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EXHIBIT 10.23
WAIVER AND FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS WAIVER AND FIFTH AMENDMENT TO CREDIT AGREEMENT (the "Waiver and
Amendment"), dated as of June 30, 1995, is entered into by and between
CALIFORNIA MICROWAVE, INC. (the "Company") and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION (the "Bank").
RECITALS
A. The Company and the Bank are parties to a Credit Agreement dated as of
May 17, 1993 (the "Original Credit Agreement"), as amended by an Amendment to
Credit Agreement dated as of October 25, 1993, a Second Amendment to Credit
Agreement dated as of October 25, 1993, a Third Amendment to Credit Agreement
dated as of February 22, 1994, and a Fourth Amendment to Credit Agreement dated
as of March 1, 1995 (the Original Credit Agreement, as so amended, the "Credit
Agreement") pursuant to which the Bank has extended certain credit facilities to
the Company.
B. The Company has reported to the Bank the existence of certain events of
default under the Credit Agreement. The Company has requested that the Bank
waive certain events of default and agree to certain amendments of the Credit
Agreement.
C. The Bank is willing to waive certain defaults under the Credit
Agreement, and to amend the Credit Agreement subject to the terms and conditions
of this Waiver and Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy 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, if any, assigned to them in the Credit
Agreement.
2. Defaults and Waiver.
(a) For purposes of this Waiver and Amendment, the "Existing Defaults"
shall mean the defaults existing on this date under Section 8.01(c) of the
Credit Agreement solely as a consequence of a breach of the negative covenants
set forth at Sections 7.11, 7.13 and 7.14(b).
(b) Subject to and upon the terms and conditions hereof, the Bank
hereby waives the Existing Defaults; provided, however, the waiver with respect
to the Existing
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Default relating to Section 7.14(b) shall only apply if and to the extent that
the Company's consolidated operating loss for June 30, 1995 does not exceed
$37,500,000 and the Company's consolidated net loss after taxes for June 30,
1995 does not exceed $27,500,000. If either such loss is determined to exceed
such amount, an Event of Default shall exist relating to Section 7.14(b) as of
June 30, 1995.
(c) Nothing contained herein shall be deemed a waiver of (or otherwise
affect the Bank's ability to enforce) any other default or Event of Default,
including without limitation (i) any default or Event of Default as may now or
hereafter exist and arise from or otherwise be related to the Existing Defaults
(including without limitation any cross-default arising under the Credit
Agreement by virtue of any matters resulting from the Existing Defaults), and
(ii) any default or Event of Default arising at any time after the Effective
Date and which is the same as any of the Existing Defaults.
3. Amendments to Credit Agreement. The Credit Agreement shall be amended
as follows:
(a) Section 7.11 shall be amended in its entirety to read as follows:
"7.11 Quick Ratio. The Company shall not at the end of any fiscal
quarter suffer or permit its ratio (determined on a consolidated
basis ) of (a) cash plus Cash Equivalents plus the amount of
Eligible Receivables, net of any allowance for doubtful accounts,
to (b) Consolidated Current Liabilities to be less than 0.90:1.0"
(b) Section 7.13 shall be amended in its entirety to read as follows:
"7.13 Tangible Net Worth. The Company shall not permit its Tangible
Net Worth (determined on a consolidated basis) at the end of any
fiscal quarter to be less than the sum of (a) $160,000,000 plus (b)
seventy-five percent (75%) of quarterly net income for each fiscal
quarter ending subsequent to the quarter ended June 30, 1995, with
no reduction for net losses, plus (c) seventy-five percent (75%) of
the Net Issuance Proceeds of any equity securities issued by the
Company after the fiscal quarter
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ended June 30, 1995, (Net Issuance Proceeds including for this
purpose the value of any equity securities issued by the Company
upon conversion of any convertible Indebtedness of the Company)."
(c) Section 7.14 shall be amended in its entirety to read as follows:
"7.14 Consecutive Quarterly Losses. The Company, on a consolidated
basis, shall not incur or suffer or permit to be incurred (a) any
quarterly operating loss or any quarterly net loss in any two
consecutive fiscal quarters or (b) any quarterly operating loss or
quarterly net loss in excess of 5% of Tangible Net Worth."
4. Representations and Warranties. The Company hereby represents and
warrants to the Bank as follows:
(a) Other than the Existing Defaults, no Default or Event of Default
has occurred and is continuing.
(b) The execution, delivery and performance by the Company of this
Waiver and Amendment have been duly authorized by all necessary corporate and
other action and do not and will not require any registration with, consent or
approval of, notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable. The Credit Agreement as
amended by this Waiver and Amendment constitutes the legal, valid and binding
obligations of the Company, enforceable against it in accordance with its
respective terms, without defense, counterclaim or offset.
(c) Subject to the Existing Defaults, all representations and
warranties of the Company contained in the Credit Agreement are true and
correct.
(d) The Company is entering into this Waiver and Amendment on the basis
of its own investigation and for its own reasons, without reliance upon the Bank
or any other Person.
5. Effective Date
This Waiver and Amendment will become effective as of June 30, 1995
(the "Effective Date") upon receipt by the
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Bank from the Company of a duly executed original of this Waiver and Amendment.
6. Reservation of Rights. The Company acknowledges and agrees that neither
the Bank's forbearance in exercising its rights and remedies in connection with
the Existing Defaults, nor the execution and delivery by the Bank of this Waiver
and Amendment, shall be deemed (i) to create a course of dealing or otherwise
obligate the Bank to forbear or execute similar waivers under the same or
similar circumstances in the future, or (ii) to waive, relinquish, or impair any
right of the Bank to receive any indemnity or similar payment from any person or
entity as a result of any matters arising form or relating to the Existing
Defaults.
7. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to such Credit Agreement shall henceforth refer to
the Credit Agreement as amended by this Waiver and Amendment. This Waiver and
Amendment shall be deemed incorporated into, and a part of, the Credit
Agreement.
(b) This Waiver and Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Waiver and Amendment.
(c) This Waiver and Amendment shall be governed by and construed in
accordance with the law of the State of California.
(d) This Waiver and Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Bank of a facsimile transmitted document purportedly bearing
the signature of the Company shall bind the Company, with the same force and
effect as the delivery of a hard copy original. Any failure by the Bank to
receive the hard copy executed original of such document shall not diminish the
binding effect of receipt of the facsimile transmitted executed original of such
document which hard copy page was not received by the Bank.
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(e) This Waiver and Amendment together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Waiver and Amendment
supersedes all prior drafts and communications with respect thereto. This Waiver
and Amendment may not be amended except in accordance with the provisions of
Section 9.01 of the Credit Agreement.
(f) If any term or provision of this Waiver and Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Waiver and
Amendment or the Credit Agreement, respectively.
(g) The Company covenants to pay to or reimburse the Bank, upon demand,
for all costs and expenses (including allocated costs of in-house counsel)
incurred in connection with the development, preparation, negotiation, execution
and delivery of this Waiver and Amendment and the administration of the Existing
Defaults, including without limitation appraisal, audit, search and filing fees
incurred in connection therewith.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Waiver and Amendment as of the date first above written.
CALIFORNIA MICROWAVE, INC.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
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Name:
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Title:
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