THIRD AMENDMENT TO REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT AND WAIVER
Exhibit 99.4
THIRD AMENDMENT TO REIMBURSEMENT, CREDIT AND SECURITY
AGREEMENT AND WAIVER
THIS THIRD AMENDMENT TO REIMBURSEMENT, CREDIT, AND SECURITY AGREEMENT AND WAIVER (this “Amendment”) is made as of this 25th day of July, 2006, by and between INNOVATIVE SOLUTIONS AND SUPPORT, LLC (the “Borrower”) and PNC BANK, NATIONAL ASSOCIATION (the “Bank”).
RECITALS:
A. The Bank and the Borrower entered into a Reimbursement, Credit and Security Agreement dated as of August 1, 2000, as amended by an Amendment dated as of November 29, 2002 and as further amended by an Amendment dated as of March 20, 2004 (as the same may be amended, restated or further modified and in effect from time to time, the “Agreement”), pursuant to which the Bank agreed to issue a letter of credit for the account of the Borrower in connection with the issuance of certain industrial development revenue bonds on behalf of the Borrower.
B. The Borrower has requested the Bank waive compliance with certain financial covenants and amend certain reporting requirements and financial covenants in the Agreement and the Bank has agreed to provide said waiver and amend the Agreement on the terms and subject to the conditions Set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for good and valuable consideration, the legality and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Agreement.
2. Waivers. The Borrower has advised the Bank that IS&S, Inc. was in violation of (i) the total liabilities to EBITDA covenant contained in Section 6.21(a) of the Agreement, (ii) the Fixed Charge Ratio covenant contained in Section 6.21(b) of the Agreement, and (iii) the minimum Tangible Net Worth covenant contained in Section 6.21(c) of the Agreement each as of the end of the fiscal quarter of IS&S, Inc. ending on June 30, 2006. At the Borrower’s request, the Bank hereby waives IS&S, Inc’s violation of the covenants contained in Section 6 21(a), Section 6.21(b) and Section 6.21(c) for the fiscal quarter ending on June 30, 2006 and the resulting Events of Default arising there from. The foregoing waivers shall not be deemed to operate as or obligate the Bank to grant any future waiver or modification of the provisions of Section 6.21(a), Section 6.21(b) or Section 6.21(c) for any other fiscal period or of any other term, condition or Event of Default under the Agreement.
3. Amendment to Agreement. The Agreement is hereby amended effective as of the date hereof as follows:
(a) Section 6.10(a)(1) is hereby amended and restated to read in full as follows:
“(1) audited consolidated and consolidating financial statements for IS&S, Inc. and its subsidiaries, including a consolidated balance sheet and related consolidated statements of income, retained earnings, cash flows, and changes in financial position as of the end of such Fiscal Year and for such Fiscal Year, audited by independent certified public accountants acceptable to the Bank and prepared in accordance with GAAP, which shall fairly present the consolidated financial condition of IS&S, Inc. and its subsidiaries as at the end of such Fiscal Year, and”
(b) Section 6.21 is hereby amended and restated to read in full as follows:
“Section 6.21 Financial covenants. The Borrower shall cause IS&S, Inc. to observe the following covenants:
(a) IS&S, Inc. will maintain, on a consolidated basis, as of the end of each fiscal quarter of IS&S, Inc. beginning with the fiscal quarter ending on June 30, 2007, a ratio of total liabilities to EBITDA of not greater than 2.25:1.00.
(b) IS&S, Inc. will maintain, on a consolidated basis, as of the end of each fiscal quarter of IS&S, Inc. beginning with the fiscal quarter ending on June 30, 2007, a Fixed Charge Ratio equal to or greater than 1.25:1.00.
(c) IS&S, Inc. will maintain, on a consolidated basis, at all times a minimum Tangible Net Worth of $65,000,000.”
4. Amendments to the Other Documents. All references to the Agreement in the Collateral Documents or the Bond Documents and in any documents executed in connection therewith shall be deemed to refer to the Agreement as amended by this Amendment.
5. Ratification of the Other Documents. Notwithstanding anything to the contrary herein contained or any claims of the parties to the contrary, the Bank and the Borrower agree that the Agreement and the Collateral Documents and each of the documents executed in connection therewith are in full force and effect and each such document shall remain in full force and effect, as further amended by this Amendment, and the Borrower hereby ratifies and confirms its obligations thereunder.
6. Representations and Warranties.
(a) The Borrower hereby certifies that (i) the representations and warranties of the Borrower in the Agreement are true and correct in all material respects as of the date hereof, as if made on the date hereof and (ii) no Event of Default and no event which could become an
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Event of Default with the passage of time or the giving of notice, or both, under the Agreement or the Collateral Documents exists on the date hereof.
(b) The Borrower further represents that it has all the requisite power and authority to enter into and to perform its obligations under this Amendment, and that the execution, delivery and performance of this Amendment have been duly authorized by all requisite action and will not violate or constitute a default under any provision of any applicable law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect or of the organizational documents of the Borrower, or of any indenture, note, loan or credit agreement, license or any other agreement, lease or instrument to which the Borrower is a party or by which the Borrower or any of its properties is bound.
(c) The Borrower also further represents that the Borrower’s reimbursement obligation under the Agreement is absolute and unconditional, and there exists no right of set off or recoupment, counterclaim or defense of any nature whatsoever to payment of such obligations.
7. Conditions Precedent. The amendments set forth herein shall be effective as of the date hereof upon the fulfillment, to the satisfaction of the Bank and its counsel, of the following conditions precedent:
(a) The Borrower shall have delivered to the Bank the following, all of which shall be in form and substance satisfactory to the Bank and shall be duly completed and executed:
(i) a fully executed counterpart of this Amendment, including the Consent of Guarantors; and
(ii) such additional documents, certificates and information as the Bank may reasonably request.
(b) The representations and warranties set forth in the Agreement shall be true and correct on and us of the date hereof.
(c) No Event of Default hereunder, and no event which, with the passage of time or the giving of notice, or both, would become such an Event of Default shall have occurred and be continuing as of the date hereof, except for those which are being waived pursuant to Section 2 hereof.
8. No Waiver. This Amendment does not and shall not be deemed to constitute a waiver by the Bank of any Event of Default, or of any event which with the passage of time or the giving of notice or both would constitute an Event of Default, nor does it obligate the Bank to agree to any further modifications to the Agreement or the Collateral Documents or constitute a waiver of any of the Bank’s other rights or remedies.
9. Release and Indemnity. (a) Recognizing and in. consideration of the Bank’s agreement to the amendments provided herein, the Borrower hereby waives and releases the Bank and its officers, attorneys, agents, directors, and employees from any liability, suit,
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damage, claim, actions, counterclaims or offsets, loss or expense of any kind or nature whatsoever and howsoever arising, whether known or unknown and whether based on facts now known or unknown, direct or derivative, that the Borrower, or anyone claiming in a derivative capacity from the Borrower, ever had or has as of the date of this Amendment against any of them including, without limitation, any of the foregoing arising out of or relating to the Bank’s or such other Persons’ acts or omissions with respect to this Amendment, the other documents executed in connection herewith, the Agreement, the Collateral Documents, the Bond Documents or any other matters described or referred to herein or therein.
(b) The Borrower further hereby agrees to indemnify and hold the Bank and its respective officers, attorneys, agents, directors and employees harmless from any loss, damage, judgment, liability or expense (including counsel fees) suffered by or rendered against the Bank or any of them on account of anything arising out of this Amendment, the Agreement, the Collateral Documents, the Bond Documents or any other document or instrument delivered pursuant hereto or thereto up to and including the date of this Amendment; provided that, the Borrower shall not have any obligation hereunder to the Bank or such other Person with respect to indemnified liabilities arising from the gross negligence or willful misconduct of the Bank or such other Person.
10. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the Agreement and the Collateral Documents and all other documents delivered to the Bank in connection therewith shall remain unaltered and in full force and effect except as modified or amended hereby. To the extent that any term or provision of this Amendment is or may be deemed expressly inconsistent with any term or provision in the Agreement or any Collateral Document or any other document executed in connection therewith, the terms and provisions hereof shall control.
(b) This Amendment constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements.
(c) In the event any provisions of this Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
(d) This Amendment shall be governed by and construed according to the laws of the Commonwealth of Pennsylvania.
(e) This Amendment, and the Agreement and Collateral Documents as amended hereby, shall inure to the benefit of, and be binding upon, the parties hereto and thereto and their respective successors and assigns and may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(f) The headings used in this Amendment are for convenience of reference only, do not form a part of this Amendment and shall not affect in any way the meaning or interpretation of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to Reimbursement, Credit and Security Agreement and Waiver as of the day and year first above written.
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INNOVATIVE
SOLUTIONS AND |
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Innovative
Solutions and Support, |
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By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ |
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇ |
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Title: CFO |
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PNC BANK, NATIONAL ASSOCIATION |
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By: |
/s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ |
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Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ |
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Title: Senior Vice President |
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CONSENT OF GUARANTORS
Each of the undersigned guarantors (the “Guarantors”) consents to the provisions of the foregoing Third Amendment to Reimbursement, Credit and Security Agreement and Waiver (the “Amendment”) and confirms and agrees that: (a) such Guarantor’s obligations under its Guaranty dated as of August 1, 2000 (as the same may be amended, restated or further modified and in effect from time to time, the “Guaranty”), relating to the obligations of the Borrower to the Bank shall be unimpaired by the Amendment; (b) such Guarantor has no defenses, set offs, counterclaims, discounts or charges of any kind against the Bank, its officers, directors, employees, agents or attorneys with respect to the Guaranty; and (c) all of the terms, conditions and covenants in the Guaranty remain unaltered and in full force and effect and are hereby ratified and confirmed and apply to the obligations of the Borrower to the Bank, as modified by the Amendment. Each of the Guarantors certifies that all representations and warranties made by it in the Guaranty are true and correct as of the date of the Amendment.
Each of the Guarantors ratifies and confirms the indemnification, confession of judgment and waiver of jury trial provisions, if any, contained in the Guaranty.
WITNESS the due execution of this Consent as a document under seal as of the date of the Amendment, intending to be legally bound hereby of Guarantors.
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INNOVATIVE SOLUTIONS AND |
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By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ |
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IS&S DELAWARE, INC. |
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By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ |
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇ |
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Title: CFO |
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