AMENDMENT NO. 5 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 10.28.5
This Amendment No. 5 to Amended and Restated Loan and Security Agreement (this
“Amendment”) is entered into this 23 day of February, 2007, by and between Xxxxxx Stratex
Networks Operating Corporation, a Delaware corporation fka Stratex Networks, Inc., a Delaware
corporation (“Borrower”), and Silicon Valley Bank (“Bank”). Capitalized terms used herein
without definition shall have the same meanings given them in the Loan Agreement (as defined
below).
Recitals
A. Borrower and Bank have entered into that certain Amended and Restated Loan and Security
Agreement dated as of January 21, 2004 (as amended, restated, modified and/or supplemented from
time to time, the “Loan Agreement”), pursuant to which Bank agreed to extend and make available to
Borrower certain advances of money.
B. On January 26, 2007, Stratex Networks, Inc. issued additional shares to Xxxxxx Corporation
(“Harris”) in exchange for the assets of Xxxxxx’ Microwave Communications Division, creating a
newly formed public company, Xxxxxx Stratex Networks, Inc. (“HSTX”), now a majority owned
Subsidiary of Xxxxxx. Stratex Networks, Inc. merged with Stratex Merger Corp., changed its name to
Xxxxxx Stratex Networks Operating Company, and is now a wholly-owned Subsidiary of HSTX.
C. Borrower has been advised by Harris that the security interest granted to Bank under the
Loan Agreement contravenes certain negative covenants under Xxxxxx’ bank credit facility which
restrict liens, and desires that Bank terminate such security interest and amend the Loan Agreement
upon the terms and conditions more fully set forth herein.
D. Subject to the representations and warranties of Borrower herein and upon the terms and
conditions set forth in this Amendment, Bank is willing to amend the Loan Agreement as set forth
herein.
Agreement
NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound,
the parties hereto agree as follows:
1. Amendments to Loan Agreement.
1.1 References to “Borrower”. All references in the Loan Agreement to “Borrower” or to
“Stratex Networks, Inc.” shall hereafter mean and refer to Xxxxxx Stratex Networks Operating
Corporation.
1.2 Security Interest. Bank hereby terminates and releases its security interest in the
Collateral, and will take such actions as necessary to terminate financing statements, account
control agreements and other evidences of its lien. To evidence the unsecured nature of the Credit
Extensions, conforming changes shall be made throughout the Loan Agreement. Specifically,
Sections 4 (Creation of Security Interest) and 5.2 (Collateral) and Exhibit A are hereby
deleted in their entirety and, in each case, replaced by the section heading “Intentionally
Omitted.”)
1.3 Section 6.2 (Financial Statements, Reports, Certificates). Section 6.2 is hereby amended
to read in its entirety as follows:
“(a) Borrower will deliver to Bank: (i) within five (5) Business Days of filing, but in no
event later than fifty (50) days after the end of each fiscal quarter in the case of the Form 10-Q
and ninety-five (95) days after the end of each fiscal year in the case of the Form 10-K, copies of
all reports on Forms 10-K and 10-Q filed by HSTX with the Securities and Exchange Commission; (ii)
as soon as available, but no later than thirty (30) days after the end of each month, a cash
holding report in form and substance satisfactory to Bank, and agings of accounts payable and
accounts receivable, international and domestic, sorted by due date; (iii) as soon as available,
but no later than forty-five (45) days after the end of each fiscal year, a one (1) year (prepared
on a quarterly basis) financial projections of Borrower on a Consolidated basis, including a pro
forma balance sheet and statements of income and cash flows and showing projected operating
revenues, expenses and debt service of Borrower on a Consolidated basis; (iv) a prompt report of
any material infringements to its Intellectual Property (collectively, “IP Infringements”); (v) a
prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of $2,000,000 or more, or in which
an adverse decision could reasonably be expected to cause a Material Adverse Change (collectively,
“Material Litigation”); and (vi) other financial information Bank reasonably requests.
(b) Borrower will deliver to Bank with its financial statements delivered pursuant to
subsection (a)(i) above, a Compliance Certificate signed by a Responsible Officer in the form of
Exhibit D.”
1.4 Section 6.7 (Financial Covenants). The financial covenants contained in Section 6.7 shall
be measured using the Consolidated financial information of HSTX commencing with the fiscal quarter
ending March 31, 2007.
1.5 Section 6.8 (Further Assurances). Section 6.8 is hereby amended to read in its entirety
as follows:
“Borrower will execute any further instruments and take further action as Bank reasonably
requests to effect the purposes of this Agreement.”
1.6 Section 7.5 (Encumbrance). Section 7.5 is hereby amended to read in its entirety as
follows:
“Create, incur, or allow any Lien on any of its assets or property, or assign or convey any
right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to
do so, except for (a) Permitted Liens, or (b) Transfers of Accounts in the ordinary course of
Borrower’s business in exchange for cash or other unencumbered Property to an entity or entities
regularly engaged in the purchase of such Accounts.”
1.7 Section 13 (Definitions). The definition of “Material Adverse Change” is amended and
restated in its entirety as follows:
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“Material Adverse Change” is any of the following: (a) a material adverse change in the
business, operations, or condition (financial or otherwise) of the Borrower, or (b) a material
impairment of the prospect of repayment of any portion of the Obligations.
1.8 Section 13 (Definitions). A new definition of “HSTX” is added as follows:
“HSTX” means Xxxxxx Stratex Networks, Inc., a Delaware corporation.
1.9 Compliance Certificate. A new form of Compliance Certificate, attached hereto as
Exhibit A, hereby replaces the existing form attached as Exhibit D to the Loan Agreement.
2. Borrower’s Representations And Warranties. Borrower represents and warrants that:
(a) immediately upon giving effect to this Amendment (i) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (ii) no Event of Default has occurred
and is continuing;
(b) Borrower has the corporate power and authority to execute and deliver this Amendment and
to perform its obligations under the Loan Agreement, as amended by this Amendment;
(c) the certificate of incorporation, bylaws and other organizational documents of Borrower
delivered to Bank on the Closing Date remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;
(d) the execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, have been duly
authorized by all necessary corporate action on the part of Borrower; and
(e) this Amendment has been duly executed and delivered by the Borrower and is the binding
obligation of Borrower, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to or affecting
creditors’ rights.
3. Limitation. The amendments set forth in this Amendment shall be limited precisely
as written and shall not be deemed (a) to be a waiver or modification of any other term or
condition of the Loan Agreement or of any other instrument or agreement referred to therein or to
prejudice any right or remedy which Bank may now have or may have in the future under or in
connection with the Loan Agreement or any instrument or agreement referred to therein; or (b) to be
a consent to any future amendment or modification or waiver to any instrument or agreement the
execution and delivery of which is consented to hereby, or to any waiver of any of the provisions
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thereof. Except as expressly amended hereby, the Loan Agreement shall continue in full force
and effect.
4. Effectiveness. This Amendment shall become effective upon the satisfaction of all
the following conditions precedent:
4.1 Amendment. Borrower and Bank shall have duly executed and delivered this Amendment to
Bank.
4.2 Payment of Bank Expenses. Borrower shall have paid all Bank Expenses (including all
reasonable attorneys’ fees and reasonable expenses) incurred and invoiced through the date of this
Amendment.
5. Counterparts. This Amendment may be signed in any number of counterparts, and by
different parties hereto in separate counterparts, with the same effect as if the signatures to
each such counterpart were upon a single instrument. All counterparts shall be deemed an original
of this Amendment.
6. Integration. This Amendment and any documents executed in connection herewith or
pursuant hereto contain the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior agreements, understandings, offers and negotiations, oral or
written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any
judicial or arbitration proceeding, if any, involving this Amendment; except that any financing
statements or other agreements or instruments filed by Bank with respect to Borrower shall remain
in full force and effect.
7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICT OF LAW.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first written above.
| Borrower: | Xxxxxx Stratex Networks Operating Corporation, a Delaware corporation |
|||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Printed Name: Xxxxx X. Xxxxxx | ||||
| Title: | Chief Financial Officer | |||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Printed Name: Xxxxx X. Xxxxxx | ||||
| Title: | Treasurer | |||
| Bank: | Silicon Valley Bank |
|||
| By: | /s/ Xxx Xxxxxxx | |||
| Printed Name: Xxx Xxxxxxx | ||||
| Title: | Relationship Manager | |||
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Exhibit A
COMPLIANCE CERTIFICATE
TO:
|
SILICON VALLEY BANK | Date: | ||
| 0000 Xxxxxx Xxxxx Xxxxx Xxxxx, XX 00000 |
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FROM:
|
XXXXXX STRATEX NETWORKS OPERATING CORPORATION |
The undersigned Responsible Officer of Xxxxxx Stratex Networks Operating Corporation (“Borrower”)
certifies that under the terms and conditions of the Amended and Restated Loan and Security
Agreement dated January 21, 2004, between Borrower and Bank (as amended, the “Agreement”), (i)
Borrower is in complete compliance for the period ending _________ with all required
covenants except as noted below and (ii) all representations and warranties in the Agreement are
true and correct in all material respects on this date. In addition, the undersigned Responsible
Officer certifies that Borrower (x) has complied with Section 6.4 of the Agreement with respect to
payment of taxes of Borrower and its Subsidiaries and (y) does not have any legal actions pending
or threatened against Borrower or any of its Subsidiaries which Borrower has not previously
notified in writing to Bank pursuant to Section 6.2 of the Agreement. Attached are the required
financial reports and calculation of financial covenants supporting the certification. The
undersigned acknowledges that no borrowings may be requested at any time or date of determination
that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is
determined not just at the date this certificate is delivered.
Please indicate compliance status by circling Yes/No under “Complies” or “Occurrences” columns.
| Reporting Covenant | Required | Complies | ||||
A/R and A/P agings
|
Monthly within 30 days | Yes | No | |||
Quarterly financial statements + CC
|
Quarterly within 50 days | Yes | No | |||
Annual audited financial statements
|
Annually within 95 days | Yes | No | |||
With compliance certificate |
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| Occurrences* | ||||||
IP Infringements
|
Prompt | Yes | No | |||
Material Litigation
|
Prompt | Yes | No | |||
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| Financial Covenant | Required | Actual | Complies | |||||
Minimum Tangible Net Worth (Quarterly) |
54,000,000 plus (i) twenty-five percent (25%) of net income, as determined in accordance with GAAP, and (ii) fifty percent (50%) of any increases to net worth due to Subordinated Debt or net equity proceeds from either public or public offerings for such quarter and all preceding quarters since December 31, 2005 (exclusive of losses). | $______ | Yes | No | ||||
Minimum Liquidity Ratio (Monthly) |
1.25:1.00 | ___:1.00 | Yes | No | ||||
| *If yes, attached is a summary of the Material Litigation or IP Infringements not previously disclosed by Borrower. |
Sincerely,
Xxxxxx Stratex Networks Operating Corporation
By:
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Name:
|
Title:
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BANK USE ONLY
Received by:
|
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| AUTHORIZED SIGNER |
Date:
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Verified:
|
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| AUTHORIZED SIGNER |
Date:
|
Compliance Status:
|
Yes No |
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