SIXTH AMENDMENT
TO REVOLVING CREDIT, OVERLINE AND TERM LOAN AGREEMENT
THIS SIXTH AMENDMENT ("Amendment") to Revolving Credit, Overline
Credit and Term Loan Agreement is made and delivered as of the ____ day of
June, 1996 by and between DAEDALUS ENTERPRISES, INC. (the "Company") and
COMERICA BANK ("Bank").
W I T N E S S E T H:
WHEREAS, the Company and the Bank did execute and deliver a certain
Revolving Credit, Overline Credit and Term Loan Agreement ("Loan Agreement")
which Loan Agreement has been amended by five (5) amendments prior to the
date hereof (as so amended the "Original Agreement"); and
WHEREAS, the Company and the Bank desire to further amend the
Original Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and of the terms
and conditions herein contained, the Bank and the Company agree as follows:
1. All capitalized terms unless otherwise defined herein or
unless the context clearly requires otherwise are as defined in the Original
Agreement.
2. The Bank hereby waives compliance by the Company with
Section 6.3 and Section 6.4 during the time period commencing on, and
including, February 1, 1996 and ending on, and including April 30, 1996; but
does not waive compliance by the Company with both said Sections at any
other time.
The aforesaid waivers contained in this Section 2 do not act as a
waiver of any other section of the Original Agreement or any related or
unrelated document, nor does it constitute a consent to any transaction,
occurrence or omission, whether related or unrelated to the matters waived
herein. The foregoing waivers do not extend to or affect any obligation,
covenant, event of default or default not expressly waived by the foregoing
or otherwise impair any of the rights of the Bank consequent therefrom.
3. The definition of Commitment Amount contained in Section 2.1
of the Original Agreement is hereby deleted in its entirety and is hereby
replaced with the following:
"Commitment Amount" shall mean $1,250,000.
4. The following language shall be added to the Original Agreement
and shall be placed immediately after the definition of Commitment Amount:
"Borrowing Base" shall mean (a) $950,000, plus (b) during
such times as the Existing Conditions shall exist, an amount equal
to the lesser of (i) 50% of the Company's Eligible Unbilled Account
Receivables owed to the Company by Asia Air Survey Co., Ltd ("Asia
Air") pursuant to a Purchase Agreement dated April 30, 1996, and
(ii) $300,000. "Existing Conditions" shall mean all of the
following: (a) Company shall have a valid, binding and enforceable
contract with Asia Air ("Asia Air Contract") which Asia Air Contract
shall be in form and substance completely satisfactory to the Bank,
(b) neither Asia Air nor the Company shall be in default under the
Asia Air Contract, nor shall any event of default exist thereunder,
(c) a letter of credit ("Letter of Credit") in form and substance
satisfactory to the Bank shall have been issued by a bank acceptable
to the Bank for the benefit of the Company pursuant to which Letter
of Credit the Company may draw the full amount of all payments which
Asia Air is required to make pursuant to the Asia Air Contract
(assuming compliance with the Asia Air Contract by the Company) and
such Letter of Credit shall be in full force and effect, (d) the
Bank shall have a first perfected security interest in, and pledge
of, the Letter of Credit, the proceeds thereof, and all rights of
the Company thereto, (e) the Company shall have entered into a
contract ("Thailand Contract") with Royal Thai Air Force
("Thailand") which contract shall be in form and substance
satisfactory to the Bank, (f) neither the Company nor Thailand shall
be in default under the Thailand Contract nor shall any event of
default exist thereunder, (g) if required by the Bank, a letter of
credit ("Thailand Letter of Credit"), in form and substance
satisfactory to the Bank, shall have been issued, and be in
existence, for the benefit of the Company pursuant to which Thailand
Letter of Credit the Company may draw all or a portion (as
acceptable to the Bank) of the payments which Thailand is required
to make pursuant to the Thailand Contract (assuming compliance with
the Thailand Contract by the Company), and (h) if required by the
Bank, the Bank shall have a first perfected security interest in,
and pledge of, the Thailand Letter of Credit, the proceeds thereof,
and all rights of the Company thereto.
5. Section 2.7 of the Original Agreement is hereby deleted and
shall be and hereby is replaced with the following:
"2.7 Bank shall not be obligated to make an advance or
issue a Standby Letter of Credit under the Revolving Credit Note if
at the time of such request for advance or issuance the loans
outstanding under this Section 2 plus the amount which could be
drawn under operative Letters of Credit (assuming compliance with
the terms and conditions thereof) plus the amount of the requested
advance or the amount which could be drawn under the requested
Letter of Credit if issued (assuming compliance with the terms and
conditions thereof) would exceed the Borrowing Base."
6. Section 2.2 of the Original Agreement is hereby deleted and
shall be and hereby is replaced with the following:
"2.2 The principal indebtedness represented by the
Revolving Credit Note and all interest thereon shall be due and
payable on November 1, 1996 (unless it shall become due and payable
prior thereto by acceleration or otherwise). The Company agrees to
pay interest on the unpaid principal balance of the Revolving Credit
Note as follows: (a) during such times as said unpaid principal
balance is less than or equal to $950,000, at a per annum rate equal
to one and one half percent (1 1/2%) above the Bank's Prime Rate and
(b) during such times as said unpaid principal balance is greater
than $950,000, (i) on $950,000 of said unpaid principal balance at a
per annum rate equal to one and one half percent (1 1/2%) above the
Bank's Prime Rate and (ii) on the amount by which said unpaid
principal balance exceeds $950,000 at a per annum rate equal to
three percent (3%) above the Bank's Prime Rate. Upon the occurrence
of any default or event of default hereunder, interest shall accrue
on the unpaid principal balance represented by the Revolving Credit
Note at the rates set forth above plus three percent (3%).
7. The first sentence of Section 2.4 of the Original Agreement is
hereby deleted and shall be and hereby is replaced by the following:
"Standby letters of credit ("Letters of Credit") may be
issued by Bank on behalf of Company from time to time not to exceed
the Commitment Amount in aggregate face amount at any time
outstanding."
8. Exhibit B to the Original Agreement is hereby replaced in its
entirety by Exhibit B to this Amendment.
9. Upon demand for the payment thereof, the Company agrees that
it shall pay to the Bank the amount of attorney's fees and disbursements
incurred by the Bank to Miller, Canfield, Paddock and Stone, P.L.C. in
connection herewith and in connection with the closing of the transactions
contemplated thereby, which fees and disbursements through June 11, 1996 are
in the amount of $2,580.00, (fees in the amount of $2,500.00 and
disbursements in the amount of $80.00) which amount shall be paid
simultaneously with the execution herewith by the Company.
10. The Company represents and warrants to the Bank that:
(a) The execution, delivery and performance of this
Amendment, the Amended and Restated Note (as hereinafter defined) and the
other documents contemplated hereby to be executed by the Company have been
duly authorized and are not in contravention with any law, rule or
regulation, of its Articles of Incorporation, or its Bylaws, or of any
contract, agreement, note, indenture, or other undertaking to which it is a
party or by which it or any of its assets are bound, and that the Company is
not required to obtain the consent or approval of any person or entity in
order to enter into this Amendment and perform in accordance herewith.
(b) This Amendment is, and the Amended and Restated
Note, and the other documents contemplated hereby to be executed by the
Company will be, when delivered, the legal, valid, and binding obligations
of the Company enforceable against it in accordance with the respective
terms hereof and thereof.
(c) After giving effect to this Amendment, the
representations and warranties (other than that set forth in Section 5.6 of
the Original Agreement) contained in the Original Agreement as amended
hereby are true and accurate on and as of the date hereof with the same
force and effect as if made on and as of the date hereof and the
representations and warranties set forth in Section 5.6 of the Original
Agreement are true and correct as of the date hereof with respect to the
most recent financial statements furnished to the Bank by the Company in
accordance with Section 6.1 of the Original Agreement.
11. This Amendment shall be effective only upon the receipt by
the Bank of the following items, each to be in form and substance
satisfactory to the Bank and its counsel:
(a) Certified Resolutions of the Company authorizing
execution and delivery of this Amendment and the documents contemplated
hereby.
(b) Certificates of Incumbency as to all officers of
the Company or any documents contemplated hereby.
(c) The Amended and Restated Revolving Credit Note
("Amended and Restated Note") in the form and substance of Exhibit B
attached hereto.
The Bank may waive in the exercise of its unfettered discretion any
of the conditions set forth in this Section to the effectiveness hereof, but
such waiver shall be enforceable against the Bank only if done in writing
which is signed by a duly authorized officer of the Bank.
12. The Company hereby certifies that its Articles of Incorporation
and its By-laws, last submitted to the Bank in connection with the Original
Agreement have not been amended or modified in any manner and remain in full
force and effect in the form as so submitted.
13. This Amendment shall be construed in accordance with the
laws of the State of Michigan.
14. Except as expressly amended hereby, the Company affirms and
ratifies the Original Agreement and all documents executed and delivered by
it in connection therewith ("Related Documents"), and restates all
representations and warranties contained therein as of the date hereof
except those set forth in Section 5.6 in the Original Agreement. The
Company furthermore agrees that the Original Agreement as amended hereby and
the Related Documents (in the case of the Revolving Credit Note, as amended
and restated as contemplated hereby) remain in full force and effect and
that it has no set off, counterclaim or defense with respect to any of the
foregoing.
15. The Company represents and warrants to the Bank that no
Default or Event of Default existed immediately prior to the execution
hereof except to the extent such Default is expressly waived herein in
paragraph 2 hereof. By execution and delivery hereof, the Bank does not
waive any Default or Event of Default in existence, whether known or unknown
to the Bank except to the extent waived in paragraph 2 hereof.
16. Company hereby waives, discharged, and forever releases
Bank, Bank's employees, officers, directors, attorneys, stockholders and
successors and assigns, from and of any and all claims, causes of action,
allegations or assertions that Company has or may have had at any time up
through and including the date of this Amendment, against any or all of the
foregoing, regardless of whether any such claims, causes of action,
allegations or assertions are known to Company or whether any such claims,
causes of actions, allegations or assertions arose as a result of Bank's
actions or omissions in connection with the Original Agreement, or any
amendments, extensions or modifications thereto, or Bank's administration of
debt evidenced by the Original Agreement or otherwise.
17. COMPANY AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE
OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THE ORIGINAL AGREEMENT, THIS
AMENDMENT, THE RELATED DOCUMENTS OR ANY INDEBTEDNESS OWNING TO THE BANK.
IN WITNESS WHEREOF, the undersigned Company and the Bank have caused
this Amendment to be executed by their respective duly authorized officers
as of the date first hereinabove stated.
DAEDALUS ENTERPRISES, INC.
By:
------------------------------
Its:
------------------------------
COMERICA BANK
By:
------------------------------
Its:
-----------------------------