exv10w1



 




Exhibit 10.1



THIRD AMENDMENT TO LOAN AGREEMENT


     
This Third Amendment to Loan Agreement (the
“Amendment”) is dated as of April 6, 2005, among
Bank of America, N. A. (the “Bank”), Mercury Air
Group, Inc., a Delaware corporation
(“Borrower 1”); Maytag Aircraft Corporation, a
Colorado corporation (“Borrower 2”); Mercury Air
Cargo, Inc., a California corporation
(“Borrower 3”); MercFuel, Inc., a Delaware
corporation (“Borrower 4”); Hermes Aviation,
Inc., a California corporation (“Borrower 5”),
and Mercury Air Center — Long Beach, Inc., a
California corporation (“Borrower 6”);
(Borrower 1, Borrower 2, Borrower 3,
Borrower 4, Borrower 5, and Borrower 6 are
sometimes referred to, collectively as the “Borrowers”
and individually as the “Borrower”).



RECITALS


     
A.     The Borrowers and the Bank are
parties to that certain Loan Agreement dated as of July 29,
2004, as amended by a First Amendment dated as of
November 1, 2004, and by a Second Amendment dated as of
January 31, 2005, (as amended, the “Agreement”).


     
B.     The Borrowers and the Bank
desire to further amend certain terms and provisions of the
Agreement.



AGREEMENT


     
1.     Definitions. Capitalized
terms used but not defined in this Amendment shall have the
meaning given to them in the Agreement.


     
2.     Amendments. The Agreement
is hereby amended as follows:



		
	 	     
    2.1     The definition of
    “Borrowing Base” set forth in Section 1 of the
    Agreement is amended in its entirety to read as follows:





		
	 	     
    “Borrowing Base” means 80% of the balance due
    on Domestic Acceptable Receivables. After calculating the
    Borrowing Base, the Bank may, upon notice to the Borrower,
    deduct such reserves as the Bank may establish from time to time
    in its reasonable credit judgment, including without limitation,
    reserves for 100% of the outstanding letters of credit, reserves
    for dilution (any non-cash reduction of accounts receivable),
    and the amount of estimated maximum exposure, as determined by
    the Bank from time to time, under any interest rate contracts
    which the Borrower enters into with the Bank (including interest
    swaps, caps, floors, options thereon, combinations thereof, or
    similar contracts).





		
	 	     
    2.2     The final paragraph of the
    definition of “Acceptable Receivable” set forth in
    Section 1 of the Agreement is amended to add the following
    two sentences to the end of such paragraph.





		
	 	     
    “It is provided, however, that if the debtor obligated upon
    an account is Flight Options, the concentration limitation
    applicable to such debtor will be increased to 25%; provided,
    however, in the event that the debt rating of




1






 




		
	 	     
    “. . . It is provided, however, that if the
    debtor obligated upon an account is Flight Options, the
    concentration limitation applicable to such debtor will be
    increased to 25%; provided, however, in the event that the debt
    rating of Raytheon, Inc., the parent company of such account
    debtor, is at any time rated lower than BBB- by Standard &
    Poor’s or rated lower than Baa3 by Moody’s Investors
    Service, Inc., such concentration limit shall be decreased to
    10%. It is further provided, that if the debtor obligated upon
    an account is Net Jets, the concentration limitation applicable
    to such debtor will be increased to 25%; provided, however, in
    the event that the debt rating of Berkshire-Hathaway, Inc., the
    parent company of such account debtor, is at any time rated
    lower than AAA by Standard & Poor’s or rated lower than
    Aaa3 by Moody’s Investors Service, Inc., such concentration
    limitation shall be decreased to 10%.




     
3. Representations and Warranties. Except as
previously disclosed in writing, each Borrower hereby represents
and warrants to Bank that: (i) no default specified in the
Agreement and no event which with notice or lapse of time or
both would become such a default has occurred and is continuing
and has not been previously waived, (ii) the
representations and warranties of each Borrower pursuant to the
Agreement and all schedules thereto are true on and as of the
date hereof as if made on and as of said date, (iii) the
making and performance by each Borrower of this Amendment have
been duly authorized by all necessary action, and (iv) no
consent, approval, authorization, permit or license is required
in connection with the making or performance of the Agreement as
amended hereby.


     
4. Conditions. This Amendment will be effective when
the Bank receives the following items, in form and content
acceptable to the Bank.



		
	 	     
    4.1 This Amendment duly executed by all parties hereto.
	 
	 	     
    4.2 Payment of an amendment fee of Twenty Thousand Dollars
    ($20,000),
	 
	 	     
    4.3 Payment of all out-of-pocket expenses, including
    attorneys’ fees, incurred by the Bank in connection with
    the preparation of this Amendment.




     
5. Effect of Amendment. Except as provided in this
Amendment, the Agreement shall remain in full force and effect
and shall be performed by the parties hereto according to its
terms and provisions.



[Signatures on Following Page]



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     This Amendment is executed as of the date stated at the top of the first page.



	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	Mercury Air Group, Inc.
	 
	By:
	 	/s/ FRANCES R. MARTINEZ	 	By:	 	/s/ JOSEPH A. CZYZYK
	
	 	 
	 	 	 	 
	
	 	Typed Name: Frances R. Martinez
	 	 	 	Typed Name: Joseph A. Czyzyk
	

	 	Title: Vice President
	 	 	 	Title: Chief Executive Officer






	 	 	 	 
	 	Mercury Air Cargo, Inc.

 	 
	 	By:  	/s/ JOSEPH A. CZYZYK	 
	 	 	Typed Name: Joseph A. Czyzyk 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



	 	 	 	 
	 	MercFuel, Inc.

 	 
	 	By:  	/s/ JOSEPH A. CZYZYK	 
	 	 	Typed Name: Joseph A. Czyzyk 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



	 	 	 	 
	 	Maytag Aircraft Corporation

 	 
	 	By:  	/s/ JOSEPH A. CZYZYK	 
	 	 	Typed Name: Joseph A. Czyzyk 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



	 	 	 	 
	 	Hermes Aviation, Inc.

 	 
	 	By:  	/s/ JOSEPH A. CZYZYK	 
	 	 	Typed Name: Joseph A. Czyzyk 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



	 	 	 	 
	 	Mercury Air Center-Long Beach, Inc.

 	 
	 	By:  	/s/ JOSEPH A. CZYZYK	 
	 	 	Typed Name: Joseph A. Czyzyk 	 
	 	 	Title:  	Chief Executive Officer