SECOND AMENDMENT TO LOAN AGREEMENT

 

THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and entered
into as of August 18, 2005, by and among: LABARGE, INC., a Delaware corporation
(the "Company") and LABARGE ELECTRONICS, INC., a Missouri corporation ("LaBarge
Electronics") (individually, a "Borrower" and collectively, the "Borrowers");
U.S. BANK NATIONAL ASSOCIATION and NATIONAL CITY BANK OF PENNSYLVANIA
(individually, a "Lender" and collectively, the "Lenders"); and U.S. BANK
NATIONAL ASSOCIATION, as agent for the Lenders (in such capacity, the "Agent").

 

WITNESSETH:

 

WHEREAS, the Borrowers, the Lenders and the Agent are parties to that certain
Loan Agreement dated as of February 17, 2004, as amended by the First Amendment
to Loan Agreement dated as of April 16, 2004 (as amended, the "Loan Agreement";
all capitalized terms used and not otherwise defined in this Amendment shall
have the respective meanings ascribed to them in the Loan Agreement as amended
by this Amendment); and

 

WHEREAS, the Borrowers desire to further amend the Loan Agreement in the manner
hereinafter set forth and the Lenders and the Agent are willing to agree thereto
on the terms and conditions 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, the
Borrowers, the Lenders and the Agent hereby agree as follows:

 

1.     The Loan Agreement is amended as follows:

 

(a)     The following definition of "Citibank Supplier Agreement" is added to
Section 1.01 of the Loan Agreement in the appropriate alphabetical order:

 

"Citibank Supplier Agreement shall mean the Supplier Agreement dated June 9,
2005, executed by the Company and Citibank, N.A., under which Citibank, N.A.
agrees to purchase certain Accounts of the Company of which Sikorsky Aircraft
Corporation is the Account Debtor."

 

(b)     In the definition of "Permitted Liens" in Section 1.01 of the Loan
Agreement: the word "and" is deleted from the end of sub-section (h); the period
at the end of sub-section (i) is deleted and replaced with "; and"; and the
following new sub-section (j) is added:

 

"(j)     Liens in favor of Citibank, N.A. on the Accounts of the Company of
which Sikorsky Aircraft Corporation is the Account Debtor, but only to the
extent described in the Citibank Supplier Agreement."

 

(c)     Section 5.02(c)(ii) of the Loan Agreement is deleted and replaced with
the following:

 

(ii)The Company will not, and will not cause or permit any Subsidiary to, (A)
sell, assign, lease, transfer, abandon or otherwise dispose of any of its
Property (including, without limitation, any shares of capital stock, membership
interests or other equity interests of a Subsidiary owned by the Company or
another Subsidiary) or (B) issue, sell or otherwise dispose of any shares of
capital stock, membership interests or other equity interests of any Subsidiary,
except for (1) sales of Inventory in the ordinary course of business (which does
not include a transfer of Inventory in partial or total satisfaction of any
Indebtedness), (2) sales of fixed assets (other than real estate) which are
obsolete, worn-out or otherwise not used or useable in the ordinary course of
its business, so long as the net proceeds thereof are used within ninety (90)
days after the date of the sale solely to purchase replacement fixed assets or
assets of comparable quality or to pay or prepay (x) in the case of asset sales
by the Company, Debt secured by any Permitted Lien encumbering the assets being
sold or the Borrower's Obligations owed by the Company, (y) in the case of asset
sales by LaBarge Electronics, Debt secured by any Permitted Lien encumbering the
assets being sold or the Borrower's Obligations owed by LaBarge Electronics and
(z) in the case of asset sales by any Subsidiary other than LaBarge Electronics,
Debt of such Subsidiary, (3) other sales of fixed assets (other than real
estate) so long as the gross sale proceeds from all such asset sales by the
Company and all of its Subsidiaries on a combined basis does not exceed
$250,000.00 in the aggregate in any fiscal year of the Company, and (4) sales of
Accounts due the Company from Sikorsky Aircraft Corporation as described in the
Citibank Supplier Agreement, provided, that Borrower provides Agent with prior
written notice before any sale of such Accounts is consummated, and, provided
further, that, the gross sales proceeds from all such Account sales shall be
delivered by Citibank directly to Agent for deposit in the deposit account(s) of
the Company designated by the Agent."

 

(d)   Section 8.13 of the Loan Agreement is deleted and replaced with the
following:

 

 "8.13 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. This notice is provided pursuant to
Section 432.047 R.S.Mo. As used herein, "creditor" means the Agent and the
Lenders and "this writing" means this Agreement, the other Transaction Documents
and all the other documents or writings referenced herein or relating hereto.
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, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings (oral or written) relating to the subject matter hereof."

 

2.The Borrowers hereby jointly and severally agree to reimburse the Agent upon
demand for all out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, incurred by the Agent 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 the Borrowers' existing credit facilities from the Lenders. All of the
obligations of the Borrowers under this paragraph shall survive the payment of
the Borrower's Obligations owed by each Borrower and the termination of the Loan
Agreement.

 

3.     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 and as the same may from time to time be further amended,
modified, extended, renewed or restated. All references in the other Transaction
Documents to the Loan Agreement and any other references of similar import shall
henceforth mean the Loan Agreement as amended by this Amendment and as the same
may from time to time be further amended, modified, extended, renewed or
restated. 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.

 

4.     This Amendment shall be binding upon and inure to the benefit of the
Borrowers, the Lenders and the Agent and their respective successors and
assigns, except that neither Borrower may assign, transfer or delegate any of
its rights or obligations under the Loan Agreement as amended by this Amendment.

 

5.     Each Borrower hereby represents and warrants to the Agent and each Lender
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 necessary corporate action on the part of such Borrower and require no
consent of, action by or in respect of, or filing, recording or registration
with, any governmental or regulatory body, instrumentality, authority, 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 Certificate or 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 body, instrumentality, authority,
agency or official 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 any of 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
in accordance with its terms;

 

(d) all of the representations and warranties made by such Borrower and/or any
other Obligor in the Loan Agreement and/or in any other Transaction Document are
true and correct in all material respects on and as of the date of this
Amendment as if made on and as of the date of this Amendment; and

 

(e)  as of the date of this Amendment and after giving effect to this Amendment,
no Default or Event of Default under or within the meaning of the Loan Agreement
has occurred and is continuing.

 

6.  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.

 

7.   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).

  

8.     This notice is provided pursuant to Section 432.047 R.S.Mo. As used
herein, "creditor" means the Agent and the Lenders and "this writing" means this
Amendment and all the other documents or writings referenced herein or relating
hereto. 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, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS
BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.

 

9.     This Agreement may be executed in any number of counterparts (including
facsimile counterparts), each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

10.    Notwithstanding any provision contained in this Amendment to the
contrary, this Amendment shall not be effective unless and until the Agent shall
have received:

 

(a)    this Amendment, duly executed by each Borrower and each Lender;

 

(b)    a copy of resolutions of the Board of Directors of the Company, duly
adopted, which authorize the execution, delivery and performance of this
Amendment executed by the Company, certified by the Secretary of the Company;

 

(c)    a copy of resolutions of the Board of Directors of LaBarge Electronics,
duly adopted, which authorize the execution, delivery and performance of this
Amendment executed by LaBarge Electronics, certified by the Secretary of LaBarge
Electronics;

 

(d)    a Consent of Guarantors (which must be in form and substance satisfactory
to the Agent and each Lender), duly executed by each of LaBarge Electronics,
LaBarge-OCS, LaBarge Properties, LaBarge/STC and Pinnacle POS;

 

(e)    a Consent of Guarantors (which must be in form and substance satisfactory
to the Agent and each Lender), duly executed by each of the Company,
LaBarge-OCS, LaBarge Properties, LaBarge/STC and Pinnacle POS; and

 

(f)    such other documents and information as requested by the Agent and the
Lenders.

 

      IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have executed
this Amendment as of the day and year first above written.

(SIGNATURES ON FOLLOWING PAGES)

 

SIGNATURE PAGE- BORROWERS

SECOND AMENDMENT TO LOAN AGREEMENT

 

LABARGE, INC.

By /S/CRAIG E. LaBARGE

Name: Craig E. LaBarge

Title: CEO & President

 

 

LABARGE ELECTRONICS, INC.

By /S/CRAIG E. LaBARGE

Name: Craig E. LaBarge

Title: President

 

 

 

 

 

 

SIGNATURE PAGE- LENDERS AND AGENT

SECOND AMENDMENT TO LOAN AGREEMENT

 

 

U.S. BANK NATIONAL ASSOCIATION

By /S/THOMAS S. SHERMAN

Name: Thomas S. Sherman

Title: Vice President

 

 

NATIONAL CITY BANK OF PENNSYLVANIA

By /S/CHARLES BUGAJSKI

Name: Charles Bugajski

Title: Vice President

 

 

U.S. BANK NATIONAL ASSOCIATION, as Agent

By /s/THOMAS S. SHERMAN

Name: Thomas S. Sherman

Title: Vice President

 

 

CONSENT OF GUARANTORS

      Each of the undersigned hereby consents to the terms, provisions and
conditions contained in that certain Second Amendment to Loan Agreement dated as
of August 18, 2005, by and among (a) LaBarge, Inc., a Delaware corporation (the
"Company") and LaBarge Electronics, Inc., a Missouri corporation ("LaBarge
Electronics") (individually, a "Borrower" and collectively, the "Borrowers"),
(b) U.S. Bank National Association and National City Bank of Pennsylvania
(individually, a "Lender" and collectively, the "Lenders") and (c) U.S. Bank
National Association, as agent for the Lenders (in such capacity, the "Agent")
(the "Second Amendment to Loan Agreement"). Each of the undersigned hereby
acknowledges and agrees that (a) the execution and delivery of the Second
Amendment to Loan Agreement by the Borrowers to the Agent and the Lenders will
not adversely affect or impair any of its obligations to the Agent and/or any
Lender under that certain Guaranty dated as of February 17, 2004, and executed
by the undersigned in favor of the Agent and the Lenders with respect to the
indebtedness of the Company to the Agent and the Lenders (the "Revolving Credit
Guaranty"), (b) payment of all of the "Borrower's Obligations" (as defined in
that certain Loan Agreement dated as of February 17, 2004, by and among the
Borrowers, the Lenders and the Agent, as previously amended, as amended by the
Second Amendment to Loan Agreement, and as the same may from time to time be
further amended, modified, extended, renewed or restated) owed by the Company is
guaranteed to the Agent and the Lenders by such undersigned pursuant to the
terms of the Revolving Credit Guaranty and (c) the Revolving Credit Guaranty is
in full force and effect on the date hereof and the same is hereby ratified and
confirmed.

      Executed as of the August 18, 2005.

 

LABARGE ELECTRONICS, INC., Guarantor LABARGE/STC, INC., Guarantor

By: /S/CRAIG E. LaBARGE                                     By: /S/CRAIG E.
LaBARGE

Name: Craig E. LaBarge                                           Name: Craig E.
LaBarge

Title: President                                                          Title:
President

 

 

LABARGE-OCS, INC., Guarantor LABARGE PROPERTIES, INC., Guarantor

By: /S/CRAIG E. LaBARGE                            By: /S/CRAIG E. LaBARGE

Name: Craig E. LaBarge                                    Name: Craig E. LaBarge

Title: President                                                   Title:
President

 

PINNACLE POS, LLC, Guarantor

By: /S/CRAIG E. LaBARGE

Name: Craig E. LaBarge

Title: President

CONSENT OF GUARANTORS

     Each of the undersigned hereby consents to the terms, provisions and
conditions contained in that certain Second Amendment to Loan Agreement dated as
of August 18, 2005, by and among (a) LaBarge, Inc., a Delaware corporation (the
"Company") and LaBarge Electronics, Inc., a Missouri corporation ("LaBarge
Electronics") (individually, a "Borrower" and collectively, the "Borrowers"),
(b) U.S. Bank National Association and National City Bank of Pennsylvania
(individually, a "Lender" and collectively, the "Lenders") and (c) U.S. Bank
National Association, as agent for the Lenders (in such capacity, the "Agent")
(the "Second Amendment to Loan Agreement"). Each of the undersigned hereby
acknowledges and agrees that (a) the execution and delivery of the Second
Amendment to Loan Agreement by the Borrowers to the Agent and the Lenders will
not adversely affect or impair any of its obligations to the Agent and/or any
Lender under that certain Guaranty dated as of February 17, 2004, and executed
by the undersigned in favor of the Agent and the Lenders with respect to the
indebtedness of LaBarge Electronics to the Agent and the Lenders (the "Term Loan
Guaranty"), (b) payment of all of the "Borrower's Obligations" (as defined in
that certain Loan Agreement dated as of February 17, 2004, by and among the
Borrowers, the Lenders and the Agent, as previously amended, as amended by the
Second Amendment to Loan Agreement, and as the same may from time to time be
further amended, modified, extended, renewed or restated) owed by LaBarge
Electronics is guaranteed to the Agent and the Lenders by such undersigned
pursuant to the terms of the Term Loan Guaranty and (c) the Term Loan Guaranty
is in full force and effect on the date hereof and the same is hereby ratified
and confirmed.

     Executed as of the August 18, 2005.

LABARGE ELECTRONICS, INC., Guarantor LABARGE/STC, INC., Guarantor

By: /S/CRAIG E. LaBARGE                                      By: /S/CRAIG E.
LaBARGE

Name: Craig E. LaBarge                                             Name: Craig
E. LaBarge

Title:
President                                                            Title:
President

 

 

LABARGE-OCS, INC., Guarantor LABARGE PROPERTIES, INC., Guarantor

By: /S/CRAIG E. LaBARGE                                 By: /S/CRAIG E. LaBARGE

Name: Craig E. LaBarge                                         Name: Craig E.
LaBarge

Title: President                                                        Title:
President

 

PINNACLE POS, LLC, Guarantor

By: /S/CRAIG E. LaBARGE

Name: Craig E. LaBarge

Title: President

CERTIFIED BOARD OF DIRECTOR RESOLUTIONS

The undersigned, Secretary of LABARGE ELECTRONICS, INC., a Missouri corporation
(the "Company"), hereby certifies to U.S. BANK NATIONAL ASSOCIATION, a national
banking association, in its capacity as Agent ("Agent"), and to the Lenders, as
defined in the Loan Agreement dated as of February 17, 2004, executed by the
Company, Agent and the Lenders, as amended, (the "Agreement"), that the
following is a true, correct and complete copy of certain resolutions duly
adopted by the Board of Directors of the Company as of August 27, 2005, in
accordance with the laws of the State of Missouri and the Certificate of
Incorporation and By-Laws of the Company, and that said resolutions have not
been amended, modified, rescinded or revoked in any manner whatsoever and are on
the date hereof still in full force and effect:

RESOLVED, that any one (1) of the following officers of the Company, to-wit:
President, any Vice President, Treasurer, Secretary, and each of them acting
alone, are hereby authorized and empowered for and in behalf and in the name of
the Company:

(a)    to borrow money and obtain letters of credit and other financial
accommodations in any form from Agent and Lenders in such amounts, for such
periods of time and upon such terms and conditions as such officer(s) may deem
desirable, and to negotiate, enter into, execute, perform and deliver to Agent
and Lenders such notes, credit agreements, loan agreements, drafts, acceptances,
applications and agreements for letters of credit and such other agreements,
documents, instruments and certificates as Agent may from time to time require
in connection therewith, including but not limited to the Agreement;

(b)   to guarantee to Agent and Lenders the payment and performance of any and
all indebtedness, liabilities and obligations of any individual, sole
proprietorship, partnership, limited liability company, corporation, trust,
association (incorporated or unincorporated) or other entity to Agent and
Lenders, whether now existing or hereafter incurred or arising, upon such terms
and conditions as Agent and Lenders may require, and to negotiate, enter into,
execute, perform and deliver to Agent and Lenders such guaranties and such other
agreements, documents, instruments and certificates as Agent and Lenders may
from time to time require in connection therewith;

(c)   to pledge with, or assign, endorse, negotiate and guarantee to, Agent and
Lenders, or to grant to Agent and Lenders security interests in and/or lien,
mortgage, deed of trust or other encumbrance upon, such present and future
assets and property of the Company, real or personal, tangible or intangible, or
any interest therein, as may now or hereafter be required by Agent and Lenders,
including, without limitation, present and future accounts, accounts receivable,
contract rights, chattel paper, general intangibles, deposit accounts,
certificates of deposit, documents, instruments, notes, bills of lading,
warehouse receipts, insurance policies, securities, security entitlements,
securities accounts, investment property, financial assets, inventory,
machinery, equipment, furniture, furnishings, fixtures and real estate, as
security for any and all present and future indebtedness, liabilities and
obligations of the Company or any other individual, sole proprietorship,
partnership, limited liability company, corporation, trust, association
(incorporated or unincorporated) or other entity to Agent and Lenders, and to
negotiate, enter into, execute, perform and deliver to Agent and Lenders such
security agreements, pledge agreements, mortgages, deeds of trust, assignments,
agreements of pledge, hypothecation agreements and financing statements and such
other agreements, documents, instruments and certificates as Agent and Lenders
may from time to time require in connection therewith;

(d)   to subordinate the payment and performance of any and all indebtedness,
liabilities and obligations of any individual, sole proprietorship, partnership,
limited liability company, corporation, trust, association (incorporated or
unincorporated) or other entity to the Company, whether now existing or
hereafter incurred or arising, to the payment and performance of any and all
indebtedness, liabilities and obligations of such individual, sole
proprietorship, partnership, limited liability company, corporation, trust,
association (incorporated or unincorporated) or other entity to Agent and
Lenders, whether now existing or hereafter incurred or arising, upon such terms
and conditions as Agent may require, and to negotiate, enter into, execute,
perform and deliver to Agent and Lenders such subordination agreements and such
other agreements, documents, instruments and certificates as Agent and Lenders
may from time to time require in connection therewith;

(e)   to withdraw from Agent and Lenders and give receipts therefor, and to
authorize and request Agent and Lenders to sell and deliver for the account of
the Company, any of the assets and property of the Company at any time pledged,
assigned or endorsed to Agent and Lenders or upon which Agent and Lenders has a
security interest, lien, mortgage, deed of trust or other encumbrance;

(f)   from time to time to amend, modify, restructure, restate, supplement,
extend, renew or terminate any arrangements or agreements with Agent and Lenders
upon such terms and conditions as such officer(s) of the Company may deem
desirable, and to negotiate, enter into, execute, perform and deliver to Agent
and Lenders such agreements, documents, instruments and certificates as Agent
and Lenders may from time to time require in connection therewith; and

(g)   to take any and all other actions and execute, perform and deliver to
Agent and Lenders any and all other agreements, documents, instruments and
certificates as may be necessary or appropriate to consummate the transactions
authorized by these resolutions and to perform all of the terms, provisions and
conditions of each of the agreements, documents, instruments and certificates
referred to in these resolutions. The execution by any such officer(s) of the
Company of any agreement, document, instrument or certificate referred to in
these resolutions shall be conclusive evidence and full proof of the approval
thereof and of all of the terms, provisions and conditions contained therein.
Any and all acts and things which any such officer(s) of the Company may do or
perform in conformity with the powers conferred upon them by these resolutions
are hereby expressly authorized, approved, ratified and confirmed.

 FURTHER RESOLVED, that the Secretary and each other officer of the Company be,
and hereby is, authorized and empowered to certify to Agent and Lenders the
names of the present officers of the Company and the offices, respectively, held
by them, together with specimens of their signatures, and in case of any change
of any office holder, the fact of such change and the name of any new officer
together with a specimen of his or her signature; and Agent and Lenders are
hereby authorized to honor any instrument signed by any new officer or officers
in respect of whom it has received any such certificate or certificates, with
the same force and effect as if said officer or officers were named in the
foregoing resolutions.

FURTHER RESOLVED, that Agent and Lenders shall be indemnified and held harmless
by the Company from and against any and all damages, losses, liabilities, costs
and expenses, including, without limitation, reasonable attorneys' fees and
expenses, incurred by Agent and Lenders in acting pursuant to these resolutions,
and until Agent and Lenders have actually received notice in writing from the
Secretary or any other officer of the Company of any change in these resolutions
Agent and Lenders are authorized to act in pursuance hereof.

The undersigned further certifies that the present officers of said Company, the
offices respectively held by them and the specimen signatures of each such
officer are as follows:

 

Name                                            Title                                     Signature

 

Craig E.
LaBarge                         President                         /s/Craig E.
LaBarge

 

IN WITNESS WHEREOF, I have hereunto set my hand as Secretary of the Company on
August 18, 2005.

 

 

/s/ Donald H. Nonnenkamp, Secretary