EXHIBIT 10.25
SECOND AMENDMENT, effective as of December 31, 1998 (entered
into on April 15, 1999) (this "Amendment"), to the Credit Agreement, dated as of
October 9, 1997 (as amended by the First Amendment, dated as of February 12,
1999, this Amendment, and as the same may be further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among CPI
AEROSTRUCTURES, INC., a New York corporation ("Holdings"), XXXXX, INC., a
Delaware corporation (the "Borrower"), the several banks and other financial
institutions from time to time parties thereto (collectively, the "Lenders"),
and THE CHASE MANHATTAN BANK, a New York banking corporation, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Lenders and the Administrative Agent
are parties to the Credit Agreement; and
WHEREAS, Holdings and the Borrower have requested that the Lenders amend
certain terms in the Credit Agreement and in the manner provided for herein; and
WHEREAS, the Administrative Agent and the Lenders are willing to agree to
the requested amendments;
NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein (and in the recitals hereto) as
defined terms are so used as so defined.
2. Amendment of Subsection 6.1(a). Subsection 6.1(a) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio at any time during any period set forth below to exceed
the ratio set forth below opposite such period:
Consolidated
Period Leverage Ratio
------ --------------
12/31/98 - 3/30/99 18.60:1.00
3/31/99 - 6/29/99 18.60:1.00
6/30/99 - 9/29/99 18.60:1.00
9/30/99 - 12/30/99 9.00:1.00
12/31/99 - 3/30/00 5.50:1.00
3/31/00 - 6/29/00 4.60:1.00
6/30/00 - 9/29/00 3.65:1.00
9/30/00 - 12/30/00 2.75:1.00
12/31/00 - 12/30/01 1.85:1.00
12/31/01 and thereafter 0.75:1.00
3. Amendment to Subsection 6.1(b). Subsection 6.1(b) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
(b) Liquidity Ratio. Permit the Liquidity Ratio at any time
during any period set forth below to be less than the ratio set forth
below opposite such period:
Period Liquidity Ratio
------------------- ---------------
12/31/98 - 12/30/99 1.00:1.00
12/31/99 - 12/30/00 1.60:1.00
12/31/00 and thereafter 1.50:1.00
4. Amendment to Subsection 6.1(c). Subsection 6.1(c) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
(c) Consolidated Tangible Net Worth. Permit Consolidated
Tangible Net Worth as at any time during any period set forth below to
be less than the amount set forth below opposite such period:
Consolidated
Period Tangible Net Worth
------------------- ------------------
12/31/98 - 12/30/99 -$3,370,000
12/31/99 - 12/30/00 -$2,300,000
12/31/00 - 12/30/01 $500,000
12/31/01 and thereafter $4,000,000
5. Amendment to Subsection 6.1(d). Subsection 6.1(d) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
(d) Consolidated Debt Service Ratio. Permit the Consolidated
Debt Service Ratio for any period of four consecutive fiscal quarters
of Holdings ending during any period set forth below to be less than
the ratio set forth below opposite such period:
Consolidated Debt
Period Service Ratio
------------------- ------------------
12/31/98 - 12/30-99 1.00:1:00
12/31/99 - 12/30/00 1.00:1.00
12/31/00 - 12/30/01 1.15:1.00
12/31/01 and thereafter 1.25:1:00
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6. Amendment to Subsection 6.1(e). Subsection 6.1(e) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
(e) Consolidated Senior Funded Indebtedness Ratio. Permit the
ratio of Consolidated Senior Funded Indebtedness to Consolidated Cash
Flow as at the last day of any period of four consecutive fiscal
quarters of Holdings ending during any period with any fiscal quarter
set forth below to exceed the ratio set forth below opposite such
period:
Consolidated
Period Senior Funded Indebtedness Ratio
------ --------------------------------
12/31/98 - 3/30/99 2.21:1.00
3/31/99 - 6/29/99 2.21:1.00
6/30/99 - 9/29/99 2.21:1.00
9/30/99 - 12/30/99 2.17:1.00
12/31/99 - 3/30/00 2.15:1.00
3/31/00 - 6/29/00 1.90:1.00
6/30/00 - 9/29/00 1.60:1.00
9/30/00 - 12/30/00 1.30:1.00
12/31/00 - 12/30/01 1.00:1.00
12/31/01 and thereafter 0.75:1.00
7. Amendment to Subsection 5.1(a). Subsection 5.1(a) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
5.1 Financial Statements. Furnish to the Administrative
Agent and each Lender:
(a) (i) as soon as available, but in any event within 90 days
after the end of each fiscal year of Holdings, a copy of the audited
consolidated and consolidating balance sheet of Holdings and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated and consolidating statements of income and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the
scope of the audit, by Goldstein, Golub, Xxxxxxx & Company, P.C. or
other independent certified public accountants of nationally recognized
standing and (ii) a copy of any management letter prepared by Holdings'
or the Borrower's accountants; provided that, in the case of such
financial statements for the fiscal year ended December 31, 1998, such
financial statements shall be delivered on or before April 30, 1999;
and
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8. Representations and Warranties. On and as of the date hereof, Holdings
and the Borrower hereby jointly and severally confirm, reaffirm and restate the
representations and warranties set forth in Section 3 of the Credit Agreement
mutatis mutandis. To the extent that any of the representations and warranties
set forth in Section 3 of the Credit Agreement expressly relate to a specific
earlier date, Holdings and the Borrower jointly and severally hereby confirm,
reaffirm and restate such representations and warranties as of such earlier
date.
9. Effectiveness. Upon receipt by the Administrative Agent of
counterparts of this Amendment duly executed by Holdings, the Borrower and all
the Lenders, this Amendment shall be effective as of December 31, 1998.
10. Continuing Effect; No Other Amendments, Waivers or Consents. Except
as expressly provided herein, all of the terms and provisions of the Credit
Agreement are and shall remain in full force and effect. The amendments provided
for herein are limited to the specific subsections of the Credit Agreement
specified herein and shall not constitute a consent, waiver or amendment of, or
an indication of the Administrative Agent's or the Lenders' willingness to
consent to any action requiring consent under any other provisions of the Credit
Agreement or the same subsection for any other date or time period.
11. Expenses. Holdings and the Borrower agree to pay and reimburse the
Administrative Agent for all its reasonable costs and out-of-pocket expenses
incurred in connection with the preparation and delivery of this Amendment,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
12. Counterparts. This Amendment may be executed in any number of
counterparts by the parties hereto (including by facsimile transmission), each
of which counterparts when so executed shall be an original, but all the
counterparts shall together constitute one and the same instrument.
13. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered
CPI AEROSTRUCTURES, INC.
/s/ Xxxxxx August
By: ---------------------------
Name: Arthur Agust
Title:President
XXXXX, INC.
/s/ Xxxxxx August
By: ---------------------------
Name: Arthur Agust
Title:Chairman of the Board
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
/s/ Xxxxxx X. Xxxxx
By: ------------------------------
Name: Xxxxxx X. Xxxxx
Title:Vice President
MELLON BANK, N.A.,
as a Lender
/s/ Xxxxxxxxx X. Xxxxxxx
By: -------------------------------
Name:Xxxxxxxxx X. Xxxxxxx
Title:First Vice President
Mellon Financial Services Corporation,
Attorney in Fact for Mellon Bank, N.A.
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