Exhibit 10(27)
SIXTH AMENDMENT TO CREDIT AGREEMENT
SIXTH AMENDMENT TO CREDIT AGREEMENT (this "Sixth Amendment"), dated as of
January 1, 1998, among AXSYS TECHNOLOGIES, INC. (f/k/a VERNITRON CORPORATION), a
corporation organized and existing under the laws of the State of Delaware (the
"Borrower"), the financial institutions party to the Credit Agreement referred
to below (each a "Bank" and, collectively, the "Banks"), and BANQUE PARIBAS, as
agent (the "Agent"). All capitalized terms used herein and not otherwise defined
shall have the respective meanings provided such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Agent are parties to a Credit
Agreement, dated as of April 25, 1996 (as amended, modified or supplemented to
the date hereof, the "Credit Agreement");
WHEREAS, the Banks are willing to amend certain provisions of the Credit
Agreement, subject to and on the terms and conditions set forth herein;
NOW, THEREFORE, it is agreed:
I. Section 3.01(a) of the Credit Agreement is hereby amended by (i)
deleting the reference to "1/2" contained therein and (ii) inserting a reference
to "3/8" in lieu thereof.
2. Section 9.08 of the Credit Agreement is hereby amended by (i) deleting
Section 9.08(a) in its entirety and (ii) inserting the following new Section
9.08(a) in lieu thereof:
"9.08 Capital Expenditures. (a) The Borrower will not and will not
permit any of its Subsidiaries to, make any expenditure which should be
capitalized in accordance with generally accepted accounting principles,
including all such expenditures with respect to fixed or capital assets
(including, without limitation, expenditures for maintenance and repairs
which should be capitalized in accordance with generally accepted
accounting principles and including Capitalized Lease Obligations)
(collectively, "Capital Expenditures"), except that (x) during the period
(taken as one accounting period) commencing on the Initial Borrowing Date
and ending on December 31, 1996, the Borrower and its Subsidiaries may make
Capital Expenditures so long as the aggregate amount thereof does not
exceed $2,900,000 during such period and (y) during any calendar year
thereafter the Borrower and its Subsidiaries may make Capital Expenditures
so long as the aggregate amount thereof does not exceed the amount set
forth opposite such fiscal year below:
Fiscal Year Amount
----------- ------
1997 $5,000,000
1998 and each
fiscal year
thereafter $7,500,000
For purposes of this Section 9.08, asset purchases made in accordance with
Section 9.02(viii) shall not constitute Capital Expenditures for purposes
of this Section 9.08 and refinancings of existing Capitalized Lease
Obligations effected in accordance with Section 9.05(v) shall not
constitute Capital Expenditures for purposes of this Section 9.08."
3. Section 9.09 of the Credit Agreement is hereby amended by (i) deleting
Section 9.09 in its entirety and (ii) inserting the following new Section 9.09
in lieu thereof:
"9.09 Fixed Charge Coverage Ratio. The Borrower will not permit the
Fixed Charge Coverage Ratio for any Test Period ended on the last day of
any fiscal quarter to be less than the ratio set forth below opposite such
date:
Fiscal Quarter Ended Ratio
-------------------- -----
June 30, 1996 1.15 : 1.00
September 30, 1996 1.15 : 1.00
December 31, 1996 1.15 : 1.00
March 31, 1997 1.15 : 1.00
June 30, 1997 1.15 : 1.00
September 30, 1997
and each fiscal
quarter thereafter 1.20 : 1.00"
4. Section 9.10 of the Credit Agreement is hereby amended by (i) deleting
Section 9.10 in its entirety and (ii) inserting the following new Section 9.10
in lieu thereof:
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"9.10 Interest Coverage Ratio. The Borrower will not permit the ratio
of its Consolidated EBITDA to its Consolidated Cash Interest Expense for
any Test Period ended on the last day of any fiscal quarter set forth below
to be less than the ratio set forth below opposite such date:
Fiscal Quarter Ended Ratio
-------------------- -----
June 30, 1996 2.85 : 1.00
September 30, 1996 2.85 : 1.00
December 31, 1996 3.25 : 1.00
March 31, 1997 3.10 : 1.00
June 30, 1997 3.30 : 1.00
September 30, 1997 3.65 : 1.00
December 31, 1997
and each fiscal
quarter thereafter 3.50 : 1.00"
5. Section 9.11 of the Credit Agreement is hereby amended by (i) deleting
Section 9.11 in its entirety and (ii) inserting the following new Section 9.11
in lieu thereof:
"9.11 Consolidated Indebtedness to Consolidated EBITDA. The Borrower
will not permit on any date set forth below the ratio of (x) Consolidated
Indebtedness at such time to (y) its Consolidated EBITDA for the Test
Period then ended to be greater than the ratio set forth below opposite
such date:
Fiscal Quarter Ended Ratio
June 30, 1996 3.50 : 1:00
September 30, 1996 3.50 : 1.00
December 31, 1996 3.00 : 1.00
March 31, 1997 3.20 : 1.00
June 30, 1997 3.00 : 1.00
September 30, 1997 2.75 : 1.00
December 31, 1997
and each fiscal
quarter thereafter 2.00 : 1.00"
6. Section 9.12 of the Credit Agreement is hereby amended by (i) deleting
Section 9.12 in its entirety and (ii) inserting the following new Section 9.12
in lieu
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thereof:
"9.12 Minimum Consolidated EBITDA. The Borrower will not permit its
Consolidated EBITDA for any Test Period ended on the last day of any fiscal
quarter set forth below to be less than the amount set forth below opposite
such date:
Fiscal Quarter Ended Minimum Amount
-------------------- --------------
June 30, 1996 $ 1,700,000
September 30, 1996 $ 4,250,000
December 31, 1996 $ 7,800,000
March 31, 1997 $ 9,600,000
June 30, 1997 $10,900,000
September 30, 1997 $11,500,000
December 31, 1997
and each fiscal
quarter thereafter $12,500,000"
7. Section 9.13 of the Credit Agreement is hereby amended by (i) deleting
Section 9.13 in its entirety and (ii) inserting the following new Section 9.13
in lieu thereof:
"9.13 Minimum Consolidated Net Worth. The Borrower will not permit its
Consolidated Net Worth for any Test Period ended on the last day of any
fiscal quarter set forth below to be less than the amount opposite such
date:
Minimum Consolidated
Period Ended Net Worth
------------ ---------
June 30, 1996 $14,800,000
September 30, 1996 $15,250,000
December 31, 1996 $16,250,000
March 31, 1997 $16,750,000
June 30, 1997 $17,750,000
September 30, 1997 $18,750,000
December 31, 1997
and each fiscal
quarter thereafter $30,000,000"
8. Section 9.14 of the Credit Agreement is hereby amended by (i) deleting
Section 9.14 in its entirety and (ii) inserting the following in lieu thereof:
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"9.14 Maximum Leverage. [Intentionally Omitted]."
9. Section 9.22 of the Credit Agreement is hereby amended by (i) deleting
the reference to "55" contained therein and (ii) inserting a reference to "60"
in lieu thereof.
10. The definition of "Applicable Margin" contained in Section 11 of the
Credit Agreement is hereby amended by (i) deleting the definition of "Applicable
Margin" in its entirety and (ii) inserting the following new definition of
"Applicable Margin" in lieu thereof:
"Applicable Margin" shall mean a percentage per annum equal to (A) in the
case of Eurodollar Loans, (i) if the ratio of (x) the Consolidated Indebtedness
to (y) Consolidated EBITDA is less than .50:1.00, then the Applicable Margin
equals 0.75%, (ii) if the ratio of (x) the Consolidated Indebtedness to (y)
Consolidated EBITDA is greater than or equal to .50:1.00 but less than
1.00:1.00, then the Applicable Margin equals 1.00%; (iii) if the ratio of (x)
the Consolidated Indebtedness to (y) Consolidated EBITDA is greater than or
equal to 1.00:1.00 but less than 1.50:1.00, then the Applicable Margin equals
1.25%; and (iv) if the ratio of (x) the Consolidated Indebtedness to (y)
Consolidated EBITDA is greater than or equal to 1.50:1.00 but less than
2.00:1.00, then the Applicable Margin equals 1.50% and (B) in the case of Base
Rate Loans, then the Applicable Margin equals 0%; the ratio of Consolidated
Indebtedness to Consolidated EBITDA shall be determined by delivery of an
officer's certificate of the Borrower to the Banks pursuant to Section 8.01(f),
which certificate shall set forth the calculation of the ratio of Consolidated
Indebtedness to Consolidated EBITDA for the applicable period. The ratio so
determined shall apply, except as set forth below, from the date on which such
officer's certificate is delivered to the Agent to the earlier of (x) the date
on which the next certificate is delivered to the Agent pursuant to Section
8.01(f) and (y) the 45th day following the first day of the fiscal quarter
immediately following the delivery of such certificate to the Agent.
Notwithstanding anything to the contrary contained above, the Applicable Margin
shall be 1.50% in the case of Eurodollar Loans (and will remain 0% in the case
of Base Rate Loans) (a) if no officer's certificate has been delivered to the
Banks pursuant to Section 8.01(f) or the financial statements upon which any
such calculations are based have not been delivered, until such a certificate
and/or financial statements are delivered and (b) at all times when there shall
exist a Default or Event of Default".
11. The definition of "Change in Control" contained in Section 11 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following new definition:
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"Change of Control" shall mean (i) the direct or indirect acquisition
by any Person or group (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act) of the beneficial ownership (as such term is
defined in Rule 13D-3 promulgated under the Securities Exchange Act) of 20%
or more of the outstanding shares of the common stock of the Borrower or
(ii) the Board of Directors of the Borrower shall cease to consist of a
majority of Continuing Directors.
12. Notwithstanding anything to the contrary contained in the Credit
Agreement (including Section 9.06) but only so long as there exists no Default
or Event of Default, the Borrower shall be permitted to purchase up to
$2,000,000, in the aggregate, of Common Stock of the Company in open market
transactions during the period beginning on the Sixth Amendment Effective Date.
13. Schedule I to the Credit Agreement is hereby amended by (i) deleting
Schedule I in its entirety and (ii) inserting in lieu thereof a new Schedule I
thereto the Schedule I attached hereto which reflects the existing commitments
of the Banks as of the Sixth Amendment Effective Date.
14. In order to induce the Banks to enter into this Sixth Amendment, the
Borrower hereby represents and warrants that on the Sixth Amendment Effective
Date, both before and after giving effect to this Sixth Amendment and the
transactions contemplated hereby, (i) no Default or Event of Default shall
exist, (ii) all of the representations and warranties contained in the Credit
Documents shall be true and correct in all material respects, with the same
effect as though such representations and warranties had been made on and as of
the Sixth Amendment Effective Date (it being understood that any representation
or warranty made as of a specific date shall be true and correct in all
materials respects as of such specified date) and (iii) the Borrower shall have
paid to the Agent all unpaid costs and expenses (including legal fees and
expenses) of the Agent.
15. This Sixth Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
16. This Sixth Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Agent.
-6-
17. THIS SIXTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
18. This Sixth Amendment shall become effective as of the date hereof (the
"Sixth Amendment Effective Date") when each Credit Party, the Required Banks and
the Collateral Agent shall have signed a copy hereof (whether the same or
different copies) and shall have delivered (including by way of telecopier) the
same to the Agent.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Sixth Amendment to be duly executed and delivered as of the date first
above written.
AXSYS TECHNOLOGIES, INC.
as Borrower
By /s/ Louis D. Mattielli
-----------------------------------
Name: Louis D. Mattielli
Title: Vice President-General Counsel
and Secretary
PRECISION AEROTECH, INC.,
as Subsidiary Guarantor
By /s/ Louis D. Mattielli
-----------------------------------
Name: Louis D. Mattielli
Title: Vice President-General Counsel
and Secretary
SPEEDRING, INC.
as Subsidiary Guarantor
By /s/ Louis D. Mattielli
-----------------------------------
Name: Louis D. Mattielli
Title: Vice President-General Counsel
and Secretary
SPEEDRING SYSTEMS, INC.,
as Subsidiary Guarantor
By /s/ Louis D. Mattielli
-----------------------------------
Name: Louis D. Mattielli
Title: Vice President-General Counsel
and Secretary
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TELETRAC, INC.,
as Subsidiary Guarantor
By /s/ Louis D. Mattielli
-----------------------------------
Name: Louis D. Mattielli
Title: Vice President-General Counsel
and Secretary
BANQUE PARIBAS, individually, as
Agent and as Collateral Agent
By /s/ Donald J. Ercole
-----------------------------------
Name: Donald J. Ercole
Title: Managing Director
By /s/ Edward Irwin
-----------------------------------
Name: Edward Irwin
Title: Director
PARIBAS CAPITAL FUNDING LLC
By /s/ Jeffrey J. Youle
-----------------------------------
Name: Jeffrey J. Youle
Title: Director
IBJ SCHRODER BANK & TRUST COMPANY
By /s/ Mark H. Minter
-----------------------------------
Name: Mark Minter
Title: Director
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FLEET BANK, N.A.
By /s/ Robert Isaksen
-----------------------------------
Name: Robert Isaksen
Title: Vice President
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SCHEDULE I
COMMITMENTS
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Revolving
Bank Loan Commitment
---- ---------------
- --------------------------------------------------------------------------------
Banque Paribas $ 2,444,444.45
- --------------------------------------------------------------------------------
Paribas Capital Funding LLC $ 1,855,333.33
- --------------------------------------------------------------------------------
First Source Financial LLP $ 2,499,444.44
- --------------------------------------------------------------------------------
IBJ Schroder Bank & Trust Company $ 2,100,388.89
- --------------------------------------------------------------------------------
Fleet Bank, N.A. $ 2,100,388.89
--------------
- --------------------------------------------------------------------------------
Total $11,000,000.00
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