EXHIBIT 10.12
SECOND AMENDMENT TO CREDIT AGREEMENT
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THIS SECOND AMENDMENT TO CREDIT AGREEMENT ("Amendment"), dated as of
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October 31, 1995, is entered into by and among MEASUREX CORPORATION (the
"Company"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent for
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itself and the Banks (the "Agent"), and the several financial institutions party
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to the Credit Agreement (collectively, the "Banks").
RECITALS
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A. The Company, Banks, and Agent are parties to a Credit Agreement
dated as of February 10, 1995, as amended by that First Amendment to Credit
Agreement dated as of June 21, 1995 (the "Credit Agreement") pursuant to which
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the Agent and the Banks have extended certain credit facilities to the Company
and its Subsidiaries.
B. The Company proposes to (1) enter into a receivables financing
program with BA Credit Corporation, an affiliate of the Agent and (2) acquire
all of the outstanding common stock of DMC (as defined below).
C. The Company has requested that the Banks consent to amendment of
the Credit Agreement in connection with such receivables financing program and
acquisition and certain other amendments of the Credit Agreement.
D. The Banks are willing to make certain amendments to the Credit
Agreement, subject to the terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
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used herein shall have the meanings, if any, assigned to them in the Credit
Agreement.
2. Amendments to Credit Agreement.
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(a) The following definitions shall be added to Section 1.01 of the
Credit Agreement:
"DMC" means Data Measurement Corporation, a Delaware corporation.
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"Receivables Finance Program" means that certain revolving receivables
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finance program between the Company and BA Credit Corporation pursuant to which
the Company shall finance certain of its lease receivables through an assignment
of such lease receivables, all collateral related thereto and proceeds thereof
to BA Credit Corporation or its assignee.
"Reverse Triangular Merger" has the meaning specified in subsection
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7.03(d).
(b) The definition of "Acquisition" in Section 1.01 of the Credit
Agreement shall be amended by adding the following language at the end thereof:
"unless such transaction is a Reverse Triangular Merger."
(c) Section 7.01 of the Credit Agreement shall be amended by
replacing the "." appearing at the end of clause (p) thereof with ";" and adding
new clauses (q) and (r) at the end thereof which shall read in their entirety as
follows:
"(q) Liens on Margin Stock consisting of common stock of DMC; and
(r) Liens incurred in connection with the Receivables Finance
Program, including without limitation, Liens on lease receivables, the
underlying equipment and all collateral related thereto, all money due and
to become due with respect to the foregoing and all proceeds thereof."
(d) Section 7.02 of the Credit Agreement shall be amended by deleting the
word "and" appearing at the end of clause (g) thereof, replacing the "."
appearing at the end of clause (h) thereof with "; and" and adding a new clause
(i) at the end thereof which shall read in its entirety as follows:
"(i) dispositions of Margin Stock consisting of common stock of DMC."
(e) Section 7.03 of the Credit Agreement shall be amended by (1) deleting
the word "and" appearing at the end of clause (b) thereof, (2) adding the
parenthetical "(including in connection with an Acquisition permitted
hereunder)" after the word "entity" appearing in the first line of clause (c)
thereof and replacing the "." appearing at the end of clause (c) thereof with ";
and" and (3) adding a new clause (d) at the end thereof which shall read in its
entirety as follows:
"(d) any Subsidiary may merge with (i) DMC or (ii) any other Person
in connection with an Acquisition of 100% of
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the capital stock, partnership interests or equity of any Person (a
"Reverse Triangular Merger")."
(f) Section 7.05 of the Credit Agreement shall be amended by deleting the
word "and" appearing at the end of clause (f) thereof, replacing the "."
appearing at the end of clause (g) thereof with "; and" and adding a new clause
(h) at the end thereof which shall read in its entirety as follows:
"(h) Indebtedness of corporations which become Subsidiaries after the
date of this Agreement, provided, however, that such Indebtedness existed at the
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time the respective corporations became Subsidiaries and were not created in
anticipation thereof."
(g) Section 7.07 of the Credit Agreement shall be amended by adding the
following language on the third line thereof after the words "Schedule 7.05":
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"and except in connection with the acquisition of the common stock of DMC".
(h) Section 7.08 of the Credit Agreement shall be amended by deleting the
word "and" appearing at the end of clause (e) thereof, replacing the "."
appearing at the end of clause (f) thereof with "; and" and adding a new clause
(g) at the end thereof which shall read in its entirety as follows:
"(g) Contingent Obligations incurred in connection with the
Receivables Finance Program in an aggregate amount not to exceed
$15,000,000 at any time outstanding."
(i) Section 7.16 of the Credit Agreement shall be amended and restated to
read in its entirety as follows:
"7.16 Tangible Net Worth. At the end of each fiscal quarter of the
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Company, the Company shall not permit on a consolidated basis the Tangible Net
Worth for the Company to be less than the sum of (a) $137,000,000, plus (b) 75%
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of quarterly net income for the Company for each fiscal quarter ending
subsequent to the fiscal quarter ended March 5, 1995 through the first fiscal
quarter of 1996, with no reduction for net losses, and 65% of quarterly net
income for the Company for each fiscal quarter ending subsequent to the first
fiscal quarter of 1996, with no reduction for net losses, provided, however,
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that if at the end of any fiscal quarter of the Company ending subsequent to the
first fiscal quarter of 1996, the Company's fiscal quarter end financial
statements indicate that the Company's Quick Ratio is greater than 1.10 to 1.00
and the Company's Leverage Ratio is less than 1.00 to 1.00, then commencing upon
receipt by the Agent
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of such financial statements and continuing until the Agent receives any
subsequent financial statements indicating that either such ratio is not met,
50% of quarterly net income for the Company, with no reduction for net losses,
shall be the applicable amount pursuant to this clause (b) of this Section 7.16,
minus (c) 90% of the net purchase price paid by the Company for repurchases of
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its outstanding shares of common stock from HIHC, Inc. subsequent to June 1,
1995 and through July 15, 1995, provided, however, that the amount subtracted
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pursuant to this clause (c) shall not exceed a total amount of $50,000,000,
minus (d) 80% of the total goodwill generated by the Company's purchase of DMC,
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provided, however, that the amount subtracted pursuant to this clause (d) shall
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not exceed a total of $20,000,000, plus (e) the sum of (1) 100% of the net
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proceeds for any capital stock issued by the Company after the fiscal quarter
ended March 5, 1995 less (2) 100% of the net purchase price paid by the Company
after the fiscal quarter ended March 5, 1995 for repurchases of its outstanding
shares of common stock (other than repurchases pursuant to clause (c) of this
Section 7.16) pursuant to the Company's stock option and employee stock option
plans, provided, however, that if the amount determined pursuant to clause (2)
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of this clause (e) exceeds the amount under clause (1) of this clause (e) and
such excess is greater than $5,000,000, then for purposes of this calculation,
$5,000,000 shall be subtracted from the sum of clauses (a), (b), (c) and (d) of
this Section 7.16; and provided, further, that the aggregate amount subtracted
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from the sum of clauses (a), (b), (c) and (d) for any calendar year shall be
limited to $5,000,000."
(j) Schedule 2 to Exhibit C to the Credit Agreement is hereby amended by
replacing Paragraph 2 therein with the Paragraph 2 attached hereto as Annex II,
which Paragraph 2 shall, for all purposes of the Credit Agreement, amend and
restate and replace in its entirety Paragraph 2 of Schedule 2 attached to
Exhibit C to the Credit Agreement.
3. Representations and Warranties. The Company hereby represents and
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warrants to the Agent and the Banks as follows:
(a) After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.
(b) The execution, delivery and performance by the Company of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to, or action by, any Person (including any Governmental Authority) in
order to be effective and enforceable. The Credit Agreement as amended by this
Amendment constitutes the legal, valid and
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binding obligations of the Company, enforceable against it in accordance with
its terms, without defense, counterclaim or offset.
(c) All representations and warranties of the Company contained in
the Credit Agreement are true and correct.
(d) The Company is entering into this Amendment on the basis of its
own investigation and for its own reasons, without reliance upon the Agent and
the Banks or any other Person.
4. Effective Date. This Amendment will become effective as of the date
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specified in the first paragraph hereof (the "Effective Date"), provided that
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each of the following conditions precedent is satisfied:
(a) The Agent has received from the Company and the Majority Banks a
duly executed original (or, if elected by the Agent, an executed facsimile copy)
of this Amendment, together with a duly executed Guarantor Acknowledgment and
Consent in the form attached as Annex I hereto (the "Consent").
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(b) The Agent has received from the Company a copy of a resolution
passed by the board of directors of the Company, certified by the Secretary or
an Assistant Secretary of the Company as being in full force and effect on the
date hereof, authorizing the execution, delivery and performance of this
Amendment and the Consent.
(c) All representations and warranties contained herein are true and
correct as of the Effective Date.
5. Miscellaneous.
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(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to the Credit Agreement shall henceforth refer to the
Credit Agreement as amended by this Amendment. This Amendment shall be deemed
incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns. No
third party beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California.
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(d) This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party hereto either in the form of an executed
hard copy original or an executed original sent by facsimile transmission to be
followed promptly by mailing of a hard copy original, and that receipt by the
Agent of a facsimile transmitted document purportedly bearing the signature of a
Bank or the Company shall bind such Bank or the Company, respectively, with the
same force and effect as the delivery of a hard copy original. Any failure by
the Agent to receive the hard copy executed original of such document shall not
diminish the binding effect of receipt of the facsimile transmitted executed
original of such document of the party whose hard copy original was not received
by the Agent.
(e) This Amendment, together with the Credit Agreement, contains the
entire and exclusive agreement of the parties hereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect hereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.
(g) The Company covenants to pay to or reimburse the Agent and the
Banks, upon demand, for all costs and expenses (including allocated costs of in-
house counsel) incurred in connection with the development, preparation,
negotiation, execution and delivery of this Amendment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
MEASUREX CORPORATION
By: ______________________
Title: ___________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: _________________________
Title: ______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: _________________________
Title: ______________________
ABN AMRO BANK
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
THE BANK OF NEW YORK
By: _________________________
Title: ______________________
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Annex I
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GUARANTOR ACKNOWLEDGMENT
AND CONSENT
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The undersigned, the guarantor under that certain Continuing Guaranty
(Multicurrency) dated February 10, 1995 (the "Guaranty"), with respect to the
Borrowers' obligations to the Agent and the Banks under the Credit Agreement,
hereby reaffirms and agrees that the Guaranty is in full force and effect,
without defense, offset or counterclaim, and applies to the Credit Agreement as
amended by that Second Amendment to Credit Agreement dated as of October 31,
1995. (Capitalized terms used herein have the meanings specified in the
Guaranty.)
MEASUREX CORPORATION
Dated: _____________ By:____________________________
Title: ________________________
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Annex II
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Actual Required/Permitted
2. Section 7.16 Minimum Tangible
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Net Worth.
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Tangible Net Worth = Not to be less than the sum of:
A. $137,000,000
plus
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B. 75% of quarterly net income,
commencing with the fiscal
quarter ending subsequent to
the 3/5/95 quarter (not
reduced by any quarterly loss)
through the first fiscal
quarter of 1996 and 65% of
quarterly net income (not
reduced by any quarterly loss)
commencing with the second
fiscal quarter of 1996, except
that commencing with the
second fiscal quarter of 1996
and for so long as the
Company's Quick Ratio is
greater than 1.10 to 1.00 and
the Leverage Ratio is less
than 1.00 to 100, then 50% of
quarterly net income (not
reduced by any quarterly loss)
$__________
minus
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C. 90% of net purchase price for
repurchases of Company's
outstanding shares of common
stock from HIHC, Inc.
subsequent to 6/1/95 and
through 7/15/95; provided that
amount subtracted pursuant to
this clause C shall not exceed
a total amount of $50,000,000
minus
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D. 80% of the total goodwill
generated by the Company's
purchase of Data Measurement
Corporation, provided,
however, that the amount
subtracted pursuant to this
clause D shall not exceed a
total of $20,000,000,
plus
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E. (1) 100% of net proceeds
arising from the sale of
capital stock
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Actual Required/Permitted
occurring after 3/5/95
$__________ , less (2) 100% of
the net purchase price paid by
the Company after 3/5/95 for
repurchases of capital stock
pursuant to stock option plans
$____________, except that if
the amount in (2) exceeds the
amount in (1) by more than
$5,000,000, then $5,000,000 is
subtracted from the sum of
clauses A, B, C and D and
provided, that the aggregate
amount subtracted from the sum
of clauses A, B, C and D for
any calendar year shall be
limited to $5,000,000
$________
= A + B + C + D + E =_________
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