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EXHIBIT 10.7.1
AMENDMENT TO REVOLVING CREDIT AGREEMENT
AND LOAN DOCUMENTS
This Amendment to Revolving Credit Agreement and Loan Documents
(this
"AMENDMENT"), is entered into as of June 4, 2008, by and between
Hi-Shear
Technology Corporation ("BORROWER") and U.S. Bank N.A., a national
banking
association ("BANK").
RECITALS
A. Borrower and Bank are parties to a Revolving Credit Agreement
dated
as of January 29, 2008 (as such document may have previously been
amended,
modified, extended, supplemented, restated or replaced, the
"EXISTING CREDIT
AGREEMENT"). Borrower and Bank are also parties to (i) an Addendum
to Revolving
Credit Agreement and Note dated as of January 29, 2008 (as such
document may
have previously been amended, modified, extended, supplemented,
restated or
replaced, the "EXISTING FIRST REVOLVER ADDENDUM") and (ii) a Second
Addendum to
Revolving Credit Agreement and Note dated as of January 29, 2008
(as such
document may have previously been amended, modified, extended,
supplemented,
restated or replaced, the "SECOND REVOLVER ADDENDUM").
B. The current outstanding and unpaid indebtedness of Borrower to
Bank
under the Existing Credit Agreement is evidenced by a Revolving
Credit Note
dated as of January 29, 2008 in the original principal amount of
Five Million
and No/100 Dollars ($5,000,000.00) by Borrower in favor of Bank,
with an
Interest Rate Rider by Borrower in favor of Bank attached thereto
(such note and
rider, as they may have previously been amended, modified,
extended,
supplemented, restated or replaced, collectively, the "NOTE").
C. Borrower and Bank desire to amend the Existing Credit Agreement
and
the Existing First Revolver Addendum to modify a financial covenant
contained
therein and to, to the extent necessary, to provide a waiver of a
certain
violation of a financial covenant.
D. The Existing Credit Agreement and the Existing First
Revolver
Addendum, as amended and modified by this Amendment, are referred
to hereinafter
as the "CREDIT AGREEMENT" and the "FIRST REVOLVER ADDENDUM,"
respectively.
AGREEMENT
1. RECITALS. The Recitals above are incorporated herein by this
reference as if
fully set forth herein. Capitalized terms not otherwise defined in
the Recitals
or otherwise in this Amendment shall have the meanings ascribed to
them in the
Existing Credit Agreement.
2. AMENDMENT AND RESTATEMENT OF DEFINITION OF "FIXED CHARGE
COVERAGE RATIO." The
definition of "Fixed Charge Coverage Ratio," which consists of
three lines of
text on the second page of the Existing First Revolver Addendum, is
hereby
amended and restated in its entirety, effective beginning with the
period ending
and ended February 29, 2008, as follows:
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"Fixed Charge Coverage Ratio" shall mean (a) EBITDAR minus cash
taxes,
cash dividends, cash distributions and Maintenance Capital
Expenditures
divided by (b) the sum of all required principal payments (on short
and
long term debt and capital leases), interest and rental or
lease
expense; PROVIDED, HOWEVER, a cash dividend shall hot be
subtracted
from EBITDAR as provided in clause (a) of this definition with
respect
to any period of measurement in and only if:
(i) such dividend is issued as permitted by the terms and
conditions of
the Loan Documents;
(ii) Borrower has maintained LIQUID ASSETS (as defined below) in
an
amount if no less than $750,000.00 with Bank as of the last day of
the
period on which such dividend is paid; and
(iii) there is no outstanding and unpaid balance under the Note on
the
day such dividend is paid.
"LIQUID ASSETS" shall mean unencumbered cash and unencumbered
cash
equivalents (which may include, without limitation, highly
marketable
securities, securities issued by the Unit
