Exhibit 10.21
AMENDMENT NO. 1
AND WAIVER
Dated as of November 3, 1998
to
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 19, 1998
THIS AMENDMENT NO. 1 AND WAIVER ("Amendment") is made as of
November 3, 1998 by and among IFR SYSTEMS, INC. (the "Borrower"), the
financial institutions parties hereto as Lenders, and THE FIRST NATIONAL BANK
OF CHICAGO, in its capacity as contractual representative (the "Agent") under
that certain Amended and Restated Credit Agreement dated as of March 19, 1998
by and among the Borrower, the Lenders and the Agent (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"). Defined terms used herein and not otherwise defined herein
shall have the respective meanings given to them in the Credit Agreement.
WHEREAS, the Borrower, the Lenders and the Agent are parties to the
Credit Agreement; and
WHEREAS, the Borrower has notified the Agent and the Lenders that
the Borrower is in violation of Section 7.4(B) of the Credit Agreement to the
extent that the Borrower's Leverage Ratio for the fiscal quarter ending on
September 30, 1998 was greater than 4.25 to 1.0 (the "Applicable Default");
WHEREAS, the Borrower has requested that the Agent and the Required
Lenders waive the Applicable Default and amend the Credit Agreement in
certain respects, and the Required Lenders and the Agent are willing to waive
the Applicable Default and to amend the Credit Agreement on the terms and
conditions set forth herein, it being expressly understood that the waiver
set forth herein shall in no event constitute a waiver by the Lenders or the
Agent of any other breach of the Credit Agreement or any of the Lenders' or
Agent's rights or remedies with respect thereto;
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Borrower, the Lenders and the Agent have agreed to the following
amendments to the Credit Agreement:
1. AMENDMENT TO CREDIT AGREEMENT. Effective as of the Effective
Date (as defined below) and subject to the satisfaction of the conditions
precedent set forth in SECTION 3 below, the Credit Agreement is hereby
amended as follows:
1.1 SECTION 1.1 of the Credit Agreement is amended (i) to delete
the definition of "REVOLVING CREDIT AVAILABILITY" now appearing therein, and
to substitute the following therefor:
-1-
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the
amount by which (i) the Aggregate Revolving Loan Commitment at such time
exceeds (ii) the sum of (a) the Dollar Amount of the Revolving Credit
Obligations at such time PLUS (b) the Seasonal Reserve.
; and (ii) to insert alphabetically the following new definition:
"SEASONAL RESERVE" means, for the period commencing on November 3,
1998 through and including June 29, 1999, Five Million Dollars
($5,000,000), and at all other times, $0.
1.2 SECTION 2.2 of the Credit Agreement is amended to insert the
phrase "PLUS the Seasonal Reserve" immediately after the phrase "Revolving
Credit Obligations" now appearing in the first sentence thereof.
1.3 SECTION 2.3(A) of the Credit Agreement is amended to insert
the phrase "PLUS the Seasonal Reserve" immediately after the phrase
"Revolving Credit Obligations" now appearing in the first sentence thereof.
1.4 SECTION 2.5(B)(i)(c) of the Credit Agreement is amended to
insert the phrase "PLUS the Seasonal Reserve" immediately after each
occurrence of the phrase "Revolving Credit Obligations" now appearing therein.
1.5 SECTION 2.5(b)(ii) of the Credit Agreement is amended to
insert the phrase "PLUS the Seasonal Reserve" immediately after the phrase
"Revolving Credit Obligations" now appearing therein.
1.6 SECTION 2.6 of the Credit Agreement is amended to insert the
phrase "PLUS the Seasonal Reserve" immediately after each occurrence of the
phrase "Revolving Credit Obligations" now appearing in the first sentence
thereof.
1.7 SECTION 2.15(C) of the Credit Agreement is amended to insert
the phrase "PLUS the Seasonal Reserve" immediately after the phrase
"Revolving Credit Obligations (excluding the outstanding principal amount of
the Swing Line Loans)" now appearing therein.
1.8 SECTION 2.15(D) of the Credit Agreement is amended by adding
the following new SUBSECTION (iv) at the end thereof:
"(iv) Notwithstanding anything herein to the contrary, from
November 3, 1998 to but not including the fifth Business Day
following receipt of the Borrower's financial statements
delivered pursuant to SECTION 7.1(A)(i) for the fiscal
quarter ending on June 30, 1999, (x) the Applicable Floating
Rate Margins shall be equal to (i) 1.75% with respect to all
Tranche A Term Loans and Revolving Loans, and (ii) 2.25%
with respect to all Tranche B Term Loans, and (y) the
Applicable Eurocurrency Margins shall be equal to (i) 2.75%
with
respect to all Tranche A Term Loans and Revolving Loans and
(ii) 3.25% with respect to all Tranche B Term Loans."
1.9 SECTION 3.3(i) of the Credit Agreement is amended to insert
the phrase "PLUS the Seasonal Reserve" immediately after the phrase
"Revolving Credit Obligations" now appearing therein.
1.10 SECTION 5.2(iii) of the Credit Agreement is amended to
insert the phrase "PLUS the Seasonal Reserve" immediately after the phrase
"Revolving Credit Obligations" now appearing therein.
1.11 SECTION 7.3(F) of the Credit Agreement is hereby deleted in
its entirety, and the following is substituted therefor:
"(F) RESTRICTED PAYMENTS. From and after November 3, 1998, the
Borrower shall not declare or make any Restricted Payment."
1.12 SECTION 7.3(N) is hereby amended to insert immediately prior
to the period (".") at the end thereof, the following:
"; PROVIDED, HOWEVER, that the Borrower and its Subsidiaries may
change its fiscal year to be the twelve-month accounting period
ending on the last day of March each year."
1.13 SECTION 7.4(B) of the Credit Agreement is amended (a) to
delete the phrase, "(i) 4.25 to 1.00 for each fiscal quarter for the period
commencing with the fiscal quarter ending on June 30, 1998 through the fiscal
quarter ending on September 30, 1998; and (ii) 4.00 to 1.00 for each fiscal
quarter for the period commencing with the fiscal quarter ending on December
31, 1998 through the fiscal quarter ending March 31, 1999; and" now appearing
therein and (b) to renumber the remaining clauses accordingly.
1.14 SECTION 7.4 of the Credit Agreement is hereby amended to
insert the following new SUBSECTION (E):
"(E) MINIMUM EBITDA. The Borrower shall not permit its EBITDA to
be less than (i) $3,800,000 for the fiscal quarter ending on December
31, 1998 and (ii) $4,700,000 for the fiscal quarter ending on March 31,
1999. For purposes of this SECTION 7.4(E), EBITDA shall be calculated
determined as of the last day of each fiscal quarter based on the actual
amount for the three-month period ending on such day, calculated, with
respect to Permitted Acquisitions, on a PRO FORMA basis using historical
audited and reviewed unaudited financial statements obtained from the
seller, broken down by fiscal quarter in the Borrower's reasonable
judgment."
2. WAIVER.
2.1 Upon the effectiveness of this Amendment in accordance with
the provisions of SECTION 3 below, and only so long as the Borrower's EBITDA
(determined as of the last day of the fiscal quarter ending on September 30,
1998 based on the actual amount for the three-month period ending on such
day) shall be equal to or greater than $1,975,000, the Agent and the Required
Lenders hereby waive the Applicable Default, and the Lenders' and the Agent's
rights and remedies arising therefrom.
3. CONDITIONS OF EFFECTIVENESS. The effectiveness of this
Amendment is subject to the condition precedent that the Agent shall have
received the following documents:
(i) duly executed originals of this Amendment from the Borrower,
the Required Lenders and the Agent;
(ii) duly executed originals of the Reaffirmation attached hereto
from each Domestic Incorporated Subsidiary of the Borrower;
(iii) an amendment fee paid to the Agent in immediately available
funds for the account of each Lender equal to .25% of the aggregate
Commitment of each Lender;
(iv) duly executed originals of the Fee Letter, dated as of
November 3, 1998, from the Borrower; and
(v) such other documents, instruments and agreements as the Agent
may reasonably request.
Upon the satisfaction of the foregoing conditions precedent, this Amendment
shall become effective (the "Effective Date").
4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
hereby represents and warrants as follows:
(a) This Amendment and the Credit Agreement as previously executed
and as amended hereby, constitute legal, valid and binding obligations of the
Borrower and are enforceable against the Borrower in accordance with their
terms.
(b) Upon the effectiveness of this Amendment, the Borrower hereby
reaffirms all covenants, representations and warranties made in the Credit
Agreement, as amended hereby, and agrees that all such covenants,
representations and warranties shall be deemed to have been remade as of the
Effective Date of this Amendment.
5. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
(a) Upon the effectiveness of SECTION 1 hereof, each reference to
the Credit Agreement in the Credit Agreement and each other Loan Document
shall mean and be a reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement and
all other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein with respect to the Applicable
Default, operate as a waiver of any right, power or remedy of the Agent or
the Lenders, nor constitute a waiver of any provision of the Credit Agreement
or any other documents, instruments and agreements executed and/or delivered
in connection therewith.
6. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the internal laws (including, without
limitation, 735 ILCS 105/5-1 et seq., but otherwise without regard to the
conflicts of laws provisions) of the State of Illinois.
7. HEADINGS. Section 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.
8. COUNTERPARTS. This Amendment may be executed by one or more of
the parties to the Amendment on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
IFR SYSTEMS, INC.
By: ____________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent and as Lender
By: ____________________________
Name:
Title:
INTRUST BANK, as a Lender
By: ____________________________
Name:
Title:
THE BANK OF NOVA SCOTIA, as a Lender
By: ____________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK, as a Lender
By: ____________________________
Name:
Title:
SIGNATURE PAGE TO AMENDMENT NO. 1
TO AMENDED AND RESTATED CREDIT AGREEMENT
NATIONAL WESTMINSTER BANK PLC, as a Lender
By: ____________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A., as a Lender
By: ____________________________
Name:
Title:
LLOYDS BANK PLC, as a Lender
By: ____________________________
Name:
Title:
SIGNATURE PAGE TO AMENDMENT NO. 1
TO AMENDED AND RESTATED CREDIT AGREEMENT
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy of
the foregoing Amendment No. 1 and Waiver to the Amended and Restated Credit
Agreement dated as of March 19, 1998 by and among IFR Systems, Inc., a
Delaware corporation (the "Borrower"), the lenders from time to time parties
thereto (collectively, the "Lenders") and The First National Bank of Chicago,
as one of the Lenders and in its capacity as contractual representative (the
"Agent") on behalf of itself and the other Lenders, (as amended and as the
same may be amended, restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT") which Amendment No. 1 and Waiver is dated as
of November 3, 1998 (the "WAIVER AND AMENDMENT"). Capitalized terms used in
this Reaffirmation and not defined herein shall have the meanings given to
them in the Credit Agreement. Without in any way establishing a course of
dealing by the Agent or any Lender, each of the undersigned reaffirms the
terms and conditions of the Guaranty, Security Agreement and any other Loan
Document executed by it and acknowledges and agrees that such agreement and
each and every such Loan Document executed by the undersigned in connection
with the Credit Agreement remains in full force and effect and are hereby
reaffirmed, ratified and confirmed. All references to the Credit Agreement
contained in the above-referenced documents shall be a reference to the
Credit Agreement as so modified by the Waiver and Amendment and as the same
may from time to time hereafter be amended, modified or restated.
Dated: November 3, 1998 IFR AMERICAS, INC., formerly known as IFR
Instruments, Inc.
PK TECHNOLOGY, INC.
IFR INSTRUMENTS OF TEXAS, INC., formerly
known as Marconi Instruments, Inc.
IFR FINANCE, INC.
By: __________________________
Name:
Title:
SIGNATURE PAGE TO REAFFIRMATION