Exhibit 10.33
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
August 1, 2002, is made and entered into by and among Analex Corporation, a
Delaware corporation, successor by merger to Hadron, Inc. (the "Borrower"), and
the subsidiaries of the Borrower identified on the signature pages hereto (the
"Subsidiary Guarantors"), and Bank of America, N.A., a national banking
association (the "Lender").
WITNESSETH
WHEREAS, the Borrower and the Lender entered into that certain Credit
Agreement dated as of November 2, 2001 (the "Existing Credit Agreement").
WHEREAS, the parties have agreed to amend the Existing Credit Agreement as
set forth herein.
NOW, THEREFORE, in consideration of the agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
PART I
DEFINITIONS
1. Certain Definitions. Unless otherwise defined herein or the context
otherwise requires, the following terms used in this Amendment, including its
preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement as amended
hereby.
"Amendment No. 1 Effective Date" is defined in Part III.
2. Other Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided in the Amended Credit Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II. Except as so amended, the Existing Credit Agreement and all
other Loan Documents shall continue in full force and effect.
1. Amendment to Section 1.1. (a) The following definition appearing in
Section 1.1 of the Existing Credit Agreement is amended in its entirety to read
as follows:
"Pricing Grid" shall mean the pricing grid attached hereto as Exhibit
C-1.
(b) The following new definition is added to Section 1.1 of the
Existing Credit Agreement in the appropriate alphabetical order to read as
follows:
"Temporary Overadvance" shall mean, for the period from and including
the Amendment No. 1 Effective Date to but excluding November 1, 2002,
$1,000,000. Notwithstanding the date of delivery of any Borrowing
Base/Non-Default Certificate, and notwithstanding the last sentence of
Section 2.15, the Temporary Overadvance shall not be included in the
Borrowing Base before the Amendment No. 1 Effective Date and after October
31, 2002.
2. Amendment to Section 2.1(a). Section 2.1(a) of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
(a) Revolving Credit Facility Commitment. Subject to the terms and
conditions and relying upon the representations and warranties of
the Borrower herein set forth, the Lender agrees (such agreement
being herein called the Lender's "Revolving Credit Facility
Commitment") to make loans (the "Revolving Credit Facility
Loans") to the Borrower at any time or from time to time on or
after the date hereof and to but not including the Revolving
Credit Facility Maturity Date, subject, however, to the
conditions that the aggregate principal amount of all Revolving
Credit Facility Loans and all Letter of Credit Obligations at any
time outstanding shall not exceed the lesser of (i) Eight Million
and 00/100 Dollars ($8,000,000.00), and (ii) the Borrowing Base
at such time (the lesser of the amounts described in the
foregoing clauses (i) and (ii) being referred to herein as the
"Revolving Credit Facility Available Amount"). Notwithstanding
anything herein to the contrary, the aggregate outstanding
principal amount of all Revolving Credit Facility Loans and all
Letter of Credit Obligations, plus the outstanding principal
amount of the Term Loan shall not exceed the Borrowing Base.
3. Amendment to Section 2.1(c). Section 2.1(c) of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
(c) Revolving Credit Facility Note. The obligation of the Borrowers
to repay the unpaid principal amount of the Revolving Credit
Facility Loans made by the Lender and to pay interest thereon
shall be evidenced in part by a promissory note of the Borrower
dated the Amendment No. 1 Effective Date (the "Revolving Credit
Facility Note"), in substantially the form attached hereto as
Exhibit A-1, with the blanks appropriately filled, payable to the
order of the Lender in a face amount of Eight Million and 00/100
Dollars ($8,000,000.00).
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4. Amendment to Section 2.15 (a). Section 2.15 (a) of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
(a) Borrowing Base. The "Borrowing Base" for the Borrower at any time
shall mean the sum, at the date of the most recent Borrowing
Base/Non-Default Certificate required to be furnished pursuant to
Section 2.15(b), of
(i) Ninety percent (90%) of the Net Value (as hereinafter
defined) of Eligible Billed Receivables representing amounts
due and owing from the Government (or from a prime
contractor under a contract with the Government with respect
to which the Borrower is a subcontractor), which are
outstanding less than ninety-one (91) days from the date of
original invoice; plus
(ii) Eighty percent (80%) of the Net Value of Eligible Billed
Receivables representing amounts due and owing from domestic
account debtors (other than the Government), which are
outstanding less than ninety-one (91) days from the date of
original invoice; plus
(iii) The lesser of (A) fifty percent (50%) of the Net Value of
Eligible Unbilled Receivables and (B) $1,000,000; plus
(iv) $2,000,000; plus
(v) The Temporary Overadvance.
The "Net Value" of an Eligible Billed Receivable or an Eligible
Unbilled Receivable shall be its face amount, net of any discount
for prompt payment (and net of any other amount representing
payment of finance charges, late charges, or interest (however
denominated)), and net of any portion thereof which constitutes
payment of sales, use or other taxes.
5. Amendment to Section 6.1. Section 6.1 of the Existing Credit Agreement
is hereby amended in its entirety to read as follows:
6.1 Financial Covenants.
The Borrower hereby covenants to the Lender as follows, which
covenants shall be based upon the consolidated financial
statements of the Borrower:
(a) Total Funded Debt to EBITDA Ratio. The Borrower will
maintain at all times during the following periods a Total
Funded Debt to EBITDA ratio of not greater than the
following:
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MAXIMUM TOTAL DEBT
PERIOD TO EBITDA RATIO
------ ------------------
Amendment No. 1 Effective Date - 03/31/03 4.15 to 1.0
04/01/03 - thereafter 3.5 to 1.0
(b) Fixed Charge Coverage Ratio. The Borrower will maintain at
all times, beginning on the Amendment No. 1 Effective Date
and during the remaining term of this Agreement, a Fixed
Charge Coverage Ratio of not less than 1.25 to 1.0.
(c) Senior Debt to EBITDA Ratio. The Borrower will maintain at
all times during the following periods a Senior Debt to
EBITDA ratio of not greater than the following:
MAXIMUM SENIOR DEBT
PERIOD TO EBITDA RATIO
------ ------------------
Amendment No. 1 Effective Date - 03/31/03 3.1 to 1.0
04/01/03 - thereafter 2.75 to 1.0
(d) Net Worth. The Borrower will maintain at all times during
the term of this Agreement Net Worth equal to at least the
sum of (i) $9,000,000 and (ii) sixty-five percent (65%) of
net income (not to be reduced by net losses) during each
fiscal quarter ending March 31, 2002 and thereafter.
The financial covenants referenced in this Section 6.1 shall
be calculated and tested on a quarterly basis as of the last
day of each quarter, and in the case of subsection (a), (b)
and (c) of this Section 6.1, for the four fiscal quarter
period then ended. Unless otherwise defined, all financial
terms used in this Section 6.1 shall have the meanings
attributed to such terms in accordance with GAAP.
6. Amendment to Schedule 3.19. Schedule 3.19 to the Existing Credit
Agreement is hereby amended in its entirety to read as set forth in the Amended
Schedule 3.19 attached to this Amendment.
PART III
CONDITIONS TO EFFECTIVENESS
1. Amendment No. 1 Effective Date. This Amendment shall be and become
effective as of the date hereof (the "Amendment No. 1 Effective Date") when all
of the conditions set forth in this Part III shall have been satisfied, and
thereafter this Amendment shall be known, and may be referred to, as "Amendment
No. 1".
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2. Execution of Counterparts of Amendment. The Lender shall have received
counterparts of this Amendment, which collectively shall have been duly executed
on behalf of the Borrower, the Subsidiary Guarantors and the Lender, and the
Revolving Credit Facility Note in the form of Exhibit A-1, which shall have been
duly executed on behalf of the Borrower.
3. Officer's Certificate. The Lender shall have received a certificate
executed by the chief financial officer of the Borrower as of the Amendment No.
1 Effective Date stating that, immediately after giving effect to this Amendment
and the transactions contemplated hereby, (i) no Default exists and (ii) the
representations and warranties set forth in the Existing Credit Agreement are
true and correct in all material respects.
4. Legal Opinion. The Lender shall have received an opinion addressed to
the Lender, dated the Amendment No. 1 Effective Date, of Holland & Knight,
counsel to the Borrower, in form and substance satisfactory to the Lender.
5. Material Adverse Change. Except as otherwise previously disclosed in
writing to the Lender, no material adverse change shall have occurred since June
30, 2002 in the condition (financial or otherwise), business or management of
the Borrower and the Subsidiary Guarantors.
6. Fees and Expenses. A $25,000 amendment fee, and all out-of-pocket fees
and expenses of the Lender in connection with the Loan Documents, including this
Amendment, including legal and other professional fees and expenses incurred on
or prior to the date of this Amendment, shall have been paid.
7. Other Items. The Lender shall have received such other documents,
agreements or information which may be reasonably requested by the Lender.
PART IV
MISCELLANEOUS
1. Representations and Warranties. Borrower hereby represents and warrants
to the Lender that, after giving effect to this Amendment, (a) no Default exists
under the Amended Credit Agreement or any of the other Loan Documents which has
not been waived and (b) except as set forth in the Amended Schedule 3.19
attached to this Amendment, the representations and warranties set forth in the
Existing Credit Agreement are, subject to the limitations set forth therein,
true and correct in all material respects as of the date hereof (except for
those which expressly relate to an earlier date).
2. Cross-References. References in this Amendment to any Part are, unless
otherwise specified, to such Part of this Amendment.
3. Instrument Pursuant to Existing Credit Agreement. This Amendment is a
Loan Document executed pursuant to the Existing Credit Agreement and shall
(unless otherwise expressly indicated therein) be construed, administered and
applied in accordance with the terms and provisions of the Existing Credit
Agreement.
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4. References in Other Loan Documents. At such time as this Amendment shall
become effective pursuant to the terms of Part III, all references in the Loan
Documents to the "Agreement" shall be deemed to refer to the Existing Credit
Agreement as amended by this Amendment.
5. Counterparts. This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
6. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF VIRGINIA WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
7. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly signed, sealed and delivered by their properly and duly authorized officers
as of the day and year first above-written.
BORROWER:
ANALEX CORPORATION
By: (SEAL)
-------------------------------
Name:
--------------------------------
Title:
-------------------------------
SUBSIDIARY GUARANTORS:
ADVANCED BIOSYSTEMS, INC.
By: (SEAL)
-------------------------------
Name:
--------------------------------
Title:
-------------------------------
SYCOM SERVICES, INC.
By: (SEAL)
-------------------------------
Name:
--------------------------------
Title:
-------------------------------
LENDER:
BANK OF AMERICA, N.A.
By: (SEAL)
-------------------------------
Name:
--------------------------------
Title:
-------------------------------
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Amended
Schedule 3.19
Subsidiaries
Entity State of Incorporation Qualification Foreign State
- ------ ---------------------- ---------------------------
Advanced Biosystems, Inc. Delaware Virginia
SyCom Services, Inc. Delaware Alabama
Maryland
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EXHIBIT A-1
ANALEX CORPORATION
REVOLVING CREDIT FACILITY NOTE
$8,000,000.00 McLean, Virginia
August 1, 2002
================================================================================
FOR VALUE RECEIVED, the undersigned, ANALEX CORPORATION, a Delaware
corporation, formerly known as Hadron, Inc. (the "Borrower"), promises to pay to
the order of BANK OF AMERICA, N.A. (the "Lender") on or before the Revolving
Credit Facility Maturity Date, and at such earlier dates as may be required by
the Agreement (as defined below), the aggregate unpaid principal amount of all
Revolving Credit Facility Loans made by the Lender to the Borrower from time to
time pursuant to the Agreement. The Borrower further promises to pay to the
order of the Lender interest on the unpaid principal amount hereof from time to
time outstanding at the rate or rates per annum determined pursuant to the
Agreement, payable on the dates set forth in the Agreement.
This Note is the "Revolving Credit Facility Note" referred to in, and is
entitled to the benefits of, the Credit Agreement, dated as of November 2, 2001
by and among the Borrower, the Subsidiary Guarantors and the Lender (as the same
may be amended, modified or supplemented from time to time, the "Agreement"),
which among other things provides for the acceleration of the maturity hereof
upon the occurrence of certain events and for prepayments in certain
circumstances and upon certain terms and conditions. Terms defined in the
Agreement have the same meanings herein.
If the Borrower fails to make any payment under this Note within seven days
after the due date, the Borrower shall pay the Lender a late charge of five
percent of the amount of the payment.
This Note is secured by and is entitled to the benefits of the Liens
granted by the Security Agreement referred to in the Agreement.
The Borrower hereby expressly waives presentment, demand, protest and all
other demands and notices (except as otherwise provided in the Agreement) in
connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Agreement, and an action for amounts due hereunder or
thereunder shall immediately accrue, in each case except as otherwise expressly
provided in the Agreement.
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This Note shall be governed by, and construed and enforced in accordance
with, the laws of Virginia, without regard to principles of choice of law.
ANALEX CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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EXHIBIT C-1
Pricing Grid
- ---------------------------------------------------------------------------------------
Applicable Margin
for Revolving
Pricing Total Debt to Applicable Margin Credit Facility Applicable
Level EBITDA Ratio for Revolving Loans and Letter Margin
Unused Fee of Credit Fee for Term Loan
- ---------------------------------------------------------------------------------------
I Less than or equal to 0.25% 2.25% 2.75%
1.5 to 1.0
II Less than or equal to 0.4% 2.5% 3.0%
2.5 to 1.0 but
greater than 1.5 to
1.0
III Less than or equal to 0.5% 2.75% 3.25%
3.5 to 1.0 but
greater than 2.5 to
1.0
IV Less than or equal to 0.5% 3.0% 3.5%
4.0 to 1.0 but
greater than 3.5 to
1.0
V Greater than 4.0 to 0.5% 3.25% 3.75%
1.0
- ---------------------------------------------------------------------------------------
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ANALEX CORPORATION
REVOLVING CREDIT FACILITY NOTE
$8,000,000.00 McLean, Virginia
August 1, 2002
================================================================================
FOR VALUE RECEIVED, the undersigned, ANALEX CORPORATION, a Delaware
corporation, formerly known as Hadron, Inc. (the "Borrower"), promises to pay to
the order of BANK OF AMERICA, N.A. (the "Lender") on or before the Revolving
Credit Facility Maturity Date, and at such earlier dates as may be required by
the Agreement (as defined below), the aggregate unpaid principal amount of all
Revolving Credit Facility Loans made by the Lender to the Borrower from time to
time pursuant to the Agreement. The Borrower further promises to pay to the
order of the Lender interest on the unpaid principal amount hereof from time to
time outstanding at the rate or rates per annum determined pursuant to the
Agreement, payable on the dates set forth in the Agreement.
This Note is the "Revolving Credit Facility Note" referred to in, and is
entitled to the benefits of, the Credit Agreement, dated as of November 2, 2001
by and among the Borrower, the Subsidiary Guarantors and the Lender (as the same
may be amended, modified or supplemented from time to time, the "Agreement"),
which among other things provides for the acceleration of the maturity hereof
upon the occurrence of certain events and for prepayments in certain
circumstances and upon certain terms and conditions. Terms defined in the
Agreement have the same meanings herein.
If the Borrower fails to make any payment under this Note within seven days
after the due date, the Borrower shall pay the Lender a late charge of five
percent of the amount of the payment.
This Note is secured by and is entitled to the benefits of the Liens
granted by the Security Agreement referred to in the Agreement.
The Borrower hereby expressly waives presentment, demand, protest and all
other demands and notices (except as otherwise provided in the Agreement) in
connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Agreement, and an action for amounts due hereunder or
thereunder shall immediately accrue, in each case except as otherwise expressly
provided in the Agreement.
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This Note shall be governed by, and construed and enforced in accordance
with, the laws of Virginia, without regard to principles of choice of law.
ANALEX CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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