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EXHIBIT 10.17
AMENDMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of March 31, 1997, is entered into by and among IMPERIAL
BANK, a California banking corporation, in its individual capacity and in its
capacity as agent for Banks (as hereinafter defined), and COMERICA
BANK-CALIFORNIA, a California banking corporation (collectively, "Banks"), on
the one hand, and ODETICS, INC., a Delaware corporation ("Parent Borrower"), ATL
PRODUCTS, INC., a California corporation ("ATL"), and GYYR INCORPORATED, a
California corporation ("Gyyr"), on the other hand, with reference to the
following facts:
A. Banks, Parent Borrower, ATL and Gyyr have previously entered into
that certain Loan and Security Agreement, dated as of August 30, 1994, as
amended by that certain letter agreement, dated as of December 6, 1994, that
certain Amendment Number One to Loan and Security Agreement, dated as of March
1, 1995, that certain Amendment Number Two to Loan and Security Agreement, dated
as of June 27, 1995, that certain Amendment Number Three to Loan and Security
Agreement, dated as of December 1, 1995, that certain Amendment Number Four to
Loan and Security Agreement, dated as of February 26, 1996, and that certain
Amendment Number Five to Loan and Security Agreement, dated as of December 4,
1996 (the "Agreement"); and
B. The parties hereto desire to make certain modifications to the
Agreement, including, but not limited to, (i) the release of ATL as a
co-borrower under the Agreement, (ii) the release by Banks of their security
interest in the Assets of ATL, (iii) the termination of the Subsidiary Borrower
Guaranty and (iv) certain modifications to the financial covenants.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINED TERMS. All initially capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Agreement. In
addition, Section 1.1 of the Agreement is hereby amended by:
(a) amending the definitions of "Borrowers", "Debt", "Guaranties",
and "Parent Borrower Guaranty" in their entirety as follows:
"`Borrowers' means and refers jointly and severally to Parent
Borrower and Gyyr (each a `Borrower')."
"`Debt' means, as of the date of determination, the sum (but
without duplication) of any and all of a Person's (i) Capitalized Lease
Obligations, (ii) indebtedness heretofore or hereafter created, issued,
incurred or assumed by such
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Person (directly or indirectly) for or in respect of borrowed money
(including, in the case of Borrowers, the Loans), (iii) notes payable
and drafts accepted representing extensions of credit to such Person,
whether or not representing obligations for borrowed money, (iv)
obligations owed by such Person for all or any part of the deferred
purchase price of property or services, (v) indebtedness secured by any
Lien on any Asset owned or held by such Person regardless of whether
the indebtedness secured thereby shall have been assumed by such Person
or is nonrecourse to the credit of such Person, and (vi) all
reimbursement or other obligations of such Person under or in respect
of letters of credit, bankers acceptances, interest rate swaps, caps,
floors and collars, currency swaps, or other similar financial
products."
"`Guaranties' means the Parent Borrower Guaranty, the Gyyr
Guaranty, and any other guaranty of the Obligations executed by any
Person in favor of Banks."
"`Gyyr Guaranty' means that certain Continuing Guaranty,
executed by Gyyr, dated as of December 4, 1996, as amended March 31,
1997, and as may be further amended from time to time, executed by
Gyyr, for the benefit of Banks, Agent, and Issuing Bank, respecting the
Obligations of Parent Borrower."
"`Parent Borrower Guaranty' means that certain Continuing
Guaranty, dated as of even date herewith, as amended December 4, 1996
and March 31, 1997, and as may be further amended from time to time,
executed by Parent Borrower, for the benefit of Banks, Agent, and
Issuing Bank, respecting the Obligations of Gyyr."
(b) deleting the definitions of "Subsidiary Borrower" and
"Subsidiary Borrower Guaranty" in their entirety.
(c) adding the following new definitions in appropriate alphabetical
order:
"`ATL' means ATL Products, Inc., a California corporation.
"`ATL Note' means that certain Promissory Note, dated April 1,
1997, executed by ATL, as maker, in favor of Odetics, in the original
principal amount of $12,997,444.
2. CONSTRUCTION. All references to "any Borrower" in the Agreement
shall be construed to be a reference to "either Borrower."
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3. ATL AS BORROWER AND GUARANTOR. Upon the effectiveness of this
Amendment as set forth in Section 8 below, (i) ATL shall cease to be a signatory
to, and "Borrower" under, the Agreement, and shall no longer be bound by any of
the terms and provisions thereof, except for such provisions which by their
terms survive termination of the Agreement, (ii) that certain Continuing
Guaranty, dated as of August 30, 1994, as amended December 4, 1996, executed by
ATL, shall be terminated, and (iii) Agent and Banks shall execute and deliver to
ATL any and all UCC Financing Statement Amendments and/or Terminations as ATL
shall reasonably request in order to release Agent's and Banks' Liens upon the
Assets of ATL.
4. AMENDMENT TO SECTION 9.12. Section 9.12 of the Agreement is hereby
amended in its entirety as follows:
"9.12 INDEBTEDNESS. Incur any Debt outside the ordinary course
of such Borrower's business, or permit any Subsidiary to do so, except
for (i) Permitted Debt, and (ii) in the case of ATL, a line of credit
in a maximum principal amount (exclusive of interest and fees) not to
exceed Five Million Dollars ($5,000,000) from Imperial."
5. AMENDMENT TO SECTION 10.16. Section 10.16 of the Agreement is hereby
amended in its entirety as follows:
"10.16 FINANCIAL COVENANTS. Borrowers shall:
"(a) as of the last day of each fiscal quarter of Borrowers,
maintain on a consolidated basis with the Subsidiaries (including ATL),
on an operating and after-tax basis (excluding extraordinary income or
gains), profitability;
"(b) as of the last day of each fiscal quarter of Borrowers,
maintain on a consolidated basis with the Subsidiaries (including ATL),
a Tangible Net Worth (including minority interests in ATL) in an amount
not less than the sum of (i) Fifty Million Five Hundred Thousand
Dollars ($50,500,000) plus (ii) eighty percent (80%) of the cumulative
consolidated net income (but without any offset for net losses)
commencing with the fiscal quarter commencing April 1, 1997, and (iii)
one hundred percent (100%) of the amount of all net cash proceeds
received upon the issuance of any of each Borrower's or any of their
Subsidiaries' capital stock after March 31, 1997;
"(c) maintain on a consolidated basis with the Subsidiaries
(including ATL), a ratio of (i) Total Liabilities (excluding minority
interests in ATL) to (ii) Tangible Net Worth (including minority
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interests in ATL), of not greater than 1.1:1.0 as of the last day of
each fiscal quarter of Borrowers;
"(d) maintain on a consolidated basis with the Subsidiaries
(including ATL), a ratio of (i) Quick Assets to (ii) the sum of Current
Liabilities plus the Revolving Loans Daily Balance, of not less than
0.9:1.0 as of the last day of each fiscal quarter of Borrowers.
"(e) [Intentionally Deleted]; and
"(f) as of the last day of each fiscal quarter of Borrowers,
maintain on a consolidated basis with the Subsidiaries (including ATL),
a ratio of (i) the sum of their net income after taxes for such quarter
plus their interest expense (exclusive of interest income) for such
quarter plus their depreciation and amortization expense for such
quarter, to (ii) the sum of their interest expense (exclusive of
interest income) for such quarter plus one fourth (1/4th) of the
current portion of their long-term Debt outstanding as of the end of
such fiscal quarter, of not less than 1.50:1.0.
6. REPLACEMENT OF EXHIBIT AND SCHEDULE. Schedule 8.19 and Exhibit 10.12
to the Agreement are hereby deleted in their entirety and replaced,
respectively, with Schedule 8.19 and Exhibit 10.12 attached to this Amendment.
7. REPRESENTATIONS AND WARRANTIES. In order to induce Banks to enter
into this Amendment, each of Parent Borrower, ATL and Gyyr represents and
warrants to Banks that:
(a) as of the date hereof, no Event of Default, Unmatured Event of
Default or Material Adverse Effect is continuing;
(b) all of the representations and warranties set forth in the
Agreement are true, complete and accurate in all respects as of the date hereof
(except for representations and warranties which are expressly stated to be true
and correct as of the Closing Date);
(c) this Amendment has been duly executed and delivered by Parent
Borrower, ATL and Gyyr, and after giving effect to this Amendment, the Agreement
continues to constitute the legal, valid and binding agreements and obligations
of each of Parent Borrower and Gyyr, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, and similar
laws and equitable principles affecting the enforcement of creditors' rights
generally; and
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(d) ATL has completed a public offering of its common stock yielding
at least $16,879,000 in proceeds, net of underwriting discounts and commissions,
of which ATL has paid $6,750,000 to Parent Borrower as a principal reduction on
an intercompany obligation which is currently evidenced by the ATL Note.
8. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENT. The
effectiveness of this Amendment is subject to and contingent upon the
fulfillment of each and every one of the following conditions on or before the
date of this Amendment:
(a) Agent, on behalf of Banks and Issuing Bank, shall have received
the following agreements, instruments and documents, in each case in form and
content satisfactory to Agent:
(i) this Amendment, duly executed by Borrowers and Banks;
and
(ii) each Consent of Guarantor and Amendment to Guaranty
attached to this Amendment, duly executed by Parent
Borrower and Gyyr, as applicable.
(b) Agent shall have received all outstanding and unpaid Bank
Expenses, including but not limited to the legal fees of Buchalter, Nemer,
Fields & Younger and of Gray, Cary, Ware & Freidenrich, and the Bank Expenses
relating to the negotiation preparation and documentation of this Amendment.
(c) Agent shall have received an executed copy of the ATL Note, in
form and substance satisfactory to Agent.
(d) No Event of Default, Unmatured Event of Default or Material
Adverse Effect shall be continuing.
(e) All of the representations and warranties set forth herein and
in the Agreement shall be true, complete and accurate in all respects as of the
date hereof (except for representations and warranties which are expressly
stated to be true and correct as of Closing Date).
9. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Amendment. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually
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executed counterpart of this Amendment but the failure to deliver a manually
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Amendment.
10. REAFFIRMATION OF THE AGREEMENT. Except as expressly modified by
this Amendment, the Agreement and the Credit Documents shall remain in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first hereinabove written.
ODETICS, INC., a Delaware corporation
By:__________________________________________
Title:________________________________
ATL PRODUCTS, INC., a California corporation
By:__________________________________________
Title:________________________________
GYYR INCORPORATED, a California corporation
By:__________________________________________
Title:________________________________
IMPERIAL BANK, a California banking
corporation, in its individual capacity and
in its capacity as agent for Banks
By:__________________________________________
Title:________________________________
COMERICA BANK-CALIFORNIA, a California
banking corporation
By:__________________________________________
Title:________________________________
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CONSENT OF GUARANTOR AND AMENDMENT TO GUARANTY
The undersigned, as "Guarantor" under that certain Continuing Guaranty,
dated as of August 30, 1994 ("Guaranty"), executed in favor of IMPERIAL BANK, a
California banking corporation, in its individual capacity and in its capacity
as agent for Banks (as hereinafter defined), and COMERICA BANK-CALIFORNIA, a
California banking corporation (collectively, "Banks"), as amended by that
certain Consent of Guarantor and Amendment to Guaranty, dated as of December 4,
1996, with respect to the obligations of ODETICS, INC., a Delaware corporation,
GYYR INCORPORATED, a California corporation, and ATL PRODUCTS, INC., a
California corporation (collectively, "Borrowers"), owing to Bank, hereby
acknowledges notice of the foregoing Amendment Number Six to Loan and Security
Agreement, dated as of March 31, 1997, among Borrowers, on the one hand, and
Banks, on the other hand, consents to the terms contained therein, and agrees
that the Guaranty shall remain in full force and effect.
The undersigned further agrees that the first sentence of the first
paragraph of the Guaranty shall be amended in its entirety as follows:
"Reference is hereby made to that certain Loan and Security
Agreement, dated as of even date herewith (as amended, supplemented,
restated, replaced, modified, or extended from time to time, the `Loan
Agreement'), among Gyyr Incorporated, a California corporation
(`Gyyr'), and Odetics, Inc., a Delaware corporation (`Guarantor'), as
borrowers, and Imperial Bank, a California banking corporation, and
Comerica Bank-California, a California banking corporation
(hereinafter, together with their successors and assigns, `Banks'), as
banks, Imperial Bank, a California banking corporation, as Issuing Bank
(as that term is defined in the Loan Agreement), and Imperial Bank, a
California corporation, as Agent (as that term is defined in the Loan
Agreement) (Banks, Issuing Bank, and Agent are hereinafter collectively
referred to as `Guaranteed Parties' and individually as, a `Guaranteed
Party')."
ODETICS, INC., a Delaware corporation
By:__________________________________________
Title:________________________________
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CONSENT OF GUARANTOR AND AMENDMENT TO GUARANTY
The undersigned, as "Guarantor" under that certain Continuing Guaranty,
dated as of December 4, 1996 ("Guaranty"), executed in favor of IMPERIAL BANK, a
California banking corporation, in its individual capacity and in its capacity
as agent for Banks (as hereinafter defined), and COMERICA BANK-CALIFORNIA, a
California banking corporation (collectively, "Banks"), with respect to the
obligations of ODETICS, INC., a Delaware corporation, GYYR INCORPORATED, a
California corporation, and ATL PRODUCTS, INC., a California corporation
(collectively, "Borrowers"), owing to Bank, hereby acknowledges notice of the
foregoing Amendment Number Six to Loan and Security Agreement, dated as of March
31, 1997, among Borrowers, on the one hand, and Banks, on the other hand,
consents to the terms contained therein, and agrees that the Guaranty shall
remain in full force and effect.
The undersigned further agrees that the first sentence of the first
paragraph of the Guaranty shall be amended in its entirety as follows:
"Reference is hereby made to that certain Loan and Security
Agreement, dated as of even date herewith (as amended, supplemented,
restated, replaced, modified, or extended from time to time, the `Loan
Agreement'), among Gyyr Incorporated, a California corporation
(`Guarantor'), and Odetics, Inc., a Delaware corporation (`Borrower'),
as borrowers, and Imperial Bank, a California banking corporation, and
Comerica Bank-California, a California banking corporation
(hereinafter, together with their successors and assigns, `Banks'), as
banks, Imperial Bank, a California banking corporation, as Issuing Bank
(as that term is defined in the Loan Agreement), and Imperial Bank, a
California corporation, as Agent (as that term is defined in the Loan
Agreement) (Banks, Issuing Bank, and Agent are hereinafter collectively
referred to as `Guaranteed Parties' and individually as, a `Guaranteed
Party')."
GYYR INCORPORATED,
a California corporation
By: /s/
------------------------------------------
Title:________________________________
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SUBSIDIARIES
SUBSIDIARIES PARENT
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ATL PRODUCTS, INC. ODETICS, INC. 82.9% OWNED SUBSIDIARY, INCORPORATED
IN CALIFORNIA
ODETICS EUROPE, LTD. ODETICS, INC. ORGANIZED AND EXISTING UNDER THE LAWS
OF THE UNITED KINGDOM
ODETICS, ASIA PACIFIC ODETICS, INC. ORGANIZED AND EXISTING UNDER THE LAWS
OF THE REPUBLIC OF SINGAPORE
CENTRO CORPORATION ODETICS, INC. AN INACTIVE CORP., INCORPORATED IN
CALIFORNIA
ODETICS INTERNATIONAL ODETICS, INC. AN INACTIVE CORP., INCORPORATED IN
SALES CORPORATION CALIFORNIA
GYYR INCORPORATED ODETICS, INC. WHOLLY-OWNED SUBSIDIARY, INCORPORATED
IN CALIFORNIA
Schedule 8.19
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FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (this "Compliance Certificate") is
delivered by Odetics, Inc., a Delaware corporation, and Gyyr Incorporated, a
California corporation (individually, a "Borrower" and collectively, the
"Borrowers") to Imperial Bank and Comerica Bank-California pursuant to Section
10.12 of the Loan and Security Agreement dated as of August 30, 1994, as
amended, among the Borrowers, Imperial Bank and Comerica Bank-California (as
amended or modified from time to time, the "Agreement"). Initially capitalized
terms used herein and not defined herein shall have the meanings defined in the
Agreement.
The undersigned hereby certifies and warrants to each Bank that he is
the ______________________ of each Borrower and that, as such, he is authorized
to execute this Compliance Certificate on behalf of each Borrower and further
certifies and warrants to each Bank that as of ______________, 19___ (the
"Computation Date") the following is a true and correct computation of the
ratios and financial tests contained in the Agreement:
11. Section 10.16(a) - Profitability
(a) Consolidated operating income of the Borrowers and their
Subsidiaries during the fiscal quarter ending on the Computation
Date (excluding extraordinary income or gains): $__________
(b) The amount set forth in Item 1(a) may not be less than: $0
(c) Consolidated net income of the Borrowers and their Subsidiaries
during the fiscal quarter ending on the Computation Date
(excluding extraordinary income or gains): $__________
(d) The amount set forth in Item 1(c) may not be less than: $0
(e) Fiscal year to date cumulative consolidated net income of the
Borrowers and their Subsidiaries (excluding extraordinary income
or gains): $__________
(f) The amount set forth in Item 1(e) may not be less than: $0
Exhibit 10.12
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12. Section 10.16(b) - Tangible Net Worth
(a) Base amount: $ 50,500,000
(b) Cumulative consolidated net income of the Borrowers and their
Subsidiaries (but without any offset for net losses) from April
1, 1997 through the Computation Date: $__________
(c) 80% of Item 2(b): $__________
(d) 100% of the aggregate net proceeds received by the Borrowers or
their Subsidiaries upon the issuance of capital stock after March
31, 1997: $__________
(e) Item 2(a) plus Item 2(c) plus Item 2(d): $__________
(f) Consolidated net book value of all Assets of the Borrowers and
their Subsidiaries as of the Computation Date: $__________
(g) Consolidated Intangible Assets of the Borrowers and their
Subsidiaries as of the Computation Date: $__________
(h) Consolidated Total Liabilities of the Borrowers and their
Subsidiaries as of the Computation Date (excluding minority
interests in ATL): $__________
(i) Item 2(f) minus Item 2(g) minus Item 2(h): $__________
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(j) The amount in Item 2(i) may not be less than the amount in Item
2(e).
13. Section 10.16(c) - Leverage Ratio
(a) Consolidated Total Liabilities of the Borrowers and their
Subsidiaries as of the Computation Date (excluding minority
interests in ATL) (Item 2(h) above): $__________
Exhibit 10.12
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Attorney wanted to freeze the
(c) The ratio of Item 3(a) to Item 3(b): ______:1.00
(d) The ratio in Item 3(c) may not be greater than: 1.10:1.00
14. Section 10.16(d) - Quick Ratio
(a) Consolidated unrestricted cash of the Borrowers and their
Subsidiaries as of the Computation Date: $__________
(b) Consolidated unrestricted Cash Equivalent Investments of the
Borrowers and their Subsidiaries as of the Computation Date: $__________
(c) Consolidated gross non-affiliated accounts receivable net of
applicable reserves therefor of the Borrowers and their
Subsidiaries as of the Computation Date (excluding costs and
estimated earnings in excess of billings on uncompleted
contracts): $__________
(d) Item 4(a) plus Item 4(b) plus Item 4(c): $__________
(e) Consolidated Current Liabilities of the Borrowers and their
Subsidiaries as of the Computation Date: $__________
(f) Revolving Loans Daily Balance as of the Computation Date: $__________
(g) Item 4(e) plus Item 4(f): $__________
(h) The ratio of Item 4(d) to Item 4(g): ______:1.00
(i) The ratio in Item 4(h) may not be less than: 0.90:1.00
Exhibit 10.12
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15. Section 10.16(f) - Fixed Charge Coverage Ratio
(a) Consolidated net income of the Borrowers and their Subsidiaries
for the fiscal quarter ending on the Computation Date: $__________
(b) Consolidated interest expense (exclusive of interest income) of
the Borrowers and their Subsidiaries for the fiscal quarter
ending on the Computation Date: $__________
(c) Consolidated depreciation and amortization expense of the
Borrowers and their Subsidiaries for the fiscal quarter ending on
the Computation Date: $__________
(d) Item 5(a) plus Item 5(b) plus Item 5(c): $__________
(e) Consolidated interest expense (exclusive of interest income) of
the Borrowers and their Subsidiaries for the fiscal quarter
ending on the Computation Date: $__________
(f) Consolidated current portion of long-term Debt of the Borrowers
and their Subsidiaries as of the Computation Date: $__________
(g) 25% of Item 5(f): $__________
(h) Item 5(e) plus Item 5(g): $__________
(i) The ratio of Item 5(d) to Item 5(h): ______:1.00
(j) The ratio in Item 5(i) may not be less than: 1.50:1.00
Exhibit 10.12
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The undersigned has reviewed the terms of the Agreement and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the transactions and condition of the Borrowers and their Subsidiaries during
the fiscal period covered by this Compliance Certificate. The undersigned does
not (either as a result of such review or otherwise) have any knowledge of the
existence as of the date of this Compliance Certificate of any condition or
event that constitutes an Event of Default or an Unmatured Event of Default,
with the exceptions set forth below in response to which the Borrowers are
taking or propose to take the following actions (if none, so state):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
IN WITNESS WHEREOF, each Borrower has caused this Compliance Certificate to
be executed and delivered, and the certifications and warranties contained
herein to be made, by its ____________________________ on this _____ day of
_________________, 19___.
ODETICS, INC.
By:_________________________________________
Its:________________________________________
GYYR INCORPORATED
By:_________________________________________
Its:________________________________________
Exhibit 10.12
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