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EXHIBIT 10.19
SECOND AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
This Second Amendment to Amended and Restated Loan Agreement ("Second
Amendment") is made and entered into this 10th day of April, 1996, by and
between TRANSCRYPT INTERNATIONAL, LTD., a Nebraska Limited Partnership, which
has its principal place of business in Lincoln, Nebraska ("Borrower") and
NORWEST BANK NEBRASKA, NATIONAL ASSOCIATION, a national banking association,
organized and existing under the laws of the United States of America, and
which has its principal place of business in Lincoln, Nebraska ("Bank").
RECITALS:
A. Borrower and the Bank have previously entered into a Loan Agreement
dated February 5, 1993 (the "Prior Loan Agreement"), an Amended and
Restated Loan Agreement dated May 18, 1994 (the "Restated Loan
Agreement") and a First Amendment to Amended and Restated Loan
Agreement dated June 1, 1995 ("First Amendment") which mutually
describe the terms and conditions of certain loans made by Bank to
Borrower and hereafter is referred to collectively as the "Agreement";
B. Subject to the terms and conditions of the Agreement, Bank agreed to
make one or more advances to Borrower not to exceed the aggregate
principal sum of One Million One Hundred Thousand Dollars
($1,100,000.00), (the "Operating Loan"), which was evidenced by a
Commercial Note dated June 1, 1995, in the principal sum of One
Million One Hundred Thousand Dollars ($1,100,000.00), having a
maturity date of May 1, 1996 (the "Operating Note").
C. Borrower and Bank have agreed to amend the Operating Loan and increase
the principal sum from One Million One Hundred Thousand Dollars
($1,100,000.00) to the principal sum of Two Million Dollars
($2,000,000.00). Borrower has executed and delivered to Bank an
Amendment to Operating Note in the principal sum of Two Million
Dollars ($2,000,000.00), a copy of which is attached to this Second
Amendment as Exhibit "A" and incorporated by this reference
("Amendment to Operating Note").
D. Borrower and the Bank desire to further amend the terms of the
Agreement to, among other things, modify the terms of the Affirmative
Covenants (as defined in the Agreement).
NOW, THEREFORE, in consideration of the foregoing and mutual covenants
and agreements, terms and conditions hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower and Bank agree as follows:
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1. Amendment of Section 1.2 (t) "Operating Note". Section 1.2
(t) "Operating Note" shall be deleted in its entirety and the following shall
be inserted in its stead:
(t) "Operating Note" means the promissory note hereafter made by
Bank to Borrower in the maximum principal amount of Two
Million Dollars ($2,000,000.00) and dated June 1, 1995, which
matures May 1, 1996.
2. Amendment of Section 2.1 "Operating Loan". Section 2.1 "Operating
Loan" shall be deleted in its entirety and the following shall be inserted in
its stead:
2.1 Operating Loan. Bank agrees, on the terms and subject to the
conditions set forth in this Agreement and the Loan Documents, and subject to
Bank's continued satisfaction with the financial affairs of Borrower, to make
one or more Advances to Borrower from time to time, not to exceed in the
aggregate amount outstanding at any time the principal sum of Two Million
Dollars ($2,000,000.00). This Operating Loan shall be a revolving facility, and
it is contemplated that Borrower will request advances, make prepayments, and
request additional advances hereunder.
3. Amendment of Section 2.2 "Operating Note". Section 2.2 "Operating
Note" shall be deleted in its entirety and the following shall be inserted in
its stead:
2.2 Operating Note. The Advances by Bank are evidenced by a
promissory note of Borrower dated June 1, 1995 (the "Operating Note"). The
Operating Note shall be due on May 1, 1996, or upon an Event of Default,
whichever occurs first. Notwithstanding the provisions of the following
paragraph, all Advances by Bank shall be made at the reasonable discretion of
Bank.
4. Amendment of Section 2.3 "Restrictions on Advances". Section 2.3
"Restrictions on Advances" shall be deleted in its entirety and the following
shall be inserted in its stead:
2.3 Restrictions on Advances. All Advances are subject to a
borrowing base defined as the lesser of:
(1) Two Million Dollars ($2,000,000.00), or
(2) Eighty-five percent (85%) of Qualified Accounts
arising from or associated with operations at
Borrower's plant in Lincoln, Nebraska plus fifty
percent (50%) of Qualified Inventory located at
Borrower's plant in Lincoln, Nebraska.
Each request for an Advance shall be deemed to be a representation by
Borrower that the statements set forth in Section 4.2 hereof are correct. The
names of the persons authorized to request Advances on behalf of Borrower shall
be provided to Bank from time to time in writing and certified by the Secretary
or Assistant Secretary of General Partner in such form as may be required by
Bank.
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5. Amendment of Section 6.7 "Financial Ratios". Section 6.7 "Financial
Ratios" shall be deleted in its entirety and the following shall be inserted in
its stead:
(a) A minimum ratio of Current Assets to Current Liabilities of
1.50 to 1.00;
(b) A minimum quick ratio (current assets less inventory divided
by current liabilities) of 1.00 to 1.00; and
(c) A maximum debt to stockholder equity of 1.50 to 1.00.
6. Amendment of Section 6.8 "Minimum Tangible Net Worth". Section 6.8
"Minimum Tangible Net Worth" shall be deleted in its entirety and the following
shall be inserted in its stead:
6.8 Minimum Tangible Net Worth. Borrower shall maintain minimum
Tangible Net Worth of Two Million Five Hundred Thousand Dollars
($2,500,000.00).
7. Amendment of Section 6.9 "Capital Expenditures". Section 6.9 "Capital
Expenditures" shall be deleted in its entirety and the following shall be
inserted in its stead:
6.9 Capital Expenditures. Annual capital expenditures of Borrower
and leases of personal property by Borrower as lessee shall not exceed Two
Million Seven Hundred Fifty Thousand Dollars ($2,750,000.00) for the fiscal
year ended December 31, 1995.
8. Amendment of Section 6.10 "Minimum Fixed Charge Coverage". Section
6.10 "Minimum Fixed Charge Coverage" shall be deleted in its entirety.
9. The definitions and other defined terms set forth in the Agreement
shall apply to the terms of this Second Amendment and are incorporated by
reference, except as may be modified by this Second Amendment.
10. Except as modified and amended by the Second Amendment, all other
terms and conditions of the Agreement and the Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed.
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Dated as of the date set forth at the beginning of this Second Amendment.
TRANSCRYPT INTERNATIONAL, LTD.
By: Transcrypt International, Inc.
Its: General Partner
By: Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Its: Chairman and CEO
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NORWEST BANK NEBRASKA, NATIONAL
ASSOCIATION
By: Xxxx Xxxxx
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Xxxx Xxxxx
Its: Vice President
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