THIRD AMENDMENT TO
COMMERCIAL REVOLVING LOAN AND SECURITY AGREEMENT
AND COMMERCIAL REVOLVING PROMISSORY NOTE
BETWEEN
▇▇▇▇▇▇ UNITED BANK
AND
AEROSPACE PRODUCTS INTERNATIONAL, INC
Dated as of June__, 2001
This Third Amendment to Commercial Revolving Loan Agreement and Commercial
Revolving Promissory Note ("Agreement") dated as of June___, 2001 between
AEROSPACE PRODUCTS INTERNATIONAL, INC., a Delaware corporation with an office at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ("Borrower") and ▇▇▇▇▇▇ UNITED
BANK, a state banking corporation with an office located at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Bank").
Recitals
A. The Borrower and Bank entered into a Commercial Revolving Loan
Agreement dated as of March 30, 2000, as amended by First Amendment to
Commercial Revolving Loan Agreement dated August 30, 2000 and Second Amendment
to Commercial Revolving Loan Agreement dated as of April 27, 2001 (collectively,
the "Loan Agreement") which Loan Agreement provide, inter alia for Revolving
Loans from the Bank to the Borrower at any time until the Commitment Termination
Date, in the principal amount which would not exceed in the aggregate at any one
time the Borrowing Base.
B. The Revolving Loans are evidenced by the Commercial Revolving
Promissory Note dated as of March 30, 2000, as amended (the "Note").
C. The Borrower has requested that the Bank extend the Maturity Date of
the Loan Agreement and the Note and to modify certain financial covenants set
forth in the Agreement.
D. The Bank agrees, subject to the terms and conditions contained in
this Agreement, to the Borrower's request.
Agreement
In consideration of the Recitals, which are incorporated by reference
and the mutual covenants contained in this Agreement, the Borrower and the Bank,
for good and valid consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be bound legally, agree as follows:
1. Definitions. Except as modified herein, all capitalized terms
herein, or in any certificate, document or report delivered pursuant to this
Agreement, shall have the meaning set forth in the Loan Agreement.
2. The term "EBITDA" as defined in Schedule 1.1 of the Loan
Agreement is hereby redefined as follows:
"EBITDA" means, for any fiscal period (i) the Net Income for such
period, (ii) plus depreciation and amortization , (iii) plus, (to
the extent deducted from earnings in determining Net Income) or
minus (to the extent added to earnings in
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determining Net Income) the sum, in each case for such period, of
income taxes and Net Interest Expense all as determined in
accordance with GAAP."
3. The definition of "Maturity Date(s)" set forth in Schedule 1.1 of
the Loan Agreement is hereby amended as follows:
"Maturity Date(s) shall mean July 1, 2003."
4. Section 6 of the Note is hereby amended and restated as follows:
"6. All outstanding principal hereunder, together with all
accrued and unpaid interest, late charges, cost and expenses shall be due and
payable in full on July 1, 2003 (the "Maturity Date")."
5. Section 6.05(a) of the Loan Agreement is hereby amended and
restated as follows:
"(a) Within twenty-five (25) days after the close of each
calendar month, monthly financial statements prepared by the Chief Financial
Officer of the Borrower, which statements shall include, without limitation, the
amount of all Indebtedness (including principal and interest) of the Borrower to
the Guarantor which Indebtedness constitutes "Junior Debt" as defined in the
Subordination Agreement between Borrower, Guarantor and Bank dated as of March
30, 2000."
6. Sections 7.01, 7.02 and 7.04 of the Loan Agreement are hereby
amended and restated as follows:
"7.01. Tangible Net Worth. Permit the Borrower's Tangible Net
Worth as reflected on the monthly financial statements delivered pursuant to
Section 6.05(a) hereof to be less than $10,000,000."
"7.02. Capital Expenditures. For the fiscal year(s) ending
January 31, 2002 and January 31, 2003 make any capital expenditures or fixed
asset acquisitions in an aggregate amount exceeding $5,000,000.00."
"7.04. Interest Coverage Ratio. Permit the Interest Coverage
Ratio of the Borrower to be less than the ratios set forth below:
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Period Ratio
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For the second quarter ending July 31, 2001 1.50:1
For the third quarter ending October 31, 2001 1.50:1
For the fourth quarter ending January 31, 2002 1.75:1
For the year ending January 31, 2002 1.60:1
For the first quarter ending April 30, 2002 1.40:1
For the second quarter ending July 31, 2002 1.50:1
For the third quarter ending October 31, 2002 1.50:1
For the fourth quarter ending January 31, 2003 1.75:1
For the year ending January 31, 2003 1.60:1
For the first quarter ending April 30, 2003 1.50:1
7. Documents. Concurrently with the Borrower's execution and
delivery of this Amendment, the Guarantor shall deliver to the Lender the
executed Third Reaffirmation of Guaranty dated as of the date hereof and such
other documents and assurances as the Bank and its counsel may reasonably
request from the Borrower, the Guarantor or its counsel.
8. Costs, Expenses and Taxes. The Borrower agree to pay on demand
all costs and expenses in connection with the preparation, execution, delivery,
filing, recording, and administration of this Agreement, and the other documents
to be delivered pursuant to this Agreement, including, without limitation, legal
fees, the cost of any appraisals of the Collateral and all costs and expenses,
if any, in connection with the enforcement of this Agreement and the other
documents to be delivered under this Agreement. Notwithstanding the foregoing,
all such costs, expenses and fees shall be reasonable.
9. Binding Effect; Governing Law and Jurisdiction. This Agreement
shall become effective when it shall have been executed by the Borrower and the
Bank and shall be binding upon and inure to the benefit of the Borrower, the
Bank and their respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Bank. This Agreement is, and shall be deemed to
be, a contract entered into under and pursuant to the laws of the State of
Connecticut and shall be in all respects governed, construed, applied and
enforced in accordance with the laws of said State; and no defense given or
allowed by the laws of any other State or Country shall be interposed in any
action or proceeding hereon unless such defense is also given or allowed by the
laws of the State of Connecticut. The undersigned irrevocably appoints ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and each and every officer of the undersigned as its attorneys upon
whom may be served any notice, process or pleading in any action or proceeding
against it arising out of or in connection with this Agreement or any other Loan
Document. The undersigned hereby consents that any action or proceeding against
it may be commenced and maintained in any court within
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the State of Connecticut or in the United States District Court for the District
of Connecticut or, at the option of Bank, any court in which Bank shall initiate
legal or equitable proceedings and which has subject matter jurisdiction over
the matter in controversy, and that such action or proceeding may be commenced
by service of process on any such officer. The undersigned agrees that the
courts of the State of Connecticut and the United States District Court for the
District of Connecticut shall have jurisdiction with respect to the subject
matter hereof and the person of the undersigned. The undersigned agrees not to
assert any defense to any proceeding initiated by Bank based upon improper venue
or inconvenient forum.
10. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
11. Headings. Section headings used herein are for convenience of
reference only and are not to affect the construction of, or be taken into
consideration in, interpreting this Agreement.
12. Entire Agreement. This Agreement, the Note and the other Loan
Documents together with all exhibits and schedules attached hereto and thereto
embody the entire agreement and understanding between the Borrower and the Bank
and supersede all prior agreements and understandings relating to the subject
matter hereof unless otherwise specifically reaffirmed or restated herein.
13. Reaffirmation. All other terms and conditions of the Loan
Agreement and Loan Documents executed in connection with the Loan Agreement
unless otherwise modified herein, are hereby ratified and confirmed in all
respects.
14. THE BORROWER ACKNOWLEDGES THAT THE LOANS EVIDENCED HEREBY ARE A
COMMERCIAL TRANSACTION AND WAIVES ITS RIGHT TO NOTICE AND HEARING UNDER CHAPTER
903a OF THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE
OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE BANK MAY DESIRE
TO USE, AND FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF
NONPAYMENT, PROTEST AND NOTICE OF ANY RENEWALS OR EXTENSIONS. THE BORROWER ALSO
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND
WITHOUT DURESS,
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AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH
ITS ATTORNEYS.
15. THE BORROWER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT,
ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY
RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR THE
ENFORCEMENT OF ANY OF THE BANK'S RIGHTS. THE BORROWER ACKNOWLEDGES THAT IT MAKES
THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY
AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS
ATTORNEYS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
AEROSPACE PRODUCTS
INTERNATIONAL, INC.
By________________________
Its Vice President
▇▇▇▇▇▇ UNITED BANK
By________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Vice President
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