FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
SENIOR SUBORDINATED LOAN AGREEMENT
This First Amendment to Second Amended and Restated Senior
Subordinated Loan Agreement (the "Amendment") is entered into as of
August 8, 1997 between Precision Standard, Inc. (the "Company") and
Bank of America NT&SA (the "Bank"). This Amendment amends certain
provisions of that certain Second Amended and Restated Senior
Subordinated Loan Agreement dated as of December 31, 1996 (the
"Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the
Agreement.
In consideration of the mutual promises herein contained, the
parties hereto agree as follows:
1. Amendments. Subject to the fulfillment of the conditions set
forth in Section 3 below, the Agreement is hereby amended as
follows:
1.1 Section 1.1 is amended to add the following definitions:
""BNY Credit Agreement" means that certain Accounts
Receivable Management and Security Agreement dated of even
date herewith entered into among BNY Financial Corporation,
the Company and certain affiliates of the Company."
""BNY Termination Date" means the date any commitment to
extend credit pursuant to the BNY Credit Agreement, as it may
be amended from time to time, has, or has been, terminated,
and all indebtedness pursuant to the BNY Credit Agreement has
been paid in full."
""First Amendment Effective Date" means the date all
conditions described in Section 3 of the First Amendment
hereto have been satisfied."
""Installment Date" means each of five following dates:
(1) the earlier to occur of (i) the BNY Termination Date, or
(ii) August 31, 2000;
(2) the earlier to occur of (i) the date one month after the
BNY Termination Date, or (ii) September 30, 2000;
(3) the earlier to occur of (i) the date four months after
the BNY Termination Date, or (ii) December 31, 2000;
(4) the earlier to occur of (i) the date seven months after
the BNY Termination Date, or (ii) March 31, 2001; and
(5) the earlier to occur of (i) the date ten months after the
BNY Termination Date, or (ii) June 30, 2001."
1.2 Section 2.2 is amended to read in its entirety as
follows:
"2.2 Repayment. The balance of the Loan shall be repaid
(a) with a $500,000 principal installment paid on the first
Amendment Effective Date and, thereafter, (b) in five
additional installments, payable on each Installment Date,
each in the amount of 20% of the unpaid principal balance of
the Loan immediately after the First Amendment Effective Date.
Notwithstanding the foregoing, any remaining unpaid principal
amount of the indebtedness outstanding hereunder together with
any other obligations arising hereunder which have not
previously been paid shall be paid in full no later than the
Maturity Date."
1.3 Subsection 2.3(c) is amended to read in its entirety as
follows:
"(c) Any interest accrued hereunder after October 1,
1996 until and including July 31, 1997 shall be payable on the
last day of each calendar month beginning on October 31, 1996
and continuing until July 31, 1997. On the First Amendment
Effective Date the Company shall make a prepayment of interest
on the Loan in the amount of $281,388.41. Such prepaid
interest shall be applied to interest as interest accrues at
the rates provided in subsection (b) above on a monthly basis
provided, that there shall be no interest discount, reduction
or rebate as a result of the early payment. Interest accrued
hereunder shall recommence to be paid on the last day of each
calendar quarter beginning on the last day of the first
calendar quarter in which the prepayment is insufficient to
pay such interest in full. Any accrued interest remaining
unpaid on the date the Loan is repaid in full shall be due and
payable on such date."
1.4 Section 5.2 is amended to read in its entirety as
follows:
"5.2. Certificates; other Information. The Company
shall furnish to the Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a) above, a certificate
of the independent certified public accountants reporting on
such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of
any Default or Event or Default, except as specified in such
certificate;
(b) not later than forty-five (45) days after the end of
each fiscal quarter, a certificate of a Responsible Officer
(i) stating that, to the best of such officer's knowledge, the
Company, during such quarter, has observed or performed all of
its covenants and other agreements, and satisfied every
condition, contained in this Agreement to be observed,
performed or satisfied by it, and that such officer has
obtained no knowledge of any Default or Event of Default
except as specified in such certificate, and (ii) showing in
detail the calculations supporting compliance with the
financial covenants in the BNY Credit Agreement;
(c) as soon as available but in any event not later
than ten (10) days after the end of each month, a borrowing
base compliance certificate in the form of Exhibit C hereto;
(d) as soon as available but in any event not later than
thirty (30) days after the end of each fiscal year, annual
projections by quarter of the budgeted financial statements of
the Company and its Subsidiaries;
(e) as soon as available but in any event not later than
one hundred twenty (120) days after the end of each fiscal
year, copies of all management letters issued by the Company's
independent public accountants with respect to such year;
(f) promptly after the same are sent, copies of all
financial statements and reports which the Company sends to
its stockholders, and promptly after the same are filed,
copies of all financial statements and regular, periodical or
special reports which the Company may make to, or file with,
the Securities and Exchange Commission or any successor or
analogous Governmental Authority regulating securities;
(g) as soon as available, a copy of any offering
memorandum, term sheet, prospectus or similar document used,
or intended to be used, by the Company to arrange for debt or
equity financing of any kind; and
(h) promptly, such additional financial and other
information as the Lender may from time to time reasonably
request."
1.5 Sections 5.3, 5.4, 5.5, 5.6, 5.7 and 5.11 are hereby
deleted and the respective section numbers are reserved for
future use.
1.6 All of Article VI except for Section 6.9 is hereby
deleted. Section 6.9 is hereby renumbered as Section 6.1.
1.7 Subsection 7.1(b) is amended by changing the phrase "20
days" to "10 days".
1.8 Subsection 7.1(c) is amended to read in its entirety as
follows:
"(c) Any representation or warranty made by the Company
herein shall prove to have been incorrect in any material
respect when made; or"
1.9 Subsection 7.1(d) is amended to read in its entirety as
follows:
"(d) The Company shall fail to observe (i) Section 6.1
hereof, or after the BNY Termination Date, any provision of
Article VIII hereof, and such failure shall remain unremedied
for 10 days after written notice thereof shall have been given
to the Company by the Lender, or (ii) any other term, covenant
or agreement contained in this Agreement or any other Loan
Document on its part to be performed or observed, and such
failure shall remain unremedied for 30 days after written
notice thereof shall have been given to the Company by the
Lender; or"
1.10 Subsection 7.1(e) is amended to read in its entirety as
follows:
"(e) Any Event or Default (as such term is defined in the
BNY Credit Agreement, or any successor thereto) shall have
occurred and be continuing unwaived; or
1.11 Subsections (g), (h) and (i) of Section 7.1 are hereby
deleted. Subsection (j) of Section 7.1 is hereby re-lettered
as subsection (g).
1.12 Existing Article VIII of the Agreement is hereby
deleted. Article VIII shall instead read in its entirety as
follows:
"ARTICLE VIII
INCORPORATION BY REFERENCE
On the BNY Termination Date, Paragraphs 8 through 12 of
the BNY Credit Agreement and the related definitional
provisions set forth elsewhere in the BNY Credit Agreement
(all as in effect on the date of the First Amendment hereto)
shall be deemed incorporated herein as Article VIII of this
Agreement. Any reference to the "Borrowers" shall be deemed
a reference to the Company and the Subsidiaries."
2. Representations and Warranties. The Company hereby represents
and warrants to the Bank that, as of the First Amendment Effective
Date:
2.1 No Event of Default specified in the Agreement and no
event which with notice or lapse of time or both would become such
an Event of Default has occurred and is continuing other than as
has been specifically waived hereby;
2.2 The representations and warranties of the Company set
forth in the Agreement are true on and as of the date hereof as if
made on and as of said date;
2.3 The making and performance by the Company of this
Amendment and any documents delivered in connection herewith have
been duly authorized by all corporate action; and
2.4 No consent, approval, authorization, permit or license
from any federal or state regulatory authority is required in
connection with the making or performance of this Amendment or the
Agreement as amended hereby.
3. Conditions Precedent. This Amendment shall become effective
upon the Bank's receipt of:
3.1 payment in full, in immediately available funds, of the
entire unpaid principal amount remaining outstanding pursuant to
the Senior Agreement, together with all interest thereon accrued to
the date of repayment, and any other obligations remaining unpaid
pursuant to the Senior Agreement;
3.2 (a) a $500,000 principal payment on the Loan, (b) payment
of all interest accrued on the Loan through July 31, 1997, and (c)
a prepayment of interest which may accrue on the Loan after July
31, 1997 in the amount of $281,388.41, all in immediately available
funds;
3.3 appropriate board resolutions with respect to the
execution and delivery of this Amendment and any documents
delivered in connection herewith, together with certificates of
incumbency for the officers executing such documents;
3.4 a copy of the fully executed BNY Credit Agreement (faxed
copy acceptable, with a hard copy to follow); and
3.5 an Agreement and Acknowledgement in the form of Exhibit
A hereto, executed and delivered by each Subsidiary, and an
Agreement and Acknowledgement in the form of Exhibit B hereto
executed and delivered by Xxxxxxx Xxxx.
4. Miscellaneous.
4.1 Interest is accruing at the post-default rate provided in
Section 2.3(b) of the Agreement. Nothing herein which waives,
cures or resolves existing defaults shall affect the rate at which
such interest accrued prior to the First Amendment Effective Date,
and any such waiver, cure or resolution shall not be deemed to be
retroactive.
4.2 This Amendment may be signed in any number of
counterparts, each of which shall be an original, with same effect
as if the signatures thereto and hereto were upon the same
instrument.
4.3 Except as herein specifically amended, all terms,
covenants and provisions of the Agreement shall remain in full
force and effect and shall be performed by the parties thereto, and
all references therein or in the Exhibits to the Agreement shall
henceforth refer to the Agreement as amended by this Amendment.
4.4 The amendments contained herein shall be effective only
to the extent specifically set forth herein and shall not be
construed as waivers of or consents to any other breach or default
or of any other provision of the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first written above.
PRECISION STANDARD, INC.
By: ______________________________
Title:____________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:_______________________________
Title:____________________________
Exhibit A
Agreement and Acknowledgement
We acknowledge and consent to the First Amendment to Second
Amended and Restated Senior Subordinated Loan Agreement dated as of
___________________, 1997 (the "Loan Agreement") and agree that our
respective guaranties of the indebtedness of Precision Standard,
Inc. pursuant to the Loan Agreement (and all collateral documents
executed in connection therewith) shall remain in full force and
effect.
PEMCO AEROPLEX, INC.
(formerly known as Xxxxx International Corporation)
By: __________________________
Title:________________________
XXXXX HOLDINGS I INC.
By: __________________________
Title:________________________
XXXXX HOLDINGS II INC.
By: __________________________
Title:________________________
SPACE VECTOR CORPORATION
By: __________________________
Title: _______________________
AIR INTERNATIONAL CORPORATION
By: __________________________
Title: _______________________
Exhibit B
Agreement and Acknowledgement
The undersigned acknowledges and consents to the First
Amendment to Second Amended and Restated Senior Subordinated Loan
Agreement dated as of ________________, 1997 (the "Loan Agreement")
and agrees that his Guaranty Agreement dated as of December 31,
1996 with respect to the indebtedness of Precision Standard,
Inc. pursuant to the Loan Agreement shall remain in full force and
effect.
_________________________
Xxxxxxx X. Gold
EXHIBIT C
BORROWING BASE CERTIFICATE
Precision Standard, Inc.
Eligible Inventory: ___________________
X Inventory Advance Rate: x__________________
________________________
= (a) Inventory Availability (or =__________________
any maximum inventory cap)
Eligible Receivables ___________________
X Receivables Advance Rate
x__________________
__________________________
= (b) Receivables Available =__________________
Lower of (i) Total Availability ___________________
(a+b) or (ii) Maximum Loan Amount
Current Outstanding Loans
as of (date) ___________________
