1
EXHIBIT 4(a)
AMENDMENT NO. 1
DATED AS OF MARCH 31, 1998
TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
DATED AS OF APRIL 4, 1997
among
TRANSMATION, INC.
as "Borrower"
and
MANUFACTURERS AND TRADERS TRUST COMPANY
and
STATE STREET BANK AND TRUST COMPANY
as "Banks"
and
MANUFACTURERS AND TRADERS TRUST COMPANY
as "Agent"
40
2
AMENDMENT NO. 1 TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS AGREEMENT, dated as of March 31, 1998, is among TRANSMATION, INC.
(the "BORROWER"), MANUFACTURERS AND TRADES TRUST COMPANY (a "BANK,"), STATE
STREET BANK AND TRUST COMPANY (a "BANK") and MANUFACTURERS AND TRADERS TRUST
COMPANY, as Agent for the Banks (in such capacity, together with its successors
in such capacity, the "AGENT").
R E C I T A L S :
R.1 The parties have entered into a Revolving Credit and Term Loan
Agreement dated as of April 4 ,1997 (the "CREDIT AGREEMENT"). Terms defined in
the Credit Agreement are used herein as so defined.
R.2 The parties wish to terminate the Guarantees and the security
agreements that were executed by the non-U.S. Subsidiaries on or about the
Closing Date; and the parties wish to amend the pledge agreement executed by the
Borrower on or about the Closing Date, with respect to the shares of the capital
stock of Borrower's non-U.S. Subsidiaries.
R.3 The parties wish to amend the Credit Agreement as hereinafter set forth, to
amend and restate the Guarantees executed by Altek Industries, Inc. ("Altek") on
or about the Closing Date, and to take certain other actions as herein provided.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS. Except as otherwise set forth herein, as used in this
Agreement No. 1, the terms defined in the Credit Agreement shall have the
meanings assigned to them in the Credit Agreement.
2. AMENDMENTS. The Credit Agreement is hereby amended as set forth
below:
2.1 DEFINITIONS. The definition of Applicable Margin is amended to
read as follows:
"APPLICABLE MARGIN" means the appropriate percentages corresponding
to the Adjusted Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
Revolving Credit Loans Term Loans
---------------------- ----------
Pricing Adjusted Eurodollar Base Rate Eurodollar Base Rate
Level Leverage Ratio Rate Plus Plus Rate Plus Plus
----- -------------- --------- ---- --------- ----
I >4.0 2.75% 1.25% 3.00% 1.50%
II >3.5 and <=4.0 2.50% 1.00% 2.75% 1.25%
III >3.0 and <=3.5 2.25% 0.75% 2.50% 1.00%
IV >2.5 and <=3.0 2.00% 0.50% 2.25% 0.75%
V >2.0 and <=2.5 1.75% 0.25% 2.00% 0.50%
VI >1.5 and <=2.0 1.50% 0.00% 1.75% 0.25%
"Applicable Margin" shall be determined and adjusted quarterly on
the date (each a "CALCULATION DATE") five Business Days after the
date by which the Borrower is required to provide the Chief
Financial Officer's certificate in accordance with the provisions of
SECTION 5.03(E); provided that the initial Applicable Margin shall
be based on Pricing Level III (as shown above) and shall remain at
Pricing Level III until the first Calculation Date subsequent to
41
3
March 31, 1998 and, thereafter, the pricing level shall be
determined by the then current Adjusted Leverage Ratio; and provided
further that if the Borrower fails to provide the Chief Financial
Officer's certificate required by SECTION 5.03(e) on or before any
Calculation Date subsequent to March 31, 1998, the Applicable Margin
shall be based on Pricing Level I from such Calculation Date until
such time as an appropriate Chief Financial Officer certificate is
provided, whereupon the pricing level shall be determined by the
Adjusted Leverage Ratio reflected on such Chief Financial Officer
certificate until the next Calculation Date. Except as provided in
the preceding sentence, each determination of the Applicable Margin
shall be effective from one Calculation Date until the next
Calculation Date. Any adjustment in the Applicable Margin shall be
applicable to all existing Loans, as well as to any new Loans made
thereafter.
2.2 DEFINITIONS. The following definition is added to SECTION 1.01
of the Credit Agreement:
"AMENDMENT NO. 1" shall mean Amendment No. 1 dated as of March 31,
1998 to Revolving Credit and Term Loan Agreement dated as of April
4, 1997.
2.3 DEFINITIONS. The definitions of the following terms set forth in
SECTION 1.01 of the Credit Agreement are amended to read as follows:
"CLOSING DATE" shall mean April 4, 1997.
"LOAN DOCUMENTS" shall mean collectively, (i) this Agreement and the
Notes, (ii) all Guarantees, stock pledge agreements, security
agreements, mortgages, subordination agreements and other agreements
or documents referred to in ARTICLE IV of this Agreement, (iii) all
other documents, certificates and instruments executed in connection
with this Agreement and all amendments to this Agreement and (iv)
all documents designated as "Loan Documents" in any amendment to
this Agreement.
2.4 CLOSING DATE. The introductory paragraph of SECTION 4.01 shall
be amended to read as follows:
SECTION 4.01 CLOSING DATE. The obligations of the Banks to make
Loans hereunder shall become effective on the Closing Date, subject
to termination of the Commitments under the circumstances provided
in the closing paragraph to this Section:
2.5 OPINIONS OF COUNSEL. SECTION 4.01(b) shall be amended to read as
follows:
(b) The Agent shall have received a favorable written opinion
(addressed to the Agent and the Banks and dated the Closing Date) of
Xxxxxx, Xxxxxxx and Xxxxx, U.S. counsel for the Borrower,
substantially in the form of SCHEDULE 4.01(b) and covering such
other matters relating to the parties, the Loan Documents or the
Acquisition as the Required Lenders shall reasonably request. The
Borrower hereby requests such counsel to deliver such opinion.
2.6 SUBSIDIARY GUARANTEE. SECTION 4.01(f) shall be amended to read
as follows:
(f) The Agent shall have received a counterpart of the U.S.
Subsidiary Guarantee Agreement, in the form of SCHEDULE 4.01(f),
signed on behalf of each U.S. Subsidiary.
2.7 PLEDGE AGREEMENTS. SECTION 4.01(g) shall be amended to read as
follows:
(g) The Agent shall have received (i) counterparts of the (x) the
Foreign Subsidiary Pledge Agreement, in the form of SCHEDULE
42
4
4.01(g), signed on behalf of the Borrower, and (y) the U.S.
Subsidiary Pledge Agreement, in the form of SCHEDULE 4.01(g-1),
signed on behalf of the Borrower, (ii) stock certificates
representing the shares of capital stock of each Subsidiary owned by
or on behalf of the Borrower or any Subsidiary and pledged pursuant
to each such pledge agreement and (iii) stock powers and instruments
of transfer, endorsed in blank, with respect to such stock
certificates.
2.8 SECURITY AGREEMENTS. SECTION 4.01(h) is amended to read as
follows:
(h) The Agent shall have received (i) counterparts of (x) the
Borrower Security Agreement, in the form of SCHEDULE 4.01(h), signed
on behalf of the Borrower (y) the Subsidiary Security Agreement, in
the form of SCHEDULE 4.01(h-1), signed on behalf of each U.S.
Subsidiary and (ii) all documents and instruments, including uniform
commercial code financing statements, required by law or reasonably
requested by the Agent to be filed, registered or recorded to create
or perfect the liens intended to be created under such security
agreements.
2.9 CONDITIONS SUBSEQUENT. The concluding paragraph of SECTION 4.01
shall be amended to read as follows:
The Commitments of the Banks shall terminate unless each of the
conditions described in SCHEDULE 2.9 to Amendment No. 1 is satisfied
(or waived by all of the Banks) at or prior to 5:00 p.m., Rochester
time on March 31, 1998.
2.10 INTERCOMPANY DEBT. SECTION 6.01(d) is amended to read as
follows:
(d) Subordinated Debt of the Borrower to any Subsidiary and Debt of
any Subsidiary to the Borrower permitted pursuant to SECTION
6.06(e).
2.11 PERMITTED DEBT OF BORROWER. SECTION 6.01(f) is amended to read
as follows:
(f) Debt of the Borrower consisting of reimbursement obligations
related to letters of credit issued for the account of the Borrower,
acceptances of the Borrower, and Debt of the Borrower secured by
purchase money liens permitted pursuant to SECTION 6.02, provided
that the aggregate principal amount of all such Debt at any time
outstanding shall not exceed $250,000;
2.12 SUBSIDIARY DEBT. SECTION 6.01(g) is amended to read as follows:
(g) Debt incurred by any Subsidiary in respect of reimbursement
obligations related to letters of credit issued for the account of
such Subsidiary, acceptances of such Subsidiary or Debt of such
Subsidiary secured by purchase money liens permitted by SECTION
6.02, provided that the aggregate principal amount of all such Debt
at any time outstanding with respect to any such Subsidiary shall
not exceed $250,000.
2.13 SECTION 6.01(h). SECTION 6.01(h) is hereby deleted and of no
further force or effect and the Section designation 6.01(h) is hereby reserved.
2.14 LEASES. The text of SECTION 6.03, prior to the table, is
amended to read as follows:
SECTION 6.03. LEASES. Create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal
property except: (a) leases existing on the date of this Agreement,
as described in SCHEDULE 6.03, and any extensions or
43
5
renewals thereof; (b) leases (other than Capitalized Lease
Obligations) in which neither the Borrower nor any of its
Subsidiaries is lessor, which do not in the aggregate require the
Borrower and its Subsidiaries on a consolidated basis to make
payments (including taxes, insurance, maintenance and similar
expense which the Borrower or any Subsidiary is required to pay
under the terms of any lease) in any Fiscal Year of the Borrower in
excess of the amount set forth with respect to such Fiscal Year in
the table following this paragraph; (c) Capitalized Lease
Obligations permitted by SECTION 6.02; and (d) leases for the
replacement of existing motor vehicles and office space.
2.15 GUARANTEES. CLAUSE (ii) of SECTION 6.04 is amended to read as
follows:
(ii) except Guarantees of obligations of Persons other than the
Borrower and any of its Subsidiaries aggregating not more than 10%
of the amount of its tangible net worth from time to time, which
Guarantee obligations shall be included in Indebtedness, Debt, or
Funded Debt, as appropriate, depending on the terms of the
guaranteed obligations.
2.16 INVESTMENTS. SECTION 6.06(e) is amended to read as follows:
(e) advances to or investments in Subsidiaries, provided that the
aggregate of all such advances or investments outstanding at any one
time (i) to Altek shall not exceed the amount of the fair saleable
value of Altek's assets, valued on a going concern basis, less the
total amount of Altek's liabilities; and (ii) to each of the
following Subsidiaries, the amount set forth after its name:
Subsidiary Maximum Amount
---------- --------------
Transmation (Canada) Inc. $250,000
Transmation Australia Pty. Ltd. $500,000
Transmation Singapore Pte. Ltd. $250,000
2.17 LEVERAGE RATIO. SECTION 7.04 of the Credit Agreement is amended
to change the Adjusted Leverage Ratio required to be maintained at the end of
each of the Fiscal Quarters indicated below to the respective Maximum Ratio set
forth below:
FISCAL QUARTER ENDING MAXIMUM RATIO
--------------------- -------------
03/31/98 4.00
06/30/98 3.75
09/30/98 3.50
12/31/98 3.25
03/31/99 3.00
06/30/99 and thereafter 2.75
3. TERMINATION OF CERTAIN GUARANTEES, SECURITY AGREEMENTS AND
SUBORDINATION AGREEMENT. (a) The Guarantees executed by each of Transmation
Australia Pty. Ltd., Transmation Singapore Pte. Ltd., Transcat F.S.C. and
Transmation (Canada) Inc. and the security agreement executed by Transmation
(Canada), Inc., copies of which are attached as SCHEDULE 3 to this Amendment No.
1, are terminated and of no further force or effect, and the rights of the Banks
and the Agent, and the obligations of the Subsidiaries executing each such
document, under and pursuant to each such document are terminated and released;
and (b) the Guarantees executed by Altek are amended and restated, and replaced
by the Guarantees required by SECTION 5.4 below to be executed and delivered by
Altek. Each Subsidiary referred to in this Section shall be a third party
beneficiary of this Section.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to the Banks that:
4.1 CORPORATE POWER AND AUTHORITY: NO CONFLICTS. The execution,
delivery and performance by each of the Borrower and Altek, as the case may be,
of this Amendment No. 1 and of each other Loan Document to be executed by it
44
6
pursuant hereto, have been duly authorized by all necessary corporate action and
do not and will not: (a) require any consent or approval of its stockholders;
(b) contravene its charter or by-laws; (c) violate any provision of, or require
any filing, registration, consent or approval under, any law, rule, regulation
(including, without limitation, Regulation U), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Borrower or any of its Subsidiaries or Affiliates (other
than any appropriate disclosure required to be contained in periodic reports to
be filed by the Borrower pursuant to the Securities Exchange Act of 1934 and
applicable regulations thereunder); (d) result in a breach of or constitute a
default or require any consent under any indenture or loan or credit agreement
or any other agreement, lease or instrument to which the Borrower or any of its
Subsidiaries or Affiliates is a party or by which any of them or their
properties may be bound or affected; (e) result in, or require, the creation or
imposition of a Debt or Guarantee of Borrower or any of its Subsidiaries or
Affiliates, or any lien upon or with respect to any of the properties now owned
or hereafter acquired by the Borrower or any of its Subsidiaries or Affiliates;
or (f) cause the Borrower or any of its Subsidiaries or Affiliates, as the case
may be, to be in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.
4.2 LEGALLY ENFORCEABLE AGREEMENT. Each of this Amendment No. 1,
each other Loan Document required to be executed in connection herewith, the
Credit Agreement as amended hereby and each other Loan Document as amended by
each such other Loan Document, is a legal, valid and binding obligation of the
Borrower and Altek, as the case may be, enforceable against the Borrower and
Altek in accordance with its terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency or other similar laws
affecting creditors' rights generally.
4.3 NO DEFAULT. On and as of the date of this Amendment No. 1, and
after giving effect to this Amendment No. 1 and to each other Loan Document
required to be executed in connection herewith, no event has occurred and is
continuing which constitutes a Default or Event of Default.
4.4 INVESTMENTS IN SUBSIDIARIES. SCHEDULE 4.4 to this Amendment No.
1 sets forth the total amount of advances to and direct investments in the
Subsidiaries made by Borrower and outstanding as of the date of this Amendment
No. 1.
5. EFFECTIVENESS. This Amendment No. 1 shall be of no force or effect
unless and until all of the following conditions are met, and unless each such
condition is either met or waived by both Banks on or before March 31, 1998,
this Amendment shall not become effective. Upon this Amendment No. 1 becoming
effective, each document delivered pursuant to this ARTICLE 5 shall constitute a
"Loan Document":
5.1 COUNTERPARTS. The Borrower and the Agent have each received
counterparts of this Amendment No. 1 duly executed by the Borrower, the Agent,
and the Banks.
5.2 RESOLUTIONS. The Agent shall have received certified copies of
the resolutions of the boards of directors of the Borrower and Altek, in form
and content reasonably satisfactory to the Agent, authorizing the execution,
delivery and performance of this Amendment No. 1 and of all other documents
required to be executed by Borrower or Altek, as the case may be, pursuant
hereto.
5.3 ALTEK GUARANTEE. The Agent shall have received a Guarantee in
favor of each Bank, in the form of SCHEDULE 5.3 to this Amendment No. 1,
executed and delivered by Altek.
5.4 OPINION. The Agent shall have received an opinion of counsel to
the Borrower and Altek to the effect that the execution, delivery and
performance of this Amendment No. 3, and the Loan Documents to be executed by
Borrower and/or Altek pursuant to SECTION 5.3 AND 5.6 of this Amendment No. 1,
have been duly and validly authorized on behalf of the Borrower and Altek, as
45
7
the case may be, and do not conflict with any legal or contractual provision or
restriction applicable to Borrower and Altek, as the case may be, or to any of
the property of either, and that this Amendment No. 1 and the Credit Agreement
and such other loan Documents, as amended hereby, are enforceable against
Borrower and Altek.
5.5 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties set forth in ARTICLE 4 to this Amendment No. 1 shall be true and
correct on and as of the date on which this Amendment No. 1 becomes effective.
5.6 AMENDMENT OF FOREIGN SUBSIDIARY PLEDGE AGREEMENT. Each of the
Borrower and the Agent shall have executed an amendment, in the form of SCHEDULE
5.6 to this Amendment No. 1, to the Foreign Subsidiary Pledge Agreement.
6. AGENT'S EXPENSES. Borrower agrees to pay the Agent for all costs,
expenses and charges (including, without limitation, fees and charges of
external legal counsel for the Agent and costs allocated by its internal legal
department) incurred by the Agent in connection with the negotiation,
preparation and execution of this Amendment No. 1 and the documents executed in
connection herewith.
7. ADJUSTED LEVERAGE RATIO REPORT. Reference is made to a letter dated
February 12, 1998 executed by the Banks and the Agent and addressed to the
Borrower (the "2/12/98 Letter"). Pursuant to paragraph 1 of the 2/12/98 Letter,
the Borrower agreed to provide to the Agent, on March 31, 1998, a statement
regarding the Adjusted Leverage Ratio as of such date. The Borrower is hereby
released from its obligation to provide such statement and from its agreements
set forth in paragraph 3 of the 2/12/98 Letter.
8. MISCELLANEOUS. Except as expressly provided in or pursuant to this
Amendment No. 1, the Credit Agreement and each other Loan Document shall remain
unchanged and in full force and effect, except that each reference in the Credit
Agreement and in any of the other Loan Documents, and in any agreements,
certificates and notices simultaneously herewith or hereafter executed under or
pursuant to the Credit Agreement or the other Loan Documents, (a) to the "Credit
Agreement", "this Agreement", "hereof", "herein" and similar terms referring to
the Credit Agreement, shall be deemed to refer to the Credit Agreement as
amended by this Amendment No. 1 and (b) to any other Loan Document, shall be
deemed to refer to such Loan Document as amended pursuant to any documents
executed pursuant to the requirements of this Amendment No. 1.
This Amendment No. 1, and each Loan Document executed by the Borrower
pursuant hereto, shall be governed by and construed in accordance with the laws
of the State of New York.
The section headings in this Amendment No. 1 are inserted for
convenience only and shall not be a part of this instrument.
This Amendment No. 1 may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signature thereto
and hereto were upon the same instrument.
TRANSMATION, INC.
By /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President, Finance
SEPARATE SIGNATURE PAGE FOR EACH BANK TO FOLLOW ON PAGES ______ THROUGH _______
46
8
MANUFACTURERS AND TRADERS TRUST COMPANY
Individually and as Agent,
By /s/ J. Xxxxxxxx Xxxxx
--------------------------------
Name: J. Xxxxxxxx Xxxxx
-----------------------------
Title: Vice President
----------------------------
47
9
STATE STREET BANK AND TRUST COMPANY
By /s/ Xxxxx X. Case
--------------------------------
Name: Xxxxx X. Case
-----------------------------
Title: Vice President
----------------------------
48
