EXHIBIT 10.18
FIFTH AMENDMENT TO LOAN AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AGREEMENT
(the "Fifth Amendment"), is made and
entered into this 13th day of October, 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, a
Third Amendment
to Loan Agreement dated May 4, 2009 and a Fourth
Amendment to Loan Agreement
dated July 30, 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
Fifth 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 Section 2.5(a) of the
Loan Agreement be and hereby is amended to
substitute "25 basis points (0.25%) per annum" for "20 basis
points (0.20%) per
annum" appearing therein as and for
the Unused Facility Fee and to add a
requirement that the Borrower agrees to pay to the Agent for the
ratable benefit
of the Lenders a "Used Facility Fee" equal to 25 basis points
(0.25%) per annum
(calculated on the basis of a 360 day year for the actual
days elapsed) of the
used portion of the Aggregate Revolving Credit Commitments
during any period(s)
that the Tangible Net Worth of the Borrower, on a
consolidated basis, is less
than $90,000,000.00. For purposes of
calculating the used portion of the
Aggregate Revolving Credit Commitments, Letters
of Credit made under the Loan
shall be deemed to be unused
portions of the Aggregate Revolving
Credit
Commitments. The Used Facility Fee shall be paid in
immediately available funds
and shall be calculated on the basis of the
average daily used portion of the
Aggregate Revolving Credit Commitments
and shall be payable quarterly in
arrears. When received, the Agent will
promptly remit to each Lender its pro
rata share of the Used Facility Fee based upon such
Lender's Revolving Credit
Percentage.
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3. That Section 2.5(b) of the
Loan Agreement be and hereby is amended to
substitute "one and one-half percent (1.50%)" for "one and
one-quarter percent
(1.25%)" appearing therein as and for the amount of the
annual letter of credit
fee that is now due and payable by the Borrower on the
aggregate amount of new
letters of
