AMENDMENT NO. 1 TO CREDIT AGREEMENT
Exhibit 10.19.1
This Amendment No. 1 to Credit Agreement (this “Amendment”) is entered into this
23rd
day of August, 2010, by and among Aviat Networks, Inc., a Delaware corporation (“Parent”),
Aviat U.S., Inc., a Delaware corporation, and Aviat Networks (S) PTE. LTD., a
company organized under the laws of Singapore (each, a “Borrower”), Bank of America, N.A.,
as Administrative Agent (in such capacity, “Agent”), Bank of America, N.A., Hong Kong
Branch, as Singapore Loan Agent, and Bank of America, N.A. and Silicon Valley
Bank, (each, a “Lender”). Aviat Networks, Inc. was formerly known as Xxxxxx Stratex Networks,
Inc. Capitalized terms used herein without definition shall have the same meanings given them in
the Credit Agreement (as defined below).
Recitals
A. Borrowers, Agents and Lenders have entered into that certain Credit Agreement dated as of
June 30, 2008 (the “Credit Agreement”), pursuant to which the Lenders have agreed to extend and
make available to Borrowers certain advances of money.
B. Borrowers desire to modify the financial covenants contained in the Credit Agreement, with
such modification to be effective as of July 2, 2010, and to make certain other modifications to
the Credit Agreement, which other modifications will become effective on the effective date of this
Amendment.
C. Subject to the representations and warranties of Borrowers herein and with the amendments
and upon the terms and conditions set forth below, Agents and Lenders are willing to modify the
Credit Agreement as requested by Borrowers.
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. Section 1.01 (Definitions). The definition of “Applicable Margin” in Section 1.01 is
hereby amended as follows:
“Applicable Margin” means the following percentages per annum:
| Eurodollar Rate Loans | ||||
| Commitment Fee | Letters of Credit | Base Rate Loans | ||
| .50% | 1.00% | 0.00% |
1.2. Section 1.01 (Definitions). A new definition is inserted in Section 1.01 in proper
alphabetical order as follows:
“Quick Ratio” means, as of any date, calculated for Parent and its Subsidiaries
on a consolidated basis, (a) the sum of (i) unrestricted cash and cash equivalents and
short-term marketable debt securities plus (ii) Accounts, divided by (b) current liabilities
(determined in accordance with GAAP) less the aggregate amount of (x) outstanding Loans
secured by Loan Collateral and, to the extent they constitute liabilities under GAAP, (y)
L/C Obligations secured by Cash Collateral.”
1.3. Section 2.01 (Committed Loans). Section 2.01 is hereby amended and restated in its
entirety as follows:
“Committed Loans. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a ‘Committed Loan’) as follows: (a)
each U.S. Lender severally agrees to make loans to the Parent and each other U.S. Borrower from time to
time, on any Business Day during the Availability Period in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Commitment, and (b) each
Singapore Lender agrees to make loans to Xxxxxx Singapore from time to time in an aggregate
amount not to exceed at any time outstanding the Singapore Sublimit; provided,
however, that after giving effect to any Committed Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment, and (iii) the Singapore Loans shall not exceed the Singapore
Sublimit, and provided further, Borrowers shall pledge and deposit with or deliver
to the Administrative Agent, for the benefit of the Lenders, as collateral for the Committed
Loans, cash or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent (which documents are hereby consented to by the
Lenders) in an amount no less than 100% of all outstanding Committed Loans, to be maintained
in a blocked, interest-bearing deposit account at Bank of America. The Borrowers hereby
grant to the Administrative Agent, for the benefit of the Lenders, a security interest in
all such cash, deposit accounts and all balances therein and all proceeds of the foregoing
(collectively, the ‘Loan Collateral’). Within the limits of each Lender’s
Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow
under this Section 2.01, prepay under Section 2.05, and reborrow under this
Section 2.01. Committed Loans may be Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.”
1.4. Section 2.03 (Letters of Credit). Sub-section (g) (Cash Collateral) of Section 2.03 is
hereby amended and restated in its entirety as follows:
“(g) Cash Collateral. The Borrowers shall immediately Cash Collateralize the
Outstanding Amount of all L/C Obligations and maintain such Cash Collateral at all times in
an amount no less than 100% of the face amount of all outstanding Dollar-denominated Letters
of Credit and 105% of the face amount of all outstanding non-Dollar-denominated Letters of
Credit. Sections 2.05 and 8.02(c) set forth certain additional requirements
to deliver Cash Collateral hereunder. For purposes of this
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Section 2.03,
Section 2.05 and Section 8.02(c), “Cash Collateralize” means to
pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the Administrative
Agent and the L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Borrowers hereby grant to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest
in all such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash Collateral shall be maintained in a blocked, interest-bearing deposit
account at Bank of America.”
1.5. Section 7.11 (Financial Covenants). Section 7.11 of the Credit Agreement is hereby
amended in its entirety, beginning with the fiscal quarter of Parent ending July 2, 2010, as
follows:
“7.11 Financial Covenant. Permit the Quick Ratio as of the end of any fiscal quarter
of Parent to be less than 1.25:1.”
2. Limitation of Amendment. The amendments set forth in Section 1 above, are
effective for the purposes set forth herein and shall be limited precisely as written and shall not
be deemed to be (a) a waiver or modification of any other term or condition of the Credit Agreement
or of any other instrument or agreement referred to therein or to prejudice any right or remedy
which any Agent or Lender may now have or may have in the future under or in connection with the
Credit Agreement or any instrument or agreement referred to therein; or (b) a consent to any future
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 thereof.
This Amendment shall be construed in connection with and as part of the Loan Documents and all
terms, conditions, representations, warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full
force and effect.
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3. Borrowers’ Representations And Warranties. Each Borrower represents and warrants
that:
3.1. 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;
3.2. the certificate of incorporation, bylaws and other organizational documents of Borrowers
delivered to Agent pursuant to the Credit Agreement: remain true, accurate and complete; except as
disclosed to Agent, have not been amended, supplemented or restated; and continue to be in full
force and effect;
3.3. Borrower has the power and authority to execute and deliver this Amendment and to perform
its obligations under the Credit Agreement, as amended by this Amendment;
3.4. The execution and delivery by Borrower of this Amendment and the performance by Borrower
of the obligations under the Credit Agreement, as amended by this Amendment, have been duly
authorized;
3.5. The execution and delivery by Borrower of this Amendment and the performance by Borrower
of the obligations under the Credit Agreement, as amended by this Amendment, do not and will not
contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d)
the organizational documents of Borrower;
3.6. The execution and delivery by Borrower of this Amendment and the performance by Borrower
of the obligations under the Credit Agreement, as amended by this Amendment, do not require any
order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on Borrower, except as already has been obtained or made;
3.7. This Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower 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; and
3.8. as of the date hereof, it has no defenses against the obligations to pay any amounts
under the Credit Agreement. Each Borrower acknowledges that Agents and Lenders have acted in good
faith and have conducted in a commercially reasonable manner their relationships with Borrowers in
connection with this Amendment and in connection with the Loan Documents.
Each Borrower understands and acknowledges that Agents and Lenders are entering into this
Amendment in reliance upon, and in partial consideration for, the above representations and
warranties, and agrees that such reliance is reasonable and appropriate.
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4. Effectiveness. The amendments contained in Sections 1.2 and 1.5 of this Amendment
will be effective as of July 2, 2010 and the remaining amendments contained in this Amendment will
be effective as of the date specified in the notice from the Agent described in Section 4.3 below
upon the satisfaction of all the following conditions precedent:
4.1. Amendment. The due execution and delivery of this Amendment to Agent by all parties
thereto.
4.2. Cash Collateral. All outstanding Loans and Letters of Credit shall be secured by Loan
Collateral and Cash Collateral, respectively, in an amount not less than 100% of all Loans and
Dollar-denominated Letters of Credit and 105% of all non-Dollar-denominated Letters of Credit.
4.3. Amendment Fee. Borrowers shall pay an amendment fee in the amount of $10,000 to Agent
for the benefit of Lenders.
Agent shall notify Borrowers and Lenders when the foregoing conditions have been satisfied,
and such notice shall be conclusive and binding.
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.
7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first written above.
| Borrowers: | Aviat Networks, Inc. a Delaware corporation |
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| By: | ||||
| Printed Name: | ||||
| Title: | ||||
| Aviat U.S., Inc. a Delaware corporation |
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| By: | ||||
| Printed Name: | ||||
| Title: | ||||
| Aviat Networks (S) PTE. LTD. a Singapore corporation |
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| By: | ||||
| Printed Name: | ||||
| Title: | ||||
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AGENTS AND LENDERS:
| Bank of America, N.A., as Administrative Agent |
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| By: | ||||
| Printed Name: | ||||
| Title: | ||||
| Bank of America, N.A., as a Lender, L/C Issuer and Swing Line Lender |
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| By: | ||||
| Printed Name: | ||||
| Title: | ||||
| Bank of America, N.A., Hong Kong Branch, as Singapore Loan Agent |
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| By: | ||||
| Printed Name: | ||||
| Title: | ||||
| Silicon Valley Bank, as a Lender and L/C Issuer |
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| By: | ||||
| Printed Name: | ||||
| Title: | ||||
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