Exhibit 10.1
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Amendment to Loan and Security Agreement is entered into
this 30th day of January, 1996 between Elexsys International, Inc. ("Borrower")
and Foothill Capital Corporation ("Foothill") with respect to the following:
A. Borrower and Foothill have previously entered into that
certain Loan and Security Agreement dated December 17, 1993 ("Agreement"), as
amended from time to time. Capitalized terms are used in this Amendment as
defined in the Agreement, unless otherwise noted.
B. Borrower has requested certain revisions to its Agreement
with Foothill as more fully set forth below. Foothill is willing to amend the
Agreement on the terms and subject to the conditions set forth in this
Amendment. Borrower is entering into this Amendment with the understanding that,
except as specifically provided herein, none of Foothill's rights or remedies as
set forth in the Agreement is being waived or modified by this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the
terms and conditions hereof, the parties hereto agree as follows:
1. The definitions set forth in Section 1.1 of the Agreement
are hereby amended and supplemented as set forth herein in their respective
alphabetical order:
"Advances" - "Equipment Purchase Advances" is
deleted therefrom.
"Average Unused Portion of Maximum Revolving Loan Amount" is
amended to add the following:
"less (c) L/C's and L/C Guaranties"
"Eligible Accounts" (i) is hereby amended by deleting
"twenty-five percent (25%)" (with respect to Northern Telecom) and substituting
"thirty percent (30%) in lieu thereof.
"Eligible Accounts" is further amended by adding the following
in the seventh line thereof following the words "Symtron Eligible Accounts;" the
following:
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Accounts on which Tellabs is the Account Debtor, to the extent
its total obligations to Borrower and Symtron exceed twenty-five percent (25%)
of the aggregate amount of all Eligible Accounts and Symtron Eligible Accounts;"
"Equipment Purchase Advance" is deleted.
"Equipment Purchase Line Amount" is deleted.
"Equipment Purchase Note" is deleted.
"L/C" has the meaning set forth in Section 2.1 (d).
"L/C Guaranty" has the meaning set forth in Section 2.1 (d).
"Maximum Revolving Loan Amount" is amended by deleting "Seven
Million Five Hundred Thousand Dollars ($7,500,000)" therefrom and substituting
"Fifteen Million Dollars ($15,000,000)" in lieu thereof.
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"Obligations" is amended to add the following after "lease
payments" in the fifth line thereof:
"L/C's and L/C Guaranties"
"Periodic Payments" - "Equipment Purchase Notes" is deleted
therefrom.
"Symtron Equipment Purchase Advances" is deleted.
The definition of "Obligations" is hereby amended to add the
following after "lease payments" in the fifth line thereof:
"L/C's and L/C Guaranties"
2. Section 2.1 of the Agreement is hereby deleted and the
following substituted in lieu thereof:
"2.1 Revolving Advances. (a) Subject to the terms and
conditions of this Agreement, Foothill agrees to make revolving
advances to Borrower in an amount at any one time outstanding not to
exceed the Borrowing Base less the undrawn or unreimbursed amount of
L/Cs and L/C Guarantees
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outstanding hereunder. For purposes of this Agreement, "Borrowing Base,
as of any date of determination, shall mean the sum of (i) an amount
equal to the lesser of: (y) eighty percent (80%) of the amount of
Eligible Accounts, and (z) an amount equal to one-half of Borrower's
cash collections with respect to accounts for the immediately preceding
ninety (90) day period; (ii) the amount of credit availability created
by Section 2.1(a)(i) above, and (z) Fifteen Million Dollars
($15,000,000).
(b) Anything to the contrary in Section 2.1(a) above
notwithstanding, Foothill may reduce its advance rates based upon
Eligible Accounts without declaring an Event of Default if it
determines, in its reasonable discretion, that there is a material
impairment of the prospect of repayment of all or any portion of the
Obligations or a material impairment of the value or priority of
Foothill's security interests in the Collateral.
(c) Foothill shall have no obligation to make advances
hereunder to the extent they would cause the outstanding
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Obligations to exceed the lesser of: (i) Fifteen Million Dollars
($15,000,000) ("Maximum Amount").
(d) Subject to the terms and conditions of this Agreement,
Foothill agrees to issue commercial or standby letters of credit for
the account of Borrower (each, an "L/C") or to issue standby letters of
credit or guarantees of payment (each such letter of credit or
guaranty, an "L/C Guaranty) with respect to commercial or standby
letters of credit issued by another Person for the account of Borrower
in an aggregate face amount not to exceed the lesser of: (i) the
Borrowing Base less the amount of advances outstanding pursuant to this
Section 2.1 and (ii) One Million Dollars ($1,000,000). Borrower
expressly understands and agrees that Foothill shall have no obligation
to arrange for the issuance by other financial institutions of letters
of credit that are to be the subject of L/C Guarantees. Each L/C and
each letter of credit that is the subject of an L/C Guaranty shall have
an expiry date no later than sixty (60) days prior to the date on which
this Agreement is scheduled to terminate under Section 3.2 (without
regard to any potential renewal term) and all such
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L/Cs and letters of credit (and the applicable L/C Guarantees) shall be
in form and substance acceptable to Foothill in its sole discretion.
Foothill shall not have any obligation to issue L/Cs or L/C Guarantees
to the extent that the face amount of all outstanding L/Cs and L/C
Guarantees, plus the amount of advances outstanding pursuant to this
Section 2.1, would exceed the Maximum Amount. The L/Cs and the L/C
Guarantees issued under this Section 2.1(d) shall be used by Borrower,
consistent with this Agreement, for its general working capital
purposes or to support its obligations with respect to workers'
compensation premiums or other similar obligations. If Foothill is
obligated to advance funds under an L/C or L/C Guaranty, the amount so
advanced immediately shall be deemed to be an advance made by Foothill
to Borrower pursuant to this Section 2.1 and, thereafter, shall bear
interest at the rates then applicable under Section 2.5.
(e) Borrower hereby agrees to indemnify, save, defend, and
hold Foothill harmless from any loss, cost, expense, or liability,
including payments made by Foothill, expenses, and reasonable attorneys
fees incurred by Foothill arising
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out of or in connection with any L/Cs or L/C Guarantees. Borrower
agrees to be bound by the issuing bank's regulations and
interpretations of any letters of credit guarantied by Foothill and
opened to or for Borrower's account or by Foothill's interpretations of
any L/C issued by Foothill to or for Borrower's account, even though
this interpretation may be different from Borrower's own, and Borrower
understands and agrees that Foothill shall not be liable for any error,
negligence, or mistakes, whether of omission or commission, in
following Borrower's instructions or those contained in the L/Cs or any
modifications, amendment, or supplements thereto. Borrower understands
that the L/C Guarantees may require Foothill to indemnify the issuing
bank for certain costs or liabilities arising out of claims by Borrower
against such issuing bank. Borrower hereby agrees to indemnify, save,
defend, and hold Foothill harmless with respect to any loss, cost,
expense (including attorneys' fees), or liability incurred by Foothill
under any L/C Guaranty as a result of Foothill's indemnification of any
such issuing bank.
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(f) Borrower hereby authorizes and directs any bank that
issues a letter of credit guaranteed by Foothill to deliver to Foothill
all instruments, documents, and other writings and property received by
the issuing bank pursuant to such letter of credit, and to accept and
rely upon Foothill's instructions and agreements with respect to all
matters arising in connection with such letter of credit and the
related application. Borrower may or may not be the "applicant" or
"account party" with respect to such letter of credit.
(g) Any and all service charges, commissions, fees, and costs
incurred by Foothill relating to the letters of credit guaranteed by
Foothill shall be considered Foothill Expenses for purposes of this
Agreement and immediately shall be reimbursable by Borrower to
Foothill. On the first day of each month, Borrower will pay Foothill a
fee equal to one percent (1%) per annum times the average Daily Balance
of the L/Cs and L/C Guarantees that were outstanding during the
immediately preceding month. Service charges, commissions, fees, and
costs may be charged to Borrower's
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loan account at the time the service is rendered or the cost is
incurred.
(h) Immediately upon the termination of this Agreement,
Borrower agrees to either: (i) provide cash collateral to be held by
Foothill in an amount equal to the maximum amount of Foothill's
obligations under L/Cs plus the maximum amount of Foothill's
obligations to any Person under outstanding L/C Guarantees, or (ii)
cause to be delivered to Foothill releases of all of Foothill's
obligations under its outstanding L/Cs and L/C Guarantees. At
Foothill's discretion, any proceeds of Collateral received by Foothill
after the occurrence and during the continuation of an Event of Default
may be held as the cash collateral required by this Section 2.1(h).
3. Section 2.2 (a) - "Equipment Purchase Advances" is hereby
deleted.
4. Section 2.2 (b) - "Equipment Purchase Notes" is hereby
deleted.
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5. Section 2.5 (a) - "Interest Rate" is amended by deleting
"three (3.00) percentage points" and substituting "one (1.00) percentage point"
in lieu thereof.
6. Section 2.5(b) is hereby deleted and the following
substituted in lieu thereof:
"(b) Default Rate. (i) All Obligations, except for undrawn
L/Cs and L/C Guarantees shall bear interest, from and after the
occurrence and during the continuation of an Event of Default, at a per
annum rate equal to four (4) percentage points above the Reference
Rate. (ii) From and after the occurrence and during the continuation of
an Event of Default, the fee provided in Section 2.1(g) shall be
increased to a fee equal to four percent (4%) per annum times the
average Daily Balance of the undrawn L/Cs and L/C Guarantees that were
outstanding during the immediately preceding month."
7. Section 2.6 is hereby amended by deleting "four (4)
Business Days" and substituting "two (2) Business Days in lieu thereof.
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8. Section 2.8 (b) - "Unused Line Fee" is hereby deleted.
9. Section 2.8 (c) - "Annual Facility Fee" is hereby deleted
and the following substituted in lieu thereof:
"As of December 17, 1995, an Annual Facility Fee of
Twenty Five Thousand Dollars ($25,000) has been charged and fully earned.
Thereafter, an Annual Facility Fee in the amount of Fifty Six Thousand Two
Hundred fifty Dollars ($56,250) shall be paid and fully earned on each
subsequent anniversary date.
10. Section 2.8 (e) - "Servicing Fee" is hereby deleted.
11. Section 3.1 is hereby amended to add a new Section 3.1(a)
to read as follows:
"3.1(a) Conditions Precedent to All L/Cs, or L/C Guarantees.
The following shall be conditions precedent to all L/Cs, or L/C
Guarantees hereunder.
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(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all
respects on and as of the date of such L/C, or L/C Guaranty, as though
made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(b) no Event of Default or event which with the giving of
notice or passage of time would constitute an Event of Default shall
have occurred and be continuing on the date of such L/C, or L/C
Guaranty, nor shall either result from the issuance thereof; and
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the issuance of such
L/C or L/C Guaranty shall have been issued and remain in force by any
governmental authority against Borrower, Foothill, or any of their
Affiliates."
Section 3.2 -"Term; Automatic Renewal" is hereby amended by
deleting "...three (3) years from the Closing Date and
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shall be automatically renewed for successive two (2) year periods
thereafter..." and substituting "...four (4) years from the Closing Date and
shall be automatically renewed for successive one (1) year periods
thereafter..."
12. Section 3.3 is hereby deleted and the following
substituted in lieu thereof:
"3.3 Effect of Termination. On the date of termination, all
Obligations (including contingent reimbursement obligations under any
outstanding L/Cs or L/C Guarantees) immediately shall become due and
payable without notice or demand. No termination of this Agreement,
however, shall relieve or discharge Borrower of Borrower's duties,
Obligations, or covenants hereunder, and Foothill's continuing security
interests in the Collateral shall remain in effect until all
Obligations have been fully and finally discharged and Foothill's
obligations to provide advances hereunder is terminated. If Borrower
has sent a notice of termination pursuant to the provisions of Section
3.4, but fails to pay all Obligations on the date set forth in said
notice, then Foothill may, but shall not be required to,
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renew this Agreement for an additional term of one (1) year."
13. Section 3.4 is hereby deleted and the following
substituted in lieu thereof:
"3.4 Early Termination by Borrower. The provisions of Section
3.3 that allow termination of this Agreement by Borrower only on the
Renewal Date and certain anniversaries thereof notwithstanding,
Borrower has the option, at any time upon sixty (60) days prior written
notice to Foothill, to terminate this Agreement by paying to Foothill,
in cash, the Obligations (including an amount equal to the full amount
of the L/Cs or L/C Guarantees), together with a premium (the "Early
Termination Premium") of Two Hundred Thousand Dollars ($200,000)."
14. Section 7.11 - "Capital Expenditures" is amended by
deleting therefrom the words "Including, without duplication, expenditures
financed with the proceeds of Equipment Line Advances..." and adding "(M)ake".
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15. In consideration of all of the foregoing, including but
not limited to, the increase in Maximum Amount, Borrower shall pay the sum of
$50,000 to Foothill concurrently with the execution of this Amendment.
16. Except as amended by the terms hereof, the Agreement
remains in full force and effect. If there is any conflict between the terms and
provisions of the Agreement and this Amendment, the terms and provisions of this
Amendment shall govern.
17. This Amendment may be executed in counter-parts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
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18. This Amendment shall be governed by and construed in
accordance with the laws of the State of California.
ELEXSYS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its CFO
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FOOTHILL CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Its Vice President
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All of the foregoing is hereby
consented to by Guarantor
30th day of January, 1996.
SYMTRON ELECTRONICS, INC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its CFO
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