SECOND AMENDMENT TO AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

 

 

This SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN
AGREEMENT(this “Second Amendment”) dated as of March 30, 2012 made by and among
CYALUME TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”), CYALUME
TECHNOLOGIES HOLDINGS, INC., a Delaware corporation (the “Holding Company”),
COMBAT TRAINING SOLUTIONS, INC., a Colorado corporation (“CTS”), CYALUME REALTY,
INC., a Delaware corporation (“Realty”), CYALUME SPECIALTY PRODUCTS, INC., a
Delaware corporation (“Specialty”), and TD BANK, N.A., as Administrative Agent
and as the Lender (the “Agent”).

 

Background

 

The Borrower, the Holding Company, the lenders party thereto and the Agent
entered into an that certain Amended and Restated Revolving Credit and Term Loan
Agreement dated as of July 29, 2010 which was amended by that certain First
Amendment to Amended and Restated Revolving Credit and Term Loan Agreement and
Limited Consent and Joinder dated as of January 20, 2012 (as further amended,
modified or supplemented to the date hereof, the “Original Credit Agreement”).

 

NOW, THEREFORE, in consideration of the promises and the agreements, provisions
and covenants herein contained, the Borrower, the Holding Company, CTS, Realty
and Specialty and the Agent and Lender hereby agree as follows:

 

1.                  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 2 below, the Original Credit Agreement shall be amended as
follows:

 

(A) Section 12.1 “Coverage Ratios” contained in the Original Credit Agreement is
hereby amended by deleting the terms and subsections therein contained and
inserting the following in lieu thereof:

 

Section 12.1 Coverage Ratios.

 

(a)                Fixed Charge Ratio. As of the last day of the fiscal year
ending December 31, 2011 and for each fiscal year thereafter, the Fixed Charge
Coverage Ratio for such fiscal year shall not be less than 1.10:1.00.

 

(b)               Total Debt Service Coverage Ratio. As of the last day of the
fiscal quarters ending on March 31, 2012 and on June 30, 2012, the Total Debt
Service Coverage Ratio shall not be less than 1.00:1.00; and, as of the last day
of the fiscal quarter ending September 30, 2012 and for each fiscal quarter
thereafter, the Total Debt Service Coverage Ratio shall not be less than
1.20:1.00.

 

 

 

 

(B) Section 12.2 “Leverage Ratio” contained in the Original Credit Agreement is
hereby amended by deleting the terms and subsections therein contained and
inserting the following in lieu thereof:

 

Section 12.2 Leverage Ratio.

 

(a) At any time during the periods set forth below, the Senior Leverage Ratio
shall not be more than the ratio set forth below during such period:

 

Period   Ratio         January 1, 2011, through and including December 31, 2011 
 2.50:1.00         March 31, 2012, through and including September 30, 2012 
 2.25:1.00         December 31, 2012, and each fiscal quarter thereafter 
 2.00:1.00 

 

(b) At any time during the periods set forth below, the Total Leverage Ratio
shall not be more than the ratio set forth below during such period:

 

Period   Ratio         January 1, 2011, through and including December 31, 2011 
 3.50:1.00         March 31, 2012, through and including September 30, 2012 
 3.75:1.00         December 31, 2012, and each fiscal quarter thereafter 
 3.00:1.00 

 

(c) For purposes of calculating the Senior Leverage Ratio and the Total Leverage
Ratio in subsections 12.2(a) and 12.2(b), respectively, the following amounts
will be added to EBITDA for the following periods:

 

 Period    Amount            fiscal quarter ending December 31, 2011   $600,000 
          fiscal quarter ending March 31, 2012   $450,000            fiscal
quarter ending June 30, 2012   $300,000            fiscal quarter ending
September 30, 2012   $150,000            Thereafter   $0 

  

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(C) Section 12.3 “Capital Expenditures” contained in the Original Credit
Agreement is hereby amended by deleting the terms and subsections therein
contained and inserting the following in lieu thereof:

 

Section 12.3 Capital Expenditures. The Borrower will not make, nor permit any
Subsidiary to make any Capital Expenditures in any fiscal year that exceed
$2,000,000 for any fiscal year.

 

(D) Section 12.4 “Current Ratio” contained in the Original Credit Agreement is
hereby amended by deleting the terms and subsections therein contained and
inserting the following in lieu thereof:

 

Section 12.4 Current Ratio. As of the last day of any fiscal quarter, the
Holding Company and its Subsidiaries shall not permit the Current Ratio to be
less than 1.00:1.00.

 

(E) Section 12.5 “Minimum EBITDA” contained in the Original Credit Agreement is
hereby deleted.

 

2.                  Conditions Precedent. The provisions of this Second
Amendment shall be effective as of the date on which all of the following
conditions shall be satisfied:

 

(a)                the Borrower shall have delivered to the Agent a fully
executed counterpart of this Second Amendment;

 

(b)               the Borrower shall have paid all costs and expenses owing to
the Agent and its counsel on or before the date hereof;

 

(c)                the Agent and the Lender shall have indicated its consent and
agreement by executing this Second Amendment;

 

(d)               the Borrower, the Holding Company, CTS, Specialty and Realty
shall have delivered certified copies of the resolutions of its Board of
Directors approving the execution, delivery and performance of this Second
Amendment and the actions contemplated herein, in form and substance
satisfactory to the Agent;

 

(e)                after giving effect to this Second Amendment, no Default or
Event of Default shall have occurred or be continuing;

 

(f)                the Borrower shall have paid the Agent an amendment fee of
Twenty Thousand Dollars ($20,000) to compensate the Agent and the Lender for
entering into this Second Amendment, which amount, when paid, is not subject to
refund or rebate and will be fully earned upon the Agent and the Lender
executing this Second Amendment; and

 

(g)               the Agent shall have received fully executed copies of the
Second Amendment to Subordinated Loan Agreement dated March 30, 2012 among
Borrower, Holding Company, CTS, Realty, Specialty, Granite Creek Partners Agent,
LLC, Granite Creek Flexcap I, L.P., and Patriot Capital II, L.P., and all
documents executed in connection therewith.

 

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3.                  Miscellaneous.

 

(a)                Ratification. The terms and provisions set forth in this
Second Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Original Credit Agreement and except as expressly
modified and superseded by this Second Amendment, the terms and provisions of
the Original Credit Agreement and the other Loan Documents are ratified and
confirmed and shall continue in full force and effect. The Borrower and the
Agent agree that the Original Credit Agreement as amended hereby and the other
Loan Documents shall continue to be legal, valid, binding and enforceable in
accordance with their respective terms. For all matters arising prior to the
effective date of this Second Amendment, the Original Credit Agreement (as
unmodified by this Second Amendment) shall control. The Borrower hereby
acknowledges that, as of the date hereof, the security interests and liens
granted to the Agent under the Credit Agreement and the other Loan Documents are
in full force and effect, are properly perfected and are enforceable in
accordance with the terms of the Credit Agreement and the other Loan Documents.

 

(b)               Representations and Warranties. The Borrower hereby represents
and warrants to the Agent that the representations and warranties set forth in
the Loan Documents are true and correct in all material respects on and as of
the date hereof, with the same effect as though made on and as of such date
except with respect to any representations and warranties limited by their terms
to a specific date. The Borrower further represents and warrants to the Agent
that the execution, delivery and performance by the Borrower of this Second
Amendment (i) are within the Borrower’s power and authority; (ii) have been duly
authorized by all necessary corporate and shareholder action; (iii) are not in
contravention of any provision of the Borrower’s certificate or articles of
incorporation or bylaws or other organizational documents; (iv) do not violate
any law or regulation, or any order or decree of any Governmental Authority in
any material respect; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which the Borrower is a party or by which the Borrower or any of
its property is bound; (vi) do not result in the creation or imposition of any
Lien upon any of the property of the Borrower other than in favor of Agent;
(vii) do not require the consent or approval of any Governmental Authority. All
representations and warranties made in this Second Amendment shall survive the
execution and delivery of this Second Amendment, and no investigation by the
Agent shall affect the representations and warranties or the right of the Agent
to rely upon them.

 

(c)                Release. In addition, to induce the Agent and Lender to agree
to the terms of this Second Amendment, the Borrower represents and warrants that
as of the date of its execution of this Second Amendment there are no claims or
offsets against or rights of recoupment with respect to or defenses or
counterclaims to its obligations under the Loan Documents and in accordance
therewith it:

 

(i)                 Waives any and all such claims, offsets, rights of
recoupment, defenses or counterclaims, arising prior to the date of its
execution of this Second Amendment and

 

(ii)               Releases and discharges the Agent and its officers,
directors, employees, agents and affiliates (collectively the “released
parties”) from any and all liabilities, claims, causes of action, in law or
equity, which the Borrower or any Guarantor may have against any released party
arising prior to the date hereof in connection with the Loan Documents or the
transactions contemplated thereby.

 

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(d)               Reference to Agreement. Each of the Loan Documents, including
the Original Credit Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Original Credit Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Original
Credit Agreement shall mean a reference to the Original Credit Agreement as
amended hereby.

 

(e)                Expenses of the Agent. As provided in the Original Credit
Agreement, the Borrower agrees to pay all reasonable costs and expenses incurred
by the Agent in connection with the preparation, negotiation, and execution of
this Second Amendment, including without limitation, the reasonable costs and
fees of the Agent’s legal counsel.

 

(f)                Severability. Any provision of this Second Amendment held by
a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Second Amendment and the effect
thereof shall be confined to the provision so held to be invalid or
unenforceable.

 

(g)               Applicable Law. This Amendment shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts and
the applicable laws of the United States of America.

 

(h)               Successors and Assigns. This Second Amendment is binding upon
and shall inure to the benefit of the Agent, the Holding Company and the
Borrower, and their respective successors and assigns, except the Borrower may
not assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Agent.

 

(i)                 Counterparts. This Second Amendment may be executed in one
or more counterparts and on facsimile counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken together
shall constitute one and the same agreement.

 

(j)                 Effect of Waiver. No consent or waiver, express or implied,
by the Agent to or for any breach of or deviation from any covenant, condition
or duty by the Borrower shall be deemed a consent or waiver to or of any other
breach of the same or any other covenant, condition or duty.

 

(k)               Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

 

(l)                 Entire Agreement. This Second Amendment embodies the entire
agreement among the parties hereto with respect to the subject matter thereof,
and supersedes any and all prior representations and understandings, whether
written or oral, relating to this Amendment. There are no oral agreements among
the parties hereto with respect to the subject matter hereof.

 

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

 

  BORROWER          

CYALUME TECHNOLOGIES, INC.

       

By:

/s/ Michael Bielonko

           

Name:

Michael Bielonko            

Title:

Chief Financial Officer  

 

 

  GUARANTORS          

COMBAT TRAINING SOLUTIONS, INC. 

       

By:

/s/ Michael Bielonko

           

Name:

Michael Bielonko            

Title:

Chief Financial Officer  

 

 

CYALUME SPECIALTY PRODUCTS, INC.

         

By:

/s/ Michael Bielonko

           

 Name:

Michael Bielonko            

 Title:

Chief Financial Officer  

  

 

 

  

 

CYALUME REALTY, INC.

         

By:

/s/ Michael Bielonko

           

Name:

Michael Bielonko            

Title:

Chief Financial Officer  

  

 

  HOLDING COMPANY          

CYALUME TECHNOLOGIES HOLDINGS, INC.

         

By:

/s/ Michael Bielonko

           

Name:

Michael Bielonko            

Title:

Chief Financial Officer  

 

 

  AGENT          

TD BANK, N.A. 

         

By:

/s/ Gregory Spurr

           

Name:

Gregory Spurr            

Title:

Senior Vice President