NINTH AMENDMENT TO CREDIT AGREEMENT AND NOTE
THIS NINTH AMENDMENT TO CREDIT AGREEMENT AND NOTE ("Ninth Amendment"), made
and entered into as of the 25th day of November 1996, by and between DATRON
SYSTEMS INCORPORATED, a Delaware corporation ("Company"), and UNION BANK OF
CALIFORNIA, N.A., a national banking association ("Bank"),
W I T N E S S E T H:
WHEREAS, on May 11, 1994, the Company and the Bank entered into a certain
Credit Agreement and Note (as amended by those certain First, Second, Third,
Fourth, Fifth , Sixth, Seventh and Eighth Amendments to Credit Agreement and
Note, dated as of October 26, 1994, December 29, 1994, February 28, 1995,
March 31, 1995, August 17, 1995, January 3, 1996, January 31, 1996 and
May 24, 1996, respectively, the "Credit Agreement") pursuant to which the
Bank agreed to extend to the Company and the Company agreed to accept from
the Bank certain credit facilities more particularly described therein; and
WHEREAS, the Company and the Bank desire to amend the Credit Agreement
(i) to extend the Facilities Termination Date through and including
June 30, 1998, and (ii) to modify certain of the covenants with which the
Company is to comply;
NOW, THEREFORE, for and in consideration of the premises hereof, and other
good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used in this Ninth Amendment shall, unless
otherwise defined herein or unless the context otherwise requires, have the
meanings given thereto in the Credit Agreement.
2. Section 1.01 of the Credit Agreement is amended by deleting
therefrom the date "December 31, 1997" where it appears on the fourth line
of said section and by substituting in lieu thereof the date "June 30, 1998".
3. Subsection 4.02(i) of the Credit Agreement is amended to read as
follows:
(i) Tangible Net Worth. The Company will not, as at the end of any
fiscal quarter of the Company, permit its consolidated Tangible Net Worth
to be less than the sum of (i) Twenty-four Million Two Hundred Fifty
Thousand Dollars ($24,250,000.00), (ii) seventy-five percent (75%) of the
cumulative consolidated net after tax profits of the Company for all fiscal
quarters of the Company ending after March 31, 1996 and on or prior to the
date of computation (without reduction, however, for consolidated net after
tax losses sustained by the Company for any of such fiscal quarters) and
(iii) the aggregate amount of all infusions of equity
made on or after April 1, 1996.
4. Subsection 4.02(k) of the Credit Agreement is amended to read as
follows:
(k) Profitability. The Company will not (i) permit its consolidated net
after tax profits to be less than (A) Seven Hundred Thousand Dollars
($700,000.00) for the year-to-date fiscal period of the Company ending
December 31, 1996, and (B) One Million Five Hundred Thousand Dollars
($1,500,000.00) for the fiscal year of the Company ending March 31, 1997 or
for any subsequent fiscal year of the Company, and (ii) suffer or incur a
consolidated net after tax loss for any two (2) consecutive fiscal quarters
of the Company.
5. This Ninth Amendment shall become effective on the date on which
the Bank shall have received the following:
(a) This Ninth Amendment, duly executed by the Company; and
(b) Two (2) written consents to entry by the Company into this Ninth
Amendment, each in form and substance satisfactory to the Bank and its
counsel, one (1) duly executed by each of D/T and DWC.
6. Except as expressly provided herein, the Credit Agreement is
unchanged and remains in full force and effect.
7. This Ninth Amendment shall be governed by and construed in
accordance with the laws of the State of California.
8. This Ninth Amendment may be executed in any number of identical
counterparts, any set of which signed by both parties hereto shall be deemed
to constitute a complete, executed original for all purposes.
IN WITNESS WHEREOF, the Bank and the Company have caused this Ninth
Amendment to be executed as of the day and year first above written.
UNION BANK OF CALIFORNIA, DATRON SYSTEMS INCORPORATED
N.A.
By: XXXXXXX X. XXXXXX By: XXXXXXX X. XXXXXXX
Title: Vice President Title: Vice President and CFO
By: XXXX XXXXXX By: XXXXX X. DERBY
Title: Vice President Title: President and CEO
