc., a Delaware corporation
Snails, Inc., a Delaware corporation
Fairchild CDI S.A., a French corporation
MediaDisc SA, a French corporation, 41% investment Cutek Research, Inc., a
California
corporation, 20.77% investment-fully diluted
Banner Aerospace, Inc.
Aero International, Inc., an Ohio corporation
Banner Aero (Australia) Pty. Ltd., an Australian corporation
Banner Aerosoace Foreign Sales Corporation, U.S. Virgin Islands
Banner Aerospace Services, Inc., an Ohio corporation
Banner Aerospace-Singapore, Inc., a Delaware corporation BAR DE,
Inc., a Delaware corporation
D A C International, Inc., a Texas corporation Discontinued
Aircraft, Inc., a Texas corporation Discontinued Services, Inc.,
a Delaware corporation GCCUS, Inc., a California corporation
Georgetown Jet Center, Inc., a Delaware corporation Harco
Northern Ireland Limited, a N. Ireland corporation Matrix
Aviation, a Kansas corporation
Nasam Incorporated, a California corporation
Dallas Aerospace, Inc., a Texas corporation
PB Herndon Aerospace, Inc., a Missouri corporation
Professional Aviation Associates, Inc., a Georgia corporation
Professional Aircraft Accessories, Inc., a Florida
corporation
_______________________________
1The Optical Disc business will be transferred to a new
subsidiary yet to be formed and sold to Fairchild Technologies
USA. The remaining entity will become part of the Fairchild
Fasteners Group Operating Unit and may be renamed.
SCHEDULE 1.01.5
to
Credit Agreement
Dated as of April 20, 1999
as amended by Amendment No. 1 and Consent Dated as of
November 29, 1999
PERMITTED DISPOSITIONS
I Technologies Companies:
Fairchild Technologies Semiconductor Equipment Group GmbH
Convac France S.A.
Fairchild Technologies Europe Limited
Fairchild Technologies Optical Disc Equipment Group GmbH1
Fairchild Germany, Inc.
Fairchild Technologies Korea Limited
Fairchild Technologies USA, Inc. Fairchild CDI S.A.
Mediadisc S.A.2
CuTek Research, Inc.3
Snails, Inc.
II Nacanco Paketleme Sanayi Ve Ticaret A.S.
III Eagle Environmental4:
Banner Capital Ventures, Inc., a Subsidiary of RHI
Note Receivable ($9,371,909 as of 3/28/99) held by Banner
Capital Ventures, Inc. and payable by Eagle Environmental,
L.P.
Recycling Investments, Inc., a Subsidiary of RHI
Equity Investment in Eagle Environmental, L.P. held by
Recycling Investments, Inc.
Recycling Investments II, Inc., a Subsidiary of RHI which
holds an investment in "Eagle Environmental" for Royal Oaks
Landfill
IV Investments:
Holder Investment
TFC Billecart Expansion
Euroactividade
State of Israel - 12 year Variable
Rate Bonds
Teuza Fund
Rotlex
Nevatim Triangle Venture
Oramir Semiconductor Equipment Ltd.5
Technical Devices Note Receivable
($863,363 as of 3/28/99) Stelfast
Fasteners Note Receivable
($137,923 as of 3/28/99)
Banner Industrial Products, Inc.6 Plymouth
Leasing Company7
Banner Energy Corporation of Kentucky,Inc.
("BECK")8
Faircraft Sales Ltd.9
Fairchild Export Sales Corporation Aircraft
Tire Corporation
Fairchild Titanium Technologies, Inc.10
RHI Medical Resources, Inc.
S.A.R.L. Soustiel 2000
Bolshoi Fund (Antiques)
Celtronix Ltd.
Visionix Ltd.
Fairchild Scandinavian Bellyloading Company -
Royalty Agreement with Teleflex
Gobble Gobble, Inc.
MISAT Ltd.11
Northking Insurance Company Limited, a
Bermuda corporation (re-insurance
collateral and guaranty)
Tutor Time Learning Systems, Inc.
Turkiye Is Bankasi GDRs
Recycling Investments, Inc. ("RII") Recycling
Investments II, Inc. ("R-II") Banner Capital
Ventures, Inc.
Sovereign Air Limited - Bristol Holdings
Banner Industrial Distribution, Inc.
F.F. Handels GmbH
Aero International, Inc.
FHC S.S.E. Telecom, Inc. common stock & warrants
Colt Royalty Agreement
Teuza Management and Development (1991)
Limited12
A10 Inc.13
Mairoll, Inc. (exclusive of Fastener Business
assets/liabilities)
Fairchild Arms International Ltd.
Suchomimous Terensis, Inc. Fairchild Data
Corporation D-M-E Iberica S.A.
Quack Quack, Inc.
Banner Investments (UK) Limited JJS Limited
StarLine Communications Fairchild Fastener
Group Ltd.
Mairoll, Inc. (FHC) V&V Redondo Beach Limited Partnership, a
California partnership (49%
interest)14
Hartz-Rex Associates, a New Jersey
partnership (49% interest)15
Warthog, Inc.
A10 Inc. (FHC) Fairchild Retiree Medical Services, Inc.
Camloc (U.K.) (FHC) Camloc (U.K.) Gas Spring Division
RII (RHI) Eagle Environmental, Limited Partnership, a
Delaware partnership (49.9% limited
partnership interest)16
R-II (RHI) Eagle Environmental II, Limited
Partnership (49.9% limited partnership
interest)17
BECK (TFC) Jenkins Coal Dock Company, Inc. (shell
corporation; 80% owned)18
KenCoal Associates, an Ohio partnership (80%
interest; inactive entity with no
assets or liabilities)19
Snails, Inc. Fairchild CDI S.A.
Mediadisc S.A.
CuTek Research, Inc. Boussugue
Note Receivable (FF
2,799,400)
Banner Companies Kellstrom Warrants (Banner)
Shared Technologies Cellular,
Inc. (BAR DE, Inc.)
CICI Preferred B Stock (BAR
DE, Inc.)
Net Holdings, Inc. Note in
principal amount of $5,000,000
V Farmingdale Property:
See attached description by parcel.
VI Other Real Estate:
Owner Real Estate Location
Mairoll, Inc. (FHC) Sloane Street Real Property (London)
Chatsworth, California Real Property
Temple City, California Real Property
RHI (TFC) West Milwaukee Real Property (Wisconsin)
Corporate Office Building (Virginia)
Watermann St. Real Property (Rhode Island)
Plymouth Leasing Company20
Trucking terminals located in Huron,Ohio
(leased to Conway Freight) and
Mansfield, Ohio (unoccupied)
BECK (TFC) 700 acres of unimproved land in Kentucky
Faircraft Sales 50 acres including a coal mine in
Vincennes, Indiana
Ltd. (TFC)
V&V Redondo Beach
Partnership (FHC) Real Property located in Redondo Beach,
California
Hartz-Rex Associates Hasbrouck Heights
Real Property (NJ)
(FHC)
Bristol Holdings (RHI) Rhode Island Real Property
VII Fairchild Finance Company
VIII Banner Aerospace, Inc.
Investments in: Watkins-Johnson Company (Banner)
Subsidiaries21: Dallas Aerospace, Inc.
Aero International, Inc.
Banner Aero (Australia) Pty Ltd.
Banner Aerospace Foreign Sales
Corporation
Banner Aerospace-Singapore, Inc.
Discontinued Aircraft, Inc.
Discontinued Services, Inc. Harco
Northern Ireland Limited Banner
Aerospace Services, Inc. BAR DE,
Inc.
DAC International, Inc.
GCCUS, Inc.
Georgetown Jet Center, Inc. Matrix
Aviation, Inc.
NASAM Incorporated
PB Herndon Aerospace, Inc.
Professional Aviation Associates,
Inc.
Professional Aircraft Accessories,
Inc.
IX Other Non-Fasteners Businesses
Investments in non-fasteners businesses received in exchange for
any Permitted Disposition
_______________________________
1 Until optical disc business transferred out
2 Equity interest of 41% held by Snails, Inc.
3 20.77% equity interest, on a fully diluted basis, held by
Snails, Inc.
4 Individual items reflected below are also reflected
elsewhere in this Schedule, but grouped here to encompass all of
"Eagle Environmental" as well
5 Israel corporation; 28.26% interest held by TFC
6 Wholly-owned subsidiary of TFC required to continue in
existence for 7 years; held assets of Roanoke Locomotive, Inc.
7 See entry under Real Estate below
8 Wholly-owned subsidiary of TFC
9 Wholly-owned subsidiary of TFC
10 Holds 50% interest in Normvest, a Russian venture
11 Israel corporation; 43.78% interest held by RHI
12 Israel corporation; 40% interest held by FHC
13 Wholly-owned subsidiary of FHC
14 51% interest held by Vestar California II Limited
15 49% interest held by Hartz Hasbrouck Limited Partnership;
2%
interest held by Dudley Godfrey
16 50.1% interest held by Khodara Environmental, Inc.
17 50.1% interest held by Khodara Environmental II, Inc.
18 20% interest held by Kinemotive Energy Corporation
19 20% interest held by Kinemotive Energy Corporation
20 Wholly-owned subsidiary of TFC
21 Capital Stock and Assets of the Subsidiaries are Permitted
Dispositions
Schedule 1.01.8
to
Credit Agreement
Dated as of April 20, 1999
PERMITTED EXISTING INVESTMENTS
Fairchild Holding Corp.
D-M-E Iberica S.A. (Spain) (46%)
Teuza Management & Development Ltd. (Israel) (40%) Fairchild Arms
International Ltd. (Canada) Simmonds Mecaero Fasteners, Inc.
Fairchild Finance Company (Republic of Ireland) Fairchild Data
Corporation
Quack Quack, Inc.
A10, Inc.
Fairchild Retiree Medical Services, Inc.
Mairoll, Inc.
V&V Redondo Beach Limited Partnership (49%)
Hartz-Rex Associates (49%)
Warthog, Inc.
Banner Investments (U.K.) Limited (United Kingdom)
JJS Ltd. (United Kingdom)
Fairchild Fastener Group Limited (United Kingdom) Camloc
(U.K.) Limited (United Kingdom)
Fairchild Germany, Inc.
Fairchild Technologies Korea Limited (Korea) (50%) Fairchild
Technologies USA, Inc.
Fairchild Technologies Europe Limited (United Kingdom)
Fairchild Technologies Korea Limited (Korea) (50%)
Fairchild Technologies Semiconductor Equipment Group
GmbH (Germany)
Convac France SA (France)
Snails, Inc.
Fairchild CDI S.A. (France)
MediaDisc S.A. (France) (41%)
Cutek Research, Inc. (California) (20.77% on a fully
diluted basis, Preferred A and B Stock)
Loan to Roger Boussugue et.al. FF 2,799,400
Suchomimous Terensis, Inc.
VSI Holdings, Inc.
Fairchild Fasteners Europe - VSD GmbH (Germany) (1%)
Camloc Holdings
Fairchild Fasteners Europe - Camloc GmbH (1%) Fairchild
Technologies Optical Disc Equipment Group GmbH
(Germany)
Fairchild Fasteners Europe - VSD GmbH (99%)
Fairchild AS+C oHG Aviation Supply + Consulting
(GmbH & Co.) (Germany) (50%)
Aviation Full Service (Hong Kong) Limited
(Hong Kong) (99.9%)
Fairchild Fasteners Europe - Camloc GmbH (99%)
Fairchild AS+C oHG Aviation Supply + Consulting
(GmbH & Co.) (Germany) (50%)
Aviation Full Service (Hong Kong) Limited
(Hong Kong) (99.9%)
Fairchild Fasteners Corp.
Fairchild Fasteners Europe - Simmonds S.A.R.L. (10%)
Meow, Inc.
Fairchild Fasteners Europe - Simmonds S.A.R.L. (90%)
SNEP S.A. (France)
Simmonds S.A. (France)
Mecaero SNC (France)
Eurosim Componentes Mecanicos de Seguranca, Lda.
(Portugal) (99.85%)
Transfix S.A. (France) (99.98%)
Kaynar Technologies Inc.
Fairchild Technologies GmbH Investment
in Fairchild Technologies USA, Inc. -
Preferred Stock DM 5,000,000
Officer Loan Program designed to encourage
officer stock ownership in the Company $ 173,938
Officer Loan Program designed to encourage
officer stock ownership in the Company $ 750,000
Loan to Robert Sharpe $ 200,000
Loan to Mel Borer $ 300,000
S.S.E. Telecom, Inc. Common Stock & Warrants $ 1,047,735
Starline Communications FF 999,272
RHI Holdings, Inc.
Banner Industrial Distribution, Inc.
F.F. Handels GmbH (Germany)
Fairchild France, Inc.
Northking Insurance Company Limited (Bermuda)
Sovereign Air Limited
Fairchild Holding Corp.
Aero International, Inc. (19%)
Gobble Gobble, Inc.
Nacanco Paketleme Sanayi Ve Ticaret A.S. (Turkey) (31.86%)
MISAT Ltd. (Israel) (43.78%)
Banner Capital Ventures, Inc., plus an estimated future
commitment to fund Eagle Environmental for $1,000,000
Recycling Investments, Inc.
Eagle Environmental, L.P. (49.9%)
Recycling Investments II, Inc.
Eagle Environmental II, L.P. (49.9%) Visionix Ltd. (Israel)
(22 to 23%) Medical Resources, Inc.
S.A.R.L. Soustiel 2000 Turkiye IS Bankasi Celtronix Ltd.
Bolshoi Fund (Antiques) Loan to Peter Levine
Tutor Time Learning Systems, Inc.
Investment in Stock of The Fairchild Corporation
The Fairchild Corporation
Faircraft Sales Ltd.
Banner Industrial Products, Inc.
Banner Aerospace Holding Company I, Inc.
Banner Aerospace Holding Company II, Inc.
Banner Energy Corporation of Kentucky, Inc. Jenkins Coal Dock
Company, Inc.
KenCoal Associates (Ohio) (Partnership)
Fairchild Export Sales Corporation (Barbados)
Aircraft Tire Corporation
Fairchild Titanium Technologies, Inc.
Normvest (USSR)(50%)
Plymouth Leasing Company
Special-T Fasteners, Inc., plus contingent cash purchase price
adjustments to be paid to Robert E. Edwards up to $2,000,000 RHI
Holdings, Inc.
Banner Aerospace, Inc.
Billecart Expansion
Euroactividade
State of Israel - 12 year Variable Rate Bonds Teuza Fund
Rotlex
Oramir Semiconductor Equipment Ltd.
Nevatim Triangle Venture
Note Receivable - Technical Devices Note Receivable - Stelfast
Fasteners
Banner Aerospace, Inc.
Aero International, Inc. (Ohio) (81%)
Banner Aero (Australia) Pty. Ltd. (Australia)
Banner Aerospace Foreign Sales Corporation (U.S. Virgin Islands)
Banner Aerospace Services, Inc. (Ohio)
BAR DE, Inc. (0.9%)
Banner Aerospace-Singapore, Inc. BAR DE, Inc. (98.6%)
D A C International, Inc. (Texas) Discontinued Aircraft, Inc.
(Texas) Discontinued Services, Inc.
GCCUS, Inc. (California) Georgetown Jet Center, Inc.
Harco Northern Ireland Limited (N. Ireland - U.K.) Matrix
Aviation, Inc. (Kansas)
Nasam Incorporated (California)
Dallas Aerospace, Inc. (Texas)
PB Herndon Aeropace, Inc. (Missouri)
BAR DE, Inc. (0.5%)
Professional Aviation Associates, Inc. (Georgia) Professional
Aircraft Accessories, Inc. (Florida)
Kellstrom Warrants
Watkins-Johnson Company
Shared Technologies Cellular, Inc. Common Stock Investment in
CICI Preferred B Stock
Note Receivable - Net Holdings, Inc.
Kaynar Technologies Inc.
Kaynar Technologies Ltd. (United Kingdom) Recoil (Europe) Ltd.
(United Kingdom)
K.T.I. Fempari Kft (Hungary)
KTI International Sales Corporation (Barbados)
Marcliff Corporation
Marson Creative Fastener, Inc.
Edson Manufacturing, Inc. note payable to Marson
Creative Fastener, Inc. $231,237.26
M&M Machine & Tool Co.
Recoil Holdings, Inc.
Recoil PTY (Australia) (99%)
Recoil Marketing BVBA (Belgium) (0.13%)
Recoil Pte Ltd. (Singapore) (50%) Recoil Thailand (Thailand)
(0.1%)
Recoil Inc.
Recoil Thailand (Thailand) (0.1%)
Recoil Australia Holdings, Inc.
Recoil PTY (Australia) (1%)
Recoil Pte Ltd. (Singapore) (50%) Recoil Thailand
(Thailand) (0.1%)
Recoil Marketing BVBA (Belgium) (99.87%)
Recoil Thailand (Thailand) (74.3%)
Shares in Pacific Horizon Funds