EXHIBIT 10.5
FIRST AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
FIRST AMENDMENT, dated as of August 14, 1995 (the
'Amendment'), to the Amended and Restated Credit Agreement, dated as of April
12, 1995, among NAI Technologies, Inc., a New York corporation (the 'Company'),
Chemical Bank, a New York banking corporation ('Chemical'), The Bank of New
York, a New York banking corporation ('BNY'), and each of the other financial
institutions which from time to time becomes party thereto (together with
Chemical and BNY, the 'Banks'), BNY, as administrative agent (in such capacity,
the 'Administrative Agent') and Chemical, as collateral agent (in such capacity,
the 'Collateral Agent').
W I T N E S S E T H :
WHEREAS, the Company, the Banks, the Administrative Agent and
the Collateral Agent are parties to that certain Amended and Restated Credit
Agreement, dated as of April 12, 1995 (as may hereafter be amended, modified,
supplemented or restated, the 'Credit Agreement');
WHEREAS, unless otherwise defined herein, terms defined in the
Credit Agreement and used herein are used herein as therein defined; and
WHEREAS, the Company has requested and the Banks have agreed
to, among other things, waive compliance with certain financial covenants and to
defer the payment of certain principal amounts due under the Credit Agreement as
hereinafter set forth.
Accordingly, the parties hereto hereby agree as follows:
Section 1. Deferral. The Banks hereby agree to defer each of
the principal payments in the amount of $875,000 which are scheduled to be made
on each of September 30, 1995 and December 31, 1995 pursuant to the terms of
Section 2.08(b) of the Credit Agreement to the Maturity Date.
Section 2. Confirmation of Inapplicability of Extended
Maturity Date. The Company hereby confirms that the right to unilaterally extend
the maturity of the Loans to the Extended Maturity Date has expired, and further
confirms that the Loans shall mature on the Maturity Date or earlier as provided
in the Credit Agreement.
Section 3. Limited Waiver of Financial Covenants. The Banks
hereby agree to waive compliance with certain provisions of the Credit Agreement
as follows:
(a) Compliance with the financial covenant set forth
in Section 6.14 is hereby waived for the fiscal quarter ended June 30,
1995; provided that the Consolidated Current Ratio for such period
shall not be less than .95 to 1.
(b) Compliance with the financial covenant set forth
in Section 6.15 is hereby waived for the fiscal quarter ended June 30,
1995; provided that the Consolidated Quick Ratio for such period shall
not be less than .48 to 1.
(c) Compliance with the financial covenant set forth
in Section 6.16 is hereby waived for each of the one month periods
ending March 31, 1995, April 30, 1995 and May 31, 1995, provided that
Consolidated Tangible Net Worth for such periods shall not be less than
$3,600,000 at any time during such periods.
Section 4. Amendments to Article VI. Article VI of the Credit
Agreement is hereby amended as follows:
a. Section 6.14 is hereby amended in its entirety to
read as follows:
SECTION 6.14. Maintenance of Consolidated Current
Ratio. Permit the Consolidated Current Ratio to fall below 1.00 to 1.00
at the end of any fiscal quarter during the period from the Closing
Date to June 30, 1995 and .91 to 1.00 at the end of any fiscal quarter
during the period from July 1, 1995 to December 31, 1995.
b. Section 6.15 is hereby amended in its entirety to
read as follows:
SECTION 6.15. Maintenance of Consolidated Quick
Ratio. Permit the Consolidated Quick Ratio to fall below (i) 0.45 to
1.00 at the end of any fiscal quarter during the period from the
Closing Date to June 30, 1995 or (ii) 0.42 to 1.00 at the end of any
fiscal quarter ending during the period from July 1, 1995 to December
31, 1995.
c. Section 6.16 is hereby amended in its entirety to
read as follows:
SECTION 6.16. Maintenance of Consolidated Tangible
Net Worth. Permit Consolidated Tangible Net Worth for the
2
following periods to fall below the amount set forth opposite such
period at any time during such periods:
Period Amounts
------ -------
March 1, 1995 $7,400,000
through March 31, 1995
April 1, 1995 7,000,000
through April 30, 1995
May 1, 1995 6,900,000
through May 31, 1995
June 1, 1995 through 2,250,000
November 30, 1995
December 1, 1995 through 2,600,000
the Maturity Date
Section 5. Further Obligations. The Company shall furnish to
the Banks on or before October 31, 1995 a liquidation analysis with respect
to the assets of the Company and its Subsidiaries, which report shall be
reviewed by, and prepared in consultation with, Policano and Manzo. Failure of
the Company to furnish such report to the Bank when due shall constitute an
immediate Event of Default.
Section 6. Amendment Fee. In order to induce each of the Banks
to execute and deliver this Amendment, the Company hereby agrees that it shall
pay to the Collateral Agent for the account of the Banks a fee equal to $50,000
(the 'Amendment Fee') on or before the Maturity Date.
Section 7. Representations and Warranties. The representations
and warranties set forth in Section 3 of the Credit Agreement are true and
correct in all material respects on and as of the date hereof, except to the
extent that such representations and warranties expressly relate to an earlier
date. As of the Effective Date, and after giving effect to this Amendment, no
Event of Default, or an event with which the giving of notice or the passage of
time, or both, would constitute an Event of Default, exists.
Section 8. Counterparts. This Amendment may be executed in
any number of counterparts, each of which shall constitute an original and
all of which when taken together shall constitute one and the same instrument.
Section 9. Conditions to Effectiveness. This Amendment shall
become effective upon the execution of this Amendment by the Company, the
Administrative Agent, the Collateral Agent and the
3
Banks (and the receipt by the Collateral Agent of evidence satisfactory to it of
such execution) (the 'Effective Date').
Section 10. Ratification. Except to the extent hereby amended,
the Credit Agreement remains in full force and effect and is hereby ratified and
affirmed. References in the Loan Documents to the Credit Agreement shall mean
such document as amended by this Amendment, as the same may be further amended,
supplemented or otherwise modified from time to time.
Section 11. Costs and Expenses. All out-of-pocket expenses
incurred by the Banks, including the reasonable fees and disbursements of
Zalkin, Rodin & Goodman LLP, counsel to the Banks, incurred in connection with
the negotiation and preparation of this Amendment shall be paid by the Company
as provided in Subsection 9.05 of the Credit Agreement.
Section 12. References. This Amendment shall be limited
precisely as written and shall not be deemed (a) to be a consent granted
pursuant to, or a waiver or modification of, any other term or condition of the
Credit Agreement or any of the instruments or agreements referred to therein or
(b) to prejudice any right or rights which the Administrative Agent, Collateral
Agent or the Banks may now have or have in the future under or in connection
with the Credit Agreement or the Loan Documents or any of the instruments or
agreements referred to therein.
Section 13. Applicable Law. THIS AMENDMENT SHALL IN ALL
RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH
STATE.
Section 14. Headings. Section headings in this Amendment are
included herein for convenience of reference only and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Amendment.
Section 15. Integration. This Amendment represents the entire
agreement of the parties hereto with respect to the amendment of the Credit
Agreement and the terms of any letters and other documentation entered into
among the Company and any Bank or the Administrative Agent or the Collateral
Agent prior to the execution of this Amendment which relate to the amendment of
the Credit Agreement shall be replaced by the terms of this Amendment.
4
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above written.
NAI TECHNOLOGIES, INC.
By___________________________
Title:
THE BANK OF NEW YORK
as Administrative Agent and as a Bank
By:___________________________
Vice President
CHEMICAL BANK
as Collateral Agent and as a Bank
By:___________________________
Vice President
Consented to as of this
14th day of August, 1995
NAI TECHNOLOGIES - SYSTEMS DIVISION CORPORATION
By:_______________________
Title:
WILCOM, INC.
By:_______________________
Title:
ARATHON, V.I., INC.
By:_______________________
Title:
CODAR TECHNOLOGY, INC.
By:_______________________
Title:
5