EXHIBIT 10.64
WAIVER AND SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT AND NOTE
THIS WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT AND NOTE ("Second Amendment") is made and entered into as of
April 30, 1998, by and between DATRON SYSTEMS INCORPORATED, a Delaware
corporation ("Borrower" or "Company") and UNION BANK OF CALIFORNIA,
N.A. ("Bank"). This Second Amendment amends that certain Amended and
Restated Credit Agreement, as previously Amended, by and between Bank
and Borrower dated as of August 8, 1997 ("Credit Agreement").
RECITALS
A. Whereas, the parties hereto agreed to certain modifications
of the Facility Documents ("Loan Documents").
B. Whereas, on August 1, 1995 Datron/Transco, Inc.("Guarantor")
executed its Continuing Guaranty in the amount of Twenty-Nine Million
and No/100 Dollars ($29,000,000.00) of Borrower's Obligations to Bank
on August 1, 1995, and Datron World Communications Inc.("Guarantor"
with each Guarantor referenced herein together as "Guarantors")
executed its Continuing Guaranty in the amount of Twenty-Nine Million
and No/100 Dollars ($29,000,000.00) of Borrower's Obligations to Bank,
both of which remain in full force and effect and referenced herein
inclusive with Loan Documents.
C. Whereas, the Borrower and the Bank desire to evidence (1)
the Bank's waiver of the Borrower's compliance with three of the
financial covenants for the periods ending for the fourth quarter and
fiscal year end March 31, 1998, (2) modify two of the financial
covenants (a) one for the first quarter ending June 30, 1998, and
(b)one for the fiscal year ending March 31, 1999, and (3) modify the
timing of the decrease in the maximum amount available under the
Revolving Loan Facility, the Standby Facility and the UC Facility from
April 30, 1998 to July 31, 1998 (Reduction Date) without changing the
Reduction Amount, and (4) modify the minimum amount of the Simi Valley
Financing from $3,500,000.00 to $3,300,000.00 ("Designated Defaults"),
and (5) to provide for certain ancillary matters.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing and for other
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Bank and Borrower and Guarantors hereby agree as
follows:
1. Incorporation of Recitals. Each of the above recitals is
incorporated herein and deemed to be the agreement of the Bank and
Borrower and Guarantors and is relied upon by each party to this
Second Amendment in agreeing to the terms of this Second Amendment.
All capitalized terms used in this Second Amendment shall, unless
otherwise defined herein or unless the context otherwise requires,
have the meanings given thereto in the Credit Agreement.
2. Confirmation of Collateral. Borrower hereby grants and confirms
that all obligations of Borrower to Bank are secured by a duly
recorded security interest of first priority in the Collateral.
2.a. Confirmation of Guarantys. Each Guarantor hereby acknowledges and
confirms such Guarantor's respective unconditional obligation as
Guarantor of the obligations of Borrower to Bank as set forth in its
Guaranty and reaffirms and restates each and every term, condition and
provision thereof.
3. Confirmation of Representations and Warranties. Borrower hereby
confirms all representations and warranties contained in the Loan
Documents and reaffirms all covenants set forth therein, as amended.
Further, Borrower certifies that, as of the date of this Second
Amendment, there exists no Event of Default as defined in the Loan
Documents other than the Designated Defaults, nor any condition, act
or event which with the giving of notice or the passage of time or
both would constitute an Event of Default.
4. Conditions Precedent. Borrower understands that this Second
Amendment shall not be effective and Bank shall have no obligation to
amend the terms of the Loan Documents as provided herein unless and
until each of the following conditions precedent has been satisfied
not later than the respective date set forth below, or waived by Bank
(in Bank's sole discretion), for whose sole benefit such conditions
exist, with Bank's determination as to whether they have been timely
satisfied being conclusive absent manifest error:
4.1 On or before May 15, 1998, Borrower and Guarantors shall have
executed and delivered to Bank this Second Amendment;
4.2 On or before May 15, 1998, Borrowers shall have paid the Extension
and Waiver Fee of Twelve Thousand Dollars ($12,000.00) which is equal
to one-half (.5%) percent per annum of the Revolving Loan Facility
Commitment annualized for the three month period; and,
4.3 On or before such time as Bank may require, Borrowers shall have
taken any and all actions and execute and deliver to Bank any and all
documents necessary or appropriate in Bank's sole discretion to
effectuate this Second Amendment.
5. Waiver of Defaults. Subject to all of the terms and conditions of
this Second Amendment, including, without limitation, the requirements
of Sections 4 and 5 hereof, Bank hereby agrees to waive, for the
fiscal quarter and fiscal year end of the Borrower ending March 31,
1998, and only for such fiscal quarter and year end, compliance by the
Borrower with the Tangible Net Worth, Profitability, and Cash Flow
Coverage Ratio covenants as set forth in Subsections 4.02(i), (k), and
(m) of the Credit Agreement, and agrees that such noncompliance shall
not constitute an Event of Default under the Credit Agreement or under
the Credit Agreement as amended by the First and this Second
Amendment. The waiver here given is specific to the covenants, and for
the fiscal quarter and year end of the Borrower, referred to above and
shall not operate as a waiver of compliance by the Borrower with any
other covenant set forth in the Credit Agreement, or in the Credit
Agreement as amended by the First or this Second Amendment, or with
the covenants referred to above for any other fiscal quarter or year
end of the Borrower.
6. Modification of Loan Documents. To induce Bank to enter into this
Second Amendment, Borrower agrees that the Loan Documents are hereby
supplemented and modified as follows, which modifications shall
supersede and prevail over any conflicting provisions of the Loan
Documents:
6.1 Subsection 4.02(i) Tangible Net Worth of the Credit Agreement is
amended to read as follows:
The Company will not, as at the end of any fiscal quarter or fiscal
year end of the Company, permit its consolidated Tangible Net Worth to
be less than Twenty-Three Million Four Hundred Thousand and No/100
Dollars ($23,400,000.00).
6.2 Subsection 4.02(k) Profitability of the Credit Agreement is
amended to read as follows:
The Company will not (1) permit its consolidated net after tax profits
to be less than Ninety-Seven Thousand Dollars ($97,000.00) for the
fiscal quarter of the Company ending June 30, 1998, and (2) permit its
consolidated net after tax profits to be less than Two Hundred Fifty
Thousand Dollars ($250,000.00) for any fiscal quarter of the Company
ending on or after September 30, 1998.
6.3 Subsection 6.010 The Simi Valley Financing of the Credit Agreement
is amended to read as follows:
Simi Valley Financing shall fail to close on or prior to July 31,
1998, or shall close on or prior to July 31, 1998 but shall fail to
generate net proceeds in an amount equal to or greater than Three
Million Three Hundred Thousand Dollars ($3,300,000.00).
6.4 Subsection 1.01(b), (c), (d), (e) and (f) Availabilities of the
Facilities of the Credit Agreement is amended such that any reference
to the Reduction Date shall be changed from April 30, 1998 to July 31,
1998 hereafter; therefore, the maximum amounts available under the
Revolving Loan Facility, the Standby Facility and the UC Facility
shall be reduced by the Reduction Amount of Four Million dollars
($4,000,000.00) on the Reduction Date.
6.5 Subsection 1.02(d) of the Credit Agreement is amended in its
entirety to read as follows:
Revolving Loan Interest Rate Options. The Company shall pay interest
on the unpaid principal amount of each Revolving Loan from the date of
such loan (if such loan is made on or after the Effective Date), from
the Effective Date (if such loan is a Reference Rate Revolving Loan
made prior to the Effective Date), or from the first day of the hrst
Interest Period for such loan which commences on or after the
Effective Date (if such loan is a LIBOR Revolving Loan made prior to
the Effective Date), until the maturity thereof (whether by
acceleration or otherwise), at one of the following rates per annum:
(i) Reference Rate Option - During such periods as such Revolving Loan
is a Reference Rate Revolving Loan, a rate per annum equal to the
Reference Rate plus one and one-half percent (1.5%), such rate to
change from time to time as the Reference Rate shall change; or
(ii) LIBO Rate Option - during such periods as such Revolving Loan is
a LIBOR Revolving Loan, a rate per annum equal at all times during
each Interest Period for such loan to the LIBO Rate for such Interest
Period ~ two and one-half percent (2.5%).
Each Revolving Loan shall, at any given time prior to maturity, bear
interest at one, and only one, of the above rates.
7. Release. Borrower and each Guarantor hereby, for itself, its
successors, heirs, executors, administrators and assigns, releases,
acquits and forever discharges Bank, its directors, officers,
employees, agents, affiliates, successors, administrators and assigns
("Released Parties") of and from any and all claims, actions, causes
of action, demands, rights, damages, costs, loss of service, expenses
and compensation whatsoever which any Borrower or Guarantor might have
because of anything done, omitted to be done, or allowed to be done by
any of Released Parties and in any way connected with the Liabilities
or this Second Amendment or the other Loan Documents as of the date of
execution of this Second Amendment, WHETHER KNOWN OR UNKNOWN, FORESEEN
OR UNFORESEEN, including without limitation, any settlement
negotiations and also including without limitation, any damages and
the consequences thereof resulting or to result from the events
described, referred to or inferred hereinabove ("Released Matters").
Each Borrower and Guarantor further agrees never to commence, aid or
participate in (except to the extent required by order or legal
process issued by a court or governmental agency of competent
jurisdiction) any legal action or other proceeding based in whole or
in part upon the foregoing. In furtherance of this general release,
each Borrower and Guarantor acknowledges and waives the benefits of
California Civil Code Section 1542 (and all similar ordinances and
statutory, regulatory, or judicially created laws or rules of any
other jurisdiction), which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR
Borrower and each Guarantor agrees that this waiver and release is an
essential and material term of this Second Amendment and that the
agreements in this paragraph are intended to be in full satisfaction
of any alleged injuries or damages in connection with the Released
Matters. Borrower and each Guarantor represents and warrants that it
has not purported to convey, transfer or assign any right, title or
interest in any Released Matter to any other person or entity and that
the foregoing constitutes a full and complete release of the Released
Matters. Borrower and each Guarantor also understands that this
release shall apply to all unknown or unanticipated results of the
transactions and occurrences described above, as well as those known
and anticipated. Borrower and each Guarantor has consulted with legal
counsel prior to signing this release, or had an opportunity to obtain
such counsel and knowingly chose not to do so, and executes such
release voluntarily, with the intention of fully and finally
extinguishing all Released Matters.
8. Effect of Amendment. Bank and Borrower and each Guarantor agree
that except as expressly provided herein, the Credit Agreement and the
Loan Documents shall remain in full force and affect in accordance
with their respective terms, without waiver or modification. Each of
Borrower and Guarantors acknowledges that it is relying on no written
or oral agreement, representation, warranty, or understanding of any
kind made by Bank or any employee or agent of Bank except for the
agreements of Bank set forth herein or in the Credit Agreement or
other Loan Documents.
9. Applicable Law; Jurisdiction. Except as otherwise provided herein,
this Second Amendment and the rights and obligations of the parties
hereto shall be governed by the laws of the State of California
without regard to principles concerning choice of law. In any action
arising out of or connected with this Second Amendment, Borrower and
Guarantors each hereby expressly consents to the personal jurisdiction
of any state or federal court located in the State of California and
also consents to service of process by any means authorized by federal
or governing state law.
IN WITNESS WHEREOF, Bank and Borrower and each Guarantor have executed
this Second Amendment as of the date set forth in the preamble.
BORROWER BANK
DATRON SYSTEMS, INC. UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXXXXX X. XXXXXXX By:/s/XXXXX XXXXX XxXXXXXX
Title: Vice President and Chief Title: Vice President
Financial Officer
GUARANTOR
DATRON/TRANSCO INC.
By:/s/XXXXX X. DERBY
Title: Chairman
GUARANTOR
DATRON WORLD COMMUNICATIONS, INC.
By:/s/XXXXX X. DERBY
Title: Chairman
