EXHIBIT 10.7
AMENDMENT NUMBER THREE TO REVOLVING CREDIT AGREEMENT
This AMENDMENT NUMBER THREE TO REVOLVING CREDIT AGREEMENT (this
"Amendment"), dated as of July 21, 2003, is entered into among NATIONAL
TECHNICAL SYSTEMS, INC., a California corporation ("Parent"), NTS TECHNICAL
SYSTEMS, a California corporation, dba National Technical Systems ("NTS"),
XXCAL, INC., a California corporation ("XXCAL"), APPROVED ENGINEERING TEST
LABORATORIES, INC., a California corporation ("AETL"), ETCR, INC., a California
corporation ("ETCR"), ACTON ENVIRONMENTAL TESTING CORPORATION, a Massachusetts
corporation ("Acton"), and one or more Subsidiaries of Parent, whether now
existing or hereafter acquired or formed, which become party to the Agreement
(as defined below) by executing an Addendum in the form of Exhibit 1 of the
Agreement (NTS, XXCAL, AETL, ETCR, Acton and such other Subsidiaries are
sometimes individually referred to herein as a "Subsidiary Borrower" and
collectively referred to herein as "Subsidiary Borrowers", and Subsidiary
Borrowers and Parent are sometimes individually referred to herein as a
"Borrower" and collectively referred to herein as "Borrowers"), the financial
institutions from time to time parties hereto as Lenders, whether by execution
hereof or an Assignment and Acceptance in accordance with Section 11.5(c) of the
Agreement, and Comerica Bank - California, in its capacity as contractual
representative for itself and the other Lenders ("Agent"), with reference to the
following facts:
A. Borrowers, Agent and Lenders previously entered into that certain
Revolving Credit Agreement, dated as of November 21, 2001, as amended by that
certain Amendment Number One to Revolving Credit Agreement, dated as of July 17,
2002 and that certain Amendment Number Two to Revolving Credit Agreement, dated
as of November 25, 2002 (as amended, the "Agreement");
B. Borrowers, Agent and Lenders desire to amend the Agreement in
accordance with the terms of this Amendment.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:
8. Defined Terms. All initially capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Agreement.
Amendment to Section 1.1. The definition of "Revolving Loans Maturity
Date" set forth in Section 1.1 of the Agreement is hereby amended in its
entirety as follows:
"`Revolving Loans Maturity Date' means August 1, 2005."
9. Amendment to Section 7.15(a). Section 7.15(a) is hereby amended in its
entirety as follows:
"(a) Consolidated Effective Tangible Net Worth, measured as of the
end of each fiscal quarter, at any time to be less than $24,900,000 plus an
amount equal to twenty-five percent (25%) of the Consolidated Adjusted Net
Income for each fiscal year, commencing with the fiscal year ending January 31,
2004 (but in no event less than zero with respect to any fiscal year)."
10. Conditions Precedent to Effectiveness of Amendment. The effectiveness
of this Amendment is subject to and contingent upon the fulfillment of each and
every one of the following conditions:
22
Agent shall have received this Amendment, duly executed by
Borrowers, Lenders and Agent;
No Event of Default, Unmatured Event of Default or Material
Adverse Effect shall have occurred; and
All of the representations and warranties set forth herein, in the
Loan Documents and in the Agreement shall be true, complete and accurate in all
respects as of the date hereof (except for representations and warranties which
are expressly stated to be true and correct as of the Closing Date).
11. Representations and Warranties. In order to induce Agent and Lenders
to enter into this Amendment, each Borrower hereby represents and warrants to
Agent and Lenders that:
No Event of Default or Unmatured Event of Default is continuing;
All of the representations and warranties set forth in the Agreement
and the Loan Documents are true, complete and accurate in all respects (except
for representations and warranties which are expressly stated to be true and
correct as of the Closing Date); and
This Amendment has been duly executed and delivered by Borrowers,
and after giving effect to this Amendment, the Agreement and the Loan Documents
continue to constitute the legal, valid and binding agreements and obligations
of Borrowers, enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, and similar laws and
equitable principles affecting the enforcement of creditors' rights generally.
12. Counterparts; Telefacsimile Execution. This Amendment may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Amendment. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
13. Integration. The Agreement as amended by this Amendment constitutes
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof and thereof, and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof and thereof.
14. Reaffirmation of the Agreement. The Agreement as amended hereby and
the other Loan Documents remain in full force and effect.
[Remainder of page intentionally left blank.]
23
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Amendment as of the date first hereinabove written.
NATIONAL TECHNICAL SYSTEMS, INC.
By /s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx, Senior Vice President, Chief
Financial Officer, Treasurer and Assistant Secretary
NTS TECHNICAL SYSTEMS dba
NATIONAL TECHNICAL SYSTEMS
By /s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx, Senior Vice President, Chief
Financial Officer, Treasurer and Assistant Secretary
XXCAL, INC.
By /s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx, Vice President, Treasurer and
Assistant Secretary
APPROVED ENGINEERING TEST
LABORATORIES, INC.
By /s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx, Vice President, Treasurer and
Assistant Secretary
24
ETCR, INC.
By /s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx, Vice President,
Treasurer and Assistant Secretary
ACTON ENVIRONMENTAL TESTING CORPORATION
By /s/ Xxxxx Xxxxxxx
----------------------------------------------------
Xxxxx Xxxxxxx, Vice President,
Treasurer and Assistant Secretary
COMERICA BANK-CALIFORNIA, in its capacities as
Agent, Issuing Lender and a Lender
By /s/ Xxxxx X. Xxxxx
----------------------------------------------------
Xxxxx X. Xxxxx, Vice President
FIRST BANK & TRUST, in its capacity as aLender
By /s/ Xxxxx X. Xxxxxx
----------------------------------------------------
Name Xxxxx X. Xxxxxx
----------------------------------------------
Title Vice President Commercial Banking
----------------------------------------------
25
