Exhibit 10.10
FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
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This First Amendment to Loan and Security Agreement (this "Amendment") is
made and entered into effective as of June 27, 1997, by and between Litronic
Industries, Inc., a California corporation (the "Company"), and Fidelity
Funding, Inc., a Texas corporation ("Fidelity").
A. The Company and Fidelity Funding of California, Inc. ("FFOC") have
entered into that certain Loan and Security Agreement (the "Original
Agreement"), dated as of June 27, 1996, and FFOC has assigned all of its right,
title and interest in, to and under the Original Agreement to Fidelity. The
Original Agreement as amended by this Amendment is referred to herein as the
"Agreement." Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Original Agreement.
B. The Company and Fidelity desire to amend the Original Agreement and,
in connection therewith, hereby agree as follows:
1. Amendment to Section 14.4. The first sentence of Section 14.4 of
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the Agreement is hereby amended to read in its entirety as follows:
"The term of this Agreement shall expire on February 28, 1998 (the
original term, and any extension thereof made by Fidelity pursuant to this
section, are herein called the "Term"); provided, however, that Fidelity
may extend the term hereof for additional one-year periods, if Fidelity
elects to do so in its sole discretion, by notifying the Company in writing
at least 30 days before the end of the term then in effect; and provided
further that Fidelity may terminate this Agreement at any time effective
immediately upon the occurrence of an Event of Default."
2. Commitment Fee. Notwithstanding Section 5.1 of the Original
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Agreement, the commitment fee payable under such Section on June 27, 1997, shall
be $29,333.36.
3. Amendment of Section 5.2. Section 5.2 of the Original Agreement
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hereby is amended to read in its entirety as follows:
"5.2 As consideration for Fidelity's commitment to advance funds
hereunder, the Company shall pay to Fidelity a minimum usage fee (in this
section called the "Minimum Usage Fee") of not less than $8,700 for each
calendar month (or fraction thereof, on a prorated basis) during the Term.
In the event that the income earned by Fidelity during any calendar month
(or fraction thereof on a prorated basis) pursuant to Sections 2.5 and 5.3
is less than the Minimum Usage Fee, the Company shall pay to Fidelity the
difference between the amount so earned by Fidelity and the Minimum Usage
Fee, regardless of Fidelity's prior compensation. The Minimum Usage Fee
for each calendar month shall be due and payable on the first day of the
next calendar month.
4. Payment of Costs. The Company shall pay Fidelity a document
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preparation fee of $500, which shall cover all costs and expenses incurred by
Fidelity, in connection with the negotiation, preparation, execution and
delivery of this Amendment and the consummation of the transactions contemplated
hereby. The Company hereby authorizes Fidelity, in its sole discretion, to
deduct such fee from any Advance made by Fidelity under the Agreement after the
date hereof or the Cash Collateral.
5. Representations and Warranties of the Company. In order to
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induce Fidelity to enter into this Amendment, the Company represents and
warrants to Fidelity that:
(a) The representations and warranties contained in Section 7 of the
Original Agreement are true and correct at and as of the time of the
effectiveness hereof.
(b) The Company is duly authorized to execute, deliver and perform
its obligations under this Amendment an dis and will continue to be duly
authorized to perform its obligations under the Original Agreement as
amended hereby. The Company has duly taken all corporate action necessary
to authorize the execution and delivery of this Amendment and to authorize
the performance of the obligations of the Company hereunder.
(c) The execution and delivery by the Company of this Amendment, the
performance by the Company of its obligations hereunder and the
consummation of the transactions contemplated hereby do not and will not
conflict with any provision of law, statute, rule or regulation or of the
articles of incorporation and bylaws of the Company, or of any material
agreement, judgment, license, order or permit applicable to or binding upon
the Company, or result in the creation of any lien, charge or encumbrance
upon any assets or properties of the Company. Except for those which have
been duly obtained, no consent, approval, authorization or order of any
court or governmental authority or third party is required in connection
with the execution and delivery by the Company of this Amendment or to
consummate the transactions contemplated hereby.
(d) The Agreement (including this Amendment) has been duly executed
and delivered by the Company and is a legal and binding instrument and
agreement of the Company, enforceable against the Company in accordance
with its terms, except as limited by bankruptcy, insolvency and similar
laws and by general principles of equity.
(e) No Event of Default or any event that, with the giving of notice,
the passage of time or both, would constitute an Event of Default has
occurred or is continuing.
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6. Miscellaneous.
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(a) This Amendment shall not be effective until ▇▇▇▇ ▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ acknowledge there consent hereto in the form attached
hereto.
(b) The Agreement is hereby ratified and confirmed in all respects.
The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right,
power or remedy of Fidelity under the Agreement nor constitute a waiver of
any provision thereof.
(c) All representations, warranties, covenants and agreements of the
Company herein shall survive the execution and delivery of this Amendment
and the performance hereof and shall further survive until the Agreement is
terminated.
(d) This Amendment may be separately executed in counterparts and by
the different parties hereto in separate counterparts, each of which when
so executed shall be deemed to constitute one and same Amendment.
IN WITNESS WHEREOF, the Company and Fidelity have executed this Amendment
as of the date first written above.
FIDELITY: THE COMPANY:
FIDELITY FUNDING, INC., LITRONIC INDUSTRIES, INC.,
a Texas corporation a California corporation
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /S/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
President President
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CONSENT AND AGREEMENT
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Each of the undersigned hereby consents to the provisions of this Amendment
and the transactions contemplated herein and hereby ratifies and confirms the
general continuing guaranty dated as of June 27, 1996, made by ▇▇▇▇ ▇▇▇▇ for the
benefit of FFOC, and agrees that his or her obligations and covenants thereunder
are unimpaired hereby and shall remain in full force and effect.
/s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇
The undersigned hereby consents to the provisions of this Amendment and the
transactions contemplated therein and hereby ratifies and confirms the
subordination agreement, dated as of June 27, 1996, made by him for the benefit
of FFOC relating to the Company, and agrees that his obligations and covenants
thereunder are unimpaired hereby and shall remain in full force and effect.
/s/ ▇▇▇▇ ▇▇▇▇
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