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EXHIBIT 10(ee)
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT ("FIRST AMENDMENT")
is made effective as of July 15, 2000, by and among Airport Systems
International, Inc. ("ASI") and DCI, Inc. ("DCI") (ASI and DCI collectively,
jointly and severally, the "BORROWER"), and Bank of America, N.A. ("LENDER").
PRELIMINARY STATEMENTS
(A) Effective February 7, 2000, Borrower and Lender entered into a Loan
and Security Agreement and other Loan Documents (as therein defined) ("LOAN
AGREEMENT");
(B) The Loan Documents provided, among other things, that Lender would
lend Borrower $8,000,000 on a revolving basis, $1,178,000 on a term loan basis,
and $2,599,572.60 on direct pay letter of credit facility;
(C) Borrower is currently not in compliance with certain terms,
conditions and covenants of the Loan Agreement, and requests that Lender modify
certain terms, conditions and covenants of the Loan Agreement as provided
herein.
NOW, THEREFORE, in consideration of the premises and upon application
of Borrower, it is agreed by and among Lender and Borrower as follows:
AGREEMENT
1. The preliminary statements set forth above are accurate, represent
the intent of the parties hereto and are incorporated herein by reference.
Unless otherwise defined in this First Amendment, capitalized terms used herein
will have the same meaning in this First Amendment as set forth in the Loan
Agreement.
2. Except as expressly provided herein, nothing in this agreement shall
be construed as a waiver on the part of Lender as to any rights, remedy or
remedies it may enjoy under the Loan Agreement with respect to any existing
circumstances, facts or events constituting an Event of Default under the Loan
Agreement.
3. In addition to those amounts due Lender pursuant to Section 9
herein, Borrower shall pay to Lender the amount of Forty Thousand Dollars and
No/100 ($40,000.00) as a "Restructure Fee". The Restructure Fee shall be deemed
earned as of the effective date hereof, and shall be due and payable in full not
later than the effective date hereof. The payment of the Restructure Fee shall
not reduce any of the Borrower's obligations under the Loan Agreement.
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4. [Intentionally Omitted].
5. Lender and Borrower hereby agree that the Loan Agreement is amended
and modified as follows:
5.1 Section 3.1(a) is deleted in its entirety and the following is
substituted therefor:
"(a) (i) Revolving Credit Loans. The Borrower will pay interest
on the unpaid principal amount of each Revolving Credit Loan for
each day from the day such Loan was made until such Loan is paid
(whether at maturity, by reason of acceleration or otherwise),
at a rate per annum equal to the Prime Rate PLUS two percent
(2.0%), payable monthly in arrears on each Interest Payment Date
and on the Termination Date.
(ii) Term Loans. The Borrower will pay interest on each Term
Loan at a rate per annum equal to the Prime Rate PLUS two
percent (2.0%) payable in arrears on each Interest Payment Date
and when such Term Loans are due (whether at maturity, by reason
of acceleration or otherwise)."
5.2 Section 3.2(e) is deleted in its entirety and the following is
substituted therefor:
"(e) Letter of Credit Fees.
(1) With respect to all Letters of Credit except the Bond
Letter of Credit, Borrower will pay to Lender, upon issuance of
such Letter of Credit, a Letter of Credit Fee equal to the
maximum face duration of the Letter of Credit in years
(provided, however, that the minimum deemed face duration of any
Letter of Credit shall be 1/12th of one year) MULTIPLIED BY one
and three-quarter percent (1.75%) of the maximum obligation of
the Lender under the Letter of Credit;
(2) With respect to the Bond Letter of Credit, Borrower
will pay to Lender, upon issuance of the Bond Letter of Credit
and annually upon each anniversary of the issuance of the Bond
Letter of Credit (prorated in the event the Bond Letter of
Credit is to expire prior to the next such anniversary), a
Letter of Credit fee equal to one and three-quarter percent
(1.75%) of the maximum obligation of the Lender under the Bond
Letter of Credit;"
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5.3 Section 10.1 is deleted in its entirety and the following is
substituted therefor:
"Section 10.1 Financial Ratios.
(a) Minimum Tangible Net Worth. Permit the Tangible Net
Worth of the Borrower measured on a quarterly basis, at
any time to be less than:
(1) $5,900,000 from April 30, 2000 through July 30,
2000
(2) $5,800,000 from July 31, 2000 through October 30,
2000
(3) $6,500,000 from October 31, 2000 through January
30, 2001
(4) $7,000,000 from January 31, 2001 through April 29,
2001
(5) $8,000,000 from and after April 30, 2001.
(b) Minimum Current Ratio. Permit the Current Ratio at any
time to be less than 1.5 to 1.0, measured on a
quarterly basis beginning April 30, 2000. Lender agrees
that, notwithstanding an accounting ruling by Ernst &
Young to the contrary, for purposes of calculating the
Current Ratio, DCI's bond reserve account (UMB Acct.
#______________) shall be considered a current Asset.
The foregoing provision is limited to the treatment of
the above-described account for purposes of the
calculation of the Current Ratio only. Except as
otherwise expressly provided, all accounting matters
are determined in accordance with GAAP.
(c) [Intentionally omitted].
(d) Maximum Liabilities Ratio. Permit the Liabilities Ratio
of the Borrower measured on a quarterly basis at any
time to exceed:
(1) 2.75 to 1 from April 30, 2000 through July 30,
2000
(2) 2.75 to 1 from July 31, 2000 through October 30,
2000
(3) 2.50 to 1 from October 31, 2000 through January
30, 2001
(4) 2.25 to 1 from January 31, 2001 through April 29,
2001
(5) 2.00 to 1 from and after April 30, 2001.
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(e) Minimum Debt Service Coverage Ratio. Permit the Debt
Service Coverage Ratio of the Borrower to be less than
1.20:1 on October 31, 2000, or less than 1.25:1 at any
time thereafter, such Debt Service Coverage Ratio to
measured on a quarterly basis."
6. Filing of Mortgage. Notwithstanding any provision in the Loan
agreement or any other Loan Document to the contrary, Borrower acknowledges and
consents to the Lender's recordation of its $800,000 second mortgage in favor of
Lender on Borrower's Overland Park, Kansas property. Without limiting the
generality of paragraph 9 below, Borrower further consents and agrees to pay all
costs of review, preparation and recording of such mortgage, including without
limitation all legal fees, costs and expenses in connection therewith.
7. Payments on Subordinated Indebtedness. Notwithstanding any provision
in the Loan Documents to the contrary, including without limitation, the
provisions of Section 10.6 of the Loan Agreement, from and after July 15, 2000,
Borrower will not make any payments of principal, interest or fees with respect
to any Subordinated Indebtedness, regardless of whether or not such Subordinated
Indebtedness is subject to a Subordination Agreement.
8. Limited Waiver of Defaults. Upon Lender's execution of this First
Amendment and Borrower's payment in full of all fees, costs and expenses
hereunder required to be paid by Borrower including without limitation the
Restructure Fee, Lender will waive Defaults existing on the effective date
hereof arising in connection with paragraph 10.1 of the Loan agreement. Nothing
contained in this First Amendment shall constitute or be construed as a waiver
of any Default or Event of Default except as expressly provided in this
Paragraph 8.
9. Modification Expenses. Borrower will pay to Lender promptly as they
come due, any and all costs and expenses incurred by Lender in connection with
the negotiation, preparation and documentation of this First Amendment,
including without limitation, all recording fees, mortgage registration tax and
all reasonable attorneys' fees and costs.
10. Cross Default and Cross Collateralization. A default in the payment
or performance of Borrower's obligations under this First Amendment will
constitute an Event of Default under the Loan Agreement and in such event Lender
will be entitled to exercise any and all remedies available thereunder. Lender
and Borrower further agree that the Security Documents securing the Loan
Agreement are hereby modified so that the Security Documents will continue to
secure the Loan Agreement as amended by this First Amendment.
11. Ratification. The parties hereto ratify and reaffirm that all
terms, conditions and provisions of the Loan Agreement remain in full force and
effect except to the extent expressly modified by the terms of this First
Amendment and the terms and conditions of this First Amendment are hereby
incorporated in, and will hereafter be deemed a part of, the Loan Documents for
all purposes.
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12. Releases. As a material part of the consideration for Lender
entering into this First Amendment and in order to induce Lender to modify the
Loan Agreement and to extend credit to Borrower, Borrower hereby jointly and
severally releases and forever discharges Lender's directors, officers,
employees, agents, attorneys, affiliates, subsidiaries, successors and assigns
from any and all liabilities, obligations, actions, contracts, claims, causes of
action, damages, demands, costs and expenses whatsoever (collectively "CLAIMS"),
of every kind and nature, however evidenced or created, whether known or
unknown, arising prior to or on the date of this First Amendment including, but
not limited to, any Claims involving the extension of credit under or
administration of the Loan Agreement, the indebtedness incurred by the Borrower
or any other transactions evidenced by the Loan Agreement and/or this First
Amendment.
13. Renewal. To the extent that any payment or payments made to Lender
under this First Amendment or the Loan Agreement are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, to either Borrower, whether directly or indirectly as a
debtor-in-possession, or to a receiver or any other party under any bankruptcy
law, or other state or federal law, then the portion of the indebtedness of the
Borrower intended to have been satisfied by such payment or payments will be
revived and will continue in full force and effect as if such payment or
payments had never been received by Lender.
14. Representations and Warranties. ASI and DCI jointly and severally
represent and warrant to Lender as follows:
(A) All of the representations and warranties of Borrower in the
Loan Agreement are true and correct as of the date hereof.
(B) Except as expressly described herein, no Event of Default has
occurred with respect to the Loan Agreement or Security Documents.
(C) No Event of Default has occurred or will occur as a result of
the execution, delivery, and performance of this First Amendment.
(D) This First Amendment has been duly authorized, executed and
delivered and is a legally valid, binding, joint and several obligation
of ASI and DCI and is enforceable against each of them in accordance
with its terms.
15. Miscellaneous.
(A) Borrower hereby agrees and acknowledges that Lender may endorse
and deposit any check or other instrument tendered in connection with a
partial payment without thereby giving effect to or being bound by any
language purporting to make acceptance of such instrument an accord and
satisfaction of the Secured Obligations evidenced by this First
Amendment or the Loan Agreement.
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(B) In the event of a conflict between or among the terms,
covenants, conditions or provisions of this First Amendment, Loan
Agreement or any other Loan Documents, Lender may elect to enforce from
time to time those provisions that would afford Lender the maximum
financial benefits and security for the Secured Obligations and/or
provide Lender the maximum assurance of payment of the Secured
Obligations in full.
(C) No inference in favor of, or against, any party will be drawn
from the fact that such party has drafted any portion of the Loan
Agreement.
(D) Borrower hereby agrees that it will immediately pay Lender all
costs, expenses or attorneys' fees Lender incurs in the preparation,
negotiation, execution and enforcement of this First Amendment.
(E) This First Amendment may be executed in any number of
counterparts, each of which will be deemed to be an original but all of
which taken together will constitute one and the same agreement.
(F) This First Amendment will be governed by and construed under
the laws of the State of Missouri.
(G) This First Amendment will be binding upon and will inure to the
benefit of the parties hereto and to their respective successors and
assigns.
16. WAIVER OF JURY TRIAL. LENDER AND BORROWER WAIVE THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT
MATTER OF THIS FIRST AMENDMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY MADE BY BORROWER AND BORROWER ACKNOWLEDGES THAT NEITHER LENDER NOR
ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS OF FACT TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS
EFFECT. BORROWER FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD
THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS FIRST AMENDMENT AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE
WILL, AND IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
BORROWER FURTHER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING AND
RAMIFICATIONS OF THIS WAIVER PROVISION.
[remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, Borrower and Lender have caused this First
Amendment to be executed by an officer duly authorized to so execute and bind
Borrower and Lender, respectively, effective as of the day and year first
written above.
"BORROWER"
AIRPORT SYSTEMS INTERNATIONAL, INC., a Kansas corporation
By: /s/
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Printed Name: Xxxxxx X. Xxxxxx
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Its: Vice President-Finance
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DCI, INC., a Kansas corporation
By: /s/
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Printed Name: Xxxxxx X. Xxxxxx
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Its: Vice President-Finance
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ACCEPTED effective the 15th day of July, 2000, at Lender's place of
business in the City of Kansas City State of Missouri.
"LENDER"
BANK OF AMERICA, N.A.,
a national banking association
By: /s/ Xxxxxxx X. Xxxxxx Xx.
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Printed Name: Xxxxxxx X. Xxxxxx Xx.
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Its: Vice President
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