AMENDMENT NO. 1
AND CONSENT
Dated as of July 29, 1996
to
RESTATED AND AMENDED CREDIT AGREEMENT
Dated as of May 27, 1996
This Amendment No. 1 and Consent ("Amendment") dated as of July 29,
1996 is entered into between RHI Holdings, Inc., a Delaware corporation
("RHI") and Citicorp North America, Inc., as the sole "Senior Lender" (as
defined in the Credit Agreement identified below) of RHI. Capitalized
terms used herein without definition are used herein as defined in the
Credit Agreement.
PRELIMINARY STATEMENT:
RHI, certain financial institutions as Senior Lenders, and the
Administrative Agent are parties to that certain Restated and Amended
Credit Agreement dated as of May 27, 1996, as amended (the "Credit
Agreement").
RHI has requested certain amendments to the Credit Agreement and the
Senior Lender's consent to (i) RHI's contribution of all issued and
outstanding Capital Stock of Fairchild Germany, Inc., a Delaware
corporation and wholly-owned Subsidiary of RHI to Fairchild Holding Corp.,
a Delaware corporation and wholly-owned Subsidiary of RHI, (ii) an
amendment of the Tax Allocation Agreement, and (iii) the sale of all of
the issued and outstanding Capital Stock of Scandinavian Bellyloading
International, Inc. ("SBI") by Fairchild Scandinavian Bellyloading Company
Aktiebolag ("FSBC") to RHI in consideration of the payment of $1.00.
Subject to the terms and conditions stated herein, RHI and the sole
Senior Lender of RHI have agreed to amend the Credit Agreement as set
forth in Section 1 and the sole Senior Lender of RHI has agreed to consent
to the aforesaid contribution of Capital Stock, amendment of the Tax
Allocation Agreement and sale of SBI Capital Stock.
SECTION 1. Amendment to the Credit Agreement. Effective as of July
29, 1996, 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 10.13 is amended to add the following provisions at the
end thereof:
In the event the Obligations exceed $10,000,000 in the aggregate at
any time after the Closing Date, the Borrower shall, within three (3)
Business Days after the occurrence of such event, execute and deliver to
the Administrative Agent, for the benefit of the Senior Secured Creditors,
pledges of all Securities, together with instruments evidencing the same,
representing or evidencing Investments of the Borrower not theretofore so
pledged. In the event Borrower acquires any additional equity Securities
of issuers identified in the Borrower Pledge Agreement or Foreign
Subsidiary Pledge Agreements, Borrower shall promptly deliver the share
certificates representing such Securities to the Administrative Agent. In
the event Borrower makes any Investments by means of loans or other
advances to any Subsidiary of the Borrower, FHC or its Subsidiaries, or
any member of the Aerospace Group, such loans and other advances shall be
evidenced by a promissory note on terms satisfactory to the Administrative
Agent and such note shall be endorsed to the Administrative Agent as part
of the Collateral.
1.2 Section 11.01 is amended to insert the following provision as
clause (c) thereof:
(c) Liens against Investments of the Borrower (i) which are not
Permitted Existing Investments or Investments required to be pledged to
secure the Obligations as described in Section 10.13, (ii) which do not
consist of pledged collateral as described or defined in any Loan
Document, or (iii) which do not consist of additional or incremental
Investments in debt Securities issued by a Person whose debt Securities
are part of the Collateral or equity Securities issued by a Person whose
equity Securities are part of the Collateral;
1.3 Section 11.16 is amended to delete the word "and at the end of
clause (m) thereof, delete the period at the end of clause (n) thereof and
substitute "; and" therefor, and add the following provision as clause (o)
thereof:
(o) Indebtedness of the Borrower to FHC.
1.4 Section 11.18 is amended to delete the provisions thereof in
their entirety.
1.5 Section 14.01(r) is amended to delete the provisions thereof in
their entirety and substitute therefor the following:
(r) TFC/RHI Consolidated Liquidity. The sum, as of any given date
of determination, of (i) the amount of consolidated Cash and Cash
Equivalents of TFC, the Borrower and FHC as of such date of determination
plus (ii) the amount of the "Consolidated Loan Availability" (as defined
in the FHC Credit Agreement) as of such date of determination after giving
effect to any requests for loans or letters of credit received by the
administrative agent under the FHC Credit Agreement on such date of
determination minus (iii) the amount of Cash and Cash Equivalents of TFC,
the Borrower and FHC required to secure Contractual Obligations of TFC,
the Borrower and FHC as of such date of determination shall be less than
$10,000,000.
SECTION 2. Consents. The undersigned, as the sole Senior Lender of
RHI, hereby consents to:
2.1 the contribution by RHI of all of the issued and outstanding
Capital Stock of Fairchild Germany, Inc., a wholly-owned Subsidiary of
RHI, to Fairchild Holding Corp., a Delaware corporation and wholly-owned
Subsidiary of RHI on July 29, 1996 and
2.2 the amendment of the Tax Allocation Agreement pursuant to that
certain Ninth Amended and Restated Tax Allocation Agreement dated as of
July 29, 1996 among TFC, RHI, FHC and certain Affiliates thereof.
2.3 the sale by FSBC to RHI of all of the issued and outstanding
Capital Stock of SBI to RHI in consideration of the payment of $1.00.
SECTION 3. Conditions Precedent to Effectiveness of this Amendment.
This Amendment shall become effective as of July 29, 1996 if, and only if,
the Administrative Agent shall have received on or before August 6, 1996,
an original copy of this Amendment executed by RHI and the sole Senior
Lender.
SECTION 4. Representations and Warranties. RHI hereby represents
and warrants as follows:
4.1 This Amendment and the Credit Agreement as previously executed
and amended and as amended hereby constitute legal, valid and binding
obligations of RHI and are enforceable against RHI in accordance with
their terms.
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, RHI hereby reaffirms
all covenants, representations and warranties made by it in the Credit
Agreement to the extent the same are not amended hereby and agrees 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 or in the note modification
agreement referenced in Section 3 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 Senior
Lender or Agent 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.
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.
RHI HOLDINGS, INC. CITICORP NORTH AMERICA, INC.
By: Karen L. Schneckenburger By: Colin M. Cohen
Title: Treasurer Title: Managing Director