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SIXTH AMENDMENT TO CREDIT AGREEMENT

SIXTH AMENDMENT (the “Amendment”) entered into as of September 1, 2011 by and
between CPI AEROSTRUCTURES, INC. (the “Borrower”), and SOVEREIGN BANK (the
“Bank”).

WHEREAS, the Borrower and the Bank are parties to that Amended and Restated Loan
Agreement dated as of August 13, 2007, as amended by that First Amendment dated
as of October 22, 2008, that Second Amendment dated as of July 7, 2009, that
Third Amendment dated as of May 21, 2010, that Fourth Amendment dated as of
March 14, 2011, and that Fifth Amendment dated as of May 10, 2011, as same may
be hereafter amended and modified (the “Agreement”); and

WHEREAS, the Borrower has requested that the Bank make available, and the Bank
has agreed to extend to Borrower, a short term increase of an additional
$3,000,000.00 under the revolving credit facility, subject to the provisions
hereof; and

WHEREAS, the Borrower has requested that the Bank amend and the Bank has agreed
to amend certain provisions of the Agreement, subject to the terms and
conditions hereinafter set forth.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. All capitalized terms used herein, unless otherwise defined herein, have the
same meanings provided therefor in the Agreement.

2. Subject to the terms and conditions hereof, the Agreement is hereby amended
as follows:

(A) Section 1.1 is amended by adding the following definition of “Credit Limit”:

“‘Credit Limit” shall mean: (i) for the period from the effective date of the
Sixth Amendment to the Loan Agreement to and including November 30, 2011, the
amount of $13,000,000.00; and (ii) for all other times, the amount of
$10,000,000.00.

(B)           Section 2.1 is amended by deleting the language contained therein
and substituting the following therefor:

“2.1          Revolving Credit Commitment.  Subject to the terms and conditions
hereof, the Bank agrees to make revolving credit loans to the Borrower
(collectively, the “Revolving Credit Loans”) from time to time during the
Commitment Period in the aggregate principal amount at any one time outstanding
of up to (but not exceeding) the Credit Limit from time to time in effect, as
such maximum available amount may be hereafter reduced as provided in this
Agreement (the “Commitment”).  During the Commitment Period, the Borrower may
use the Commitment for obtaining Revolving Credit Loans by borrowing, paying,
prepaying in whole or in part and reborrowing on a revolving basis, all in
accordance with the terms and conditions hereof provided that no more than eight
(8) types of Libor Rate Loans may be outstanding at any time.”

(C)           Exhibit A of the Agreement is hereby amended by deleting same and
substituting therefor Exhibit A annexed hereto.

(D)           Except as amended herein, all other provisions of the Agreement
shall remain in full force and effect, and are hereby ratified.

3. The Bank and the Borrower agree that as of August 30, 2011, the aggregate
outstanding principal amount of:  (i) the Revolving Credit Loans as evidenced by
the Revolving Credit Note is $9,700,000.00 and interest has been paid through
July 31, 2011.

4. The Borrower hereby represents and warrants to the Bank that:

(a)           Each and every of the representations and warranties set forth in
the Agreement is true as of the date hereof and with the same effect as though
made on the date hereof, and is hereby incorporated herein in full by reference
as if fully restated herein in its entirety; provided, however, that the
December 31, 2006 date in Section 3.1 of the Agreement shall be deemed to be
December 31, 2010, and the March 31, 2007 date in Section 3.1 of the Agreement
shall be deemed to be March 31, 2011.

(b)           No Default or Event of Default and no event or condition which,
with the giving of notice or lapse of time or both, would constitute such a
Default or Event of Default, now exists or would exist after giving effect
hereto.

(c)           There are no defenses or offsets to the Borrower'’s obligations
under the Agreement, the Notes or the Loan Documents or any of the other
agreements in favor of the Bank referred to in the Agreement.

5. It is expressly understood and agreed that all collateral security for the
Loans and other extensions of credit set forth in the Agreement prior to the
amendment provided for herein is and shall continue to be collateral security
for the Loans and other extensions of credit provided in the Agreement as herein
amended, including (without limitation) Borrower’s obligations under the Master
Agreement, except those receivables sold in accordance with Section 7.7 of the
Agreement as amended herein.  Without limiting the generality of the foregoing,
the Borrower hereby absolutely and unconditionally confirms that each document
and instrument executed by the Borrower pursuant to the Agreement continues in
full force and effect, is ratified and confirmed and is and shall continue to be
applicable to the Agreement (as herein amended).

6. The amendments set forth herein are limited precisely as written and shall
not be deemed to (a) be a consent to or a waiver of any other term or condition
of the Agreement or any of the documents referred to therein, or (b) prejudice
any right or rights which the Bank may now have or may have in the future under
or in connection with the Agreement or any documents referred to
therein.  Whenever the Agreement is referred to in the Amendment or any of the
instruments, agreements or other documents or papers executed and delivered in
connection therewith, it shall be deemed to mean the Agreement as modified by
this Amendment.

7. The Borrower agrees to pay on demand, and the Bank may charge any deposit or
loan account(s) of the Borrower, all expenses (including reasonable attorney’s
fees) incurred by the Bank in connection with the negotiation and preparation of
the Agreement as amended hereby.

8. This Amendment shall become effective on such date as all of the following
conditions shall be satisfied retroactive to the date hereof:

(a) The Bank shall have received four (4) executed, original counterparts of
this Amendment together with the original, executed Amended and Restated
Revolving Credit Note.

(b) The Bank shall have received updated UCC searches of the Borrower, a current
Good Standing Certificate for the Borrower from New York State and an opinion of
counsel, in each case satisfactory to the Bank and its counsel.

(c) The Bank shall have received four (4) executed counterparts of the
Officer'’s Certificate of the Borrower together with any other action (in form
and substance satisfactory to the Bank and its counsel) taken by the Borrower to
authorize the execution, delivery and performance of this Amendment and such
other documents as the Bank or its counsel may require.

(d) The Bank shall have received (i) a fee with respect to the increase of the
Revolving Credit Note  in the amount of $5,000.00, and (ii) payment of the fees
and disbursements of the Bank’s outside counsel with respect to this Amendment.

9. This Amendment is dated as of the date set forth in the first paragraph
hereof and shall be effective (after satisfaction of the conditions set forth in
paragraph 8 above) on the date of execution by the Bank retroactive to such
date.

10. This Amendment may be executed in counterparts, each of which shall
constitute an original, and each of which taken together shall constitute one
and the same agreement.

 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective duly authorized officers as of the
date first above written.

CPI AEROSTRUCTURES

By:
/s/ Vincent Palazzolo
 
Vincent Palazzolo
 
Chief Financial Officer

SOVEREIGN BANK

By:
/s/Christine Gerula
 
Christine Gerula
 
Senior Vice President

 
 
 
State of New York, County of Suffolk, ss:

On the 1st day of September, in the year 2011, before me the undersigned,
personally appeared VINCENT PALAZZOLO, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual or the
person upon behalf of which the individual acted, executed the instrument.

______/s/___________________
Notary Public

State of New York, County of Suffolk, ss:

On the 1st day of September, in the year 2011, before me the undersigned,
personally appeared CHRISTINE GERULA, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that she executed the same in
her capacity, and that by her signature on the instrument, the individual or the
person upon behalf of which the individual acted, executed the instrument.
 
______/s/____________________
Notary Public

 
 
 

 
 

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EXHIBIT A
FORM OF AMENDED AND RESTATED
REVOLVING CREDIT NOTE

$13,000,000.00                                                                                                                                                       
            Melville, New
York                                                                                                                                                As
of September 1, 2011

CPI AEROSTRUCTURES, INC., a New York corporation (the “Borrower”), for value
received, hereby promises to pay to the order of SOVEREIGN BANK (the “Bank”) on
the Termination Date (as such term is defined in the Agreement), at the office
of the Bank specified in Section 10.1 of the Credit Agreement dated as of August
13, 2007, as amended by that First Amendment dated  as of October 22, 2008, that
Second Amendment dated as of July 7, 2009, that Third Amendment dated as of May
21, 2010, that Fourth Amendment dated as of March 14, 2011,  that Fifth
Amendment dated as of May 10, 2011, and that Sixth Amendment dated as of
September __,1, 2011, each between the Borrower and the Bank, as amended from
time to time (as so amended, the “Agreement”; terms defined in the Agreement
shall have their defined meanings when used in this Note), in lawful money of
the United States of America and in immediately available funds the principal
amount of THIRTEEN MILLION AND 00/100 ($13,000,000.00) DOLLARS or, if less than
such principal amount, the aggregate unpaid principal amount of all Revolving
Credit Loans made by the Bank to the Borrower pursuant to Section 2.1 of the
Agreement.  The Borrower further promises to pay interest at said office in like
money on the unpaid principal balance of this Note from time to time outstanding
at an annual rate as selected by the Borrower pursuant to the terms of Section 2
(inclusive) of the Agreement.  Interest shall be computed on the basis of a
360-day year for actual days elapsed and shall be payable as provided in the
Agreement.  All Loans made by the Bank pursuant to subsection 2.1 of the
Agreement and payments of the principal thereon may be endorsed by the holder of
this Note on the schedule annexed hereto, to which the holder may add additional
pages.  The aggregate net unpaid amount of Revolving Credit Loans set forth in
such schedule shall be presumed to be the principal balance hereof.  After the
stated or any accelerated maturity hereof, this Note shall bear interest at a
rate as set forth in the Agreement, payable on demand, but in no event in excess
of the maximum rate of interest permitted under applicable law.

This Note is the Revolving Credit Note referred to in the Agreement, and is
entitled to the benefits thereof and may be prepaid, and is required to be
prepaid, in whole or in part (subject to the indemnity provided in the
Agreement) as provided therein.

Upon the occurrence of any one or more of the Events of Default specified in the
Agreement, all amounts then remaining unpaid on this Note may be declared to be
immediately due and payable as provided in the Agreement.

This Note shall replace and supersede the Revolving Credit Note made by the
Borrower to the order of the Bank dated August 13, 2007, the Amended and
Restated Revolving Credit Note made by the Borrower to the order of the Bank
dated as of July 7, 2009, the Amended and Restated Revolving Credit Note made by
the Borrower to the order of the Bank dated as of May 21, 2010 and the Amended
and Restated Revolving Credit Note made by the Borrower to the order of the Bank
dated as of May 10, 2011 (collectively, the “Prior Note”); provided, however,
that the execution and delivery of this Note shall not in any circumstance be
deemed to have terminated, extinguished or discharged the Borrower’s
indebtedness under such Prior Note, all of which indebtedness shall continue
under and be governed by this Note and the documents, instruments and agreements
executed pursuant hereto or in connection herewith.  This Note is a replacement,
consolidation, amendment and restatement of the Prior Note and IS NOT
NOVATION.  The Borrower shall also pay and this Note shall also evidence any and
all unpaid interest on the Revolving Credit Loans made by the Bank to the
Borrower pursuant to Prior Note, and at the interest rate specified in the
Agreement, for which this Note has been issued as replacement therefore.

This Note shall be construed in accordance with and governed by the laws of the
State of New York.

 
CPI AEROSTRUCTURES, INC.

 
 

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SCHEDULE OF LOANS AND PAYMENT OF PRINCIPAL
TO AMENDED AND RESTATED REVOLVING CREDIT NOTE
DATED AS OF SEPTEMBER 1, 2011
BY
CPI AEROSTRUCTURES, INC.
TO
SOVEREIGN BANK
 

Date
Amount of Loan
Interest Rate
Last Day of  Interest Period
Balance Principal Paid
Remaining Unpaid
Notation Made By
 

                           

 
 

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