1
EXHIBIT 10.55
SIXTH AMENDMENT TO CREDIT AGREEMENT AND NOTE
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT AND NOTE ("Sixth Amendment"),
made and entered into as of the 29th day of June, 1995, by and between GTI
CORPORATION, a California corporation ("Company"), and UNION BANK, a California
banking corporation ("Bank"),
W I T N E S S E T H:
WHEREAS, on December 17, 1992, the Company and the Bank entered into a
certain Credit Agreement and Note (as amended by those certain First, Second,
Third, Fourth and Fifth Amendments to Credit Agreement and Note, dated as of May
7, 1993, July 14, 1993, March 24, 1994, June 24, 1994 and November 30, 1994,
respectively, the "Credit Agreement") pursuant to which the Bank agreed to
extend to the Company and the Company agreed to accept from the Bank certain
credit facilities more particularly described therein; and
WHEREAS, the Company and the Bank desire to amend the Credit Agreement
to modify (i) certain of the financial and reporting covenants with which the
Company is to comply, and (ii) to provide for certain ancillary matters;
NOW, THEREFORE, for and in consideration of the premises hereof, and
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used in this Sixth Amendment shall, unless
otherwise defined herein or unless the context otherwise requires, have the
meanings given thereto in the Credit Agreement.
2. Subsection 2.01(c) of the Credit Agreement is amended by deleting
therefrom the date "December 31, 1993" where it appears in the second line of
such subsection and by substituting in lieu thereof the date "December 31,
1994".
3. Subsection 2.01(d) of the Credit Agreement is amended by deleting
therefrom the date "September 30, 1994" where it appears in the second line of
such subsection and by substituting in lieu thereof the date "March 31, 1995".
4. Subsection 2.02(b) of the Credit Agreement is amended to read as
follows:
(b) The Company shall have delivered to the Bank statements in
form and detail satisfactory to the Bank showing the aging and
adjustment of the accounts receivable of the Company, Valor, ESC and
Promptus (and collections
-1-
2
thereon) as at the end of the calendar month most recently ended (or as
at the end of the next preceding calendar month if the requested
Revolving Loan is to be made during the first fifteen (15) days of a
calendar month);
5. Subsection 3.01(b) of the Credit Agreement is amended to read as
follows:
(b) Authority. The execution, delivery and performance by the
Company of this Agreement and the other Facility Documents, and the
execution, delivery and performance by Valor, ESC, GIL and Promptus, as
the case may be, of such corporation's Continuing Guaranty (and, in the
case of Valor, ESC and Promptus, such corporation's Security Agreement
(Chattel Mortgage)), are within the corporate power of the Company,
Valor, ESC, GIL or Promptus, as the case may be, have been duly
authorized by all necessary corporate action, do not require any
registration with, consent or approval of, license or permit from, or
notice to any Person, do not contravene any law, rule or regulation,
any order, writ, decree or judgment of any Person, or the constitutive
documents of the Company, Valor, ESC, GIL or Promptus, as the case may
be, do not violate or constitute a default under any mortgage,
indenture, lease, contract or other agreement or instrument binding
upon the Company, Valor, ESC, GIL, Promptus or any other Subsidiary,
and will not result in or require the creation of any lien on the
property, assets or revenue of the Company, Valor, ESC, GIL, Promptus
or any other Subsidiary (except such liens as may be created in favor
of the Bank pursuant to this Agreement and the other Facility
Documents).
6. Subsection 3.01(c) of the Credit Agreement is amended to read as
follows:
(c) Enforceability. This Agreement and the other Facility Documents
constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, and
the Continuing Guaranties of Valor, ESC, GIL and Promptus (and the
Security Agreements (Chattel Mortgage) of Valor, ESC and Promptus)
constitute legal, valid and binding obligations of Valor, ESC, GIL or
or Promptus, as the case may be, enforceable against it in accordance
with its or their terms, except, in each case, as limited by
bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors' rights and general
principles of equity.
7. Subsection 3.01(g) of the Credit Agreement is amended by deleting
therefrom the date "December 31, 1993" where it appears in the second line of
such subsection and by substituting in lieu thereof the date "December 31,
1994".
-2-
3
8. Subsection 3.01(h) of the Credit Agreement is amended by deleting
therefrom the phrase "the Fifth Amendment" where it appears in the third line of
such subsection and by substituting in lieu thereof the phrase "the Sixth
Amendment".
9. Subsection 4.01(a) of the Credit Agreement is amended by deleting
therefrom Subsection 4.01(a)(i).
10. Subsection 4.01(a)(vi) of the Credit Agreement is amended by
deleting therefrom the phrase "Subsections 4.01(a)(i), (ii) and (iv) hereof"
where it appears in the second and third lines of such subsection and by
substituting in lieu thereof the phrase "Subsections 4.01(a)(ii) and (iv)
hereof".
11. Subsection 4.01(a)(ix) of the Credit Agreement is amended to read
as follows:
(ix) Not later than the fifteenth (15th) day after the end of
each calendar month, but only if Revolving Loans are then outstanding
under the Revolving Loan Facility, statements in form and detail
satisfactory to the Bank showing the aging and adjustment of the
accounts receivable of the Company, Valor, ESC and Promptus (and
collections thereon) as at the end of such calendar month;
12. Subsection 4.02(h) of the Credit Agreement is amended to read as
follows:
(h) Tangible Net Worth. The Company will not, as at the end of
any fiscal quarter of the Company ending after March 31, 1995, permit
its consolidated Tangible Net Worth to be less than the sum of (i)
Forty Million Eight Hundred Seventy-eight Thousand Dollars
($40,878,000.00), (ii) seventy-five percent (75%) of the cumulative
consolidated after tax net profits of the Company for all fiscal
quarters of the Company ending after March 31, 1995 and on or prior to
the date of computation (without reduction, however, for consolidated
after tax net losses sustained by the Company for any of such fiscal
quarters), and (iii) the aggregate amount of all infusions of equity
made on or after April 1, 1995.
13. Subsection 4.02(l) of the Credit Agreement is amended to read as
follows:
(l) Cash Coverage Ratio. The Company will not permit the ratio
of (i) the sum of (A) its consolidated net profit before taxes, (B) its
consolidated interest expenses, (C) its consolidated depreciation
expenses, and (D) its consolidated minimum lease payments (in the case
of each clause of this Subsection 4.02(l)(i), for the four (4)
consecutive fiscal quarters of the Company ending on the
-3-
4
date of computation), to (ii) the sum of (A) the current portion of its
consolidated long term liabilities, (B) its consolidated interest
expenses, and (C) its consolidated minimum lease payments (in the case
of clause (A) of this Subsection 4.02(l)(ii), as at the date of
computation, and in the case of clauses (B) and (C) of this Subsection
4.02(l)(ii), for the four (4) consecutive fiscal quarters of the
Company ending on the date of computation), to be less than 1.50:1.00
as at the end of any fiscal quarter of the Company ending after March
31, 1995.
14. The definition of "Eligible Accounts" set forth in Section 7.01 of
the Credit Agreement is amended to read as follows:
"Eligible Accounts" shall mean those of the accounts receivable of the
Company, Valor, ESC and Promptus which the Bank in its sole discretion
elects to use to determine the extent of availability of Revolving
Loans under the Revolving Loan Facility, which Eligible Accounts shall,
unless otherwise specifically consented to be the Bank, exclude
accounts receivable which are outstanding and unpaid more than ninety
(90) days after the invoice date; accounts receivable subject to offset
(contras); accounts receivable relating to disputed or pre-billed items
or consigned or guaranteed sales; accounts receivable due from a
foreign account debtor, unless covered by the Foreign Credit Insurance
Association (or similar insurer) or transacted by letters of credit or
sight drafts (acceptable to the Bank); accounts receivable owed by any
shareholder, director, officer, employee, sales representative or
Subsidiary of the Company or by any Person who is an Affiliate of the
Company or who is an Affiliate of any shareholder, director, officer,
employee, sales representative or Subsidiary of the Company; note
receivables; and accounts receivable the assignment of which is subject
to any requirements set forth in the Assignment of Claims Act of 1940,
as amended from time to time, or in any Federal, state, county or
municipal statute, regulation, ordinance, constitution or charter, now
or hereafter existing, similar in effect thereto, as determined by the
Bank in its sole discretion.
15. The Credit Agreement is amended by deleting therefrom Exhibit C
thereto and by substituting in lieu thereof a new Exhibit C in the form appended
to this Sixth Amendment as Exhibit I.
16. This Sixth Amendment shall become effective on the date on which
the Bank shall have received the following:
(a) this Sixth Amendment, duly executed by the Company;
-4-
5
(b) Four (4) written consents to entry by the Company into this
Sixth Amendment, each in form and substance satisfactory to the Bank
and its counsel, one (1) duly executed by each of Valor, ESC, GIL and
Promptus; and
(c) Such other documents and agreements as the Bank may
reasonably request to effectuate the purposes of this Sixth Amendment.
17. Except as expressly provided herein, the Credit Agreement is
unchanged and remains in full force and effect.
18. This Sixth Amendment shall be governed by and construed in
accordance with the laws of the State of California.
19. This Sixth Amendment may be executed in any number of identical
counterparts, any set of which signed by both parties hereto shall be deemed to
constitute a complete, executed original for all purposes.
IN WITNESS WHEREOF, the Bank and the Company have caused this Sixth
Amendment to be executed as of the day and year first above written.
UNION BANK GTI CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------------- ------------------------------
Title: Vice President Title: Vice President Finance and
Chief Financial Officer
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxx
----------------------------- ------------------------------
Title: Senior Vice President Title: President and
Chief Executive Officer
-5-
