Waiver, Consent, and Fourth Amendment to Loan and Security Agreement among Del Global Technologies Corp. and General Electric Capital Corporation

 EXHIBIT 10.30 WAIVER, CONSENT AND FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT This Waiver, Consent and Fourth Amendment to the Loan and Security Agreement dated as of June 10, 2002 (this "AMENDMENT") is entered into as of the 12th day of March, 2004, by and among DEL GLOBAL TECHNOLOGIES CORP., a New York corporation ("DEL GLOBAL"), BERTAN HIGH VOLTAGE CORP., a Delaware corporation ("BERTAN"), RFI CORPORATION, a Delaware corporation ("RFI"), and DEL MEDICAL IMAGING CORP., a Delaware corporation ("DEL MEDICAL") (each a "BORROWER" and collectively, the "Borrowers) and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as successor by assignment to Transamerica Business Corporation ("LENDER"). BACKGROUND The Borrowers and the Lender are parties to a Loan and Security Agreement dated as of June 10, 2002 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") pursuant to which the Lender provides the Borrowers with certain financial accommodations. The Borrowers have requested that the Lender (a) waive certain Events of Default that have occurred and are continuing under the Loan Agreement, (b) consent to the incurrence of subordinated Indebtedness and the grant of a Lien in the Borrowers' assets in connection therewith and (c) amend the Loan Agreement and the Lender is willing to do so on the terms and conditions hereafter set forth. NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or hereafter made to or for the account of the Borrowers by the Lender, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. DEFINITIONS. All capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan Agreement. 2. AMENDMENT TO LOAN AGREEMENT. Subject to satisfaction of the conditions precedent set forth in Section 5 below, the Loan Agreement is hereby amended as follows: (i) Section 1.1 of the Loan Agreement is amended as follows: (a) The following defined terms are amended in their entirety to provide as follows: "BASE RATE" means the latest rate for 30-day dealer placed commercial paper (which for the purposes hereof shall mean high grade unsecured notes sold through dealers by major corporations  in multiples of $1,000), which normally is published in the "Money Rates" section of The Wall Street Journal (or if such rate ceases to be so published, as quoted from such other generally available and recognizable source as the Lender may select). The Base Rate shall be determined on the last Business Day of each calendar month for calculation of interest for the following month. "EXPIRATION DATE" means the earlier of (i) December 31, 2004 and (ii) the date of termination of the Lender's obligations to make Loans or to use its best efforts to cause Letters of Credit to be issued pursuant to the terms hereof. "FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of the following for the Borrowers and their Subsidiaries on a consolidated basis determined in accordance with GAAP: (a) EBITDA for such period less Capital Expenditures for such period which are not financed through the incurrence of any Indebtedness (excluding the Loans) to (b) the sum of (i) Interest Expense paid or accrued in respect of any Indebtedness during such period, plus (ii) regularly scheduled payments of principal paid or that were required to be paid on Funded Debt (excluding the Loans) during such period plus (iii) dividends or other distributions paid to stockholders during such period except for the dividends or other distributions paid to the minority stockholders of Villa Sistemi. (b) The following defined terms are inserted in their appropriate alphabetical order: "EBITDA" means, for any period, the Net Income (Loss) of the Borrowers and their Subsidiaries on a consolidated basis for such period, plus Interest Expense, income tax expense, amortization expense, depreciation expense and extraordinary losses and minus extraordinary gains, in each case, of the Borrowers and their Subsidiaries on a consolidated basis for such period determined in accordance with GAAP to the extent included in the determination of such Net Income (Loss). The fees payable by Borrowers in connection with the Fourth Amendment shall be excluded in calculating EBITDA. "FOURTH AMENDMENT" means the Waiver, Consent and Fourth Amendment to Loan and Security Agreement dated as of March __, 2004 by and among the Lender and the Borrowers. "FOURTH AMENDMENT EFFECTIVE DATE" means the date on which all of the conditions precedent set forth in the Fourth Amendment shall have been satisfied. "FUNDED DEBT" means, for any Person, all of such Person's Indebtedness which by the terms of the agreement governing or instrument evidencing such Indebtedness matures more than one year from, or is directly or indirectly renewable or extendible at the option of such Person under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year from, the date of creation 2  thereof, including current maturities of long-term debt, revolving credit, and short-term debt extendible beyond one year at the option of such Person. "NET INCOME (LOSS)" means with respect to any Person and for any period, the aggregate net income (or loss) after taxes of such Person for such period, determined in accordance with GAAP. "NET WORTH" means with respect to any Person and for any period, the net worth of such Person for such period, determined in accordance with GAAP. "PERFORMANCE FEE" shall mean $500,000. "PERFORMANCE FEE PAYMENT DATE" shall mean the earliest to occur of (i) the Expiration Date and/or (ii) the date of indefeasible payment or repayment in full of all outstanding Loans and all outstanding Obligations (whether such final payment or prepayment is made pursuant to Section 2.4 or any other provision of this Agreement) and/or termination of this Agreement. (c) The following defined terms are deleted: "ADJUSTED EARNINGS" "ADJUSTED U.S. EARNINGS" "AVERAGE EXCESS AVAILABILITY" "PRICING INCREMENT" "TANGIBLE NET WORTH" (ii) The following subsection is added after the end of Section 2.2(e): "(f) Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, following the Fourth Amendment Effective Date, the Borrowers may not request any LIBOR Rate Advances, convert any Base Rate Advance into a LIBOR Rate Advance or maintain any Borrowing as a LIBOR Rate Advance at the end of the Interest period for such Borrowing." (iii) Section 4.1 is amended in its entirety to provide as follows: "SECTION 4.1. INTEREST. Commencing on March 1, 2004, the Borrowers shall pay to the Lender interest on the Advances, payable monthly in arrears of the first Business Day of each month and on the Expiration Date, at a floating rate equal to the Base Rate plus three and one-half percent (3.50%) per annum." (iv) Section 4.6 is amended in its entirety to provide as follows: 3  "SECTION 4.6. PERFORMANCE FEE. On the Fourth Amendment Effective Date, Lender shall have earned the Performance Fee. The Borrowers shall pay the Lender the Performance Fee on the Performance Fee Payment Date. Notwithstanding anything to the contrary in this Agreement, the terms of this Section 4.6, if not fully complied with and indefeasibly paid in full by the Borrowers, shall survive in full the termination of this Agreement, any public offering of securities of any Borrower, the Expiration Date, an Event of Default and/or payment or prepayment in full of any Loan and/or the Obligations." (v) The following subsection is added after the end of Section 7.1(v): "(w) DOD SETTLEMENT. No later than September 30, 2004, the Lender shall have received evidence that the United States Government and RFI have entered into a written settlement agreement with respect to the investigation conducted by the Department of Justice of the United States (the "DOJ") into the business relationship between the Department of Defense of the United States of America ("DOD") and RFI on terms and conditions satisfactory to the Lender including, without limitation, (i) an agreement by the DOJ to end its investigation of RFI with respect to RFI's business relationship with the DOD and to release any claims with respect thereto and (ii) the payment by RFI to the United States Government of an amount not to exceed $5,000,000. (vi) The following subsection is added after the end of Section 7.2(w): "(x) EXCESS AVAILABILITY. At all times, after giving effect to all Revolving Credit Loans and all Letters of Credit issued at such time, the Excess Availability shall not be less than $500,000." (vii) Section 8.1 is amended in its entirety to provide as follows: "SECTION 8.1. Intentionally Omitted." (viii) Section 8.2 is amended in its entirety to provide as follows: "SECTION 8.2. Intentionally Omitted." (ix) Section 8.3 is amended in its entirety to provide as follows: "SECTION 8.3. Intentionally Omitted." (x) Section 8.4 is amended in its entirety to provide as follows: "SECTION 8.4. FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio for any period set forth below shall not be less than the ratio set forth below opposite such period: 4  Minimum Fixed Period Charge Coverage Ratio ------ --------------------- February 1, 2004 through April 30, 2004 2.00:1.00 February 1, 2004 through July 31, 2004 2.00:1.00 February 1, 2004 through October 31, 2004 1.50:1.00 (xi) Section 8.5 is amended in its entirety to provide as follows: "SECTION 8.5. NET WORTH. The Net Worth of Borrowers and their Subsidiaries as of the last day of each fiscal month commencing with the fiscal month ending March 31, 2004 shall not be less than $9,500,000." (xii) The addresses for notice to the Lender in Section 11.1 are amended in their entirety to provide as follows: General Electric Capital Corporation 201 Merritt 7 Norwalk, Connecticut 06856 Attention: Account Manager - Del Global Technologies Corp. Telecopier No.: 203 ###-###-#### Telephone No.: 203 ###-###-#### 3. CONSENT. Subject to the satisfaction of the conditions precedent set forth in Section 5 below, the Lender agrees that the Borrowers may obtain financing in an amount not to exceed $5,000,000 (the "SUBORDINATED DEBT") from a financial institution (the "SUBORDINATED LENDER") so long as (a) the proceeds of such financing shall be used solely to pay all amounts owing by RFI to the United States Government under the settlement agreement between RFI and the United States Government, (b) the agreements evidencing such Indebtedness shall be in a form and substance satisfactory to Lender and (c) such Indebtedness shall be subordinated in the right of payment and claims, to the rights and claims of Lender in respect of the Obligations on terms and conditions satisfactory to the Lender, pursuant to a subordination agreement, satisfactory in form and substance to Lender. The Borrowers may grant the Subordinated Lender a Lien in their assets to secure the Subordinated Debt so long as the Subordinated Lender agrees to subordinate its Lien in the Borrowers' assets to the Lender's Lien in the Borrowers' assets and agrees that it shall exercise no rights or remedies with respect thereto pursuant to an agreement having terms and conditions satisfactory to the Lender. 4. WAIVER. Subject to the satisfaction of the conditions precedent set forth in Section 5 below, the Lender hereby waives the Events of Default arising solely out of the failure by the Borrowers to maintain (a) Adjusted Earnings of not less than $4,500,000 for the fiscal period commencing February 2, 2003 and ending January 31, 2004 as required by Section 8.1 of the Loan Agreement, (b) Adjusted U.S. Earnings of not less than $2,775,000 for the fiscal period commencing February 2, 2003 and ending January 31, 2004 as required by Section 8.2 of the Loan Agreement, (c) a Senior Debt Ratio of not greater than 5  1.50 to 1.00 as of the last day of the fiscal quarter ending January 31, 2004 as required by Section 8.3 of the Loan Agreement and (d) a Fixed Charge Coverage Ratio of not less than 2.00 to 1.00 for the fiscal period commencing February 2, 2003 and ending January 31, 2004 as required by Section 8.4 of the Loan Agreement. 5. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective upon satisfaction or waiver in writing by the Lender of each of the following conditions precedent, each in form and substance satisfactory to the Lender: (a) the Lender's receipt of this Amendment duly executed by the Borrowers and (b) the Lender's receipt of a non-refundable fee in the amount of $100,000 and all reasonable attorney's fees incurred in connection with this Amendment, each of which shall be charged to the Borrowers' loan account as a Loan on the date of this Amendment. 6. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby represent and warrant as follows: (a) This Amendment and the Loan Agreement, as amended hereby, constitute legal, valid and binding obligations of the Borrowers and are enforceable against the Borrowers in accordance with their respective terms. (b) Upon the effectiveness of this Amendment, the Borrowers hereby reaffirm all covenants, representations and warranties made in the Loan Agreement to the extent the same are not amended hereby and agree that all such covenants, representations and warranties shall be deemed to have been remade as of the effective date of this Amendment. (c) No Event of Default or Default has occurred and is continuing or would exist after giving effect to this Amendment. (d) As of the date hereof, the Borrowers have no defense, counterclaim or offset with respect to the Loan Agreement. 7. EFFECT ON THE LOAN AGREEMENT. (a) Upon the effectiveness of Section 2 hereof, each reference in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like import and each reference in the other Loan Documents to the Loan Agreement shall mean and be a reference to the Loan Agreement as amended hereby. (b) Except as specifically amended or waived herein, the Loan Agreement, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed by each of the parties hereto. (c) Except as specifically provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Lender, nor constitute a waiver of any 6  provision of the Loan Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith. 8. GOVERNING LAW. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the internal laws (as opposed to the conflicts of law provisions) of the State of Illinois. 9. HEADINGS. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 10. COUNTERPARTS; FACSIMILE. This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto. [Signature Page to Follow] 7  IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first written above. DEL GLOBAL TECHNOLOGIES CORP. By: /s/ Thomas Gilboy ----------------------------- Name: Thomas Gilboy Title: Chief Financial Officer BERTAN HIGH VOLTAGE CORP. By: /s/ Thomas Gilboy ----------------------------- Name: Thomas Gilboy Title: Chief Financial Officer RFI CORPORATION By: /s/ Thomas Gilboy ----------------------------- Title: Chief Financial Officer DEL MEDICAL IMAGING CORP. By: /s/ Thomas Gilboy ----------------------------- Title: Chief Financial Officer GENERAL ELECTRIC CAPITAL CORPORATION By:/s/ Jeffrey Zinn --------------------------------- Name: Jeffrey Zinn Title: Duly Authorized Signatory