AMENDMENT AGREEMENT NO. 3 TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
This AMENDMENT AGREEMENT NO. 3 (this "Amendment"), dated as of March
29, 1996, by and among SIGNAL TECHNOLOGY CORPORATION, a Delaware corporation
("STC"), those Subsidiaries of STC that are parties to the Credit Agreement
referred to below (together with STC, the "Companies"), and The First National
Bank of Boston, a national banking association (the "Bank"), amends the
Second Amended and Restated Credit Agreement dated as of September 30, 1993, as
the same may be amended, modified, or supplemented from time to time (the
"Credit Agreement"), by and among the Companies and the Bank. Capitalized terms
used but not defined herein shall have the meanings set forth for such terms in
the Credit Agreement.
WHEREAS, the Companies have requested that the Bank agree to certain
amendments to the Credit Agreement, including, without limitation, certain
changes to the financial covenants; and
WHEREAS, subject to the terms and provisions hereof, the Bank has
agreed to so amend the Credit Agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
ss. 1. Amendment to Credit Agreement. Subject to the satisfaction of
the conditions precedent set forth in ss. 3 hereof, the Credit Agreement is
hereby amended as follows:
ss. 1.1. Interest on Revolving Credit Loans. The text of Section 2.8 of
the Credit Agreement is hereby amended, effective as of April 1, 1996, to read
as follows:
"(a) Except as provided in ss. 5.1 hereof, each Base Rate Loan
shall bear interest at the rate per annum equal to the Base Rate plus
0.50% per annum.
(b) Except as provided in ss. 5.1 hereof, each Eurodollar Rate
Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period
applicable thereto at the rate per annum equal to the Eurodollar Rate
determined for such Interest Period plus 2.25% per annum.
(c) The Companies hereby jointly and severally promise to pay
the interest on each Revolving Credit Loan in arrears on each Interest
Payment Date with respect thereto and at the stated or any accelerated
maturity of the Revolving Credit Loans."
ss. 1.2. Investments. Section 12.2(e) of the Credit Agreement is hereby
amended by deleting the phrase "with respect to each transaction shall not
exceed $4,000,000 (exclusive of any Indebtedness of the acquired Person)" from
the final two lines of Section 12.2(e), and
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inserting in place of such deleted language, and immediately before the
semi-colon at the end of ss. 12.2(e), the phrase "is permitted by the final
sentence of ss. 12.6 hereof".
ss. 1.3. Mergers and Acquisitions, Etc. Section 12.6 of the Credit
Agreement is hereby amended by inserting the phrase "which becomes a Subsidiary
of STC at such time" immediately after the word "Person", and immediately before
the word "provided" in the sixth line of Section 12.6. In addition, Section 12.6
of the Credit Agreement is hereby amended by deleting from the final sentence of
Section 12.6 the phrase "with respect to each such transaction in excess of
$4,000,000" and inserting in place of such deleted language, and immediately
before the period at the end of ss. 12.6. the phrase "exceeding $2,000,000 in
the aggregate, determined on a cumulative basis, in any fiscal year".
ss. 1.4. Net Worth. The Bank hereby waives any Default or Event of
Default directly resulting from a violation of Section 12.7 of the Credit
Agreement only as such Section 12.7 was in effect immediately prior to the
effectiveness of this Amendment, and then only with respect to the fiscal
quarter ended December 31, 1995. Section 12.7 of the Credit Agreement is hereby
amended by deleting the table set forth therein and replacing it with the
following table:
Period Amount
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December 31, 1995 through June 29, 1996 $28,500,000
June 30, 1996 through December 30, 1996 $29,200,000
December 31, 1996 through December 30, 1997 $29,500,000
December 31, 1997 through April 1, 1998 $30,500,000
ss. 1.5. Interest Coverage. The Bank hereby waives any Default or Event
of Default directly resulting from a violation of Section 12.8 of the Credit
Agreement only as such Section 12.8 was in effect immediately prior to the
effectiveness of this Amendment, and then only with respect to the fiscal period
ending December 31, 1995. The text of Section 12.8 of the Credit Agreement is
hereby amended to read as follows:
"Permit the ratio of (a) Consolidated Net Earnings Available
for Interest Charges for any period of four consecutive fiscal
quarters (a "Rolling Period") to (b) aggregate Interest
Charges for such Rolling Period, to be less than (a) 2 to 1,
for the Rolling Period ended December 31, 1995, (b) 2.5 to 1,
for the Rolling Period ending March 31, 1996, or (c) 3 to 1,
for any Rolling Period ending after March 31, 1996."
ss. 2. Representations and Warranties. The Companies hereby represent
and warrant to the Bank as follows:
(a) Representations and Warranties in Credit Agreement. Except as
specified in writing by the Companies to the Bank with respect
to the subject matter of this Amendment prior to the execution
and delivery hereof by the Bank and the Companies, the
representations and warranties of the Companies contained in
the Credit Agreement were true and correct in all material
respects when made and continue to be true and correct in all
material respects on the date hereof,
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except, in each case to the extent of changes resulting from
transactions contemplated or permitted by the Loan Documents
and this Amendment, and changes occurring in the ordinary
course of business which singly or in the aggregate are not
materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier
date.
(b) Authority, No Conflicts, Enforceability of Obligations. Etc.
Each of the Companies hereby confirms that the representations
and warranties of the Companies contained in ss. 8.1 and ss.
8.2 of the Credit Agreement are true and correct on and as of
the date hereof as if made on the date hereof, treating this
Amendment, the Credit Agreement as amended hereby, and the
other Loan Documents as amended hereby, as "Loan Documents"
for the purposes of making said representations and
warranties.
ss. 3. Conditions to Effectiveness. The effectiveness of this Amendment
shall be subject to the delivery to the Bank by (or on behalf of) each of the
Companies, as the case may be, contemporaneously with the execution hereof, of
the following, in form and substance satisfactory to the Bank:
(a) this Amendment signed by each of the Companies and the Bank; and
(b) any other confirmatory or corporate authority document or
instrument the Bank may reasonably request.
ss. 4. Miscellaneous Provisions. Except as otherwise expressly provided
by this Amendment, all of the terms, conditions and provisions of the Credit
Agreement and the other Loan Documents shall remain in full force and effect.
Each of the Companies confirms and agrees that the joint and several Obligations
of the Companies to the Bank, as amended and supplemented hereby, are entitled
to the benefits of the Loan Documents. The parties hereto hereby acknowledge and
agree that all references to the Credit Agreement and the Obligations thereunder
contained in any of the Loan Documents shall be references to the Credit
Agreement and the Obligations, as amended hereby and as the same may be amended,
modified, supplemented, or restated from time to time. This Amendment may be
executed in any number of counterparts, but all such counterparts shall together
constitute but one instrument. In making proof of this Amendment it shall not be
necessary to produce or account for more than one counterpart signed by each
party hereto by and against which enforcement hereof is sought. The Companies
hereby jointly and severally confirm their obligations to pay promptly upon
request all reasonable out-of-pocket costs and expenses incurred or sustained by
the Bank in connection with this Amendment, including the reasonable fees and
expenses of the Bank's Special Counsel.
ss. 5. Governing Law. This Amendment shall be construed according to
and governed by the internal laws of the Commonwealth of Massachusetts without
reference to principles of conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized.
SIGNAL TECHNOLOGY CORPORATION,
ST OLEKTRON CORP., and each of the other
Companies that are parties to the Credit Agreement
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: CEO
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THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
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Title: Vice President
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