1
FIRST AMENDMENT TO THIRD AMENDED
AND RESTATED LOAN AGREEMENT
This First Amendment to Third Amended and Restated Loan
Agreement (the "Amendment") dated as of June 30, 1995, is between Bank of
America National Trust and Savings Association (the "Bank") and Ducommun
Incorporated (the "Borrower").
RECITALS
A. The Bank and the Borrower entered into that certain Third
Amended and Restated Loan Agreement dated as of January 20, 1995 (the
"Agreement").
B. The Bank and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in
this Amendment shall have the meaning given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as follows:
2.1 In Schedule 1 of the Agreement, the definition
of "Expiration Date" is amended by deleting the date "July 15, 1996"
therefrom, and inserting the date "July 15, 1997" in its stead.
2.2 In Subparagraph 1.12(e) of the Agreement, the
period at the end of item (ix) of the definition of "Excess Cash Flow"
is deleted and the following substituted therefor:
", (x) minus any voluntary Commitment
reduction for that fiscal period."
2.3 In Subparagraph 1.12(e) of the Agreement,
item (i) of the definition of Cash Flow is amended and restated in its
entirety to read as follows:
"(i) Minus any increase (and plus any
decrease) in Working Capital over that fiscal period
(excluding $1,800,000 of the Working Capital
Advances),"
2.4 In Subparagraph 1.12(e) of the Agreement, item
(iii) of the definition of "EBITDA" is amended and restated in its
entirety to read as follows:
"(iii) provisions for taxes accrued in that
fiscal period,"
2.5 The following Subparagraph (h) is added to
Paragraph 1.12 of the Agreement:
"(h) Interim permanent prepayments of
Acquisition Advances outstanding under the Commitment
are permitted at the Borrower's option and will be
applied; (i) first to the next scheduled principal
payment within the calendar quarter, and (ii) then
-1-
2
to scheduled principal payments in the inverse order
of their maturity and the Commitment shall
concurrently be reduced by the amount of any such
prepayments."
2.6 In Paragraph 7.2 of the Agreement,
Subparagraph (f) is amended and restated in its entirety to read as
follows:
"(f) Updated projections for the Borrower and
its Subsidiaries (prepared on a consolidated and
consolidating basis) as follows: (i) within 60 days
prior to the end of each Fiscal Year on an annual
basis for the subsequent Fiscal Years through
December 31, 1998, and (ii) within 30 days after the
end of each Fiscal Year the annual operating plan for
the current Fiscal Year, on a monthly basis; such
projections required by (i) and (ii) above to be in
form and detail satisfactory to the Bank, and each
one to be submitted together with the certification
of the Borrower's chief financial officer stating
that the projections are based on facts known to the
Borrower and on assumptions that are reasonable and
consistent with such facts, that no material (in
amount and likelihood) fact or assumption has been
omitted as a basis for such projections which, in the
Borrower's reasonable business judgment, should be
included, and that such projections are reasonably
based on such facts and assumptions."
2.7 In Paragraph 7.3 of the Agreement, Subparagraphs
(a) and (b) are amended and restated in their entirety to read as
follows:
"(a) Twenty Four Million Dollars
($24,000,000); plus
(b) 90% of the net income after income taxes
(without subtracting losses) earned in each Fiscal
Quarter commencing March 31, 1995; minus
(c) any earnout payments to former Brice and
3DBM stockholders in connection with the Brice
acquisition or the 3DBM acquisition, if such earnout
payments are capitalized."
2.8 In Paragraph 7.4 of the Agreement, the ratios
required for the periods are amended and restated in their entirety to
read as follows:
Period Ratio
------ -----
the date hereof through
December 30, 1995 1.65:1.00
December 31, 1995 through
December 30, 1996 1.40:1.00
December 31, 1996 through
December 30, 1997 1.10:1.00
December 31, 1997 through
December 31, 1998 .90:1.00
-2-
3
2.9 In Paragraph 7.5 of the Agreement, the lead in
paragraph is amended and restated in full to read as follows:
"7.5 Quick Ratio. To maintain, on a
consolidated basis as of the end of each month, a
ratio of selected current assets to selected current
liabilities of at least 0.55:1.00 commencing June 30,
1995 and at all times, calculated in accordance with
GAAP consistently applied."
2.10 In Paragraph 7.6 of the Agreement, the ratios
required for the periods are amended and restated in their entirety as
follows:
Period Ratio
------ -----
the date hereof through
June 29, 1995 1.10:1.00
June 30, 1995 through
December 30, 1995 1.08:1.00
December 31, 1995 through
March 30, 1997 1.15:1.00
March 31, 1997 through
March 30, 1998 1.20:1.00
March 31, 1998
and at all times 1.25:1.00
2.11 The following is added to Subparagraph 7.6(a)
of the Agreement:
"minus (x) earnout payments in connection
with the Brice acquisition or the 3DBM Acquisition,
if such earnout payments are capitalized;"
3. Representations and Warranties. When the Borrower signs
this Amendment, the Borrower represents and warrants to the Bank that: (a)
there is no event which is, or with notice or lapse of time or both would be, a
default under the Agreement, (b) the representations and warranties in the
Agreement are true as of the date of this Amendment as if made on the date of
this Amendment, (c) this Amendment is within the Borrower's powers, has been
duly authorized, and does not conflict with any of the Borrower's
organizational papers, and (d) this Amendment does not conflict with any law,
agreement, or obligation by which the Borrower is bound.
4. Effect of Amendment. Except as provided in this
Amendment, all of the terms and conditions of the Agreement shall remain in
full force and effect.
This Amendment is executed as of the date stated at the
beginning of this Amendment.
-3-
4
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:________________________________
J. Thomas Fagan
Vice President
DUCOMMUN INCORPORATED
By:________________________________
Joseph C. Berenato
Executive Vice President, Chief
Operating Officer and Chief
Financial Officer
By:________________________________
James S. Heiser
Vice President and
Secretary
-4-