Document:

Amendment No. 2, Note Purchase Agreement

 Exhibit 10.1 
 AMENDMENT NO. 2 
 AMENDMENT NO. 2, dated as of July 31, 2007 (this
“Amendment”), to the Purchase Agreement, dated as of February 15, 2006, as amended by that certain Amendment No. 1 (“Amendment No. 1”) dated as of February 15, 2007 (as further amended,
supplemented, amended and restated or otherwise modified from time to time, the “Purchase Agreement”), among Special Value Bond Fund, LLC, a Delaware limited liability company (“Holder”), Pemco Aviation Group, Inc.,
a Delaware corporation (the “Company”) and Guarantors a party thereto. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Purchase Agreement as amended hereby. 
 W I T N E S S E T H: 
 WHEREAS, the Holder currently owns all of the Company’s Amended and Restated Senior Secured Notes due 2008 issued pursuant to the Purchase
Agreement; 
 WHEREAS, the Company has requested that the Holder agree to amend the Purchase Agreement, amend and restate the Amended and
Restated Senior Secured Notes due 2008, and consent to a sale of Pemco World Air Services, Inc., a Delaware corporation (“PWAS”), as more particularly set forth herein; 
 WHEREAS, pursuant to Section 15.10 of the Purchase Agreement, the Company and the Holder may amend the Transaction Documents by a writing signed by
each of the Company and the Holder; and 
 WHEREAS, subject to and in accordance with the terms and conditions hereinafter set forth, the
Holder is willing to agree to such modifications. 
 NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows: 
 SECTION 1. AMENDMENTS. 
 Section 1.01. Amendments to Section 1. Section 1 of the Purchase Agreement is hereby deleted in its entirety and replaced
with the following: 
 “On the Closing Date, the Company issued and sold $5,000,000 in aggregate principal amount of its
Senior Secured Notes due 2007 (the “Old Notes”), in substantially the form of note attached hereto as Exhibit A. 
 On the Amendment No. 1 Effective Date, the Company delivered to each Holder, against delivery by the Holder of Existing Notes, Amended and Restated Senior Secured Notes due 2008 (“Existing
Notes”) in like principal amount in the form attached to Amendment No. 1 as Exhibit A-1. 

 On the Amendment No. 2 Effective Date, the Company will deliver to each Holder,
against delivery by the Holder of Existing Notes, Amended and Restated Senior Secured Notes due 2009 (“Notes”) in like principal amount in the form attached to Amendment No. 2 as Exhibit A-2, which Notes shall bear
interest at a rate of 15.0% per annum (the “Interest Rate”) plus an additional two percent (2.0%) per annum at any time that a Default hereunder has occurred and is continuing, payable in cash quarterly in arrears on each
January 1, March 1, June 1, and September 1 that the Notes are outstanding. 
 The Company
acknowledges that the Holder has delivered its Existing Notes to the Company, and the Company and the Holder agree that the Existing Notes shall be amended and restated in their entirety by such Notes.” 
 Section 1.02. Amendments to Section 13.01. Section 13.01 of the Purchase Agreement is hereby amended by deleting the
definition of “Maturity Date” and replacing it with the following: 
 “‘Maturity Date’ shall
mean the third anniversary of the Closing Date.” 
 Section 1.03. Amendments to Section 13.01.
Section 13.01 of the Purchase Agreement is hereby further amended by adding thereto the following definitions in proper alphabetical order: 
 “‘Amendment No. 2’ shall mean that certain Amendment No. 2, dated as of July 31, 2007, between and among the Company and Special Value Bond Fund, LLC, as Holder.” 

“‘Amendment No. 2 Effective Date’ shall mean the Amendment No. 2 Effective Date under and as defined in
Amendment No. 2.” 
 “‘Old Notes’ shall have the meaning set forth in Section 1 of this
Agreement.” 
 Section 1.04. Amendments to Signature Pages. Upon the consummation of the Permitted Transaction, the
signature pages to the Purchase Agreement will be hereby amended by deleting in their entirety all references to Pemco World Air Services, Inc. under the heading “GUARANTORS.” 
 SECTION 2. CONSENT TO SALE OF ASSETS; WAIVER OF PUT OPTION; AUTHORIZATION AND DIRECTION. 
 Section 2.01. Consent to Sale of Assets. Pursuant to Section 11.02 of the Purchase Agreement, Holder hereby consents
to the sale of all or substantially all of the Equity Interests of, or all or substantially all of the assets of, PWAS (the “Permitted Transaction”), provided that such Permitted Transaction is consummated on or before
November 30, 2007 and that the aggregate consideration received by the Company pursuant to the Permitted Transaction is at least equal to the “Purchase Price” as defined in that certain Stock Purchase Agreement by and among the
Company, PWAS and WAS Aviation Services, Inc., dated July 10, 2007. 
  

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 Section 2.02. Waiver of Put Option. Solely with respect to the Permitted Transaction
and subject to the restrictions described in Section 2.01 hereof, Holder hereby waives its right, pursuant to Section 11.02 of the Purchase Agreement, to require the Company to repurchase all or any part of Holder’s Notes. 

Section 2.03 Authorization and Direction. The Holder hereby authorizes and directs the Collateral Agent to execute and deliver all
such agreements, instruments or documents and take all such further actions on behalf of the Holder, which shall in the Collateral Agent’s sole judgment be necessary, proper and advisable in order to terminate, upon the Closing of the Permitted
Transaction (but not before), the security interests (including mortgages) that the Collateral Agent, on behalf of the Secured Parties, has solely in the properties and assets to be sold in the Permitted Transaction. 
 SECTION 3. REPRESENTATIONS AND WARRANTIES. 
 To induce the Holder to enter into this Amendment, the Company and Guarantors party to the Purchase Agreement hereby jointly and severally represent and warrant to Holder that as of the Amendment No. 2 Effective
Date: 
 Section 3.01. The execution and delivery of this Amendment, the performance of this Amendment and the
Purchase Agreement as amended hereby (the “Amended Agreement”), and the other Transaction Documents, and the issuance of the Notes by the Company and the Guarantors have been duly authorized and constitute legal, valid and
binding obligations of each of the Company and the Guarantors enforceable against the Company and each Guarantor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors’ rights generally and except as enforceability may be limited by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 Section 3.02. Neither the execution or delivery by the Company or any of the Guarantors of this Amendment, nor performance by
any of them of this Amendment and the Amended Agreement or the issuance of the Notes will (i) contravene any applicable provision of any law, statute, rule or regulation, or any order, writ, injunction or decree of any court or Governmental
Authority, (ii) conflict or be inconsistent with, or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, the terms of any indenture, mortgage, deed of trust, loan agreement, credit
agreement or any other material agreement, contract or instrument to which any of them or their respective Subsidiaries may be subject, including without limitation, the Transaction Documents, or (iii) violate any provision of their respective
certificates of incorporation or bylaws (or equivalent organizational or charter documents) or the certificate of incorporation or bylaws (or equivalent organizational or charter documents) of any of their respective Subsidiaries. 
  

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 Section 3.03. The representations and warranties contained in the Purchase
Agreement, as amended hereby, are true, correct and complete in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in
all respects) on and as of the date hereof as if made on the date hereof, except to the extent such representations and warranties expressly relate to an earlier date. 
 Section 3.04. Prior to and after giving effect to this Amendment and the issuance of the Notes, no Default or Event of Default
has occurred or is continuing. 
 Section 3.05. After giving effect to this Amendment, the guaranties granted
pursuant to the Transaction Documents in favor of the Secured Parties shall be valid and enforceable against the respective Guarantors thereunder. 
 SECTION 4. CONDITIONS PRECEDENT. 
 Section 4.01. Conditions Precedent to Amendment. This Amendment shall
not become effective unless all of the following conditions precedent shall have been satisfied or waived before July 31, 2007 (the date of such satisfaction or waiver being herein referred to as the “Amendment No. 2 Effective
Date”): 
 (a) The Holder shall have received by hand, courier, mail, email or facsimile transmission, duly executed
counterparts to this Amendment which, when taken together, bear the authorized signatures of the Company, the Guarantors and the Holder. 
 (b) The Notes shall have been executed by the Company and delivered to the Holder in form and substance satisfactory to the Holder. 
 (c) All corporate and other proceedings taken or to be taken in connection with this Amendment and all documents incidental thereto,
whether or not referred to herein, shall be satisfactory in form and substance to the Holder. 
 (d) The guaranties in favor
of the Secured Party granted pursuant to the Transaction Documents, shall continue to be valid and enforceable against the Guarantors. 
 (e) The Company shall have delivered a consent under the Senior Credit Facility, in form and substance satisfactory to the Holder, permitting this Amendment and the issuance of the Notes. 
 SECTION 5. NO PREJUDICE OR WAIVER; REAFFIRMATION; ACKNOWLEDGMENT. 
 Section 5.01. No Prejudice or Waiver. Except as provided herein, the terms of this Amendment shall not operate as a waiver by the Holder of,
or otherwise prejudice the Holder’s rights, remedies or powers under the Transaction Documents or under any applicable law. Except as expressly provided herein: 
 (a) no terms or provisions of any Transaction Document are waived, modified or changed by this Amendment; and 
  

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 (b) the terms and provisions of the Transaction Documents shall continue in full force
and effect. 
 Section 5.02. Reaffirmation. 
 (a) The Company and the Guarantors party to the Purchase Agreement hereby acknowledge and reaffirm all of their obligations and duties
under the Transaction Documents as to the Notes. 
 (b) The Company and the Guarantors party to the Purchase Agreement and the
Holder hereby acknowledge and reaffirm that the Holder has and shall continue to have valid, secured, second priority Liens in the Collateral, as set forth in the Transaction Documents as to all of the Notes. 
 (c) The Guarantors party to the Purchase Agreement hereby acknowledge and reaffirm all of their obligations and duties under
Section 14 of the Purchase Agreement. 
 Section 5.03. Acknowledgements. The Company and the Guarantors party to the
Purchase Agreement acknowledge that the definition of Secured Obligations under the Security Agreement will include, following the Amendment No. 2 Effective Date, all of the obligations owing from such parties to the Secured Parties under the
Notes. 
 SECTION 6. MISCELLANEOUS. 
 Section 6.01. Governing Law. This Amendment shall be construed in accordance with and governed by the law of the State of New York, without regard to any conflicts of law provisions that would require the
application of the law of any other jurisdiction. 
 Section 6.02. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by
all the parties hereto shall be lodged with the Company and the Holder. 
 Section 6.03. Headings Descriptive. The headings of
the several sections and subsections of this Amendment are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Amendment. 
 Section 6.04. Waivers and Consents. Neither this Amendment nor any term hereof may be changed, waived, discharged or terminated orally, or by
any action or inaction, but only by an instrument in writing signed in accordance with the waiver provisions set forth in the Purchase Agreement. 
  

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 Section 6.05. Survival. All warranties, representations, certifications and covenants made by
or on behalf of the Company and/or the Subsidiaries herein or in any of the other Transaction Documents or in any certificate or other instrument delivered pursuant hereto or pursuant to any other Transaction Document shall be considered to have
been relied upon by the Holders and shall survive the execution hereof and of the other Transaction Documents, regardless of any investigation made by or on behalf of the Holder. All statements in any such certificate or other instrument shall
constitute representations and warranties of the Company hereunder. 
 Section 6.06. Transaction Documents. This Amendment and
all other documents executed in favor of the Holder in connection herewith shall be deemed to be Transaction Documents for all purposes under the Purchase Agreement. 
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 
  

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

			
	PEMCO AVIATION GROUP, INC., as Company
		
	By:	 	 /s/ Randy Shealy

	Name:	 	Randy Shealy
	Title:	 	Senior Vice President and Chief Financial Officer
	
	PEMCO AEROPLEX, INC., as a Guarantor
		
	By:	 	 /s/ Randy Shealy

	Name:	 	Randy Shealy
	Title:	 	Senior Vice President and Chief Financial Officer
	
	PEMCO ENGINEERS, INC., as a Guarantor
		
	By:	 	 /s/ Randy Shealy

	Name:	 	Randy Shealy
	Title:	 	Senior Vice President and Chief Financial Officer
	
	PEMCO WORLD AIR SERVICES, INC., as a Guarantor
		
	By:	 	 /s/ Randy Shealy

	Name:	 	Randy Shealy
	Title:	 	Senior Vice President and Chief Financial Officer
	
	SPACE VECTOR CORPORATION, as a Guarantor
		
	By:	 	 /s/ Randy Shealy

	Name:	 	Randy Shealy
	Title:	 	Senior Vice President and Chief Financial Officer

  

 [Signature Page to Amendment No. 2] 

			
	SPECIAL VALUE BOND FUND, LLC, as Holder
	By: Tennenbaum Capital Partners, LLC, its Investment Manager
		
	By:	 	 /s/ Michael E. Tennenbaum

	Name:	 	Michael E. Tennenbaum
	Title:	 	Senior Partner

  

 [Signature Page to Amendment No. 2] 

 Exhibit A-2 
 Form of Amended and Restated NoteAmended and Restated Senior Secured Note

 Exhibit 10.2 
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. 
 PEMCO AVIATION GROUP, INC. 
 AMENDED AND RESTATED SENIOR SECURED NOTE DUE 2009

  

			
	 $5,000,000
	 	Issue Date: February 15, 2006

 For value received, the undersigned, PEMCO AVIATION GROUP, INC., a Delaware corporation (the
“Company”, which term includes any successor corporation under the Purchase Agreement hereinafter referred to), hereby promises to pay to the order of Special Value Bond Fund, LLC, a Delaware limited liability company, or its
registered assigns (the “Holder”), the principal sum of $5,000,000 on the third anniversary of the Closing Date (the “Maturity Date”) and to pay interest thereon from time to time as provided
herein. 
 1. This Amended and Restated Note is one of a duly authorized issue of notes of the Company designated as its Senior Secured Notes
due 2009 (herein called the “Notes”), issued in the aggregate principal amount limited to $5,000,000 pursuant to the Purchase Agreement dated as of February 15, 2006, as amended pursuant to that certain Amendment
No. 1 dated as of February 15, 2007 and as amended pursuant to that certain Amendment No. 2 dated as of July 31, 2007 (as so amended, the “Purchase Agreement”) by and among the Company, the Guarantors
party thereto and the Purchaser party thereto, and is entitled to the benefits thereof and to the exercise of the remedies provided thereby or otherwise available in respect thereof. This Note amends and restates in its entirety the Amended and
Restated Senior Secured Note due 2008 of like principal amount of the Company issued on February 15, 2006. Capitalized terms used herein without definition have the meanings assigned thereto in the Purchase Agreement. 
 2. 
 (a) The Company promises to pay
interest (“Interest”) on the principal amount of this Note at the rate of 15.0% per annum (the “Interest Rate”). Interest on this Note shall accrue from and including the date of issuance through
and until repayment of the principal amount of this Note and payment of all Interest in full, and shall be computed on the basis of a 360-day year composed of twelve (12) thirty (30)-day months and the actual number of days elapsed. Interest
shall be payable in cash quarterly in arrears on each January 1, March 1, June 1 and September 1 that the Notes are outstanding or, if any such date shall not be a Business Day, on the next succeeding Business Day to
occur after such date (each date upon which interest shall be so payable, an “Interest Payment 

 
Date”), beginning on March 1, 2006, by wire transfer of immediately available funds to an account at a bank designated in writing by
the Holder on reasonable notice. In the absence of any such written designation, any such Interest payment shall be deemed made on the date a check for good funds in the applicable amount payable to the order of Holder is received by the Holder at
its last address as reflected in the Company’s Note Register (as defined in Section 10 hereof); if no such address appears, then to such Holder in care of the last address in such note register of any predecessor holder of this Note
(or its predecessor). 
 (b) Notwithstanding the foregoing provisions of this Section 2, but subject to applicable law, any
overdue principal of, overdue Interest on and any other overdue amounts payable under this Note shall bear interest, payable on demand in immediately available funds, for each day from the date payment thereof was due to the date of actual payment
at a rate equal to the sum of (i) the Interest Rate and (ii) an additional two percent (2.0%) per annum. Subject to applicable law, any interest that shall accrue on overdue interest on this Note as provided in the preceding sentence
and shall not have been paid in full in cash on or before the next Interest Payment Date to occur after the date on which the overdue interest became due and payable shall itself be deemed to be overdue interest on this Note to which the preceding
sentence shall apply. 
 (c) In addition, subject to applicable law, with respect to any acceleration of this Note pursuant to
Section 12 of the Purchase Agreement prior to the date that is nine (9) months following the Closing Date, any principal amount owing under this Note at any time that an Event of Default under the Purchase Agreement has occurred and
is continuing shall bear interest, payable on demand in immediately available funds, for each day commencing on the occurrence of such Event of Default, at a rate equal to the sum of (i) the Interest Rate and (ii) an additional two percent
(2.0%) per annum, calculated from the date of such payment upon acceleration to the date that is nine (9) months following the Closing Date. 
 (d) In the event that any interest rate(s) provided for in this Section 2 shall be determined to be unlawful, such interest rate(s) shall be computed at the highest rate permitted by applicable law. Any
payment by the Company of any interest amount in excess of that permitted by law shall be considered a mistake, with the excess being applied to the principal amount of this Note without prepayment premium or penalty; if no such principal amount is
outstanding, such excess shall be returned to the Company. 
 3. The Notes are subject to redemption upon not less than 30 nor more than 60
days notice at any time, as a whole or in part, at the election of the Company, at 100% of the principal amount of the Notes being redeemed, together with Interest accrued and unpaid thereon to the date fixed for such redemption, as provided in the
Purchase Agreement; provided, however, that in the case of each redemption of less than all of the outstanding Notes, the Notes shall be redeemed pro rata among all of the Notes at the time outstanding in proportion, as nearly
as practicable, to the respective unpaid principal amounts thereof not theretofore called for redemption, with adjustments, to the extent practicable, to compensate for any prior redemptions not made exactly in such proportion. 
  

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 4. All redemption payments shall include payment of accrued Interest on the principal amount of this Note
so prepaid and shall be applied first to all costs, expenses and indemnities payable under the Purchase Agreement, then to payment of default interest, if any, then to payment of the Interest and the Prepayment Fee, and thereafter to principal.

 5. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issue in the name
of the Holder hereof upon cancellation hereof. 
 6. If an Event of Default shall occur and be continuing, the principal of all the Notes may
be declared to be due and payable in the manner and with the effect provided in the Purchase Agreement. This Note is entitled to the benefits of certain guarantees set forth in the Purchase Agreement (the “Guaranties”) made
in favor of the Holders of the Notes by the Guarantors. Reference is hereby made to the Purchase Agreement for a statement of the respective rights, limitation of rights, duties and obligations thereunder of the Guarantors and Holders of the Notes.

 7. The Notes are secured by a pledge of substantially all of the assets and properties of the Company and the Guaranties are secured by
the pledge of substantially all of the assets and properties of each Guarantor, as set forth in the Purchase Agreement. Pursuant to the Intercreditor Agreement, the security interests securing the indebtedness evidenced by the Notes are
contractually subordinate to the prior payment in full of amounts outstanding under the Senior Credit Facility. 
 8. This Note may be
transferred, pledged or assigned, in whole or in part, by the Holder at any time, in accordance with the provisions of the Purchase Agreement. The Purchase Agreement also contains provisions permitting the Required Holders, on behalf of the Holders
of all the Notes, to waive compliance by the Company or the Guarantors with certain provisions of the Purchase Agreement and certain past defaults under the Purchase Agreement and their consequences. Any such consent or waiver by or on behalf of the
Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in the exchange herefor or in lieu hereof whether or not notation of
such consent or waiver is made upon this Note. 
 9. No reference herein to the Purchase Agreement and no provision of this Note or of the
Purchase Agreement shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place and rate, and in the coin and currency, herein
prescribed. 
 10. The Company shall maintain a register (the “Note Register”) in its principal offices for the
purpose of registering the Notes and any transfer or partial transfer thereof, which register shall as set forth in the Purchase Agreement reflect and identify the ownership of record of any interest in this Note. Upon surrender for registration of
transfer or exchange of this Note at the principal offices of the Company, the Company shall, at its expense, execute and deliver one or more new Notes of like tenor of a like aggregate principal amount, registered in the name of the Holder or a
transferee or transferees. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly 

  

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executed by the Holder of such Note or such Holder’s attorney duly authorized in writing. Prior to and at the time of due presentment of this Note for
registration of transfer, the Company may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and the Company shall not be affected by notice to the contrary. 

11. The term “Holder” as used herein shall also include any transferee of this Note whose name has been recorded by the Company in
the Note Register. Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and may be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable
exemption from the registration requirements of the Securities Act. 
 12. On receipt by the Company of an affidavit of an authorized
representative of the Holder stating the circumstances of the loss, theft, destruction or mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of such Note), the Company, at its expense, will promptly
execute and deliver, in lieu thereof, a new Note of like tenor. If required by the Company, such Holder must provide indemnity sufficient in the reasonable judgment of the Company to protect the Company from any loss which they may suffer if a lost,
stolen or destroyed Note is replaced. 
 13. All notices, demands and other communications provided for or permitted hereunder shall be made
in accordance with Section 15.03 of the Purchase Agreement. 
 14. This Note shall be governed by, construed in accordance with,
and enforced under, the laws of the state of New York applicable to agreements or instruments entered into and performed entirely within such state. 
  

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	PEMCO AVIATION GROUP, INC.
		
	By:	 	 /s/ Randy Shealy

	Name:	 	Randy Shealy
	Title:	 	Senior Vice President and Chief Financial Officer

  

 [Signature Page to Amended and Restated Note]

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