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EXHIBIT 10.8
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND FACILITY LETTER
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY
LETTER (this "Amendment") is made this 14th day of June, 1996, by and among
FIRST UNION COMMERCIAL CORPORATION ("Lender"), a North Carolina corporation;
and XXXXXXXXXXX SECURITY, INC. ("Xxxxxxxxxxx Security"), XXXXXXXXXXX, INC.
("Xxxxxxxxxxx Transportation") (Xxxxxxxxxxx Security and Xxxxxxxxxxx
Transportation, collectively, "U.S. Borrowers"), ADI U.K. LIMITED ("ADI U.K."),
AVIATION DEFENCE INTERNATIONAL GERMANY LIMITED ("ADI Germany") (ADI U.K. and
ADI Germany, collectively, "European Borrowers") (U.S. Borrowers and European
Borrowers, collectively, "Obligated Borrowers"), XXXXXXXXXXX HOLDINGS LIMITED
("U.S. Holdings Guarantor"), and ADI GROUP LIMITED ("European Guarantor")
(U.S. Holdings Guarantor and European Guarantor, collectively, "Corporate
Guarantors"), each a corporation with its chief executive office and principal
place of business at the address specified in the Loan and Security Agreement
referred to below.
WHEREAS, Obligated Borrowers, Corporate Guarantors and Lender have
entered into that certain Loan and Security Agreement, dated as of December 22,
1995 (the "Loan Agreement"), pursuant to which Lender has extended to U.S.
Borrowers the U.S. Revolver Facility (as defined in the Loan Agreement) in the
amount of up to twenty million dollars ($20,000,000); and
WHEREAS, pursuant to the Loan Agreement, Lender, European Borrowers
and European Guarantor have entered into that certain Facility Letter, dated
December 22, 1995, pursuant to which Lender has extended to European Borrowers
the European Revolver Facility (as defined in the Facility Letter) in the
amount of up to the Dollar Equivalent of five million dollars ($5,000,000); and
WHEREAS, under the Facility Letter, European Revolver Loans are
advanced by Lender and repaid to Lender by European Borrowers in the applicable
currency in which such loans were made; and
WHEREAS, FUCC and First Union National Bank, London Branch ("FUNB
London") will enter into a Participation Agreement (the "Participation
Agreement"), pursuant to which FUNB London will purchase up to a 100%
participation interest in European Revolver Loans under the European Revolver
Facility; and
WHEREAS, so long as the Participation Agreement is in effect, FUNB
London will fund advances and receive repayments under the European Revolver
Facility; and
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WHEREAS, pursuant to Section 2.3 of the Loan Agreement, Obligated
Borrowers and Corporate Guarantors have consented to the sale or transfer by
FUCC of all or any part of the Loan Agreement, the Facility Letter and the
credit facilities thereunder; and
WHEREAS, Section 2.3 of the Loan Agreement provides that the Loan
Agreement may be amended by agreement of all Obligated Borrowers, Corporate
Guarantors and Lender;
NOW, THEREFORE, for and in consideration of the foregoing, and for ten
dollars ($10.00) and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINED TERMS
Capitalized terms used herein and not defined herein are to have the
meanings accorded such terms in the Loan Agreement or the Facility Letter, as
applicable.
SECTION 2. AMENDMENTS TO THE LOAN AGREEMENT
Effective on the Amendment Effective Date (as defined herein), the
Loan Agreement is amended in accordance with this Amendment. Except as
specifically amended by this Amendment, all of the original terms and
provisions of the Loan Agreement shall continue in full force and effect.
Section 2.1. The Loan Agreement is hereby amended to delete in its
entirety the definition of "Facility Letter" contained therein and to
substitute therefor the following definition, reading as follows:
"Facility Letter - the letter attached to this Agreement
setting forth, among other things, certain terms and
provisions of the European Revolver Facility, as amended by
that certain letter agreement, dated as of April 19, 1996, and
by that certain Second Amendment to Loan and Security
Agreement and Facility Letter, dated as of June 14, 1996.
The Facility Letter shall constitute a part of this
Agreement."
SECTION 3. AMENDMENTS TO THE FACILITY LETTER
Effective on the Amendment Effective Date, the Facility Letter is
amended in accordance with this Amendment. Except as specifically amended by
this Amendment, all of the original terms and provisions of the Facility Letter
shall continue in full force and effect.
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Section 3.1. The Facility Letter is hereby amended to add the
following definitions to the Glossary thereto:
"FUNB London - First Union National Bank, London Branch, a
United States banking association doing business through its
London Branch."
"Overdraft Facility Rate - means (a) as determined by FUNB
London in its sole discretion, either (i) the U.K. Base Rate
plus the Foreign Currency Margin or (ii) the U.K. LIBOR Rate
plus the Foreign Currency Margin, in either case plus (b) the
rate reflecting the cost to FUNB London (as determined by FUNB
London) of complying with the existing requirements of the
Bank of England or other regulatory authority affecting
mandatory liquid assets, special deposits, reserve, capital
adequacy or other requirements of whatever nature and
attributable to the European Revolver Facility, including any
reduction in the rate of return on capital resources. A
certificate by FUNB London as to the amount of such cost shall
be conclusive in the absence of manifest error."
"Overdraft Loan - a European Revolver Loan disbursed by FUNB
London and repayable at FUNB London."
"Participation Agreement - the Participation Agreement, dated
June 14, 1996, between FUCC and FUNB London, as the same may
be amended, modified or supplemented."
"U.K. LIBOR Rate - means the rate (as conclusively determined
by FUNB London in accordance with its normal procedures) at
which FUNB London is offered deposits in the Foreign Currency
at or about 11 a.m. London time on the relevant dealing day
on or before the commencement of the relevant Interest Period
(as determined by FUNB London) by banks in the London
interbank market for deposits in the Foreign Currency of
similar amount and for a similar interest period as the
relevant Interest Period."
"U.K. Base Rate - means the base rate of FUNB London from time
to time as conclusively certified by FUNB London."
Section 3.2. The Facility Letter is hereby amended to delete in its
entirety subsection (b) of Section 1 thereof and to substitute therefor the
following subsection (b), reading as follows:
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"(b) The European Revolver Loans, which are to be
evidenced by the European Revolver Notes (the "European
Revolver Notes"), are to be made by Lender as Foreign Currency
Loans in the Foreign Currency from time to time designated by
European Borrowers, if such Foreign Currency is available to
Lender, or as Dollar Loans; are to be repaid in the same
currency as which the Loans were made by Lender; and are to be
used solely for Permitted Proceeds Uses. Each Foreign Currency
Loan (other than Overdraft Loans) shall be in a minimum Dollar
Equivalent amount of five hundred thousand Dollars ($500,000)
and upward increments of two hundred fifty thousand Dollars
($250,000)."
Section 3.3.
The Facility Letter is hereby amended to delete in its
entirety subsection (c) of Section 1 thereof and to substitute therefor the
following subsection (c), reading as follows:
"(c) Borrowings under the European Revolver Facility
are to be as follows:
(i) Each European Revolver Loan is to be
made, or is to be deemed to be made, in the following
manner: (a) the European Borrower shall give Lender
written, telephonic or electronic notice (provided
that telephonic notice shall be promptly, and in any
event within one Business Day, confirmed in writing
by delivery of a written notice to Lender that
conforms to the requirements of this paragraph), or
notice in such other manner as may be agreed upon
from time to time by Lender and European Borrowers,
of its intention to borrow (which notice is to be
irrevocable) before 11:30 a.m. (Atlanta, Georgia
time), specifying the amount of the proposed
borrowing; whether the requested Loan is to be a
Dollar Loan or a Foreign Currency Loan, and, if the
latter, the Foreign Currency in which the borrowing
is to be made, with no more than two Foreign Currency
Loans to be requested each calendar month; and the
proposed borrowing date for the Loan, which must be
no earlier than the third Business Day after the date
of receipt of the request by Lender in Atlanta,
Georgia (with the date of request not to count as the
first of such three Business Days); (b) unless
payment is otherwise timely made by the European
Borrowers, the becoming due of any amount required to
be paid by the European Borrowers under this Letter
or under the Agreement as principal or accrued
interest is to be deemed irrevocably to be a request
by European Borrowers for a European Revolver Loan on
the due date of, and in the currency due, with
respect to such principal and accrued interest; (c)
unless payment is otherwise timely made by the
European Borrowers, the becoming due of any other
Obligation due from the European Borrowers is to be
deemed irrevocably to be a request for a European
Revolver Loan on the due date of, and in the currency
due, with respect to such Obligation; and (d) so long
as the Participation Agreement is in effect, the
presentation for payment by FUNB London of any check,
draft or other item of
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payment drawn by a European Borrower shall be deemed
irrevocably to be a request by European Borrowers for
an Overdraft Loan in the amount of such check, draft
or other item of payment.
(ii) The proceeds of each European Revolver
Loan requested as described in (a) above are to be
disbursed by Lender in the requested Dollars or
Foreign Currency by wire transfer to such bank
account as may be agreed upon by European Borrowers
and Lender from time to time; the proceeds of each
European Revolver Loan requested to satisfy an
Obligation as described above are to be disbursed by
way of direct payment of the relevant Obligation; and
the proceeds of each Overdraft Loan requested as
described in (d) above are to be disbursed by FUNB
London by payment of such check, draft or other item
of payment.
(iii) Each request, including specifically,
but without limitation, a telephonic request, for a
European Revolver Loan is to be conclusively presumed
to be made by a Person authorized by European
Borrowers to do so; and the making of the requested
European Revolver Loan will conclusively establish
European Borrowers' obligation to repay such European
Revolver Loan in accordance with this Letter and the
Agreement."
Section 3.4. The Facility Letter is hereby amended to delete in its
entirety subsection (i) of Section 1 thereof and to substitute therefor the
following subsection (i), reading as follows:
"(i) European Revolver Loans constituting Dollar
Loans shall bear interest from the date such European Revolver
Loans are made to the date paid at the Regular Rate or the
Loan LIBOR Rate. European Revolver Loans constituting Foreign
Currency Loans (other than Overdraft Loans) shall bear
interest from the date such European Revolver Loans are made
to the date paid at the Foreign Currency Rate. European
Revolver Loans constituting Overdraft Loans shall bear
interest from the date such European Revolver Loans are made
to the date paid at the Overdraft Facility Rate. The
applicable basis for determining the rate of interest shall be
selected by European Borrowers initially at the time a notice
of borrowing is given. The basis for determining the interest
rate with respect to any European Revolver Loan may be changed
from time to time pursuant to paragraph (4) hereinafter. If
on any day a European Revolver Loan constituting a Dollar Loan
is outstanding with respect to which notice has not been
delivered to Lender in accordance with the terms of this
Letter and the Agreement specifying the basis for determining
the rate of interest, then for that day that Dollar Loan shall
bear interest at the Regular Rate."
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Section 3.5. The Facility Letter is hereby amended to add at
the end of Section 1 thereof the following subsection (j), reading as
follows:
"(j) Notwithstanding anything to the contrary
contained herein, so long as the Participation Agreement is in
effect, European Borrowers shall not have the option to
request Dollar Loans or Foreign Currency Loans by written,
telephonic or electronic notice, or to change the basis for
determining the interest rate on Overdraft Loans, but shall be
limited to requesting such Loans as Overdraft Loans as
provided in subparagraph (c)(i) of this paragraph (3)."
Section 3.6. The Facility Letter is hereby amended to delete in its
entirety the introductory clause to Section 2 thereof and to substitute
therefor the following clause, reading as follows:
"2. Interest Periods
(a) In connection with each Foreign Currency Loan
(other than Overdraft Loans) and LIBOR Rate Loan, European
Borrowers shall elect an Interest Period to be applicable to
such Loan, which Interest Period shall be a one month period,
if such Loan is a Foreign Currency Loan, and either a one,
two, three or six month period, if such Loan is a Dollar Loan;
provided that:"
Section 3.7. The Facility Letter is hereby amended to delete in its
entirety the last paragraph of Section 3 thereof and to substitute therefor the
following paragraph, reading as follows:
"European Borrowers may repay an Overdraft Loan on
any Business Day. European Borrowers may repay a Foreign
Currency Loan that is not an Overdraft Loan on a day other
than the last day of the applicable Interest Period, but only
if European Borrowers shall compensate Lender for each such
repayment, by the payment in Dollars of the greater of (i) two
thousand Dollars (U.S. $2,000) or (ii) all losses, expenses
and liabilities (including, without limitation, any loss
(including interest paid) sustained by Lender in connection
with the reemployment of such funds) which Lender may incur
because of such prepayment, upon Lender's written request
(which request shall set forth in reasonable detail the basis
for requesting any amounts pursuant to subsection (ii) and
which shall, absent manifest error, be conclusive and binding
upon all parties hereto)."
Section 3.8. The Facility Letter is hereby amended by inserting at the
end of the final paragraph of Section 4 thereof the following sentences,
reading as follows:
"Interest on Overdraft Loans shall accrue from day to day and
shall be calculated on the basis of a 360 day year (except for
British pounds sterling, in which case a 365 day year) for the
actual number of days elapsed. Interest on Overdraft Loans
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shall be due and payable and debited to the account of
European Borrowers on a monthly basis."
SECTION 4. CONDITIONS TO EFFECTIVENESS
Section 4.1. Effective Date. The amendments to the Loan Agreement and
the Facility Letter set forth in Sections 2 and 3 of this Amendment are to
become effective only as of the first date (the "Amendment Effective Date") on
which this Amendment has been executed by Corporate Guarantors and Obligated
Borrowers and all of the conditions to effectiveness of this Amendment set
forth in Sections 4.2 and 4.3 of this Amendment have been satisfied.
Section 4.2. Execution. Lender shall have received (i) two original
counterparts of this Amendment, duly executed by Corporate Guarantors and
Obligated Borrowers, and (ii) two original consents to this Amendment, duly
executed by Xxxxx X. Xxxxxxxxxxx, Xx.
Section 4.3. Compliance with Warranty; No Default, etc.
1. As of the Amendment Effective Date, the representations and
warranties set forth in Section 5 of the Loan Agreement, and
the representations and warranties set forth in each of the
other Loan Documents, are to be true and correct in all
material respects.
2. As of the Amendment Effective Date, no Default or Event of
Default shall have occurred and be continuing.
SECTION 5. DOCUMENT PURSUANT TO LOAN AGREEMENT.
This Amendment is a Loan Document executed pursuant to the Loan
Agreement and, unless otherwise expressly indicated herein, is to be construed,
administered and applied in accordance with all of the terms and provisions of
the Loan Agreement. Except as otherwise expressly provided for herein, all
representations, warranties, terms, covenants and conditions of the Loan
Agreement, the Facility Letter and each of the other Loan Documents are to
remain unamended and unwaived.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers hereunder duly authorized as of the
day and year first written above.
XXXXXXXXXXX SECURITY, INC.
("OBLIGATED BORROWER")
By: /s/
------------------------------
Its:
-----------------------------
XXXXXXXXXXX, INC.
("OBLIGATED BORROWER")
By: /s/
------------------------------
Its:
-----------------------------
ADI U.K. LIMITED
("OBLIGATED BORROWER")
By: /s/
------------------------------
Its:
-----------------------------
AVIATION DEFENCE INTERNATIONAL
GERMANY LIMITED
("OBLIGATED BORROWER")
By: /s/
------------------------------
Its:
-----------------------------
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XXXXXXXXXXX HOLDINGS LIMITED
("U.S. HOLDINGS GUARANTOR")
By: /s/
-------------------------------------
Title:
-------------------------------------
THE ADI GROUP LIMITED
("EUROPEAN GUARANTOR")
By: /s/
-------------------------------------
Title:
-------------------------------------
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FIRST UNION COMMERCIAL
CORPORATION
("LENDER")
By: /s/
-------------------------------
Title:
----------------------------
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CONSENT AND CONFIRMATION
The undersigned, a guarantor of the Obligations of Obligated
Borrowers to Lender, hereby consents to the terms and conditions of the SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY LETTER by and among the
Corporate Guarantors and European Borrowers party thereto and FIRST UNION
COMMERCIAL CORPORATION, and the undersigned hereby confirms and agrees that the
Guaranty by the undersigned in favor of Lender continues to be in full force
and effect and is hereby ratified and confirmed.
/s/ XXXXX X. XXXXXXXXXXX, XX.
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XXXXX X. XXXXXXXXXXX, XX.
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