Exhibit 10.25
THIRD AMENDMENT
THIRD AMENDMENT, dated as of August 7, 2002 (this
"Amendment"), to the Credit Agreement, dated as of May 23, 2000 (as amended,
supplemented or otherwise modified, the "Credit Agreement"), among Acterna LLC
(f/k/a Dynatech LLC), a Delaware limited liability company (the "Primary
Borrower"), Acterna International GmbH, a German company, the banks and other
financial institutions from time to time parties thereto (collectively, the
"Lenders"), JPMorgan Chase Bank (as successor by merger to Xxxxxx Guaranty Trust
Company of New York), as agent for the German Term Loan Lenders named therein,
JPMorgan Chase Bank (as successor by merger to Xxxxxx Guaranty Trust Company of
New York), as administrative agent (in such capacity, the "Administrative
Agent") for the Lenders, Credit Suisse First Boston, as syndication agent for
the Lenders and JPMorgan Chase Bank (f/k/a The Chase Manhattan Bank) and Bankers
Trust Company, each in its capacity as co-documentation agents for the Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make, and have made, certain loans and other extensions of credit to
the Primary Borrower;
WHEREAS, the Primary Borrower has requested the Lenders to
agree to amend the Credit Agreement; and
WHEREAS, the Lenders have agreed to the requested amendments
but only on the terms and conditions contained in this Amendment;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Defined Terms. Terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
Section 2. Amendment to Subsection 1.1 (Definitions).
Subsection 1.1 of the Credit Agreement is hereby amended as follows:
(a) by deleting therefrom the definition of the following
defined terms in their respective entireties and substituting in lieu thereof
the following definitions:
"'Additional Indebtedness': Indebtedness of the Primary
Borrower (i) having terms and conditions not less favorable to
the Primary Borrower than those of the Convertible Notes or
(ii) issued pursuant to the CD&R Barbados Purchase Agreement,
as the same may be amended, supplemented or otherwise modified
from time to time in accordance with
subsection 14.12. Such Indebtedness may be secured and
guaranteed to the same extent as the Convertible Notes so long
as (a) such Indebtedness is held by one or more members of the
CD&R Group and (b) the holder or holders of such Indebtedness
be or become party to the Intercreditor Agreement as
contemplated by paragraph 18(d) of the Intercreditor
Agreement."
"'Applicable Margin": (a) with respect to Tranche B Loans,
4.25% (for Eurocurrency Loans), and 3.25% (for ABR Loans), (b)
with respect to the German Term Loan, 0.30% and (c) with
respect to Revolving Credit Loans, Swing Line Loans, Tranche A
Loans and Reimbursement Term Loans (if any), the rate per
annum set forth below under the relevant column heading below
opposite the Level then in effect:
===============================================================
Applicable Margin
---------------------------------------
Level Eurocurrency ABR Loans
Loans
---------------------------------------------------------------
Level I 2.75% 1.75%
Level II 3.00% 2.00%
Level III 3.25% 2.25%
Level IV 3.50% 2.50%
Level V 3.75% 2.75%
===============================================================
Notwithstanding the foregoing, (y) the "Applicable Margin"
from time to time in effect for Swing Line Loans shall be the
rate which would then be applicable to Revolving Credit Loans
which are ABR Loans and (z) for each day prior to the date
which is six months following the Closing Date, the Level in
effect shall be deemed to be Level V."; and
"'Credit Documents': this Agreement, the Notes, the German
L/C, the Applications, the Intercreditor Agreement, the
Airshow Sale Proceeds Cash Collateral Agreement and the
Security Documents."
(b) by adding the following new definitions in the appropriate
alphabetical order:
"'Airshow Sale Proceeds Cash Collateral Account': the "Cash
Collateral Account" as defined in the Airshow Sale Proceeds
Cash Collateral Agreement."
"'Airshow Sale Proceeds Cash Collateral Agreement: the Cash
Collateral Agreement, dated as of the Third Amendment
Effective Date, among the
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Primary Borrower, the Securities Intermediary named therein
and the Administrative Agent, as the same may be amended from
time to time in accordance with this Agreement."
"'Available Airshow Sale Proceeds: an amount equal to (a)
$24,000,000, less (b) the amount, if any, by which $10,000,000
exceeds the aggregate purchase price of Senior Subordinated
Notes purchased by CD&R Barbados and its Affiliates in
connection with the Senior Subordinated Notes Tender Offer
(based upon evidence of such aggregate purchase price
delivered, and reasonably acceptable, to the Administrative
Agent)."
"'CD&R Barbados': CD&R VI (Barbados), Ltd., a company
organized under the laws of Barbados and a wholly-owned
Subsidiary of the Investor."
"'CD&R Barbados Purchase Agreement': the Investment Agreement,
dated on or about the Third Amendment Effective Date, among
the Primary Borrower, the Guarantor and CD&R Barbados with
respect to the right of CD&R Barbados to purchase Additional
Indebtedness."
"'CD&R Barbados Senior Subordinated Notes Agreement': the
Agreement, dated on or about the Third Amendment Effective
Date, among CD&R Barbados and the Administrative Agent with
respect to Senior Subordinated Notes owned by CD&R Barbados."
"'Extraordinary Prepayment Date': the date on which the
aggregate principal amount of all optional or mandatory
prepayments of the Term Loans (other than pursuant to
paragraphs (i) and (j) of subsection 9.5) during the period
from and after the consummation of the Permitted Airshow Sale
to and including June 30, 2003, equals or exceeds
$100,000,000."
"'Permitted Airshow Sale': as defined in subsection 14.5(m)."
"[Text redacted.]: as defined in subsection 14.5(n).
"[Text redacted.]: as defined in subsection 14.5(n).
"'Senior Subordinated Notes Tender Offer: as defined in
subsection 14.12(a)."
"'Third Amendment Effective Date': the date on which the Third
Amendment to this Agreement becomes effective in accordance
with its terms."
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Section 3. Amendment to Section 9.5 (Mandatory Reduction of
Commitments and Prepayments). Section 9.5 is hereby amended as follows:
(a) by deleting the phrase "subsection 9.5(c), (d) or (e)"
where it appears in subsections 9.5(f) and 9.5(g) and inserting in lieu thereof
the phrase "subsection 9.5(c), (d), (e), (i), (j) or (k)"; and
(b) by inserting the following new subsections at the end
thereof:
"(i) Upon consummation of the Permitted Airshow Sale, the
Primary Borrower shall give notice thereof to the
Administrative Agent, and shall deliver 100% of the Net
Proceeds from such sale to the Administrative Agent. The
Administrative Agent shall (i) immediately deposit $24,000,000
of such Net Proceeds into the Airshow Sale Proceeds Cash
Collateral Account to be administered in accordance with the
terms of the Airshow Sale Proceeds Cash Collateral Agreement
and (ii) on the applicable Mandatory Prepayment Date, apply
the balance of such Net Proceeds to the prepayment of the
Loans and reduction of the Commitments in accordance with the
provisions of subsection 9.5(f).
(j) On the date that is 75 days after the Third Amendment
Effective Date (or such earlier date as the Primary Borrower
shall request in writing), the Primary Borrower shall give
notice to the Administrative Agent, and on the applicable
Mandatory Prepayment Date, the Administrative Agent shall
apply the funds on deposit in the Airshow Sale Proceeds Cash
Collateral Account to the prepayment of the Loans and
reduction of the Commitments in accordance with the provisions
of subsection 9.5(f) and the Airshow Sale Proceeds Cash
Collateral Agreement (it being understood and agreed that if
the Senior Subordinated Notes Tender Offer is consummated
prior to such date, the Available Airshow Sale Proceeds shall
be released to the Primary Borrower on such earlier date
pursuant to the terms of the Airshow Sale Proceeds Cash
Collateral Agreement).
(k) [Text redacted.]
Section 4. Amendment to Section 12.2 (Certificates; Other
Information). Section 12.2 of the Credit Agreement is hereby amended by deleting
the word "copies" the second time it occurs in Subsection 12.2(d) and inserting
in lieu thereof the word "notice".
Section 5. Amendment to Section 13.1 (Minimum Interest
Coverage Ratio). Section 13.1 of the Credit Agreement is hereby amended by
inserting the following proviso at the end of such Section:
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"provided, however, that at any time after the Extraordinary
Prepayment Date, the references to each of the fiscal quarters
ending June 30, 2003, September 30, 2003, December 31, 2003
and March 31, 2004 set forth above and the ratio set forth
opposite each such period shall be deemed to be deleted."
Section 6. Amendment to Section 13.2 (Maximum Leverage
Coverage Ratio). Section 13.2 of the Credit Agreement is hereby amended by
inserting the following proviso at the end of such Section:
"provided, however, that at any time after the Extraordinary
Prepayment Date, the references to each of the fiscal quarters
ending June 30, 2003, September 30, 2003, December 31, 2003
and March 31, 2004 set forth above and the ratio set forth
opposite each such period shall be deemed to be deleted."
Section 7. Amendment to Section 13.3 (Minimum EBITDA). Section
13.3 of the Credit Agreement is hereby amended by deleting such Section in its
entirety and inserting in lieu thereof the following new Section:
"Section 13.3 Minimum EBITDA. (a) So long as the Permitted
Airshow Sale has not been consummated, permit EBITDA for any
period of consecutive fiscal quarters of the Guarantor set
forth below to be less than the amount set forth opposite such
period:
Fiscal Periods EBITDA
-------------- ------
Two fiscal quarters ending 9/30/02 negative $10,000,000
Three fiscal quarters ending 12/31/02 $17,000,000
Four fiscal quarters ending 3/31/03 $40,000,000.
(b) At any time after the Permitted Airshow Sale has been
consummated and so long as the Extraordinary Prepayment Date
has not occurred, permit EBITDA for any period of consecutive
fiscal quarters of the Guarantor set forth below to be less
than the amount set forth opposite such period:
Fiscal Periods EBITDA
-------------- ------
Two fiscal quarters ending 9/30/02 negative $40,000,000
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Three fiscal quarters ending 12/31/02 negative $17,000,000
Four fiscal quarters ending 3/31/03 -- 0 --.
(c) At any time after the Permitted Airshow Sale has been
consummated and the Extraordinary Prepayment Date has
occurred, permit EBITDA for any period of consecutive fiscal
quarters of the Guarantor set forth below to be less than the
amount set forth opposite such period:
Fiscal Periods EBITDA
-------------- ------
Four fiscal quarters ending 6/30/03 $20,000,000
Four fiscal quarters ending 9/30/03 $30,000,000
Four fiscal quarters ending 12/31/03 $40,000,000
Four fiscal quarters ending 3/31/04 $50,000,000.
(d) [Text redacted.]
(e) [Text redacted.]
Section 8. Amendment to Section 14.1 (Indebtedness). Section
14.1 of the Credit Agreement and Section 14.1 of Exhibit K to the Credit
Agreement are each hereby amended by deleting the proviso in paragraph (e)
thereof in its entirety and inserting in lieu thereof the following new proviso:
"provided that the aggregate principal amount at any time
outstanding of Convertible Notes and Additional Indebtedness
shall not exceed the sum of (x) $125,000,000, plus (y) the
amount of Additional Indebtedness under the CD&R Barbados
Purchase Agreement, plus (z) the amount of any interest
accreted or paid in kind in respect of the Convertible Notes
and the Additional Indebtedness."
Section 9. [Text redacted.]
Section 10. Amendment to Section 14.5 (Limitation on Sale of
Assets). Section 14.5 of the Credit Agreement and Section 14.5 of Exhibit K to
the Credit Agreement are each hereby amended by (i) deleting the word "and"
following paragraph (k) thereof, and (ii) deleting the period at the end of
paragraph (l) thereof and inserting in lieu thereof a semicolon followed by the
following:
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"(m) the sale of the Capital Stock or substantially all the
assets of Airshow, Inc. (the "Permitted Airshow Sale"),
provided that (i) the Primary Borrower shall receive
approximately $152,000,000 in Net Proceeds from such sale,
(ii) an amount equal to 100% of the Net Proceeds of such sale
shall be delivered to the Administrative Agent for application
in accordance with subsection 9.5(i) and (j), (iii) no Default
or Event of Default shall have occurred and be continuing
before and after giving effect to the consummation of such
sale and (iv) the terms and conditions of such sale shall be
as set forth in the Stock Purchase Agreement, dated as of June
13, 2002, among the Guarantor, the Primary Borrower and
Rockwell Xxxxxxx Inc., and other terms and conditions of such
sale (including any amendment to such agreement) shall be
reasonably satisfactory to the Administrative Agent, its
counsel and other advisors; and
(n) [Text redacted.]
Section 11. Amendment to Subsection 14.6 (Restricted
Payments). Section 14.6 of the Credit Agreement and Section 14.6 of Exhibit K to
the Credit Agreement are each hereby amended as follows:
(a) by correcting the reference to clause "(iii)" in clause
(a) of Section 16 of the Second Amendment to the Credit Agreement to read clause
"(ii)"; and
(b) by inserting the phrase "or Additional Indebtedness" after
the phrase "Convertible Note Documents" (a) in clause (ii) of paragraph (c)
thereof and (b) in clause (ii) of paragraph (f) thereof.
Section 12. Amendment to Section 15.2 (Other Events of
Default). Section 15.2 of the Credit Agreement is hereby amended by inserting
the word "or" at the end of paragraph (j) thereof followed by the following new
paragraph:
"(k) (i) CD&R Barbados shall default in the observance or
performance of any agreement contained in the CD&R Barbados
Senior Subordinated Notes Agreement, (ii) the Primary Borrower
shall default in the observance or performance of any
agreement contained in the CD&R Barbados Purchase Agreement
that is adverse to the Lenders hereunder in any material
respect or (iii) any amendment, supplement, modification or
waiver of any of the terms of the CD&R Barbados Senior
Subordinated Notes Agreement which relates to any material
provision thereunder or otherwise adversely affects the
interests of the Lenders hereunder in any material respect
shall have occurred;"
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Section 13. Amendment to Section 14.12 (Optional Payments).
Section 14.12 of the Credit Agreement and Section 14.12 of Exhibit K to the
Credit Agreement are each hereby amended as follows:
(a) by inserting at the end of paragraph (a) thereof the
following (it being understood that the word "further" in the first phrase below
shall not be included in the amendment to Section 14.12 of Exhibit K):
"provided further, however, that the Primary Borrower shall be
permitted to make and consummate an offer (the "Senior
Subordinated Notes Tender Offer") to purchase a portion of the
Senior Subordinated Notes, provided that (i) the aggregate
purchase price of the Senior Subordinated Notes that are
acquired by the Primary Borrower or any of its Subsidiaries
pursuant to the Senior Subordinated Notes Tender Offer shall
not exceed $24,000,000, (ii) immediately upon the acquisition
of Senior Subordinated Notes by the Primary Borrower pursuant
to the Senior Subordinated Notes Tender Offer, the Primary
Borrower shall return such Senior Subordinated Notes to the
trustee under the Senior Subordinated Notes Indenture for
cancellation, (iii) no Default or Event of Default shall have
occurred and be continuing before and after giving effect to
the consummation of the Senior Subordinated Notes Tender
Offer, (iv) no Senior Subordinated Notes are purchased by the
Primary Borrower or any of its Subsidiaries prior to
consummation of the Permitted Airshow Sale and (v) the other
terms and conditions of the Senior Subordinated Notes Tender
Offer shall be reasonably satisfactory to the Administrative
Agent, its counsel and its other advisors," and
(b) by deleting the phrase "$125,000,000 plus the amount of
any interest accreted or paid in kind in respect thereof" in clause (e)(i)
thereof and inserting in lieu thereof the phrase "the aggregate amount of
Convertible Notes and Additional Indebtedness permitted to be incurred pursuant
to subsection 14.1(e)".
Section 14. New Section 17.17 (Financial Advisor). Section
17.17 of the Credit Agreement is hereby amended by inserting the following new
Subsection 17.17:
"Section 17.17 Financial Advisor. The Primary Borrower hereby
agrees (a) to the engagement of FTI Xxxxxxxx & Xxxxx ("P&M")
by counsel to the Administrative Agent as a financial advisor
in connection with this Agreement and the other Credit
Documents to, among other things, monitor the financial
performance of, make visits to, and discuss financial,
operational and collateral matters with the Primary Borrower
and its Subsidiaries and to advise the Administrative Agent,
its counsel and the Lenders with respect to such matters, (b)
to cooperate (and cause its
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Subsidiaries to cooperate) with P&M and provide P&M with
access to the properties, books and records of the Primary
Borrower and its Subsidiaries on the same terms as such access
is to be provided to the Administrative Agent pursuant to
subsection 12.6 (it being understood and agreed that P&M is to
keep confidential any Confidential Information on the same
terms and conditions as the Administrative Agent pursuant to
Section 17.15) and (c) to pay all reasonable fees and expenses
of P&M in connection with such engagement promptly upon
receipt of invoices for such fees and expenses."
Section 15. Conditions to Effectiveness. This Amendment shall
become effective on the date (the "Amendment Effective Date") on which the
Administrative Agent shall have received:
(a) this Amendment, duly executed and delivered by each of the
Borrowers, each Subsidiary Guarantor and the Majority Lenders;
(b) reasonably satisfactory evidence that CD&R Barbados and
its Affiliates own an aggregate principal amount of Senior Subordinated Notes
equal to $50,000,000;
(c) the Airshow Cash Collateral Agreement, duly executed and
delivered by the parties thereto, on terms and conditions reasonably
satisfactory to the Administrative Agent;
(d) the CD&R Barbados Senior Subordinated Notes Agreement,
duly executed and delivered by the parties thereto, on terms and conditions
reasonably satisfactory to the Administrative Agent;
(e) the CD&R Barbados Purchase Agreement, duly executed and
delivered by the parties thereto, on terms and conditions reasonably
satisfactory to the Administrative Agent;
(f) an amendment fee, for the account of the Lenders that have
delivered an executed signature page to this Amendment to the Administrative
Agent or its counsel no later than 5:00 p.m., New York City time, on July 12,
2002, in an amount equal to 0.125% of the aggregate amount (without duplication)
of the Commitments in effect and Loans outstanding of such Lenders; and
(g) an executed legal opinion of each of Debevoise & Xxxxxxxx,
the general counsel of the Primary Borrower and Barbados counsel to CD&R
Barbados, in each case covering such matters relating to the transactions
contemplated hereby as shall be reasonably requested by the Administrative
Agent.
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The Administrative Agent shall promptly notify the Primary
Borrower in writing upon the occurrence of the Amendment Effective Date.
Section 16. Representation and Warranties; No Defaults or
Events of Default. The Primary Borrower represents and warrants to the
Administrative Agent and the Lenders that as of the Amendment Effective Date,
after giving effect to this Amendment, no Default or Event of Default has
occurred and is continuing, and the representations and warranties made by the
Borrowers in or pursuant to the Credit Agreement or any other Credit Document
are true and correct in all material respects on and as of the Amendment
Effective Date as if made on such date (except to the extent that any such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties were true and correct in all material
respects on and as of such earlier date).
Section 17. Payment of Expenses. The Primary Borrower agrees
to pay or reimburse the Administrative Agent for all of its reasonable
out-of-pocket costs and expenses incurred in connection with this Amendment, any
other documents prepared in connection herewith and the transactions
contemplated hereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent.
Section 18. Continuing Effect of the Credit Agreement. This
Amendment shall not constitute an amendment or waiver of or consent to any
provision of the Credit Agreement not expressly referred to herein and shall not
be construed as an amendment, waiver or consent to any action on the part of the
Borrowers that would require an amendment, waiver or consent of the
Administrative Agent or the Lenders except as expressly stated herein. Except as
expressly amended hereby, the provisions of the Credit Agreement are and shall
remain in full force and effect in accordance with its terms.
Section 19. Counterparts. This Amendment may be executed by
one or more of the parties to this Amendment on any number of separate
counterparts (including by facsimile), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
Section 20. Release. Each Borrower hereby acknowledges and
agrees that (i) it is truly and justly indebted to the Administrative Agent and
the Lenders on account of the Obligations (as defined in the Collateral
Agreement) without any defense, counterclaim or setoff of any kind and (ii) it
releases the Administrative Agent and each Lender from any claim, cause of
action or liability at any time arising prior to the date hereof out of or with
respect to the Credit Agreement, this Amendment and the transactions
contemplated hereby, other than as a result of the Administrative Agent's or
such Lender's gross negligence or willful misconduct.
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Section 21. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
ACTERNA LLC
By:_____________________________
Name:
Title:
ACTERNA INTERNATIONAL GMBH
By:_____________________________
Name:
Title:
________________________________
(NAME OF LENDER)
By:_____________________________
Name:
Title:
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned as guarantors under the Guarantee and
Collateral Agreement, dated as of May 23, 2000, made by the undersigned in favor
of the Administrative Agent, for the benefit of the Lenders, hereby (a) consents
to the transactions contemplated by this Amendment and (b) acknowledges and
agrees that the guarantees (and grants of collateral security therefor)
contained in such Guarantee and Collateral Agreement are, and shall remain, in
full force and effect after giving effect to this Amendment.
ACTERNA BUSINESS TRUST
By:___________________________________
Name:
Title:
AIRSHOW, INC.
By:___________________________________
Name:
Title:
APPLIED DIGITAL ACCESS, INC.
By:___________________________________
Name:
Title:
DA VINCI SYSTEMS, INC.
By:___________________________________
Name:
Title:
ITRONIX CORPORATION
By:___________________________________
Name:
Title:
