SECOND AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER
Exhibit
10.1
SECOND
AMENDMENT TO CREDIT
AGREEMENT
AND LIMITED WAIVER
This
SECOND AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER (this “Second
Amendment”) dated as of December 7, 2009 made by and among CYALUME TECHNOLOGIES,
INC., a Delaware corporation (the “Borrower”), CYALUME TECHNOLOGIES HOLDINGS,
INC., a Delaware corporation (the “Holding Company”) and TD BANK, N.A., as
Administrative Agent and as the Lender (the “Agent”).
Background
The
Borrower, the Holding Company and the Agent entered into a credit agreement
dated as of December 19, 2008, which was amended by that certain First Amendment
to Credit Agreement and Limited Waiver dated as of September 1, 2009
(collectively, the “Original Credit Agreement”). The Borrower has
requested a waiver of the Senior Leverage Ratio and the Total Debt Service
Coverage Ratio each for the quarter ending September 30, 2009. In
addition, the Borrower has requested an amendment to the Senior Leverage Ratio,
the Total Debt Service Ratio, the Fixed Charge Ratio and the Minimum EBITDA
Covenant.
NOW,
THEREFORE, in consideration of the promises and the agreements, provisions and
covenants herein contained, the Borrower, the Holding Company and the Agent
hereby agree as follows:
1. Limited
Waiver. Subject to the terms and conditions herein contained
and in reliance on the representations and warranties of the Borrower herein
contained, effective upon the satisfaction of the conditions precedent set forth
in section 3 below, the Agent hereby waives the requirements that the
Borrower be in compliance with (i) the Total Debt Service Ratio contained in
section 12.1(b) of the Original Credit Agreement for the quarter ending
September 30, 2009, and (ii) the Senior Leverage Ratio contained in section 12.2
of the Original Credit Agreement for the quarter ending September 30,
2009. The foregoing limited waivers are limited to the waivers of the
specific Total Debt Service Ratio, and Senior Leverage Ratio for the specific
time period referred to in this section 1 and is not a commitment or agreement
to grant any waiver in the future.
2. Amendment. Subject
to the terms and conditions herein contained and in reliance on the
representations and warranties of the Borrower herein contained, effective upon
satisfaction of the conditions precedent contained in section 3
below:
(a) Section 1.1 “Definitions” of the Original
Credit Agreement is hereby amended by deleting the text of the defined terms
below and inserting the following in lieu thereof is hereby amended as
follows:
(1) Borrowing
Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Agent pursuant to §10.4(h), as adjusted pursuant to the
provisions below, which is equal to the sum of: 80% of Eligible
Accounts Receivable plus the lesser of
(i) $2,100,000 which amount will decrease in the amount of $100,000 on the
last day of December 2009 (when the amount of this subsection (i) will be
$2,000,000) or (ii) 50% of Eligible Raw Material and Finished
Goods Inventory.
The
Required Lenders may, in their reasonable discretion, from time to time, in
accordance with §2.7: (x) reduce the lending formula with
respect to any Eligible Accounts Receivable to the extent that the Required
Lenders reasonably determine that: (i) the dilution with respect
of the Accounts Receivable for any period has increased in any material respect
or may be reasonably anticipated to increase in any material respect above
historical levels, or (ii) the general creditworthiness of account debtors
or other obligors of the Borrower has declined materially or (y) reduce the
lending formula with respect to any Eligible Raw Material and Finished Goods
Inventory to the extent that the Required Lenders determine
that: (i) the number of days of the turnover of the inventory
owned by Borrower for any period has changed in any material adverse respect,
(ii) the liquidation value of any Eligible Raw Material and Finished Goods
Inventory, or any category thereof, has materially decreased, or (iii) the
nature and quality of the inventory has changed materially and
adversely. In determining whether to reduce the lending formula(s),
the Required Lenders may consider events, conditions, contingencies or risks
which are also considered in determining Eligible Accounts Receivable and
Eligible Raw Material and Finished Goods Inventory.
(2) Revolving
Credit Loan Commitment. The Revolving Credit Lenders’ several
commitments to make Revolving Credit Loans to the Borrower subject to the terms
and conditions hereof, in the maximum outstanding principal amount of
$3,300,000, subject to the limitations herein contained, as the same may be
reduced from time to time, or if such commitment is terminated pursuant to the
provisions hereof, zero.
(b) Section
5.3(b) “Mandatory
Prepayments” contained in the Original Credit Agreement is hereby deleted
in its entirety and the following is hereby inserted in lieu
thereof:
(b) subject
to Section 11.1, an amount equal to 100% of the proceeds received by the
Guarantor or any of its Subsidiaries (i) from the incurrence of any Indebtedness
for borrowed money other than borrowings hereunder and (ii) from the issuance of
any Shares of the Guarantor or any of its Subsidiaries (referred to herein,
collectively, as “New Equity”), in each case, excluding reasonable fees and
expenses incurred by such Person relating to the incurrence of such Indebtedness
or issuance of such Shares.
(c) Section
12.1 “Coverage
Ratios” contained
in the Original Credit Agreement is deleted in its entirety and the following is
hereby inserted in lieu thereof:
Section
12.1 Coverage
Ratios.
(a) Fixed Charge
Ratio. As of the last day of the fiscal quarter ending
December 31, 2009, the Fixed Charge Coverage Ratio shall not be less than
0.80:1.00 and as of the last day of the fiscal quarter ending December 31, 2010,
the Fixed Charge Coverage Ratio shall not be less than 1.00:1.00.
(b) Total Debt Service
Ratio. As of the last day of any fiscal quarter below, the
Total Debt Service Coverage Ratio shall not be less than (i) for the fiscal
quarters ending December 31, 2009 and March 31, 2010: 1.00:1.00 and (ii) for the
fiscal quarter ending June 30, 2010 and each fiscal quarter end
thereafter: 1.20:1.00
(d) Section
12.2 “Leverage Ratio”
contained in the Original Credit Agreement is deleted in its entirety and the
following is hereby inserted in lieu thereof:
Section
12.2 Leverage
Ratio. At any time during the periods set forth below, the
Senior Leverage Ratio shall not be more than the ratio set forth below during
such period:
|
Period
|
Ratio
|
|
|
December
31, 2009, through and including March 30, 2010
|
4.75:1.00
|
|
|
|
||
|
March
31, 2010, through and including June 29, 2010
|
4.00:1.00
|
|
|
June
30, 2010, through and including December 30, 2010
|
3.25:1.00
|
|
|
December
31, 2010 and thereafter
|
3.00:1.00
|
|
(e) Section
12.3 “Capital
Expenditures” contained in the Original Credit Agreement is deleted in
its entirety and the following is hereby inserted in lieu thereof:
Section
12.3 Capital
Expenditures. The Borrower will not make, nor permit any
Subsidiary to make any Capital Expenditures in any fiscal year that exceed
$2,000,000 for any fiscal year.
(f) Section
12.4 “Current Ratio”
contained in the Original Credit Agreement is deleted in its entirety and the
following is hereby inserted in lieu thereof:
Section
12.4 Current
Ratio. As of the last day of any fiscal quarter the Borrower
and its Subsidiaries shall not permit the Current Ratio to be less than
1.00:1.00.
(g) Section
12.5 “Minimum Quarterly
EBITDA” contained in the Original Credit Agreement is delete in its
entirety and the following is hereby inserted in lieu
thereof:
Section
12.5 Minimum
Quarterly EBITDA. At any time during the periods set forth
below the minimum EBITDA of the Borrower and its subsidiaries for the fiscal
quarter then ending shall not be less than the amount set forth
below:
less than
the amount set forth below:
|
Quarterly
Date
|
Minimum
EBITDA for Quarter
|
|
|
December
31, 2009
|
$1,400,000
|
|
|
March
31, 2010
|
$1,850,000
|
|
|
June
30, 2010
|
$1,850,000
|
|
|
September
30, 2010
|
$1,850,000
|
|
|
December
31, 2010 and each fiscal quarter thereafter
|
$1,500,000
|
(h) The
Original Credit Agreement is hereby amended by adding the following new Section
10.16 “Minimum Cash
Balances”:
Section
10.16 Minimum Cash
Balances. The Borrower, Guarantor, and CTSA together will
maintain at each month end on the consolidated balance sheet, unrestricted
consolidated cash balances of not less than $1,000,000.
(i) The
Original Credit Agreement is hereby amended by adding the following new Section
10.17 “2009 Field
Audit”:
Section
10.17 2009 Field
Audit. The Borrower shall cause to be delivered to the Agent a
field audit at Borrower’s sole cost and expense, in form and substance
satisfactory to the Agent, on or before December 31, 2009.
(j) Section
15.1 “Events of
Default” of the Original Credit Agreement is hereby amended (i) by adding
in subsection (c) “10.16”, “10.17” after the reference to subsection 10.14 in
such subsection, and (ii) by adding the following new subsections (s) and (t)
and (iii) by deleting the word “or” at the end of subsection q:
(s) on
or before April 30, 2010, the Borrower has not received net cash proceeds of at
least $3,000,000 from the issuance of subordinated Indebtedness, such
Indebtedness to be on terms and conditions satisfactory to Agent and
subordinated by a written subordinated agreement, to the Obligations, such
subordination to be on terms and conditions satisfactory to the Agent, or by the
issuance of New Equity in the Borrower or the Guarantor, to be on terms and
conditions satisfactory to Agent, and the Term Loans have not been prepaid with
at least $3,000,000 of such proceeds on or before April 30, 2010;
or
(t) credit
insurance, in form and substance satisfactory to Agent, for each Account
Receivable owed by an Account Debtor which is not organized under the laws of a
State in the United States of America has not been assigned to Agent on or
before December 31, 2009 or the Borrower has not repaid, on or before December
31, 2009, the Revolving Loan outstanding which were advanced because Accounts
Receivable owed by an Account Debtor which is not organized under the laws of a
State in the United States of America were included in the Borrowing
Base.
3. Conditions
Precedent. The provisions of this Second Amendment shall be
effective as of the date on which all of the following conditions shall be
satisfied:
(a) the
Borrower shall have delivered to the Agent a fully executed counterpart of this
first amendment;
(b) the
Borrower shall have paid all fees, costs and expenses owing to the Agent and its
counsel on or before the date hereof;
(c) the
Agent shall have indicated its consent and agreement by executing this Second
Amendment;
(d) the
Borrower shall have delivered certified copies of the resolutions of its Board
of Directors approving the execution of this Second Amendment and the actions
contemplated herein, in form and substance satisfactory to the Agent;
and
(e) the
Borrower shall have paid the Agent $75,000 for this Second
Amendment.
4. Miscellaneous.
(a) Ratification. The
terms and provisions set forth in this Second Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Original Credit
Agreement and except as expressly modified and superseded by this Second
Amendment, the terms and provisions of the Original Credit Agreement and the
other Loan Documents are ratified and confirmed and shall continue in full force
and effect. The Borrower and the Agent agree that the Original Credit Agreement
as amended hereby and the other Loan Documents shall continue to be legal,
valid, binding and enforceable in accordance with their respective terms. For
all matters arising prior to the effective date of this Second Amendment, the
Original Credit Agreement (as unmodified by this Amendment) shall
control. The Borrower hereby acknowledges that, as of the date
hereof, the security interests and liens granted to the Agent under the Credit
Agreement and the other Loan Documents are in full force and effect, are
properly perfected and are enforceable in accordance with the terms of the
Credit Agreement and the other Loan Documents.
(b) Representations
and Warranties. The Borrower hereby represents and warrants to
the Agent that the representations and warranties set forth in the Loan
Documents, after giving effect to the waiver contained in this Second Amendment,
are true and correct in all material respects on and as of the date hereof, with
the same effect as though made on and as of such date except with respect to any
representations and warranties limited by their terms to a specific
date. The Borrower further represents and warrants to the Agent that
the execution, delivery and performance by the Borrower of this consent letter
(i) are within the Borrower’s power and authority; (ii) have been duly
authorized by all necessary corporate and shareholder action; (iii) are not in
contravention of any provision of the Borrower’s certificate or articles of
incorporation or bylaws or other organizational documents; (iv) do not violate
any law or regulation, or any order or decree of any Governmental Authority; (v)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which the
Borrower is a party or by which the Borrower or any of its property is bound;
(vi) do not result in the creation or imposition of any Lien upon any of the
property of the Borrower other than in favor of Agent; (vii) do not require the
consent or approval of any Governmental Authority. All
representations and warranties made in this Second Amendment shall survive the
execution and delivery of this Second Amendment, and no investigation by the
Agent shall affect the representations and warranties or the right of the Agent
to rely upon them.
(c) Release. In
addition, to induce the agent to agree to the terms of this first amendment, the
borrower represents and warrants that as of the date of its execution of this
first amendment there are no claims or offsets against or rights of recoupment
with respect to or defenses or counterclaims to its obligations under the loan
documents and in accordance therewith it:
(i) Waives
any and all such claims, offsets, rights of recoupment, defenses or
counterclaims, arising prior to the date of its execution of this amendment
and
(ii) Releases
and discharges the agent and its officers, directors, employees, agents and
affiliates (collectively the "released parties") from any and all liabilities,
claims, causes of action, in law or equity, which the borrower or any guarantor
may have against any released party arising prior to the date hereof in
connection with the loan documents or the transactions contemplated
thereby.
(d) Reference
to Agreement. Each of the Loan Documents, including the
Original Credit Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Original Credit Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Original
Credit Agreement shall mean a reference to the Original Credit Agreement as
amended hereby.
(e) Expenses
of the Agent. As provided in the Credit Agreement, the
Borrower agrees to pay all reasonable costs and expenses incurred by the Agent
in connection with the preparation, negotiation, and execution of this Second
Amendment, including without limitation, the reasonable costs and fees of the
Agent’s legal counsel.
(f) Severability. Any
provision of this Second Amendment held by a court of competent jurisdiction to
be invalid or unenforceable shall not impair or invalidate the remainder of this
Second Amendment and the effect thereof shall be confined to the provision so
held to be invalid or unenforceable.
(g) Applicable
Law. This Amendment shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts and the applicable
laws of the United States of America.
(h) Successors
and Assigns. This Second Amendment is binding upon and shall
inure to the benefit of the Agent, the Holding Company and the Borrower, and
their respective successors and assigns, except the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Agent.
(i) Counterparts. This
Second Amendment may be executed in one or more counterparts and on facsimile
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
agreement.
(j) Effect
of Waiver. No consent or waiver, express or implied, by the
Agent to or for any breach of or deviation from any covenant, condition or duty
by the Borrower shall be deemed a consent or waiver to or of any other breach of
the same or any other covenant, condition or duty.
(k) Headings. The
headings, captions, and arrangements used in this Amendment are for convenience
only and shall not affect the interpretation of this Amendment.
(l) Entire
Agreement. This Second
Amendment embodies the entire agreement among the parties hereto with respect to
the subject matter thereof, and supersedes any and all prior representations and
understandings, whether written or oral, relating to this
Amendment. There are no oral agreements among the parties hereto with
respect to the subject matter hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of
the date first above written.
| BORROWER | |||
| CYALUME TECHNOLOGIES, INC. | |||
|
|
By:
|
/s/ Xxxxxxx Xxxxxxxx | |
| Name: Xxxxxxx Xxxxxxxx | |||
| Title Chief Financial Officer | |||
| HOLDING COMPANY | |||
| CYALUME TECHNOLOGIES HOLDINGS, INC. | |||
|
|
By:
|
/s/ Xxxxx Xxxxxxx | |
| Name: Xxxxx Xxxxxxx | |||
| Title Chief Executive Officer | |||
| AGENT | |||
| TD BANK, N.A. | |||
|
|
By:
|
/s/ Xxxx Xxxxx | |
| Name: Xxxxxxx X. Xxxxx | |||
| Title Senior Vice President | |||
