Exhibit 99.1
AMENDMENT NO. 4
TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 4 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(this "Amendment") is entered into this 27th day of February, 2006, by and
between 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. 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 Section 2.1.5 (Term Loan). Section 2.1.5(a) is hereby
amended to read in its entirety as follows:
(a) From the Closing Date through March 31, 2006, Bank shall
make up to two (2) advances (each, a "Term Advance" and, collectively, "Term
Advances") in an aggregate amount not to exceed the Term Loan Amount; provided
however, any Term Advances with a Funding Date after the effective date of
Amendment No. 4 to this Agreement (a "Term B Advance") shall not exceed
$20,000,000 in the aggregate.
1.2 Section 2.2 (Overadvances). Section 2.2 is hereby
amended to read in its entirety as follows:
If the Borrower's aggregate obligations under (a) the Term
Advances under Section 2.1.5 exceed twice the Borrowing Base, or (b) Sections
2.1.1, 2.1.2, and 2.1.4 plus the FX Reserve under Section 2.1.3 and Term
Advances under Section 2.1.5 exceed $50,000,000, then, in either case, Borrower
must immediately pay Bank the excess.
1.3 Section 2.3 (General Provisions Relating to the Advances
and Term Advances). Section 2.3(b) is hereby amended to read in its entirety as
follows:
(b) Each Term Advance shall, at Borrower's option in
accordance with the terms of this Agreement, be either in the form of a Fixed
Rate Advance or a Floating Rate Advance; provided however, any Term B Advance
shall bear interest at the fixed rate set forth in Section 3.7(c). Borrower
shall pay interest accrued on the Term Advances at the rates and in the manner
set forth in Section 2.6(a).
1.4 Section 3.7 (Calculation of Interest and Fees). Section
3.7(c) is hereby amended to read in its entirety as follows:
(c) Fixed Rate Advances. (1) Fixed Rate Advances with a
Funding Date prior to February __, 2006 accrue interest on the outstanding
principal balance at a rate per annum equal to the 60-month Treasury Rate in
effect on the Funding Date plus two and one-half percent (2.50%) and (2) Term B
Advances accrue interest on the outstanding principal balance at a rate per
annum equal to the 60-month Treasury Rate in effect on the Funding Date plus two
and six-tenth of one percent (2.60%) ((1) and (2), each referred to as a "Fixed
Rate"). Interest on each Fixed Rate Advance is payable monthly by debit to the
Designated Deposit Account on each Term Advance Payment Date applicable to such
Fixed Rate Advance.
1.5 Section 6.7 (Financial Covenants). Section 6.7(a) is
hereby amended to read in its entirety as follows:
(a) Tangible Net Worth. As measured at the last day of each
fiscal quarter of Borrower, Tangible Net Worth of at least $54,000,000 plus (i)
twenty-five percent (25%) of net income, as determined in accordance with GAAP
(exclusive of losses), and (ii) fifty percent (50%) of any increases to net
worth due to Subordinated Debt or net equity proceeds from either private or
public offerings (exclusive of issuance of stock under Borrower's employee
benefit plans) for such quarter and all preceding quarters since December 31,
2005.
1.6 Section 6.7 (Financial Covenants). Section 6.7(b) is
hereby amended to read in its entirety as follows:
(b) "Liquidity Coverage. As measured at the last day of each
fiscal month of Borrower, a ratio of (1) unrestricted cash and Cash Equivalents
plus (i) short-term and long-term, marketable securities of Borrower, plus (ii)
twenty-five percent (25%) of Accounts minus (iii) outstanding Cash Management
Services, and minus (iv) the FX Reserve divided by (2) the aggregate amount of
the Obligations, of not less than 1.00 to 1.00 as measured at the last day of
each calendar month through May 31, 2006 and 1.25:1.00 thereafter."
1.7 Section 13 (Definitions). The definition of "Committed
Revolving Line" is amended and restated in its entirety as follows:
"Committed Revolving Line" is $50,000,000 minus the aggregate
outstanding principal amount of all Term Advances.
1.8 Section 13 (Definitions). The definition of "Revolving
Maturity Date" is amended and restated in its entirety as follows:
"Revolving Maturity Date" is April 30, 2008.
1.9 Section 13 (Definitions). The definition of "Tangible
Net Worth" is amended and restated in its entirety as follows:
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"Tangible Net Worth" is, on any date, the Consolidated Total
Assets of Borrower and its Subsidiaries minus (a) any amounts attributable to
reserves not already deducted from assets; (b) restricted cash; and (c)
Consolidated Total Liabilities.
1.10 Section 13 (Definitions). A new definition of "Term B
Advance" is inserted in its proper alphabetical order as follows:
"Term B Advance" is defined in Section 2.1.5(a).
1.11 Section 13 (Definitions). A new definition of "Term Loan
Amount" is inserted in its proper alphabetical order as follows:
"Term Loan Amount" is $34,583,333.
1.12 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.
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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 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 Consents and approvals. Bank shall have received
necessary consent from Borrower's shareholders (if required) and board of
directors to execute and deliver this Amendment and to perform its obligations
under the Loan Agreement, as amended by this Amendment.
4.3 Good standing. Bank shall have received a good standing
certificate of Borrower from the State of Delaware and a certificate of
status/foreign corporation of Borrower from the State of California.
4.4 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.
4.5 Amendment Fee. Borrower shall have paid Bank an
amendment fee in an amount equal to $240,000.
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: STRATEX NETWORKS, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
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Printed Name: Xxxxx X. Xxxxxx
---------------------------------
Title: Treasurer and Assistant Secretary
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By: /s/ Xxxx X. Xxxxx
---------------------------------
Printed Name: Xxxx X. Xxxxx
---------------------------------
Title: General Counsel and
Assistant Secretary
---------------------------------
BANK: SILICON VALLEY BANK
By: /s/ Xxx Xxxxx
---------------------------------
Printed Name: Xxx Xxxxx
---------------------------------
Title: Senior Relationship Manager
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EXHIBIT A
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK Date:
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
FROM: STRATEX NETWORKS, INC.
The undersigned Responsible Officer of Stratex Networks, Inc. ("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
Form 10-Q + CC Quarterly within 5 days of filing with SEC Yes No
Form 10-K + CC Annually within 5 days of filing with SEC Yes No
OCCURRENCES*
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IP Infringements Prompt Yes No
Material Litigation Prompt Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ ----------------------------------- --------- --------
Minimum Tangible 54,000,000 plus (i) twenty-five $________ Yes No
Net Worth percent (25%) of net income, as
(Quarterly) determined in accordance with
GAAP (exclusive of losses),
and (ii) fifty percent (50%) of
any increases to net worth due to
Subordinated Debt or net equity
proceeds from either private
or public offerings (exclusive of
issuances of stock under Borrower's
employee benefit plans) for such
quarter and all preceding quarters
since December 31, 2005.
Minimum Liquidity 1.00:1.00 through May 30, 2006 and Yes No
Ratio (Monthly) _____:1.00 1.25:1.00 thereafter
*If yes, attached is a summary of the Material Litigation or IP Infringements
not previously disclosed by Borrower.
Sincerely,
STRATEX NETWORKS, INC.
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:
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Compliance Status: Yes No
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