Document:

EX-10.85

 

Exhibit 10.85

Erie Insurance Company and Erie Insurance Company of New York

Erie, Pennsylvania

AGGREGATE EXCESS OF LOSS REINSURANCE

ADDENDUM NO. 5

TERMINATION ADDENDUM

Amendment to the REINSURANCE CONTRACT made the first day of January, 1998, between ERIE INSURANCE
EXCHANGE, by and through its Attorney-in-Fact, ERIE INDEMNITY COMPANY, of Erie, Pennsylvania,
(hereafter called the “REINSURER”), and ERIE INSURANCE COMPANY and its wholly owned subsidiary ERIE
INSURANCE COMPANY OF NEW YORK, both of Erie, Pennsylvania (herein referred to collectively (or
individually as the context requires) as the “COMPANY”)

It is understood and agreed that this Reinsurance Contract shall be terminated on December 31,
2005, in accordance with Article 18 — Termination.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives.

In Erie, Pennsylvania, this 8th day of November, 2005.

	 	 	 	 	 
	ATTEST:

	 	ERIE INSURANCE COMPANY	 	 
	 
	 	 	 	 
	/s/ Margaret Porter

	 	/s/ J.R. Van Gorder	 	 
	 

	 	 	 	 
	 

	 	J. R. Van Gorder	 	 
	 

	 	Sr. Exec. V.P., Secretary & General Counsel	 	 
	 
	 	 	 	 
	 

	 	ERIE INSURANCE COMPANY	 	 
	ATTEST:

	 	OF NEW YORK	 	 
	/s/ Margaret Porter

	 	/s/ Philip A. Garcia	 	 
	 

	 	 	 	 
	 

	 	Philip A. Garcia	 	 
	 

	 	Executive Vice President & CFO	 	 
	 
	 	 	 	 
	 

	 	ERIE INSURANCE EXCHANGE, by	 	 
	 

	 	ERIE INDEMNITY COMPANY,	 	 
	ATTEST:

	 	Attorney-in-Fact	 	 
	 
	 	 	 	 
	/s/ Margaret Porter

	 	/s/ Michael S. Zavasky	 	 
	 

	 	 	 	 
	 

	 	Michael S. Zavasky	 	 
	 

	 	Senior Vice President	 	 

27Amendment to Credit Agreement dated as of February 15, 2006

    EXHIBIT
      10.1

     

    FIRST
      AMENDMENT TO CREDIT AND SECURITY AGREEMENT

     

     

    This
      FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this “Amendment”),
      is
      made as of February 15, 2006, by and among LEONARD’S METAL, INC., a Missouri
      corporation, LMI FINISHING, INC., an Oklahoma corporation, TEMPCO ENGINEERING,
      INC., a Missouri corporation, VERSAFORM CORP., a California corporation, PRECISE
      MACHING PARTNERS, LLP, a Texas limited liability partnership,
      and
      LMI-TCA, Inc., a Delaware Corporation (collectively,
      the
      “Borrower”),
      and
      WELLS FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the “Lender”).

     

    Recitals

     

    The
      Borrower and the Lender have entered into a Credit and Security Agreement dated
      as of November 29, 2004 (as amended from time to time, the “Credit
      Agreement”).
      Capitalized terms used in these recitals have the meanings given to them in
      the
      Credit Agreement unless otherwise specified.

     

    The
      Borrower has requested that certain amendments be made to the Credit Agreement,
      the Loan Documents and the Security Documents and the Lender is willing to
      so
      amend the Credit Agreement, the Loan Documents and the Security Documents
      pursuant to the terms and conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual covenants and
      agreements herein contained, it is agreed as follows:

     

    1.  Amendments
      to Credit Agreement, the Loan Documents and the Security
      Documents.
      

     

    (a)  The
      Credit Agreement, the Loan Documents, and the Security Documents shall be
      amended as necessary to provide that LMI-TCA, Inc. is a “Borrower” or a
“Debtor,” as applicable.

     

    (b)  With
      respect to any grant of a security interest under the Credit Agreement or any
      Security Document, LMI-TCA, Inc. hereby pledges, grants and assigns to the
      Lender, a security interest in the collateral described in each such document,
      to the extent LMI-TCA, Inc. may at such time or thereafter have an interest
      in
      such collateral.

     

    2.  Defined
      Terms.
      Capitalized terms used in this Amendment which are defined in the Credit
      Agreement shall have the same meanings as defined therein, unless otherwise
      defined herein. Section
      1
      of the Credit Agreement is amended by adding or amending, as the case may be,
      the following definitions:

     

    (a)  “Advance”
      means a Revolving Advance, an Overadvance, an Equipment Term Advance, or a
      Real
      Estate Term Advance.

     

    (b)  “Availability”
      means the difference of (i) the Borrowing Base and (ii) the sum of (A) the
      outstanding principal balance of the Revolving Note (B) the L/C Amount and
      (C)
      the outstanding principal balance of the Overadvance Note.

     

    (c)  “Borrowing
      Base” means at any time the lesser of:

    

    (a) the
      Maximum Line; or

    

    (b) subject
      to change from time to time in the Lender’s sole discretion, the sum
      of:

    

    (i) 85%
      of
      Eligible Accounts, plus

    

    (ii) during
      the Foreign Accounts Eligibility Period, the lesser of (A) 85% of Eligible
      Foreign Accounts or (B) $1,500,000; plus

    

    (iii) the
      lesser of (A) 34% of Eligible Inventory that consists of raw material, or
      (B) $2,500,000; plus

    

    (iv) the
      lesser of (A) 50% of Eligible Inventory that consists of works in progress,
      or
      (B) $6,000,000;
      plus

    

    (v) the
      lesser of (A) 31% of Eligible Inventory that consists of finished goods, or
      (B) $6,000,000.

     

    (d)  “Credit
      Facility” means the credit facility being made available to the Borrower by the
      Lender under Article II, as evidenced by the Revolving Note, Overadvance Note,
      the Equipment Term Loan Note and Real Estate Term Loan Note.

     

    (e)  “Funding
      Date” means November 15, 2004.

     

    (f)  “Maturity
      Date” means November 15, 2009.

     

    (g)  “Maximum
      Line” means $23,250,000 unless said amount is reduced pursuant to Section 2.16,
      in which event it means such lower amount.

     

    (h)  “Maximum
      Overadvance Line” means $3,000,000 as of the execution date of this Amendment,
      provided that such amount shall be reduced by $83,333.33 on the first day of
      each month thereafter. 

     

    (i)  “Overadvance
      Note” means the Borrower’s promissory note, payable to the order of the Lender
      in substantially the form of Exhibit I hereto and any note or notes issued
      in
      substitution therefor. 

     

    (j)  “Overadvance
      Line Availability” means the difference of (i) the Maximum Line and (ii) the sum
      of (A) the outstanding principal balance of the Revolving Note and (B) the
      outstanding principal balance of the Overadvance Note.

     

    (k)  “Overadvance
      Amount” means the aggregate amount of outstanding Overadvances.

     

    3.  Margins.
      Section
      2.12(b) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following in lieu thereof:

    

    (b) Margins.
      The
      Margins through and including the first adjustment occurring as specified below
      shall be (i) four percent (4%) for the Equipment Term Advance if it is a
      Floating Rate Advance, (ii) four percent (4%) for the Real Estate Term Advance
      if it is a Floating Rate Advance, (iii) zero percent (0%) for Revolving Advances
      that are Floating Rate Advances, (iv) one-half
      of one percent (0.50%) for
      Overadvances, which Overadvances shall all be Floating Rate Advances, and (v)
      for LIBOR Rate Advances, a percentage equal to the difference between the Base
      Rate and the LIBOR Base Rate on the date of the LIBOR Rate Advance, which shall
      be determined by Lender, plus the Margin that would have been applicable to
      that
      type of Advance if it had been a Floating Rate Advance. By way of example only,
      if the Prime Rate was five percent (5%), the LIBOR Base Rate was three percent
      (3%) and the Margin for an Equipment Term Advance that was a Floating Rate
      Advance was (0.5), then the margin for an Equipment Term Advance that was a
      LIBOR Rate Advance would be two and one-half percent (2.5%).

    

    Effective
      February 1, 2006 and upon Borrower’s payment to Lender of a $50,000 success fee,
      the Margin for the Equipment Term Advance shall be reduced to one-half of one
      percent (0.5%) or the equivalent LIBOR Rate, as determined by Lender in
      accordance with this section. Also effective January 1, 2006, the Margin for
      the
      Real Estate Term Advance shall be reduced to one-half of one percent (0.5%)
      or
      the equivalent LIBOR Rate, as determined by Lender in accordance with this
      section

    

    If
      Borrower establishes a Net Income of greater than $1,950,000 for the period
      commencing January 1, 2006 and ending June 30, 2006 (which amount represents
      50%
      of Borrower’s projected Net Income for the period commencing January 1, 2006 and
      ending June 30, 2006), then (i) the Margin for the Revolving Advances shall
      be
      reduced to a negative one-quarter of one percent (0.25%) or the equivalent
      LIBOR
      Rate, as determined by Lender in accordance with this section; (ii) the Margin
      for the Real Estate Term Advance shall be reduced to one-quarter of one percent
      (0.25%) or the equivalent LIBOR Rate, as determined by Lender in accordance
      with
      this section; and (iii) the Margin for the Equipment Term Advance interest
      rates
      will be reduced to one-quarter of one percent (0.25%) or the equivalent LIBOR
      Rate, as determined by Lender in accordance with this section. Such reductions
      in the Margins shall be effective on the first day of the first month after
      Lender’s receipt of Borrower’s June 30, 2006 periodic SEC Filing (Form 10Q)
      required under Section 6.1.

    

    Except
      as
      otherwise specifically provided to the contrary, reductions and increases in
      the
      Margins and any payments to be made by Borrower to Lender in connection with
      such reductions or increases in the Margins shall be made on the first day
      of
      the first month after Lender’s receipt of Borrower’s audited financial
      statements and compliance certificate required under Section 6.1.
      Notwithstanding the foregoing, (i) if the Borrower fails to deliver any
      financial statements or compliance certificates when required under Section
      6.1,
      the Lender may, by notice to the Borrower, increase the Margins to the highest
      rates set forth above until such time as the Lender has received all such
      financial statements and compliance certificates, and (ii) no reduction in
      the
      Margins will be made if a Default Period exists at the time that such reduction
      would otherwise be made.

     

    4.  Prepayment
      Fees.
      Section
      2.13(f) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following in lieu thereof: 

     

    (f) Prepayment
      Fees.
      If the
      Credit Facility is prepaid for any reason, the Borrower shall pay to the Lender
      a fee in an amount equal to a percentage of the amount prepaid as follows:
      (i)
      three percent (3%) if prepayment occurs on or before the first anniversary
      of
      the Funding Date; (ii) two percent (2%) if prepayment occurs after the first
      anniversary of the Funding Date but on or before the second anniversary of
      the
      Funding Date; (iii) one percent (1%) if prepayment occurs after the second
      anniversary of the Funding Date but on or before the third anniversary of the
      Funding Date; and (iv) zero percent (0%) if prepayment occurs after the third
      anniversary of the Funding Date. 

     

    5.  Waiver
      of Fees.
      Section
      2.13(g) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following in lieu thereof:

     

    (g) Waiver
      of Termination and Prepayment Fees.
      The
      Borrower will not be required to pay the termination and prepayment fees
      otherwise due under subsections (e) and (f) if such termination or prepayment
      is
      made because of refinancing by an affiliate of the Lender. In addition, the
      Borrower will not be required to pay the termination and prepayment fees
      otherwise due under subsections (e) and (f) upon payment in full of the Real
      Estate Term Loan.

     

    6.  Mandatory
      Prepayment.
      Section
      2.16 of the Credit Agreement is hereby deleted in its entirety and replaced
      with
      the following in lieu thereof:

    

    Section
      2.16 Voluntary
      Prepayment; Reduction of the Maximum Line; Termination of the Credit Facility
      by
      the Borrower.
      Except
      as otherwise provided herein, the Borrower may prepay the Advances and
      Overadvances in whole at any time or from time to time in part. The Borrower
      may
      terminate the Credit Facility or reduce the Maximum Line at any time if it
      (i)
      gives the Lender at least 30 days’ prior written notice and (ii) pays the Lender
      termination, prepayment and Maximum Line reduction fees in accordance with
      Sections 2.13(e) and (f). Any reduction in the Maximum Line must be in an amount
      of not less than $1,000,000 or an integral multiple thereof. If the Borrower
      reduces the Maximum Line to zero, all Obligations shall be immediately due
      and
      payable. Subject to termination of the Credit Facility and payment and
      performance of all Obligations, the Lender shall, at the Borrower’s expense,
      release or terminate the Security Interest and the Security Documents to which
      the Borrower is entitled by law.

     

    7.  Mandatory
      Prepayment.
      Section
      2.17 of the Credit Agreement is hereby deleted in its entirety and replaced
      with
      the following in lieu thereof:

    

    Section
      2.17 Mandatory
      Prepayment.
      

    

    (a) Without
      notice or demand, if the sum of the outstanding principal balance of the
      Revolving Advances plus the L/C Amount shall at any time exceed the Borrowing
      Base, the Borrower shall (i) first, immediately prepay the Revolving Advances
      to
      the extent necessary to eliminate such excess; and (ii) if prepayment in full
      of
      the Revolving Advances is insufficient to eliminate such excess, pay to the
      Lender in immediately available funds for deposit in the Special Account an
      amount equal to the remaining excess. 

    

    (b) Without
      notice or demand, if the sum of the outstanding principal balance of the
      Overadvances exceed the Maximum Overadvance Line, the Borrower shall immediately
      prepay the Overadvances to the extent necessary to eliminate such excess.

    

    (c) Any
      payment received by the Lender under this Section 2.17 or under Section 2.16
      may
      be applied to the Obligations, in such order and in such amounts as the Lender,
      in its discretion, may from time to time determine.

     

    8.  Overadvance
      Facility.
      New
      Sections 2.21 and 2.22 of the Credit Agreement are hereby inserted as
      follows:

    

    Section
      2.21 Overadvance
      Facility.

    

    (a) The
      Lender agrees, on the terms and subject to the conditions set forth herein,
      to
      make advances to the Borrower from the execution date of this Amendment to
      March
      1, 2009 (the “Overadvances”). The Lender shall have no obligation to make an
      Overadvance to the extent the amount of the requested Overadvance exceeds the
      lesser of:

    

    (i)
      the
      Maximum Overadvance Line less the Overadvance Amount, or

    

    (ii)
      the
      Overadvance Line Availability.

    

    The
      Borrower’s obligation to pay the Overadvances shall be evidenced by the
      Overadvance Note and shall be secured by the Collateral. Within the limits
      set
      forth in this Section 2.1, the Borrower may borrow, prepay pursuant to Section
      2.16 and reborrow.

    

    Section
      2.22 Payment
      of Overadvance Note.
      The
      entire unpaid principal balance of the Overadvance Note and all unpaid interest
      accrued thereon shall be due and payable in full on or before March 1,
      2009.

     

    9.  Excess
      Availability.
      Notwithstanding anything to the contrary in Section 6.1(c) of the Credit
      Agreement, so long as Borrower maintains an average excess Availability balance
      greater than $3,500,000 (based on the average excess Availability balance of
      the
      previous 30-days), Borrower shall provide semi-monthly collateral reporting
      to
      the Lender without the supporting detail referenced in Section 6.1(c) of the
      Credit Agreement.

     

    10.  Capital
      Expenditures.
      Section
      6.2(f) of the Credit Agreement is hereby deleted in its entirety and replaced
      with the following in lieu thereof: 

    

    (f)
       Capital
      Expenditures.
      The
      Borrower will not incur or contract to incur Capital Expenditures of more than
      $3,000,000 in the aggregate during any fiscal year, with no more than $2,400,000
      paid from Borrower’s working capital. As of fiscal year end 2006 and thereafter,
      the Borrower will not incur or contract to incur Capital Expenditures of more
      than $5,000,000 in the aggregate during any fiscal year, with no more than
      $2,400,000 paid from Borrower’s working capital.

     

    11.  Investments
      and Subsidiaries.
      Lender
      hereby waives the restrictions contained Section 6.6 of the Credit Agreement
      that would prohibit Borrower from acquiring certain assets of Technical Change
      Associates, Inc.,  a Utah corporation, by Guarantor LMI Aerospace, Inc.
      Lender hereby consents to the acquisition of the Acquired Corporation and the
      subsequent transfer of the assets of such Acquired Corporation to LMI-TCA,
      Inc.,
      a Delaware corporation and a newly formed wholly owned subsidiary of LMI
      Aerospace, Inc. This waiver shall be effective only in this specific instance
      and for the specific purpose for which it is given, and this waiver shall not
      entitle the Borrower to any other or further waiver in any similar or other
      circumstances. 

     

    12.  Books
      and Records; Inspection and Examination.
      The
      last sentence of Section 6.10 of the Credit Agreement is deleted in its entirety
      and replaced with the following sentence:

     

    The
      Borrower will permit the Lender, or its employees, accountants, attorneys or
      agents, to examine and inspect any Collateral or any other property of the
      Borrower at any time during ordinary business hours up to two (2) times per
      year, provided that such limitation on Lender’s right to examine and inspect
      said Collateral shall not apply during any Default Period.

     

    13.  Secondary
      Offering.
      On
      January 19, 2006, Borrower filed a registration statement for a public offering
      with 2,900,000 shares of its common stock offered (the “Secondary Offering”).
      Subject to the receipt of new equity to be raised pursuant to the Second
      Offering, Borrower may use a portion of the new equity to reduce the outstanding
      amount of the Revolving Advances; however, such payment shall not be deemed
      a
      payment to reduce the Maximum Line. As long as such repayment does not reduce
      the Maximum Line, such repayment shall not be deemed a prepayment for purposes
      of calculating any applicable prepayment or termination fees.

     

    14.  Repayment
      of Subordinate Debt.
      Lender
      hereby gives its approval to the Borrowers to repay the $1,000,000 Subordinated
      Note, subject to the completion of the Secondary Offering raising at least
      $10,000,000 in new equity for Borrower. Subject to Borrower’s receipt of new
      equity from the Secondary Offering of at least $10,000,000, payment of the
      Subordinate Note shall not constitute an Event of Default under Section 7.1(p)
      to the extent that such repayment does not exceed $1,000,000. This waiver shall
      be effective only in this specific instance and for the specific purpose for
      which it is given, and this waiver shall not entitle the Borrower to any other
      or further waiver in any similar or other circumstances.

     

    15.  Participation.
      If (i)
      Lender determines for any reason and at any time that the total Credit Facility
      between Borrower and Lender exceeds the Lender’s internal lending limits, which
      determination shall be made at Lender’s sole discretion, (ii) Lender seeks to
      participate the Credit Facility with one or more other lenders, and (iii) the
      effect of such participation would be to reduce Lender’s position in the Credit
      Facility below Lender’s then existing position in the Credit Facility before
      such participation, then such reduction in Lender’s position in the Credit
      Facility as a result of such participation shall not be deemed a reduction
      for
      the purposes of calculating the termination fees and prepayment fees pursuant
      to
      Section 2.13(e) and Section 2.13(f) of the Credit Agreement. Nothing in this
      section shall be deemed a limitation of the Lender’s rights to seek
      participation with another lender or lenders under the Credit
      Agreement.

     

    16.  No
      Other Changes.
      Except
      as explicitly amended by this Amendment, all of the terms and conditions of
      the
      Credit Agreement shall remain in full force and effect and shall apply to any
      advance or letter of credit thereunder.

     

    17.  Non-waiver.
      By
      entering into this Amendment, Lender is not waiving any Default or Event of
      Default that may exist at this time under the Credit Agreement, and Lender
      reserves all rights and remedies available to it.

     

    18.  Conditions
      Precedent.
      This
      Amendment shall be effective when the Lender shall have received an executed
      original hereof, together with each of the following, each in substance and
      form
      acceptable to the Lender in its sole discretion:

     

    (a)  The
      Acknowledgment and Agreement of Guarantor set forth at the end of this
      Amendment, duly executed by the guarantor.

     

    (b)  A
      Certificate of the Borrower’s Secretary or manager certifying as to the
      resolutions of the Borrower’s managers and, if required, members, authorizing
      the execution, delivery and performance of this Amendment.

     

    (c)  Such
      other matters as the Lender may require.

     

    19.  Representations
      and Warranties.
      The
      Borrower hereby represents and warrants to the Lender as follows:

     

    (a)  The
      Borrower has all requisite power and authority to execute this Amendment and
      to
      perform all of its obligations hereunder, and this Amendment has been duly
      executed and delivered by the Borrower and constitute the legal, valid and
      binding obligation of the Borrower, enforceable in accordance with its
      terms.

     

    (b)  The
      execution, delivery and performance by the Borrower of this Amendment has been
      duly authorized by all necessary corporate action and do not (i) require
      any authorization, consent or approval by any governmental department,
      commission, board, bureau, agency or instrumentality, domestic or foreign,
      (ii) violate any provision of any law, rule or regulation or of any order,
      writ, injunction or decree presently in effect, having applicability to the
      Borrower, or the articles of incorporation or by-laws of the Borrower, or
      (iii) result in a breach of or constitute a default under any indenture or
      loan or credit agreement or any other agreement, lease or instrument to which
      the Borrower is a party or by which it or its properties may be bound or
      affected.

     

    (c)  All
      of
      the representations and warranties contained in Article VII of the Credit
      Agreement are correct on and as of the date hereof as though made on and as
      of
      such date, except to the extent that such representations and warranties relate
      solely to an earlier date.

     

    20.  References.
      All
      references in the Credit Agreement to “this Agreement” shall be deemed to refer
      to the Credit Agreement as amended hereby; and any and all references
      in
      the Security Documents and the Loan Documents to
      the
      Credit Agreement shall be deemed to refer to the Credit Agreement as amended
      hereby.

     

    21.  Release.
      The
      Borrower and the guarantor, by signing the Acknowledgment and Agreement of
      Guarantor set forth below, each hereby absolutely and unconditionally releases
      and forever discharges the Lender, and any and all participants, parent
      corporations, subsidiary corporations, affiliated corporations, insurers,
      indemnitors, successors and assigns thereof, together with all of the present
      and former directors, officers, agents and employees of any of the foregoing,
      from any and all claims, demands or causes of action of any kind, nature or
      description, whether arising in law or equity or upon contract or tort or under
      any state or federal law or otherwise, which the Borrower or guarantor has
      had,
      now has or has made claim to have against any such person for or by reason
      of
      any act, omission, matter, cause or thing whatsoever arising from the beginning
      of time to and including the date of this Amendment, whether such claims,
      demands and causes of action are matured or unmatured or known or
      unknown.

     

    22.  Costs
      and Expenses.
      The
      Borrower hereby reaffirms its agreement under the Credit Agreement to pay or
      reimburse the Lender on demand for all costs and expenses incurred by the Lender
      in connection with the Credit Agreement, the Loan Documents, the Security
      Documents and all other documents contemplated thereby, including without
      limitation all reasonable fees and disbursements of legal counsel. Without
      limiting the generality of the foregoing, the Borrower specifically agrees
      to
      pay all fees and disbursements of counsel to the Lender for the services
      performed by such counsel in connection with the preparation of this Amendment
      and the documents and instruments incidental hereto. The Borrower hereby agrees
      that the Lender may, at any time or from time to time in its sole discretion
      and
      without further authorization by the Borrower, make a loan to the Borrower
      under
      the Credit Agreement, or apply the proceeds of any loan, for the purpose of
      paying any such fees, disbursements, costs and expenses.

     

    23.  Miscellaneous.
      

    

    (a)  This
      Amendment and the Acknowledgment and Agreement of Guarantor may be executed
      in
      any number of counterparts, each of which when so executed and delivered shall
      be deemed an original and all of which counterparts, taken together, shall
      constitute one and the same instrument.

     

    (b)  Mo.Rev.Stat.
      § 432.047 Required Statement.
      “Oral loan agreements or commitments to loan money, extend credit or to forbear
      from enforcing repayment of 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.”

     

    (c)  Incorporation
      by Reference.
      All of
      the terms of the other Loan Documents are incorporated in and made part of
      this
      Amendment by reference; provided,
      however,
      that to
      the extent of any inconsistency between this Amendment and such other Loan
      Documents, this Amendment shall prevail and govern.

     

    [Remainder
      of Page Intentionally Blank - Signature Page Follows]

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    
      	
              LEONARD’S
                METAL, INC.

               

              By: 
                /s/ Lawrence E. Dickinson

               Lawrence
                E. Dickinson

              Its  
                Secretary 

               

            	
              LMI
                FINISHING, INC.

               

              
                By: 
                  /s/ Lawrence E. Dickinson

                Lawrence
                  E. Dickinson

                Its  
                  Secretary 

              

            
	
              TEMPCO
                ENGINEERING, INC.

               

              By: 
                /s/ Lawrence E. Dickinson

              Lawrence
                E. Dickinson 

              Its 
                Secretary

              
                 

              

            	
              VERSAFORM
                CORP.

               

              
                By: 
                  /s/ Lawrence E. Dickinson

                Lawrence
                  E. Dickinson

                Its 
                  Secretary

               

            
	
              PRECISE
                MACHINE PARTNERS, LLP

               

              By:
                LMI Aerospace, Inc., Partner

               

              By: 
                /s/ Lawrence E. Dickinson

              
                Lawrence
                  E. Dickinson 

                Its 
                  Secretary

               

            	
              LMI-TCA,
                INC.

               

              
                By: 
                  /s/ Lawrence E. Dickinson

                Lawrence
                  E. Dickinson

                Its 
                  Secretary

              

               

            
	
              WELLS
                FARGO BUSINESS CREDIT, INC.

               

              By: 
                /s/ Gary
                P. Yakel                  
                

              Gary
                P. Yakel

              Its
                Vice President

            	 

    

    

    

    

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    ACKNOWLEDGMENT
      AND AGREEMENT OF GUARANTOR

    The
      undersigned, a guarantor of the indebtedness of LEONARD’S
      METAL, INC., a Missouri corporation, LMI FINISHING, INC., an Oklahoma
      corporation, TEMPCO ENGINEERING, INC., a Missouri corporation, VERSAFORM CORP.,
      a California corporation, PRECISE MACHING PARTNERS, LLP, a Texas limited
      liability partnership,
      and
LMI-TCA,
      INC. a Delaware Corporation (collectively,
      the
      “Borrower”)
      to Wells
      Fargo Business Credit, Inc. (the “Lender”) pursuant to a separate Guaranty dated
      as of November 29, 2004 (the “Guaranty”), hereby (i) acknowledges receipt of the
      foregoing Amendment; (ii) consents to the terms and execution thereof;
      (iii) reaffirms its obligations to the Lender pursuant to the terms of its
      Guaranty; and (iv) acknowledges that the Lender may amend, restate, extend,
      renew or otherwise modify the Credit Agreement and any indebtedness or agreement
      of the Borrower, or enter into any agreement or extend additional or other
      credit accommodations, without notifying or obtaining the consent of the
      undersigned and without impairing the liability of the undersigned under its
      Guaranty for all of the Borrowers’ present and future indebtedness to the
      Lender.

    

     

    

      
        	 	
                LMI
                  AEROSPACE, INC., a Missouri

                Corporation

              
	 	 
	 	
                By:
                  /s/ Lawrence E. Dickinson       

              
	 	
                Name: 
                  Lawrence E. Dickinson      

              
	 	
                Its 
                  Secretary       

              
	 	 

      

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    ACKNOWLEDGMENT
      AND AGREEMENT OF GUARANTOR

     

    The
      undersigned, a guarantor of the indebtedness of LEONARD’S
      METAL, INC., a Missouri corporation, LMI FINISHING, INC., an Oklahoma
      corporation, TEMPCO ENGINEERING, INC., a Missouri corporation, VERSAFORM CORP.,
      a California corporation, PRECISE MACHING PARTNERS, LLP, a Texas limited
      liability partnership,
      and
      LMI-TCA, INC. a Delaware Corporation (collectively,
      the
      “Borrower”)
      to Wells
      Fargo Business Credit, Inc. (the “Lender”) pursuant to a separate Guaranty dated
      as of November 29, 2004 (the “Guaranty”), hereby (i) acknowledges receipt of the
      foregoing Amendment; (ii) consents to the terms and execution thereof;
      (iii) reaffirms its obligations to the Lender pursuant to the terms of its
      Guaranty; and (iv) acknowledges that the Lender may amend, restate, extend,
      renew or otherwise modify the Credit Agreement and any indebtedness or agreement
      of the Borrower, or enter into any agreement or extend additional or other
      credit accommodations, without notifying or obtaining the consent of the
      undersigned and without impairing the liability of the undersigned under its
      Guaranty for all of the Borrowers’ present and future indebtedness to the
      Lender.

    

     

    

      
        	 	
                PRECISE
                  MACHINE COMPANY, a Missouri Corporation

              
	 	 
	 	
                By:
                  /s/ Lawrence E. Dickinson              

              
	 	
                Name:
                  Lawrence E. Dickinson      

              
	 	
                Its
                  Secretary      

              
	 	 

      

    

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    Exhibit
      I
      to Credit and Security Agreement

    

    OVERADVANCE
      NOTE

    

    
      	 	
              $3,000,000.00

            	
              Minneapolis,
                Minnesota

              February
                15, 2006

            

    

    

    For
      value
      received, the undersigned, LEONARD’S METAL, INC., a Missouri corporation
      (“Leonard’s Metal”), LMI FINISHING, INC., an Oklahoma corporation (“LMI
      Finishing”), TEMPCO ENGINEERING, INC., a Missouri corporation (“Tempco”),
      VERSAFORM CORP., a California corporation (“Versaform”), PRECISE MACHINE
      PARTNERS, LLP, a Texas limited liability partnership (“Precise Machine”), and
      LMI-TCA, INC. a Delaware Corporation (“TCA”), (Leonard’s Metal, LMI Finishing,
      Tempco, Versaform, Precise Machine, and TCA are hereinafter collectively
      referred to as the “Borrower”), hereby promise to pay on the Termination Date
      under the Credit Agreement (defined below), to the order of WELLS FARGO BUSINESS
      CREDIT, INC., a Minnesota corporation (the “Lender”), at its main office in
      Minneapolis, Minnesota, or at any other place designated at any time by the
      holder hereof, in lawful money of the United States of America and in
      immediately available funds, the principal sum of Eighteen Million and 00/100
      Dollars ($3,000,000.00) or, if less, the aggregate unpaid principal amount
      of
      all Overadvances made by the Lender to the Borrower under the Credit Agreement
      (defined below) together with interest on the principal amount hereunder
      remaining unpaid from time to time, computed on the basis of the actual number
      of days elapsed and a 360-day year, from the date hereof until this Note is
      fully paid at the rate from time to time in effect under the Credit and Security
      Agreement of even date herewith (the “Credit Agreement”) by and between the
      Lender and the Borrower. The principal hereof and interest accruing thereon
      shall be due and payable as provided in the Credit Agreement. This Note may
      be
      prepaid only in accordance with the Credit Agreement.

    

    This
      Note
      is issued pursuant, and is subject, to the Credit Agreement, which provides,
      among other things, for acceleration hereof. This Note is the Overadvance Note
      referred to in the Credit Agreement. This Note is secured, among other things,
      pursuant to the Credit Agreement and the Security Documents as therein defined,
      and may now or hereafter be secured by one or more other security agreements,
      mortgages, deeds of trust, assignments or other instruments or
      agreements.

    

    The
      Borrower shall pay all costs of collection, including reasonable attorneys’ fees
      and legal expenses if this Note is not paid when due, whether or not legal
      proceedings are commenced.

     

    Presentment
      or other demand for payment, notice of dishonor and protest are expressly
      waived.

    

    

    
      	 	
              LEONARD’S
                METAL, INC.

            
	 	 
	 	
              By: 
                /s/ Lawrence E. Dickinson        

            
	 	
              Name: 
                Lawrence E. Dickinson

            
	 	
              Its
                Secretary

            
	 	 

    

    

    
      	 	
              LMI
                FINISHING, INC.

            
	 	 
	 	
              By: 
                /s/ Lawrence E. Dickinson        

            
	 	
              Name: 
                Lawrence E. Dickinson

            
	 	
              Its
                Secretary

            
	 	 

    

    

    
      	 	
              TEMPCO
                ENGINEERING, INC.

            
	 	 
	 	
              By: 
                /s/ Lawrence E. Dickinson        

            
	 	
              Name: 
                Lawrence E. Dickinson

            
	 	
              Its
                Secretary

            
	 	 

    

    

    
      	 	
              VERSAFORM
                CORP.

            
	 	 
	 	
              By: 
                /s/ Lawrence E. Dickinson        

            
	 	
              Name: 
                Lawrence E. Dickinson

            
	 	
              Its
                Secretary

            
	 	 

    

    

    
      	 	
              PRECISE
                MACHINE PARTNERS, LLP

            
	 	 
	 	 By: 
              LMI Aerospace, Inc., Partner
	 	 
	 	
              By: 
                /s/ Lawrence E. Dickinson        

            
	 	
              Name: 
                Lawrence E. Dickinson 

            
	 	
              Its
                Secretary

            
	 	 

    

    

    
      	 	
              LMI-TCA,
                INC.

            
	 	 
	 	
              By: 
                /s/ Lawrence E. Dickinson        

            
	 	
              Name: 
                Lawrence E. Dickinson 

            
	 	
              Its
                Secretary

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