EXHIBIT 10.16
WAIVER AND AMENDMENT NO. 3
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 3 ("Amendment") is entered into as of March
17, 2000, by and between MPD TECHNOLOGIES, INC., a New York corporation
("Borrower") having its principal place of business at 00 Xxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxx Xxxx and IBJ WHITEHALL BUSINESS CREDIT CORPORATION (formerly
known as IBJ Xxxxxxxx Business Credit Corporation) ("IBJ") having its principal
place of business at Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx and each of the other
financial institutions named in or which hereafter become a party to the Loan
Agreement (as defined below) (IBJ and such other financial institutions, the
"Lenders") and IBJ as agent for the Lenders (IBJ in such capacity, the "Agent").
BACKGROUND
Borrower, Agent and Lenders are parties to a Loan and Security Agreement
dated as of February 13, 1997 (as amended, supplemented or otherwise modified
from time to time, the "Loan Agreement") pursuant to which Lenders provided
Borrower with certain financial accommodations.
Borrower has requested that Lenders and Agent amend the Loan Agreement to,
among other things, (a) waive certain Events of Default and (b) amend certain
financial covenants, and Agent and Lenders are willing to do so on the terms and
conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Agent and
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the conditions
precedent set forth in Section 4 below, the Loan Agreement is hereby amended as
follows:
2.1. Section 1.2 of the Loan Agreement is hereby amended by inserting the
following defined terms in their appropriate alphabetical order:
Amendment No. 3 - means Waiver and Amendment No. 3 to Loan and
Security Agreement dated as of the Amendment No. 3 Effective Date
among Borrower, Lenders and Agent.
Amendment No. 3 Effective Date - means March 17, 2000.
Maximum Additional Capex Amount - Two Million Two Hundred Sixty-Six
Thousand and 00/100 ($2,266,000), less principal payments of the
Additional Capex Loans.
2.2 Section 1.2 of the Loan Agreement is hereby amended by amending the
defined terms "Fixed Charge Coverage" and "Permitted Purchase Money
Indebtedness" in their entirety to provide as follows:
"Fixed Charge Coverage - with respect to a particular period, the
ratio of (a) EBITDA for such period minus non-financed Capital
Expenditures during such period to (b) the sum of all amounts paid
during such period with respect to (i) federal, state and local
taxes, (ii) scheduled principal payments, (iii) interest on
Indebtedness for borrowed money and (iv) Capitalized Lease
Obligations."
"Permitted Purchase Money Indebtedness - Purchase Money Indebtedness
of Borrower incurred after the date hereof which is secured by a
Purchase Money Lien and which, when aggregated with the principal
amount of all other such Indebtedness and Capitalized Lease
Obligations of Borrower at the time outstanding, does not exceed
either (a) $2,500,000 in any fiscal year or (b) $5,000,000 in the
aggregate during the Original Term. For the purposes of this
definition, (i) the principal amount of any Purchase Money
Indebtedness consisting of capitalized leases shall be computed as a
Capitalized Lease Obligation, (ii) any renewals, extensions or
refinancings of Purchase Money Indebtedness shall not be computed in
the limitation set forth above and (iii) Indebtedness owing to Agent
and Lenders under this Agreement shall not be computed in the
limitations set forth above."
2.3. Section 2.3 of the Loan Agreement is hereby amended by inserting a
new subsection "(D)" at the end thereof as follows:
"(D) Anything in Section 2.3(c) to the contrary
notwithstanding, from and after the Amendment No. 3 Effective Date,
(i) the maximum amount of new Additional Capex Loans shall be
limited to $1,000,000, (ii) subject to the terms and conditions set
forth in this Agreement including, without limitation, Sections 10.2
and 10.4 hereof, Additional Capex Loans may be borrowed up to and
including December 31, 2000."
2.4. Section 3.1(A) of the Loan Agreement is hereby amended by (i)
deleting the reference in clause (a) to "Alternate Base Rate plus one-quarter of
one percent (.25%)" and inserting "Alternate Base Rate plus three-quarters of
one percent (.75%)" in its place and stead, (ii) deleting the reference in
clause (b) to "Alternate Base Rate" and inserting "Alternate Base Rate plus
one-half of one percent (.50%)" in its place and stead, and (iii) deleting the
last paragraph of Section 3.1(A).
2.5. Section 3.3(C) of the Loan Agreement is hereby amended in its
entirety to provide as follows:
"(C) At the effective date of any such termination by Borrower
(the "Prepayment Date"), Borrower shall pay to Agent (in addition to
the then outstanding principal, accrued interest and other charges
owing under the terms of
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this Agreement and any of the other Loan Documents), as liquidated
damages for the loss of the bargain and not as a penalty, an amount
equal to (x) one percent (1%) of the Maximum Revolving Amount plus
the Maximum Capex Amount plus the Maximum Additional Capex Amount
plus the outstanding principal balance of the Term Loan if the
Prepayment Date occurs from the Amendment No. 3 Effective Date to
and including the date immediately preceding the first anniversary
of the Amendment No. 3 Effective Date, and (y) one-half of one
percent (.50%) of the Maximum Revolving Amount plus the Maximum
Capex Amount plus the Maximum Additional Capex Amount plus the
outstanding principal balance of the Term Loan if the Prepayment
Date occurs on or after the first anniversary of the Amendment No. 3
Effective Date to and including February 11, 2002."
2.6. Section 9.3 of the Loan Agreement is hereby amended in its entirety
to provide as follows:
"9.3 Specific Financial Covenants. Borrower covenants that,
unless otherwise consented to by Agent in writing, it shall:
(a) maintain a Fixed Charge Ratio of not less than (i) (1.70)
to 1.00 for the three month period ending March 31, 2000, (ii) (.50)
to 1.00 for the six month period ending June 30, 2000, (iii) .50 to
1.00 for the nine month period ending September 30, 2000, (iv) 1.00
to 1.00 for the twelve month period ending December 31, 2000, (v)
1.10 to 1.00 for the twelve month period ending March 31, 2001 and
as at the end of each fiscal quarter thereafter for the twelve month
period then ended.
(b) until it has maintained a Fixed Charge Ratio of not less
than 1.10 to 1.00 as at the end of any fiscal quarter for the twelve
month period then ended commencing with the fiscal quarter ending
December 31, 2000, maintain an Excess Availability at all times of
not less than $900,000."
2.7. Section 10.4 of the Loan Agreement is hereby amended to include the
following new clause (d) at the end thereof:
"(d) and Borrower shall have been in compliance with Section
9.3(b) of the Loan Agreement at all times since the Amendment No. 3
Effective Date."
2.8. Section 11.1 of the Loan Agreement is hereby amended to include the
following new clause (S) at the end thereof:
(S) Borrower shall fail to provide Agent with an appraisal of
Equipment from Xxxxx-Xxxxxx Corporation (i) on or before May 15,
2000, and (ii) which sets forth an orderly liquidation value of
Equipment of at least $4,800,000.
3. Waiver. Subject to the satisfaction of the conditions precedent set
forth in Section 5 below, Agent and Lenders hereby waive the requirement that
Borrower maintain a Fixed Charge Ratio of not less than 1.00 to 1.00 for the
twelve month period ended December 31, 1999.
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4. Credit Limit. The maximum credit limit for SAMM for purposes of clause
(xiii) of the defined term "Eligible Account" shall be $3,529,412.
5. Conditions of Effectiveness. This Amendment shall become effective upon
satisfaction of the following conditions precedent: Agent shall have received
(i) four (4) copies of this Amendment executed by Borrower and consented and
agreed to by Microwave Power Devices, Inc., as guarantor, (ii) an amendment fee
equal to $50,000, (iii) evidence in the form of corporate resolutions
demonstrating that Borrower shall have taken all necessary corporate action for
the authorization, execution, delivery and performance of this amendment, (iv) a
Second Amended and Restated Revolving Credit Note to replace the original Second
Amended and Restated Revolving Credit Note which, if delivered to Agent, is no
longer in Agent's possession, (v) an Amended and Restated Additional Capex Note
reflecting the new Maximum Additional Capex Amount, (vi) UCC-1 Financing
Statements to be filed in all necessary jurisdictions to perfect Agent's lien in
Inventory kept at Lucent Technology locations in Ohio and New Jersey and (vii)
such other certificates (including an updated Incumbency Certificate),
instruments, documents, agreements and opinions of counsel as may be required by
Agent or its counsel, each of which shall be in form and substance satisfactory
to Agent and its counsel.
6. Representations and Warranties. Borrower hereby represents and warrants
as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective
terms.
(b) Upon the effectiveness of this Amendment, Borrower hereby
reaffirms all covenants, representations and warranties made in the
Loan Agreement to the extent the same are not amended hereby and
agree that all such covenants, representations and warranties shall
be deemed to have been remade as of the effective date of this
Amendment.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment.
(d) Borrower has no defense, counterclaim or offset with
respect to the Loan Agreement.
7. Effect on the Loan Agreement.
(a) Upon the effectiveness of this Amendment, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
like import shall mean and be a reference to the Loan Agreement as amended
hereby.
(b) Except as specifically amended herein, the Loan Agreement, and
all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) Except as specifically provided in Section 3 hereof, the
execution, delivery
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and effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of Agent, nor constitute a waiver of any provision of the Loan
Agreement, or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.
8. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
9. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
10. Counterparts; Telecopied Signatures. This Amendment may be executed in
any number of and by different parties hereto on separate counterparts, all of
which, when so executed, shall be deemed an original, but all such counterparts
shall constitute one and the same agreement. Any signature delivered by a party
by facsimile transmission shall be deemed to be an original signature hereto.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first written above.
MPD TECHNOLOGIES, INC.
By: /s/ X. Xxxxx
--------------------------------
Name: X. Xxxxx
Title: Chairman, President/CEO
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION, as Agent and a Lender
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
CONSENTED AND AGREED TO:
MICROWAVE POWER DEVICES, INC.
By: /s/ X. Xxxxx
---------------------------
Name: X. Xxxxx
Title: Chairman, President/CEO
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SECOND AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$13,750,000.00 New York, New York
as of May 19, 1999
This Second Amended and Restated Revolving Credit Note is executed
and delivered under and pursuant to the terms of that certain Loan and Security
Agreement dated as of February 13, 1997 (as the same has been and may be further
amended, supplemented or modified from time to time, the "Loan Agreement") by
and among MPD TECHNOLOGIES, INC., a New York corporation having its chief
executive office at 00 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("Borrower"), IBJ WHITEHALL BUSINESS CREDIT CORPORATION (formerly known as IBJ
Xxxxxxxx Business Credit Corporation) ("IBJ"), each of the other financial
institutions named in or which hereafter become parties to the Loan Agreement
(IBJ and such other financial institutions, the "Lenders") and IBJ as agent for
the Lenders (IBJ in such capacity, "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings as provided in the Loan Agreement.
FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of
Agent for the ratable benefit of Lenders at Agent's offices located at Xxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as Agent may from time
to time designate in writing to Borrower:
(i) the principal sum of THIRTEEN MILLION SEVEN HUNDRED FIFTY
THOUSAND AND 00/100 DOLLARS ($13,750,000.00) or, if different from such amount,
such amount of Revolving Advances as may be due and owing under the Loan
Agreement, payable in accordance with the provisions of the Loan Agreement and
subject to acceleration upon the occurrence of an Event of Default under the
Loan Agreement, earlier termination of the Loan Agreement or earlier prepayment
as required pursuant to the terms thereof; and
(ii) interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full, at such interest rates
and at such times as are provided in the Loan Agreement. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, interest
shall be payable at the Default Rate. In no event, however, shall interest
hereunder exceed the maximum interest rate permitted by law.
This Second Amended and Restated Revolving Credit Note amends and
restates in its entirety and is given in substitution for, but not in
satisfaction of, that certain Amended and Restated Revolving Credit Note dated
as of February 13, 1998 issued by Borrower in favor of Agent for the ratable
benefit of Lenders in the original principal amount of $12,000,000 and replaces
an identical Second Amended and Restated Revolving Credit Note which Agent
cannot locate in its files.
This Note is the Revolving Credit Note referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
Agreement and the Other Agreements, is entitled to the benefits of the Loan
Agreement and the Other Agreements and is subject to all of the agreements,
terms and conditions therein contained.
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This Note is subject to mandatory prepayment and may be voluntarily
prepaid, in whole or in part, on the terms and conditions set forth in the Loan
Agreement.
If an Event of Default under Sections 11.1(J) or 11.1(K) of the Loan
Agreement shall occur, then this Note shall immediately become due and payable,
without notice, together with reasonable attorneys' fees if the collection
hereof is placed in the hands of an attorney to obtain or enforce payment
hereof. If any other Event of Default shall occur under the Loan Agreement or
any of the Other Agreements which is not cured within any applicable grace
period, then this Note may, as provided in the Loan Agreement, be declared to be
immediately due and payable, without notice, together with reasonable attorneys'
fees, if the collection hereof is placed in the hands of an attorney to obtain
or enforce payment hereof.
This Note is being delivered in the State of New York, and shall be
construed and enforced in accordance with the laws of such State.
Borrower expressly waives any presentment, demand, protest, notice
of protest, or notice of any kind except as expressly provided in the Loan
Agreement.
MPD TECHNOLOGIES, INC.
By: /s/ X. Xxxxx
----------------------------------------
Name: X. Xxxxx
Title: Chairman, President/CEO
STATE OF NEW YORK )
: ss.:
SUFFOLK COUNTY OF NEW YORK )
On the 17 day of March, 2000, before me personally came X. Xxxxx, to
me known, who being by me duly sworn, did depose and say that he is the
Chairman, President/CEO of MPD Technologies, Inc., the corporation described in
and which executed the foregoing instrument; and that he was authorized to sign
his name thereto.
/s/ Xxxxxxxx Xxxxxxxxxx
--------------------------------------------
Notary Public
XXXXXXXX XXXXXXXXXX
Notary Public, State of New York
Suffolk County No. 01OM6015966
Commission Expires November 09, 2000
8
AMENDED AND RESTATED
ADDITIONAL CAPEX NOTE
$2,266,000.00 New York, New York
as of March 17, 2000
This Amended and Restated Additional Capex Note is executed and
delivered under and pursuant to the terms of that certain Loan and Security
Agreement dated as of February 13, 1997 (as the same has been and may be further
amended, supplemented or modified from time to time, the "Loan Agreement") by
and among MPD TECHNOLOGIES, INC., a New York corporation having its chief
executive office at 00 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("Borrower"), IBJ WHITEHALL BUSINESS CREDIT CORPORATION (formerly known as IBJ
Xxxxxxxx Business Credit Corporation) ("IBJ"), each of the other financial
institutions named in or which hereafter become parties to the Loan Agreement
(IBJ and such other financial institutions, the "Lenders") and IBJ as agent for
the Lenders (IBJ in such capacity, "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings as provided in the Loan Agreement.
FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of
Agent for the ratable benefit of Lenders at Agent's offices located at Xxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as Agent may from time
to time designate to Borrower in writing:
(i) the principal sum of TWO MILLION TWO HUNDRED SIXTY-SIX THOUSAND
AND 00/100 DOLLARS ($2,266,000.00) or such lesser amount as shall be advanced by
Lender on or before December 31, 2000, payable in consecutive monthly
installments each in an amount equal to the applicable monthly payment on
Additional Capex Loans as set forth in the Loan Agreement, subject to
acceleration upon the occurrence of an Event of Default under the Loan
Agreement, earlier termination of the Loan Agreement or earlier prepayment as
required pursuant to the terms of the Loan Agreement; and
(ii) interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full, at such interest rates
and at such times as are provided in the Loan Agreement. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, interest
shall be payable at the Default Rate. In no event, however, shall interest
hereunder exceed the maximum interest rate permitted by law.
This Amended and Restated Additional Capex Note amends and restates
in its entirety and is given in substitution for, but not in satisfaction of,
that certain Additional Capex Note dated as of May 19, 1999 issued by Borrower
in favor of Agent for the ratable benefit of Lenders in the original principal
amount of $3,000,000.
This Note is the Additional Capex Note referred to in the Loan
Agreement and is secured, inter alia, by the liens granted pursuant to the Loan
Agreement and the Other Agreements, is entitled to the benefits of the Loan
Agreement and the Other Agreements and is subject to all of the agreements,
terms and conditions therein contained.
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This Note is subject to mandatory prepayment and may be voluntarily
prepaid, in whole or in part, on the terms and conditions set forth in the Loan
Agreement.
If an Event of Default under Sections 11.1(J) or 11.1(K) of the Loan
Agreement shall occur, then this Note shall immediately become due and payable,
without notice, together with reasonable attorneys' fees if the collection
hereof is placed in the hands of an attorney to obtain or enforce payment
hereof. If any other Event of Default shall occur under the Loan Agreement or
any of the Other Agreements, which is not cured within any applicable grace
period, then this Note may, as provided in the Loan Agreement, be declared to be
immediately due and payable, without notice, together with reasonable attorneys'
fees, if the collection hereof is placed in the hands of an attorney to obtain
or enforce payment hereof.
This Note is being delivered in the State of New York, and shall be
construed and enforced in accordance with the laws of such State.
Borrower expressly waives any presentment, demand, protest, notice
of protest, or notice of any kind except as expressly provided in the Loan
Agreement.
MPD TECHNOLOGIES, INC.
By: /s/ X. Xxxxx
-----------------------------------------
Name: X. Xxxxx
Title: Chairman, President/CEO
STATE OF NEW YORK )
: ss.:
SUFFOLK COUNTY OF NEW YORK )
On the 17 day of March, 2000, before me personally came X. Xxxxx, to
me known, who being by me duly sworn, did depose and say that he is the
Chairman, President/CEO of MPD Technologies, Inc., the corporation described in
and which executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of said corporation.
/s/ Xxxxxxxx Xxxxxxxxxx
---------------------------------------------
Notary Public
XXXXXXXX XXXXXXXXXX
Notary Public, State of New York
Suffolk County No. 01OM6015966
Commission Expires November 09, 2000
10
