Exhibit 10.31
SIXTH AMENDMENT TO
COMMERCIAL REVOLVING LOAN AND SECURITY AGREEMENT
AND COMMERCIAL REVOLVING PROMISSORY NOTE
BETWEEN
XXXXXX UNITED BANK
AND
AEROSPACE PRODUCTS INTERNATIONAL, INC.
Dated as of July 31, 2004
This Sixth Amendment to Commercial Revolving Loan And Security Agreement
And Commercial Revolving Promissory Note ("Agreement") dated as of July 31, 2004
between AEROSPACE PRODUCTS INTERNATIONAL, INC., a Delaware corporation with an
office at 0000 Xxxxxxxxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx ("Borrower") and
XXXXXX UNITED BANK, a state banking corporation with an office located at 00
Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Bank").
Recitals
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A. The Borrower and Bank entered into a Commercial Revolving Loan And
Security Agreement and a Commercial Revolving Promissory Note each dated as of
March 30, 2000, as amended by First Amendment to Commercial Revolving Loan And
Security Agreement And Commercial Revolving Promissory Note dated August 30,
2000, and as further amended by Second Amendment to Commercial Revolving Loan
And Security And Commercial Revolving Promissory Note dated as of April 27,
2001, and as further amended by Third Amendment to Commercial Revolving Loan And
Security And Commercial Revolving Promissory Note dated as of June 28, 2001, and
as further amended by Fourth Amendment to Commercial Revolving Loan And Security
Agreement And Commercial Revolving Promissory Note dated as of July 31, 2002,
and as further amended by Fifth Amendment to Commercial Revolving Loan And
Security Agreement And Commercial Revolving Promissory Note dated as of July 31,
2003 (said Commercial Revolving Loan And Security Agreement and Commercial
Revolving Promissory Note as amended, collectively, the "Loan Agreement") which
Loan Agreement provides, 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.
D. The Bank agrees, subject to the terms and conditions contained in this
Agreement, to the Borrower's request.
Agreement
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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:
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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 definition of "Maturity Date(s)" set forth in Schedule 1.01 of the
Loan Agreement is hereby amended as follows:
"Maturity Date(s) shall mean July 1, 2006."
3. Section 7.02 of the Loan Agreement is hereby amended and restated as
follows:
"7.02. Capital Expenditures . For the fiscal years ending January 31,
2005 and January 31, 2006 make any capital expenditures or fixed
asset acquisitions in an aggregate amount exceeding $4,000,000.00
per fiscal year.
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, 2006 (the "Maturity Date")."
5. Section 6.05 of the Loan Agreement is hereby amended and restated as
follows:
"6.05. Financial Statements; Reports. Furnish to the Bank:
(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;
(b) Annual budget to be submitted within thirty (30) days following
Borrower's fiscal year end;
(c) A Borrowing Base Certificate duly executed by the Chief Financial
Officer of the Borrower to be submitted at the time of each request for an
advance of a Revolving Loan;
(d) No later than fifteen (15) Business Days after the end of each calendar
month an accounts receivable aging and report with respect to the amount and
value of the Borrower's Inventory and Eligible Inventory, all in form and
substance acceptable to Bank;
(e) A Covenant Compliance Certificate in the form of Exhibit C, duly
executed by the Chief Financial Officer of the Borrower to be submitted within
thirty (30) days following the end of each quarter and within forty-five (45)
days following Borrower's fiscal year end;
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(f) Within ten (10) days of issuance, proxy statements, management letters,
reports, press releases or such other information regarding the operations,
business affairs and financial condition of the Borrower, the Guarantors or any
Subsidiary of the Borrower, or compliance with the terms of any Loan Documents,
as the Bank may reasonably request.
6. The following interest coverage ratio requirements are added to Section
7.04 of the Loan Agreement as follows:
"For the second quarter ending July 31, 2005 1.50:1
For the third quarter ending October 31, 2005 1.50:1
For the fourth quarter ending January 31, 2006 1.75:1
For the year ending January 31, 2006 1.60:1
For the first quarter ending April 30, 2006 1:50:1
For the second quarter ending July 31, 2006 1:50:1"
7. Section 8.01 of the Loan Agreement is hereby amended and restated as
follows:
"8.01 Grant of Collateral. To secure the prompt payment and performance of
the Obligations, the Borrower pledges, assigns, transfers and grants to the Bank
a continuing first priority security interest in the following property of the
Borrower (collectively, the "Collateral"):
(a) All accounts (the "Accounts"), as that term is defined in the Uniform
Commercial Code as in effect from time to time in the States of Tennessee and
Delaware (the "UCC"), including, without limitation, all accounts receivable,
book debts and other forms of obligations, other than forms of obligations
evidenced by Chattel Paper or Instruments, as those terms are defined below, now
owned or hereafter received or acquired by or belonging or owing to the
Borrower, including, without limitation, under any trade name, style or division
thereof, whether arising out of goods sold or services rendered by the Borrower
or from any other transaction, whether or not the same involves the sale of
goods or services by the Borrower, including, without limitation, any such
obligation which may be characterized as an account or contract right under the
UCC, and all of the Borrower's rights in, to and under all purchase orders or
receipts now owned or hereafter acquired by it for goods or services, and all of
the Borrower's rights to any goods represented by any of the foregoing,
including, without limitation, unpaid seller's rights of rescission, replevin,
reclamation or repossessed goods, and all monies due or to become due to the
Borrower under all purchase orders and contracts for the sale of goods or the
performance of services or both by the Borrower, whether or not yet earned by
performance on the part of the Borrower or in connection with any other
transaction, now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of such purchase orders and
contracts, and all collateral security and guaranties of any kind given by any
person with respect to any of the foregoing;
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(b) All chattel paper (the "Chattel Paper"), as that term is defined in the
UCC, now owned or hereafter acquired by the Borrower;
(c) All contracts, undertakings, franchise agreements or other agreements
(collectively, the "Contracts"), other than rights evidenced by Chattel Paper,
Documents or Instruments, as those terms are defined below, in or under which
the Borrower may now or hereafter have any right, title or interest, including,
without limitation, with respect to an Account, any agreement relating to the
terms of payment or the terms of performance thereof;
(d) All documents (the "Documents"), as that term is defined in the UCC,
now owned or hereafter acquired by the Borrower;
(e) All equipment (the "Equipment"), as that term is defined in the UCC,
now or hereafter owned or acquired by the Borrower and, in any event, shall
include, without limitation, all machinery, tools, dyes, equipment, furnishings,
vehicles and computers and other electronic data processing and other office
equipment, any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto;
(f) All general intangibles (the "General Intangibles"), as that term is
defined in the UCC, now owned or hereafter acquired by the Borrower and, in any
event, shall include, without limitation, all right, title and interest which
the Borrower may now or hereafter have in or under any Contract, all customer
lists, trademarks, rights in intellectual property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions, whether or
not patented or patentable, technical information, procedures, designs,
knowledge, know-how, software, data bass, data, skill, expertise, recipes,
experience, processes, models, drawings, blueprints, catalogs, materials and
records, goodwill including, without limitation, the goodwill associated with
any trademark, trademark registration or trademark licensed under any trademark
license, claims in or under insurance policies, including unearned premiums,
uncertificated securities, deposit accounts, rights to receive tax refunds and
other payments and rights of indemnification;
(g) All instruments (the "Instruments"), as that term is defined in the
UCC, now owned or hereafter acquired by the Borrower, including, without
limitation, all Note and other evidences of indebtedness, other than instruments
that constitute, or are a part of a group or writings that constitute, Chattel
Paper;
(h) All inventory (the "Inventory"), as that term is defined in of the UCC,
wherever located, now or hereafter owned or acquired by the Borrower and, in any
event, shall include all inventory, merchandise, goods and other personal
property which are held by or on behalf of the Borrower for sale or lease or are
furnished or are to be furnished under a contract of service or which constitute
raw materials, work in process or materials used or consumed or to be used or
consumed in the Borrower's business, or the processing, packaging, promotion,
delivery or shipping of the same, and all finished goods, whether or not such
inventory is listed on any schedules, assignments or reports furnished to the
Bank from time to time and whether or not the same is in transit or in the
constructive, actual or exclusive occupancy or possession of the Borrower or is
held by the Borrower or by others for the Borrower's account, including, without
limitation, all goods covered by purchase orders and contracts with suppliers
and all goods billed and held by suppliers and all inventory which may be
located on premises of the Borrower or of any carriers, forwarding agents,
truckers, warehousemen, vendors, selling agents or other persons; and
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(i) All proceeds (the "Proceeds"), as that term is defined in the UCC, and
in any event including, without limitation, (i) any and all Accounts, Chattel
Paper, Instruments, cash and other proceeds payable to the Borrower from time to
time in respect of any of the foregoing collateral security, (ii) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Borrower from time to time with respect to any of the collateral security, (iii)
any and all payments (in any form whatsoever) made or due and payable to the
Borrower from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the collateral
security by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority) and (iv) any and all other amounts
from time to time paid or payable under or in connection with any of the
collateral security."
8. Documents. Concurrently with the Borrower's execution and delivery of
this Amendment, the Guarantor shall deliver to the Lender the executed Fifth
Modification and 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.
9. Costs, Expenses and Taxes. The Borrower agrees 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.
10. 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 Xxxxx
Xxxxxxxxx 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 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.
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11. 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.
12. 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.
13. 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.
14. 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.
15. 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, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF
THIS WAIVER WITH ITS ATTORNEYS.
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16. 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 /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
Its Secretary
XXXXXX UNITED BANK
By /s/ Xxxxxxxxxxx X. Xxxxx
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Xxxxxxxxxxx X. Xxxxx
Its Vice-President
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