Exhibit 10.2

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as
of August 3, 2015, by and among (i) Cyalume Technologies Holdings, Inc., a
Delaware corporation (“Holdings”), (ii) Cyalume Technologies, Inc., a Delaware
corporation (“CTI”), (iii) Cyalume Specialty Products, Inc., a Delaware
corporation (“CSPI”), (iv) COMBAT TRAINING SOLUTIONS, INC., a Colorado
corporation (“CTSI”), (v) Cyalume Realty, Inc., a Delaware corporation (“CRI”),
(vi)  CT SAS HOLDINGS, INC., a Delaware corporation (“SAS Holdings”, and
together with Holdings, CTI, CSPI, CTSI and CRI, individually and collectively
referred to herein as “Borrower”), (vi) the Lenders party hereto, and
(vii) Monroe Capital Management Advisors, LLC, a Delaware limited liability
company, as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”).

 

RECITALS:

 

WHEREAS, the Administrative Agent, Borrower and the Lenders have entered into
that certain Credit Agreement dated as of May 18, 2015 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
pursuant to which the Lenders, subject to the terms and conditions of the Loan
Documents, have made available to the Borrower a term loan, a revolving credit
facility and a delayed draw term loan facility;

 

WHEREAS, each Loan Party has requested that the Lenders amend certain provisions
of the Credit Agreement to, among other things, permit Borrower to draw on the
Delayed Draw Term Loan concurrently herewith, and the Administrative Agent and
the Lenders are willing to do so subject to the terms and conditions of this
Amendment.

 

NOW, THEREFORE, for and in consideration of the premises and mutual agreements
herein contained and for the purposes of setting forth the terms and conditions
of this Amendment, the parties hereto, intending to be bound, hereby agree as
follows:

 

1.                  Capitalized Terms. All capitalized terms which are not
defined in this Amendment shall have the same meanings as set forth in the
Credit Agreement.

 

2.                  Amendments to the Credit Agreement. Subject to the terms and
conditions of this Amendment, the Credit Agreement is amended as follows:

 

(a)                The following definitions set forth in Section 1.1 of the
Credit Agreement are hereby amended and restated in their entirety:

 

(i)“Delayed Draw Term Loan Commitment” means, as to any Lender, such Lender’s
commitment to make Delayed Draw Term Loans under this Agreement. The amount of
each Lender’s Delayed Draw Term Loan Commitment is set forth on Annex A. The
aggregate amount of the Delayed Draw Term Loan Commitments of all Lenders is
$1,500,000.

 

 

 

 

(ii)“Delayed Draw Term Loan Commitment Expiration Date” means August 3, 2015.

 

(iii)“Delayed Draw Term Loan Funding Date” means August 3, 2015.

 

(iv)“Omniglow Settlement Agreement” means that certain Confidential Settlement
Agreement and Mutual Release dated as of July 10, 2014 among CTI, Omniglow LLC,
Randye M. Holland and Stanley M. Holland as Trustees of the Randye M. Holland
and Stanley M. Holland Trust, Leemon Family LLC and Ira Leemon, as amended by
that certain Amendment to the Parties’ July 10, 2014 Confidential Settlement
Agreement and Mutual Release dated as of July 29, 2014, and that certain Second
Amendment to the Parties’ July 10, 2014 Confidential Settlement Agreement and
Mutual Release dated as of August 3, 2015.

 

(v)“Omniglow Settlement Payment” means the settlement payment required to be
made by CTI pursuant to Section 3b of the Omniglow Settlement Agreement in an
aggregate amount not to exceed $1,400,000 due and payable on or before August 3,
2015.

 

(b)               The following definition is added to Section 1.1 of the Credit
Agreement in alphabetical order:

 

“Observer” is defined in Section 10.1.12.

 

(c)                The definition of Delayed Draw Term Loan Non-Use Fee is
deleted from Section 1.1 of the Credit Agreement.

 

(d)               Section 5.4 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

5.4                Reserved.

 

(e)                Section 6.4.3 of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:

 

6.4.3             Delayed Draw Term Loans. The Delayed Draw Term Loans shall be
paid in installments as follows:

 

PAYMENT DATE

 

INSTALLMENT AMOUNT

        September 30, 2015  $9,375  December 31, 2015  $9,375  March 31, 2016 
$18,750  June 30, 2016  $18,750  September 30, 2016  $18,750  December 31, 2016 
$18,750 

 

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PAYMENT DATE   INSTALLMENT AMOUNT             March 31, 2017   $ 37,500   June
30, 2017   $ 37,500   September 30, 2017   $ 37,500   December 31, 2017   $
37,500   March 31, 2018   $ 37,500   June 30, 2018   $ 37,500   September 30,
2018   $ 37,500   December 31, 2018   $ 37,500   March 31, 2019   $ 37,500  
June 30, 2019   $ 37,500   September 30, 2019   $ 37,500   December 31, 2019   $
37,500   March 31, 2020   $ 37,500   Term Loan Maturity Date     The outstanding
principal amount of the Delayed Draw Term Loans  

 

Unless sooner paid in full, the outstanding principal balance of the Delayed
Draw Term Loans shall be paid in full on the Term Loan Maturity Date.

 

(f)                A new Section 10.1.12 is added to the Credit Agreement to
read as follows:

 

10.1.12        Notice of Meetings. Cause to be furnished to Administrative Agent
notice of each meeting of the board of directors of Holdings and each other Loan
Party and of each committee thereof at the same time and in the same manner and
method of communication as notice of each such meeting is given to the directors
(or managers or other equivalent) on the board of directors of Holdings, each
other Loan Party and such committee.

 

(a) In addition, subject to the limitation in Section (b) below: (i) one
individual designated by Administrative Agent (the “Observer”), shall be
entitled to attend in person (as an observer without any rights to vote, address
or be heard by the board of directors, or have any other rights of a duly
elected director) all meetings held in person and to listen to the entirety of
all telephonic meetings of the board of directors of Holdings, each other Loan
Party and each such committee; and (ii) the Observer shall be entitled to
receive all notices, written materials and other information, (including,
without limitation, copies of meeting minutes) given to directors (or managers
or other equivalent) in connection with such meetings at the same time such
materials and information are given to the directors (or managers or other
equivalent).

 

(b) The Borrower reserves the right to exclude the Observer from any meeting, or
any portion of any meeting of the board of directors (or managers or other
equivalent), and withhold from the Observer all notices, written materials and
other information, (including, without limitation, copies of meeting minutes)
given to directors (or managers or other equivalent) if, in the opinion of
Borrower’s counsel, attendance at such meeting (or portion of such meeting) or
access to such information would adversely affect the attorney-client privilege
between the Borrower and its counsel, result in the breach of an agreement
between the Borrower and a third party, result in the disclosure of trade
secrets of the Borrower, or present a conflict of interest between the Borrower
and the Administrative Agent (or its Affiliates).

 

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(c) Borrower shall reimburse the Observer for reasonable documented
out-of-pocket expenses incurred in connection with attending each meeting of the
board of directors of Holdings, each other Loan Party and any committee thereof.
Loan Parties agree to take any and all actions necessary to effectuate the
intent of the foregoing provisions of this Section 10.1.12.

 

(g)               Section 10.10 of the Credit Agreement is amended to append the
following language to the end of such Section:

 

“provided further, that the foregoing clause (a) shall not apply to deposit
accounts maintained by any Borrower for the sole purpose of the cash
collateralization of letters of credit permitted under Sections 11.1(o) and
11.2(k), provided that the amount on deposit in any such deposit accounts at any
time shall not exceed one hundred five percent (105%) of the face amount of each
such letter of credit, individually.

 

(h)               A new Section 11.1(o) is added to the Credit Agreement to read
as follows:

 

“(o)             Debt constituting reimbursement obligations with respect to
letters of credit issued after the date hereof for the account of any Borrower
in the ordinary course of business that are pre-approved by Administrative Agent
in writing; provided, however, that (i) the maximum face amount of all letters
of credit in the aggregate at any time outstanding shall not exceed $500,000,
and (ii) all letters of credit shall be unsecured except for cash
collateralization not exceeding one hundred five percent (105%) of the face
amount of each such letter of credit, individually.”

 

(i)                 A new Section 11.2(k) is added to the Credit Agreement to
read as follows:

 

“(k)              Lien on cash collateral securing Debt described in (and to the
extent permitted by) Section 11.1(o).”

 

(j)                 Section 11.14.3 of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:

 

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11.14.3 Senior Debt to EBITDA Ratio. Not permit the Senior Debt to EBITDA Ratio
as of the last day of any Computation Period to exceed the applicable ratio set
forth below for such Computation Period:

 

Computation
Period Ending  Senior Debt
to EBITDA Ratio 05/31/15  4.50 to 1.00 06/30/15  4.25 to 1.00 07/31/15  4.00 to
1.00 08/31/15  4.00 to 1.00 09/30/15  4.00 to 1.00 10/31/15  4.00 to 1.00
11/30/15  4.00 to 1.00 12/31/15  3.75 to 1.00 01/31/16  3.50 to 1.00 02/29/16 
3.50 to 1.00 03/31/16  3.50 to 1.00 04/30/16  3.50 to 1.00 05/31/16  3.50 to
1.00 06/30/16  3.25 to 1.00 07/31/16  3.25 to 1.00 08/31/16  3.25 to 1.00
09/30/16  3.00 to 1.00 10/31/16  3.00 to 1.00 11/30/16  3.00 to 1.00 12/31/16 
2.75 to 1.00 03/31/17  2.50 to 1.00 06/30/17  2.25 to 1.00 09/30/17  2.00 to
1.00 12/31/17  2.00 to 1.00 03/31/18  1.75 to 1.00 06/30/18  1.75 to 1.00
09/30/18  1.75 to 1.00 12/31/18  1.75 to 1.00 03/31/19  1.50 to 1.00 06/30/19 
1.50 to 1.00 09/30/19  1.50 to 1.00 12/31/19 and the last day of each Fiscal
Quarter thereafter
  1.50 to 1.00

 

(k)               Section 11.14.4 of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:

 

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11.14.4           Capital Expenditures. Not permit the aggregate amount of all
Capital Expenditures made by the Loan Parties in any Fiscal Year to exceed the
following amounts:

 

Fiscal Year Ending  Capital Expenditures  12/31/15  $1,250,000  12/31/16 
$1,700,000  12/31/17 and the last day of
each Fiscal Year thereafter  $1,500,000 

 

 

(l)                 Section 12.2.1(d) of the Credit Agreement is hereby deleted
in its entirety and replaced with the following:

 

(d)             prior to funding any Delayed Draw Term Loan, the Administrative
Agent shall have received a fully executed acknowledgment from the parties to
the Omniglow Settlement Agreement, in form and substance satisfactory to the
Administrative Agent, that shall provide that the making of the Omniglow
Settlement Payment shall (i) satisfy all of the Loan Parties’ obligations under
the Omniglow Settlement Agreement and under the “Amended Final Judgment” (as
defined in the Omniglow Settlement Agreement), and (ii) cause the release of the
Loan Parties set forth in Section 8(a) of the Omniglow Settlement Agreement to
become automatically effective.

 

(m)             Section 13.1.15 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

13.1.15      Settlement Agreements. Default in the payment when due, or in the
performance or observance of, any obligation of, or condition agreed to by, any
Loan Party under the Colon Settlement Agreement or Omniglow Settlement
Agreement; or the Omniglow Settlement Agreement is found to be invalid or
unenforceable and/or any Loan Party is obligated to pay any additional sum to
any of the other parties to the Omniglow Settlement Agreement in further
settlement of the matters addressed therein, in excess of the amount of the
Omniglow Settlement Payment.

 

(n)               Annex A of the Credit Agreement is hereby deleted in its
entirety and replaced with Annex A attached hereto.

 

3.                  Conditions Precedent. The amendments set forth in Section 2
shall be effective upon the satisfaction of all of the following conditions
precedent, each to the satisfaction of Administrative Agent in its sole
discretion:

 

(a)                receipt by Administrative Agent from each party hereto of a
counterpart of this Amendment signed on behalf of such party;

 

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(b)               receipt by Administrative Agent of a non-refundable deferred
closing fee in the amount of $100,000, which fee is fully earned and due and
payable on the date hereof;

 

(c)                receipt by Administrative Agent of the documents necessary to
satisfy the conditions of Section 12.2.1(d) of the Credit Agreement; and

 

(d)               receipt by Administrative Agent of each document, instrument
and certificate set forth on the closing checklist applicable hereto, duly
executed by each party thereto, and in form and substance satisfactory to
Administrative Agent.

 

4.                  Post-Closing Obligations. Loan Parties shall deliver each of
the following to Administrative Agent within the time frames set forth below, or
such later date as agreed to by Administrative Agent in its sole discretion:

 

(a)                Within five (5) Business Days of the date hereof, a copy of
the Satisfaction, as defined in the Omniglow Settlement Agreement, which has
been filed with the Hampden County Superior Court.

 

Each Loan Party hereby agrees that the failure to so complete and/or deliver to
Administrative Agent these items within the time period specified herein shall
constitute an Event of Default under the Credit Agreement and Administrative
Agent will be entitled to exercise all rights and remedies provided for
thereunder.

 

5.                  Representations, Covenants and Warranties; No Default. The
covenants set forth in the Credit Agreement and the other Loan Documents shall
be deemed remade as of the date hereof by each Loan Party. Each Loan Party
hereby represents and warrants that (a) the representations and warranties of
each Loan Party set forth in the Credit Agreement and the other Loan Documents
are true and correct with the same effect as if made on the date hereof (except
to the extent stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date), (b) no Default or Event of Default has occurred and is continuing as of
the date of this Amendment, (c) the Recitals hereto are true and correct, and
(d) the execution, delivery and performance by each Loan Party of this Amendment
and each related Loan Document to which it is a party, and the consummation of
the transactions described herein and the transactions related hereto, do not
and will not (i) require any consent or approval of any governmental agency or
authority (other than any consent or approval which has been obtained and is in
full force and effect), (ii) conflict with (x) any provision of law, (y) the
charter, by-laws or other organizational documents of any Loan Party or (z) any
agreement, indenture, instrument or other document, or any judgment, order or
decree, which is binding upon any Loan Party or any of their respective
properties, or (iii) require, or result in, the creation or imposition of any
Lien on any asset of any Loan Party (other than Liens in favor of Administrative
Agent created pursuant to the Collateral Documents).

 

6.                  Ratification; Claims. Except as expressly amended hereby,
the Credit Agreement and the other Loan Documents are hereby ratified and
confirmed by the parties hereto and remain in full force and effect in
accordance with the terms thereof. Without limiting the generality of the
foregoing, each Loan Party hereby acknowledges and agrees that the Guaranty and
Collateral Agreement remains in full force and effect, and each Loan Party
hereby acknowledges, reaffirms, confirms and ratifies all of its obligations
under the Guaranty and Collateral Agreement. Each Loan Party hereby
acknowledges, confirms, reaffirms and ratifies its grant to Administrative
Agent, for the benefit of the Administrative Agent, Lenders and their applicable
Affiliates, of a continuing security interest in all of its right, title and
interest in all currently existing and hereafter acquired or arising Collateral.
Each Loan Party hereby represents and warrants that as of the date hereof, there
are no defenses, setoffs, claims or counterclaims which could be asserted
against the Administrative Agent or the Lenders arising from or in connection
with the Credit Agreement or any other Loan Document.

 

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7.                  No Waiver or Novation. The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of the Administrative Agent or Lenders, nor constitute a waiver
of any provision of the Credit Agreement or the Loan Documents. Nothing herein
is intended or shall be construed as a waiver of any existing Defaults or Events
of Default under the Credit Agreement or other Loan Documents. This Amendment
(together with any other document executed in connection herewith) is not
intended to be, nor shall it be construed as, a novation of the Credit Agreement
or any of the Loan Documents.

 

8.                  Fees and Expenses. The Loan Parties jointly and severally
agree to pay on demand all costs and expenses of or incurred by the
Administrative Agent in connection with the evaluation, negotiation,
preparation, execution and delivery of this Amendment and the other instruments
and documents executed and/or delivered in connection with the transactions
described herein, including, but not limited to, the fees and expenses of
counsel for the Administrative Agent.

 

9.                  Release. Each Loan Party, on behalf of itself and its
predecessors, advisors, agents, Affiliates, directors, employees, officers,
parents, representatives and subsidiaries, together with its successors and
assigns (collectively, the “Releasors” and individually each a “Releasor”),
knowingly, voluntarily, and intentionally releases and forever discharges the
Administrative Agent, each Lender, their respective predecessors, advisors,
agents, Affiliates, directors, employees, officers, parents, representatives and
subsidiaries, together with their respective successors and assigns
(collectively, the “Released Parties” and individually each a “Released Party”)
from all possible claims, counterclaims, demands, actions, causes of action,
damages, costs, expenses and liability whatsoever, known or unknown, anticipated
or unanticipated, suspected or unsuspected, at law or in equity, originating in
whole or in part on or before the date hereof, which any Releasor may now or
hereafter have against any Released Party, if any (collectively, the “Released
Claims”), and irrespective of whether any such Released Claims arise out of
contract, tort, equity, violation of law or regulations, or otherwise.

 

10.              Reference to the Effect on the Credit Agreement; Loan Document.
Upon the effectiveness of this Amendment, (a) each reference in the Credit
Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of
similar import shall mean and be a reference to the Credit Agreement as amended
by this Amendment, and (b) each reference in the other Loan Documents to the
Credit Agreement shall mean and be a reference to the Credit Agreement as
amended by this Amendment.

 

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11.              GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION.

 

12.              Headings. Section headings in this Amendment are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

 

13.              Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Amendment by facsimile or by “.PDF” shall be equally as
effective as delivery of an original executed counterpart of this Amendment.

 

14.              Loan Document. This Amendment shall constitute a “Loan
Document” for purposes of the Credit Agreement and all other Loan Documents.

 

[SIGNATURE PAGES FOLLOW]

 

 

 

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(Signature Page to First Amendment to Credit Agreement)

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the date first above written.

 

BORROWER: CYALUME TECHNOLOGIES HOLDINGS, INC., a Delaware corporation        
By: /s/ Michael Bielonko     Michael Bielonko     Chief Financial Officer,
Treasurer and Secretary         CYALUME TECHNOLOGIES, INC., a Delaware
corporation         By: /s/ Michael Bielonko     Michael Bielonko     Chief
Financial Officer, Treasurer and Secretary           CYALUME SPECIALTY PRODUCTS,
INC., a Delaware corporation         By: /s/ Michael Bielonko     Michael
Bielonko     Chief Financial Officer, Treasurer and Secretary         COMBAT
TRAINING SOLUTIONS, INC., a Colorado corporation         By: /s/ Michael
Bielonko     Michael Bielonko     Chief Financial Officer, Treasurer and
Secretary         CYALUME REALTY, INC., a Delaware corporation         By:    
/s/ Michael Bielonko     Michael Bielonko     Chief Financial Officer, Treasurer
and Secretary      

 

 

 

 

(Signature Page to First Amendment to Credit Agreement)

 

BORROWER: CT SAS HOLDINGS, INC., a Delaware corporation         By:     /s/
Michael Bielonko     Michael Bielonko     Chief Financial Officer, Treasurer and
Secretary

 

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(Signature Page to First Amendment to Credit Agreement)

 

ADMINISTRATIVE AGENT: MONROE CAPITAL MANAGEMENT ADVISORS, LLC, as Administrative
Agent       By:    /s/ Jeffrey Cupples     Jeffrey Cupples     Director

 

 

 

 

LENDERS: Monroe Capital Corporation, in its capacity as a Lender              
By:      /s/ Jeffrey Cupples     Jeffrey Cupples      Director              
Monroe Capital Corporation SBIC, LP, a Delaware limited partnership            
    By:    MCC SBIC GP, LLC, a Delaware limited liability company     Its:
General Partner                   By:     Monroe capital bdc advisors llc, a
Delaware limited liability company       Its: Manager                       By:
/s/ Jeffrey Cupples           Jeffrey Cupples           Director               
  Monroe Capital Senior Secured Direct Loan Fund LP, in its capacity as a Lender
                By: MONROE CAPITAL SENIOR  SECURED DIRECT LOAN FUND LLC     Its:
General Partner                   By: /s/ Jeffrey Cupples         Jeffrey
Cupples         Director      

 

Annex A

 

 

(Signature Page to First Amendment to Credit Agreement)

 

LENDERS: Monroe Capital Senior Secured Direct Loan FINANCING SPV LLC,

in its capacity as a Lender

                  By:    MONROE CAPITAL SENIOR SECURED DIRECT LOAN FUND LP    
Its: Designated Manager                   By:   Monroe Capital Senior Secured
Direct Loan Fund LLC       Its: General Partner                     By:    /s/
Jeffrey Cupples           Jeffrey Cupples           Director                 
Monroe Capital Senior Secured Direct Loan Fund (Unleveraged) LP, in its capacity
as a Lender                 By: Monroe Capital Senior  Secured Direct Loan Fund
LLC     Its:   General Partner                   By: /s/ Jeffrey Cupples        
Jeffrey Cupples         Director                  Monroe Capital ParTners Fund
II, Lp, in its capacity as a Lender                 By:   Monroe Capital
PArtners fund ii, llc     Its:  General Partner                   By:    /s/
Jeffrey Cupples         Jeffrey Cupples         Director   

 

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