EXHIBIT 10.24
FIRST AMENDMENT, dated as of February 12, 1999 (this "Amendment") to the
Credit Agreement, dated as of October 9, 1997 (as amended by this Amendment, and
as the same may be further amended, supplemented or otherwise modified from time
to time, the ("Credit Agreement"), among CPI AEROSTRUCTURES, INC., a New York
corporation ("Holdings"), XXXXX, INC., a Delaware corporation (the "Borrower"),
the several banks and other financial institutions from time to time parties
thereto (collectively, the "Lenders"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent for the Lenders (in such capacity,
the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Lenders and the Administrative Agent
are parties to the Credit Agreement; and
WHEREAS, Holdings and the Borrower have requested that the Lenders amend
certain terms in the Credit Agreement and in the manner provided for herein; and
WHEREAS, the Administrative Agent and the Lenders are willing to agree to
the requested amendments;
NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are defined
in the Credit Agreement and used herein (and in the recitals hereto) as defined
terms are so used as so defined.
2. Amendment of Subsection 2.3(a). Subsection 2.3(a) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
(a) The Tranche A Term Loans shall mature on December 31, 2001, to be
paid in (i) 3 consecutive quarterly installments payable on the last Business
Day of each March, June and September, commencing on March 31, 1998 and ending
on September 30, 1998, each of which shall be in an aggregate amount equal to
$587,500; (ii) 12 consecutive monthly installments payable on the last Business
Day of each month commencing on January 31, 1999 and ending on December 31,
1999, each of which shall be in an aggregate amount equal to $120,000; (iii) 12
consecutive monthly installments payable on the last Business Day of each month
commencing on January 31, 2000 and ending on December 31, 2000, each of which
shall be in an aggregate amount equal to $200,000; and (iv) 12 consecutive
monthly installments payable on the last Business Day of each month commencing
on January 31, 2001 and ending on December 31, 2001, each of which shall be in
an aggregate amount equal to $317,000.
3. Amendment to Subsection 2.4(b). Subsection 2.4(b) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following:
(b) The Borrower agrees that in the event that the outstanding
principal amount of the Loans is not reduced to $3,500,000 or less by March 31,
1999, then the Borrower shall pay to the Administrative Agent, for the ratable
benefit of the Lenders, an additional fee in the aggregate amount of $300,000,
to be paid in quarterly installments payable on the last Business Day of each
March, June, September and December, commencing on December 31, 1999 and ending
on March 31, 2001, each of which shall be in an aggregate amount equal to
$50,000.
4. Representations and Warranties. On and as of the date hereof, Holdings
and the Borrower hereby jointly and severally confirm, reaffirm and restate the
representations and warranties set forth in Section 3 of the Credit Agreement
mutatis mutandis, except to the extent that the disclosures made by Holdings in
its pro forma financial statements prepared by its management and presented to
the Lenders in December 1998 and January 1999 (the "Pro Forma Financial
Statements") related to subsections 3.2 and 3.7 of the Credit Agreement. To the
extent that any of the representations and warranties set forth in Section 3 of
the Credit Agreement expressly relate to a specific earlier date, Holdings and
the Borrower jointly and severally hereby confirm, reaffirm and restate such
representations and warranties as of such earlier date. Holdings further
represents and warrants that its Pro Forma Financial Statements will not vary in
any significant respect from the audited consolidated balance sheet of Holdings
and its consolidated Subsidiaries as at December 31, 1998 and the related
audited consolidated and consolidating statements of income and of cash flows
for the fiscal year ending on such date, prepared by Goldstein, Golub, Xxxxxxx &
Company, P.C.
5. Effectiveness. This Amendment shall become effective as of the date
first written above upon (a) receipt by the Administrative Agent of counterparts
of this Amendment duly executed by Holdings, the Borrower and all the Lenders
and (b) such certificates and opinions as the Administrative Agent may
reasonably require in connection with this Amendment; provided that, as a
condition to effectiveness, the Administrative Agent and the Lenders shall have
approved any amendments, supplements or modifications (including, but not
limited to, the Amendment to Agreements, dated February __, 1999, by and among
Ralok, Inc. (formerly known as Xxxxx Machine, Inc.), Xxxxxx Xxxxxxx, Holdings
and the Borrower) to (i) the $4,000,000 Promissory Note, dated October 9, 1997,
made by Xxxxx Inc. in favor of Xxxxx Machine, Inc. (it being understood that
such Note shall be required to be amended as a condition to effectiveness of
this Amendment to defer interest payments in respect thereof in a manner
satisfactory to the Lenders), (ii) the Employment Agreement, dated as of October
9, 1997, by and between and the Borrower and Xxxxxx Xxxxxxx and (iii) the
Intercreditor and Subordination Agreement, dated as of October 9, 1997, among
Xxxxx Machine, Inc., Holdings, the Borrower and the Administrative Agent.
6. Continuing Effect; No Other Amendments, Waivers or Consents. Except as
expressly provided herein, all of the terms and provisions of the Credit
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Agreement are and shall remain in full force and effect. The amendments provided
for herein are limited to the specific subsections of the Credit Agreement
specified herein and shall not constitute a consent, waiver or amendment of, or
an indication of the Administrative Agent's or the Lenders' willingness to
consent to any action requiring consent under any other provisions of the Credit
Agreement or the same subsection for any other date or time period.
7. Expenses. Holdings and the Borrower agree to pay and reimburse the
Administrative Agent for all its reasonable costs and out-of-pocket expenses
incurred in connection with the preparation and delivery of this Amendment,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
8. Counterparts. This Amendment may be executed in any number of
counterparts by the parties hereto (including by facsimile transmission), each
of which counterparts when so executed shall be an original, but all the
counterparts shall together constitute one and the same instrument.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties herto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
CPI AEROSTRUCTURES, INC.
/s/ Xxxxxx August
By: ---------------------------
Name: Arthur Agust
Title:President
XXXXX, INC.
/s/ Xxxxxx August
By: ---------------------------
Name: Arthur Agust
Title:Chairman of the Board
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
/s/ Xxxxxx X. Xxxxxxx
By: ------------------------------
Name:Xxxxxx X. Xxxxxxx
Title:Vice President
MELLON BANK, N.A.,
as a Lender
/s/ Xxxxxxxxx X. Xxxxxxx
By: -------------------------------
Name:Xxxxxxxxx X. Xxxxxxx
Title:First Vice President
Mellon Financial Services Corporation,
Attorney in Fact for Mellon Bank, N.A.
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