EXHIBIT 10.1
FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (the "First Amendment") dated as of the 9th day of December, 1996, is
entered into by and between SAWTEK INC., a Florida corporation, Post Office Box
609501, Orlando, Florida 32860-9501 (the "Borrower") and SUNTRUST BANK, CENTRAL
FLORIDA, NATIONAL ASSOCIATION, f/k/a/ SUN BANK, NATIONAL ASSOCIATION (the
"Bank"), a national banking association, with its principal banking office
located at 200 South Orange Avenue, Orlando, Orange County, Florida.
W I T N E S S E T H:
WHEREAS, the Borrower and the Bank heretofore entered into that certain
Amended and Restated Loan and Security Agreement dated as of November 15, 1995
(the "Loan Agreement") pursuant to which the Bank agreed, among other things, to
lend to the Borrower a line of credit loan in the maximum principal amount of
$11,500,000.00 (the "Line of Credit Loan"), which is scheduled to convert to a
term loan on March 31, 1997; and
WHEREAS, the Borrower has requested the Bank (a) to renew and modify
the Line of Credit Loan by restructuring it to be strictly a revolving line of
credit loan, with interest payable periodically and principal due on maturity,
increasing the maximum principal amount available for borrowing thereunder to
$15,000,000, changing the interest rate applicable to the Line of Credit Loan
and extending the Revolving Period through January 31, 1998, (b) to release all
collateral securing the Line of Credit Loan so that it will be an unsecured
loan, (c) to modify the financial covenants and reporting requirements contained
in the Loan Agreement and (d) to otherwise modify the Loan Agreement; and
WHEREAS, the Bank has agreed to do so subject to the additional
conditions, limitations and requirements as hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises
contained herein and for other good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, the parties hereto do hereby agree
as follows:
1. Amendments to Loan Agreement. The Loan Agreement is hereby amended
as follows:
(a) The definitions of "Account", "Account Debtor", "Adjusted Net
Worth", "Cash Flow", "Cash Flow to Current Maturities of Long Term Debt Ratio",
"Chattel Paper", "Collateral", "Current Maturities of Long Term Debt", "Current
Ratio", "Document", "EBITDA", "Equipment", "Existing Security Agreement",
"Funded Debt to EBITDA Ratio", "Income Tax Expense", "Instrument", "Intercompany
Loan", "Intercompany Note", "Interest Expense", "Inventory", "Long Term Debt",
"Maturity Date", "Prime Rate", "Stock", "Term Loan" and "Term Note" are hereby
deleted from the Loan Agreement, together with all references to such terms in
the Loan Agreement.
(b) The definition of the term "Interest Rate" contained in
Paragraph 1 of the Loan Agreement is hereby deleted in its entirety and in lieu
thereof there is substituted the following:
"'Interest Rate' shall mean the applicable rate of interest to
be borne by the Note (except when the Default Rate is in
effect), which rate shall be the lesser of (a) a rate per
annum equal to LIBOR plus one hundred twenty-five basis points
(1.25%) or (b) the maximum rate allowed by applicable law from
time to time."
(c) The definition of the term "Line of Credit Loan" contained in
Paragraph 1 of the Loan Agreement is hereby deleted in its entirety and in lieu
thereof there is substituted the following:
"'Line of Credit Loan' shall mean the revolving line of credit
loan in the maximum principal amount of $15,000,000.00 extended to the Borrower
by the Bank pursuant to the terms of this Agreement."
(d) The definition of the term "Revolving Period" contained in
Paragraph 1 of the Loan Agreement is hereby deleted in its entirety and in lieu
thereof there is substituted the following:
"'Revolving Period' shall mean the period during the term of
the Line of Credit Loan during which the Borrower shall be
entitled to receive Advances on the Line of Credit Loan, which
period shall commence on the date hereof and end on the
earlier of (a) the occurrence of an Event of Default, (b)
January 31, 1998, or (c) such later date as the Bank, in its
absolute discretion, may agree to in writing."
(e) The definitions of the terms "Interest Payment Date", "Interest
Period", "Interest Rate Determination Date", "LIBOR" and "Permitted Loan Limit",
are hereby added to Paragraph 1 of the Loan Agreement in the proper alphabetical
order, as follows:
"'Interest Payment Date' shall mean the earlier of (i) the end
of each Interest Period, or (ii) quarterly.
Interest Period' shall mean 30, 60, 90 or 120 Days, or any
other period approved by the Bank in its sole and absolute
discretion, as selected by the Borrower from time to time in
accordance with the terms hereof.
'Interest Rate Determination Date' shall mean each date for
calculating LIBOR for purposes of determining the Interest
Rate in respect of an Interest Period, and which shall be the
second Business Day prior to the first Day of the applicable
Interest Period.
'LIBOR' shall mean the interest rate per annum (in accordance
with the length of the designated Interest Period) in effect
on the Interest Rate Determination Date designated as the
LIBOR rate and published from time to time in the Wall Street
Journal or such substitute publication or interest rate
reporting service as may be designated in writing from time to
time by the Bank to the Borrower; in any such case rounded, if
necessary, to the next higher 1/16 of 1.0%, if the rate is not
such a multiple.
'Permitted Loan Limit' shall mean $15,000,000.00."
(f) Subparagraphs (a), (b), (c) and (d) of paragraph 2 of the Loan
Agreement are hereby deleted in their entirety and, in lieu thereof, the
following is substituted therefor:
"(a) Amount and Terms of the Line of Credit Loan. The Bank
agrees from time to time during the term of the Line of Credit
Loan to lend to the Borrower, upon the Borrower's request, up
to the aggregate principal amount of the Permitted Loan Limit
on the terms and conditions set forth herein. Except as
otherwise set forth in this Agreement, the Borrower shall,
during the Revolving Period, be entitled to receive up to the
amount of the Permitted Loan Limit in one or more Advances.
Advances under the Line of Credit Loan shall be evidenced by
the Line of Credit Note and shall be payable in accordance
with the terms of Paragraph 2(c) hereof. The Borrower shall
not be liable under the Line of Credit Note except with
respect to funds actually advanced to the Borrower by the Bank
pursuant to the terms hereof. The Line of Credit Loan shall be
a revolving loan and, accordingly, during the Revolving
Period, the Borrower may in one or more Advances borrow up to
the Permitted Loan Limit, repay all or any portion thereof,
and reborrow up to such amount, subject to the terms and
conditions set forth herein. After the expiration of the
Revolving Period, the Borrower shall not be entitled to
receive any further Advance under the Line of Credit Loan.
(b) Advances on the Line of Credit Loan. After the date hereof
the Borrower shall be entitled to obtain Advances under the
Line of Credit Loan. The Borrower shall give the Bank written
or telephonic notice of any requested Advance under the Line
of Credit Loan. The Bank shall be under no duty or obligation
to verify or confirm the authority of the representative of
the Borrower requesting any such Advance as long as said
person identifies himself/herself as an employee or repre-
sentative of the Borrower. Such notice (the "Notice of
Borrowing") shall specify (i) the proposed date of the Advance
(which shall be a Banking Day), (ii) the amount thereof, (iii)
the requested Interest Period and (iv) that on the date of the
Notice of Borrowing there has been no material adverse change
in the financial condition of the Borrower from that set forth
on the most recent financial statements furnished to the Bank
as provided herein. Each Advance under the Line of Credit Loan
shall be in the minimum principal amount of $10,000.00 or, if
less, the remaining amount available under the Line of Credit
Loan. The Bank shall make each Advance under the Line of
Credit Loan on the date proposed by the Borrower (which may be
the same Banking Day if such request is made by the Borrower
and is received by the Bank prior to 12:00 NOON (Orlando,
Florida time), otherwise no earlier than the following Banking
Day) by crediting the amount of each such Advance requested by
the Borrower to the general deposit account of the Borrower
maintained with the Bank. Each request for an Advance shall be
deemed to restate and verify all representations of the
Borrower made herein as of the date of such request.
Loans or Advances which are unpaid upon the
expiration of the Interest Period applicable thereto and with
respect to which the Borrower has not advised the Bank in
writing (a "Notice of Selection of Interest Period") as
provided in paragraph 2(d) hereof and received by the Bank
within the times provided in paragraph 2(d) prior to the
expiration of such Interest Period of the Interest Period to
be applicable to such Loans or Advances after the current
Interest Period expires shall, effective as of the first Day
after the expiration of such Interest Period, be continued for
an Interest Period of identical length to that just expired.
Thereafter, subject to the limitations set forth in paragraph
2(d) hereof, the Borrower may, by giving the Bank an
appropriate Notice of Selection of Interest Period, together
with the requested Interest Period, elect to change the
Interest Period applicable to such Loan or Advance at a date
designated by the Borrower, which date shall be (i) no earlier
than a date two (2) Banking Days after the receipt by the Bank
of such Notice of Selection of Interest Period and (ii)
immediately following the expiration of an existing Interest
Period.
(c) Interest on the Line of Credit Note. The Line of Credit
Note shall bear interest from the date thereof through
maturity (whether by acceleration or otherwise) on the unpaid
principal balance thereof from time to time outstanding at the
Interest Rate. From and after the Due Date, interest shall
accrue on the unpaid principal balance of the Line of Credit
Note and on all accrued but unpaid interest thereon, or on
such defaulted payment, from the Due Date at the Default
Rate. such interest shall continue to accrue until the date of
payment in full of all principal and accrued but unpaid
interest on such defaulted payment, if applicable.
(d) Payment of the Line of Credit Note. Accrued
interest only on the Line of Credit Note, at the Interest
Rate, shall be payable on each Interest Payment Date, upon any
permitted prepayment of the Loan (to the extent accrued on the
amount being prepaid) and at maturity. The Bank will endeavor
to notify Borrower of interest due prior to any Interest
Payment Date. The entire outstanding principal balance,
together with all accrued but unpaid interest, shall be due
and payable upon the expiration of the Revolving Period.
For each Loan or Advance under the Loan, the Borrower shall
deliver to the Bank a written notice (or facsimile
transmission, immediately confirmed by telephone and further
confirmed by sending the original notice to the Bank so that
the same is received by the Bank no later than three (3)
Banking Days after the date of the facsimile transmission) (a
"Notice of Selection of Interest Period"), no later than 11:00
a.m. Orlando, Florida time, on the Interest Rate Determination
Date, which Notice of Selection of Interest Period shall be in
such form as may be acceptable to the Bank in its sole and
absolute discretion and shall specify (i) the amount of the
Advance for which an Interest Period is being selected, (ii)
the requested Interest Period and (iii) that on the date of
the Notice of Selection of Interest Period, there has been no
material adverse change in the financial condition of the
Borrower from that set forth on the most recent annual
financial statements furnished to the Bank.
The Bank shall incur no liability to the Borrower in acting
upon any telephonic notice referred to above or for
otherwise acting under this paragraph (d) and upon selection
of an Interest period in accordance with this Agreement
pursuant to any telephonic notice, the Borrower shall have
effected Loans hereunder. Each Notice of Selection of Interest
Period shall be irrevocable by the Borrower on or after the
related Interest Rate Determination Date and the Borrower
shall be bound to continue such Advance in accordance
therewith."
(g) Paragraph 4 of the Loan Agreement is hereby deleted in its
entirety and, in lieu thereof, the following is substituted therefor:
"4. Special provisions Governing LIBOR. Notwithstanding
other provisions of this Agreement, the following provisions
shall govern with respect to LIBOR as to the matters covered:
(a) Determination of Interest Period. By giving
notice as set forth in paragraphs 2(b) and (d) the
Borrower shall have the option, subject to the
other provisions of this paragraph 4, to specify the
Interest Period commencing on any such date, provided,
that:
(i) in the case of immediately successive Interest
Periods, each successive Interest Period shall
commence on the Day on which the next preceding
Interest Period expires;
(ii) if any Interest Period would otherwise expire
on a Day which is not a Banking Day, that
Interest Period shall be extended to expire
on the next succeeding Banking Day; provided,
that if any such Interest Period would otherwise
expire on a Day which is not a Banking Day but is a
Day of the month after which no further Banking
Day occurs in that month, that Interest Period shall
expire on the next preceding Banking Day; and
(iii) any Interest Period which begins on the last
Banking Day of a calendar month (or on a Day for
which there is no numerically corresponding
Day in the calendar month at the end of such
Interest Period) shall end on the last Banking Day
of a calendar month.
(b) Determination of Interest Rate. As soon as
practicable after 11:00 A.M. Orlando, Florida time, on
the Interest Rate Determination Date, Bank shall
determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties)
the Interest Rate which shall apply to the Advance for
which an Interest Rate is then being determined for the
applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing)
to the Borrower."
(h) Subparagraphs 6(b) (iii) and (iv) of the Loan Agreement
are hereby deleted in their entirety and, in lieu thereof, the following is
substituted therefor:
"(iii) quarterly, as soon as possible and in any event
within thirty (30) Days after the end of each quarter of
Borrower's fiscal year, (1) a Covenant Compliance
Certificate confirming the Borrower's compliance with all
financial covenants and ratios, in form and substance
satisfactory to the Bank and certified to the Bank by the
Chief Financial Officer of the Borrower;
(iv) as soon as available, copies of all such financial
statements, proxy statements, notices, and reports as it
shall send to all stockholders and of all Form 10Q and Form
10K reports (with exhibits) and all registration statements
(with exhibits) and all other reports which it is or may be
required to file with the Securities and Exchange
Commission or any governmental body or agency succeeding to
the functions of such Commission;
(v) promptly upon receipt thereof, a copy of each other report
submitted to the Borrower by independent accountants in
connection with any annual, interim or special audit made by
them of the books of the borrower; and
(vi) with reasonable promptness, such other data, financial
information or reports as the Bank may request from time to
time."
(i) Subparagraphs 6(s) (i), (ii), (iii) and (iv) of the Loan
Agreement are hereby deleted in their entirety and, in lieu thereof, the
following is substituted therefor:
"(i) Minimum Tangible Net Worth. The Borrower's Tangible
Net Worth shall equal or exceed $50,000,000.
(ii) Total Liabilities to Tangible Net Worth Ratio. The
ratio of Borrower's Total Liabilities to its Tangible Net
Worth shall not exceed 1.0:1."
(j) Subparagraph 6(t) of the Loan Agreement is hereby deleted
in its entirety and, in lieu thereof, the following is substituted therefor:
"(t) Subordination of Affiliate Loans. All loans,
commissions or fees owed to Affiliates of the Borrower shall,
at all times, be subordinate to the Loan and all other
Obligations of the Borrower to the Bank and the Borrower shall
cause its Affiliates from time to time, to execute and deliver
to the Bank subordination agreements in form and content
satisfactory to the Bank; provided, however, so long as no
Default exists or has occurred, the Bank may pay (but not
prepay) current principal and interest on such loans to such
Affiliates."
(k) Subparagraph 7(b) of the Loan Agreement is hereby deleted
in its entirety and, in lieu thereof, the following is substituted therefor:
"(b) RESERVED."
(l) Subparagraph 7(e) of the Loan Agreement is hereby deleted
in its entirety and, in lieu thereof, the following is substituted therefor:
"(e) Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of any of its assets or properties, tangible
or intangible, whether now owned or hereafter acquired, in
excess of $500,000.00, either in a single case or in the
aggregate, to any Person; provided, however, so long as no
default has occurred, the Borrower may (i) replace its
equipment due to obsolescence or repair, and (ii) sell its
inventory in the normal course of its business."
(m) Subparagraph 7(g) of the Loan Agreement is hereby deleted
in its entirety and, in lieu thereof, the following is substituted therefor:
"(g) Additional Indebtedness. Except for the Existing
Loans, incur, create, assume or permit or suffer to exist any
indebtedness or liability for borrowed money, any indebtedness
evidenced by notes, bonds, debentures, or similar obligations
or any conditional sales or title retention agreement or
capitalized lease, in excess of an aggregate of $500,000.00 in
any fiscal year without the prior written consent of the
Bank."
(n) Subparagraph 7(o) of the Loan Agreement is hereby deleted
in its entirety and, in lieu thereof, the following is substituted therefor:
"(o) Subsidiaries. Form any additional Subsidiaries
other than those set forth on Exhibit D, attached hereto; or
loan or advance to, or guarantee or endorse or otherwise be or
become contingently liable, directly or indirectly, in
connection with the obligations of, or make any capital
contribution to or otherwise invest in, Subsidiaries in excess
of $15,000,000.00 in the aggregate, without prior written
notice to and written consent from the Bank."
2. Payment and Elimination of the Term Loan. As of the date of
execution of this First Amendment, the Borrower shall repay in full the
outstanding principal balance and all accrued but unpaid interest due to the
Bank on the Term Loan from its own funds and the Term Loan shall be eliminated
from the Loan Agreement.
3. Representations and Warranties. The Borrower hereby reaffirms all of
the representations and warranties contained in the Loan Agreement as though
made and given in connection with the execution and delivery of this First
Amendment and further certifies that all such representations and warranties are
true and correct on and as of the date hereof.
4. Ratification. Except for any modification of and/or amendment to the
Loan Agreement as herein provided, no other term, condition or provision of the
Loan Agreement shall be considered to be altered or amended, and this First
Amendment shall not be considered a novation. The Borrower agrees that the
amounts extended by the Bank to the Borrower hereunder are absolutely and
unconditionally due and owing to the Bank, and are not subject to any claims,
counterclaims, defenses or other rights of offset whatsoever.
5. Complete Agreement. This First Amendment constitutes the
complete agreement between the parties hereto and incorporates all prior
discussions, agreements and representations made in regard to the matters set
forth herein.
6. Capitalized Terms. Capitalized terms used in this First Amendment
shall have the meanings assigned to them in the Loan Agreement unless otherwise
indicated or the context hereof clearly dictates otherwise.
7. Conflict with Agreement. In the event of conflict between the
terms of the Loan Agreement and the terms of any of the other loan documents
executed in connection therewith the terms of the Loan Agreement shall govern
in all instances.
IN WITNESS WHEREOF, the Bank and the Borrower have caused this First
Amendment to be executed by their respective duly authorized officers as of the
day and year first above written.
Signed, sealed and delivered in SAWTEK INC.
the presence of:
/s/Kathleen Sinnott By:/s/Raymond A. Link
Raymond A. Link,
Print Name: Kathleen Sinnott Vice President-Finance/
Chief Financial Officer
/s/KC Hoppe
Print Name: KC Hoppe
SUNTRUST BANK, CENTRAL
FLORIDA, NATIONAL ASSOCIATION,
f/k/a SUN BANK, NATIONAL
ASSOCIATION
_________________________________ By:______________________________
Print Name:_______________________ Name:____________________________
Title:___________________________