Document:

ex10_1.htm

Exhibit 10.1

AMENDMENT TO CREDIT AGREEMENT

This Amendment to Credit Agreement (this "Amendment") is dated as of the 30th day of May, 2012 and is by and between Orbit International Corp., Behlman Electronics, Inc., Tulip Development Laboratory, Inc. and Integrated Consulting Services, Inc. d/b/a Integrated Combat Systems (each a "Borrower" and collectively, the "Borrowers"), and Capital One, National Association ("Bank") (this "Amendment").

WHEREAS, on March 10, 2010 the Bank made available to the Borrowers a line of credit in the amount of $3,000,000.00 and a term loan in the amount of $4,654,761.84 pursuant to a Credit Agreement dated as of March 10, 2010 between the Borrowers and the Bank (as amended from time to time, the "Credit Agreement") and evidenced by, respectively, a Line of Credit Note dated March 10, 2010 from the Borrowers to the Bank (as amended from time to time, the "Line of Credit Note") and the Term Loan Note dated March 10, 2010 from the Borrowers to the Bank (as amended from time to time, the "Term Loan Note") and secured by a Security Agreement dated March 10, 2010 from the Borrowers to the Bank (the "Security Agreement") (the Credit Agreement, the Line of Credit Note, the Term Loan Note, the Security Agreement, and all other documents executed and delivered in connection therewith, collectively, the "Financing Documents");

WHEREAS, the Borrowers have requested that the Bank modify certain covenants set forth in the Credit Agreement and waive compliance with certain covenants set forth in the Credit Agreement to which the Bank has agreed provided the Borrowers enter into this Amendment;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Borrowers and the Bank hereby agree as follows:

1.             Capitalized terms not defined herein shall have the meaning set forth in the Credit Agreement.

2.             The definitions of "Applicable Margin" and “Line of Credit Maturity Date” set forth in Section 1.01 of the Credit Agreement are hereby amended to read in their entirety as follows:

"Applicable Margin" means (i) with respect to Line of Credit Loans which are LIBOR Loans, two percent (2.00%) and with respect to Line of Credit Loans which are Prime Rate Loans, zero percent (0%), and (ii) with respect to the Term Loan which is a LIBOR Loan, three percent (3.00%) and with respect to the Term Loan which is a Prime Rate Loan, zero percent (0%).

 

“Line of Credit Maturity Date” means June 1, 2013.

  

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3.             Section 2.01(b) of the Credit Agreement is hereby amended to read in its entirety as follows:

(b)           Each Line of Credit Loan shall be a LIBOR Loan or a Prime Rate Loan as a Borrower may request subject to and in accordance with the terms and conditions hereof. Subject to the other provisions of this Agreement, Line of Credit Loans of more than one Type may be outstanding at the same time.  Each such request shall be submitted to Bank on the Bank’s standard form, a copy of which is attached hereto as Exhibit C.  Notwithstanding anything to the contrary contained herein, not more than four (4) LIBOR Loans shall be outstanding at any time under the Line of Credit Commitment.

4.             Section 2.07 of the Credit Agreement is hereby amended and restated in ite entirety as follows:

Section 2.07. Interest Periods. In the case of each LIBOR Loan, the Borrowers shall select an Interest Period in accordance with the definition of Interest Period in “Definitions”, subject to the following limitations (1) no Interest Period shall have a duration of less than one (1) month, and (2) no Interest Period of particular duration with respect to a LIBOR Loan may be selected by the Borrowers if Bank determines, in its sole discretion, that a LIBOR Loan with such maturities are not generally available.

 

5.             The last sentence of Section 5.07 of the Credit Agreement is hereby amended to read in its entirety as follows:

In addition, the Bank shall have the right to obtain a field examination of the Borrowers’ Accounts and inventory, at Borrowers’ expense, by the Bank’s field examiner or an outside firm engaged by the Bank, in either case at Borrowers’ expense, at any time provided that so long as no Event of Default has occurred and is continuing, such field examination shall not be required more than once in any twelve (12) month period.  Currently, the cost of a field examination is $950.00 per day per examiner plus expenses.

 

6.             Section 5.10(4) of the Credit Agreement is hereby amended to read in its entirety as follows:

(4)           Borrowing Base Certificate. (a) Within fifteen (15) days of the end of each month, a Borrowing Base Certificate with an accounts receivable aging schedule (including the scheduling of all respective due dates and cancel dates and setting forth those due more than 30 days, 60 days, 90 days, 120 days and over 121 days), and (b) within fifteen (15) days of the end of each quarter, (i) a quarterly summary report of inventory broken down by raw material, finished goods and work-in-process which quarterly summary report shall be as of the date of the end of the most recent fiscal quarter, and (b) a schedule of all backlog work in process and completed contracts in the form attached hereto as Exhibit I in substance reasonably satisfactory to the Bank.

 

7.             Section 5.12 of the Credit Agreement is hereby deleted in its entirety.

 

8.             Section 6.11 of the Credit Agreement is amended to add the following:

(provided the repurchase of stock shall be permitted only if such repurchase will not cause a violation of any financial covenants set forth in Article VII herein)

9.             Section 7.04 of the Credit Agreement is hereby deleted in its entirety.

10.           Exhibit H of the Credit Agreement is hereby amended and restated in its entirety as follows:

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11.           The following Exhibit I is hereby added to the Credit Agreement:

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12.           The Bank hereby agrees to release the Cash Deposit previously pledged to the Bank.

13.           The Blocked Account Agreement dated as of April 20, 2011 between Tulip Development Laboratory, Inc. and the Bank, the Blocked Account Agreement dated as of April 20, 2011 between Orbit International Corp. and the Bank, the Blocked Account Agreement dated as of April 19, 2011 between Integrated Consulting Services, Inc. d/b/a Integrated Combat Systems and the Bank, and the Pledge Agreement dated as of October 17, 2011 between the Borrowers and the Bank are each hereby terminated.

14.           The obligation of the Bank to enter into this Amendment is subject to the following:

(a)           Receipt by the Bank of a fully executed counterpart of this Amendment from the Borrowers;

(b)           The Borrowers shall pay to the Bank all of its out-of-pocket fees and disbursements incurred by the Bank in connection with this Amendment, including legal fees incurred by the Bank in the preparation, consummation, administration and enforcement of this Amendment.

15.           The Borrowers ratify and reaffirm the Financing Documents and the Financing Documents, as hereby amended, shall remain in full force and effect.

16.           The Borrowers represent and warrant that (a) the representations and warranties contained in the Credit Agreement are true and correct in all material respects as of the date of this Amendment, (b) no condition, at, or event which could constitute an event of default under the Credit Agreement, the Notes or any other Financing Documents exists, and (c) no condition, event, act or omission has occurred, which, with the giving of notice or passage of time, would constitute an event of default under the Credit Agreement, the Notes or any other Financing Document.

17.           The Borrowers acknowledge that as of the date of this Amendment they have no offsets or defenses with respect to all amounts owed by it to the Bank arising under or related to the Financing Documents on or prior to the date of this Amendment.  The Borrowers fully, finally and forever release and discharge the Bank and its successors, assigns, directors, officers, employees, agents and representatives from any and all claims, causes of action, debts and liabilities, of whatever kind or nature, in law or in equity, whether now known or unknown to them, which they may have and which may have arisen in connection with the Financing Documents or the actions or omissions of the Bank related to the Financing Documents on or prior to the date hereof.  The Borrowers acknowledge and agree that this Amendment is limited to the terms outlined above and shall not be construed as an agreement to change any other terms or provisions of the Financing Documents.  This Amendment shall not establish a course of dealing or be construed as evidence of any willingness on the Bank’s part to grant other or future agreements, should any be requested.

 

18.           This Amendment is a modification only and not a novation.  Except for the above-quoted modifications, the Financing Documents, any loan agreements, credit agreements, reimbursement agreements, security agreements, mortgages, deeds of trust, pledge agreements, assignments, guaranties, instruments or documents executed in connection with the Financing Documents, and all the terms and conditions thereof, shall be and remain in full force and effect with the changes herein deemed to be incorporated therein.  This Amendment is to be considered attached to the Financing Documents and made a part thereof.  This Amendment shall not release or affect the liability of any guarantor of the Notes or credit facility executed in reference to the Financing Documents, if any, or release any owner of collateral granted as security for the Financing Documents.  The validity, priority and enforceability of the Financing Documents shall not be impaired hereby.  To the extent that any provision of this Amendment conflicts with any term or condition set forth in the Financing Documents, or any document executed in conjunction therewith, the provisions of this Amendment shall supersede and control.  The Bank expressly reserves all rights against all parties to the Financing Documents.

19.           This Amendment shall be governed and construed in accordance with the laws of the State of New York

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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed as of the day and year first above written.

 

	 	
BORROWERS:

	 	 
	 	
ORBIT INTERNATIONAL CORP.

	 	  
	 	
By: /s/ David Goldman

	 	
Name: David Goldman

	 	
Title:   Chief Financial Officer

	 	  
	 	
BEHLMAN ELECTRONICS, INC.

	 	  
	 	
By: /s/ David Goldman

	 	
Name: David Goldman

	 	
Title:   Chief Financial Officer

	 	  
	 	
TULIP DEVELOPMENT LABORATORY, INC.

	 	  
	 	
By: /s/ David Goldman

	 	
Name: David Goldman

	 	
Title:   Chief Financial Officer

	 	  
	 	
INTEGRATED CONSULTING SERVICES, INC.

	 	  
	 	
By: /s/ David Goldman

	 	
Name: David Goldman

	 	
Title:   Chief Financial Officer

	 	  
	 	
BANK:

	 	  
	 	
CAPITAL ONE,

	 	
NATIONAL ASSOCIATION

	 	  
	 	
By: /s/ Dawn Juliano

	 	
Name: Dawn Juliano

	 	
Title: Vice President

 

6EXHIBIT 10.4

 

GOLD PARTY PAYDAY, INC.

 

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (the "Agreement"),
is made and entered into as of the 30th day of May 2012, by and between Gold Party Payday, Inc., a Delaware corporation (the "Company"),
with a principal office at 3189 Pepperhill Road, Lexington, Kentucky 40502, and Glenn Hoskins P.S.C., with an office at 1077 Eastland
Drive, Lexington, Kentucky 40505 (the "Escrow Agent").

 

WHEREAS, the Company is raising capital
through the sale of up 666,667 shares of Common Stock at a price of $0.12 per share (the "Shares"), on a self-underwritten
basis, 333,334 shares minimum and 666,667 shares maximum (the "Offering"), all as described in the Subscription Agreement;

 

WHEREAS, the Company is authorized
and desires to commence the Offering promptly;

 

WHEREAS, the Company wishes by this
Agreement to provide for the periodic receipt, deposit, safekeeping and disbursement of payments and subscription documents submitted
by persons subscribing to the Shares pursuant to the Offering; and

 

WHEREAS, the Escrow Agent has agreed
to act as such for the Company for the Offering subject to the terms and conditions of this Agreement.

 

WITNESSETH:

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Escrow Agent do hereby covenant
and agree as follows:

 

1.          Appointment
of Escrow Agent. The Company does hereby appoint the Escrow Agent as escrow agent for the Offering to perform the functions
and provide the services hereinafter provided, and the Escrow Agent does hereby accept the appointment as Escrow Agent upon the
terms and conditions set forth in this Agreement.

 

2.          Receipt
and Deposit of Funds. Persons wishing to subscribe for Shares in the Offering are required to execute a Subscription Agreement.
Prospective investors must pay cash for their subscription. The prospective investor must forward the Subscription Agreement and
their subscription cash payment to the Escrow Agent. Funds received by the Escrow Agent pursuant to the Offering shall be held
in escrow and deposited promptly and the Subscription Agreement shall be held for the benefit of the Company pending disbursement
in accordance with the terms and conditions hereof. Checks and money orders should be made payable to "Glenn Hoskins P.S.C.
Escrow Account.” Recognizing that in some cases checks and money orders may be made payable to the Company, the Company does
hereby appoint the Escrow Agent as its lawful attorney-in-fact for the purposes of endorsing said checks and money orders, which
promptly upon receipt shall be deposited in a non-interest bearing escrow account for the benefit of the Company pending disbursement
and release of the funds in accordance with the terms and conditions of this Agreement. The Escrow Agent shall be charged with
the responsibility to exercise reasonable care and due diligence in the deposit of funds received by it pursuant to the Offering.

 

    	 

    	 

    

 

3.          Records
to Be Kept by the Escrow Agent. The Escrow Agent shall maintain records of the name, address and subscription payments for
each subscription it receives under the Offering. Subscription Agreements forwarded to the Escrow Agent shall be directed to Glenn
Hoskins P.S.C. at the above address for the Escrow Agent, or to such other person as the Escrow Agent shall designate in writing.
Upon request, the Escrow Agent shall forward to the Company a summary of subscriptions received to date.

 

4.          Funds
and Documents to Be Returned If Conditions Not Met. Subject to the other provisions of this Agreement, the Escrow Agent shall
return subscription payments, plus the Subscription Agreement to any subscriber from whom (a) the Company has not accepted the
Subscription Agreement, (b) has submitted a Subscription Agreement after the termination of the Offering, which will be 180 days
after the offering, unless extended by the Company for an additional 90 days, or (c) in the event that 333,334 shares are not sold
within the 180 days, or within the additional 90 days if extended (the “Offering Period”). If at least 333,334 shares
are sold within 180 days, or within the additional 90 days, if extended, all money received by us will be retained by us and there
will be no refund. There are no minimum purchase requirements for each individual investor. The foregoing notwithstanding, the
Escrow Agent shall not be obligated, in any manner, to return any subscription payments which have been disbursed by it in accordance
with Section 5 hereof. If the Escrow Agent is required to return documents and the subscription payments pursuant to this paragraph,
it shall do so the next business day after termination of the Offering Period, including any extension thereof.

 

5.          Funds
May Be Paid to Company Once Subscription Conditions Are Met. Upon receipt by the Escrow Agent of: (a) Executed acceptances
by the Company of Subscription Agreements and (b) upon certification by securities counsel for the Company that the terms of the
Offering have been met, and that the Company's transfer agent and registrar has been authorized and notified to duly issue certificates
evidencing ownership of the shares of the Company's common stock to each investor whose Subscription Agreement has been accepted,
then the Escrow Agent shall disburse the funds held by it in escrow to the Company. Funds will be held in escrow until the Company
sells at least 333,334 shares of common stock. Once the Company sells at least 333,334 shares of common stock, the Escrow Agent
will release the funds from escrow to the Company. If the Company does not accept the subscription of a subscriber, as evidenced
by written notice to the Escrow Agent, then the Escrow Agent shall return the Subscription Agreement, all related documents and
subscription payments without interest to the Subscriber.

 

6.          Compensation
for Escrow Agent's Services. It is understood and agreed between the parties to this Agreement that the compensation to be
paid to the Escrow Agent hereunder is intended primarily to compensate the Escrow Agent for the record-keeping and processing associated
with the performance of its obligations hereunder. The compensation to be paid to the Escrow Agent for its services rendered in
connection with this Agreement shall be at its usual and customary rates and it shall be reimbursed any and all out-of-pocket costs
and expenses it incurs in performing its duties herein.

 

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7.          Escrow
Agent's Duties Limited. The sole responsibility of the Escrow Agent shall be to receive, hold and release the aforesaid Subscription
Agreements, documents and funds in accordance with the provisions hereof. In disbursing funds, the Escrow Agent may rely solely
upon documents and events specified in this Agreement. The Escrow Agent shall have no duties and obligations, except such as are
specifically stated herein, and the Company confirms that the Escrow Agent’s status as a law firm does not create any duties
beyond those set forth in this Agreement. The Escrow Agent has rendered and will continue to render certain legal advice to the
Company, but which is unrelated to the Offering.

 

8.          Escrow
Agent's Liability Limited. The Escrow Agent shall not be liable for any error of judgment or act done or committed by it in
good faith in connection with its duties as escrow agent.

 

9.          Reliance
by Escrow Agent On Documents Presented. The Escrow Agent hereby is authorized to act upon the assumption that all agreements
or documents delivered to it by the Company and the subscribers to this Offering are genuine and have been duly signed by the proper
party or parties. The Escrow Agent shall not be bound by any modification of this Agreement unless the same shall be in writing
and be signed by the parties hereto.

 

10.         Escrow
Agent's Duties In the Event of Adverse Claims. In the event of disagreement between subscribers and the Company, or upon the
presentation of an adverse claim or demand on the escrowed funds, the Escrow Agent may, at its option, refuse to perform its duties
as Escrow Agent until such time as the disagreement or adverse claim or demand has been fully resolved, judicially or otherwise,
and in this regard Escrow Agent shall not be liable for failure to perform its duties during this time.

 

11.         Escrow
Agent Held Harmless. It is expressly understood and agreed by the parties to this Agreement, and their respective successors
and assigns, that the Escrow Agent shall be free and harmless from any and all claims, disputes or defenses which may arise between
the Company or its legal successors and assigns, and the subscribers or any other person which may for any reason have a claim
against the funds escrowed hereunder or against the Company. The Company hereby agrees to hold the Escrow Agent harmless from and
indemnify it for any liability or expense that may be incurred by the Escrow Agent by virtue of any claim, dispute or defense.
If any such claim is asserted, the Escrow Agent may engage counsel of its choice and shall be entitled to reimbursement of reasonable
legal fees and expenses to defend it against such claim and, in the event any such claimant is successful in establishing such
a claim, the Company will hold the Escrow Agent harmless and make all payments required to be made pursuant to any final order
or judgment that may be entered against the Escrow Agent by a court of competent jurisdiction.

 

12.         Termination.
This Agreement may be terminated at any time by the written agreement of all parties.

 

13.         Notices.
Until further notice, all communications and notices given with respect to this Agreement shall be made to the addresses first
written above.

 

14.         Headings.
All headings contained in this Agreement are for convenience and reference only, and shall not constitute a part of this Agreement.

 

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15.         Entire
Agreement. This Agreement is the entire agreement and understanding between the Company and the Escrow Agent, and there are
no representations, warranties, promises, inducements, covenants or conditions made by any of the parties except as expressly contained
herein.

 

16.         Binding
Effect. This Agreement shall inure to the benefit, and be binding upon, the representatives, successors and assigns of each
party.

 

17.         Governing
Law. This Agreement shall be governed by and interpreted in conformity with, the laws of the Commonwealth of Kentucky without
regard to its provisions governing the choice of laws.

 

18.         Authority.
Both signatories to this Agreement warrant and represent that he or she has the appropriate authority to execute this Agreement
and bind the entity for whom he or she is signing the Agreement.

 

IN WITNESS WHEREOF, the parties have
hereunto affixed the following signatures as of the day and year first above written.

 

	 	GOLD PARTY PAYDAY, INC.
	 	 	 
	 	By:	/s/ Tatum L. Morita
	 	 	Tatum L. Morita
	 	 	President, Chief Executive Officer and
	 	 	Chief Financial Officer
	 	 	 
	 	GLENN HOSKINS P.S.C., as Escrow Agent
	 	 	 
	 	By:	/s/ Glenn Hoskins
	 	 	Glenn Hoskins, President

 

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