Exhibit 10.1
 

WAIVER AND AMENDMENT TO REVOLVING CREDIT FACILITY
 
THIS WAIVER AND AMENDMENT TO REVOLVING CREDIT FACILITY (the “Agreement”) is made
and entered into as of this 15th day of December, 2016, by and between JPMORGAN
CHASE BANK, N.A., a national banking association, having an office located at
395 North Service Road, 3rd Floor, Melville, New York 11747 (“Lender”), on the
one hand, and FREQUENCY ELECTRONICS, INC., a Delaware corporation whose address
is 55 Charles Lindbergh Boulevard, Uniondale, New York 11553 (“Borrower”),
FEI-ELCOM TECH, INC., having an office at 11 Volvo Drive, Rockleigh, New Jersey
07647, FEI COMMUNICATIONS, INC., having an office at 55 Charles Lindbergh
Boulevard, Uniondale, New York 11553, FEI GOVERNMENT SYSTEMS, INC., having an
office at 55 Charles Lindbergh Boulevard, Uniondale, New York 11553, and
FEI-ZYFER, INC., having an office at 7321 Lincoln Way, Garden Grove, California
92841 (collectively hereinafter referred to as the “Guarantors”), on the other
hand.

RECITALS

A. Borrower and Guarantors have executed and delivered to the Lender various
loan documents, instruments and agreements, in connection with a $25,000,000.00
revolving credit facility (the “Loan Facility”) including, but not limited to, a
Credit Agreement (the “Credit Agreement”) and Continuing Guarantees (the
“Guarantees”), each dated as of June 6, 2013 (all such documents, agreements,
and instruments executed by the Borrower and/or Guarantors, including all
extensions, amendments and/or modifications, including hereunder, are
hereinafter collectively referred to as the “Loan Documents”). Capitalized terms
not otherwise defined herein shall have the meanings given such terms in the
Credit Agreement.
 
B. To secure its obligations to Lender under the Loan Documents, Borrower has
granted to Lender a security interest in the Collateral.

C. Lender has advised Borrower that Events of Default have occurred under
Section 4.6A and Section 4.6B of the Credit Agreement (“Existing Defaults”).

D. By reason of the existence of the Existing Defaults, Lender has no obligation
to make additional revolving credit facilities available to Borrower and Lender
has the full legal right to exercise its rights and remedies under the Credit
Agreement. Such remedies include, but are not limited to, the right to
repossession and sale of the Collateral.

E. Borrower has requested that Lender waive Existing Defaults and the applicable
provisions of Sections 4.6A and 4.6B of the Credit Agreement, each solely
pertaining to the quarter ended October 31, 2016, on the terms and subject to
the conditions set forth herein.

F. Pursuant to Section 8.2 of the Credit Agreement, the waiver requested by
Borrower must be contained in a written agreement signed by Lender.

G. Lender has agreed to waive, and pursuant to the Agreement, has waived the
Existing Defaults and the applicable provisions of Sections 4.6A and 4.6B of the
Credit

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Agreement, each solely pertaining to the quarter ended October 31, 2016, on the
terms and conditions set forth herein.

AGREEMENT

In consideration of the Recitals and of the mutual promises and covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
Lender, Borrower and Guarantors agree as follows:

1. Waiver: Limitation of Waiver.
 
(a) As of the Effective Date (as hereinafter defined), the Existing Defaults and
the applicable provisions of Sections 4.6A and 4.6B of the Credit Agreement,
each solely pertaining to the quarter ended October 31 , 2016, are hereby waived
until the expiration of the Loan Restructuring Period (as hereinafter defined).

(b) Without limiting the generality of Section 8.2 of the Credit Agreement, the
waiver set forth above shall be limited precisely as written and relates solely
to the Existing Defaults and nothing in this Agreement shall be deemed to: (i)
constitute a waiver of compliance by the Borrower with respect to any other
term, provision or condition of the Credit Agreement or any other Loan Document,
or any other instrument or agreement referred to therein; or (ii) prejudice any
right or remedy that the Lender may now have or may have in the future under or
in connection with the Credit Agreement or any other Loan Document, or any other
instrument or agreement referred to therein.

(c) Revolving Credit Facilities. During the period from the Effective Date until
the earlier of (i) February 15, 2017, or (ii) the date upon which the Loan
Restructuring (as hereinafter defined) is completed (the “Loan Restructuring
Period”), Lender will not provide, and Borrower shall have no right to obtain,
any further loans, advances or other extensions of credit under the Loan
Documents.

2. Amendments to the Credit Agreement. As of the Effective Date, the Credit
Agreement is hereby amended as follows:

(a) Section 2.1 of the Credit Agreement is hereby amended by adding the
following new definition in the appropriate alphabetical order:

“Loan Restructuring” means a restructuring and revision of the amount and terms
of the Revolving Credit Facility, the Collateral therefor, and any Related
Document in connection therewith, satisfactory to Lender in its sole and
complete discretion.”

(b) Section 7.l (a) of the Credit Agreement is hereby amended to add the
following Subsection M:

“M. The Loan Restructuring shall not have occurred on or before February 15,
2017, without any period of notice of or opportunity to cure the same.”
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(c) Section 12 of the Credit Agreement, as hereby amended, is hereby amended to
read as follows:

“12. VOLUNTARY TERMINATION. Borrower may terminate this agreement, each other
Loan Document and all security interests in the Collateral at any time upon at
least ten ( 10) days’ prior written notice to the Bank. On the date specified in
such notice, termination will be effective, so long as Borrower has (i) paid to
the Bank, in same day funds, all amounts due under the Liabilities, including
but not limited to the aggregate principal amount outstanding on such date,
together with accrued interest and fees thereon, and (ii) provided cash
collateral to Lender as reasonably determined by Lender to secure any credit
card or other Lender products then utilized by Borrower pursuant to which Lender
could have any further amounts due from Borrower.”

3. Conditions Precedent to Effectiveness of Agreement. This Agreement shall not
be effective unless and until the date (the “Effective Date”) that each of the
following conditions shall have been satisfied in Lender’s sole discretion or
waived by Lender, for whose sole benefit such conditions exist:

(a) Execution and Delivery of this Agreement. The Borrower and Guarantors shall
each have executed and delivered this Agreement.

(b) Payment of Expenses. Borrower shall have paid to Meltzer, Lippe, Goldstein &
Breitstone, LLP, special counsel to Lender, the sum of $10,000, in payment of
Lender’s attorneys’ fees and disbursements incurred in connection with the
negotiation, preparation and closing of this Agreement.

(c) Waiver Fee. The Borrower shall have paid Lender a waiver fee of $5,000,
which fee shall be fully earned upon the effectiveness of this Agreement.

(d) Lender shall have received (i) satisfactory evidence that all corporate and
other proceedings that are necessary in connection with this Agreement have been
taken to the Lender’s and its counsel’s reasonable satisfaction, and the Lender
and such counsel shall have received all such counterpart originals or certified
copies of such documents as the Lender may reasonably request; and (ii) such
other information and documents as may reasonably be required by the Lender and
its counsel in connection with this Agreement.

4. Representations and Warranties. The Borrower and each Guarantor hereby
represents and warrants to the Lender (before and after giving effect to this
Agreement) that:

(a) The Borrower and each Guarantor has the corporate power and authority, and
the legal right, to execute, deliver and perform this Agreement.

(b) The Borrower and each Guarantor has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement.
 
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(c) No Violation. Borrower’s and Guarantors’ execution, delivery and performance
of this Agreement do not and will not (i) violate any law, rule, regulation or
court order to which Borrower or any Guarantor is subject; (ii) conflict with or
result in a breach of the Articles of Incorporation or Bylaws of Borrower or any
Guarantor or any agreement or instrument to which Borrower or any Guarantor is
party or by which it or its properties are bound; or (iii) result in the
creation or imposition of any lien, security interest or encumbrance on any
property of Borrower or any Guarantor, whether now owned or hereafter acquired,
other than liens in favor of Lender.

(d) This Agreement has been duly executed and delivered on behalf of the
Borrower and each Guarantor. This Agreement and the Credit Agreement as amended
hereby constitute the legal, valid and binding obligations of the Borrower and
each Guarantor and are enforceable against the Borrower and each Guarantor in
accordance with their terms except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

(e) Each of the representations and warranties made by the Borrower and each
Guarantor herein or in or pursuant to the Loan Documents is true and correct in
all material respects on and as of the Effective Date as if made on and as of
such date (except that any representation or warranty which by its terms is made
as of an earlier date shall be true and correct in all material respects as of
such earlier date).

(f) No Event of Default (other than the Existing Defaults) has occurred and, as
of the Effective Date after giving effect to this Agreement, is continuing, or
will result from this Agreement.

(g) The Borrower and each Guarantor has performed in all material respects all
agreements and satisfied all conditions which this Agreement and the other Loan
Documents provide shall be performed or satisfied by the Borrower and each
Guarantor on or before the Effective Date.

5. Default. Each of the following shall constitute an additional Event of
Default under the Credit Agreement:

(a) any representation or warranty of Borrower or any Guarantor in this
Agreement shall be false, misleading or incorrect in any material respect; or

(b) Any breach of any covenant or agreement of Borrower or any Guarantor in this
Agreement.

6. Effect and Construction of Agreement. Except as expressly provided herein,
the Credit Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms, and this Agreement shall not
be construed to:

(i) impair the validity, perfection or priority of any lien or security interest
securing the obligations under the Loan Documents (the “Obligations”);
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(ii) waive or impair any rights, powers or remedies of Lender under the Credit
Agreement and the other Loan Documents upon termination of the Loan
Restructuring Period;

(iii) constitute an agreement by Lender or require Lender to extend the Loan
Restructuring Period, or grant additional waivers or any forbearance periods, or
extend the term of the Credit Agreement or the time for payment of any of the
Obligations or otherwise amend or modify any Loan Document or waive any Events
of Defaults or any rights of Lender under any Loan Document; or

(iv) make any loans, advances or other extensions of credit to Borrower.

In the event of any inconsistency between the terms of this Agreement and the
Credit Agreement as amended hereby or any of the other Loan Documents, this
Agreement shall govern. Borrower and each Guarantor acknowledges that it has
consulted with counsel and with such other experts and advisors as it has deemed
necessary in connection with the negotiation, execution and delivery of this
Agreement. This Agreement shall be construed without regard to any presumption
or rule requiring that it be construed against the party causing this Agreement
or any part hereof to be drafted.

7. Miscellaneous.

(a) Further Assurance. Borrower and each Guarantor agrees to execute such other
and further documents and instruments as Lender may reasonably request to
implement the provisions of this Agreement and to perfect and protect the liens
and security interests created by the Loan Documents.

(b) Benefit of Agreement. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto, their respective successors
and assigns. No other person or entity shall be entitled to claim any right or
benefit hereunder, including, without limitation, the status of a third-party
beneficiary of this Agreement.

(c) Integration. This Agreement, together with the Credit Agreement and the
other Loan Documents, constitutes the entire agreement and understanding among
the parties relating to the subject matter hereof, and supersedes all prior
proposals, negotiations, agreements and understandings relating to such subject
matter. In entering into this Agreement, Borrower and each Guarantor
acknowledges that it is relying on no statement, representation, warranty,
covenant or agreement of any kind made by Lender or any employee or agent of
Lender, except for the express agreements of Lender set forth herein.

(d) Severability. The provisions of this Agreement are intended to be severable.
If any provisions of this Agreement shall be held invalid or unenforceable in
whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction , be ineffective to the extent of such invalidity or enforceability
without in any manner affecting the validity or enforceability of such provision
in any other jurisdiction or the remaining provisions of this Agreement in any
jurisdiction.
 
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(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York (and excluding the laws applicable
to conflicts or choice of law).

(f) Counterparts; Telecopied Signatures. This Agreement may be executed in any
number of counterparts and by different parties to this Agreement on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement. Any signature
delivered by a party by facsimile or other electronic transmission shall be
deemed to be an original signature hereto.

(g) Notices. Any notices with respect to this Agreement shall be given in
writing and sent by either certified mail, return receipt requested or by a
nationally recognized overnight delivery service as follows:

If to Borrower:

Frequency Electronics, Inc.
55 Charles Lindbergh Boulevard
Uniondale, New York 11553

with a copy (which shall not be notice) to:

Greenberg Traurig, LLP
Metlife Building
200 Park Avenue
New York, NY 10166
Attn: Dennis Block

If to the Guarantors:

c/o Frequency Electronics, Inc.
55 Charles Lindbergh Boulevard
Uniondale, New York 11553

with a copy (which shall not be notice) to:

Greenberg Traurig, LLP
Metlife Building
200 Park Avenue
New York, NY 10166
Attn: Dennis Block

If to Lender, to:

JPMorgan Chase Bank, N.A.
Middle Market Tech Credit
270 Park Avenue, Floor 43, NY1-K839
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New York, New York 10017-2014
Attn: William Horstman
 
with a copy (which shall not be notice) to:

Meltzer, Lippe, Goldstein & Breitstone, LLP
190 Willis Avenue
Mineola, New York 11501
Attn: Ira R. Halperin, Esq.

(h) Survival. All representations, warranties, covenants, agreements,
undertakings, waivers and releases of Borrower and the Guarantors contained
herein shall survive the termination of the Loan Restructuring Period.

(i) Amendment. No amendment, modification, rescission, waiver or release of any
provision of this Agreement shall be effective unless the same shall be in
writing and signed by the parties hereto.

8. Release of Claims and Waiver. Borrower and each Guarantor hereby releases,
remises, acquits and forever discharges Lender and Lender’s employees, agents,
representatives, consultants, attorneys, fiduciaries, servants, officers,
directors, partners, predecessors, successors and assigns, subsidiary
corporations, parent corporations, and related corporate divisions (all of the
foregoing hereinafter called the “Released Parties”), from any and all actions
and causes of action, judgments, executions, suits, debts, claims, demands,
liabilities, obligations, damages and expenses of any and every character, known
or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or
nature, whether heretofore or hereafter arising, for or because of any matter or
things done, omitted or suffered to be done by any of the Released Parties prior
to and including the date of execution hereof, and in any way directly or
indirectly arising out of or in any way connected to this Agreement, the Credit
Agreement and the other Loan Documents (all of the foregoing hereinafter called
the “Released Matters”). Borrower and each Guarantor acknowledges that the
agreements in this paragraph are intended to be in full satisfaction of all or
any alleged injuries or damages arising in connection with the Released Matters.
Each of Borrower and Guarantors represents and warrants to Lender that it has
not purported to transfer, assign or otherwise convey any of their respective
right, title or interest in any Released Matter to any other Person and that the
foregoing constitutes a full and complete release of all Released Matters.

9. Jury Trial Waiver. LENDER, BORROWER AND GUARANTORS EACH HEREBY IRREVOCABLY
WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY CONTROVERSY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, THE CREDIT AGREEMENT AS AMENDED HEREBY AND/OR THE OTHER LOAN
DOCUMENTS.

10. Jurisdiction and Venue. The provisions of Section 8.5 of the Credit
Agreement regarding jurisdiction and venue are incorporated herein by reference.

[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written .
JPMORGAN CHASE BANK, N.A.

By: /s/ William J. Hortsman
     Name: Will Hortsman
     Title: Authorized Officer

Date Signed:  December 15, 2016

Borrower:

FREQUENCY ELECTRONICS, INC.

By: /s/ Steven Bernstein
      Steven Bernstein
      Chief Financial Officer

Date Signed:  December 15, 2016

Guarantors:

FEI-ELCOM TECH, INC.

By: /s/ James Davis
      Name: James Davis
      Title:Chief Executive Officer

Date Signed:  December 15, 2016

FEI COMMUNICATIONS, INC.

By: /s/Martin B. Bloch
      Name: Martin B. Bloch
      Title: President

Date Signed:  December 15, 2016
 
 
[Signatures Continued on Following Page]

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FEI GOVERNMENT SYSTEMS, INC.
 
By:                /s/Martin B. Bloch
      Name: Martin B. Bloch
      Title: President

Date Signed: December 15, 2016

FEI-ZYFER, INC.

By: /s/ Steven Strang
      Name: Steven Strang
      Title: President, FEI-Zyfer, Inc.

Date Signed:  December 15, 2016

 
[Signature Page to Waiver and Amendment to Revolving Credit Facility]

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