EXHIBIT 10.1
ELEVENTH AMENDMENT TO LOAN AGREEMENT
THIS ELEVENTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into effective as of April 15, 2003, by and among LMI AEROSPACE, INC.,
formerly known as Leonard's Metal, Inc., a Missouri corporation, LMI FINISHING
INC., an Oklahoma corporation, LEONARD'S METAL, INC., formerly known as LMI
Acquisition, Inc., a Missouri corporation, PRECISE MACHINE COMPANY, a Missouri
corporation, TEMPCO ENGINEERING, INC., a Missouri corporation, formerly known as
Metal Corporation and doing business in the state of California as Metal
Corporation of Sun Valley and VERSAFORM CORP., a California corporation, as
co-obligors and co-borrowers and not as accommodation parties (said corporations
being jointly and severally referred to herein as "Borrower"), and UNION
PLANTERS BANK, N.A., a national banking association, successor to Magna Bank,
National Association ("Bank").
WITNESSETH:
WHEREAS, Borrower and Bank have heretofore entered into that certain Loan
Agreement dated August 15, 1996 as amended by that certain First Amendment to
Loan Agreement dated January 15, 1997, that certain Second Amendment to Loan
Agreement dated November 1, 1997, that certain Third Amendment to Loan Agreement
dated March 30, 2000, that certain Fourth Amendment to Loan Agreement dated
October 30, 2000, that certain Fifth Amendment to and Restatement of Loan
Agreement dated April 2, 2001, that certain Sixth Amendment to Loan Agreement
dated October 30, 2001, that certain Seventh Amendment to Loan Agreement dated
November 30, 2001, that certain Eighth Amendment to and Restatement of Loan
Agreement dated May 15, 2002, that certain Ninth Amendment to Loan Agreement
dated June 30, 2002, and that certain Tenth Amendment to Loan Agreement dated
November 13, 2002 (as so amended, the "Loan Agreement"); and
WHEREAS, Borrower and Bank desire to further amend the Loan Agreement in
the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Bank hereby agree as follows:
1. The parties acknowledge that there are no sums outstanding under Term
Loan B. Borrower shall have no further right to borrow and Bank shall have no
further obligation to lend any amounts under Term Loan B. All references in the
Loan Agreement to "Term Loan B" and to "Term Note B" are hereby deleted. Bank
shall return the canceled original executed Term Note B to Borrower.
2. The definition of "Consolidated EBITDA" contained in Section 2 of the
Loan Agreement is hereby amended to provide in its entirety as follows:
Consolidated EBITDA shall mean for the period in question the sum of
(a) the after-tax net income (or loss) of Borrower and its Consolidated
Subsidiaries for the period in question (exclusive of extraordinary gains
and/or losses, gains and/or losses from the sale or other disposition of
assets other than in the ordinary course of business, and any revaluation
of "available for-sale securities" as that term is defined under FASB 115),
plus (b) to the extent deducted in determining net income, the sum of (i)
all gross interest expense of Borrower and its Consolidated Subsidiaries
during each period, plus (ii) all provisions for any Federal, state, local
and/or foreign income taxes made by Borrower and its Consolidated
Subsidiaries during such period (whether paid or deferred), plus (iii) all
depreciation and amortization expenses, including any expense or charge
created by the adoption or application of Statements of Financial
Accounting Standards ("SFAS") No. 141, Business Combinations or SFAS No.
142, Goodwill and Other Intangibles of Borrower and its Consolidated
Subsidiaries, plus (iv) any costs related to the restructuring or closing
of a facility or location, including employee severance pay, employee
relocation costs to other facilities, moving expenses related to relocating
equipment and inventory, liabilities accrued in conjunction with closing or
restructuring of a facility or location, or other costs related to closing
or restructuring of a facility during such period, all determined on a
consolidated basis and in accordance with generally accepted accounting
principles consistently applied.
3. The "Revolving Credit Period", as defined in Section 2 of the Loan
Agreement, is hereby extended to January 5, 2004.
4. Section 3.01(a) of the Loan Agreement is hereby amended to provide in
its entirety as follows:
(a) Subject to the terms and conditions of this Agreement, during
the Revolving Credit Period of this Agreement, and so long as no
Default or Event of Default under this Agreement has occurred and is
continuing, Bank hereby agrees to make such loans (individually, a
"Revolving Credit Loan" and collectively, the "Revolving Credit
Loans") to Borrower as Borrower may from time to time request pursuant
to Section 3.02. The aggregate principal amount of Revolving Credit
Loans which Bank shall be required to have outstanding under this
Agreement at any one time shall not exceed the lesser of (A)
$10,000,000.00 or (B) the Borrowing Base. Subject to the terms and
conditions of this Agreement, Borrower may borrow, repay and reborrow
such sums from Bank, provided, however, that in no event may the
aggregate outstanding principal amount of Revolving Credit Loans on
any given day exceed the applicable amount specified in the preceding
sentence. All Revolving Credit Loans not paid prior to the last day of
the Revolving Credit Period, together with all accrued and unpaid
interest thereon, shall be due and payable on the last day of the
Revolving Credit Period.
5. The first sentence of Section 3.04(a) is hereby amended to provide as
follows:
So long as no Event of Default under this Agreement has been declared
by Bank and is continuing, all Revolving Credit Loans shall bear
interest prior to maturity at a rate per annum equal to LIBOR plus Two
and One-Half percent (2.50%) (fluctuating as and when LIBOR shall
change).
6. Section 8.01(i) of the Loan Agreement is hereby amended to provide in
its entirety as follows:
(i) Financial Covenants. Borrower will:
(i) Have a ratio of Indebtedness of Borrower and its Consolidated
Subsidiaries to Consolidated Tangible Net Worth of less than 2.0 to
1.0 as of the end of each fiscal quarter of Borrower;
(ii) Have Consolidated EBITDA of not less than the following
amounts for the fiscal year-to-date period ending on the date
indicated:
($600,000.00) March 31, 2003
($200,000.00) June 30, 2003
$1,200,000.00 September 30, 2003
$3,700,000.00 December 31, 2003
Borrower and Bank shall enter into an amendment to this Agreement by
January 5, 2004 establishing minimum levels of Consolidated EBITDA to
apply for subsequent periods during the term of this Agreement.
Failure to enter into such amendment by such date shall constitute an
Event of Default hereunder.
7. Section 8.02(i) of the Loan Agreement is hereby amended to provide in
its entirety as follows:
(i) Capital Expenditures. Neither Borrower nor any Subsidiary of
Borrower will make any Capital Expenditures or enter into any
Capitalized Leases which in the aggregate (for Borrower and all
Subsidiaries of Borrower) exceed the amount indicated during each of
the following periods:
$2,750,000.00 April 2, 2001 to December 31, 2001
$3,000,000.00 January 1, 2002 to December 31, 2002
$2,300,000.00 January 1, 2003 to December 31, 2003
$2,300,000.00 January 1, 2004 to December 31, 2004
$2,300,000.00 January 1, 2005 to October 15, 2005
8. Borrower covenants and agrees that:
(a) No later than April 15, 2003, Borrower shall retain the services
of a financial consultant acceptable to Bank;
(b) Within sixty (60) days after the effective date of this Amendment,
Borrower will furnish Bank with a written business plan for Bank's review;
(c) Promptly upon receipt, Borrower will pay to Bank for application
against the Revolving Credit Loans, (i) Borrower's Federal income tax
refund for its net loss carryback generated in the fiscal year ended
December 31, 2002, and (ii) the proceeds of Borrower's claim against
Lockheed Martin Corp., upon application of either and both of which, the
maximum amount specified in Section 3.01(a) which Bank shall be required to
have outstanding at any one time shall be reduced by an equal amount.
9. Pursuant to Borrower's request, Bank hereby waives the existing Events
of Default under the Loan Agreement caused by Borrower's failure to comply with
the financial covenants contained in Section 8.01(i) of the Loan Agreement for
its fiscal year ended December 31, 2002. This paragraph is not and shall not be
construed as a commitment on the part of Bank to waive any future Default or
Event of Default under the Loan Agreement resulting from any subsequent
violation of Section 8.01(i) of the Loan Agreement or any other future Default
or Event of Default under the Loan Agreement.
10. Borrower hereby agrees to pay Bank a nonrefundable amendment and waiver
fee in the amount of $ 25,000.00 (the "Fee") contemporaneously with the
execution of this Amendment.
11. Contemporaneously with the execution of this Amendment, Borrower will
execute and deliver to Bank an Amended and Restated Revolving Note in
substantially the form of Exhibit A attached hereto and incorporated herein by
reference.
12. Borrower hereby agrees to reimburse Bank upon demand for all
out-of-pocket costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by Bank in the preparation, negotiation
and execution of this Amendment and any and all other agreements, documents,
instruments and/or certificates relating to the amendment of Borrower's existing
credit facilities with Bank (collectively, the "Loan Documents"). Borrower
further agrees to pay or reimburse Bank for (a) any stamp or other taxes
(excluding income or gross receipts taxes) which may be payable with respect to
the execution, delivery, filing and/or recording of the Loan Documents and (b)
the cost of any filings and searches, including, without limitation, Uniform
Commercial Code filings and searches. All of the obligations of Borrower under
this paragraph shall survive the payment of the Borrower's Obligations and the
termination of the Loan Agreement.
13. All references in the Loan Agreement to "this Agreement" and any other
references of similar import shall henceforth mean the Loan Agreement as amended
by this Amendment. All references in the Loan Agreement and the other
Transaction Documents to the "Revolving Credit Note" and any other references of
similar import shall henceforth mean the Amended and Restated Revolving Note in
the form of Exhibit A attached hereto.
14. Except to the extent specifically amended by this Amendment, all of the
terms, provisions, conditions, covenants, representations and warranties
contained in the Loan Agreement shall be and remain in full force and effect and
the same are hereby ratified and confirmed. This amendment is an amendment and
continuation of the Loan Agreement and is not a novation thereof nor of any
obligations of Borrower outstanding thereunder on the date hereof.
15. This Amendment shall be binding upon and inure to the benefit of
Borrower and Bank and their respective successors and assigns, except that
Borrower may not assign, transfer or delegate any of its rights or obligations
under the Loan Agreement, as amended by this Amendment.
16. Each Borrower hereby represents and warrants to Bank that:
(a) the execution, delivery and performance by such Borrower of this
Amendment are within the corporate powers of such Borrower, have been duly
authorized by all corporate action and require no action by or in respect
of, consent of or filing or recording with, any governmental or regulatory
body, agency or official or any other Person;
(b) the execution, delivery and performance by such Borrower of this
Amendment do not conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under or result in any
violation of, the terms of the Articles of Incorporation or By-Laws of such
Borrower, any applicable law, rule, regulation, order, writ, judgment or
decree of any court or governmental or regulatory agency or instrumentality
or any agreement, document or instrument to which such Borrower is a party
or by which such Borrower or any of its Property or assets is bound or to
which such Borrower or its Property or assets is subject;
(c) this Amendment has been duly executed and delivered by such
Borrower and constitutes the legal, valid and binding obligation of such
Borrower enforceable against such Borrower in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
(d) as of the date of this Amendment, all of the representations and
warranties of Borrower set forth in the Loan Agreement and the Transaction
Documents are true and correct in all material respects and no Default or
Event of Default under or within the meaning of the Loan Agreement has
occurred and is continuing.
17. In the event of any inconsistency or conflict between this Amendment
and the Loan Agreement, the terms, provisions and conditions contained in this
Amendment shall govern and control.
18. This Amendment shall be governed by and construed in accordance with
the substantive laws of the State of Missouri (without reference to conflict of
law principles).
19. Notwithstanding any provision contained in this Amendment to the
contrary, this Amendment shall not be effective unless and until Bank shall have
received:
(a) this Amendment, duly executed by Borrower;
(b) the Amended and Restated Revolving Note, duly executed by
Borrower;
(c) a copy of resolutions of the Board of Directors of Borrower, duly
adopted, which authorize the execution, delivery and performance of this
Amendment and the Amended and Restated Revolving Note;
(d) an incumbency certificate, executed by the Secretary of Borrower,
which shall identify by name and title and bear the signatures of all of
the officers of Borrower executing this Amendment; and
(e) the Fee.
20. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR
RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER AND BANK FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWER AND BANK
COVERING SUCH MATTERS ARE CONTAINED IN THE LOAN AGREEMENT AS AMENDED BY THIS
AMENDMENT AND THE OTHER AGREEMENTS, WHICH LOAN AGREEMENT AS AMENDED BY THIS
AMENDMENT AND OTHER AGREEMENTS ARE A COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENTS BETWEEN BORROWER AND BANK, EXCEPT AS BORROWER AND BANK MAY LATER
AGREE IN WRITING TO MODIFY THEM.
[SIGNATURE PAGES FOLLOWS THIS PAGE]
IN WITNESS WHEREOF, the parties have executed this Eleventh Amendment to
Loan Agreement as of the date first written above.
LMI AEROSPACE, INC. (formerly known as
Leonard's Metal, Inc.)
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
LMI FINISHING, INC.
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
LEONARD'S METAL, INC. (formerly known as
LMI Acquisition, Inc.)
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
PRECISE MACHINE COMPANY
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
TEMPCO ENGINEERING, INC. (formerly known as
Metal Corporation)
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
VERSAFORM CORP.
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
UNION PLANTERS BANK, N.A.
By /s/ Patricia A. O'Herin
----------------------------------------
Title:
EXHIBIT A
AMENDED AND RESTATED
REVOLVING NOTE
$10,000,000.00 St. Louis, Missouri
Date of Original Note: May 15, 2002
Date of this Amended and Restated Note: April 15, 2003
For value received, the undersigned, LMI AEROSPACE, INC., a Missouri
corporation, LMI FINISHING, INC., an Oklahoma corporation, LEONARD'S METAL,
INC., a Missouri corporation, PRECISE MACHINE COMPANY, a Missouri corporation,
TEMPCO ENGINEERING, INC., a Missouri corporation, and VERSAFORM CORP., a
California corporation (collectively, the "Borrower"), hereby jointly and
severally promise to pay on the last day of the Revolving Credit Period under
the Loan Agreement (defined below), to the order of UNION PLANTERS BANK, N.A., a
national banking association (the "Bank"), at its main office in St. Louis,
Missouri, or at any other place designated at any time by the holder hereof, in
lawful money of the United States of America and in immediately available funds,
the principal sum of Ten Million Dollars ($10,000,000.00) or, if less, the
aggregate unpaid principal amount of all Revolving Credit Loans made by the Bank
to the Borrower under the Loan Agreement (defined below) together with interest
on the principal amount hereunder remaining unpaid from time to time, computed
on the basis of the actual number of days elapsed and a 360-day year, from the
date hereof until this Note is fully paid at the rate from time to time in
effect under the Eighth Amendment to and Restatement of Loan Agreement dated May
15, 2002 (as the same has been and may hereafter be amended, supplemented or
restated from time to time, the "Loan Agreement") by and between the Bank and
the Borrower. The principal hereof and interest accruing thereon shall be due
and payable as provided in the Loan Agreement. This Note may be prepaid only in
accordance with the Loan Agreement.
This Note is issued pursuant, and is subject, to the Loan Agreement, which
provides, among other things, for acceleration hereof. This Note is the
Revolving Credit Note referred to in the Loan Agreement. This Note is secured,
among other things, pursuant to the Security Agreements, the Patent, Trademark
and License Security Agreement, the Kansas Assignment of Leases and Rents, the
Kansas Mortgage, the Missouri Deed of Trust, the Oklahoma Assignment of Leases
and Rents, and the Oklahoma Mortgage, each defined in the Loan Agreement, and
may now or hereafter be secured by one or more other security agreements,
mortgages, deeds of trust, assignments or other instruments or agreements
(collectively, the "Security Documents") to which Security Documents reference
is hereby made for a description of the security and a statement of the terms
and conditions upon which this Note is secured.
The Borrower hereby agrees to pay all costs of collection, including attorneys'
fees and legal expenses in the event this Note is not paid when due, whether or
not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest are
expressly waived.
This Note is an amendment, restatement and continuation of that certain
Revolving Credit Note of Borrower dated May 15, 2002 and payable to the order of
Bank in the original principal amount of up to $7,000,000.00 and is not a
novation thereof. All interest accrued on the instrument being amended and
restated by this Note shall continue to be due and owing to Bank until paid.
LMI AEROSPACE, INC. (formerly known as
Leonard's Metal, Inc.)
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
LMI FINISHING, INC.
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
LEONARD'S METAL, INC. (formerly known as
LMI Acquisition, Inc.)
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
PRECISE MACHINE COMPANY
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
TEMPCO ENGINEERING, INC.
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer
VERSAFORM CORP.
By /s/ Lawrence E. Dickinson
----------------------------------------
Lawrence E. Dickinson, Vice President
and Chief Financial Officer