EXHIBIT 10.60
WAIVER AND FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT AND NOTE
THIS WAIVER AND FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT AND NOTE ("First Amendment"), made and entered into as of
the 10th day of February, 1998, by and between DATRON SYSTEMS
INCORPORATED, a Delaware corporation ("Company"), and UNION BANK OF
CALIFORNIA, N.A., a national banking association ("Bank"),
W I T N E S S E T H:
WHEREAS, on August 8, 1997, the Company and the Bank entered into
a certain Amended and Restated Credit Agreement and Note (the "Credit
Agreement") pursuant to which the Bank agreed to extend to the Company
and the Company agreed to accept from the Bank certain credit
facilities more particularly described therein; and
WHEREAS, the Company and the Bank desire (i) to evidence the
waiver by the Bank of the Company's compliance with one of the
financial covenants set forth in the Credit Agreement for the fiscal
quarter of the Company ended December 31, 1997, and (ii) to amend the
Credit Agreement (A) to extend the Revolving Loan Facility Termination
Date through and including Xxxxx 00, 0000, (X) to decrease the maximum
amount available under the Revolving Loan Facility by an amount (the
"Reduction Amount") equal to the greater of Four Million Dollars
($4,000,000.00) or one hundred percent (100%) of the net proceeds
received by D/T from its financing (the "Simi Valley Financing") of
the real property presently encumbered by the Deed of Trust (the
"Property"), such decrease to become effective on the date on which
the Simi Valley Financing closes or April 30, 1998, whichever is the
earlier (the "Reduction Date"), (C) to decrease the maximum aggregate
amount available under the Revolving Loan Facility, the Standby
Facility and the L/C Facility by the Reduction Amount, such decrease
to become effective on the Reduction Date, (D) to modify certain of
the covenants with which the Company is to comply, and (E) to provide
for certain ancillary matters;
NOW, THEREFORE, for and in consideration of the premises hereof,
and other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. All capitalized terms used in this First Amendment shall,
unless otherwise defined herein or unless the context otherwise
requires, have the meanings given thereto in the Credit Agreement.
2. The Bank hereby waives, for the fiscal quarter of the Company
ended December 31, 1997, and only for such fiscal quarter, compliance
by the Company with the profitability covenant set forth in Subsection
4.02(k) 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 this First Amendment. The
waiver here given is specific to the covenant, and for the fiscal
quarter of the Company, referred to above and shall not operate as a
waiver of compliance by the Company with any other covenant set forth
in the Credit Agreement, or in the Credit Agreement as amended by this
First Amendment, or with the covenant referred to above for any other
fiscal quarter of the Company.
3. Section 1.01 of the Credit Agreement is amended to read as
follows:
1.01 Availability of the Facilities. Subject to the terms and
conditions of this Agreement, the Bank shall (x) from time to time
during the period commencing on the First Amendment Effective Date and
ending on April 30, 1999 (the "Revolving Loan Facility Termination
Date"), advance to the Company such loans as the Company may request
under the Revolving Loan Facility (individually a "Revolving Loan" and
collectively the "Revolving Loans"), and (y) from time to time during
the period commencing on the First Amendment Effective Date and ending
on June 30, 1999 (the "Letter of Credit Facilities Termination Date"),
issue for the account of the Company much standby letters of credit as
the Company may request under the Standby Facility (individually a
"Standby L/C" and collectively the "Standby L/C's"), and such
commercial documentary letters of credit as the Company may request
under the L/C Facility (individually a "Commercial L/C" and
collectively the "Commercial L/C's"); provided, however, that:
(a) Except as otherwise provided in Subsections 1.01(b),
(c), (d), (e) and (f) hereof, the sum of:
(i) the aggregate principal amount of all outstanding
Revolving Loans ("Revolving Loan Utilization");
(ii) the aggregate amount available to be drawn under
all Standby L/C's;
(iii) the aggregate amount of unpaid reimbursement
obligations in respect of all drafts drawn under Standby L/C's (the
sum of the aggregate amounts described in Subsection 1.01(a)(ii)
hereof and in this Subsection 1.01(a)(iii) being hereinafter referred
to as "Standby L/C Utilization");
(iv) the aggregate amount available to be drawn under
all Commercial L/C's; and
(v) the aggregate amount of unpaid reimbursement
obligations in respect of all drafts drawn under Commercial L/C's (the
sum of the aggregate amounts described in Subsection 1.01(a)(iv)
hereof and in this Subsection 1.01(a)(v) being hereinafter referred to
as "Commercial L/C Utilization");
shall not exceed in the aggregate (x) at any given time during the
period commencing on the First Amendment Effective Date and ending on
the Reduction Date, Nineteen Million Five Hundred Thousand Dollars
($19,500,000.00), and (y) at any other given time, the difference
between Nineteen Million Five Hundred Thousand Dollars
($19,500,000.00) and the Reduction Amount;
(b) Revolving Loan Utilization shall not exceed in the aggregate
(i) at any given time during the period commencing on the First
Amendment Effective Date and ending on the Reduction Date, the lesser
of (A) Nine Million Five Hundred Thousand Dollars ($9,500,000.00), or
(B) the difference between Nineteen Million Five Hundred Thousand
Dollars ($19,500,000.00) and the sum of Standby L/C Utilization and
Commercial L/C Utilization, and (ii) at any other given time, the
lesser of (A) the difference between Nine Million Five Hundred
Thousand Dollars ($9,500,000.00) and the Reduction Amount, or (B) the
difference between Nineteen Million Five Hundred Thousand Dollars
($19,500,000.00) and the mum of Standby L/C Utilization, Commercial
L/C Utilization and the Reduction Amount;
(c) Commercial L/C Utilization "hall not exceed in the aggregate
at any one time the least of (i) Two Million Dollars ($2,000,000.00),
(ii) the difference between Fifteen Million Dollars ($15,000,000.00)
and Standby L/C Utilization, or (iii) the difference between Nineteen
Million Five Hundred Thousand Dollars ($19,500,000.00) and the sum of
Revolving Loan Utilization, Standby L/C Utilization and, at any time
after the Reduction Date, the Reduction Amount;
(d) Standby L/C Utilization "hall not exceed in the aggregate at
any one time, the lesser of (i) the difference between Fifteen Million
Dollars ($15,000,000.00) and Commercial L/C Utilization, or (ii) the
difference between Nineteen Million Five Hundred Thousand Dollars
($19,500,000.00) and the sum of Revolving Loan Utilization, Commercial
L/C Utilization and, at any time after the Reduction Date, the
Reduction Amount;
(e) Standby L/C Utilization relating to Standby L/C's issued in
favor of beneficiaries located in countries listed in Column B or
Column C of Exhibit A hereto shall not exceed, as to all beneficiaries
located in any given country listed in Column B or Column C of Exhibit
A hereto, Three Million Five Hundred Thousand Dollars ($3,500,000.00)
in the aggregate at any one time; and
(f) Standby L/C Utilization relating to Standby L/C's issued in
favor of beneficiaries located in countries listed in Column D of
Exhibit A hereto (individually a "Column D Country" and collectively
the "Column D Countries") shall not exceed in the aggregate at any one
time (i) in the case of all beneficiaries located in any given Column
D Country, Five Hundred Thousand Dollars ($500,000.00), and (ii) in
the case of all beneficiaries located in all Column D Countries, the
least of (A) Two Million Five Hundred Thousand Dollars
($2,500,000.00), (B) the difference between (1) Fifteen Million
Dollars ($15,000,000.00), and (2) the sum of Standby L/C Utilization
relating to Standby L/C's issued in favor of all beneficiaries located
in all countries other than Column D Countries and Commercial L/C
Utilization, or (C) the difference between (1) Nineteen Million Five
Hundred Thousand Dollars ($19,500,000.00), and (2) the sum of Standby
L/C Utilization relating to Standby L/C's issued in favor of all
beneficiaries located in all countries other than Column D Countries,
Commercial L/C Utilization, Revolving Loan Utilization and, at any
time after the Reduction Date, the Reduction Amount.
Within the limits set forth above, and except as otherwise
provided herein, the Company may utilize the Facilities, repay
amounts-owing thereunder, and reutilize the Facilities.
4. The proviso which immediately follows clause (ii) of
Subsection 1.02(d) of the Credit Agreement is amended to read as
follows:
provided, however, that the rates set forth in Subsections
1.02(d)(i) and (ii) hereof shall each be reduced by thirty-five
one-hundredths of one percent (0.35%) per annum (x) on the tenth
(lOth) Banking Day following the first date subsequent to September
29, 1998 on which a monthly Financial Statement delivered by the
Company to the Bank pursuant to Subsection 4.01(a)(i) hereof reflects
profitability of not less than Two Hundred Fifty Thousand Dollars
($250,000.00) for each of the two (2) consecutive fiscal quarters of
the Company most recently ended and the Company is in compliance with
each and all of the terms and conditions set forth in this Agreement
and the other Facility Documents in the case of any Reference Rate
Revolving Loan or in the case of a LIBOR Revolving Loan which is first
made on or after such date, or (y) on the first day of the First
Interest Period which commences on or after such tenth (10th) Banking
Day in the case of a LIBOR Revolving Loan which was made prior to, and
is outstanding on, such tenth (10th) Banking Day.
5. The first sentence of Subsection 1.02(g)(i) of the Credit
Agreement is amended to read as follows:
If not sooner repaid, the Company shall repay the aggregate
unpaid principal amount of all Revolving Loans on the Revolving Loan
Facility Termination Date; provided, however, that on the Reduction
Date, the Company shall repay such portion of the aggregate unpaid
principal amount of all Revolving Loans as shall be necessary (A) to
reduce Revolving Loan Utilization to an amount not greater than the
difference between Nine Million Five Hundred Thousand Dollars
($9,500,000.00) and the Reduction Amount, and (B) to reduce the sum of
Revolving Loan Utilization, Standby L/C Utilization and Commercial L/C
Utilization to an amount not greater than the difference between
Nineteen Million Five Hundred Thousand Dollars ($19,500,000.00) and
the Reduction Amount.
6. Subsection 1.02(h) of the Credit Agreement is amended to read
as follows:
(h) Revolving Loan Commitment Fee. During the period
commencing on January 1, 1998 and ending on the Reduction Date, the
Company shall pay to the Bank a commitment fee of one-quarter of one
percent (1/4 of 1%) per annum on the difference between Nine Million
Five Hundred Thousand Dollars (69,500,000.00) and the average daily
principal amount of outstanding Revolving Loans during each calendar
quarter or portion thereof. Thereafter, and until the Revolving Loan
Facility Termination Date, the Company shall pay to the Bank a
commitment fee of one-quarter of one percent (1/4 of 1%) per annum on
the difference between (i) Nine Million Five Hundred Thousand Dollars
($9,500,000.00), and (ii) the mum of (A) the average daily principal
amount of outstanding Revolving Loans during each calendar quarter or
portion thereof, and (B) the Reduction Amount. Such fee "hall be
payable quarterly in arrears on the last day in each March, June,
September and December (commencing on the first such day to occur
after the First Amendment Effective Date), and at maturity (whether by
acceleration or otherwise).
7. Subsection 4.02(a) of the Credit Agreement is amended to read
as follows:
(a) Liens. The Company will not, and will not permit any
Subsidiary to, create or assume, or permit to exist, any mortgage,
lien, charge or encumbrance on, pledge of, or other security interest
in, any property or assets of any kind of the Company or such
Subsidiary, except for Permitted Liens, liens created in favor of the
Bank and such liens as D/T may create or cause to be created on the
Property in connection with the Simi Valley Financing.
8. Subsection 4.02(f) of the Credit Agreement is amended to read
as follows:
(f) Unsecured Indebtedness. Investments. Advances and
Guaranties. The Company will not, and will not permit any Subsidiary
to, incur any unsecured Indebtedness, advance funds to (whether by way
of loan, "sock purchase, capital contribution, or otherwise) or incur
any Indebtedness with respect to the obligations of, any Person;
provided, however, that (i) the Company may (A) on or prior to June
30, 1998, purchase the residence of a certain officer of the Company
for a purchase price not to exceed Seven Hundred Fifty Thousand
Dollars ($750,000.00), and hold such residence as an investment until
such time as the Company deems it appropriate to sell the same, and
(B) guaranty the obligations of DWC arising under a lease of new
facilities to be entered into by DWC on or prior to December 31, 1998,
and (ii) the Company and its Subsidiaries may (A) make acquisitions,
whether by purchase of stock or by purchase of assets, of all or any
substantial division or portion of the assets and business of another
Person as and to the extent permitted by Subsection 4.02(e) hereof,
(B) make advances to finance sales in the ordinary course of business,
(C) incur trade debt in the ordinary course of business, and (D)
purchase certificates of deposit from banks with deposits in excess of
Five Hundred Million Dollars ($500,000,000.00), securities issued by
the United States government and commercial paper rated A-1 by
Standard & Poor's or Prime-1 by Xxxxx 's.
9. Subsection 4.02(k) of the Credit Agreement is amended to read
as follows:
(k) Profitability. The Company will not (i) permit its
consolidated net after tax profits to be less than Fifty-three
Thousand Dollars ($53,000.00) for the fiscal quarter of the Company
ending March 31, 1998, or less than One Thousand Dollars ($1,000.00)
for the fiscal year of the Company ending March 31, 1998, and (ii)
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 June 30, 1998.
10. Subsection 6.01(i) of the Credit Agreement is amended by
deleting therefrom the period which appears at the end of such
subsection and by substituting in lieu thereof a semicolon followed by
the word "or".
11. Section 6.01 of the Credit Agreement is amended by the
addition thereto of a new Subsection 6.01(j) to read as follows:
(j) The Simi Valley Financing shall fail to close on or
prior to April 30, 1998, or shall close on or prior to April 30, 1998
but shall fail to generate net proceeds in an amount equal to or
greater than Three Million Five Hundred Thousand Dollars
($3,500,000.00).
12. Section 7.01 of the Credit Agreement is amended by the
addition thereto of the following definitions in proper alphabetic
order:
"First Amendment" shall mean that certain Waiver and First
Amendment to Amended and Restated Credit Agreement and Note, dated as
of February 10, 1998, by and between the Company and the Bank.
"First Amendment Effective Date" shall mean the date on which the
First Amendment becomes effective as provided in Paragraph 13 thereof.
"Property" shall have the meaning given to that term in the
second recital to the First Amendment.
"Reduction Amount" shall have the meaning given to that term in
the second recital to the First Amendment.
"Reduction Date" shall have the meaning given to that term in the
second recital to the First Amendment.
"Simi Valley Financing" shall have the meaning given to that term
in the second recital to the First Amendment.
13. This First Amendment shall become effective on the date on
which the Bank shall have received the following:
(a) This First Amendment, duly executed by the Company;
(b) A Consent in the form appended hereto as Exhibit I, duly
executed by D/T; and
(c) A Consent in the form appended hereto as Exhibit II,
duly executed by DWC.
14. In order to facilitate the closing of the Simi Valley
Financing, the Bank shall, as promptly as practicable following Bank's
receipt of written notice that D/T and D/T's lender are prepared to
close such financing, deliver to an escrow agent acceptable to the
Bank, the Company, D/T and D/T's lender (a) a reconveyance of the Deed
of Trust, in recordable form, and (b) an instruction letter
authorizing such escrow agent either (i) to cause such reconveyance to
be recorded at such time as such escrow agent has taken possession of,
and is prepared to remit to D/T or D/T's order, net proceeds of the
Simi Valley Financing in an amount equal to or greater than Three
Million Five Hundred Thousand Dollars ($3,500,000.00), or (ii) to
return such reconveyance to the Bank unrecorded if such escrow agent
has not taken possession of, and is not prepared to remit to D/T or
D/T's order, net proceeds of the Simi Valley Financing in an amount
equal to or greater than Three Million Five Hundred Thousand Dollars
($3,500,000.00) by the close of business on the tenth (10th) Banking
Day following the date much escrow agent receives such reconveyance
and instruction letter (or such later date to which the Bank may
consent in writing).
15. Except as expressly provided herein, the Credit Agreement is
unchanged and remains in full force and effect.
16. This First Amendment shall be governed by and construed in
accordance with the laws of the State of California.
17. This First Amendment may be executed in any number of
identical counterparts, any set of which signed by both parties hereto
shall be deemed to constitute a complete, executed original for all
purposes.
IN WITNESS WHEREOF, the Bank and the Company have caused this
First Amendment to be executed as of the day and year first above
written.
UNION BANK OF CALIFORNIA,
N.A.
By: /s/XXXX XXXXXX
Title: Vice President
By: /s/XXXXXXX XXXXX
Title: Vice President
DATRON SYSTEMS INCORPORATED
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President and Chief Financial Officer
By: /s/ XXXXX X. DERBY
Title: President and Chief Executive Officer
