Exhibit 10.1
[PNC BANK logo]
Third Amendment to Amended
and Restated Credit Agreement
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is made and effective as of November 17, 2005, by and among
COMPUDYNE CORPORATION (the "Borrower"), the GUARANTORS party to this Amendment
(collectively, the "Guarantors"), the BANKS party to this Amendment and the
Credit Agreement referred to below (collectively and together with PNC and the
Agent, the "Banks") and PNC BANK, NATIONAL ASSOCIATION, individually and in its
capacity as agent for the Banks under the Credit Agreement referred to below
(hereinafter referred to in its individual capacity as "PNC" and in its agent
capacity as the "Agent").
WITNESSETH:
WHEREAS, reference is made to (i) that certain Amended and Restated Credit
Agreement dated March 31, 2004 by and among the Borrower, CORRLOGIC, LLC,
formerly CORRLOGIC, INC., FIBER SENSYS, LLC, formerly FIBER SENSYS, INC.,
COMPUDYNE - PUBLIC SAFETY & JUSTICE, INC., formerly TIBURON, INC., XXXXXXX
SECURITY GROUP, INC., NORSHIELD CORPORATION and COMPUDYNE - INTEGRATED
ELECTRONICS DIVISION, LLC successor by merger to QUANTA SYSTEMS CORPORATION
(collectively the "Loan Parties"), the Banks party thereto and the Agent, as
amended by that Amendment to Amended and Restated Credit Agreement dated as of
October 29, 2004 and that Second Amendment to Amended and Restated Credit
Agreement and Amendment to Securities Pledge Agreement (the "Second Amendment")
dated as of March 4, 2005 (as the same may be further amended, restated,
supplemented or modified from time to time, the "Credit Agreement") pursuant to
which PNC, as the sole Bank thereunder as of the date hereof, has made available
to the Borrower a $10,000,000 original principal amount revolving credit
facility (including an $8,000,000 letter of credit subfacility ((the "LC
Subfacility")) and a $500,000 swing line of credit (the "Swing Line") ) (the
"Revolving Credit Facility") and (ii) that Fifth Amended and Restated Revolving
Credit Note (Revolving Line of Credit A) of the Borrower in favor of PNC Bank,
National Association in the stated principal amount of $10,000,000 dated October
29, 2004 (the "Existing Note") evidencing its obligations under the Revolving
Credit Facility, the Credit Agreement and the Loan Documents;
WHEREAS, the Borrower, the Guarantors, the Agent and PNC, as the sole Bank
as of the date hereof, desire to amend the Credit Agreement to (i) increase the
Banks' commitment to lend under the Revolving Credit Facility from $10,000,000
to $13,000,000, (ii) increase the amount of the LC Subfacility from $8,000,000
to $13,000,000 and (iii) terminate the Swing Line; and
WHEREAS, in connection with this Amendment and to evidence Borrower's
indebtedness to the Banks under the increased Revolving Credit Facility and the
LC Subfacility, the Borrower will execute and deliver to PNC Bank, National
Association its Sixth Amended and Restated Revolving Credit Note (Revolving Line
of Credit A) in the stated principal amount of $13,000,000 in substitution for
the Existing Note (the "Restated Note").
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NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
Amendments to Credit Agreement. The Credit Agreement is amended as set forth in
Exhibit A. All references in the Loan Documents and herein to the "Note"
shall mean and refer to the Restated Note. Any and all references to the
Credit Agreement in the Note or any of the other Loan Documents shall be
deemed to refer to the Credit Agreement as amended hereby. Any initially
capitalized terms used in this Amendment without definition shall have the
meanings assigned to those terms in the Credit Agreement.
Incorporation into Credit Agreement. This Amendment is deemed incorporated into
the Note and the other Loan Documents. To the extent that any term or
provision of this Amendment is or may be deemed expressly inconsistent with
any term or provision in any Loan Document, the terms and provisions hereof
shall control.
Representations. In order to induce the Banks and the Agent to enter into this
Amendment and agree to the transactions herein specified, the Borrower and
the Guarantors represent and warrant as follows: (a) all of their
respective representations and warranties in the Credit Agreement and all
of the other Loan Documents are true and correct as of the date hereof as
though made and given this date, (b) None of the Borrower or any of the
Guarantors has ceased operations, commenced liquidation or winding-up
proceedings or changed its jurisdiction of incorporation or been a party to
any merger or consolidation and has not succeeded to all or any substantial
part of the liabilities of any entity at any time since March 31, 2004
except as set forth in the Second Amendment, (c) since December 31, 2004
(the date of the last audited financial statements of Borrower provided to
the Agent), no Material Adverse Change (as defined in the Credit Agreement)
has occurred and there has been no material adverse change in the
management of the Borrower, any of the Guarantors or any subsidiary of the
Borrower or any Guarantor, (d) all corporate and other action, approvals
and authorizations necessary or appropriate for the execution and delivery
by Borrower and each of the Guarantors of this Amendment, the Restated Note
and all other documents, instruments and agreements set forth herein or
otherwise to be executed or delivered in connection with this Amendment
(collectively with this Amendment, the "Amendment Documents") and the
consummation of the transactions herein contemplated have been taken or
obtained, (e) the undersigned officers are each duly constituted and
appointed officers of the Borrower and the Guarantors, as applicable, and
have full power and authority to execute and deliver this Amendment, the
Restated Note and the other Amendment Documents on behalf of the Borrower
or the Guarantors, as applicable, (f) this Amendment, the Restated Note and
the other Amendment Documents constitute the valid and legally binding
obligations of the Borrower and each of the Guarantors and are fully
enforceable against the Borrower and each of the Guarantors in accordance
with their respective terms, (g) since March 31, 2004, there have been no
amendments, modifications, restatements, substitutions, repeals or
terminations of the articles of incorporation or bylaws of the Borrower or
any of the Guarantors (other than as reflected in the Second Amendment),
and the copies of such documents provided to the Bank in connection with
the original closing under the Credit Agreement on March 31, 2004 or in
connection with the execution and delivery of the Second Amendment, as the
case may be, continue unaltered and in full force and effect, (h) None of
the Borrower or any of the Guarantors has any defense, set-off, claim or
counterclaim to or against, or with respect to, full and prompt payment and
performance by Borrower of all of Borrower's and Guarantors' Obligations to
Agent or any of the Banks under the Credit Agreement and under the Loan
Documents as of the date hereof and, if applicable, as amended or
reaffirmed hereby and (i) no Event of Default, or any fact, matter or
circumstance which, with the passage of time or the giving of notice, or
both, would constitute an Event of Default, under the Credit Agreement has
occurred and is existing on the date hereof.
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Borrower Confirmation. The Borrower hereby acknowledges and, to the extent
applicable, confirms that any Collateral for the Obligations granted by the
Borrower, the Loan Parties, the Guarantors or third parties (if
applicable), including without limitation, the Agent's and/or the Banks'
security interests, rights, title or interest in or under that Pledge
Agreement (Stocks, Bonds and Commercial Paper) dated as of February 4, 2005
from CompuDyne Corporation in favor of PNC individually and as agent
(together with all related consents, account agreements and other related
documents, instruments and agreements and as amended by the Second
Amendment, the "Securities Pledge Agreement"), or any of the "Collateral"
as described or defined in the Securities Pledge Agreement (the "Securities
Collateral"), which Securities Pledge Agreement and Securities Collateral
(including all of PNC's rights, title, liens, encumbrances and interests
therein or thereon), as well as all other rights of the Agent and the Banks
in and to all other Collateral, shall continue unimpaired and in full force
and effect notwithstanding this Amendment and the execution and delivery of
the Restated Note and are hereby ratified and affirmed in all respects.
Guarantor Consent and Reaffirmation. The Guarantors hereby affirm, acknowledge
and agree that their respective guaranty agreements (including, without
limitation that Guaranty and Suretyship Agreement dated November 16, 2001
and that Reaffirmed Guaranty and Suretyship Agreement dated as of March 4,
2005, as the same have been joined in, ratified and affirmed from time to
time) and all other documents and instruments in favor of the Agent for the
benefit of the Banks continue in full force and effect with respect to the
Obligations as modified and amended by this Amendment and reflected in the
Restated Note notwithstanding this Amendment, the execution and delivery of
the Restated Note and the termination of the Swing Line and the Swing Line
Agreements, which guaranty agreements and other documents and instruments
are hereby ratified and affirmed. Each Guarantor hereby acknowledges and
affirms that it has and will continue to realize tangible and significant
direct economic benefit from the transactions described in the Credit
Agreement, as amended hereby, the Note and the other Loan Documents and
hereby irrevocably and unconditionally acknowledge the receipt of good and
valuable consideration for the execution, delivery and continued
effectiveness of their respective guaranty agreements.
Release of Agent and Banks. As additional consideration for the Agent's and the
Banks' entering into this Amendment, the Borrower and each Guarantor hereby
fully and unconditionally releases and forever discharges the Agent and the
Banks, their respective agents, employees, directors, officers, attorneys,
branches, affiliates, subsidiaries, successors and assigns and all persons,
firms, corporations and organizations acting on any of their respective
behalves (the "Released Parties") of and from any and all claims,
liabilities, demands, obligations, damages, losses, actions and causes of
action whatsoever which the Borrower or any Guarantor may now have or claim
to have against the Agent or any Bank or any other Released Parties as of
the date hereof with respect to the Credit Agreement, the Note, or the
Loans Documents, whether presently known or unknown and of any nature and
extent whatsoever, including, without limitation, on account of or in any
way affecting, concerning or arising out of or founded upon the Credit
Agreement, this Amendment, the Existing Note, the Restated Note or the
Swing Line Agreements, including but not limited to all such loss or damage
of any kind heretofore sustained or that may arise as a consequence of the
dealings between the parties up to and including the date hereof, including
but not limited to, the administration or enforcement of the Loans, the
Existing Note, any and all prior or restated notes, the Obligations, any of
the Loan Documents, the Swing Line (including the termination thereof
pursuant to this Agreement) or any collateral security therefor. The
obligations of the Borrower and the Guarantors under the Loan Documents and
this Amendment shall be absolute and unconditional and shall remain in full
force and effect without regard to, and shall not be released, discharged
or in any way affected by the termination of the Swing Line and the Swing
Line Agreements or:
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any exercise or nonexercise of any right, remedy, power or
privilege under or in respect of this Amendment, any Loan Document,
any document relating to or evidencing any of the Agent's or any
Bank's liens or applicable law, including, without limitation, any
waiver, consent, extension, indulgence or other action or inaction in
respect thereof; or
any other act or thing or omission or delay to do any other act
or thing which could operate to or as a discharge of the Borrower or
any Guarantor as a matter of law, other than payment in full of all
Obligations, including, but not limited to, all obligations under the
Loan Documents and this Amendment.
The Borrower and each of the Guarantors further agree to indemnify and hold
the Agent and the Banks and their respective officers, directors,
attorneys, agents and employees harmless from any loss, damage, judgment,
liability or expense (including attorneys' fees) suffered by or rendered
against the Agent or the Banks, or any of them, on account of any claims
arising out of or relating to the Obligations. The Borrower and each of the
Guarantors further state that they have carefully read the foregoing
release and indemnity, know the contents thereof and grant the same as
their own free act and deed.
Additional Conditions and Covenants. The following agreements and covenants
constitute additional and substantial consideration for the Agent's and the
Banks' agreement to effect the releases and the amendments to the Credit
Agreement and the Loan Documents set forth herein:
(a) The Borrower shall pay to the Agent an administrative fee in the
amount of $2,000 in connection with the transactions contemplated by
this Amendment.
(b) The Borrower shall reimburse the Agent and the Banks for their
reasonable out of pocket fees and expenses incurred in connection with
this Amendment and the release of the Released Collateral, including,
without limitation, their attorney fees and expenses.
(c) The Borrower shall have executed and delivered the original Restated
Note in favor of PNC.
(d) The Borrower and the Guarantors shall have complied with such other
conditions and requirements, including, without limitation, the
execution and delivery of further reaffirmation documents, instruments
and agreements, that the Agent may reasonably require.
Counterparts. This Amendment may be signed in any number of counterpart copies
and by the parties hereto on separate counterparts, but all such copies
shall constitute one and the same instrument.
Binding Effect. This Amendment will be binding upon and inure to the benefit of
the Borrower, the Guarantors, the Banks and the Agent and their respective
heirs, executors, administrators, successors and assigns.
Representation by Counsel. The Borrower and each Guarantor represents and
warrants that they are represented by legal counsel of their choice, and
that their counsel has had the opportunity to review this Amendment, that
they are fully aware of the terms contained herein and that they have
voluntarily and without coercion or duress of any kind or nature whatsoever
entered into this Amendment. The provisions of this Amendment shall survive
the execution and delivery of this Amendment.
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LIMITATION ON DAMAGES. NEITHER THE AGENT, ANY BANK NOR ANY AGENT OR ATTORNEY FOR
OR OF THE AGENT OR ANY BANK SHALL BE LIABLE TO THE BORROWER OR ANY
GUARANTOR FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
ARISING FROM ANY BREACH OF CONTRACT, TORT OR OTHER WRONG RELATING TO THE
ESTABLISHMENT, ADMINISTRATION OR COLLECTION OF THE OBLIGATIONS, AS DEFINED
IN ANY LOAN DOCUMENT OR THE ACTION OR INACTION OF THE AGENT OR ANY BANK OR
THE BORROWER OR ANY GUARANTOR UNDER THIS AMENDMENT OR ANY LOAN DOCUMENT OR
OTHERWISE.
Ratification of Loan Documents. Except as waived, released or amended hereby,
the terms and provisions of the Loan Documents remain unchanged and in full
force and effect, and are hereby ratified and affirmed. Except as expressly
provided herein, this Amendment shall not constitute an amendment, waiver,
consent or release with respect to any provision of any Loan Document, a
waiver of any default or Event of Default thereunder, or a waiver or
release of any of the Banks' rights and remedies (all of which are hereby
reserved). The Borrower and each of the Guarantors expressly ratify and
confirm the confession of judgment (if applicable) and waiver of jury trial
provisions contained in the Loan Documents as if set forth herein in their
entirety as of the date hereof.
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[SIGNATURE PAGE TO THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT]
WITNESS the due execution hereof as of the day and year first above written.
COMPUDYNE CORPORATION COMPUDYNE - INTEGRATED ELECTRONICS
DIVISION, LLC successor by merger to
By: QUANTA SYSTEMS CORPORATION
-----------------------
Title: Corporate Secretary
By:
-----------------------
CORRLOGIC, LLC, Title: Corporate Secretary
formerly CORRLOGIC, INC.
By: NORSHIELD CORPORATION
-----------------------
Title: Corporate Secretary
By:
-----------------------
FIBER SENSYS, LLC, Title: Corporate Secretary
formerly FIBER SENSYS, INC.
By:
-----------------------
Title: Corporate Secretary
PNC BANK, NATIONAL ASSOCIATION,
as a Bank and as Agent
COMPUDYNE - PUBLIC SAFETY &
JUSTICE, INC., formerly TIBURON,
INC.
By:
-----------------------
Title: Corporate Secretary By:
------------------
Title: Vice President
XXXXXXX SECURITY GROUP, INC.
By:
-----------------------
Title: Corporate Secretary
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AMENDMENTS TO CREDIT AGREEMENT
EXHIBIT A
The Credit Agreement is hereby amended as follows:
I. Background to Amendment
-----------------------
The Borrower, the Guarantors, the Banks and the Agent desire to (i)
increase the Banks' commitment to lend under the Revolving Credit Facility from
$10,000,000 to $13,000,000, (ii) increase the amount of the LC Subfacility from
$8,000,000 to $13,000,000 and (iii) terminate the Swing Line.
II. Credit Agreement Amendments
---------------------------
(A) The Swing Line Loan and the Swing Line Commitment are hereby cancelled
and, pursuant to the Working Cash Line of Credit Investment Sweep Rider, the
Swing Line Agreements are hereby terminated, cancelled and of no further force
or effect.
(B) The definition of "Revolving Credit Facility A Usage" set forth in
Section 1.1 is deleted and restated in its entirety as follows:
"Revolving Credit Facility A Usage shall mean at any time the sum of
the Revolving Credit Facility A Loans and the Letter of Credit Outstandings."
(C) Section 2.1 is deleted and restated in its entirety as follows:
"2.1 Revolving Credit Facility A Commitments.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, and so long as the
Borrower is in full compliance with its obligations under Section 8.1.15
regarding maintenance of the Investment Collateral at the Required
Coverage, each Bank severally agrees to make Revolving Credit Facility A
Loans to the Borrower at any time or from time to time on or after the date
hereof to the Revolving Credit Facility A Expiration Date, provided that
after giving effect to such Loan the aggregate amount of all Revolving
Credit Facility A Loans from such Bank shall not exceed (x) such Bank's
Revolving Credit Facility A Commitment minus (y) such Bank's Ratable Share
of Letter of Credit Outstandings. Within such limits of time and amount and
subject to the other provisions of this Agreement, the Borrower may borrow,
repay and reborrow pursuant to this Section 2.1."
EXHIBIT A-1
(D) Section 2.8.1 is deleted and restated in its entirety as follows:
"2.8.1 Issuance of Letters of Credit.
Borrower may request the issuance of letters of credit (each a "Letter
of Credit") pursuant to a letter of credit subfacility under Revolving Credit
Facility A on behalf of itself or another Loan Party by delivering to the Agent
a completed application and agreement for letters of credit in such form as the
Agent may specify from time to time by no later than 10:00 a.m., Pittsburgh
time, at least three (3) Business Days, or such shorter period as may be agreed
to by the Agent, in advance of the proposed date of issuance. Except for the
Second Xxxxxxx Letter of Credit (as defined in Subsection 2.8.10, below), each
Letter of Credit shall be either a Standby Letter of Credit or a Commercial
Letter of Credit. Subject to the terms and conditions hereof and in reliance on
the agreements of the other Banks set forth in this Section 2.8, the Agent will
issue a Letter of Credit provided that each Letter of Credit shall (A) have a
maximum maturity of thirty-six (36) months from the date of issuance, and (B) in
no event expire later than ten (10) Business Days prior to the Expiration Date
and further provided that in no event shall (i) the Letter of Credit
Outstandings exceed, at any one time, $13,000,000 or (ii) the Revolving Facility
A Usage exceed, at any one time, the Revolving Credit Facility A Commitments.
The Second Xxxxxxx Letter of Credit constitutes a "Letter of Credit" hereunder
(subject to the provisions of Subsection 2.8.10)."
(E) Part 1 of Schedule 1.1(b) is deleted in its entirety and restated as
follows:
Part 1 - Commitments of Banks and Addresses for Notices to Banks
----------------------------------------------------------------
Amount of
Commitment for
Revolving Credit
Loans under
Revolving Credit Total
Bank Facility A* Commitment Ratable Share
---- ------------------ -------------------- --------------------
Name: PNC Bank, National
Association
Address: 0000 Xxxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000)000-0000 $13,000,000 $13,000,000 100.0%
Telecopy: (000) 000-0000 ------------------ -------------------- --------------------
Total $13,000,000 $13,000,000 100%
================== ==================== ====================
*Includes a Letter of Credit Subfacility in an amount up to the Revolving
Credit Facility A Commitment
EXHIBIT A-2
STATE OF )
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) SS:
COUNTY OF )
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On this, the 17th day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared W. C. Rock, who acknowledged
himself/herself to be the Corporate Secretary of COMPUDYNE CORPORATION and that
he/she, as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing on behalf of the
corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
STATE OF ----------------------------------- )
) SS:
COUNTY OF )
----------------------------------
On this, the 17th day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared W. C. Rock, who acknowledged
himself/herself to be the Corporate Secretary of CORRLOGIC, LLC, formerly
CORRLOGIC, INC. and that he/she, as such officer, being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
on behalf of the limited liability company as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
STATE OF )
------------------------------------
) SS:
COUNTY OF )
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On this, the 17th day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared W. C. Rock, who acknowledged
himself/herself to be the Corporate Secretary of FIBER SENSYS, LLC, formerly,
FIBER SENSYS, INC. and that he/she, as such officer, being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
on behalf of the limited liability company as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
STATE OF )
------------------------------------
) SS:
COUNTY OF )
----------------------------------
On this, the 17th day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared W. C. Rock, who acknowledged
himself/herself to be the Corporate Secretary of COMPUDYNE - PUBLIC SAFETY &
JUSTICE, INC., formerly TIBURON, INC. and that he/she, as such officer, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing on behalf of the corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
STATE OF )
------------------------------------
) SS:
COUNTY OF )
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On this, the 17th day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared W. C. Rock, who acknowledged himself/
herself to be the Corporate Secretary of XXXXXXX SECURITY GROUP, INC. and that
he/she, as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing on behalf of the
corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
STATE OF )
------------------------------------
) SS:
COUNTY OF )
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On this, the 17th day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared Xxxxx Xxx, who acknowledged
himself/herself to be the Corporate Secretary of COMPUDYNE - INTEGRATED
ELECTRONICS DIVISIONS, LLC, successor to QUANTA SYSTEMS CORPORATION and that
he/she, as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing on behalf of the
limited liability company as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------------------------------
Notary Public
My commission expires:
STATE OF )
------------------------------------
) SS:
COUNTY OF )
----------------------------------
On this, the 17th day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared W. C. Rock, who acknowledged
himself/herself to be the Corporate Secretary of NORSHIELD CORPORATION and that
he/she, as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing on behalf of the
corporation as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF )
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On this, the _____ day of November, 2005, before me, a Notary Public, the
undersigned officer, personally appeared Xxxxxx X. Xxxxxxxx, who acknowledged
himself to be the Vice President of PNC BANK, NATIONAL ASSOCIATION and that he,
as such officer, being authorized to do so, executed the foregoing instrument
for the purposes therein contained by signing on behalf of said bank as such
officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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Notary Public
My commission expires:
