EXHIBIT 10.2
FIRST AMENDMENT TO
CREDIT AND SECURITY
AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AND
SECURITY AGREEMENT (this “ Amendment ”) is made
as of the 1st day of August, 2006 by and among MTC TECHNOLOGIES,
INC., a Delaware corporation (“ MTCT ”), MTC
TECHNOLOGIES, INC. (formerly known as MODERN TECHNOLOGIES CORP.),
an Ohio corporation (together with MTCT, collectively, “
Borrowers ” and, individually, each a “
Borrower ”); the financial institutions listed on
Schedule 1 to the Credit Agreement (collectively, the
“ Banks ” and, individually, each a “
Bank ”); NATIONAL CITY BANK, as lead arranger and
administrative agent for the Banks (“ Agent ”);
BRANCH BANKING AND TRUST COMPANY, as syndication agent (“
Syndication Agent ”); KEYBANK NATIONAL ASSOCIATION, as
co-documentation agent (“ KeyBank ”); and FIFTH
THIRD BANK, as co-documentation agent (“ Fifth Third
Bank ”; KeyBank and Fifth Third Bank, collectively, the
“ Co-Documentation Agents ”), under the
following circumstances:
A. The Borrowers, the Banks, the
Agent, the Syndication Agent and the Co-Documentation Agents are
parties to a Credit and Security Agreement made effective as of
April 21, 2005 (as the same may be amended, supplemented,
modified and/or restated from time to time, the “ Credit
Agreement ”). Unless otherwise defined herein, all
capitalized terms used herein shall have the respective meanings
ascribed to those terms by the Credit Agreement.
B. The Borrowers, the Banks, the
Agent, the Syndication Agent and the Co-Documentation Agents now
desire to amend the Credit Agreement for the reasons and upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the Borrowers, the
Banks, the Agent, the Syndication Agent and the Co-Documentation
Agents agree as follows:
Section 1. Amendment to
Credit Agreement.
(a) Amendment to
Section 5.7(d) . Section 5.7(d) of the Credit
Agreement (captioned Capital Expenditures ) is hereby
amended in its entirety to read as follows:
Borrowers will not make or commit to
make Consolidated Capital Expenditures exceeding 2.75% of annual
Consolidated revenues of Borrowers in any fiscal year of
Borrowers.
(b) Amendment to
Section 5.11 of the Credit Agreement . Section 5.11
of the Credit Agreement (captioned Investments and Loans )
is hereby amended in its entirety to read as follows:
No Company shall, without the prior
written consent of Agent and the Required Banks, (a) create,
acquire or hold any Subsidiary, (b) make or hold any
investment in any stocks, bonds or securities of any kind,
(c) be or become a party to any joint venture or other
partnership, (d) make or keep outstanding any advance or loan
to any Person, or (e)
be or become a Guarantor of any kind
(other than a Guarantor of Payment); provided that this
Section 5.11 shall not apply to the following:
(i) any endorsement of a check or
other medium of payment for deposit or collection through normal
banking channels or similar transaction in the normal course of
business;
(ii) any investment in direct
obligations of the United States of America or in certificates of
deposit issued by a member bank of the Federal Reserve
System;
(iii) any investment in commercial
paper or securities that at the time of such investment is assigned
the highest quality rating in accordance with the rating systems
employed by either Moody’s or Standard &
Poor’s;
(iv) the holding of Subsidiaries
listed on Schedule 7.1 hereto;
(v) loans to or investments in a
Company from a Company so long as each such Company is a Credit
Party;
(vi) the holding of any Subsidiary
as a result of an Acquisition made pursuant to Section 5.13
hereof or the creation of any new subsidiary so long as, in each
case, such Subsidiary becomes a Guarantor of Payment promptly
following such Acquisition or creation in accordance with and to
the extent required by Section 5.20 hereof; or
(vii) an investment in shares of
capital stock or other equity interest of USFalcon, Inc., a
Massachusetts corporation, having a fair market value at the time
of purchase of no more than $2,000,000.
Notwithstanding anything in the
foregoing to the contrary, any Company may enter into a joint
venture with Intuit Services, Inc., a subsidiary of Bering Straits
Native Corporation, provided that such Company is not required to
make an equity investment in the joint venture and such joint
venture does not become a Subsidiary.
(c) Amendment to
Section 5.17 of the Credit Agreement . Section 5.17
of the Credit Agreement (captioned Use of Proceeds ) is
hereby amended in its entirety to read as follows:
Borrowers’ use of the proceeds
of the Notes shall be solely for working capital, funding capital
expenditures, permitted acquisitions, and other general corporate
purposes of the Companies. Notwithstanding anything contained in
the foregoing however, the proceeds of the Revolving Credit Notes
may be used by MTCT to repurchase shares of common stock of MTCT to
the extent such repurchase is permitted by Section 5.19
hereof.
(d) Amendment to
Section 5.19 of the Credit Agreement . Section 5.19
of the Credit Agreement (captioned Restricted Payments ) is
hereby amended in its entirety to read as follows:
No Company shall make or commit
itself to pay any Restricted Payment at any time. Notwithstanding
anything contained in the foregoing however, the repurchase
by
2
MTCT of shares of common stock of
MTCT having a fair market value at the time of such repurchase of
no more than $10,000,000 by no later than December 31, 2007
shall not constitute a Restricted Payment for the purposes of this
Section 5.19.
Section 2. Effective
Date . This Amendment shall take effect immediately upon the
satisfaction, in the Agent’s sole discretion, of the
following conditions precedent:
(a) Agent’s receipt of an
original counterpart of this Amendment executed by all parties
hereto;
(b) Agent’s receipt of the
original Confirmation of Guarantees exec
