EXHIBIT 10.3
WAVETEK CORPORATION
FIRST AMENDMENT
TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of July 21, 1998 and entered into by and among WAVETEK CORPORATION,
a Delaware corporation ("COMPANY"), THE LENDERS LISTED ON THE SIGNATURE PAGES
HEREOF ("Lenders"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as syndication agent
for Lenders (in such capacity, "SYNDICATION AGENT"), and FLEET NATIONAL BANK,
as administrative agent for Lenders (in such capacity "ADMINISTRATIVE
AGENT"), and, for purposes of Section 4 hereof, the Subsidiary Guarantors
listed on the signature pages hereof, and is made with reference to that
certain Credit Agreement dated as of June 11, 1997 (the "CREDIT AGREEMENT"),
by and among Company, Lenders, Syndication Agent and Administrative Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Company and Lenders desire to amend the Credit Agreement
to (i) adjust the financial covenants as set forth herein, and (ii) make
certain other amendments as set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto
agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 7: COMPANY'S NEGATIVE COVENANTS
A. INDEBTEDNESS. Subsection 7.1 of the Credit Agreement is
hereby amended by re-numbering clause (viii) thereof as clause (ix) and by
inserting in numerical order a new clause (viii) as follows:
"(viii) Company may become and remain liable with respect
to an unsecured promissory note in the principal amount of up to
$4.6 million for the benefit of ComSonics, Incorporated, as
payee, which promissory note evidences Company's obligations to
make royalty payments to such payee pursuant to a licensing
agreement entered into between Company and such payee."
B. MINIMUM FIXED CHARGE COVERAGE RATIO. Subsection 7.6A of the
Credit Agreement is hereby amended by deleting the seventh line in the table
set forth therein in its entirety and substituting the following therefor:
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Minimum Fixed Charge
"Period Coverage Ratio
------- --------------
12/31/1998 1.20 : 1.00"
C. MAXIMUM LEVERAGE RATIO. Subsection 7.6B of the Credit
Agreement is hereby amended by deleting the fifth, sixth and seventh lines in
the table set forth therein in their entirety and substituting the following
therefor:
"Period Maximum Leverage Ratio
------- -----------------------
6/30/1998 6.30 : 1.00
9/30/1998 6.80 : 1.00
12/31/1998 7.10 : 1.00"
D. MINIMUM CONSOLIDATED EBITDA. Subsection 7.6C of the Credit
Agreement is hereby amended by deleting the fifth, sixth and seventh lines in
the table set forth therein in their entirety and substituting the following
therefor:
"Period Minimum Consolidated EBITDA
------- ---------------------------
(in millions)
6/30/1998 $ 19.0
9/30/1998 $ 17.9
12/31/1998 $ 17.0"
E. MINIMUM CONSOLIDATED NET WORTH. Subsection 7.6D of the Credit
Agreement is hereby amended by deleting the fifth, sixth and seventh lines in
the table set forth therein in their entirety and substituting the following
therefor:
"Period Minimum Consolidated Net Worth
------- ------------------------------
(in millions)
9/30/1998 $ (71.9)
12/31/1998 $ (72.2)"
F. AMENDMENT FEES. Section 7 of the Credit Agreement is hereby
amended by adding at the end thereof a new subsection 7.16 as follows:
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"7.16 PAYMENT OF AMENDMENT FEES.
Company shall not fail to pay on January 1, 1999, to
Administrative Agent, for payment to each Lender in accordance with
its Pro Rata Share, a fee equal to 0.25% of the sum of (i) the Term
Loan Exposure of all Lenders plus (ii) the Revolving Loan Commitments
of all Lenders; PROVIDED HOWEVER that if all Revolving Loan
Commitments have been terminated in full and all Obligations paid in
full prior to such date, no such amendment fee shall be payable
pursuant to this subsection 7.16."
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIRST
AMENDMENT EFFECTIVE DATE"):
A. On or before the First Amendment Effective Date, Company shall
deliver to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its
counsel) the following, each, unless otherwise noted, dated the First
Amendment Effective Date:
1. Signature and incumbency certificates of its officers
executing this Amendment; and
2. Executed copies of this Amendment.
B. Requisite Lenders shall have executed this Amendment.
C. On or before the First Amendment Effective Date, all corporate
and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent and Syndication Agent,
acting on behalf of Lenders, and their counsel shall be satisfactory in form
and substance to Administrative Agent and Syndication Agent and such counsel,
and Administrative Agent and Syndication Agent and such counsel shall have
received all such counterpart originals or certified copies of such documents
as Administrative Agent and Syndication Agent may reasonably request.
SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
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B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Company.
C. NO CONFLICT. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, the Certificate
or Articles of Incorporation or Bylaws of Company or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on Company or any of its Subsidiaries, (ii) conflict with, result in
a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of Company or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its
Subsidiaries, or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of
its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Company
of this Amendment and the performance by Company of the Amended Agreement do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement
have been duly executed and delivered by Company and are the legally valid
and binding obligations of Company, enforceable against Company in accordance
with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on
and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
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SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Company is a party to certain of the Collateral Documents, in each
case as amended through the First Amendment Effective Date, pursuant to which
Company has created Liens in favor of Agent on certain Collateral to secure
the Obligations. Each Subsidiary Guarantor is a party to the Guaranties and
certain of the Collateral Documents, in each case as amended through the
First Amendment Effective Date, pursuant to which each such Subsidiary
Guarantor has (i) guarantied the Obligations and (ii) created Liens in favor
of Administrative Agent on certain Collateral to secure the obligations of
such Subsidiary Guarantor under the applicable Guaranty of such Subsidiary
Guarantor. Company and each such Subsidiary Guarantor are collectively
referred to herein as the "CREDIT SUPPORT PARTIES", and the Guaranties and
Collateral Documents referred to above are collectively referred to herein as
the "CREDIT SUPPORT DOCUMENTs".
Each Credit Support Party hereby acknowledges that it has reviewed
the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit
Support Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be,
to the fullest extent possible the payment and performance of all
"Obligations," "Guarantied Obligations" and "Secured Obligations," as the
case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance
of all such "Obligations," "Guarantied Obligations" or "Secured Obligations,"
as the case may be, in respect of the Obligations of Company now or hereafter
existing under or in respect of the Amended Agreement.
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in
the Amended Agreement and the Credit Support Documents to which it is a party
or otherwise bound are true, correct and complete in all material respects on
and as of the First Amendment Effective Date to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party (other than Company) acknowledges and agrees
that (i) notwithstanding the conditions to effectiveness set forth in this
Amendment, such Credit Support Party is not required by the terms of the Credit
Agreement or any other Loan Document to consent to the amendments to the Credit
Agreement effected pursuant to this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Loan Document shall be deemed to require
the consent of such Credit Support Party to any future amendments to the Credit
Agreement.
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SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
(i) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement shall mean and be a reference to the Amended
Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force
and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Administrative Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees
and expenses as described in subsection 10.2 of the Credit Agreement incurred
by Syndication Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
WAVETEK CORPORATION
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Title: CHIEF FINANCIAL OFFICER
---------------------------------
WAVETEK U.S. INC., (for purposes of Section 4
only) as a Credit Support Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Title: CHIEF FINANCIAL OFFICER
---------------------------------
DLJ CAPITAL FUNDING, INC., INDIVIDUALLY AND
AS SYNDICATION AGENT
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Title: XXXXXX X. XXXXXXXX
MANAGING DIRECTOR
---------------------------------
FLEET NATIONAL BANK, INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
By: Xxxxx Xxxxxx
---------------------------------
Title: ASSISTANT VICE PRESIDENT
---------------------------------
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IMPERIAL BANK, AS A LENDER
By: /s/ X. Xxxxxxx
---------------------------------
Title: XXX XXXXXXX
SENIOR VICE PRESIDENT
---------------------------------
UNION BANK OF CALIFORNIA, AS A LENDER
By: /s/ Xxxx XxXxxx
---------------------------------
Title: VICE PRESIDENT
---------------------------------
CREDITANSTALT BANKVEREIN, AS A LENDER
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Title: VICE PRESIDENT
---------------------------------
By: /s/ Xxxx Xxxxxxx
---------------------------------
Title: S.V.P.
---------------------------------
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