Exhibit 10.1

 

 

FIRST AMENDMENT TO FIRST

AMENDED AND RESTATED EXTENSION AGREEMENT

 

THIS FIRST AMENDMENT TO FIRST AMENDED AND RESTATED EXTENSION AGREEMENT (“First
Amendment”) is made and entered into as of December 21, 2005, by and among LYNCH
SYSTEMS, INC. (“Borrower”), a South Dakota corporation; LYNCH CORPORATION, an
Indiana corporation (“Guarantor”); and SUNTRUST BANK (“Lender”), a Georgia
banking corporation.

Recitals:

Lender, Borrower and Guarantor entered into a First Amended and Restated
Extension Agreement dated October 6, 2005 (the “Extension Agreement”) pursuant
to which, among other things, the maturity date for repayment of the obligations
owed by Borrower and Guarantor to Lender was extended under the terms and
conditions stated in the Extension Agreement. Capitalized terms used herein, to
the extent not otherwise defined, shall have the meanings ascribed to such terms
in the Extension Agreement.

Borrower has not been able to meet the deadlines for delivery of a term sheet or
an Acceptable Commitment Letter as provided in Section 8 of the Extension
Agreement. As a result, the rate of interest that accrues on the principal
amount of the Obligations has increased as and to the extent provided in Section
8 of the Extension Agreement.

Borrower has requested that Lender further extend the maturity date of the
Obligations, and Lender is willing to do so, subject to all of the terms and
conditions in the Extension Agreement and this First Amendment.

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and in consideration of
the premises and the mutual covenants herein contained, the parties hereto,
intending to be legally bound hereby, agree as follows:

1.          Definitions. All capitalized terms used in this First Amendment,
unless otherwise defined, shall have the meanings ascribed to such terms in the
Extension Agreement.

2.          Amendment to Extension Agreement. The Extension Agreement is hereby
amended as follows:

(a)        In Section 1, by deleting the definition of “Extension Period” and by
substituting in lieu thereof the following definition:

“Extension Period” shall mean the period commencing on October 6, 2005, and
ending at 5:00 o’clock p.m. on March 1, 2006.

(b)        By deleting Section 8 in its entirety and by substituting in lieu
thereof the following Section 8:

 

 

 

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8.                Applicable Rate of Interest.  

 

(a)               From October 6, 2005, through and including October 31, 2005,
interest shall accrue on the unpaid principal balance of the Obligations
outstanding at the rate of five and one-half percent (5.5%) per annum,
calculated and paid in accordance with the terms of the Term Note.

 

(b)               From November 1, 2005, through and including November 30,
2005, interest shall accrue on the unpaid principal balance of the Obligations
outstanding at the rate of six and one-half percent (6.5%) per annum, calculated
and paid in accordance with the terms of the Term Note.

 

(c)               From and after December 1, 2005, and except as otherwise
provided in this Section 8, interest shall accrue on the unpaid principal
balance of the Obligations outstanding at the rate of seven and one-half percent
(7.5%) per annum, calculated and paid in accordance with the terms of the Term
Note.

 

(d)               During the Extension Period, and provided that each of the
Extension Conditions is satisfied, Lender shall not be authorized to charge or
collect any default rate of interest that Lender would otherwise be entitled to
charge or collect in the absence of this Agreement, but on and after the
Termination Date Lender may charge and collect such default rate of interest to
the extent authorized by the Loan Documents.

 

3.              Representations, Acknowledgments and Warranties. Each Obligor
hereby acknowledges, stipulates and warrants to Lender that (i) the Loan
Documents and the Extension Agreement are legal, valid and binding obligations
of such Obligor and are enforceable against such Obligor in accordance with the
terms thereof; (ii) all of the Obligations are owing and payable without
defense, offset or counterclaim (and to the extent there exists any such
defense, offset or counterclaim on the date hereof, the same is hereby waived by
such Obligor); (iii) the security interests and liens granted by Borrower in
favor of Lender are duly perfected, first priority security interests and liens;
(iv) as of the opening of business on December 19, 2005, the aggregate undrawn
amount of Letters of Credit outstanding totaled $281,690, and the unpaid
principal balance of the Term Loan Obligations totaled $381,105.53, in each case
exclusive of interest, fees, other charges and attorneys’ fees at any time
payable by Borrower under any of the Loan Documents; and (v) each of the
warranties and representations of such Obligor contained in the Extension
Agreement was true, accurate and complete at the time of execution of the
Extension Agreement and remains true, accurate and complete as of the date
hereof.

4.              Ratification and Reaffirmation. Borrower hereby ratifies and
reaffirms the Loan Documents, the Extension Agreement and all of its obligations
and liabilities thereunder. Guarantor hereby ratifies and reaffirms the
validity, legality and enforceability of the Guaranty and the Extension
Agreement and agrees that the Guaranty is and shall remain in full force and in
effect until all of the Obligations have been paid in full.

5.

No Novation. Except for the amendment expressly provided in Section 2 of this

 

 

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First Amendment, nothing herein shall be deemed to amend or modify any provision
of the Extension Agreement or the Loan Documents, which shall continue in full
force and effect. This First Amendment is not intended to be, nor shall it be
construed to create, a novation or an accord and satisfaction.

6.              Governing Law; Waiver of Notice of Acceptance. This First
Amendment shall be deemed to be a contract made in Georgia and shall be governed
by and construed in accordance with the internal laws of the State of Georgia.
Obligors hereby waive notice of the acceptance of this First Amendment.

7.              Non-Waiver of Default; Reservation of Rights and Remedies.
Neither this First Amendment, nor Lender’s agreements hereunder, nor Lender’s
continued extension of credit (if any) to Borrower shall be deemed to constitute
a waiver of or consent to any Event of Default or breach of any Extension
Condition. Lender reserves all of the rights and remedies available to it under
the Loan Documents, the Extension Agreement and Applicable Law.

8.              Payment of Expenses. Obligors agree to pay all expenses,
including, without limitation, legal fees, incurred by Lender in connection with
the negotiation, drafting and execution of this First Amendment.

9.              Counterparts; Facsimile Signatures. This First Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall constitute an
original, but all of which taken together shall be one and the same instrument.
In proving this First Amendment, it shall not be necessary to produce or account
for more than one such counterpart signed by the party against whom enforcement
is sought. Any signed counterpart of this First Amendment that is transmitted by
facsimile transmission shall be deemed to constitute an original counterpart for
all purposes.

10.            Release of Claims. To induce Lender to enter into this First
Amendment, each Obligor hereby releases, acquits and forever discharges Lender,
and Lender’s officers, directors, agents, attorneys, employees, successors and
assigns, from all liabilities, claims, demands, actions or causes of action of
any kind (if any there be), whether absolute or contingent, due or to become
due, disputed or undisputed, liquidated or unliquidated, at law or in equity, or
known or unknown, that any one or more of them now have or ever have had against
Lender, whether arising under or in connection with any of the Loan Documents,
the Extension Agreement, this First Amendment or otherwise.

11.            Waiver of Jury Trial. To the fullest extent permitted by
Applicable Law, the parties hereto each hereby waives the right to trial by jury
in any action, suit or proceeding arising out of or related to this First
Amendment, the Extension Agreement, the Loan Documents or the Guaranty.

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed and delivered as of the date first written above.

ATTEST:

 

LYNCH SYSTEMS, INC.

(“Borrower”)

 

 

 

/s/ Janet Grimsley

 

By:

/s/ Brian Fabacher

Secretary

 

Title:

President

 

 

 

ATTEST:

 

LYNCH CORPORATION

(“Guarantor”)

 

 

 

/s/ Eugene Hynes

 

By:

/s/ John C. Ferrara

Secretary

 

Title:

President

 

 

 

 

 

 

 

 

 

 

 

 

 

Accepted as of December 30, 2005.

 

 

 

 

 

 

 

 

SUNTRUST BANK

(“Lender”)

 

 

 

 

 

By:

/s/ Greg Griner

 

 

Title:

Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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