Exhibit 10.7.4
THIRD AMENDMENT
TO
FINANCING AGREEMENT
THIS THIRD AMENDMENT TO FINANCING AGREEMENT (this "Agreement") is made
as of the 1st day of June, 1997, by TESSCO TECHNOLOGIES INCORPORATED (sometimes
referred to herein as the "Parent"), a corporation organized under the laws of
the State of Delaware, TESSCO COMMUNICATIONS INCORPORATED, a corporation
organized under the laws of the State of Delaware, TESSCO INCORPORATED, a
corporation organized under the laws of the State of Delaware, TESSCO FINANCIAL
CORPORATION, a corporation organized under the laws of the State of Delaware,
NATIONAL AIRTIME CORPORATION, a corporation organized under the laws of the
State of Delaware, WIRELESS SOLUTIONS INCORPORATED, a corporation organized
under the laws of the State of Maryland, (each of the foregoing corporations,
jointly and severally, collectively, the "Original Borrower") and XXXXXXXXXX
COMMUNICATIONS COMPANY, a corporation organized under the laws of the State of
Delaware ("Xxxxxxxxxx"), jointly and severally (the Original Borrower and
Xxxxxxxxxx collectively, the "Borrower"), and NATIONSBANK, N.A., a national
banking association, its successors and assigns (the "Lender").
RECITALS
A. The Borrower and the Lender are parties to a Financing Agreement
dated March 31, 1995 (the same as amended by First Amendment to Financing
Agreement dated September 26, 1996, by Second Amendment to Financing Agreement
dated February 28, 1997, and as amended, modified, substituted, extended, and
renewed from time to time, the "Financing Agreement"). The Financing Agreement
provides for some of the agreements between the Borrower and the Lender with
respect to the "Loans" (as defined in the Financing Agreement), including the
Revolving Credit Facility (as that term is defined in the Financing Agreement)
in an amount not to exceed $15,000,000.
B. The Borrower and the Lender have entered into an AutoBorrow Service
Agreement dated the same date as this Agreement (as amended, modified, restated,
substituted, extended and renewed at any time and from time to time, the
"AutoBorrow Service Agreement") and wish to amend the Financing Agreement as set
forth in this Agreement to provide that $5,000,000 of the Revolving Credit
Facility shall serve as the "Line of Credit" (as that term is defined in the
AutoBorrow Service Agreement).
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrower
and the Lender agree as follows:
1. The Borrower and the Lender agree that the Recitals above are a part
of this Agreement. Unless otherwise expressly defined in this Agreement, terms
defined in the Financing Agreement shall have the same meaning under this
Agreement.
2. The Borrower represents and warrants to the Lender as follows:
(a) The Borrower is a corporation duly organized, and validly
existing and in good standing under the laws of the state in which it was
organized and has the power and authority to own its property and to carry on
its business in each jurisdiction in which the Borrower does business;
(b) The Borrower has the power and authority to execute and deliver
this Agreement and perform its obligations hereunder and has taken all necessary
and appropriate corporate action to authorize the execution, delivery and
performance of this Agreement;
(c) The Financing Agreement, as amended by this Agreement, and each
of the other Financing Documents to which the Borrower is a party remain in full
force and effect, and each constitutes the valid and legally binding obligation
of Borrower, enforceable in accordance with its terms;
(d) All of Borrower's representations and warranties contained in
the Financing Agreement and the other Financing Documents to which the Borrower
is a party are true and correct on and as of the date of Borrower's execution of
this Agreement; and
(e) No Event of Default and no event which, with notice, lapse of
time or both would constitute an Event of Default, has occurred and is
continuing under the Financing Agreement or the other Financing Documents which
has not been waived in writing by the Lender.
3. The Financing Agreement is hereby amended as follows:
(a) Section 1.1 of the Financing Agreement is hereby amended adding
the following:
"AutoBorrow Service Agreement" means that certain AutoBorrow
Service Agreement dated _______, 1997, between the Borrower and the
Lender, as amended, modified, restated, substituted, extended and
renewed at any time and from time to time.
"AutoBorrow Advances" means that portion of the Revolving Loans
which have been advanced under the
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terms of the AutoBorrow Service Agreement and pursuant to the terms of
Section 2.1.2(b) of this Agreement.
"Other Advances" means advances under the Revolving Credit
Facility other than AutoBorrow Advances.
(b) Section 2.1.2 of the Financing Agreement is hereby deleted
in its entirety and substituted therefor is the following:
2.1.2 Procedure for Making Advances Under the Revolving
Loan; Lender Protection Loans
(a) The Borrower may borrow under the Revolving
Credit Commitment on any Business Day.
(b) Up to Five Million Dollars ($5,000,000) of the
Revolving Loans at any time outstanding may be advanced under the
terms, in the amounts and at the times provided in the AutoBorrow
Service Agreement. References in the AutoBorrow Service Agreement to
the "Line of Credit" shall mean that portion of the Revolving Credit
Facility.
(c) Other Advances under the Revolving Loan shall
be deposited to the Borrower's demand deposit account with the Lender
or shall be otherwise applied as directed by the Borrower, which
direction the Lender may require to be in writing. No later than 10:00
a.m. (Baltimore time) on the date of the requested borrowing, the
Borrower shall give the Lender oral or written notice (a "Loan Notice")
of the amount of the requested borrowing. Any oral Loan Notice shall be
confirmed in writing by the Borrower within three (3) Business Days
after the making of the requested Revolving Loan. In addition, the
Borrower hereby irrevocably authorizes the Lender at any time and from
time to time, without further request from or notice to the Borrower,
to make advances under the Revolving Loan to cover principal of, and/or
interest on, the Loan, the Obligations, and/or Enforcement Costs, prior
to, on, or after the termination of other advances under this
Agreement, regardless of whether the outstanding principal amount of
the Revolving Loan which the Lender may make hereunder exceeds the
Revolving Credit Committed Amount. In the event the Borrower chooses
the LIBOR Rate under the Revolving Loan Rate, the Borrower shall give
the Lender three (3) days prior written notice thereof.
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(c) Section 2.1.3 of the Financing Agreement is hereby deleted
in its entirety and substituted therefor is the following:
2.1.3. Revolving Credit Note. The obligation of the
Borrower to pay the Revolving Loan with interest shall be evidenced by
two promissory notes (as from time to time extended, amended, restated,
supplemented or otherwise modified, collectively the "Revolving Credit
Note"), one of which shall be in the amount of $10,000,000, shall be in
substantially in the form of EXHIBIT "A-1" attached hereto and made a
part hereof, with appropriate insertions, and shall evidence the Other
Advances; and the other shall be in the amount of $5,000,000, shall be
in substantially in the form of EXHIBIT "A-2" attached hereto and made
a part hereof, with appropriate insertions, and shall evidence the
AutoBorrow Advances. The Revolving Credit Note shall be payable to the
order of the Lender at the times provided in the Revolving Credit Note,
and shall be in the aggregate principal amount of the Revolving Credit
Committed Amount. The Borrower acknowledges and agrees that, if the
outstanding principal balance of the Revolving Loan outstanding from
time to time exceeds the aggregate face amount of the Revolving Credit
Note, the excess shall bear interest at the rates provided from time to
time for advances under the Revolving Loan evidenced by the Revolving
Credit Note and shall be payable, with accrued interest, ON DEMAND. The
Revolving Credit Note shall not operate as a novation of any of the
Obligations or nullify, discharge, or release any such Obligations or
the continuing contractual relationship of the parties hereto in
accordance with the provisions of this Agreement.
(d) Section 2.2.1(c) of the Financing Agreement is hereby
deleted in its entirety and substituted therefor is the following:
(c) The term "Revolving Loan Rate" shall mean for
outstanding AutoBorrow Advances the LIBOR Base Rate (as determined
daily by the Lender assuming an
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Interest Period of 30 days and adjusted automatically, without notice,
as of the effective date of any change to the LIBOR Base Rate) plus 125
basis points. The term "Revolving Loan Rate" shall mean for outstanding
Other Advance the Base Rate or the LIBOR Rate for such Revolving Loan
as chosen by the Borrower in writing prior to the making of such
Revolving Loan in accordance with the terms and conditions of this
Agreement, including the following basis points (the "Applicable
Margin"), based upon the Borrower's reaching and maintaining the
following corresponding Fixed Charges Coverage Ratios as determined by
the Lender from the Borrower's financial statements delivered in
accordance with Section 5.1.1 hereof:
---------------------------------------------------------- ---------------------- -----------------------
Applicable Margin for Applicable Margin for
Ratio LIBOR Loans Base Rate Loans
---------------------------------------------------------- ---------------------- -----------------------
If the Borrower's Fixed Charges Coverage Ratio is 125 0
greater than 2.0 to 1.0
---------------------------------------------------------- ---------------------- -----------------------
If the Borrower's Fixed Charges Coverage Ratio is 150 0
greater than or equal to 1.75 to 1.0, but less than 2.0
to 1.0
---------------------------------------------------------- ---------------------- -----------------------
If the Borrower's Fixed Charges Coverage Ratio is less 175 25
than 1.75 to 1.0
---------------------------------------------------------- ---------------------- -----------------------
The initial Fixed Charges Coverage Ratio is assumed to be greater
than 2.0 to 1.0. Upon the determination of the Fixed Charges Coverage
Ratio at the end of each of the Borrower's fiscal quarters (beginning
on the fiscal quarter ending March, 1997), the corresponding
Revolving Loan Rate shall be in effect commencing with the first day
of the month following the receipt of the applicable financial
statements of the Borrower and continuing through and including the
next determination of the Fixed Charges Coverage Ratio. Provided,
however, in the event that the Borrower fails to timely provide the
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Lender with the financial statements required by Section 5.1.1
hereof, then the Lender may in good faith determine the Fixed
Charges Coverage Ratio and the Borrower may choose the
corresponding Revolving Loan Rate set forth above.
(e) Section 2.2.5(a) of the Financing Agreement is hereby
deleted in its entirety and substituted therefor is the following:
(a) Without implying any limitation on the grace period set
forth in Section 6.1.1 of this Agreement, unpaid and accrued
interest on Other Advances which consist of a Base Rate Loan,
and all unpaid and accrued interest on AutoBorrow Advances,
shall be paid monthly, in arrears, on the first day of each
calendar month, commencing on the first such date after the
date of this Agreement, and on the first day of each calendar
month thereafter, and at maturity (whether by acceleration,
declaration, extension or otherwise).
4. At the time this Agreement is executed and delivered, the Borrower
shall execute and deliver the Revolving Credit Note in substantially the forms
attached to this Agreement as EXHIBIT A-1 and EXHIBIT A-2, which amends and
restates the Revolving Credit Note. References in this Agreement, the Financing
Agreement and the other Financing Documents to the "Revolving Credit Note" shall
mean the Revolving Credit Note as so amended and restated.
5. The Borrower hereby ratifies and confirms the representations,
warranties and covenants contained in the Financing Agreement, as amended
hereby. The Borrower agrees that this Agreement is not intended to and shall not
cause a novation with respect to any or all of the Obligations.
6. The Borrower shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Lender and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of the Lender's
counsel.
7. This Agreement may be executed in any number of duplicate originals
or counterparts, each of such duplicate originals or counterparts shall be
deemed to be an original and all taken together shall constitute but one and the
same instrument. The Borrower agrees that the Lender may rely on a
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telecopy of any signature of the Borrower. The Lender agrees that the Borrower
may rely on a telecopy of this Agreement executed by the Lender.
IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement under seal as of the date and year first written above on the pages
which follow.
WITNESS: TESSCO TECHNOLOGIES INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Treasurer
WITNESS: TESSCO COMMUNICATIONS INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Treasurer
WITNESS: TESSCO INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Treasurer
WITNESS: TESSCO FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Treasurer
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WITNESS: NATIONAL AIRTIME CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Treasurer
WITNESS: WIRELESS SOLUTIONS INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Treasurer
WITNESS: XXXXXXXXXX COMMUNICATIONS COMPANY
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Treasurer
WITNESS: NATIONSBANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx (Seal)
------------------------- ----------------------------
Xxxxxx X. Xxxxxxx
Vice President
