CPI AEROSTRUCTURES, INC. 8-K [cvu-8k_062519.htm]

 

Exhibit 10.1

 

FIFTH AMENDMENT

TO AMENDED AND RESTATED CREDIT AGREEMENT

 

FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”)
entered into as of June 25, 2019 by and among CPI AEROSTRUCTURES, INC. (the
“Borrower”), BANKUNITED, N.A., a national banking association, as Sole Arranger,
Agent and a Lender, BNB BANK, a New York banking corporation, as a Lender
(“BNB”), and the other financial institutions from time to time parties thereto
as lenders (collectively, the “Lender”), and BANKUNITED, N.A., a national
banking association, as administrative agent and collateral agent for the Lender
thereunder (in such capacities, the “Administrative Agent” and the “Collateral
Agent,” respectively and each an “Agent”).

 

WHEREAS, the Borrower, the Agent and each Lender including Citizens Bank, N.A.,
a national banking association (“Citizens”), are parties to that Amended and
Restated Credit Agreement dated as of March 24, 2016, as amended by that First
Amendment and Waiver to Amended and Restated Credit Agreement dated as of May 9,
2016, as further amended by that Second Amendment to Amended and Restated Credit
Agreement dated as of July 13, 2017, as further amended by that Third Amendment
and Waiver to Amended and Restated Credit Agreement dated as of August 15, 2018,
and as further amended by that Fourth Amendment dated as of December 20, 2018,
as same may be hereafter amended and modified (collectively, the “Agreement”);

 

WHEREAS, immediately prior hereto, BNB entered into that certain Assignment and
Acceptance Agreement with Agent, Citizens and Borrower, and BNB is now a Lender
under the Agreement in replacement of Citizens;

 

WHEREAS, the Borrower has requested that the Agent and each Lender amend certain
provisions of the Agreement; and

 

WHEREAS, the Agent and each Lender are willing to accede to such request to
amend certain provisions of the Agreement, subject to the terms and conditions
hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
set forth and for other good and valuable consideration, 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. This Amendment constitutes a
Loan Document.

 

2.                 

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

 

(A)            

Section 1.1 of the Agreement (Defined Terms) is amended by deleting the
definitions “Revolving Credit Termination Date” and “Term Loan Maturity Date”
and substituting the following therefor:

 

“Revolving Credit Termination Date”: June 30, 2021.

 

   

 

 

“Term Loan Maturity Date”: June 30, 2021.

 

(B)             

Section 2.7 of the Agreement (Repayment of Term Loan) is amended by deleting
same and substituting the following therefor:

 

“2.7 Repayment of Term Loan. The principal balance of the Term Loan shall be
payable to the Administrative Agent for the account of each Term Lender (in
accordance with each Term Lender’s respective Term Loan Percentage) in
consecutive monthly installments of principal, in the principal amounts set
forth on the table below, such payments commencing on May 1, 2016 with each
succeeding installment being due on the first Business Day of each month
thereafter until June 1, 2021 with a final payment due on the applicable Term
Loan Maturity Date in an amount equal to the then outstanding principal balance
of the Term Loan. Notwithstanding the foregoing, upon Borrower’s receipt of a
Contract Termination Payment (if any), a A-10 2015 REA Payment or Net Offering
Proceeds, Borrower shall then either (1) prepay the Term Loan (which in the case
of Eurodollar Term Loans shall be on the last day of the current Interest
Period) in the principal amount equal to the applicable Designated Amount plus
all accrued and unpaid interest through the date of prepayment, or (2) at
Borrower’s request (subject to Agent’s approval), deposit into a bank account
held by and pledged (as additional collateral for the Loans and any related
interest rate swap obligations, if applicable) to the Agent on behalf of the
Term Lenders, on terms and documentation satisfactory to the Agent and its
counsel, an amount equal to the applicable Designated Amount. Each Term Lender
shall receive its Term Loan Percentage of each installment of principal paid
under the Term Loan.

 

First Business Day Month and Year Principal Amortization Amount per Month May
2016 – April 2017 $41,667.67 May 2017 – April 2018 $125,000.00 May 2018 – August
2018 $166,666.67 September 2018 – June 2021 $175,000.00”

 

(C)             

Schedule I of the Agreement is hereby amended by deleting same and substituting
the attached Schedule I therefor.

 

(D)            

Except as amended herein, all other provisions of the Agreement and the Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed.

 

3.                 

Each Lender and the Borrower agree that as of [June 17, 2019], the aggregate
outstanding principal amount of: (a) the Revolving Credit Loans as evidenced by
Revolving Credit

 

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Notes is [$25,738,684.58], and (b) the Term Loan as evidenced by the
corresponding Term Notes is [$4,383,333.32].

 

4.                 

The Borrower hereby represents and warrants to each Lender 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 September 30, 2018
date in Sections 4.1 and 4.2 shall be deemed to be December 31, 2018.

 

(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 Lender referred to in the Agreement.

 

(d)              

The WHEREAS clauses set forth hereinabove are true and correct.

 

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, obligations and other extensions of credit provided in the Agreement (as
herein amended) and the Loan Documents. Without limiting the generality of the
foregoing, the Borrower hereby absolutely and unconditionally confirms that each
Loan Document, 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, based on the
facts specified, for the periods stated and shall not be deemed to (a) be a
consent to or a waiver of, or future waiver of any further violation or
non-compliance with any of the indicated covenants or any other term or
condition of the Agreement, the Loan Documents or any of the documents referred
to therein, or (b) prejudice any right or rights which the Lender may now have
or may have in the future under or in connection with the Agreement, the Loan
Documents or any documents referred to therein. Whenever the Agreement is
referred to in the Amendment, the Loan Documents 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 Agent may charge any deposit or
loan account(s) of the Borrower, all expenses (including reasonable attorney’s
fees) incurred by the Lender in connection with the negotiation and preparation
of the Agreement as amended hereby.

 

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8.                 

This Amendment shall become effective on such date as all of the following
conditions shall be satisfied retroactive to the date hereof (the “Effective
Date”):

 

(a)              

Loan Documents. The Administrative Agent shall have received four (4) original
counterparts of this Amendment (inclusive of all exhibits, and attachments),
executed and delivered by a duly authorized officer of the Borrower and the
Guarantors, with a counterpart or a conformed copy for each Lender, together
with an executed original Amended and Restated Term Note and Amended and
Restated Revolving Credit Note in favor of BNB.

 

(b)              

Effective Date Certificate. The Administrative Agent shall have received, with a
copy for each Lender, a certificate of each of the Borrower and the other Loan
Parties, dated the Effective Date, substantially in the form of Exhibit E to the
Agreement, with appropriate insertions and attachments satisfactory in form and
substance to the Administrative Agent, executed by the President (or other
authorized officer) of the Borrower or the relevant Loan Party, as applicable.

 

(c)              

Corporate Proceedings of the Borrower and the Guarantors. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative Agent, of
the Board of Directors of the Borrower and the Guarantors authorizing the
execution, delivery and performance of this Amendment, certified by the
Secretary or an Assistant Secretary as of the Effective Date, which certificate
shall be in form and substance satisfactory to the Administrative Agent and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.

 

(d)              

Fees. The Lenders shall have received the amendment fee due to Lenders (pro
rata) in the aggregate amount of $25,000.00 together with all invoiced fees,
costs, expenses and compensation required to be paid on the Effective Date
(including any fees payable under this Amendment, any fee letter with the
Lenders and the reasonable fees, disbursements and other charges of legal
counsel to the Arranger, the Agent and the Lenders and expenses of appraisers,
consultants and other advisors to the Arranger, the Agent and the Lenders and
who have been approved by the Borrower).

 

(e)              

Material Adverse Change. Since December 20, 2018, there has been no development
or event which has had or would reasonably be expected to have a Material
Adverse Effect.

 

(f)               

Execution by Lenders. The Amendment shall have been executed and delivered by
each Lender hereunder.

 

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 Agent and the Lenders,
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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SIGNATURE PAGE

 

Fifth Amendment to Amended and Restated Credit Agreement

 

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, INC.,   as Borrower       By: /s/ Vincent Palazzolo    
Name: Vincent Palazzolo   Title: CFO       BANKUNITED, N.A.,   as Arranger,
Agent, and a Lender       By: /s/ Christine Gerula     Name: Christine Gerula  
Title: Senior Vice President       BANKUNITED, N.A.,   as Administrative Agent
and Collateral Agent       By: /s/ Christine Gerula     Name: Christine Gerula  
Title: Senior Vice President       BNB BANK,   as a Lender       By: /s/ JoAnn
Bello     Name: JoAnn Bello   Title: Senior Vice President

 

 

 

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Each of the Guarantors indicated below hereby consent to this Amendment and
acknowledge its continuing liability under its respective Guaranty with respect
to the Agreement, as amended hereby, including (without limitation) the Loan
Documents executed in connection with the Obligations, and all other documents,
instruments and agreements executed pursuant thereto or in connection therewith,
without offset, defense of counterclaim) any such offset, defense or
counterclaim as may exist being hereby irrevocably waived by each Guarantor.

 

  GUARANTORS:       WELDING METALLURGY, INC.           By: /s/ Vincent Palazzolo
    Name: Vincent Palazzolo   Title: CFO     COMPAC DEVELOPMENT CORPORATION    
      By: /s/ Vincent Palazzolo     Name: Vincent Palazzolo   Title: CFO    

 

 

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SCHEDULE I

 

Commitments

 

Lender Revolving Credit Commitment (%) Term Loan Commitment (%)       1.
BankUnited, N.A. $18,750,000 [$2,739,583.32]   14817 Oak Lane (62.5%) (62.5%)  
Miami Lakes, FL 33016                 2. BNB Bank $11,250,000 [$1,643,750.00]  
898 Veterans Memorial Highway (37.5%) (37.5%)   Hauppauge, New York 11788      
Total: $30,000,000.00 [$4,383,333.32]

 

 

 

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