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EXHIBIT 10.1.5
AMENDMENT NO. 5 TO CREDIT AGREEMENT
This AMENDMENT No. 5 TO CREDIT AGREEMENT (this "Amendment"), is made
and entered into as of February 12, 1999, among COMMUNICATIONS & POWER
INDUSTRIES, INC. (the "Borrower"), COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, CPI SUBSIDIARY HOLDINGS INC., COMMUNICATIONS & POWER INDUSTRIES
INTERNATIONAL INC., COMMUNICATIONS & POWER INDUSTRIES ASIA INC., COMMUNICATIONS
& POWER INDUSTRIES ITALIA S.R.L., COMMUNICATIONS & POWER INDUSTRIES EUROPE
LIMITED, COMMUNICATIONS & POWER INDUSTRIES CANADA INC., COMMUNICATIONS & POWER
INDUSTRIES AUSTRALIA PTY LIMITED, CPI SALES CORP. (collectively, the
"Obligors"), BANKERS TRUST COMPANY, as agent (the "Agent"), and the various
lenders (the "Lenders") from time to time party to the Credit Agreement, dated
as of August 11, 1995 (as the same has been amended and modified through the
date hereof, the "Agreement"), among the Obligors, the Agent and the Lenders.
W I T N E S S E T H:
WHEREAS, the Obligors, the Agent and the Lenders desire to amend
certain provisions of the Agreement;
NOW, THEREFORE, in consideration of the foregoing, the premises and
mutual covenants contained herein and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings given thereto in the Agreement.
2. Effectiveness of this Amendment. This Amendment shall become
effective and the Agreement shall be deemed amended as provided herein as of
December 31, 1998 on the first date (the "Effective Date") on which each of the
following conditions shall be satisfied or waived:
(a) Execution of Amendment. Each Obligor, the Agent and the
Required Lenders shall have executed a copy of this Amendment (whether
the same or different copies) and shall have delivered the same to the
Agent.
(b) No Default; Representations and Warranties. The Required
Lenders shall be satisfied that, on the Effective Date and after giving
effect to this Amendment, (i) there shall exist no Default or Event of
Default and (ii) the representations and warranties of each Obligor,
each Guarantor and each Pledgor contained in the Loan Documents to
which such Person is a party are true and correct in all material
respects as of the Effective Date with the same effect as though such
representations and warranties had been made on and as of the Effective
Date (except for such representations and warranties made as of a
specified date, which shall be true and correct in all material
respects as of such specified date).
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(c) Amendment Fee. For consenting to the amendments contained
in this Amendment, each Lender that executes this Amendment shall have
received on the Effective Date a fee in immediately available funds
equal to the product of (i) 0.25% and (ii) the aggregate amount of such
Lender's Commitments.
(d) Other Payments. The Agent and each Lender shall have
received all other amounts, if any, amounts owing from the Obligors to
such Person through and including the Effective Date.
3. Amendments. As of December 31, 1998:
(a) Annex A to the Agreement shall be amended by:
(i) deleting the defined terms: "Consolidated Fixed
Charges", "Consolidated Net Worth" and "Fixed Charge Coverage
Ratio";
(ii) adding the following defined term after the
defined term "Currency Agreement": `"Current Maturities of
Funded Indebtedness" shall have the meaning provided in ANNEX
F.'; and
(iii) adding the following defined term after the
defined term "Letters of Credit": `"Leverage Ratio" shall have
the meaning provided in ANNEX F.'.
(b) Annex F to the Agreement shall be deleted in its
entirety and Exhibit A to this Amendment shall be substituted
therefor.
4. Representations and Warranties. Each Obligor makes, as of
the Effective Date, each of the representations and warranties set forth in
Section 3 of the Agreement, and such representations and warranties are, by this
reference, incorporated herein as if set forth herein in their entirety,
provided that references to "Loan Documents" shall, for purposes of this
paragraph, be deemed to include this Amendment.
5. Miscellaneous.
(a) Except as expressly modified by this Amendment,
the Agreement and Schedules and Annexes thereto shall continue
to be and remain in full force and effect in accordance with
their terms. Any future reference to the Agreement and
Schedules and Annexes thereto shall, from and after the
Effective Date, be deemed to be a reference to the Agreement
and Schedules and Annexes thereto as amended by this
Amendment.
(b) This Amendment may be executed in any number of
counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute but one
instrument.
(c) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO CONFLICTS OF LAW RULES.
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(d) This Amendment may be executed by facsimile signature and each such
signature shall be treated in all respects as having the same effect as an
original signature.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
COMMUNICATIONS & POWER
INDUSTRIES, INC.
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer,
Treasurer and Secretary
COMMUNICATIONS & POWER
INDUSTRIES HOLDING CORPORATION
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer, Treasurer
and Secretary
CPI SUBSIDIARY HOLDINGS INC.
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
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COMMUNICATIONS & POWER
INDUSTRIES INTERNATIONAL INC.
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
COMMUNICATIONS & POWER
INDUSTRIES ASIA INC.
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
COMMUNICATIONS & POWER
INDUSTRIES ITALIA S.R.L.
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: (Per Power of Attorney)
COMMUNICATIONS & POWER
INDUSTRIES EUROPE LIMITED
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
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COMMUNICATIONS & POWER
INDUSTRIES CANADA INC.
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
COMMUNICATIONS & POWER
INDUSTRIES AUSTRALIA
PTY LIMITED
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: (Per Power of Attorney)
CPI SALES CORP.
By /s/XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary and Treasurer
BANKERS TRUST COMPANY,
as Lender and as Agent
By /s/XXXX XX XXXXX
-----------------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
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DRESDNER BANK AG,
New York Branch and
Grand Cayman Branch
By
-------------------------------------------
Name:
Title:
By
-------------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
(f/k/a FIRST BANK NATIONAL ASSOCIATION)
By /s/XXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By /s/XXXXXX XXXXXXXX
-----------------------------------------
Name: Xxxxxx Xxxxxxxx, CFA
Title: Authorized Signatory
ROYALTON COMPANY
By PACIFIC INVESTMENT MANAGEMENT
COMPANY, as Investment Adviser
By /s/XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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SENIOR DEBT PORTFOLIO
By BOSTON MANAGEMENT AND RESEARCH,
as Investment Adviser
By /s/XXXXX X. PAGE
-----------------------------------------
Name: Xxxxx X. Page
Title: Vice President
XXXXX XXXXX SENIOR INCOME TRUST
By XXXXX XXXXX MANAGEMENT
as Investment Adviser
By /s/XXXXX H PAGE
-----------------------------------------
Name: Xxxxx X. Page
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By /s/XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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ANNEX F
to
Credit Agreement
FINANCIAL COVENANTS
Each of the following covenants shall be calculated in accordance with
GAAP, consistently applied:
1. Borrower will not permit Consolidated EBITDA for any Test Period
determined as of the last day of the applicable Fiscal Quarter set forth below
to be less than the amount set forth opposite such Fiscal Quarter:
Consolidated
Fiscal Quarter EBITDA
-------------- ------------
Q1, 1999 $33,000,000
Q2, 1999 $33,000,000
Q3, 1999 $33,000,000
Q4, 1999 $33,000,000
Q1, 2000 $33,000,000
Q2, 2000 $33,000,000
Q3, 2000 $34,000,000
Q4, 2000 $35,000,000
Q1, 2001 $35,000,000
Q2, 2001 $35,000,000
Q3, 2001 $36,000,000
Q4, 2001 $37,000,000
Q1, 2002 $37,000,000
Q2, 2002 $37,000,000
Q3, 2002 $38,000,000
Q4, 2002 $39,000,000
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2. Borrower will not permit the Interest Coverage Ratio for any Test
Period determined as of the last day of the applicable Fiscal Quarter set forth
below to be less than the ratio set forth opposite such Fiscal Quarter:
Fiscal Quarter Ratio
-------------- -----
Q1, 1999 2.0:1.0
Q2, 1999 2.0:1.0
Q3, 1999 2.0:1.0
Q4, 1999 2.1:1.0
Q1, 2000 2.1:1.0
Q2, 2000 2.2:1.0
Q3, 2000 2.3:1.0
Q4, 2000 2.4:1.0
Q1, 2001 2.5:1.0
Q2, 2001 2.6:1.0
Q3, 2001 2.7:1.0
Q4, 2001 2.8:1.0
Q1, 2002 2.9.1.0
Q2, 2002 3.0:1.0
Q3, 2002 3.0:1.0
Q4, 2002 3.0:1.0
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3. Borrower will not permit the Leverage Ratio for any Test Period
determined as of the last day of the applicable Fiscal Quarter set forth below
to be less than the ratio set forth opposite such Fiscal Quarter:
Fiscal Quarter Ratio
-------------- -----
Q1, 1999 4.7:1.0
Q2, 1999 4.7:1.0
Q3, 1999 4.6:1.0
Q4, 1999 4.5:1.0
Q1, 2000 4.5:1.0
Q2, 2000 4.3:1.0
Q3, 2000 4.1:1.0
Q4, 2000 3.9.1.0
Q1, 2001 3.8:1.0
Q2, 2001 3.6:1.0
Q3, 2001 3.4:1.0
Q4, 2001 3.2:1.0
Q1, 2002 3.0:1.0
Q2, 2002 3.0:1.0
Q3, 2002 3.0:1.0
Q4, 2002 3.0:1.0
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4. Borrower will not, and will not permit any of its Subsidiaries to,
make any Capital Expenditures, except that during any Fiscal Year (taken as one
accounting period) Parent and its Subsidiaries may make Capital Expenditures so
long as such Capital Expenditures do not exceed in any such Fiscal Year set
forth below the amount set forth opposite such Fiscal Year below:
Fiscal Year Amount
----------- ------
1998 $12,000,000
1999 $13,000,000
2000 $13,000,000
2001 $13,000,000
2002 $13,000,000
To the extent that the amount of Capital Expenditures made by Obligors during
any Fiscal Year set forth in the table above is less than the amount applicable
to the respective Fiscal Year set forth in the table above (without giving
effect to any increase in such amount as provided below), the lesser of (a) such
unused amount and (b) 25% of the respective scheduled amount (such lesser
amount, the "Rollover Amount") may be carried forward and utilized by Obligors
to make additional Capital Expenditures in the immediately succeeding Fiscal
Year, provided that no amount once carried forward to the next Fiscal Year may
be carried forward to a Fiscal Year thereafter, provided further, that Capital
Expenditures made during any Fiscal Year shall be first deemed made in respect
of the Rollover Amount and then deemed made in respect of the scheduled amount
permitted for such Fiscal Year.
As used in this ANNEX F and the Agreement, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"Acquisition" shall mean from and after December 31, 1998, any
acquisition by any Obligor of an equity interest in (whether by purchase of such
equity interest or merger, consolidation or other similar transaction), or all
or substantially all of the assets of, or any smaller portion that constitutes
an operating unit or division or, any Person as permitted pursuant to the
Agreement.
"Acquisition EBITDA" of a Target for a period shall mean the
Consolidated EBITDA of such Target for such period based on historical financial
statements for such Target previously delivered to the Lenders, it being
understood that Acquisition EBITDA shall not include any income, expenses or
other items relating to assets not acquired in the applicable Acquisition.
"Capital Expenditures" shall mean, on a Consolidated basis for Parent
and its Subsidiaries without duplication, all payments or accruals (including
the incurrence of Capital Lease Indebtedness) for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and that are required to be capitalized
under GAAP; provided, that the term "Capital Expenditures" shall not include
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expenditures permitted under Section 5.5(d) for the purchase, replacement or
restoration of assets from the proceeds of any insurance or condemnation award.
"Consolidated Current Assets" shall mean, at any time, the current
assets (other than cash, Cash Equivalents and deferred income taxes to the
extent included in current assets) of Parent and its Subsidiaries at such time
determined on a Consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time, the current
liabilities of Parent and its Subsidiaries determined on a Consolidated basis,
but excluding deferred income taxes and the current portion of and accrued but
unpaid interest on any Indebtedness under the Agreement and any other Funded
Indebtedness which would otherwise be included therein.
"Consolidated EBITDA" shall mean, without duplication for any period,
Consolidated Net Income adjusted by adding (to the extent deducted in computing
Consolidated Net Income) or subtracting (to the extent added in computing
Consolidated Net Income) thereto the following on a Consolidated basis for such
period for Parent and its Subsidiaries: (a) provisions for taxes based on income
and foreign withholding taxes for such period, (b) Consolidated Interest Expense
and interest income for such period, and (c) the amount of all depreciation
expense and amortization expense that was deducted in determining Consolidated
Net Income for such period; in each case determined without giving effect (to
the extent reflected in Consolidated Net Income for such period) to (i) any
extraordinary gains or losses, (ii) gains or losses from sales of assets (other
than sales of Inventory in the ordinary course of business), (iii) any write-off
of in-process research and development made in connection with the Acquisition,
(iv) any write-up of Inventory made in connection with the Acquisition, and (v)
any other non-recurring charges (including fees and closing costs in connection
with the Acquisition); provided, however, that for purposes of calculating the
Leverage Ratio only, Consolidated EBITDA shall include Acquisition EBITDA for
the applicable four Fiscal Quarter period of each Target acquired during or
after such period to the extent such Acquisition EBITDA has not otherwise been
taken into account in the calculation of Consolidated EBITDA.
"Consolidated Interest Expense" shall mean, for any period, the sum of
(a) the total interest expense (including that attributable to Capital Leases in
accordance with GAAP) of Parent and its Subsidiaries determined on a
Consolidated basis with respect to all outstanding Indebtedness of Parent and
its Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs or benefits under any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement, but excluding,
however, amortization of deferred financing costs, original issue discount and
any interest expense on deferred compensation arrangements to the extent
included in total interest expense and (b) the cash dividends, if any, paid by
the Parent in respect of its Stock during such period.
"Current Maturities of Funded Indebtedness" shall mean at any time and
with respect to any item of Funded Indebtedness, the portion of such Funded
Indebtedness outstanding at such time which by the terms of such Funded
Indebtedness or the terms of any
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instrument or agreement relating thereto is due on demand or within one year
from such time (whether by sinking fund, other required prepayment or final
payment at maturity) and is not directly or indirectly renewable, extendible or
refundable at the option of the Obligor under an agreement or firm commitment in
effect at such time to a date one year or more from such time
"Consolidated Net Income" shall mean, for any period, the net income
(or loss), after provision for taxes, of Parent and its Subsidiaries on a
Consolidated basis for such period taken as a single accounting period but
excluding any unrealized losses and gains for such period resulting from
xxxx-to-market of any foreign exchange contracts, currency swap agreements or
other similar agreements or arrangements designed to protect against
fluctuations in currency values.
"Excess Cash Flow" shall mean, for any period an amount equal to the
greater of zero or,
(a) the sum of, without duplication:
(i) Consolidated Net Income for such period; plus
(ii) the amount of all non-cash charges (including, without
limitation or duplication, depreciation, amortization and non-cash
components of interest expense) which reduce Consolidated Net Income
for such period; plus
(iii) the decrease, if any, in Working Capital from the first
day to the last day of such period; plus
(iv) the decrease in the principal amount of loans to Parent
and employees or officers of the Obligors (to the extent such loans
were permitted by the Agreement) from the first day to the last day of
such period; plus
(v) the decrease in any deferred tax assets and long-term cash
assets (not including pension funds) from the first day to the last day
of such period; plus
(vi) the increase in any deferred tax liabilities and
long-term cash liabilities (not including Indebtedness) from the first
day to the last day of such period;
minus, without duplication (b) the sum of:
(i) an amount equal to all Capital Expenditures made during
such period that were not financed by Indebtedness (including Capital
Lease Indebtedness but excluding Loans hereunder); plus
(ii) the amount of all non-cash charges (including, without
limitation or duplication, depreciation, amortization and non-cash
components of interest expense) which increase Consolidated Net Income
for such period; and
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(iii) the aggregate principal amount of permanent principal
payments of Indebtedness for borrowed money of Borrower and its
Subsidiaries (other than repayments of Loans, provided that repayments
of Loans shall be deducted in determining Excess Cash Flow if such
repayments were (A) required pursuant to Section 1.4(d) of the
Agreement or (B) made as a voluntary prepayment with internally
generated funds (but in the case of a voluntary prepayment of the
Revolving Credit Loan, only to the extent accompanied by a voluntary
reduction to the Maximum Revolving Credit Commitment)) during such
period; plus
(iv) the increase, if any, in Working Capital from the first
day to the last day of such period; plus
(v) the increase in the principal amount of loans to Parent
and employees or officers of the Obligors (to the extent such loans
were permitted by the Agreement) from the first day to the last day of
such period; plus
(vi) the increase in any deferred tax assets and long-term
cash assets (not including pension funds) from the first day to the
last day of such period; plus
(vii) the decrease in any deferred tax liabilities and
long-term cash liabilities (not including Indebtedness) from the first
day to the last day of such period; plus
(viii) the aggregate amount of cash dividends or other cash
distributions on the capital stock of Borrower paid by Borrower, to the
extent permitted by the Agreement, during such period.
"Funded Indebtedness" shall mean, with respect to Parent and its
Subsidiaries on a Consolidated basis, all Indebtedness of such Obligors (other
than Indebtedness in respect of undrawn letters of credit which shall, for
purposes of calculating the Leverage Ratio, be excluded from Funded
Indebtedness) which by its terms or by the terms of any instrument or agreement
related thereto has a final stated maturity which is more than one year from, or
is directly renewable or extendible at the option of any such Obligor to a date
more than one year from (including an option of any such Obligor under a
revolving credit or similar agreement obligating the lender or lenders
thereunder to extend credit over a period of one year or more from) the date of
the creation thereof, provided that Funded Indebtedness shall include, as at any
date of determination, Current Maturities of Funded Indebtedness.
"Interest Coverage Ratio" shall mean, for any period, the ratio of (a)
Consolidated EBITDA to (b) Consolidated Interest Expense for such period.
"Leverage Ratio" shall mean, for any period, the ratio of (a) Funded
Indebtedness as of the last day of such period to (b) Consolidated EBITDA for
such period.
"Q1" shall mean, for any Fiscal Year, the first Fiscal Quarter of such
Fiscal Year.
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"Q2" shall mean, for any Fiscal Year, the second Fiscal Quarter of such
Fiscal Year.
"Q3" shall mean, for any Fiscal Year, the third Fiscal Quarter of such
Fiscal Year.
"Q4" shall mean, for any Fiscal Year, the fourth Fiscal Quarter of such
Fiscal Year.
"Target" shall mean the Person an equity interest in (whether by
purchase of such equity interest or merger, consolidation or other similar
transaction) which is to be acquired, or the Person whose assets are to be
acquired, in any Acquisition.
"Test Period" shall mean, as of the end of any Fiscal Quarter, the
immediately preceding four (4) Fiscal Quarters, including the Fiscal Quarter
then ending, taken as one period.
"Working Capital" shall mean, as of any date or determination,
Consolidated Current Assets less Consolidated Current Liabilities, in each case,
as of such date.
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