THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made
effective as of the 17th day of January, 1997, by and among AAI CORPORATION, a
Maryland corporation ("Borrower"), AAI SYSTEMS MANAGEMENT, INC., a Maryland
corporation ("Systems"), AAI/ACL TECHNOLOGIES, INC., a Maryland corporation
("Technologies"), AAI ENGINEERING SUPPORT, INC., a Maryland corporation
("Engineering"), AAI CALIFORNIA CARSHELL, INC., a Maryland corporation
("Carshell"), AAI MEDICAL CORPORATION, a Maryland corporation ("Medical"),
UIC-DEL. CORPORATION, a Delaware corporation ("UIC-DEL"), AAI INTERNATIONAL,
INC., a Delaware corporation ("International"), AAI MICROFLITE SIMULATION
INTERNATIONAL CORPORATION, a Maryland corporation ("Microflite"), SETI, INC., a
Pennsylvania corporation ("Seti"), SYMTRON SYSTEMS, INC., a New Jersey
corporation ("Symtron"), UNITED INDUSTRIAL CORPORATION, a Delaware corporation
("UIC") (Systems, Technologies, Engineering, Carshell, Medical, UIC-DEL,
International, Microflite, Seti, Symtron and UIC being hereinafter collectively
referred to as "Guarantors"), and FIRST UNION COMMERCIAL CORPORATION, as Lender
(in such capacity, "Lender"), as Issuing Bank (in such capacity, "Issuing
Bank"), and as Agent (in such capacity, "Agent"), under the Credit Agreement (as
hereinafter defined).
RECITALS
R-1. Lender is the successor to First Fidelity Bank, National Association
("FFB") under that certain Credit Agreement dated October 13, 1995, as modified
by First Amendment and Additional Credit Agreement dated October 18, 1995 and
the Second Amendment to Credit Agreement dated September 20, 1996 (collectively,
the "Credit Agreement"), among Borrower, FFB, and another financial institution
which subsequently merged into FFB, as a consequence of which Lender now holds
one hundred percent (100%) of the Revolving Credit Commitments and the Notes,
and one hundred percent (100%) of the L/C Commitment.
R-2. Borrower has requested that Lender, Issuing Bank and Agent amend the
Credit Agreement, and Lender, Issuing Bank and Agent have agreed to do so upon
the terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises stated, and other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:
1. Defined Terms. All capitalized terms used in this Amendment without
other express definitions being assigned herein, shall have the meanings
assigned to such terms in the Credit Agreement, giving effect to the
modification of the Credit Agreement contained in Section 2 of this Amendment.
2. Amendment of the Credit Agreement. The Credit Agreement
is hereby amended by amending the definition of "Termination Date"
contained in Section 1 to read in its entirety as follows:
"TERMINATION DATE": the earlier of (a) March 18, 1997, or (b)
the date which is one hundred fifty (150) days after the date on
which the Agent shall have given written notice to the Borrower, at
the direction of the Required Lenders and whether or not an Event of
Default shall have occurred, that the Obligations shall be due in
full on such date.
3. Representations and Warranties of Borrower. In order to
induce Lender, Issuing Bank and Agent to enter into this Amendment,
Borrower represents and warrants to Lender, Issuing Bank and Agent
that:
(a) Each of Borrower and Guarantors has the power and authority to
execute, deliver and perform this Amendment. Each of Borrower and Guarantors has
taken all necessary action (including, without limitation, obtaining any
required approval of its Board of Directors or stockholders) to authorize its
execution, delivery and performance of this Amendment. No consent, approval or
authorization of, or filing with, any Governmental Authority, and no consent of
any other Person, is required in connection with the execution, delivery and
performance of this Amendment by each of Borrower and Guarantors, except for
those already duly obtained.
(b) This Amendment has been duly executed and delivered by each of
Borrower and Guarantors, and constitutes the legal, valid and binding obligation
of each of Borrower and Guarantors, enforceable against Borrower and Guarantors
in accordance with its terms without defense, setoff or counterclaim. The
execution, delivery and performance of this Amendment by each of Borrower and
Guarantors does not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon any property of Borrower, any Subsidiary of Borrower
or any Guarantor by reason of the terms of (a) any mortgage, lease, agreement,
instrument or Contractual Obligation to which Borrower, any Subsidiary of
Borrower or any Guarantor is a party or which is binding upon it, or (b) any
Requirement of Law.
(c) Each of the representations and warranties of Borrower and
Guarantors contained in the Credit Agreement and the other Credit Documents are
correct and complete in all material respects as of the date hereof.
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(d) There has not occurred any material adverse change in the
business, operations, assets or financial or other condition of Borrower or UIC
from those indicated in the last financial statements delivered to Agent
pursuant to Subsection 6.1 of the Credit Agreement.
(e) There exists no Default or Event of Default as of
the date hereof.
4. Condition to Effectiveness of Amendment. The modification of the Credit
Agreement contained in Section 2 of this Amendment shall be conditioned upon,
and shall not be effective until, the following condition precedent shall have
been satisfied as determined by Agent: As of the date hereof, all
representations and warranties of Borrower and Guarantors contained in the
Credit Agreement, this Amendment and the other Credit Documents shall be correct
and complete in all material respects, and no Default or Event of Default shall
have occurred and be continuing.
5. No Defenses or Claims: Release. In order to induce Lender, Issuing Bank
and Agent to enter into this Amendment, each of Borrower and Guarantors
acknowledges and represents to Lender, Issuing Bank and Agent that it has no
defense, setoff, cause of action or claim of any kind against Lender, Issuing
Bank or Agent on account of actions heretofore taken or not taken by Lender,
Issuing Bank or Agent or otherwise, which can be asserted as a basis to seek
affirmative relief or damages from Lender, Issuing Bank or Agent or to reduce or
eliminate any obligations of Borrower or such Guarantor to Lender, Issuing Bank
or Agent. Each of Borrower and Guarantors, on behalf of itself and its
successors and assigns, hereby forever and irrevocably releases Lender, Issuing
Bank and Agent, and each of their employees, officers, agents, attorneys,
successors and assigns, from any and all claims, demands, damages, liabilities,
obligations, penalties, suits and causes of action of any kind relating to,
resulting from or arising out of any fact, matter or occurrence known to
Borrower or any of Guarantors existing as of, or occurring prior to, the date of
this Amendment directly or indirectly relating to, resulting from or arising out
of any Revolving Credit Loans or Letters of Credit, any of the Credit Documents
or any obligations of Borrower or such Guarantor to Lender, Issuing Bank or
Agent.
6. Consents of Guarantors. Each of Guarantors hereby consents to the
modification of the Credit Agreement provided for in this Amendment.
7. No Novation or Waiver. Borrower, Guarantors, Lender, Issuing Bank and
Agent intend that the execution and delivery of this Amendment shall not
constitute or be construed to operate as
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a novation of the Credit Agreement, the Notes, the Deed of Trust, the Guaranty,
the Borrower Security Agreement, the Borrower Pledge Agreement, the Intellectual
Property Assignments, the Guarantor Security Agreement, the UIC Pledge
Agreement, the UIC Subordination Agreement, the UIC-DEL Subordination Agreement,
the L/C Agreements or any other of the Credit Documents or any obligations of
Borrower or Guarantors evidenced by any of the Credit Documents or as a novation
of any security interests or other Liens directly or indirectly securing any of
such obligations. Nothing contained in this Amendment or in any prior oral or
written communications from or on behalf of Lender, Issuing Bank or Agent to
Borrower or any of Guarantors shall constitute or be construed to operate as a
waiver by Lender, Issuing Bank or Agent of any Defaults or Events of Default
which have occurred. Nor shall anything contained in this Amendment or in any
prior oral or written communications from or on behalf of Lender, Issuing Bank
or Agent to Borrower or any of Guarantors constitute or be construed to operate
as a waiver by Lender, Issuing Bank or Agent of any rights or remedies
heretofore or hereafter accruing to Lender, Issuing Bank or Agent on account of
any such Default or Event of Default or any other Default or Event of Default.
8. Expenses. Whether or not the transactions contemplated hereby are
consummated, Borrower shall pay to Agent on demand all out-of-pocket costs and
expenses that Agent has paid or incurred or subsequently pays or incurs in
connection with the negotiation, preparation, consummation and administration of
this Amendment, all as further provided in Subsection 10.6 of the Credit
Agreement.
9. Ratification of Documents and Obligations. Borrower, Guarantors,
Lender, Issuing Bank and Agent hereby ratify and confirm the Credit Agreement
(as amended pursuant hereto), the Notes, the Deed of Trust, the Borrower
Security Agreement, the Borrower Pledge Agreement, the Guaranty, the
Intellectual Property Assignments, the Guarantor Security Agreement, the UIC
Pledge Agreement, the UIC Subordination Agreement, the UIC-DEL Subordination
Agreement, the L/C Agreements and the other Credit Documents, and agree that the
same, and all obligations of the parties thereunder, shall remain in full force
and effect.
10. Binding Nature, Merger, Counterparts and Choice of Law. This Amendment
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and each reference in this Amendment to any
of the parties hereto shall be deemed to include the successors and assigns of
such party. This Amendment contains the entire agreement of the parties with
respect to the matters covered and the transactions contemplated hereby and
thereby, and no agreement, statement or promise made by any party, or by any
employee, officer, agent or attorney of any party, which is not contained herein
or therein, shall be valid or
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binding. This Amendment may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute one and the same agreement. This Amendment, and the rights and
obligations of the parties hereunder, shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of Maryland,
exclusive of principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Amendment under seal as of the date first above written.
ATTEST/WITNESS: AAI CORPORATION
AAI SYSTEMS MANAGEMENT, INC.
AAI/ACL TECHNOLOGIES, INC.
AAI ENGINEERING SUPPORT INC.
AAI CALIFORNIA CARSHELL, INC.
AAI MEDICAL CORPORATION
______________________ By:_________________________(SEAL)
Richard R. Erkeneff
President of each of the
foregoing corporations
UIC - DEL. CORPORATION
AAI INTERNATIONAL, INC.
AAI MICROFLITE SIMULATION
INTERNATIONAL CORPORATION
SETI, INC.
______________________ By:_________________________(SEAL)
Richard R. Erkeneff
Title:
SYMTRON SYSTEMS, INC.
_____________________ By:_________________________(SEAL)
Richard R. Erkeneff
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Signatures continued:
UNITED INDUSTRIAL CORPORATION
_____________________ By:_________________________(SEAL)
Richard R. Erkeneff
President
FIRST UNION COMMERCIAL CORPORATION,
successor to First Fidelity Bank,
National Association, as Lender,
Issuing Bank and Agent
_____________________ By:_________________________(SEAL)
Name:_______________________
Title:______________________
STATE OF ___________________, COUNTY OF ___________________, SS:
I HEREBY CERTIFY that on this ____ day of January, 1997, before me, the
undersigned, a Notary Public of said State, personally appeared Richard R.
Erkeneff, who acknowledged himself to be the President of each of AAI
CORPORATION, AAI SYSTEMS MANAGEMENT, INC., AAI/ACL TECHNOLOGIES, INC., AAI
ENGINEERING SUPPORT INC., AAI CALIFORNIA CARSHELL, INC., and AAI MEDICAL
CORPORATION, and the _______________________ of each of UIC -DEL. CORPORATION,
AAI INTERNATIONAL, INC., AAI MICROFLITE SIMULATION INTERNATIONAL CORPORATION,
and SETI, INC., and that he, as such, being authorized so to do, executed the
foregoing instrument for the purposes therein contained.
WITNESS my hand and Notarial Seal.
----------------------------
Notary Public
My Commission Expires: ______________
STATE OF ___________________, COUNTY OF ___________________, SS:
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I HEREBY CERTIFY that on this ____ day of January, 1997, before me, the
undersigned, a Notary Public of said State, personally appeared P. David
Bocksch, who acknowledged himself to be the Vice President of SYMTRON SYSTEMS,
INC., and the President of UNITED INDUSTRIAL CORPORATION, and that he, as such,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained.
WITNESS my hand and Notarial Seal.
----------------------------
Notary Public
My Commission Expires: ______________
STATE OF ___________________, COUNTY OF ___________________, SS:
I HEREBY CERTIFY that on this ____ day of January, 1997, before me, the
undersigned, a Notary Public of said State, personally appeared
________________________, who acknowledged himself/herself to be the
________________________ of FIRST UNION COMMERCIAL CORPORATION, and that he/she,
as such, being authorized so to do, executed the foregoing instrument for the
purposes therein contained.
WITNESS my hand and Notarial Seal.
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Notary Public
My Commission Expires: ______________
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