Exhibit 10.8.3
 
EXECUTION VERSION

THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of June 1, 2017 (this
“Amendment”), is among AROTECH CORPORATION (collectively, the “Borrower”), the
other Loan Parties party to the Credit Agreement described below and JPMORGAN
CHASE BANK, N.A. (the “Lender”).
RECITAL
The Borrower, the other Loan Parties and the Lender are parties to a Credit
Agreement dated as of March 11, 2016, as amended by a certain First Amendment to
Credit Agreement dated as of, and as further amended by a certain Second
Amendment to Credit Agreement dated as of June 25, 2016 (as may be further
amended or modified from time to time, the “Credit Agreement”), and desire to
amend the Credit Agreement on the terms and conditions of this Amendment.
TERMS
In consideration of the premises and of the mutual agreements herein contained,
the parties hereby agree as follows:
ARTICLE I           AMENDMENTS.  Upon fulfillment of the conditions set forth in
Article III hereof, the Credit Agreement shall be amended as follows:
1.1          The following definitions are added to Section 1.01 of the Credit
Agreement:
“Oak Valley Real Estate” means the Real Property owned by FAAC and commonly
known as 1229 Oak Valley Drive, Ann Arbor, MI 48108.
“Term C Commitment” means the commitment of the Lender to make a Term C Loan,
expressed as an amount representing the maximum principal amount of the Term C
Loan to be made by the Lender.  The amount of the Lender’s Term C Commitment on
the Third Amendment Effective Date is $1,358,000.
“Term C Draw Expiration Date” means the earlier of (a) the date upon which the
Term C Loan is advanced pursuant to Section 2.01(d); and (b) June 30, 2017.
“Term C Loan” means the Loan made pursuant to Section 2.01(d).
“Term C Maturity Date” means June 1, 2024.
“Third Amendment” means the Third Amendment to this Agreement among the parties
hereto.
“Third Amendment Effective Date” means the date the Third Amendment is
effective.
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1.2          The following definitions in Section 1.01 of the Credit Agreement
are amended and restated as follows:
“Applicable Rate” means, for any day, with respect to any Loan, or with respect
to the commitment fees payable hereunder, as the case may be, the applicable
rate per annum set forth below under the caption “Revolving Commitment CBFR
Spread”, “Revolving Commitment Eurodollar Spread” “Term A Loan CBFR Spread”,
“Term A Loan Eurodollar Spread”, “Term B Loan CBFR Spread”, “Term B Loan
Eurodollar Spread”, “Term C Loan CBFR Spread”, “Term C Loan Eurodollar Spread”,
or “Commitment Fee Rate”, as the case may be, based upon the Borrower’s Leverage
Ratio as of the most recent determination date, provided that until the delivery
to the Lender, pursuant to Section 5.01, of the Borrower’s consolidated
financial information for the Borrower’s first fiscal quarter ending after the
Effective Date, the “Applicable Rate” shall be the applicable rates per annum
set forth (all numbers are in basis points) below in Category IV:
Leverage
Ratio
 
Revolving
Commitment
CBFR Spread
Revolving
Commitment
Eurodollar
 Spread
Term A, B and C  Loan
CBFR Spread
Term A, B and C Loan Eurodollar Spread
Commitment Fee Rate
Category I
< 2.00:1.00
 
0
175
25
200
25
Category II
≥  2.00:1.00
  but
< 2.50:1.00
 
25
200
50
225
30
Category III
≥  2.50:1.00
  but
< 3.00:1.00
 
50
250
75
275
35
Category IV
≥ 3.00:1.00
 
75
300
100
325
40

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of
the end of each fiscal quarter of the Borrower, based upon the Borrower’s annual
or quarterly consolidated financial statements delivered pursuant to
Section 5.01 and (b) each change in the Applicable Rate resulting from a change
in the Leverage Ratio shall be effective during the period commencing on and
including the scheduled date the delivery to the Lender of such consolidated
financial statements indicating such change and ending on the date immediately
preceding the effective date of the next such change, provided that, at the
option of the Lender, if the Borrower fails to deliver the annual or quarterly
consolidated financial statements required to be delivered by it pursuant to
Section 5.01, the Leverage Ratio shall be deemed to be in Category IV during the
period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.

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If at any time the Lender determines that the financial statements upon which
the Applicable Rate was determined were incorrect (whether based on a
restatement, fraud or otherwise), the Borrower shall be required to
retroactively pay any additional amount that the Borrower would have been
required to pay if such financial statements had been accurate at the time they
were delivered.
“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, a Term A
Loan, a Term B Loan, or a Term C Loan and (b) any Commitment, refers to whether
such Commitment is a Revolving Commitment, a Term A Commitment, a Term B
Commitment, or a Term C Commitment.
“Interest Payment Date” means (a) with respect to any CBFR Loan, the first
Business Day of each calendar month and the Revolving Credit Maturity Date, the
Term A Maturity Date, the Term B Maturity Date, or the Term C Maturity Date as
applicable, and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three
months’ duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months’ duration after the first day of such
Interest Period and the Revolving Credit Maturity Date, the Term A Maturity
Date, the Term B Maturity Date, or the Term C Maturity Date, as applicable.
“Term B Commitment” means the commitment of the Lender to make a Term B Loan,
expressed as an amount representing the maximum principal amount of the Term B
Loan to be made by the Lender.  The amount of the Lender’s Term B Commitment on
the Third Amendment Effective Date is $1,730,895.
“Term B Draw Expiration Date” means the earlier of (a) the date upon which the
Term B Loan is advanced pursuant to Section 2.01(c), and (b) May 31, 2017.
“Term B Maturity Date” means June 1, 2024.
“Term Commitments” means the Term A Commitment, the Term B Commitment and the
Term C Commitment.
“Term Loans” means the Term A Loan, the Term B Loan and the Term C Loan.
1.3          Section 2.01(c) of the Credit Agreement is restated as follows:
(c)           Subject to the terms and conditions set forth herein, the Lender
agrees to make a Term B Loan in dollars to FAAC, at one time on a date on or
after the Third Amendment Effective Date but prior to the Term B Draw Expiration
Date, in an aggregate principal amount, including the principal amount
outstanding as Term Loan B immediately prior to the Third Amendment Effective
Date, not to exceed the lesser of the Lender’s Term B Commitment or 70% of the
appraised value of the Ann Arbor Real Estate as determined pursuant to an
appraisal satisfactory to the Lender. Amounts prepaid or repaid in respect of
Term B Loans may not be borrowed. The principal amount of Term Loan B
outstanding immediately prior to the Third Amendment Effective Date shall
constitute usage of the Term B Commitment (as modified by the Third Amendment)
and shall continue to a portion of Term Loan B on and after the Third Amendment
Effective Date.   The Third Amendment is not a novation of the portion of the
Term Loan B outstanding immediately prior to the Third Amendment Effective Date.
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1.4          The following new Section 2.01(d) is added to the Credit Agreement:
(d)          Subject to the terms and conditions set forth herein, the Lender
agrees to make a Term C Loan in dollars to FAAC, at one time on a date on or
after the Third Amendment Effective Date but prior to the Term C Draw Expiration
Date in an aggregate principal amount not to exceed the lesser of the Lender’s
Term C Commitment or 70% of the appraised value of the Oak Valley Real Estate as
determined pursuant to an appraisal satisfactory to the Lender.  Amounts prepaid
or repaid in respect of Term C Loans may not be borrowed.
1.5          Section 2.02(d) of the Credit Agreement is restated as follows:
(d)          Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Credit Maturity Date, the Term A Maturity Date, the Term B
Maturity Date or the Term C Maturity Date, as applicable.
1.6          Section 2.07(a) of the Credit Agreement is restated as follows:
(a)          Unless previously terminated, (i) the Term A Commitment shall
terminate at 5:00 p.m., Detroit time, on the Effective Date, (ii) the Term B
Commitment shall terminate on the Term B Draw Expiration Date, (iii) the Term C
Commitment shall terminate on the Term C Draw Expiration Date, and (iv) the
Revolving Commitment shall termi-nate on the Revolving Credit Maturity Date.
1.7          Section 2.08 of the Credit Agreement is restated as follows:
(a)          The Borrower hereby unconditionally promises to pay the Lender the
then unpaid principal amount of each Revolving Loan on the Revolving Credit
Maturity Date.
(b)          The Borrower hereby unconditionally promises to pay Term A Loan in
consecutive monthly principal payments to the Lender on the first Business Day
of each month, commencing with the first Business Day of May, 2016, in the
following amounts (as adjusted from time to time pursuant to Section 2.09(d) or
2.16(b)): (i) the first twelve (12) monthly principal payments will each be in
the amount of $83,333.33, (ii) the next thirty six (36) monthly principal
payments will each be in the amount of $166,666.67, (iii) the next eleven (11)
monthly principal payments will each be in the amount of $250,000, and (iv) the
remaining principal balance of the Term A Loan will shall be paid in full in
cash by the Borrower on the Term A Maturity Date.
(c)          FAAC hereby unconditionally promises to pay the Term B Loan in
consecutive monthly principal payments to the Lender on the first Business Day
of each month, commencing with the first such Business Day after the Term B Draw
Expiration Date, in the total amount of $7,212.00 (as adjusted from time to time
pursuant to Section 2.09(d) or 2.16(b)), and the remaining principal balance of
the Term B Loan shall be paid in full in cash by FAAC on the Term B Maturity
Date.
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(d)          FAAC hereby unconditionally promises to pay the Term C Loan in
consecutive monthly principal payments to the Lender on the first Business Day
of each month, commencing with the first such Business Day after the Term C Draw
Expiration Date, in the total amount of 5,660.00 (as adjusted from time to time
pursuant to Section 2.09(d) or 2.16(b)), and the remaining principal balance of
the Term C Loan shall be paid in full in cash by FAAC on the Term C Maturity
Date.
(e)          Prior to any repayment of any Term Loan Borrowings of any Class
under this Section, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Lender by telephone
(confirmed by fax) of such selection not later than 11:00 a.m., Detroit time,
three (3) Business Days before the scheduled date of such repayment.  Each
repayment of a Term Loan Borrowing shall be applied ratably to the Loans
included in the repaid Term Loan Borrowing.  Repayments of Term Loan Borrowings
shall be accompanied by accrued interest on the amounts repaid.
(f)           The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrower to the Lender
resulting from each Loan made by the Lender, including the amounts of principal
and interest payable and paid to the Lender from time to time hereunder.
(g)          The Lender shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Class and Type thereof and the Interest
Period applicable thereto, if any, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Lender hereunder.
(h)          The entries made in the accounts maintained pursuant to paragraph
(f) and (g) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of the
Lender to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Loans in accordance with the
terms of this Agreement.
(i)           The Lender may request that Loans made by it be evidenced by a
promissory note.  In such event, the Borrower shall prepare, execute and deliver
to the Lender a promissory note payable to the order of the Lender (or, if
requested by the Lender, to the Lender and its registered assigns) and in a form
approved by the Lender.  Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 8.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
1.8          Section 4.03 of the Credit Agreement is restated as follows:
Section 4.03.  Term Loan C Funding.  In addition to the satisfaction of all
conditions in Section 4.01, the obligation of the Lender to make the Term C Loan
shall not become effective until the date on which each of the following
conditions are satisfied (or waived in accordance with Section 8.02;
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(a)          Environmental Reports.  The Lender shall have received
environmental review reports with respect to the owned real properties of the
Borrower and its Subsidiaries specified by the Lender from firm(s) satisfactory
to the Lender, which review reports shall be acceptable to the Lender.  Any
environmental hazards or liabilities identified in any such environmental review
reports shall indicate the Loan Parties’ plans with respect thereto.
(b)          Mortgages, etc.  The Lender shall have received, with respect to
each owned parcel of real property which is required to be subject to a Lien in
favor of the Lender, each of the following, in form and substance reasonably
satisfactory to the Lender:
(i)               Mortgage on such property;
(ii)              evidence that a counterpart of the Mortgage has been recorded
in the place necessary, in the Lender’s judgment, to create a valid and
enforceable first priority Lien in favor of the Lender, for the benefit of the
Secured Parties;
(iii)             ALTA or other mortgagee’s title policy;
(iv)             an ALTA survey prepared and certified to the Lender by a
surveyor acceptable to the Lender;
(v)              an opinion of counsel in the state in which such parcel of real
property is located in form and substance and from counsel reasonably
satisfactory to the Lender;
(vi)             if any such parcel of real property is determined by the Lender
to be in a flood zone, a flood notification form signed by the Borrower and
evidence that flood insurance is in place for the building and contents, all in
form and substance satisfactory to the Lender;
(vii)            a current appraisal of the real property prepared by an
appraiser reasonably acceptable to the Lender, and in form and substance
satisfactory to the Lender;
(viii)           an environmental assessment of the real property prepared by an
environmental engineer reasonably acceptable to the Lender, and accompanied by
such reports, certificates, studies or data as Lender may reasonably require,
which shall all be in form and substance satisfactory to the Lender; and
(ix)              such other information, documentation, and certifications as
may be reasonably required by the Lender.
1.9          The following new Section 4.04 is added to the Credit Agreement:
Section 4.04. Each Credit Event. The obligation of the Lender to make any Loan
on the occasion of any Borrowing, and to issue, amend, renew or extend any
Letter of Credit, is also subject to the satisfaction of the following
conditions:
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(a)          The representations and warranties of the Loan Parties set forth in
the Loan Documents shall be true and correct in all material respects with the
same effect as though made on and as of the date of such Borrowing or the date
of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date, and that
any representation or warranty which is subject to any materiality qualifier
shall be required to be true and correct in all respects).
(b)          At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.
(c)          After giving effect to any Borrowing or the issuance, amendment,
renewal or extension of any Letter of Credit, Availability shall not be less
than zero.
(d)          No event shall have occurred and no condition shall exist which has
or could be reasonably expected to have a Material Adverse Effect.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b),
(c) and (d) of this Section.
ARTICLE II          REPRESENTATIONS.  Each Loan Party represents and warrants to
the Lender that:
2.1          The execution, delivery and performance of this Amendment are
within its powers, have been duly authorized and are not in contravention with
any law, or the terms of its articles of incorporation or organization (as
applicable), by-laws or operating agreement (as applicable), or any undertaking
to which it is a party or by which it is bound.
2.2          The Amendment is the valid and binding obligation of each Loan
Party, enforceable against such Borrower in accordance with its terms.
2.3          After giving effect to the amendments and waivers herein contained,
the representations and warranties contained in the Credit Agreement and the
other Loan Documents are true on and as of the date hereof with the same force
and effect as if made on and as of the date hereof and no Default has occurred
and is continuing.
ARTICLE III        CONDITIONS OF EFFECTIVENESS.  This Amendment shall be
effective as of the date hereof when each of the following is satisfied:
3.1          Each Loan Party and the Lender shall have executed this Amendment.
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3.2          Closing Certificates; Certified Certificate of Incorporation; Good
Standing Certificates.  The Lender shall have received (i) a certificate of
FAAC, dated the Third Amendment Effective Date and executed by its Secretary or
Assistant Secretary, which shall (A) certify the resolutions of its Board of
Directors, members or other body authorizing the execution, delivery and
performance of the Loan Documents to which it is a party, (B) identify by name
and title and bear the signatures of the officers of such Loan Party authorized
to sign the Loan Documents to which it is a party and, in the case of the
Borrower, its Financial Officers, and (C) contain appropriate attachments,
including the charter, articles or certificate of organization or incorporation
of each Loan Party certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a true and correct copy of its bylaws or
operating, management or partnership agreement, or other organizational or
governing documents (or a certification that such attachments have not changed
since March 11, 2016), and (ii) a good standing certificate for FAAC from its
jurisdiction of organization (or a certification that FAAC has been in good
standing since March 11, 2016).
3.3          Fees.  The Lender shall have received all fees required to be paid,
and all expenses required to be reimbursed for which invoices have been
presented (including the reasonable fees and expenses of legal counsel), on or
before the Third Amendment Effective Date.  All such amounts will be paid with
proceeds of Loans made on the Third Amendment Effective Date and will be
reflected in the funding instructions given by the Borrower to the Lender on or
before the Third Amendment Effective Date.
3.4          Lien Searches.  The Lender shall have received the results of a
recent lien search in the jurisdiction of organization of each Loan Party and
each jurisdiction where assets of the Loan Parties are located, and such search
shall reveal no Liens on any of the assets of the Loan Parties except for liens
permitted by Section 6.02 of the Credit Agreement or discharged on or prior to
the Third Amendment Effective Date pursuant to a pay-off letter or other
documentation satisfactory to the Lender.
3.5          Insurance.  The Lender shall have received evidence of insurance
coverage in form, scope, and substance reasonably satisfactory to the Lender and
otherwise in compliance with the terms of Section 5.10 of the Credit Agreement
and the Collateral Documents.
3.6          Legal Due Diligence. The Lender and its counsel shall have
completed all legal due diligence, the results of which shall be satisfactory to
Lender in its sole discretion.
3.7          Other Documents.  The Lender shall have received such other
documents as the Lender or its counsel may have reasonably requested.
ARTICLE IV        MISCELLANEOUS.
4.1          References in the Loan Documents to the Credit Agreement shall be
deemed to be references to the Credit Agreement as amended hereby and as further
amended from time to time.  This Amendment is a Loan Document.  Terms used but
not defined herein shall have the respective meanings ascribed thereto in the
Credit Agreement.  Without limiting the foregoing, each of the Loan Parties
acknowledges and agrees that all references to Secured Obligations in any of the
Collateral Documents shall be deemed references to Secured Obligations as such
term is amended hereby and as further amended or modified from time to time in
accordance with the Loan Documents.
4.2          Except as expressly amended hereby, each Loan Party agrees that the
Loan Documents are ratified and confirmed and shall remain in full force and
effect and that it has no set off, counterclaim, defense or other claim or
dispute with respect to any of the foregoing.
4.3          This Amendment may be signed upon any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument and signatures sent by facsimile or other electronic imaging shall be
enforceable as originals.
[Remainder of Page Intentionally Left Blank – Signature Page Follows]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and
delivered as of the day and year first above written.
AROTECH CORPORATION
 
By:   /s/ Thomas J. Paup
 
Name:   Thomas J. Paup
 
Title:     Sr VP Finance & CFO
 
FAAC INCORPORATED
 
By:   /s/ Thomas J. Paup
 
Name:   Thomas J. Paup
 
Title:     Treasurer
 
ELECTRIC FUEL BATTERY CORP.
 
By:   /s/ Thomas J. Paup
 
Name:   Thomas J. Paup
 
Title:    Treasurer
 
UEC ELECTRONICS, LLC
 
By:   /s/ Thomas J. Paup
 
Name:   Thomas J. Paup
 
Title:     Treasurer
 
JPMORGAN CHASE BANK, N.A.
 
By:   /s/ Michelle L. Montague
 
Name:   Michelle L. Montague
 
Title:     Vice President
 

 
Signature Page to Third Amendment to Credit Agreement

 
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