Loan and Security Agreement [Amendment] - Crestar Bank, ANADAC Inc. and System Dynamics Inc.
DECEMBER 1996 AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS DECEMBER 1996 AMENDMENT TO LOAN AND SECURITY AGREEMENT (the
Amendment), dated as of December 2, 1996 made by and between CRESTAR BANK, a
Virginia banking corporation (the "Lender"), ANADAC, INC., a Virginia
corporation (the "Parent"), and SYSTEM DYNAMICS, INC., a Delaware corporation
("SDI," and together with the Parent, the "Borrowers"), recites and provides:
RECITALS
The Parent, Defense Systems Concepts, Inc., a Maryland corporation
("DSC"), and the Lender are parties to a Loan and Security Agreement, dated as
of January 9, 1991 (the "Original Loan Agreement"). SDI subsequently became a
party to the Original Loan Agreement in accordance with the terms thereof, and
DSC subsequently was released as a party to the Original Loan Agreement. The
Original Loan Agreement has been amended by amendments dated August 5, 1992,
October 23, 1992, July 26, 1993, January 31, 1995, May 26, 1995, June 21, 1995
and May 24, 1996 (the Substantive Amendments). In addition, the Termination
Date, as defined in the Original Loan Agreement, has been extended from time to
time pursuant to various letter agreements (the Extension Letters). The
Original Loan Agreement, as amended to the date hereof by the Substantive
Amendments and the Extension Letters, and as further amended, modified or
supplemented from time to time, shall be referred to as the "Loan Agreement."
Terms defined in the Loan Agreement shall have the same defined meanings when
such terms are used in this Amendment.
The Borrowers and the Lender have agreed to amend the terms of the Loan
Agreement. Accordingly, for valuable consideration, the receipt and sufficiency
of which are acknowledged, the Borrowers and the Lender agree as follows:
AGREEMENT
1. Each of the following definitions in Section 1 of the Loan
Agreement is amended to read in its entirety as follows:
"'Maximum Amount' means, with respect to the Revolving Loans,
$6,000,000; provided, however, that the Maximum Amount shall be reduced
by an amount equal to the aggregate of the face amounts of letters of
credit issued by the Lender for the account of any Borrower."
"'Termination Date' means October 31, 1997, and any extension or
extensions thereof granted by the Lender in accordance with the
provisions of Section 2.1(h) below."
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2. Section 2.1(h) of the Loan Agreement is deleted in its entirety
and is replaced with the following provisions:
"(h) The Borrowers and the Lender from time to time may agree
to extend the Termination Date or increase the amount of credit to be
provided under this Agreement, or both. During any such periods of
extension, the remaining terms and conditions of this Agreement shall
remain in full force and effect, and the Borrowers shall execute and
deliver any amendments or modifications to the Loan Documents as the
Lender may require in connection with any such extension or increase.
Nothing in this Section 2.1(h) shall obligate the Lender to grant such
extensions or to increase the amount of credit provided under this
Agreement."
3. Section 7.1 of the Loan Agreement is deleted in its entirety
and is replaced with the following provisions:
"Section 7.1. Minimum Tangible Net Worth. The Parent will
maintain at all times a Tangible Net Worth of not less than (a)
$3,500,000 from December 31, 1996 through June 29, 1997, and (b)
$3,700,000 from June 30, 1997 and at all times thereafter."
4. Section 7.3 of the Loan Agreement is deleted in its entirety
and is replaced with the following provisions:
"Section 7.3. Leverage Ratio. The Parent will maintain as of the
end of each fiscal quarter of the Parent a ratio of Total Liabilities to
Tangible Net Worth of not greater than 2.25 to 1."
5. Simultaneously with the execution of this Amendment, the
Borrowers agree to execute and deliver to the Lender an amended and restated
Revolving Note, substantially similar to the Revolving Note currently held by
the Lender and reflecting the increased Maximum Amount. Each reference in the
Loan Documents to the "Revolving Note" shall be deemed to be a reference to the
Revolving Note as amended and restated by the amended and restated Revolving
Note required hereunder. Revolving Loans outstanding on the date hereof shall
be deemed to be Revolving Loans outstanding under such amended and restated
Revolving Note and shall be subject to the terms of the Loan Agreement and each
other Loan Document as any of the same are amended hereby.
6. Except for the amendments to the Loan Agreement and the
Revolving Note set forth above, the Loan Documents shall remain in full force
and effect. The Borrowers acknowledge and agree that this Amendment effects an
extension of the Termination Date,
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among other amendments, and is not a novation, and the Borrowers ratify and
confirm the remaining terms and provisions of the Loan Documents in all
respects.
7. The Borrowers represent and warrant that this Amendment has
been duly authorized, executed and delivered by each of them in accordance with
resolutions adopted by their respective boards of directors. All other
representations and warranties made by the Borrowers in the Loan Documents are
incorporated by reference in this Amendment and are deemed to have been
repeated as of the date of this Amendment, with the same force and effect as if
set forth in this Amendment, except that any representation or warranty
relating to any financial statements shall be deemed to be applicable to the
financial statements most recently delivered to the Lender in accordance with
the provisions of the Loan Documents.
8. The Borrowers jointly and severally agree to pay all costs and
expenses incurred by the Lender in connection with this Amendment, including,
but not limited to, reasonable attorneys' fees.
9. This Agreement shall be governed by the laws of the
Commonwealth of Virginia, without reference to conflict of laws principles.
10. This Amendment may be executed by the parties individually or
in any combination, in one or more counterparts, each of which shall be an
original and all of which together constitute one and the same instrument.
11. The Borrowers acknowledge and agree that there are no defenses,
counterclaims or setoffs against any of their respective obligations under the
Loan Documents.
[SIGNATURES ON FOLLOWING PAGE]
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WITNESS the following signatures.
ANADAC, INC.,
a Virginia corporation
By: /s/ Melinda K. Jensen
----------------------------
Melinda K. Jensen
Chief Financial Officer
SYSTEMS DYNAMICS, INC.,
a Delaware corporation
By: /s/ H. N. Walther
----------------------------
Name: H. N. Walther
--------------------------
Title: President
-------------------------
CRESTAR BANK,
a Virginia banking corporation
By: /s/ Diane D. Taylor
----------------------------
Diane D. Taylor
Senior Vice President
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