Exhibit 10.58
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SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of August 23, 2001, is made by and between RF
MONOLITHICS, INC., a Delaware corporation (the "Borrower"), and XXXXX FARGO BANK
MINNESOTA, N.A., a national banking association (the "Lender").
Recitals
The Borrower and the Lender are parties to a Credit and Security Agreement
dated as of December 8, 2000, as amended by the First Amendment to Credit and
Security Agreement and Waiver of Defaults dated as of March 30, 2001 (as so
amended, the "Credit Agreement"). Capitalized terms used in these recitals have
the meanings given to them in the Credit Agreement unless otherwise specified.
The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment which are
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defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:
"Accounts" means all of the Borrower's accounts, as such term is
defined in the UCC, including each and every right of the Borrower to the
payment of money, whether such right to payment now exists or hereafter
arises, whether such right to payment arises out of a sale, lease or other
disposition of goods or other property, out of a rendering of services, out
of a loan, out of the overpayment of taxes or other liabilities, or
otherwise arises under any contract or agreement, whether such right to
payment is created, generated or earned by the Borrower or by some other
person who subsequently transfers such person's interest to the Borrower,
whether such right to payment is or is not already earned by performance,
and howsoever such right to payment may be evidenced, together with all
other rights and interests (including all Liens) which the Borrower may at
any time have by law or agreement against any account debtor or other
obligor obligated to make any such payment or against any property of such
account debtor or other obligor; all including but not limited to all
present and future accounts, contract rights, loans and obligations
receivable, chattel papers, bonds, notes and other debt instruments, tax
refunds and rights to payment in the nature of general intangibles.
"Collateral" means all of the Borrower's assets, including Accounts,
Chattel Paper, deposit accounts, documents, Equipment, General Intangibles,
goods, Instruments, Intellectual Property, Inventory, Investment Property,
letter-of-credit rights, letters of credit, Receivables, all sums on deposit in
any Collateral Account, and any items in any Lockbox; together with (i) all
substitutions and replacements for and products of any of the foregoing; (ii) in
the case of all goods, all accessions; (iii) all accessories, attachments,
parts, equipment and repairs now or hereafter attached or affixed to or used in
connection with any goods; (iv) all warehouse receipts, bills of lading and
other documents of title now or hereafter covering such goods; (v) all
collateral subject to the Lien of any Security Document; (vi) any money, or
other assets of the Borrower that now or hereafter come into the possession,
custody, or control of the Lender; (vii) all sums on deposit in the Special
Account; and (viii) proceeds of any and all of the foregoing.
"Lien" means any security interest, mortgage, deed of trust, pledge, lien,
charge, encumbrance, title retention agreement or analogous instrument or
device, including the interest of each lessor under any capitalized lease and
the interest of any bondsman under any payment or performance bond, in, of or on
any assets or properties of a Person, whether now owned or hereafter acquired
and whether arising by agreement or operation of law.
"Special Charges" means certain restructuring changes of the Borrower to be
taken during the fiscal year ending August 31, 2001 including approximately (a)
$1,000,000 for a fixed asset reserve, (b) $1,000,000 for an inventory reserve
and (c) $200,000 of severance package accruals related to the plan for a
reduction in work force.
2. Rules of Interpretation. Section 1.2 of the Credit Agreement is
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amended to read as follows:
Section 1.2 Other Definitional Terms; Rules of Interpretation. The
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words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. All accounting terms not
otherwise defined herein have the meanings assigned to them in accordance
with GAAP. All terms defined in the UCC and not otherwise defined herein
have the meanings assigned to them in the UCC. References to Articles,
Sections, subsections, Exhibits, Schedules and the like, are to Articles,
Sections and subsections of, or Exhibits or Schedules attached to, this
Agreement unless otherwise expressly provided. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". Unless the context in which used herein otherwise
clearly requires, "or" has the inclusive meaning represented by the phrase
"and/or". Defined terms include in the singular number the plural and in
the plural number the singular. Reference to any agreement (including the
Loan Document), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in
accordance with the terms thereof (and, if applicable, in accordance with
the terms hereof and the other Loan Documents), except where otherwise
explicitly provided, and reference to any promissory note includes any
promissory note which is an extension or renewal thereof or a substitute or
replacement
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therefor. Reference to any law, rule, regulation, order, decree,
requirement, policy, guideline, directive or interpretation means as
amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect on the determination date, including rules and
regulations promulgated thereunder.
3. Financing Statements. Section 3.6 of the Credit Agreement is amended
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by adding the following new sentence before the first sentence of that Section:
The Borrower authorizes the Lender to file from time to time where
permitted by law, such financing statements against collateral described as
"all personal property" as the Lender deems necessary or useful to perfect
the Security Interest.
4. Amendment to Section 6.15. Section 6.15 of the Credit Agreement is
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amended in its entirety to read as follows:
Minimum Book Net Worth. The Borrower will maintain, during each period
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described below, its Book Net Worth in an amount not less than the amount
set forth below:
(a) From June 1, 2001 through August 31, 2001, a minimum Book Net
Worth of not less than $26,750,000; and
(b) From September 1, 2001 through November 30, 2001, a minimum Book
Net Worth of not less than the Book Net Worth as of FYE August 31, 2001,
minus $250,000.
Notwithstanding the foregoing, if the Special Charges are not taken during the
fiscal year ending August 31, 2001, the covenants for the above-listed periods
will be adjusted to new levels to be determined by the Lender in its sole
discretion.
5. Amendment to Section 6.16. Section 6.16 of the Credit Agreement is
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amended in its entirety to read as follows:
Quarterly Minimum Net Income. The Borrower will achieve (a) during the
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fiscal year ending on August 31, 2001, a minimum Net Income of greater than
($6,240,000); and (b) during the three month fiscal period from August 31,
2001, to November 30, 2001, a minimum Net Income of greater than
($250,000). Notwithstanding the foregoing, if the Special Charges are not
taken during the fiscal year ending August 31, 2001, the covenants for the
above-listed periods will be adjusted to new levels to be determined by the
Lender in its sole discretion.
6. Amendment to Section 6.17. Section 6.17 of the Credit Agreement is
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amended in its entirety to read as follows:
Monthly Minimum Net Income. The Borrower will achieve, as of the end
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of each month (a) during the fiscal year ended August 31, 2001, before the
effectiveness of the Special Charges a minimum Net Income of greater than
($500,000); and (b) from
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August 31, 2001 through November 30, 2001, a minimum Net Income of greater
than ($500,000).
7. Amendment to Exhibit C. Exhibit C to the Credit Agreement is hereby
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amended to be in the form of Exhibit C to this Amendment.
8. No Other Changes. Except as explicitly amended by this Amendment, all
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of the terms and conditions of the Credit Agreement shall remain in full force
and effect and shall apply to any advance or letter of credit thereunder.
9. Waiver of Defaults. The Borrower is in default of Sections 6.15, 6.16
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and 8.1(q) of the Credit Agreement and Section 5(a) of the Patent Security
Agreement (collectively, the "Existing Defaults"). The defaults under Sections
6.15 and 6.16 of the Credit Agreement may be summarized as follows:
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Section/Covenant Required Performance Actual Performance
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Section 6.15/Minimum Book Through August 31, 2001, a As of June 30, 2001,
Net Worth minimum Book Net Worth not Book Net Worth was
less than $29,500,000 $29,334,000
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Section 6.16/Quarterly During the fiscal year ended As of June 30, 2001,
Minimum Net Income on August 31, 2001, a Net Income was
minimum Net Income of ($3,619,000)
($3,200,000)
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Upon the terms and subject to the conditions set forth in this Amendment, the
Lender hereby waives the Existing Defaults. This waiver shall be effective only
in this specific instance and for the specific purpose for which it is given,
and this waiver shall not entitle the Borrower to any other or further waiver in
any similar or other circumstances.
10. Conditions Precedent. This Amendment, and the waiver set forth in
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Paragraph 9 hereof, shall be effective when the Lender shall have received an
executed original hereof, together with each of the following, each in substance
and form acceptable to the Lender in its sole discretion:
(a) The Acknowledgment and Agreement of Guarantor set forth at the
end of this Amendment, duly executed by the Guarantor.
(b) A Certificate of the Secretary of the Borrower certifying as to
(i) the resolutions of the board of directors of the Borrower approving the
execution and delivery of this Amendment, (ii) the fact that the articles
of incorporation and bylaws of the Borrower, which were certified and
delivered to the Lender pursuant to the Certificate of Authority of the
Borrower's secretary or assistant secretary dated as of December 8, 2000,
continue in full force and effect and have not been amended or otherwise
modified except as set forth in the Certificate to be delivered, and (iii)
certifying that the officers and agents of the Borrower who have been
certified to the Lender, pursuant to the
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Certificate of Authority of the Borrower's secretary or assistant secretary
dated as of December 8, 2000, as being authorized to sign and to act on behalf
of the Borrower continue to be so authorized or setting forth the sample
signatures of each of the officers and agents of the Borrower authorized to
execute and deliver this Amendment and all other documents, agreements and
certificates on behalf of the Borrower.
(c) Such other matters as the Lender may require.
11. Representations and Warranties. The Borrower hereby represents and
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warrants to the Lender as follows:
(a) The Borrower has all requisite power and authority to execute
this Amendment and to perform all of its obligations hereunder, and this
Amendment has been duly executed and delivered by the Borrower and
constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms.
(b) The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by all necessary corporate action and
do not (i) require any authorization, consent or approval by any
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree
presently in effect, having applicability to the Borrower, or the articles
of incorporation or by-laws of the Borrower, or (iii) result in a breach of
or constitute a default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which the Borrower is a party
or by which it or its properties may be bound or affected.
(c) All of the representations and warranties contained in Article V
of the Credit Agreement are correct on and as of the date hereof as though
made on and as of such date, except to the extent that such representations
and warranties relate solely to an earlier date.
12. References. All references in the Credit Agreement to "this Agreement"
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shall be deemed to refer to the Credit Agreement as amended hereby; and any and
all references in the Security Documents to the Credit Agreement shall be deemed
to refer to the Credit Agreement as amended hereby.
13. No Other Waiver. Except as set forth in Paragraph 9 hereof, the
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execution of this Amendment and acceptance of any documents related hereto shall
not be deemed to be a waiver of any Default or Event of Default, breach or
default under the Credit Agreement or breach, default or event of default under
any Security Document or other document held by the Lender, whether or not known
to the Lender and whether or not existing on the date of this Amendment.
14. Release. The Borrower and the Guarantor by signing the Acknowledgment
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and Agreement of Guarantor set forth below, each hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or
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description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower or such Guarantor has
had, now has or has made claim to have against any such person for or by reason
of any act, omission, matter, cause or thing whatsoever arising from the
beginning of time to and including the date of this Amendment, whether such
claims, demands and causes of action are matured or unmatured or known or
unknown.
15. Security Agreement. The Borrower shall cause the Guarantor to deliver
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a security agreement, in favor of the Lender and in form and substance
satisfactory to the Lender in its sole discretion, to be properly executed by
the Guarantor and delivered to the Lender within 30 days from the date hereof.
16. Costs and Expenses. The Borrower hereby reaffirms its agreement under
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the Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Loan Documents, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrower specifically
agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.
17. Miscellaneous. This Amendment and the Acknowledgment and Agreement of
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Guarantor may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.
18. Governing Law; Jurisdiction, Venue; Waiver of Jury Trial. This
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Amendment, the Acknowledgment and Agreement of Guarantor and the Loan Documents
shall be governed by and construed in accordance with the substantive laws
(other than conflict laws) of the State of Texas. Each party hereto and the
Guarantor hereby (i) consents to the personal jurisdiction of the state and
federal courts located in the State of Texas in connection with any controversy
related to this Amendment; (ii) waives any argument that venue in any such forum
is not convenient, (iii) agrees that any litigation initiated by the Lender or
the Borrower in connection with this Amendment or the other Loan Documents shall
be venued in either the District Court of Collin County, Texas, or the United
States District Court for the Northern District of Texas; and (iv) agrees that a
final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS AMENDMENT.
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19. ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS
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AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY
THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above. XXXXX FARGO BANK MINNESOTA,
N.A. RF MONOLITHICS, INC.
By /s/ Xxxxx Xxxxxxxxx By /s/Xxxxx X. Xxxx
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Name: Xxxxx Xxxxxxxxx Xxxxx X. Xxxx
Title: Vice President President
