SECOND AMENDMENT TO
REVOLVING LINE OF CREDIT LOAN AGREEMENT, TERM
LOAN AGREEMENT AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO REVOLVING LINE OF CREDIT LOAN AGREEMENT, TERM
LOAN AGREEMENT AND SECURITY AGREEMENT (the "Second Amendment") is made as of
December 31, 1998, by and between United Industrial Corporation, a Delaware
corporation, having an address of 18 E. 48th Street, New York, New York 10017,
and the other Persons signing below as the Borrower (collectively, the
"Borrower"), and FIRST UNION COMMERCIAL CORPORATION, a North Carolina
corporation, having an address of 1970 Chain Bridge Road, McLean, Virginia 22101
("Lender").
RECITALS
A. The Borrower and the Lender are parties to a Revolving Line of Credit
Loan Agreement, Term Loan Agreement and Security Agreement, dated as of June 11,
1997 (the "Loan Agreement"), as amended by First Amendment to Revolving Line of
Credit Loan Agreement, Term Loan Agreement and Security Agreement (the "First
Amendment") made as of October 1, 1998 (said agreement, as so amended, being
hereinafter called the "Loan Agreement").
B. The Borrower has requested that the Lender agree to amend certain of
the covenants contained in the Loan Agreement, and the Lender has agreed to the
Borrower's request.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby
agree as follows:
1. Paragraph d of Section 6.14 of the Loan Agreement is amended by revising the
Tangible Net Worth requirements for the quarters ending December 31, 1998 and
thereafter as follows:
Borrower shall maintain a minimum Tangible Net Worth of Seventy Million
Dollars ($70,000,000.00) as of December 31, 1998; provided, that the
required minimum Tangible Net Worth shall increase by One Million, Five
Hundred Thousand Dollars ($1,500,000.00) on the last day of each calendar
quarter commencing March 31, 1999 and continuing on the last day of each
subsequent calendar quarter to and including March 31, 2000.
2. The second sentence of Section 7.5 of the Loan Agreement is deleted in its
entirety and replaced with the following:
Notwithstanding the foregoing: (i) Borrower may make investments in or
loans to
ETI, provided that the aggregate amount of all of Borrower's loans to or
investments in ETI shall at no time exceed the sum of Seventeen Million
Dollars ($17,000,000.00) and provided, further, that any guaranty of an
indebtedness of ETI or other contingent contractual obligations arising
out of an obligation of ETI shall be considered an investment in ETI for
purposes of the foregoing limitation, but contingent liabilities incurred
under indemnity agreements given to induce a surety to issue a performance
or payment bond required of ETI in connection with a contract to provide
goods or services to one of ETI's customers shall not be considered an
investment in ETI for purposes of the foregoing limitation; (ii) Borrower
may make investments in or loans to PUI, provided that the aggregate
amount of all of Borrower's loans to or investments in PUI shall at no
time exceed the sum of Five Million Dollars ($5,000,000.00) and provided,
further, that any guaranty of an indebtedness of PUI or other contingent
contractual obligations arising out of an obligation of PUI shall be
considered an investment in PUI for purposes of the foregoing limitation;
(iii) Borrower may make investments in repurchase obligations with a term
of not more than seven days entered into with First Union Commercial
Corporation or with any commercial bank chartered in the United States and
having its deposits insured by the Federal Deposit Insurance Corporation;
and (iv) Borrower may make investments in marketable securities regularly
traded on a national stock exchange or on NASDAQ.
3. For the quarters ending December 31, 1998, through September 30, 1999, clause
(i) of the definition of Debt Service Coverage Ratio contained in Section 1.1 of
the Loan Agreement shall read as follows:
(i) the sum of EBIT plus non-cash expenses (i.e., depreciation and
amortization), less cash dividends, less Ten Million Dollars
($10,000,000.00) and less cash taxes,
however, the foregoing amendment to the definition of Debt Service Coverage
Ratio shall not apply to any quarter prior to the quarter ending December 31,
1998 or after the quarter ending September 30, 1999. For calendar quarters
ending December 31, 1999, and thereafter, the definition of Debt Service
Coverage Ratio shall remain as stated initially in the Loan Agreement.
4. The Borrower warrants and represents to the Lender that:
a. Borrower has the power and authority to enter into this Second
Amendment, to perform its obligations hereunder, to execute all
documents being executed and delivered in connection herewith, and
to incur the obligations provided for herein, all of which have been
duly authorized and approved in accordance with the Borrower's
organizational documents;
b. This Second Amendment, together with all documents executed in
connection herewith or pursuant hereto, constitute the valid and
legally binding obligations of
2
the Borrower in accordance with their respective terms;
c. The Borrower's obligations under the Loan Documents remain valid and
enforceable obligations, and the execution and delivery of this
Second Amendment and the other documents executed in connection
herewith shall not be construed as a novation of the Loan Agreement
or the other Loan Documents.
5. Except as modified by this Second Amendment, the Loan Agreement remains in
full force and effect and unmodified. Borrower warrant and represent that it has
no offsets or defenses to its obligations under the Loan Documents, as so
modified.
IN WITNESS WHEREOF, the undersigned have duly executed this Second
Amendment, or have caused this Second Amendment to be duly executed on their
behalf, as of the day and year first hereinabove written.
UNITED INDUSTRIAL CORPORATION
By: /s/ James Perry
---------------------------------
James Perry, Treasurer & Chief
Financial Officer
AAI CORPORATION
By: /s/ Paul J. Michaud
---------------------------------
Paul J. Michaud, Vice President,
Chief Financial Officer & Treasurer
AAI ENGINEERING SUPPORT, INC.
By: /s/ Paul J. Michaud
---------------------------------
Paul J. Michaud, Vice President,
Chief Financial Officer & Treasurer
3
AAI SYSTEMS MANAGEMENT, INC.
By: /s/ Paul J. Michaud
---------------------------------
Paul J. Michaud, Vice President,
Chief Financial Officer & Treasurer
AAI/ACL TECHNOLOGIES, INC.
By: /s/ Paul J. Michaud
---------------------------------
Paul J. Michaud, Vice President &
Chief Financial Officer
DETROIT STOKER COMPANY
By: /s/ James Perry
---------------------------------
James Perry
Vice President
MIDWEST METALLURGICAL
LABORATORY, INC.
By: /s/ James Perry
---------------------------------
James Perry
Vice President
NEO PRODUCTS CO.
By: /s/ James Perry
---------------------------------
James Perry
Vice President
4
SYMTRON SYSTEMS, INC.
By: /s/ James Perry
---------------------------------
James Perry, Chief Financial Officer,
Asst. Treasurer & Asst. Secretary
UIC-Del. CORPORATION
By: /s/ Paul J. Michaud
---------------------------------
Paul J. Michaud
President & Treasurer
AAI MICROFLITE Simulation International
Corporation
By: /s/ Paul J. Michaud
---------------------------------
Paul J. Michaud
President
AGREED TO BY LENDER:
FIRST UNION COMMERCIAL
CORPORATION
By: /s/ Michael J. Landini
---------------------------------
Michael J. Landini
Vice President
5