EXHIBIT 10.6.3.3
For Bank Use Only Reviewed by____________
Due DECEMBER 15, 2004
Customer #1105510939 Loan # 83/125
AMENDMENT TO LOAN AGREEMENT AND NOTE
This amendment the "Amendment", dated as of the date specified below,
is by and between the borrower (the "Borrower") and the bank (the "Bank")
identified below.
RECITALS
A. The Borrower and the Bank have executed a Loan Agreement (the
"Agreement") dated MARCH 23, 2000 and the Borrower has executed a Note (the "
Note "), dated FEBRUARY 15, 2001, either or both which may have been amended and
replaced from time to time, and the Borrower (and if applicable, certain third
parties) have executed the collateral documents which may or may not be
identified in the Agreement and certain other related documents (collectively
the "Loan Documents"), setting forth the terms and conditions upon which the
Borrower may obtain loans from the Bank from time to time in the original amount
of $5,500,000.00, as may be amended from time to time.
B. The Borrower has requested that the Bank permit certain
modifications to the Agreement and Note as described below.
C. The Bank has agreed to such modifications, but only upon the terms
and conditions outlined in this Amendment.
TERMS OF AGREEMENT
In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the Borrower and the Bank agree as
follows:
[X] Extension of Maturity Date. If checked here, any references in the
Agreement or Note to the maturity date or date of final payment are hereby
deleted and replaced with DECEMBER 15, 2004.
__ Change in Maximum Loan Amount. If checked here, all references in
the Agreement and in the Note (whether or not numerically) as the maximum loan
amount are hereby deleted and replaced with "$______", which evidences an
additional $______ available to be advanced subject to the terms and conditions
of the Agreement and Note.
__ Temporary Increase in Maximum Loan Amount. If checked here,
notwithstanding the maximum principal amount that may be borrowed from time to
time under the Agreement and Note, the maximum principal amount that may be
borrowed thereunder shall increase from $_______________ to $_________ effective
___________ through __________ annually. On ___ through _______annually, the
maximum principal amount that may be borrowed thereunder shall revert to $____
and any loans outstanding in excess of that amount will be immediately due and
payable without further demand by the Bank.
__ Change in Multiple Advance Termination Date. If checked here, all
references in the Agreement and in the Note to the termination date for multiple
advances are hereby deleted and replaced with " N/A ".
Change in Financial Covenant(s).
(i) __ If checked here, all references to "$____________" in the
Agreement as the minimum Net Working Capital amount are hereby deleted
and replaced with "$______________" for the period beginning
_________and thereafter.
(ii) ___ If checked here, all references to "$___________" in the
Agreement as the minimum Tangible Net Worth amount are hereby deleted
and replaced with "$__________"for the period beginning __________ and
thereafter.
(iii) ___ If checked here, all references to "___________" in the
Agreement as the maximum Debt to Worth Ratio are hereby deleted and
replaced with "____________" for the period beginning ____________and
thereafter.
(iv) ___ If checked here, all references to "_________" in the
Agreement as the minimum Current Ratio are hereby deleted and replaced
with "____________" for the period beginning _____________and
thereafter.
(v) ___ If checked here, all references to "$_____________" in the
Agreement as the maximum Capital Expenditures amount are hereby deleted
and replaced with "$__________" for the period beginning _____________
and thereafter.
(vi) ___ If checked here, all references to "_______" in the Agreement
as the minimum Cash Flow Coverage Ratio are hereby deleted and replaced
with "______________" for the period beginning ___________ and
thereafter.
(vii) ___ If checked here, all references to "$____________" in
Agreement as the maximum Officers, Directors, Partners, and Management
Salaries and Other Compensation amount are hereby deleted and replaced
with "$__________" for the period beginning _______________ and
thereafter.
_X_ Change in Payment Schedule. If checked here, effective upon the
date of this Amendment, any payment terms are amended as follows:
Interest is payable beginning JANUARY 1, 2004, and on the same date of each
consecutive month thereafter (except that if a given month does not have such a
date, the last day of such month), plus a final interest payment with the final
payment of principal.
Principal is payable on DECEMBER 15, 2004.
___ Change in Late Payment Fee. If checked here, subject to applicable
law, if any payment is not made on or before its due date, the Bank may collect
a delinquency charge of____% of the unpaid amount. Collection of the late
payment fee shall not be deemed to be a waiver of the Bank's right to declare a
default hereunder.
__X_ Change in Closing Fee. If checked here and subject to applicable
law, the Borrower will pay the Bank a closing fee of $6,250.00 (apart from any
prior closing fee) contemporaneously with the execution of this Amendment. This
fee is in addition to all other fees, expenses and other amounts due hereunder.
___ Change in Borrowing Base. If checked here, the Borrowing Base is
hereby changed to an amount equal to the sum of (i) ____% of the face amount of
Eligible Accounts, and (ii) the lesser of $ ____ or _____% of the Borrower's
cost of Eligible Inventory, as such cost may be diminished as a result of any
event causing loss or depreciation in value of Eligible Inventory less (iii) the
current outstanding loan balance on note(s) in the original amount(s) of $_____,
and less (iv) undrawn amounts of outstanding letters of credit issued by Bank or
any affiliate thereof. The Borrower will provide the Bank with information
regarding the Borrowing Base in such form and at such times as the Bank may
request. The terms used in this section will have the meanings set forth in a
supplement entitled "Financial Definitions", a copy of which the Borrower
acknowledges having received with this Amendment, which is incorporated herein
by reference and which replaces any prior Financial Definitions supplement.
___ Change in Paid-In-Full Period. If checked here, all revolving loans
under the Agreement and the Note must be paid in full for a period of at lest
____ consecutive days during each fiscal year. Any previous Paid-In-Full
provision is hereby replaced with this provision.
Default Interest Rate. Notwithstanding any provision of this Note to
the contrary, upon any default or at any time during the continuation thereof
(including failure to pay upon maturity), the Bank may, at its option and
subject to applicable law, increase the interest rate on this Note to a rate of
5% per annum plus the interest rate otherwise payable hereunder. Notwithstanding
the foregoing and subject to applicable law, upon the occurrence of a default by
the Borrower or any guarantor involving bankruptcy, insolvency, receivership
proceedings or an assignment for the benefit of creditors, the interest rate on
this Note shall automatically increase to a rate of 5% per annum plus the rate
otherwise payable hereunder.
Effectiveness of Prior Documents. Except as specifically amended
hereby, the Agreement, the Note and the other Loan Documents shall remain in
full force and effect in accordance with their respective terms. All warranties
and representations contained in the Agreement and the other Loan Documents are
hereby reconfirmed as of the date hereof. All collateral previously provided to
secure the Agreement and/or Note continues as security, and all guaranties
guaranteeing obligations under the Loan Documents remain in full force and
effect. This is an amendment, not a novation.
Preconditions to Effectiveness. This Amendment shall only become
effective upon execution by the Borrower and the Bank, and approval by any other
third party required by the Bank.
No Waiver of Defaults; Warranties. This Amendment shall not be
construed as or be deemed to be a waiver by the Bank of existing defaults by the
Borrower, whether known or undiscovered. All agreements, representations and
warranties made herein shall survive the execution of this Amendment.
Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be considered an original, but when taken
together shall constitute one document.
Authorization. The Borrower represents and warrants that the execution,
delivery and performance of this Amendment and the documents referenced herein
are within the authority of the Borrower and have been duly authorized by all
necessary action.
Transferable Record. The agreement and note, as amended, is a
"transferable record" as defined in applicable law relating to electronic
transactions. Therefore, the holder of the agreement and note, as amended, may,
on behalf of Borrower, create a microfilm or optical disk or other electronic
image of the agreement and note, as amended, that is an authoritative copy as
defined in such law. The holder of the agreement and note, as amended, may store
the authoritative copy of such agreement and note, as amended, in its electronic
form and then destroy the paper original as part of the holder's normal business
practices. The hold, on its own behalf, may control and transfer such
authoritative copy as permitted by such law.
Attachments. All documents attached hereto, including any appendices,
schedules, riders, and exhibits to this Amendment, are hereby expressly
incorporated herein by reference.
Dated as of DECEMBER 15, 2003
HI-SHEAR TECHNOLOGY, CORP.
(Individual Borrower) Borrower Name (Organization)
_________________________________(SEAL) a DELAWARE Corporation
Borrower Name ____________N/A______ By: /s/ Xxxxxx X. Xxxxxx
Name and Title: XXXXXX XXXXXX,
PRESIDENT/CEO
_________________________________(SEAL) By: /s/ Xxxxxxx X. Xxxxx
Name and Title: XXXXXXX XXXXX,
V.P. FINANCE/CFO
Borrower Name ___________N/A_________
Agreed to:
U.S. BANK N.A.
By: /s/ Xxxxx X. Xxxxxxxx
Name and Title: XXXXX X. XXXXXXXX/pab
VICE PRESIDENT
ADDENDUM TO AMENDMENT TO LOAN AGREEMENT AND NOTE
This Addendum is made part of the Amendment to Loan Agreement and Note
(the "Amendment") made and entered into by and between the undersigned borrower
(the "Borrower") and the undersigned bank (the "Bank") as of the date identified
below. The following provisions are hereby added to the Agreement, (or to the
extent such provisions already exist, are hereby modified) as follows:
Borrower shall maintain a positive cash flow from operations as presented in the
Sources and Uses Statement of the 10-Q and 10-K, measured on a rolling four
quarter.
Fixed Charge Coverage Using Maintenance Capital Expenditures with Rent/Lease.
Borrower agrees to maintain at all times Fixed Charge Coverage ratio of at least
1.50 to 1.00.
"Fixed Charge Coverage" means (a) EBITDAR (EBITDAR for a given period means net
income, plus interest expense, plus income tax expense, plus depreciation
expense amortization expense plus rent or lease expense) minus cash taxes, cash
dividends and Maintenance Capital Expenditures for the previous four (4) rolling
quarters and/or fiscal period divided by (b) the sum of all required principal
payments (on short and long term debt and capital leases), interest and rental
or lease expense over the last four rolling quarters and/or fiscal period.
"Maintenance Capital Expenditures" means the dollar amount of Capital
Expenditures that are necessary to maintain the current level of revenues. For
the purposes of the covenant calculation, at not time shall the amount of the
Capital Expenditures used be less than $132,000.00
Dated as of DECEMBER 15, 2003
HI-SHEAR TECHNOLOGY, CORP.
(Individual Borrower) Borrower Name (Organization)
_________________________________(SEAL) a DELAWARE Corporation
Borrower Name ____________N/A______ By: /s/ Xxxxxx X. Xxxxxx
Name and Title: XXXXXX XXXXXX,
PRESIDENT/CEO
_________________________________(SEAL) By: /s/ Xxxxxxx X. Xxxxx
Name and Title: XXXXXXX XXXXX,
V.P. FINANCE/CFO
Borrower Name ___________N/A_________
Agreed to:
U.S. BANK N.A.
By: /s/ Xxxxx X. Xxxxxxxx
Name and Title: XXXXX X. XXXXXXXX/pab
VICE PRESIDENT
