Exhibit 10.1
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FOURTH AMENDMENT TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (the "Fourth Amendment"), is made
and entered into this 9th day of June, 2005, by and among HERLEY
INDUSTRIES, INC. (the "Borrower"), MANUFACTURERS AND TRADERS TRUST COMPANY,
successor in interest to Allfirst Bank, and FULTON BANK (each a "Lender"
and collectively, the "Lenders") and MANUFACTURERS AND TRADERS TRUST
COMPANY, successor in interest to Allfirst Bank, as agent (in such
capacity, the "Agent").
B A C K G R O U N D
A. Borrower has borrowed from Lenders and desires to continue to borrow
from Lenders in connection with the operation of its business. On June 19,
2002, the parties entered into a Loan Agreement, upon which monies have
been advanced, which was amended by an Amendment to Loan Agreement dated
May 2, 2003 and a Second Amendment to Loan Agreement dated April 20, 2004
and a Third Amendment to Loan Agreement dated January 28, 2005 (as amended,
the "Loan Agreement"). The Loan Agreement is incorporated herein by
reference and made a part hereof. All capitalized terms used herein without
definition which are defined in the Loan Agreement shall have the meanings
set forth therein.
B. Borrower has requested Lenders to amend certain provisions of the Loan
Agreement.
C. The parties desire to enter into this Amendment to effectuate such
amendments.
D. Borrower has no defense, charge, defalcation, claim, plea, demand or
set-off against the Loan Agreement or any of the Loan Documents.
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
covenant and agree as follows:
1. That the above Background is incorporated herein by reference.
2. That Section 1.1 of the Loan Agreement be and hereby is amended by
amending the definitions of "Guarantor" and "Guarantors" to read in its
entirety as follows:
"Guarantor" and "Guarantors": one or more of HMS Investments, Inc., Herley
Wireless Technologies, Inc., Terrasat, Inc., General Microwave Corporation,
General Microwave Israel Corporation, Herley-CTI, Inc., Herley-RSS, Inc.,
Micro Systems, Inc., Innovative Concepts, Inc., HMS Trading, Inc. and any
additional U.S.-domiciled subsidiaries which Borrower or any Guarantor has
created or acquired or may create or acquire at any time a Loan remains
outstanding and unpaid or any other amount is owing under any Loan
Document; provided, however, the terms "Guarantor" and "Guarantors" do not
include General Microwave Israel, Ltd and EW Simulation Technology Ltd.
3. That Section 3.4 of the Loan Agreement be and hereby is amended to read
in its entirety as follows:
3.4 Security Agreement.
The Agent shall have received a pledge of and security interest in
sixty-six percent (66%) of the issued and outstanding common shares of
General Microwave Israel, Ltd and EW Simulation Technology Ltd.
4. That Section 6.11 of the Loan Agreement be and hereby is amended to read
in its entirety as follows:
6.11 Minimum Tangible Net Worth.
Permit the Tangible Net Worth of the Borrower, on a consolidated basis, to
be less than $90,000,000 at the time any Loan remains outstanding and
unpaid, or any other amount is owing under any Loan Document to any Lender.
5. That the Borrower reaffirms and restates the representations and
warranties set forth in Section 7 of the Loan Agreement, as amended by this
Fourth Amendment, and all such representations and warranties shall be true
and correct on the date hereof with the same force and effect as if made on
such date, except as they may specifically refer to an earlier date(s). The
Borrower represents and warrants (which representations and warranties
shall survive the execution and delivery hereof) to the Agent and the
Lenders that (i) this Fourth Amendment has been duly authorized, executed
and delivered and constitute a legal, valid and binding obligation of the
Borrower, and is enforceable in accordance with its terms; (ii) the
Borrower is not in default under the Loan Agreement or any of the other
Loan Documents, and the Borrower is in full compliance with all of the
terms and conditions thereof; (iii) no event exists, or is likely to exist
in the future, which with the passage of time, notice, or both, will
constitute a default under the Loan Agreement or any of the other Loan
Documents; and (iv) there have been no material adverse changes in the
Borrower's financial condition or operations which would cause the Borrower
to be in default under any of the financial covenants contained in the Loan
Documents. Borrower shall update all Schedules as of the date of this
Amendment.
6. That the terms and conditions, paragraph sections, collateral and
guaranty requirements, representations and warranties of the Loan Agreement
and Loan Documents, together with all understandings by and between the
parties to this Fourth Amendment evidenced by writings of the same or
subsequent date not in conflict with the above modifications under this
Amendment shall remain in full force and effect as the agreement of the
parties relative to the Loans, and are hereby ratified, reaffirmed and
confirmed. Any past, present or future delay or failure of the Agent and
the Lenders to demand or enforce strict performance of each term and
condition of the Loan Agreement and Loan Documents, and any past, present
or future delay or failure of the Agent or the Lenders to exercise any
right, power or privilege shall not be deemed or construed as a waiver with
respect to the same or any other matter, or preclude the future exercise of
such right, power or privilege, or be construed or deemed to be a waiver of
or acquiescence in any such default.
7. That all references to the Loan Agreement, the Loan Documents and the
other documents and instruments delivered pursuant to or in connection
therewith, as well as in writings of the same or subsequent date, shall
mean the Loan Agreement as amended hereby and as each may in the future be
amended, restated, supplemented or modified from time to time. Further, all
references to Allfirst Bank in the Loan Agreement, the Loan Documents and
the other documents and instruments delivered pursuant to or in connection
therewith shall be deemed to have been made and to refer to Manufacturers
and Traders Trust Company, a New York banking corporation, successor in
interest to Allfirst Bank.
8. That the parties hereto shall, at any time, and from time to time
following the execution of this Fourth Amendment, execute and deliver all
such further instruments and take all such further action as may be
reasonably necessary or appropriate in order to carry out the provisions of
this Fourth Amendment.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Borrower,
the Lenders and the Agent have caused this Fourth Amendment to be executed
by their proper corporate officers thereunto duly authorized as of the day
and year first above written.
ATTEST: HERLEY INDUSTRIES, INC.,
/S/ Thomas V. Gilboy By: /S/ Anello C. Garefino
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Title: Chief Financial Officer Vice President - Finance
MANUFACTURERS AND TRADERS TRUST COMPANY,
successor in interest to Allfirst Bank,
in its capacities as Agent and Lender
By: /S/ Eric Rebert
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Administrative Vice President
FULTON BANK
By: /S/ William T. Kepler
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Senior Vice President