Exhibit 10
FOURTH AMENDMENT TO
REVOLVING LINE OF CREDIT LOAN AGREEMENT, TERM
LOAN AGREEMENT AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO REVOLVING LINE OF CREDIT LOAN AGREEMENT, TERM
LOAN AGREEMENT AND SECURITY AGREEMENT (the "Fourth Amendment") is made as of
September 21, 2000, by and among United Industrial Corporation, a Delaware
corporation, having an address of 570 Lexington Avenue, New York, New York
10022, and AAI Corporation, AAI Engineering Support, Inc., AAI/ACL Technologies,
Inc., AAI/ACL Technologies Europe Limited, Detroit Stoker Company, Midwest
Metallurgical Laboratory, Inc., UIC Products Co., Symtron Systems, Inc., and AAI
MICROFLITE Simulation International Corporation (collectively, the
"co-borrowers"), and First Union Commercial Corporation, a North Carolina
corporation, having an address of 1970 Chain Bridge Road, McLean, Virginia 22101
("Lender").
RECITALS
A. United Industrial Corporation and certain of its subsidiaries and
the Lender are parties to a Revolving Line of Credit Loan Agreement, Term Loan
Agreement and Security Agreement, dated as of June 11, 1997 (the "Loan
Agreement"), as amended by First Amendment to Revolving Line of Credit Loan
Agreement, Term Loan Agreement and Security Agreement (the "First Amendment")
made as of October 1, 1998, by Second Amendment to Revolving Line of Credit Loan
Agreement, Term Loan Agreement and Security Agreement (the "Second Amendment")
made as of December 31, 1998 and by Third Amendment to Revolving Line of Credit
Loan Agreement, Term Loan Agreement and Security Agreement (the "Third
Amendment") made as of March 31, 2000 (said agreement, as so amended, being
hereinafter called the "Loan Agreement").
B. The co-borrowers' obligations to repay advances under the Loan
Agreement is evidenced by a Revolving Note, dated as of July 11, 1997, as
amended by a First Amendment to Revolving Note, made as of March 31, 2000 (said
Revolving Note, as so amended, being hereinafter called the "Note").
C. Repayment of advances made under the Loan Agreement is secured by,
among other things, a certain Pledge and Security Agreement, dated as of October
13, 1994, by and among United Industrial Corporation ("UIC"), as pledgor, and
First Fidelity Bank, National Association, as Agent and pledgee, as amended by
First Amendment to Pledge and Security Agreement, dated as of June 11, 1997, by
and between United Industrial Corporation and the Lender (said Pledge and
Security Agreement, as so amended, being hereinafter called the "Pledge
Agreement"), the Pledge Agreement having pledged to the Lender the Symtron
Securities (as defined in the Pledge Agreement).
D. UIC has requested that Lender consent to the sale of the Symtron
Securities, that Lender release its security interest in the Symtron Securities
and in the assets of Symtron Systems, Inc., and that Lender release Symtron
Systems, Inc. from its obligations as a co-borrower under the Note and the Loan
Agreement; that Lender release its security interests in certain patents and
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trademarks being assigned by AAI Corporation in connection with the sale of the
Symtron Securities; and that Lender release its security interest in the
FireTrainer A-3000 Mobile ARFF Training System (which is owned by AAI
Engineering Support, Inc., and which is being transferred in connection with the
sale of the Symtron Securities); and Lender has agreed to those requests on the
terms and conditions stated in this Fourth Amendment, including (without
limitation) a condition that the purchase price for the Symtron Securities be
not less than Thirteen Million, Four Hundred Thousand Dollars ($13,400,000.00)
(which includes the repayment of intercompany indebtedness).
E. The parties desire to amend the Loan Agreement: (i) to release
Symtron Systems, Inc. as one of the co-borrowers; (ii) to release the Lender's
security interest in the Symtron Securities; (iii) to release the Lender's
security interest in the assets of Symtron Systems, Inc.; (iv) to release the
Lender's security interest in certain patents and trademarks owned by AAI
Corporation that are being assigned to Symtron Systems, Inc., in connection with
the purchase of the Symtron Securities; (v) to release the Lender's security
interest in the FireTrainer A-3000 Mobile ARFF Training System, owned by AAI
Engineering Support, Inc., which is being assigned to the purchaser of the
Symtron Securities; (vi) to confirm that the Loan Agreement remains in full
force and effect as to the remaining co-borrowers; and (vii) for certain other
purposes hereinafter set forth.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the co-borrowers and the Lender
hereby agree as follows:
1. The recitals are incorporated herein by reference. Capitalized terms
used but not defined herein shall have the meanings ascribed to them in the Loan
Agreement.
2. The definition of "Borrower" as set forth in Section 1.1 of the Loan
Agreement is deleted in its entirety and replaced with the following:
"Borrower" means United Industrial Corporation, AAI
Corporation, AAI Engineering Support, Inc., AAI/ACL Technologies, Inc.,
AAI/ACL Technologies Europe Limited, Detroit Stoker Company, Midwest
Metallurgical Laboratory, Inc., UIC Products Co., and AAI MICROFLITE
Simulation International Corporation. The term "Borrower" shall refer
to each such Person or to all of them, as the context may require, and
the representations and obligations hereunder of the Persons comprised
by the term "Borrower" shall be joint and several. For purposes of
testing compliance with the financial covenants hereinafter, the
negative covenants hereinafter, the unused fee provided hereinafter,
and pricing under the Revolving Note that is based on the Borrower's
financial performance, financial information concerning the Borrower
shall mean financial information for United Industrial Corporation and
its wholly owned subsidiaries (and wholly owned subsidiaries of
subsidiaries) stated on a consolidated basis.
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3. The definition of "Collateral" as set forth in Section 1.1 of the
Loan Agreement is amended to exclude the Symtron Securities and the properties
and assets of Symtron Systems, Inc.
4. Lender hereby:
a. releases Symtron Systems, Inc. from any further obligation
under the Note or the Loan Agreement;
b. releases its security interest under the Loan Agreement in the
properties and assets of Symtron Systems, Inc.;
c. releases its security interest in the Symtron Securities, and
hereby delivers the original stock certificates for the
Symtron Securities to UIC Corporation;
d. releases its security interest in the FireTrainer A-3000
Mobile ARFF Training System (which is owned by AAI Engineering
Support, Inc., and which is being sold in connection with the
sale of the Symtron Securities); and
e. releases its security interests in the patents and trademarks
listed in Exhibit A attached hereto and made a part hereof.
Lender agrees, further, to execute and deliver to Borrower or its
designee, at the Borrower's cost and expense, any and all instruments
or documents (including, without limitation, UCC-3 termination
statements) reasonably requested by Borrower to publicize or confirm
the releases described in paragraphs a. through e. above.
5. The Borrower consents to Lender's release of Symtron Systems, Inc.,
as an obligor under the Note and a co-borrower under the Loan Agreement, to
Lender's release of its security interest in the assets and properties of
Symtron Systems, Inc., to Lender's release of its security interest in the
Symtron Securities, to Lender's release of its security interest in the
FireTrainer A-3000 Mobile ARFF Training System; and to Lender's release of its
security interest in the patents and trademarks listed in Exhibit A attached
hereto and made a part hereof. None of the foregoing actions by the Lender shall
release the Borrower from any of its obligations under the Note, the Loan
Agreement or any other document evidencing, guaranteeing or securing the
Borrower's obligation to repay any financial accommodation extended to the
Borrower under the Loan Agreement.
6. To induce the Lender to enter into this Fourth Amendment, the
Borrower warrants and represents to the Lender that:
a. The Borrower's books and record properly reflect the
Borrower's financial condition, and no material adverse change
in the Borrower's financial condition has occurred since the
last date that the Borrower provided financial reports to the
Lender; and
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b. No litigation is pending or, to the Borrower's knowledge,
threatened against the Borrower which could materially
adversely affect the Borrower or which involves a claim
against the Borrower in an amount equal to or greater than
$500,000 of which the Borrower has not informed the Lender in
writing; and
c. The Borrower is in compliance with all provisions of the Loan
Agreement and is in compliance in all material respects with
all applicable laws and regulations; and
d. The amendment of the definition of Borrower to delete Symtron
Systems, Inc. as a co-borrower will not cause the Borrower to
cease to comply with its financial covenants under the Loan
Agreement; and
e. The purchase price that UIC will receive for the Symtron
Securities is not less than Thirteen Million, Four Hundred
Thousand Dollars ($13,400,000.00) (which includes the
repayment of intercompany indebtedness); and
f. The Lender's release of its security interest in the assets of
Symtron Systems, Inc., will not cause the sum of (i) aggregate
principal amount of Advances outstanding under the Revolving
Note plus (ii) the LOC Obligations to exceed the Borrowing
Base; and
g. Borrower has the power and authority to enter into this Fourth
Amendment, to perform its obligations hereunder, to execute
all documents being executed and delivered in connection
herewith, and to incur the obligations provided for herein,
all of which have been duly authorized and approved in
accordance with the Borrower's organizational documents; and
h. This Fourth Amendment, together with all documents executed in
connection herewith or pursuant hereto, constitute the valid
and legally binding obligations of the Borrower in accordance
with their respective terms; and
i. The Borrower's obligations under the Loan Documents remain
valid and enforceable obligations, and the execution and
delivery of this Fourth Amendment and the other documents
executed in connection herewith shall not be construed as a
novation of the Loan Agreement or the other Loan Documents.
7. The Borrower reaffirms its obligation to reimburse Lender or any
Affiliate of Lender that issued a letter of credit for the account of Symtron
Systems, Inc. for all drawings under outstanding letters of credit issued by the
Lender or its Affiliate for the account of Symtron Systems, Inc. Borrower agrees
to defend the Lender or such Affiliate, indemnify the Lender or such Affiliate
and hold the Lender or such Affiliate harmless from any drawings, claims,
demands, suits, actions, judgments, decrees, losses or damages (including
reasonable litigation expenses and attorneys fees) arising out of any such
letter of credit heretofore issued by the Lender or any affiliate of the Lender.
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The letters of credit covered by this paragraph are the following letters of
credit issued by First Union National Bank for the account of Symtron Systems,
Inc.: (i) Letter of Credit No. C SM409290 issued to Kawasaki Heavy Industries in
the amount of $22,450.00; (ii) Letter of Credit No. SM 410150c issued to ICS
Canadian in the amount of $28,466.00; and (iii) Letter of Credit No. S150334
issued to H. Krantz - TKT in the amount of $500,000.00.
8. Effective as of the date of this Fourth Amendment, the second
sentence of Section 3.3 of the Loan Agreement is deleted in its entirety and
replaced with the following:
Until further notice, Borrower designates James Perry and Richard
Erkeneff, or either one of them, as its employees authorized to
communicate with the Lender.
9. Effective as of the date of this Fourth Amendment, Section 7.3 of
the Loan Agreement is deleted in its entirety and replaced with the following
new Section 7.3, covenanting that the Borrower shall not:
Amend its Articles or Certificate of Incorporation by any amendment
which would adversely affect Borrower's ability to perform or comply
with any of the terms, conditions or agreements to be performed or
complied with by Borrower hereunder or to perform any of the
transactions contemplated hereby, change its name or ownership (except
changes of ownership of the shares in United Industrial Corporation),
convert its organizational form into another entity or form, sell,
lease or otherwise dispose of all or any substantial part of its assets
or properties, reorganize, consolidate or merge with any other
corporation, or purchase, lease or otherwise acquire all or
substantially all of the assets of any other entity, including shares
of stock of other corporations, except that Borrower may own notes and
other receivables acquired in the ordinary course of business. This
Section shall not prohibit the merger of any wholly owned subsidiary of
any of the corporations comprised by the Borrower into that
corporation, nor shall this Section prohibit the Borrower from
acquiring new businesses.
10. The Borrower promises to pay, upon execution of this Fourth
Amendment, all costs (including attorneys fees) incurred by the Lender in
connection with the preparation of this Fourth Amendment, and immediately to pay
all prior unpaid invoices submitted by Lender's attorney to the Borrower for
legal services rendered to the Lender in connection with the Loan Agreement. The
Borrower authorizes the Lender to advance funds to itself or to third parties to
pay the fees and costs mentioned in this paragraph, which shall be deemed to be
Advances to the Borrower under the Loan Agreement and which shall be repayable
in accordance with the Note.
11. The Security Interest in the Collateral granted by the Loan
Agreement shall henceforth secure not only the Loans made pursuant to the Loan
Agreement but also any other credit that Lender may extend to the Borrower.
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12. ARBITRATION. UPON DEMAND OF ANY PARTY HERETO, WHETHER MADE BEFORE
OR AFTER INSTITUTION OF ANY JUDICIAL PROCEEDING, ANY CONTROVERSY OR CLAIM
ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS BETWEEN PARTIES HERETO (A
"DISPUTE") SHALL BE RESOLVED BY BINDING ARBITRATION CONDUCTED UNDER AND GOVERNED
BY THE COMMERCIAL FINANCIAL DISPUTES ARBITRATION RULES (THE "ARBITRATION RULES")
OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA") AND THE FEDERAL ARBITRATION ACT.
DISPUTES MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS, COUNTERCLAIMS, A DISPUTE
AS TO WHETHER A MATTER IS SUBJECT TO ARBITRATION, CLAIMS BROUGHT AS CLASS
ACTIONS, OR CLAIMS ARISING FROM DOCUMENTS EXECUTED IN THE FUTURE. A JUDGMENT
UPON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. NOTWITHSTANDING
THE FOREGOING, THIS ARBITRATION PROVISION DOES NOT APPLY TO DISPUTES UNDER OR
RELATED TO SWAP AGREEMENTS. ALL ARBITRATION HEARINGS SHALL BE CONDUCTED IN THE
CITY OR COUNTY WHERE THE LENDER'S OFFICE, AS FIRST STATED ABOVE, IS LOCATED, OR
AT SUCH OTHER PLACE AS THE PARTIES MAY IN WRITING AGREE. A HEARING SHALL BEGIN
WITHIN 90 DAYS OF DEMAND FOR ARBITRATION AND ALL HEARINGS SHALL CONCLUDE WITHIN
120 DAYS OF DEMAND FOR ARBITRATION. THESE TIME LIMITS MAY NOT BE EXTENDED UNLESS
A PARTY SHOWS CAUSE FOR EXTENSION AND THEN FOR NO MORE THAN A TOTAL OF 60 DAYS.
THE EXPEDITED PROCEDURES SET FORTH IN RULE 51, ET SEQ., OF THE ARBITRATION RULES
SHALL APPLY TO DISPUTES IN WHICH THE CLAIM IS LESS THAN $1,000,000.00.
ARBITRATORS SHALL BE LICENSED ATTORNEYS SELECTED FROM THE COMMERCIAL FINANCIAL
DISPUTE ARBITRATION PANEL OF THE AAA. THE PARTIES DO NOT WAIVE APPLICABLE
FEDERAL OR STATE SUBSTANTIVE LAW EXCEPT AS PROVIDED HEREIN. NOTWITHSTANDING THE
PRECEDING BINDING ARBITRATION PROVISIONS, THE PARTIES AGREE TO PRESERVE WITHOUT
DIMINUTION, CERTAIN REMEDIES THAT ANY PARTY MAY EXERCISE BEFORE OR AFTER AN
ARBITRATION PROCEEDING IS BROUGHT. THE PARTIES SHALL HAVE THE RIGHT TO PROCEED
IN ANY COURT OF PROPER JURISDICTION OR BY SELF HELP TO EXERCISE OR PROSECUTE THE
FOLLOWING REMEDIES, AS APPLICABLE: (1) ALL RIGHTS TO FORECLOSE AGAINST ANY REAL
OR PERSONAL PROPERTY OR OTHER SECURITY BY EXERCISING A POWER OF SALE OR UNDER
APPLICABLE LAW BY JUDICIAL FORECLOSURE INCLUDING A PROCEEDING TO CONFIRM THE
SALE; (2) ALL RIGHTS OF SELF HELP, INCLUDING WITHOUT LIMITATION, PEACEFUL
OCCUPATION OF REAL PROPERTY AND COLLECTION OF RENTS, SETOFF, AND PEACEFUL
POSSESSION OF PERSONAL PROPERTY; (3) OBTAINING PROVISIONAL OR ANCILLARY REMEDIES
INCLUDING INJUNCTIVE RELIEF, SEQUESTRATION, GARNISHMENT, ATTACHMENT, APPOINTMENT
OF RECEIVER AND FILING AN INVOLUNTARY BANKRUPTCY PROCEEDING; AND (4) WHEN
APPLICABLE, A JUDGMENT BY CONFESSION OF JUDGMENT. ANY CLAIM OR CONTROVERSY WITH
REGARD TO ANY PARTY'S ENTITLEMENT TO SUCH REMEDIES IS A DISPUTE. THE PARTIES
AGREE THAT THEY SHALL NOT HAVE A REMEDY OF PUNITIVE OR EXEMPLARY DAMAGES AGAINST
OTHER PARTIES IN ANY DISPUTE, AND THEY
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HEREBY WAIVE ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY NOW
HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE WHETHER THE
DISPUTE IS RESOLVED BY ARBITRATION OR JUDICIALLY.
13. Except as modified by this Fourth Amendment, the Loan Agreement
remains in full force and effect and unmodified. Borrower warrants and
represents that it has no offsets or defenses to its obligations under the Loan
Documents, as so modified.
14. This Fourth Amendment may be signed in several counterparts which,
when executed, shall constitute a single agreement. A counterpart containing a
facsimile signature shall be effective to the same extent as if it were a
counterpart containing an original signature, but shall be confirmed promptly
with a counterpart containing an original signature.
IN WITNESS WHEREOF, the undersigned have duly executed this Fourth
Amendment, or have caused this Fourth Amendment to be duly executed on their
behalf, as of the day and year first hereinabove written.
UNITED INDUSTRIAL CORPORATION
By /s/ James Perry
-----------------------------------------
James Perry, Vice President
AAI CORPORATION
By /s/ James Perry
-----------------------------------------
James Perry, Vice President
AAI ENGINEERING SUPPORT, INC.
By: /s/ Richard Erkeneff
-----------------------------------------
Name:
Title:
AAI/ACL TECHNOLOGIES, INC.
By: /s/ Thomas E. Wurzel
-----------------------------------------
Name: Thomas E. Wurzel
Title: President
[Signatures continue on the following page.]
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AAI/ACL TECHNOLOGIES EUROPE LIMITED
By: /s/ Thomas E. Wurzel
-----------------------------------------
Name: Thomas E. Wurzel
Title: President
DETROIT STOKER COMPANY
By /s/ James Perry
-----------------------------------------
James Perry, Vice President
MIDWEST METALLURGICAL LABORATORY, INC.
By /s/ James Perry
-----------------------------------------
James Perry, Vice President
UIC PRODUCTS CO.
By /s/ James Perry
-----------------------------------------
James Perry, Vice President
SYMTRON SYSTEMS, INC.
By /s/ James Perry
-----------------------------------------
James Perry, Vice President
[Signatures continue on the following page.]
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AAI MICROFLITE Simulation International
Corporation
By: /s/ Stanley J. Mecinski Jr.
-----------------------------------------
Name: Stanley J. Mecinski Jr.
Title: Assistant Secretary and
Assistant Treasurer
FIRST UNION COMMERCIAL CORPORATION
By: /s/ Scott Santa Cruz
-----------------------------------------
Scott Santa Cruz
Vice President
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EXHIBIT A
PATENTS:
U.S. Patent No.: Issued:
--------------- ------
5,181,851 Jan. 26, 1993
5,316,484 May 31, 1998
5,226,818 July 13, 1993
5,447,437 Sept. 5, 1995
5,374,191 Dec. 20, 1994
5,573,394 Nov. 12, 1996
5,220,637 June 15, 1993
5,168,544 Dec. 1, 1992
Foreign Patent No.: Issued:
------------------ ------
Australia 659,175 Nov. 13, 1995
Canada 2,103,055 Feb. 25, 1997
Canada 2,090,522 Dec. 16, 1997
Europe 0585392 Feb. 25, 1998
Europe 0614562 Jan. 27, 1999
Europe 0561534 July 15, 1998
Japan 5-55789 May 9, 1997
Korea 202043 March 17, 1999
PATENT APPLICATIONS
Foreign Application No.: Issued:
----------------------- ------
Japan 5-500168 May 21, 1992
Canada 2,124,360 Nov. 24, 1992
Australia 48086/93 March 12, 1993
Brazil P193054408 March 12, 1993
Korea 703459/93 March 12, 1993
TRADEMARKS
Mark: U.S. Application No.: Registered:
---- -------------------- ----------
FIRETRAINER 1,723,385 Oct. 13, 1992
Mark: Foreign Application No.: Registered:
---- ----------------------- ----------
FIRETRAINER German 2,085,349 Nov. 21, 1994
FIRETRAINER (Stylized) UK & N. Ireland 1540435 March 24, 1995
FIRETRAINER (Stylized) Japan 3270074 March 12, 1997
