Fourth Amendment



 Exhibit 10.1 
  
 FOURTH AMENDMENT TO CREDIT AGREEMENT 
  
 THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (the “Fourth Amendment”) is made effective as of May 7, 2004,
among PEMCO AVIATION GROUP, INC., a Delaware corporation, PEMCO AEROPLEX, INC., an Alabama corporation, PEMCO ENGINEERS, INC., a Delaware corporation, PEMCO WORLD AIR SERVICES, INC., a Delaware corporation, SPACE
VECTOR CORPORATION, a Delaware corporation (collectively, the “Borrowers”), SOUTHTRUST BANK, an Alabama banking corporation, as Agent (the “Agent”), SOUTHTRUST BANK, an Alabama banking corporation, as a Lender,
and COMPASS BANK, an Alabama banking corporation, as a Lender. Capitalized terms used herein but not defined shall have the meanings as set forth in the Credit Agreement, as amended (as hereinafter defined). 
  
 WHEREAS, pursuant to that certain Credit Agreement dated as of
December 16, 2002, among Borrowers, Agent, and the other Lender Parties a party thereto (the “Credit Agreement”), Lenders made available, subject to the terms and conditions thereof, (i) the Revolving Loan of up to $20,000,000.00, (ii) the
Swing Line Loan of up to $5,000,000.00, and (iii) the Term Loan of up to $5,000,000.00; and 
  
 WHEREAS, pursuant to that certain First Amendment to Credit Agreement dated as of May 22, 2003, among Borrowers, Agent, and the other Lender Parties a party thereto (the “First Amendment”), the Credit
Agreement was amended in order to extend to Borrowers the Treasury Stock Loan in the amount of up to $5,000,000.00; and 
  
 WHEREAS, pursuant to that certain Second Amendment to Credit Agreement dated as of November 24, 2003, among Borrowers, Agent, and the other Lender
Parties a party thereto (the “Second Amendment”), the Credit Agreement was amended in order to (i) temporarily increase the Swing Line Loan Commitment to up to $7,000,000.00, and (ii) temporarily increase the Revolving Loan Commitment to
up to $22,000,000.00; and 
  
 WHEREAS, pursuant to that
certain Third Amendment to Credit Agreement dated as of December 16, 2003, among Borrowers, Agent, and the other Lender Parties a party thereto (the “Third Amendment”), the Credit Agreement was amended in order to (i) increase the Swing
Line Loan Commitment to up to $6,000,000.00, (ii) increase the Revolving Loan Commitment to up to $25,000,000.00, and (iii) extend the Revolving Loan Maturity Date from December 16, 2004 until December 16, 2005 (the Credit Agreement, as amended by
the First Amendment, the Second Amendment and the Third Amendment, hereinafter referred to as the “Credit Agreement, as amended”); and 
  
 WHEREAS, Lender Parties and Borrowers have agreed to amend the Credit Agreement, as amended, in order to (i) temporarily increase the Revolving
Loan Commitment to up to $27,000,000.00, and (ii) increase the Letter of Credit Commitment to up to $1,500,000.00, all as more specifically hereinafter provided. 
  
 NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree that the Credit Agreement, as amended, is hereby amended as follows: 
  









 1. The Credit Agreement, as amended, is hereby amended by deleting the definitions of “Letter of
Credit Commitment”, “Revolving Loan Commitment” and “Revolving Notes”, and by substituting the following new definitions, respectively, in lieu thereof: 
  
 “Letter of Credit Commitment” means the
commitment of Issuing Lender, subject to the terms of this Agreement, to issue for the account of Borrowers Letters of Credit in an aggregate amount of up to the lesser of (i) One Million Five Hundred Thousand and 00/100 Dollars, or (ii) the Unused
Revolving Loan Commitment. 
  
 “Revolving
Loan Commitment” means the commitment of the Revolving Loan Lenders, subject to the terms of this Agreement, to lend Borrowers up to (A) from May 7, 2004 to August 1, 2004, the lesser of (i) Twenty-Seven Million and 00/100 Dollars
($27,000,000.00), or (ii) the Borrowing Base, less the Available Amount of the Letters of Credit, less any outstanding Letter of Credit Advances; and (B) thereafter, the lesser of (i) Twenty-Five Million and 00/100 Dollars ($25,000,000.00), or (ii)
the Borrowing Base, less the Available Amount of the Letters of Credit, less any outstanding Letter of Credit Advances. 
  
 “Revolving Notes” means (i) that certain Third Amended and Restated Revolving Note from Borrowers to SouthTrust, dated
May 7, 2004, in the principal amount of $17,280,000.00, and (ii) that certain Second Amended and Restated Revolving Note from Borrowers to Compass, dated May 7, 2004, in the principal amount of $9,720,000.00, and includes any amendment to or
modification of any such note and any promissory note given in extension or renewal of, or in substitution for, such note. 
  
 2. Borrowers and Lender Parties acknowledge and agree that all of the Collateral (including, but not limited to, the Mortgaged Property) shall secure all
of the Obligations (including, but not limited to the obligation to pay the principal of and interest on the Third Amended and Restated Revolving Note from Borrowers to SouthTrust and the Second Amended and Restated Revolving Note from Borrowers to
Compass), and each Borrower hereby grants, bargains, sells, transfers, assigns, sets over, conveys, re-grants, re-bargains, re-sells, re-transfers, re-assigns, re-sets over and re-conveys to Agent, its successors and assigns, a Lien on, upon and in
the Collateral. 
  
 3. As a condition to the effectiveness of this
Fourth Amendment (a) Borrowers shall have executed and delivered to SouthTrust the Third Amended and Restated Revolving Note from Borrowers to SouthTrust; (b) Borrowers shall have executed and delivered to Compass the Second Amended and Restated
Revolving Note from Borrowers to Compass; (c) Borrowers shall have reimbursed Lender Parties for all of Lender Parties’ fees and expenses, including, but not limited to, any and all filing fees, recording fees, and expenses and fees of Lender
Parties’ legal counsel, incurred in connection with the preparation of this Fourth Amendment and any and all documents executed and delivered in connection herewith; (d) Agent shall have received an opinion of Borrowers’ counsel with
respect to the due authorization, execution and delivery of this Fourth Amendment and the documents required to be executed and delivered hereunder, and the enforceability of the Loan Documents, as amended by this Fourth Amendment, such opinion


  

 2 








 
letter to be in form and substance acceptable to Agent; (e) Agent shall have received appropriate resolutions of Borrowers’ directors, in a form
satisfactory to Agent, authorizing Borrowers to enter into this Fourth Amendment and any other documentation required by Agent in connection with this Fourth Amendment; (f) Agent shall have received a Bringdown and Incumbency Certificate of each
Borrower, in a form satisfactory to Agent; (g) Borrowers shall have executed and delivered to Agent all further documents and performed all other acts which Agent reasonably deems necessary or appropriate to perfect or protect its security for the
Loans; and (h) Borrowers shall have delivered to Agent such other documentation, if any, as may be requested by Agent to satisfy Agent that this Fourth Amendment, and all other documents and instruments executed by Borrowers in connection with this
Fourth Amendment or in furtherance hereof have each been duly authorized, executed and delivered on behalf of Borrowers, and constitute valid and binding obligations of Borrowers. 
  
 4. Each Borrower represents and warrants to Lender Parties that all representations and warranties given by such Borrower in
Article IX of the Credit Agreement, as amended, are true and correct as of the date of this Fourth Amendment, except to the extent affected by this Fourth Amendment. Each Borrower represents and warrants to Lender Parties that as of the date of this
Fourth Amendment, such Borrower is in full compliance with all of the covenants of such Borrower contained in Article X of the Credit Agreement, as amended, except to the extent affected by this Fourth Amendment. 
  
 5. Except as heretofore or herein expressly modified, or as may otherwise be
inconsistent with the terms of this Fourth Amendment (in which case the terms and conditions of this Fourth Amendment shall govern), all terms of the Credit Agreement, as amended, and all documents and instruments executed and delivered in
furtherance thereof shall be and remain in full force and effect, and the same are hereby ratified and confirmed in all respects. 
  
 * * * * * 
  
  

 3 








 IN WITNESS WHEREOF, this Fourth Amendment has been duly executed as of the day and year first
above written. 
  

			
	 BORROWERS:
  
 PEMCO AVIATION GROUP, INC.

		
	By:	 	/s/    John R. Lee
	Its:	 	Senior Vice President & Chief Financial Officer


  
  
  

			
	 PEMCO AEROPLEX, INC.

		
	By:	 	/s/    John R. Lee
	Its:	 	Chief Financial Officer


  
  
  

			
	PEMCO ENGINEERS, INC.
		
	By:	 	/s/    John R. Lee
	Its:	 	Chief Financial Officer


  
  
  

			
	PEMCO WORLD AIR SERVICES, INC.
		
	By:	 	/s/    John R. Lee
	Its:	 	Chief Financial Officer


  
  
  

			
	SPACE VECTOR CORPORATION
		
	By:	 	/s/    John R. Lee
	Its:	 	Chief Financial Officer


  
  
  

			
	 AGENT:
  
 SOUTHTRUST BANK, as Agent

		
	By:	 	/s/    Austin Davis
	Its:	 	Vice President


  
  

 4 









			
	 LENDERS:
  
 SOUTHTRUST BANK

		
	By:	 	/s/    Austin Davis
	Its:	 	Vice President


  
  

			
	COMPASS BANK
		
	By:	 	/s/    Alex Morton
	Its:	 	Vice President


  

 5