EXHIBIT 10.17
FOURTH AMENDMENT TO LOAN AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AGREEMENT (the "Fourth Amendment"), is made
and entered into this 30 day of July, 2009, by and among HERLEY INDUSTRIES, INC.
(the "Borrower"), MANUFACTURERS AND TRADERS TRUST COMPANY and PNC BANK, NATIONAL
ASSOCIATION, successor to Bank of Lancaster County, a division of BLC Bank N.A.,
successor to Bank of Lancaster County, N.A. (each a "Lender" and collectively,
the "Lenders") and MANUFACTURERS AND TRADERS TRUST COMPANY, as agent (in such
capacity, the "Agent").
B A C K G R O U N D
A. Borrower has borrowed from Lenders and desires to continue to borrow
from Lenders in connection with the operation of its business(es). On April 30,
2007, the parties entered into a Loan Agreement, upon which monies have been
advanced, which was amended by an Amendment to Loan Agreement dated May 2, 2008,
a Second Amendment to Loan Agreement dated September 11, 2008 and a Third
Amendment to Loan Agreement dated May 4, 2009 (as amended, the "Loan
Agreement"). The Loan Agreement is incorporated herein by reference and made a
part hereof. All capitalized terms used herein without definition which are
defined in the Loan Agreement shall have the meanings set forth therein.
B. Borrower has requested Lenders to amend certain provisions of the Loan
Agreement.
C. The parties desire to enter into this Fourth Amendment to effectuate
such amendments.
D. Borrower has no defense, charge, defalcation, claim, plea, demand or
set-off against the Loan Agreement or any of the Loan Documents.
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
covenant and agree as follows:
1. That the above Background is incorporated herein by reference.
2. That the definition of "Debt Service Coverage Ratio" contained in
Section 1.1 of the Loan Agreement be and hereby is modified, effective for the
fiscal quarter ending August 2, 2009, to exclude from the rolling four (4)
quarter calculation a $10,000,000.00 provision for employment settlement costs.
This modification will reduce and eventually terminate as the charge rolls out
of the calculation.
3. That the Borrower shall pay to the Agent for the ratable benefit of the
Lenders a modification fee in the amount of $20,000.00 upon execution of this
Fourth Amendment.
4. That the Borrower reaffirms and restates the representations and
warranties set forth in Section 7 of the Loan Agreement, as amended by this
Fourth Amendment, and all such representations and warranties shall be true and
correct on the date hereof with the same force and effect as if made on such
date, except as they may specifically refer to an earlier date(s). The Borrower
represents and warrants (which representations and warranties shall survive the
execution and delivery hereof) to the Agent and the Lenders that (i) this Fourth
Amendment has been duly authorized, executed and delivered and constitute a
legal, valid and binding obligation of the Borrower, and is enforceable in
accordance with its terms; (ii) the Borrower is not in default under the Loan
Agreement or any of the other Loan Documents, and the Borrower is in full
compliance with all of the terms and conditions thereof; (iii) no event exists,
or is likely to exist in the future, which with the passage of time, notice, or
both, will constitute a default under the Loan Agreement or any of the other
Loan Documents; and (iv) there have been no material adverse changes in the
Borrower's financial condition or operations which would cause the Borrower to
be in default under any of the financial covenants contained in the Loan
Documents.
5. That the terms and conditions, paragraph sections, collateral and
guaranty requirements, representations and warranties of the Loan Agreement and
Loan Documents, together with all understandings by and between the parties to
this Fourth Amendment evidenced by writings of the same or subsequent date not
in conflict with the above modifications under this Fourth Amendment shall
remain in full force and effect as the agreement of the parties relative to the
Loans, and are hereby ratified, reaffirmed and confirmed. Any past, present or
future delay or failure of the Agent and the Lenders to demand or enforce strict
performance of each term and condition of the Loan Agreement and Loan Documents,
and any past, present or future delay or failure of the Agent or the Lenders to
exercise any right, power or privilege shall not be deemed or construed as a
waiver with respect to the same or any other matter, or preclude the future
exercise of such right, power or privilege, or be construed or deemed to be a
waiver of or acquiescence in any such default.
6. That all references to the Loan Agreement, the Loan Documents and the
other documents and instruments delivered pursuant to or in connection
therewith, as well as in writings of the same or subsequent date, shall mean the
Loan Agreement as amended hereby and as each may in the future be amended,
restated, supplemented or modified from time to time. Further, all references to
Bank of Lancaster County, N.A. in the Loan Agreement, the Loan Documents and the
other documents and instruments delivered pursuant to or in connection therewith
shall now be deemed to have been made and to refer to PNC Bank, National
Association, successor to Bank of Lancaster County, a division of BLC Bank,
N.A., successor to Bank of Lancaster County, N.A.
7. That the parties hereto shall, at any time, and from time to time
following the execution of this Fourth Amendment, execute and deliver all such
further instruments and take all such further action as may be reasonably
necessary or appropriate in order to carry out the provisions of this Fourth
Amendment.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Borrower,
the Lenders and the Agent have caused this Fourth Amendment to be executed by
their proper corporate officers thereunto duly authorized as of the day and year
first above written.
ATTEST/WITNESS: HERLEY INDUSTRIES, INC.
/a/ Margaret Guzzetti By: Anello Garefino
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Title: Title: Chief Financial Officer
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MANUFACTURERS AND TRADERS
TRUST COMPANY, in its capacities as
Agent and Lender
By: /s/ Jane E. McMinn
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Jane E. McMinn, Vice President
PNC BANK, NATIONAL ASSOCIATION
By: Craig Kauffman
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Title: SVP
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