Exhibit 10 (C)
FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT SECURITY AGREEMENT
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This Fourth Amendment to Second Amended and Restated Revolving Credit
and Security Agreement (the "Amendment") is made this 11th day of May, 2007, by
and among COMPUDYNE CORPORATION, a Nevada corporation ("CompuDyne"), TIBURON,
INC., a Virginia corporation (formerly known as Compudyne - Public Safety &
Justice, Inc., a Virginia corporation) ("Tiburon"), XXXXXXX SECURITY GROUP,
INC., a Delaware corporation ("Xxxxxxx"), NORSHIELD CORPORATION, an Alabama
corporation ("Norshield"), COMPUDYNE - INTEGRATED ELECTRONICS DIVISION, LLC, a
Delaware limited liability company ("CompuDyne Integrated"), CORRLOGIC, LLC, a
Delaware limited liability company ("CorrLogic"), XANALYS CORPORATION, a
Delaware corporation ("Xanalys"), SIGNAMI DCS, LLC, a Delaware limited liability
company ("Signami") FIBER SENSYS, LLC, a Delaware limited liability company
("Fiber") (CompuDyne, Tiburon, Xxxxxxx, Norshield, Fiber, CompuDyne Integrated,
CorrLogic, Xanalys, Signami and Fiber, each a "Borrower", and collectively
"Borrowers"), the financial institutions which are now or which hereafter become
a party hereto (collectively, the "Lenders" and individually a "Lender") and PNC
BANK, NATIONAL ASSOCIATION ("PNC"), as agent for Lenders (PNC, in such capacity,
the "Agent").
BACKGROUND
A. On December 19, 2005, Borrowers, Lenders and Agent entered into,
inter alia, a certain Second Amended and Restated Revolving Credit and Security
Agreement (as same has been or may be amended, modified, renewed, extended,
replaced, or substituted from time to time, the "Loan Agreement"), to reflect
certain financing arrangements between the parties thereto. The Loan Agreement
and all other documents executed in connection therewith are collectively
referred to as the "Existing Financing Agreements." All capitalized terms not
otherwise defined herein shall have the meaning ascribed thereto in the Loan
Agreement. In the case of a direct conflict between the provisions of the Loan
Agreement and the provisions of this Amendment, the provisions hereof shall
prevail.
B. The Borrowers have requested and the Agent and the Lenders have
agreed to modify the Loan Agreement, subject to the terms and conditions of this
Amendment.
C. Certain Events of Default have occurred under the Loan Agreement
by reason of Borrower's failure to maintain the Fixed Charge Coverage Ratio
required under Section 6.5 of the Loan Agreement for the fiscal quarter ending
March 31, 2007 (such default the "Existing Default").
NOW THEREFORE, with the foregoing background hereinafter deemed
incorporated by reference herein and made part hereof, the parties hereto,
intending to be legally bound, promise and agree as follows:
Amendments to Loan Agreement. Upon the Effective Date, the Loan
Agreement shall be amended as follows:
Financial Covenants. Section 6.5 of the Loan Agreement shall be
deleted in its entirety and replaced as follows:
a. Fixed Charge Coverage Ratio. Commencing with the fiscal
quarter ending December 31, 2007 and as of the end of each fiscal
quarter thereafter, cause to be maintained, a Fixed Charge
Coverage Ratio of not less than 1.1 to 1.0.
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b. Unrestricted Undrawn Borrowing Base. Cause to be
maintained at all times Unrestricted Undrawn Borrowing Base
Availability of not less than $5,000,000. In the event that
Borrowers' Unrestricted Undrawn Borrowing Base Availability falls
below $5,000,000, at any time, Borrowers shall pledge cash
collateral or marketable securities satisfactory to Agent within
two (2) days after the Borrower became aware of such fact pursuant
to an agreement or agreements in form and substance satisfactory
to Agent such that Unrestricted Undrawn Borrowing Base
Availability equals or exceeds $5,000,000; provided that, any cash
collateral or securities pledged based on this Section 6.5(b)
shall not be subsequently released without the Agent's prior
written consent.
c. Minimum EBITDA. Cause to be maintained (i) for the fiscal
quarter ending June 30, 2007 a minimum EBITDA of $800,000, and
(ii) for the fiscal quarter ending September 30, 2007 a minimum
EBITDA of $1,750,000.
Waiver of Existing Defaults. Subject to the terms and conditions
herein, upon the effectiveness of this Agreement, Agent hereby waives the
Existing Default provided that such waiver shall in no way constitute a waiver
of any other Default or Event of Default which may have occurred but which is
not specifically referenced as the "Existing Default," nor shall it obligate
Agent to provide any further waiver of any other Default or Event of Default
(whether similar or dissimilar, including any further Default or Event of
Default resulting from a failure to comply with the terms of the Loan
Agreement). This waiver shall not preclude the future exercise of any right,
power, or privilege available to Agent whether under the Loan Agreement, the
Other Documents or otherwise.
Reaffirmation. Each Borrower hereby:
reaffirms all representations and warranties made to Agent
and Lenders under the Loan Agreement and all of the other Existing Financing
Agreements and confirms that all are true and correct in all material respects
as of the date hereof (except to the extent any such representations and
warranties specifically relate to a different date, in which case such
representations and warranties shall be true and correct in all material
respects on and as of such other specific date);
except to the extent consented to by Agent herein, reaffirms
all of the covenants contained in the Loan Agreement, covenants to abide thereby
until all Advances, Obligations and other liabilities of Borrowers to Agent and
Lenders under the Loan Agreement of whatever nature and whenever incurred, are
satisfied and/or released by Agent and Lenders; and
except as modified by the terms hereof, all of the other
terms and conditions of the Loan Agreement, as amended, and all other of the
Existing Financing Agreements are hereby reaffirmed and shall continue in full
force and effect as therein written.
Representations and Warranties. Each Borrower hereby:
represents and warrants that no Default or Event of Default
has occurred and is continuing under any of the Existing Financing Agreements,
except the Existing Default;
except as modified hereby, represents and warrants that it
has the authority and legal right to execute, deliver and carry out the terms of
this Amendment, that such actions were duly authorized by all necessary
corporate or limited liability company action and that the officers executing
this Amendment on its behalf were similarly authorized and empowered, and that
this Amendment does not contravene any provisions of its articles of
incorporation or by-laws, or certificate of formation or operating agreement, as
applicable, or other formation documents, or of any contract or agreement to
which it is a party or by which any of its properties are bound; and
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represents and warrants that this Amendment and all
assignments, instruments, documents, and agreements executed and delivered in
connection herewith, are valid, binding and enforceable in accordance with their
respective terms.
Conditions Precedent/Effectiveness Conditions. This Amendment
shall be effective upon (the "Effective Date"):
Agent's receipt of this Amendment fully executed by
Borrowers; and
Receipt by Agent of a non-refundable Amendment/Waiver Fee in
the amount of $7,500.00, which shall be fully earned as of the date of this
Amendment.
Further Assurances. Each Borrower hereby agrees to take all such
actions and to execute and/or deliver to Agent and Lenders all such documents,
assignments, financing statements and other documents, as Agent and Lenders may
reasonably require from time to time, to effectuate and implement the purposes
of this Amendment.
Release. As further consideration for Agent's and Lender's
agreement to enter into this Amendment and the waiver set forth herein, each
Borrower hereby waives and releases and forever discharges Agent, Lender and
their officers, directors, attorneys, agents and employees from any liability,
damage, claim, loss or expense of any kind that such Borrower may now or
hereafter have against Agent or Lender arising out of or relating to the
Obligations, the Loan Agreement as amended, or the other Existing Financing
Agreements.
Payment of Expenses. Borrowers shall pay or reimburse Agent and
Lenders for its reasonable attorneys' fees and expenses in connection with the
preparation, negotiation and execution of this Amendment and the documents
provided for herein or related hereto.
Confirmation of Obligations. Borrowers' confirm and acknowledge
that as of the close of business on May 9, 2007, the outstanding Obligations
consist of (i) $0 of Revolving Advances, (ii) issued and outstanding Letters of
Credit in the Maximum Undrawn Amount equal to $2,864,926.02 and (iii) all fees,
costs and expenses incurred to date in connection with the Loan Agreement and
the Other Loan Documents.
Miscellaneous.
Third Party Rights. No rights are intended to be created
hereunder for the benefit of any third party donee, creditor, or incidental
beneficiary.
Headings. The headings of any paragraph of this Amendment are
for convenience only and shall not be used to interpret any provision hereof.
Modifications. No modification hereof or any agreement
referred to herein shall be binding or enforceable unless in writing and signed
on behalf of the party against whom enforcement is sought.
Governing Law. The terms and conditions of this Amendment
shall be governed by the laws of the Commonwealth of Pennsylvania.
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Counterparts. This Amendment may be executed in any number of
counterparts and by facsimile or PDF, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their duly authorized officers as of the date first
above written.
BORROWERS: COMPUDYNE CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Chief Financial Officer, Treasurer
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TIBURON, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Treasurer, Vice President
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NORSHIELD CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Treasurer, Vice President
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COMPUDYNE - INTEGRATED ELECTRONICS
DIVISION, LLC
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Vice President
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CORRLOGIC, LLC
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Treasurer, Vice President
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XXXXXXX SECURITY GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Treasurer, Vice President
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XANALYS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Treasurer, Vice President
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[Signature Page 1 of 2 (Fourth Amendment To Second Amended And Restated
Revolving Credit Security Agreement)]
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SIGNAMI DCS, LLC
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Vice President
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FIBER SENSYS, LLC
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Title: Treasurer, Vice President
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AGENT AND LENDER: PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Xxxxx X. Xxxxxxxxxxx, Vice President
[Signature Page 2 of 2 (Fourth Amendment To Second Amended And Restated
Revolving Credit Security Agreement)]
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