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EXHIBIT 10.10
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND FACILITY LETTER
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY
LETTER (this "Amendment") is made this 24th day of December, 1996, by and among
FIRST UNION COMMERCIAL CORPORATION ("Lender"), a North Carolina corporation;
and XXXXXXXXXXX SECURITY, INC. ("Xxxxxxxxxxx Security"), XXXXXXXXXXX, INC.
("Xxxxxxxxxxx Transportation") and INTERSEC, INC. ("Intersec"), (Xxxxxxxxxxx
Security, Xxxxxxxxxxx Transportation and Intersec, collectively, "U.S.
Borrowers"), ADI U.K. LIMITED ("ADI U.K."), AVIATION DEFENCE INTERNATIONAL
GERMANY LIMITED ("ADI Germany") (ADI U.K. and ADI Germany, collectively,
"European Borrowers") (U.S. Borrowers and European Borrowers, collectively,
"Obligated Borrowers"), XXXXXXXXXXX HOLDINGS LIMITED ("U.S. Holdings
Guarantor"), and ADI GROUP LIMITED ("European Guarantor") (U.S. Holdings
Guarantor and European Guarantor, collectively, "Corporate Guarantors"), each a
corporation with its chief executive office and principal place of business at
the address specified in the Loan and Security Agreement referred to below.
WHEREAS, Obligated Borrowers, Corporate Guarantors and Lender have
entered into that certain Loan and Security Agreement, dated as of December 22,
1995, as amended (the "Loan Agreement"), pursuant to which Lender has extended
to U.S. Borrowers the U.S. Revolver Facility (as defined in the Loan Agreement)
in the amount of up to twenty million dollars ($20,000,000); and
WHEREAS, pursuant to the Loan Agreement, Lender, European Borrowers
and European Guarantor have entered into that certain Facility Letter, dated
December 22, 1995, as amended, pursuant to which Lender has extended to
European Borrowers the European Revolver Facility (as defined in the Facility
Letter) in the amount of up to the Dollar Equivalent of five million dollars
($5,000,000); and
WHEREAS, Obligated Borrowers, Corporate Guarantors and Lender wish to
amend the Loan Agreement and the Facility Letter on the terms and subject to
the conditions provided herein; and
WHEREAS, Section 2.3 of the Loan Agreement provides that the Loan
Agreement may be amended by agreement of all Obligated Borrowers, Corporate
Guarantors and Lender;
NOW, THEREFORE, for and in consideration of the foregoing, and for ten
dollars ($10.00) and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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SECTION 1. DEFINED TERMS
Capitalized terms used herein and not defined herein are to have the
meanings assigned to such terms in the Loan Agreement or the Facility Letter,
as applicable.
SECTION 2. AMENDMENTS TO THE LOAN AGREEMENT
Effective on the Amendment Effective Date (as defined herein), the
Loan Agreement is amended in accordance with this Amendment. Except as
specifically amended by this Amendment, all of the original terms and
provisions of the Loan Agreement shall continue in full force and effect.
Section 2.1. The Loan Agreement is hereby amended to delete in its
entirety the definition of "Net Operating Cash Flow" contained therein and to
substitute therefor the following definition, reading as follows:
"Net Operating Cash Flow - with respect to any period, a
Person's EBIDAT, plus (i) the amount, if any, by which the reserve for
insurance claims on the last day of such period exceeds the reserve
for insurance claims on the first day of such period, to the extent
such excess resulted in a charge to net income for such period, minus
(ii) all Unfinanced Capital Expenditures, minus (iii) all income and
franchise taxes paid in cash during such period, minus (iv) the
amount, if any, by which the reserve for insurance claims on the first
day of such period exceeds the reserve for insurance claims on the
last day of such period."
Section 2.2. The Loan Agreement is hereby amended to delete in its
entirety the lead-in clause of Section 6(C) thereof and to substitute therefor
the following clause, reading as follows:
"(C) U.S. Holdings Guarantor (on a consolidated basis) to
maintain at each Fiscal Period-end a Debt Service Coverage for the
immediately preceding thirteen (13) Fiscal Periods (provided that
during the fiscal year ending December 31, 1996, such calculation
shall be based upon the cumulative monthly average annualized for such
fiscal year and provided further that such calculation shall exclude
U.S. tax payments made with respect to the fiscal year ended December
31, 1995) of not less than the ratio shown below for the period
corresponding thereto:"
Section 2.3. The Loan Agreement is hereby amended to amend the
Financial and Contingency Schedule thereto to delete in their entirety
subparagraphs (a) and (b) of paragraph 9 thereof and to substitute therefor the
following subparagraphs (a) and (b), reading as follows:
"(a) The U.S. Borrowers, the U.S. Holdings Guarantor and
their Subsidiaries may make Capital Expenditures and may incur
Capitalized Lease Obligations in an amount which, in the aggregate for
all such Capital Expenditures and Capitalized Lease
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Obligations, does not exceed $1,900,000 during their 1996 fiscal
years, $2,100,000 during their 1997 fiscal years and $2,300,000 during
their 1998 fiscal years.
(b) The European Borrowers, the European Guarantor and their
Subsidiaries may make Capital Expenditures and may incur Capitalized
Lease Obligations in an amount which, in the aggregate for all such
Capital Expenditures and Capitalized Lease Obligations, does not
exceed $2,000,000 during their 1996 fiscal years, $2,200,000 during
their 1997 fiscal years and $2,400,000 during their 1998 fiscal
years."
SECTION 3. AMENDMENTS TO THE FACILITY LETTER
Effective on the Amendment Effective Date, the Facility Letter is
amended in accordance with this Amendment. Except as specifically amended by
this Amendment, all of the original terms and provisions of the Facility Letter
shall continue in full force and effect.
Section 3.1. The Facility Letter is hereby amended to delete in its
entirety the definition of "Interim Term" from the Glossary thereto.
Section 3.2. The Facility Letter is hereby amended to delete in its
entirety subsection (d) of Section 2 thereof and to substitute therefor the
following subsection (d), reading as follows:
"(d) The European Revolver Facility will be in effect for
a period commencing on the date hereof and ending on the last day of
the Original Term and will automatically renew itself for one (1) year
periods thereafter (each a "Renewal Term"), unless terminated as
hereinafter provided."
SECTION 4. CONDITIONS TO EFFECTIVENESS
Section 4.1. Effective Date. The amendments to the Loan Agreement and
the Facility Letter set forth in Sections 2 and 3 of this Amendment are to
become effective as of November 1, 1996 on the first date (such first date, the
"Amendment Effective Date") on which this Amendment has been executed by
Corporate Guarantors and Obligated Borrowers and all of the conditions to
effectiveness of this Amendment set forth in Sections 4.2, 4.3 and 4.4 of this
Amendment have been satisfied.
Section 4.2. Execution. Lender shall have received (i) two original
counterparts of this Amendment, duly executed by Corporate Guarantors and
Obligated Borrowers, and (ii) two original consents to this Amendment, duly
executed by Xxxxx X. Xxxxxxxxxxx, Xx.
Section 4.3. Incumbency Certificate. Lender shall have received a
secretarial and incumbency certificate of each Obligated Borrower and Corporate
Guarantor, with copies of the corresponding corporate resolutions attached
thereto.
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Section 4.4. Compliance with Warranty; No Default, etc.
1. As of the Amendment Effective Date, the representations and
warranties set forth in Section 5 of the Loan Agreement, and
the representations and warranties set forth in each of the
other Loan Documents, are to be true and correct in all
material respects.
2. As of the Amendment Effective Date, no Default or Event of
Default shall have occurred and be continuing.
3. Lender shall have received from an authorized officer of each
Obligated Borrower and Corporate Guarantor a certificate,
dated the Amendment Effective Date, certifying the matters set
forth in subsections 1 and 2 of this Section 4.4.
SECTION 5. DOCUMENT PURSUANT TO LOAN AGREEMENT.
This Amendment is a Loan Document executed pursuant to the Loan
Agreement and, unless otherwise expressly indicated herein, is to be construed,
administered and applied in accordance with all of the terms and provisions of
the Loan Agreement. Except as otherwise expressly provided for herein, all
representations, warranties, terms, covenants and conditions of the Loan
Agreement, the Facility Letter and each of the other Loan Documents are to
remain unamended and unwaived.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers hereunder duly authorized as of the
day and year first written above.
XXXXXXXXXXX SECURITY, INC.
("OBLIGATED BORROWER")
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Title: Vice President
and Chief
Financial Officer
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XXXXXXXXXXX, INC.
("OBLIGATED BORROWER")
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Title: Vice President
and Chief
Financial Officer
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INTERSEC, INC.
("OBLIGATED BORROWER")
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President
and Chief
Financial Officer
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ADI U.K. LIMITED
("OBLIGATED BORROWER")
By: /s/ Xxxxx X. Xxxxxx
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Title: Director
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AVIATION DEFENCE INTERNATIONAL
GERMANY LIMITED
("OBLIGATED BORROWER")
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Title: Director
--------------------------------
XXXXXXXXXXX HOLDINGS LIMITED
("U.S. HOLDINGS GUARANTOR")
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Title: Vice President and
Chief Financial Officer
--------------------------------
THE ADI GROUP LIMITED
("EUROPEAN GUARANTOR")
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Title: Director
--------------------------------
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FIRST UNION COMMERCIAL
CORPORATION
("LENDER")
By: /s/
------------------------------------
Title:
---------------------------------
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CONSENT AND CONFIRMATION
The undersigned, a guarantor of the Obligations of Obligated
Borrowers to Lender, hereby consents to the terms and conditions of the FOURTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY LETTER by and among the
Corporate Guarantors and Obligated Borrowers party thereto and FIRST UNION
COMMERCIAL CORPORATION, and the undersigned hereby confirms and agrees that the
Guaranty by the undersigned in favor of Lender continues to be in full force
and effect and is hereby ratified and confirmed.
/s/ XXXXX X. XXXXXXXXXXX, XX.
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XXXXX X. XXXXXXXXXXX, XX.
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