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EXHIBIT 10.18D
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FIRST AMENDMENT TO PARTICIPATION AGREEMENT, LEASE AND
DEVELOPMENT AGREEMENT, AND LOAN AGREEMENT
Dated as of May 15, 1998
among
ASSET XI HOLDINGS COMPANY, L.L.C., as Lessor
EAGLE USA AIRFREIGHT, INC., as Lessee
and
BANK ONE, TEXAS, N.A., as Lender
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Lease Financing
for EAGLE USA AIRFREIGHT, INC.
Corporate Headquarters and Warehouse Facility
Harris County, Texas
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FIRST AMENDMENT TO PARTICIPATION AGREEMENT, LEASE AND
DEVELOPMENT AGREEMENT, AND LOAN AGREEMENT
THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT. LEASE AND
DEVELOPMENT AGREEMENT AND LOAN AGREEMENT (this "Amendment"), dated as of May 15,
1998, is among ASSET XI HOLDINGS COMPANY, a Massachusetts limited liability
company, as Lessor, EAGLE USA AIRFREIGHT, INC., a Texas corporation, as Lessee,
and BANK ONE, TEXAS, N.A., a national banking association, as Lender.
WITNESSETH:
WHEREAS, in accordance with the terms and provisions of that certain
Participation Agreement dated as of January 10, 1997 among the parties hereto
(the "Participation Agreement"), the Deed, the Lease, the Loan Agreement, the
Note and the other Operative Documents (all as defined in the Participation
Agreement), (i) the Lessor has acquired fee simple title in the Leased Property
and has agreed to lease the Leased Property to the Lessee, (ii) the Lessee has
agreed to construct certain Improvements for the Lessor, and (iii) the Lessor
and the Lessee have obtained, and the Lender has provided, funding in the amount
of $7,600,000 to pay a portion of the cost of acquisition and development of the
Leased Property and (iv) Lessor made a Contribution from its own equity
resources of $400,000 to pay a portion of the cost of acquisition and
development of the Leased Property; and
WHEREAS, the Lessee has requested an amendment to the Operative
Documents to increase the amount of the Note to $8,075,000 and the amount of the
Contribution to $425,000 in respect of Development Costs of the Leased Property;
and
WHEREAS, the Lender has agreed to reduce the interest rate and the
Lessor has agreed to reduce the rate of the Contribution Return; and
WHEREAS, the Lender and the Lessor each represent to the other that
it has not received written notice of any Event of Default under the Lease; and
WHEREAS, the Lender and the Lessor are prepared to enter into that
certain Modification Agreement, dated of even date herewith (the "Modification
Agreement"), pursuant to which the parties will agree to evidence the revision
of the per annum rate of interest applicable to the Note and the rate of
Contribution Return, and to increase the principal amount of the Note and the
Contribution as aforesaid; and
WHEREAS, the parties hereto desire to amend the Participation
Agreement, Lease and Development Agreement and Loan Agreement and the other
Operative Documents in a manner consistent with, as a condition precedent to the
delivery of, the Modification Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained
in this Amendment and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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SECTION 1
DEFINITIONS; INTERPRETATION
Appendix I of the Participation Agreement, the Lease and the Loan
Agreement is hereby amended by deleting the definitions of the terms listed in
Exhibit A attached hereto and inserting in lieu thereof the definitions therefor
contained in said Exhibit A. Furthermore, said Appendix I is hereby amended by
adding those defined terms set forth in Exhibit B attached hereto. Unless the
context shall otherwise require, capitalized terms used and not defined herein
shall have the meanings assigned thereto in Appendix I to the Participation
Agreement, the Lease and the Loan Agreement before taking into account the
amendments effected herein.
SECTION 2
AMENDMENT OF LOAN AGREEMENT
Section 2.4(b)(ii) of the Loan Agreement is hereby amended by
deleting the same in its entirety and inserting in lieu thereof the following:
(ii) LIBOR Rate Loans. With respect to each LIBOR Rate Loan, a rate
per annum (the "Applicable LIBOR Rate") (A) during each Interest
Period commencing prior to the Completion Date, equal to the Interim
LIBOR Rate and (B) during each Interest Period commencing on and
after the Completion Date, equal to the sum of the Adjusted LIBOR
Rate for such Interest Period plus 1.45% per annum, payable monthly
on each Loan Payment Date.
SECTION 3
REPRESENTATIONS AND COVENANTS
Effective as of the date of execution hereof, the Lessee and Lessor
each represents and warrants to each of the other parties that each of the
representations and warranties made by it in the Participation Agreement and the
other Operative Documents remain true and correct in all material respects as of
the Effective Date to the same extent and subject to the same qualifications as
set forth in the Participation Agreement and the other Operative Documents.
SECTION 4
CONDITIONS
The obligations of the Lessor and the Lender to enter into the
Modification Agreement shall be subject to the fulfillment to the satisfaction
of, or waiver by, each such party (acting directly or through its counsel) on or
prior to the Effective Date of the following conditions precedent:
(a) Documents. The following documents shall have been executed and
delivered by the respective parties thereto:
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(i) Title and Title Insurance. The Lessor and the Lender shall
receive from the Title Insurance Company, respectively, endorsements
to the Title Policies reflecting the recording of the Modification
Agreement.
(ii) Lessee's Resolutions and Incumbency Certificate, Etc. Each of
the Lender and the Lessor shall have received (A) a certificate of
the Secretary or an Assistant Secretary of the Lessee attaching and
certifying as to (1) the resolution of the Lessee's Board of
Directors (or an appropriate committee of such Board) duly
authorizing the execution, delivery and performance by the Lessee of
each Transaction Document to which the Lessee is or will be a party,
(2) the incumbency and signatures of Persons authorized to execute
and deliver Transaction Documents on the Lessee's behalf, (3) the
Lessee's certificate of incorporation, certified as of a recent date
by the Secretary of State of the state of the Lessee's incorporation
and (4) the Lessee's by-laws and (B) a good standing certificate for
the Lessee from the appropriate officer of the State of Texas.
(iii) Recording Fees; Transfer Taxes. The Lender shall have received
satisfactory evidence of the payment by the Lessee of all recording
and filing fees and taxes with respect to any recordings or filings
made of the Modification.
(iv) Opinion of Lessee's Counsel. The opinion of Franklin, Cardwell
& Jones, as special counsel to Lessee, dated the Effective Date, and
being substantially in the form set forth in Exhibit H to the
Participation Agreement and containing such other matters as the
parties to whom such opinion is addressed shall reasonably request,
shall have been delivered and addressed to each of the Lessor and
the Lender.
(v) Lessor's Resolution and Incumbency Certificate. The Lender shall
have received a certificate of the managing member of the Lessor
attaching and certifying as to (A) the managing member's resolution
authorizing the execution, delivery and performance by it of each
Transaction Document to which the Lessor is or will be a party and
(B) the incumbency and signatures of Person(s) authorized to execute
and deliver such documents on the Lessor's behalf.
(vi) Opinion of Lessor's Counsel. The Opinion of Ropes and Gray,
Boston, Massachusetts dated the Effective Date, substantially is the
form of Exhibit I to the Participation Agreement shall have been
delivered and addressed to each of the Lessee and the Lender.
(vii) Governmental Authorizations. All authorizations, if any,
required by an governmental authority for the operation of the
Leased Property as a headquarters and warehouse facility, which are
presently procurable.
(b) Litigation. No action or proceeding shall have been instituted
or, to the Lessee's knowledge, threatened nor shall any governmental action,
suit, proceeding or investigation be instituted or, to the Lessee's knowledge,
threatened before any Governmental Authority, nor shall any order, judgment or
decree have been issued or, to the Lessee's knowledge, proposed to be issued by
any Governmental Authority, to set aside, restrain, enjoin or prevent the
performance of
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the Operative Documents or any of the Transaction Documents or any transaction
contemplated hereby or thereby or which would materially adversely affect the
Leased Property or any transaction contemplated by the Operative Documents or
which would result in a Material Adverse Effect.
(c) No Events. (i) No Default, Event of Default, Event of Loss or
Event of Taking shall have occurred and be continuing and (ii) no action shall
be pending or, to the Lessee's knowledge, threatened by a Governmental Authority
to initiate a Condemnation or an Event of Taking.
(d) No Material Adverse Effect. There shall not have occurred any
event having a Material Adverse Effect since January 22, 1997.
(e) Fees and Transaction Expenses. The Lessee shall have paid the
reasonable fees and expenses of the Lessor, the Lender and their respective
counsel.
SECTION 5
MISCELLANEOUS
SECTION 5.1 Ratification of Operative Documents. Except as modified
and amended hereby or by the other Transaction Documents, each of the
Participation Agreement, the Lease, the Loan Agreement and the other Operative
Documents shall each remain unmodified and in full force and effect.
SECTION 5.2 Counterparts. This Amendment may be executed in any
number of counterparts as may be convenient or necessary, and it shall not be
necessary that the signatures of all parties hereto or thereto be contained on
any one counterpart hereof or thereof. Additionally, the parties hereto agree
that for purposes of facilitating the execution of this Amendment, (a) the
signature pages taken from the separate individually executed counterparts of
this Amendment may be combined to form multiple fully executed counterparts and
(b) a facsimile transmission shall be deemed to be an original signature for all
purposes. All executed counterparts of this Amendment shall be deemed to be
originals, but all such counterparts taken together or collectively, as the case
may be, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective duly authorized officers as of the day and year
first above written.
EAGLE USA AIRFREIGHT, INC., as Lessee
Witnesses:
By:
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Name:
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Title:
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ASSET XI HOLDINGS COMPANY, L.L.C., as
Lessor
By Asset Holdings Corporation I, a
Delaware corporation, its managing
member
By:
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Name:
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Title:
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BANK ONE, TEXAS, N.A., as Lender
By:
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Name:
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Title:
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EXHIBIT A
TO
FIRST AMENDMENT TO PARTICIPATION AGREEMENT
LEASE AND DEVELOPMENT AGREEMENT AND LOAN AGREEMENT
AMENDED DEFINITIONS
"Contribution Return" means, as of any date of calculation, a
pre-tax cumulative return on the balance of the Contribution outstanding from
time to time, computed at a per annum rate equal to (a) during any period when a
LIBOR Rate Loan is outstanding, (i) during each Interest Period commencing prior
to the Completion Date, the Interim Rate and (ii) during each Interest Period
commencing on or after the Completion Date, the sum of the Adjusted LIBOR Rate
for such Interest Period plus 2.45% per annum; (b) during any period when either
(i) 100% of the principal balance of the Loan is a Base Rate Loan, or (ii) the
Base Rate applies as a result of any circumstance described in Section 2.4 (f)
of the Loan Agreement, the Base Rate; or (c) during any period when an Event of
Default shall have occurred and remain uncured, the Overdue Rate; provided,
however, that in none of the foregoing cases shall the applicable foregoing rate
exceed the highest rate permitted by Applicable Law. During the period from the
initial Funding Date to the Completion Date, Contribution Return shall be
compounded on each Loan Payment Date as a result of a Contribution Advance to be
deemed made pursuant to Section 2.2 (d) of the Participation Agreement. After
the Completion Date, Contribution Return shall be payable on each Loan Payment
Date from the proceeds of the Facility Rent payable by the Lessee on each such
date and any amount of Contribution Return not so paid when due will bear
interest at the Overdue Rate until paid in full (whether after or before
judgment).
"Equity Commitment" means $425,000, being the maximum amount of the
Contribution which Lessor has committed to make under the Participation
Agreement.
"Interim LIBOR Rate" means, for any Interest Period, the per annum
rate of interest equal to the sum of the Adjusted LIBOR Rate for such Interest
Period plus 1.50% per annum.
"Lease" means the Lease and Development Agreement dated as of
January 10, 1997 between the Lessor and the Lessee, as amended by the Amendment
to Agreements, together with all amendments and supplements thereto.
"Loan Agreement" means the Loan Agreement dated as of January 10,
1997, between the Lender and the Lessor, as amended by the Amendment to
Agreements, together with all amendments and supplements thereto.
"Memorandum of Lease" means the Amended and Restated Memorandum of
Lease.
"Loan Commitment" means the aggregate amount of Loan Advances which
Lender has committed to make under the Loan Agreement, up to the maximum
principal amount of $8,075,000.
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"Note" means the promissory note issued by Lessor to the Lender
under the Loan Agreement to evidence the Loan, as amended by the Modification
Agreement, together with any amendments or supplements thereto or replacements
thereof.
"Operative Documents" means the Participation Agreement, the Ground
Lease, the Lease, the Security Agreement and Assignment, the Note, the Loan
Agreement, the Assignment of Lease and Rents, the Mortgage, the Non-Disturbance
and Attornment Agreement, the Pledge Agreement and the Modification Agreement.
"Participation Agreement" means the Participation Agreement dated as
of January 10, 1997 among the Lender, the Lessor and the Lessee, as amended by
the Amendment to Agreements, together with all amendments and supplements
thereto.
"Recourse Deficiency Amount" means $__________; provided, however,
if any amount of principal of the Note shall be prepaid following the occurrence
of an Event of Loss or Event of Taking, then the Lessee may request the
Financial Advisor to recalculate the amount of the Recourse Deficiency Amount
utilizing the same formula, methodology and assumptions used to calculate the
original Recourse Deficiency Amount. The Financial Advisor shall notify the
Lessee, the Lessor and the Lender of the recalculated Recourse Deficiency
Amount, which recalculation, in the absence of manifest error, shall be
conclusive and binding upon the Lender, the Lessor and the Lessee.
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EXHIBIT B
TO
FIRST AMENDMENT TO PARTICIPATION AGREEMENT
LEASE AND DEVELOPMENT AGREEMENT AND LOAN AGREEMENT
NEW DEFINITIONS
"Amendment to Agreements" means that certain First Amendment to
Participation Agreement, Lease and Development Agreement and Loan Agreement
among the Lender, the Lessee and the Lessor dated as of May 15, 1998, together
with any amendments or supplements thereto.
"Amended and Restated Memorandum of Lease" means that certain
Amended and Restated Memorandum of Lease, dated as of May 15, 1998, by and
between Lessor and Lessee, which describes the Lease and certain of its
provisions and is intended to be recorded in the Harris County, Texas real
property records.
"Effective Date" means May 15, 1998.
"Modification Agreement" means that certain Modification Agreement
among the Lender, and the Lessor dated as of May 15, 1998, together with any
amendments or supplements thereto.
"Transaction Documents" means the Amendment to Agreements, the
Modification Agreement and the Amended and Restated Memorandum of Lease.
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