Exhibit
10.1
FIRST AMENDMENT TO
CREDIT
AGREEMENT AND LIMITED
WAIVER
This FIRST AMENDMENT TO CREDIT AGREEMENT AND
LIMITED WAIVER (this “First Amendment”) dated as of
September 11, 2009 made by and among CYALUME TECHNOLOGIES, INC., a
Delaware corporation (the “Borrower”), CYALUME
TECHNOLOGIES HOLDINGS, INC., a Delaware corporation (the
“Holding Company”) and TD BANK, N.A., as Administrative
Agent and as the Lender (the “Agent”).
Background
The Borrower, the Holding Company and the Agent
entered into a credit agreement (the “Original Credit
Agreement”) dated as of December 19, 2008. The
Borrower has requested a waiver of the Senior Leverage Ratio and
the Total Debt Service Coverage Ratio each for the quarter ending
June 30, 2009. In addition, the Borrower has requested
an amendment to the Senior Leverage Ratio.
NOW, THEREFORE, in consideration of the promises
and the agreements, provisions and covenants herein contained, the
Borrower, the Holding Company and the Agent hereby agree as
follows:
1.
Limited Waiver . Subject to the terms and
conditions herein contained and in reliance on the representations
and warranties of the Borrower herein contained, effective upon the
satisfaction of the conditions precedent set forth in
section 3 below, the Agent hereby waives the requirement that
the Borrower be in compliance with the Total Debt Service Ratio
contained in section 12.1(b) of the Original Credit Agreement
for the quarter ending June 30, 2009, and the Agent hereby waives
the requirement that the Borrower be in compliance with the Senior
Leverage Ratio contained in section 12.2 of the Original Credit
Agreement for the quarter ending June 30, 2009. The
foregoing limited waivers are limited to the waivers of the
specific Total Debt Service Ratio and Senior Leverage Ratio for the
specific time period referred to in this section 1 and is not a
commitment or agreement to grant any waiver in the
future.
2.
Amendment . Subject to the terms and conditions
herein contained and in reliance on the representations and
warranties of the Borrower herein contained, effective upon
satisfaction of the conditions precedent contained in
section 3 below:
(a) Section 1.1
“Definitions ” of the Original Credit Agreement
is hereby amended by deleting the text of the defined terms below
and inserting the following in lieu thereof is hereby amended as
follows:
(1)
Adjusted EBITDA . With respect to any
period, an amount equal to EBITDA for such period plus to
the extent accounted for in EBITDA and without duplication, the sum
of (i) Acquired EBITDA and (ii) legal and professional
fees related to Permitted Acquisitions to the extent included in
Consolidated Net Income. For purposes of calculating
trailing twelve (12) month Adjusted EBITDA for a portion of the
first twelve months following Closing, the following shall
apply: $1,193,000 of restructuring expenses for the
quarter ending March 31, 2008 are added, $700,000 of the Holding
Company transaction expenses, and $443,000 of one time Acquisition
expenses are added, and $2,751,000 of gains on settlement of
lawsuit are subtracted.
(2)
Applicable Margin . Effective as of August
1, 2009, so long as no Event of Default exists and subject to the
terms of this definition, the applicable per annum percentage set
forth below; provided , that if any Event of Default exists
the applicable per annum percentage shall be that specified for
Level II.
|
Level
|
Senior Leverage
Ratio
|
LIBOR Rate
Margin
|
Base Rate
Margin
|
|
|
|
|
|
|
I
|
less than
2.0:1.0
|
5.00%
|
5.00%
|
|
|
|
|
|
|
II
|
greater than or
equal to 2.0:1.0
|
5.50%
|
5.50%
|
Any change in
the Applicable Margin required pursuant to the foregoing shall
become effective on the fifth (5 th ) Business Day after the Agent receives the
Borrower’s officer’s certificate under Section 10.4 for
the Borrower’s fiscal quarter or year-end, as the case may
be, in question; provided that interest rate reductions
shall become final only on the basis of Borrower’s annual
audited financial statements and (a) in the event that such
annual audited financial statements establish that the Borrower was
not entitled to a rate reduction which was previously granted, the
Borrower shall, upon written demand by the Agent, repay to the
Agent an amount equal to the excess of (i) interest at the
rate which should have been charged based on such annual audited
financial statement(s) to (ii) the rate actually charged
on the basis of the Borrower’s quarterly financial
statement(s) and (b) in the event that such annual
audited financial statements establish the Borrower was entitled to
a rate reduction which was previously not granted, the Agent shall,
upon written demand by the Borrower, apply the excess of
(i) the rate actually charged on the basis of the
Borrower’s quarterly financial statement(s) to
(ii) interest at the rate which should have been charged based
on such annual audited financial statement(s), to the payment of
principal outstanding under the Term A Note and if no amounts are
outstanding thereunder, under the Term B Note, in inverse
order of maturity without the payment of any premium of penalty and
if not amounts are outstanding thereunder to the payments of the
Revolving Credit Loans and if no Revolving Credit Loans are
outstanding such excess shall be remitted to the Borrower;
provided , that in the event of a dispute as to the
appropriate fiscal quarter as to which any adjustment should be
allocated, the decision of the independent accountants of the
Borrower shall be made in accordance with GAAP and shall be binding
upon the Agent and the Borrower absent manifest error; and,
provided further , that in the event that the
Borrower fails to provide any financial statements or
officer’s certificate on a timely basis in accordance with
Section 10.4, any interest rate increase payable as a result
thereof shall be retroactively effective to the date on which the
financial statements or officer’s certificate, as the case
may be, should have been received by the Agent in accordance with
Section 10.4 and the Borrower shall pay any amount due as a result
thereof upon written demand from the Agent . The Agent
shall send the Borrower a written acknowledgement of each change in
the Applicable Margin in accordance with the Agent’s
customary procedures as in effect from time to time, but the
failure to send such acknowledgement shall have no effect on the
effectiveness or applicability of the foregoing provisions of this
definition or the Borrower’s obligations with respect to
payment and calculation of interest on the Loans.
(3)
Borrowing Base . At the relevant time of
reference thereto, an amount determined by the Agent by reference
to the most recent Borrowing Base Report delivered to the Agent
pursuant to §10.4(h), as adjusted pursuant to the provisions
below, which is equal to the sum of: 80% of Eligible
Accounts Receivable plus the lesser of (i) $2,500,000
which amount will decrease in the amount of $100,000 on the last
day of each month with the first such reduction occurring on August
31, 2009 until December 31, 2009 (when the amount of this
subsection (i) will be $2,000,000 or (ii) 50% of Eligible Raw
Material and Finished Goods Inventory.
The Required
Lenders may, in their reasonable discretion, from time to time, in
accordance with §2.7: (x) reduce the lending
formula with respect to any Eligible Accounts Receivable to the
extent that the Required Lenders reasonably determine
that: (i) the dilution with respect of the Accounts
Receivable for any period has increased in any material respect or
may be reasonably anticipated to increase in any material respect
above historical levels, or (ii) the general creditworthiness
of account debtors or other obligors of the Borrower has declined
materially or (y) reduce the lending formula with respect to
any Eligible Raw Material and Finished Goods Inventory to the
extent that the Required Lenders determine
that: (i) the number of days of the turnover of the
inventory owned by Borrower for any period has changed in any
material adverse respect, (ii) the liquidation value of any
Eligible Raw Material and Finished Goods Inventory, or any category
thereof, has materially decreased, or (iii) the nature and
quality of the inventory has changed materially and
adversely. In determining whether to reduce the lending
formula(s), the Required Lenders may consider events, conditions,
contingencies or risks which are also considered in determining
Eligible Accounts Receivable and Eligible Raw Material and Finished
Goods Inventory.
(4)
EBITDA . With respect to any period, an
amount equal to the Consolidated Net Income of the Borrower and its
Subsidiaries for such period, plus to the extent accounted
for in Consolidated Net Income during such period and without
duplication the sum of: (i) depreciation and
amortization, (ii) Consolidated Total Interest Expense for
such period, (iii) non-cash expenses, (iv) income tax
expense and (v) extraordinary losses (net of tax
eff
