Exhibit 10.22
AMENDMENT NO. 2
Dated as of March 31, 1999
to
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 19, 1998
THIS AMENDMENT NO. 2 ("Amendment") is made as of March 31, 1999 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 by an Amendment No. 1 and
Waiver dated as of November 3, 1998 (as amended and as the same may be
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 requested that the Agent and the Required
Lenders amend the Credit Agreement in certain respects, and the Required
Lenders and the Agent are willing to amend the Credit Agreement on the terms
and conditions set forth herein, it being expressly understood that the
modifications set forth herein shall in no event constitute a waiver by the
Lenders or the Agent of any 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 2 below, the Credit Agreement is hereby
amended as follows:
1.1 SECTION 1.1 of the Credit Agreement is amended (i) to delete
the phrase "$30,000,000" now appearing in the definition of "AGGREGATE
REVOLVING LOAN COMMITMENT" and to substitute the following therefor:
"$25,000,000"; and (ii) to insert the following immediately prior to the
period (".") now appearing at the end of the definition of "EBITDA":
", PLUS (ix) any non-recurring expenses related to the reorganization,
restructuring and rationalization of the Borrower and its Subsidiaries
which are charged as operating expenses when and as charged (a) during the
fiscal quarter ending March 31, 1999 up to amounts not to be in excess of
$1,000,000, on a pre-tax basis, in the
aggregate, and (b) during the two fiscal quarter period ending on
September 30, 1999 up to amounts not to be in excess of $500,000, on a
pre-tax basis, in the aggregate, in each case, to the extent such
charges are deducted in computing Net Income".
1.2 SECTION 2.5(B)(i) of the Credit Agreement is hereby amended
to realphabetize the second CLAUSE (e) and CLAUSE (f) thereof as CLAUSES (f)
and (g), respectively.
1.3 SECTION 2.5(B)(ii) of the Credit Agreement is hereby amended
to delete the phrase "SECTION 2.5(B)(i)(d)(II)" now appearing therein and to
substitute the following therefor: "SECTION 2.5(B)(i)(e)(II)".
1.4 SECTION 2.15(D)(ii) of the Credit Agreement is amended to
delete the chart now appearing therein and to substitute the following
therefor:
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APPLICABLE
APPLICABLE FLOATING APPLICABLE EUROCURRENCY COMMITMENT
RATE MARGINS MARGINS FEE PERCENTAGE
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TRANCHE A TERM TRANCHE B TERM LOANS TRANCHE A TERM TRANCHE B TERM
LOANS AND REVOLVING LOANS AND REVOLVING LOANS
LOANS LOANS
LEVERAGE RATIO
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Greater than 4.5 to 1.0 2.00% 2.50% 3.00% 3.50% 0.50%
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Greater than 3.5 to 1.0
and less than or equal 1.75% 2.25% 2.75% 3.25% 0.50%
to 4.5 to 1.0
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Greater than 3.0 to
1.0 and less than or 1.50% 2.00% 2.50% 3.00% 0.50%
equal to 3.5 to 1.0
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Greater than 2.5 to 1.0
and less than or equal 1.25% 1.75% 2.25% 2.75% 0.50%
to 3.0 to 1.0
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Greater than 2.0 to 1.0
and less
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APPLICABLE
APPLICABLE FLOATING APPLICABLE EUROCURRENCY COMMITMENT
RATE MARGINS MARGINS FEE PERCENTAGE
------------------------------------------------------------------------------------
TRANCHE A TERM TRANCHE B TERM LOANS TRANCHE A TERM TRANCHE B TERM
LOANS AND REVOLVING LOANS AND REVOLVING LOANS
LOANS LOANS
LEVERAGE RATIO
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than or equal 1.00% 1.50% 2.00% 2.75% 0.50%
to 2.5 to 1.0
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Less than or equal to
2.0 to 1.0 1.00% 1.50% 1.75% 2.75% 0.375%
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1.5 SECTION 7.1(A)(i) of the Credit Agreement is hereby amended
to insert immediately after the phrase "forty-five (45) days after the end of
each fiscal quarter in each fiscal year", the following: "and not later than
July 31, 1999 for the fiscal quarter ending on June 30, 1999".
1.6 EXHIBIT A of the Credit Agreement is hereby restated in the
form of ATTACHMENT A hereto.
2. 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) duly executed originals of the Fee Letter, dated as of March
31, 1999, from the Borrower, together with all fees and
expenses in the amount separately agreed between the Borrower
and the Agent thereunder; and
(iv) such other documents, instruments and agreements as the Agent
may reasonably request.
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Upon the satisfaction of the foregoing conditions precedent, this Amendment
shall be deemed effective as of March 31, 1999 for CLAUSE (ii) of Section 1.1
hereof and as of June 1, 1999 for all other purposes (as applicable, the
"Effective Date").
3. AMENDMENT FEE. Each Lender that delivers a duly executed
signature page to this Amendment and Amendment No. 3 to the Credit Agreement
to Robert J. Lewis, Sidley & Austin (fax: 312-853-7036) by 5:00 p.m.
(Chicago time) on Friday, May 28, 1999, shall be entitled to an Amendment Fee
of 0.15% of such Lender's Commitment (as defined in the Credit Agreement
after giving effect to the reduction of the Aggregate Revolving Loan
Commitment contemplated in this Amendment), PROVIDED this Amendment is
approved by the Required Lenders (including the Agent). The Amendment Fee
shall be due and payable by the Borrower on the date the Borrower executes
this Amendment.
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 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.
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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.
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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:
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:
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy of
the foregoing Amendment No. 2 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 by an
Amendment No. 1 and Waiver dated as of November 3, 1998 (as amended and as
the same may be amended, restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT") which Amendment No. 2 is dated as of
March 31, 1999 (the "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 Amendment and as the same may from time to time
hereafter be amended, modified or restated.
Dated as of March 31, 1999 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:
ATTACHMENT A
TO AMENDMENT NO. 2 TO
AMENDED AND RESTATED CREDIT AGREEMENT
DATED MARCH 19, 1998
[ATTACHED]
EXHIBIT A
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Commitments
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REVOLVING LOAN COMMITMENTS
LENDER AMOUNT OF REVOLVING LOAN % OF AGGREGATE REVOLVING
COMMITMENT LOAN COMMITMENT
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THE FIRST NATIONAL BANK $5,769,230.77 23.076923078
OF CHICAGO
INTRUST BANK $2,884,615.38 11.538461538
THE BANK OF NOVA SCOTIA $3,846,153.85 15.384615385
HARRIS TRUST AND SAVINGS $3,846,153.85 15.384615385
BANK
NATIONAL WESTMINSTER $2,884,615.38 11.538461538
BANK PLC
UNION BANK OF $2,884,615.38 11.538461538
CALIFORNIA, N.A.
LLOYDS BANK PLC $2,884,615.38 11.538461538
TOTAL $25,000,000 100.00%
TRANCHE A TERM LOAN COMMITMENTS
LENDER AMOUNT OF TRANCHE A % OF AGGREGATE TRANCHE A
TERM LOAN COMMITMENT TERM LOAN COMMITMENT
------ -------------------- ------------------------
THE FIRST NATIONAL BANK $11,538,461.54 23.076923078
OF CHICAGO
INTRUST BANK $5,769,230.77 11.538461538
THE BANK OF NOVA SCOTIA $7,692,307.69 15.384615385
HARRIS TRUST AND SAVINGS $7,692,307.69 15.384615385
BANK
NATIONAL WESTMINSTER $5,769,230.77 11.538461538
BANK PLC
UNION BANK OF $5,769,230.77 11.538461538
CALIFORNIA, N.A.
LLOYDS BANK PLC $5,769,230.77 11.538461538
TOTAL $50,000,000 100.00%
TRANCHE B TERM LOAN COMMITMENTS
LENDER AMOUNT OF TRANCHE B % OF AGGREGATE TRANCHE B
TERM LOAN COMMITMENT TERM LOAN COMMITMENT
------ -------------------- ------------------------
THE FIRST NATIONAL BANK $11,538,461.54 23.076923078
OF CHICAGO
INTRUST BANK $5,769,230.77 11.538461538
THE BANK OF NOVA SCOTIA $7,692,307.69 15.384615385
HARRIS TRUST AND SAVINGS $7,692,307.69 15.384615385
BANK
NATIONAL WESTMINSTER $5,769,230.77 11.538461538
BANK PLC
UNION BANK OF $5,769,230.77 11.538461538
CALIFORNIA, N.A.
LLOYDS BANK PLC $5,769,230.77 11.538461538
TOTAL $50,000,000 100.00%
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