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EXHIBIT 10.12
THIRD AMENDMENT TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "Amendment"),
dated and effective as of August 19, 1996, is made by and between MICRODYNE
CORPORATION, a Maryland corporation (the "Borrower"), CRESTAR BANK and NBD BANK
(the "Banks"), and CRESTAR BANK ("Crestar") as agent (the "Agent") for the
Banks.
RECITALS
The Borrower, the Banks and the Agent are parties to a Credit
Agreement, dated as of January 27, 1995, and amended by the First Amendment to
Credit Agreement, dated as of October 26, 1995, and the Second Amendment Credit
Agreement, dated as of June 30, 1996 (as further amended, modified or
supplemented from time to time, the "Agreement"). Terms defined in the
Agreement shall have the same defined meanings when such terms are used in this
Amendment.
The Borrower, the Agent and the Banks have agreed to amend
certain provisions of the Agreement. Accordingly, for valuable consideration,
the receipt and sufficiency of which are acknowledged, the Borrower, the Banks
and the Agent agree as follows:
1. The following definition is added to Section 1.1 of
the Agreement:
"Mortgage" means a Mortgage, in form and
substance acceptable to the Banks, creating a lien against
the land, buildings and fixtures located at 000 Xxx Xxxx,
Xxxxx, Xxxxxxx, as the same may be amended, modified or
supplemented from time to time. The Mortgage shall be a Loan
Document, as defined in this Agreement.
2. The following definitions contained in Section 1.1
of the Agreement are deleted in their entirety and replaced with the following
provisions:
"Advance Commitment" means $13,884,000 in
the case of Crestar and $6,116,000 in the case of NBD;
provided, however that each Bank's Advance Commitment shall be
reduced automatically by its Commitment Percentage of any
Maximum Amount reduction resulting from a prepayment of the
Advances pursuant to Section 2.10(e).
"Maximum Amount" means, with respect to the
Advances, $20,000,000; provided, however, that the applicable
Maximum Amount on any date
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shall be further reduced by the amount of the prepayment of
the Advances required by Section 2.10(e) of this Agreement.
"Termination Date" means September 19, 1996,
any earlier date of termination in whole of the Commitments
pursuant to Section 9.1, or any later date if the Termination
Date is extended in the sole discretion of the Banks in
accordance with Section 2.4.
3. Section 2.l(a) is deleted in its entirety and
replaced with the following:
"Subject to the terms and conditions of this Agreement, each
Bank severally may make Advances to the Borrower from time to
time until the Termination Date in an aggregate amount not to
exceed at any time outstanding such Bank's Advance Commitment.
The aggregate outstanding amount of Advances shall not exceed
the Maximum Amount at any time, unless the Banks, in their
sole discretion elect to make Advances in excess of such
limit, which Advances, if made, shall be subject to the terms
of this Agreement. All Advances will be made from time to
time in the sole discretion of the Banks, and this Agreement,
the making of any Advance or any other action by any Bank
shall not obligate the Banks to make further Advances to the
Borrower. The Borrower acknowledges and agrees that the Banks
may decline to make an Advance for any reason, even if no
Default or Event of Default has occurred and if the Borrower
is in compliance with all of the terms and conditions of this
Agreement. By close of business on Tuesday of each week prior
to the Termination Date, Borrower shall prepare and deliver to
the Agent a weekly cash projection showing Borrower's
projected receipts, disbursements, and Advance requests for
the next seven calendar days. Subject to the foregoing,
within the limits of each Bank's Advance Commitment and up to
the Maximum Amount, the Borrower may borrow, prepay pursuant
to Section 2.10 and reborrow hereunder from the date of this
Agreement until the Termination Date."
4. The following provisions are added to the end of
Article 4:
"SECTION 4.4 Mortgage. As additional security for
the Obligations, the Borrower shall use its best efforts to
execute, deliver and record the Mortgage in the appropriate
land records not later than September 6, 1996, and deliver to
the Agent, not later than September 13, 1996, a mortgagee
title insurance commitment, issued by a title insurance
company acceptable to the Banks, to insure the Lien of the
Mortgage as a second Lien, subordinate only to the Lien
securing the Industrial Development Revenue Bonds described on
Schedule 4 to this Agreement, and containing no exceptions to
title that are not acceptable to the Banks in their sole
discretion.
SECTION 4.5 Cash Collateral Account. The Borrower agrees that
it shall direct all payments on Receivables to a lockbox
established with the Agent. The Borrower also agrees to remit
all payments on Receivables received by the Borrower, as well
as any
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other revenues of any kind (including, without limitation, any
income tax refunds) received by the Borrower, to the Agent.
All of the foregoing payments and revenues shall be remitted
or delivered to the lockbox or the Agent, as applicable, in
their original form on the date of receipt. All such payments
and revenues shall be credited to a cash collateral account
over which the Agent shall have the exclusive power of
withdrawal. The Agent shall hold all funds in the cash
collateral account as security for the Obligations and is
authorized to apply funds in the cash collateral to pay the
Obligations from time to time. The Borrower represents that
it does not have an account with any financial institution
other than the Agent, save and except those accounts set forth
on Schedule A ("Other Accounts"). The Borrower agrees that it
shall not establish any other account hereafter without prior
written approval of the Agent. The Borrower further agrees
that proceeds of Receivables totalling in excess of $25,000
deposited in any Other Account shall be transferred to the
cash collateral account established hereunder within 24 hours
of such deposit and all other proceeds of Receivables
deposited in any Other Account shall be transferred to said
cash collateral account within 48 hours of such deposit. The
Borrower shall respond to requests by the Agent for
information or documents relating to the Other Accounts and
the balances therein within 24 hours of its receipt of each
such request."
5. Pursuant to the provisions of Subsection (9) of
Section 7.1(b), the Borrower agrees to provide to the Agent, (a) on each
Business Day on which Receivables are created or collected, or on which
Inventory is purchased, shipped or returned, or on which a credit is issued or
created with respect to a Receivable, a sales journal on a form provided by the
Agent reflecting such activity and the resulting balance of Receivables and
Inventory, and (b) on each Business Day, a summary, by budget category, of all
disbursements in excess of $5,000 made by the Borrower on the immediately
preceding Business Day.
6. Except for the amendments to the Agreement expressly
set forth above, the Agreement and the other Loan Documents shall remain in
full force and effect. The Borrower acknowledges and agrees that this
Amendment only amends the terms of the Agreement and is not a novation, and the
Borrower ratifies and confirms the remaining terms and provisions of the
Agreement and the other Loan Documents in all respects. Nothing in this
Amendment shall require the Banks to grant any further amendments to the terms
of the Loan Documents. Without limiting the generality of the foregoing, the
Borrower acknowledges and agrees that it is obligated to develop a business
plan acceptable to the Banks as required by the August 19, 1996 letter from the
Agent to the Borrower, and that no Advances will be made after September 16,
1996, unless such business plan is received by the Banks.
7. The Borrower acknowledges and agrees that (a) there
are no defenses, counterclaims or setoffs against any of its obligations under
the Loan Documents, and (b) the prior grant of a security interest in the
Collateral created by the Security Agreement and the Patent and Trademark
Assignment continues to secure the Obligations, is in full force and effect,
and is ratified and confirmed by the Borrower in all respects.
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8. The Borrower represents and warrants that this
Amendment has been duly authorized, executed and delivered by it in accordance
with resolutions adopted by its board of directors. All other representations
and warranties made by the Borrower in the Loan Documents are incorporated by
reference in this Amendment and are deemed to have been repeated as of the date
of this Amendment with the same force and effect as if set forth in this
Amendment, except that any representation or warranty relating to any financial
statements shall be deemed to be applicable to the financial statements most
recently delivered to the Banks in accordance with the provisions of the Loan
Documents.
9. The Borrower agrees to pay all costs and expenses
incurred by the Agent and the Banks in connection with this Amendment,
including, but not limited to, reasonable attorneys' fees.
10. This Amendment shall be governed by the laws of the
Commonwealth of Virginia, without reference to conflict of laws principles.
11. This Amendment may be executed by the parties
individually or in any combination, in one or more counterparts, each of which
shall be an original and all of which together constitute one and the same
instrument.
[SIGNATURES ON FOLLOWING PAGE]
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WITNESS the following signatures.
BORROWER:
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MICRODYNE CORPORATION,
a Maryland corporation
By: /s/ XXXXXX X. XXXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxxx
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Title: President
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AGENT:
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CRESTAR BANK
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Senior Vice President
BANKS:
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CRESTAR BANK
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Senior Vice President
NBD BANK
By: /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
Authorized Agent
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SCHEDULE A - OTHER ACCOUNTS
BANK PURPOSE ACCOUNT #
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Xxxxx Fargo Bank San Xxxx Xxxxx Cash 0491-059366
Xxxxxxx Bank Ocala Operating Account 1150065051
First Interstate Bank Lancaster Xxxxx Cash 502628619
Chase Manhattan Bank Microdyne Ltd. Account 000-0-000000
Royal Bank of Scotland UK Division Xxxxx Xxxx 00000000
Xxxxx Xxxx xx Xxxxxxxx XX Division Corporate Account 00000000
Deutsch Bank German Office Operating Account 0000000-00
Crestar Bank Flexible Spending Account 202258521
