10(j)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of August
1, 2002 (this "Amendment"), is among KEITHLEY INSTRUMENTS, INC., an Ohio
corporation (the "Company"), Subsidiary Borrowers (referred to below and
collectively with the Company, the "Borrowers"), the Lender (as referred to
below) and BANK ONE, NA, a national banking association, having its principal
office in Columbus, Ohio, as Agent for the Lender (in such capacity the
"Agent").
RECITALS
A. The Company, certain Subsidiary Borrowers party thereto,
the Lender party thereto and Agent are parties to a Credit Agreement, dated as
of March 30, 2001 (as now and hereafter amended, the "Credit Agreement"),
pursuant to which the Lender agreed, subject to the terms and conditions
thereof, to extend credit to the Borrowers.
B. The Borrowers desire to amend the Credit Agreement and
the Agent and the Lender are willing to do so strictly in accordance with the
terms hereof.
TERMS
In consideration of the premises and of the mutual agreements
herein contained, the parties agree as follows:
ARTICLE 1.
AMENDMENTS
Upon fulfillment of the conditions set forth in Article 3
hereof, the Credit Agreement shall be amended as follows:
1.1 Article I shall be amended by adding the following definitions in
appropriate alphabetical order:
"Consolidated Current Assets" means, as of any date, all
assets which, in accordance with Agreement Accounting Principles,
should be classified as current assets on the consolidated balance
sheet of the Company, provided that, prepaid assets shall be excluded,
all calculated for the Company and its Subsidiaries on a consolidated
basis.
"Consolidated Current Liabilities" means, as of any date, all
liabilities which, in accordance with Agreement Accounting Principles,
should be classified as current liabilities on the consolidated balance
sheet of the Company, provided that, the Aggregate Outstanding Credit
Exposure shall be included as "Consolidated Current Liabilities"
hereunder, all calculated for the Company and its Subsidiaries on a
consolidated basis.
"EBIDA Plus Non-Recurring Expense" means Consolidated Net
Income plus, to the extent deducted from revenues in determining
Consolidated Net Income, (i) Consolidated Interest Expense (without any
netting against any interest income), (ii) depreciation, (iii)
amortization and (iv) non-recurring expenses prepared in accordance
with Agreement Accounting Principles, all calculated for the Company
and its Subsidiaries on a consolidated basis.
"Working Capital" means as of any date, the amount, if any, by
which Consolidated Current Assets exceeds Consolidated Current
Liabilities.
1.2 Section 6.10 shall be amended by deleting the reference in clause
(b) therein to "25% of the Consolidated Net Income in any fiscal year" and
inserting "$3,000,000 in any fiscal year" in place thereof.
1.3 Section 6.14 shall be amended by deleting the reference in clause
(iv)(f) therein to "50%" and inserting "10%" in place thereof.
1.4 Section 6.16 shall be amended and restated in its entirety to read
as follows:
6.16. FINANCIAL COVENANTS
6.16.1. FIXED CHARGE COVERAGE RATIO. The Company will
not permit the Fixed Charge Coverage Ratio, determined as of the end of
each of its fiscal quarters for the four most-recently ended fiscal
quarters, to be less than 3.0 to 1.0, commencing with the fiscal
quarter ending June 30, 2003. The Fixed Charge Coverage Ratio is
suspended for the fiscal quarters ending June 30, 2002 through and
including March 31, 2003.
6.16.2. LEVERAGE RATIO. The Company will not permit
the Leverage Ratio, determined as of the end of each of its fiscal
quarters, to be greater than 1.0 to 1.0, commencing with the fiscal
quarter ending June 30, 2003. The Leverage Ratio is suspended for the
fiscal quarters ending June 30, 2002 through and including March 31,
2003.
6.16.3. WORKING CAPITAL. The Company will not
permit Working Capital to be less than $40,000,000 at any time,
determined as of the end of each fiscal quarter commencing June 30,
2002 through and including March 31, 2003.
6.16.4. EBIDA PLUS NON-RECURRING EXPENSE. The Company
will not permit the EBIDA plus Non-Recurring Expense, determined as of
the end of each of its fiscal quarters for such fiscal quarter, to be
less than: (i) as of June 30, 2002, ($500,000); (ii) as of September
30, 2002, $0, (iii) as of December 31, 2002, $500,000, and (iv) as of
March 31, 2003, $1,000,000.
1.5 Schedule 2 to the Credit Agreement shall be amended to add
the Subsidiary referenced below:
Keithley Instruments KK. Organized under the laws of Japan.
100% Wholly-Owned Subsidiary.
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ARTICLE 2.
REPRESENTATIONS
Each Borrower represents and warrants to the Agent and the
Lender that:
2.1 The execution, delivery and performance of this Amendment is within
its powers, has been duly authorized and is not in contravention with any law,
of the terms of its Articles of Incorporation or By-laws, or any undertaking to
which it is a party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligation of the
Borrower enforceable against it in accordance with the terms hereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Article V of the Credit Agreement
are true on and as of June 30, 2002 with the same force and effect as if made on
and as of June 30, 2002.
2.4 No Default or Unmatured Default exists or has occurred and is
continuing on the date hereof.
ARTICLE 3.
CONDITIONS OF EFFECTIVENESS
This Amendment shall not become effective until each of the
following has been satisfied:
3.1 This Amendment shall be signed by each Borrower, the Agent and the
Lender.
3.2 The Company shall have paid an amendment fee in the amount of
$7,500.
ARTICLE 4.
MISCELLANEOUS.
4.1 References in the Credit Agreement or in any note, certificate,
instrument or other document to the "Credit Agreement" shall be deemed to be
references to the Credit Agreement as amended hereby and as further amended from
time to time.
4.2 The Company agrees to pay and to save the Agent harmless for the
payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Agent in connection with
preparing this Amendment and the related documents.
4.3 Each Borrower acknowledges and agrees that the Agent and the Lender
have fully performed all of their obligations under all documents executed in
connection with the Credit Agreement and all actions taken by the Agent and the
Lender are reasonable and appropriate under the circumstances and within their
rights under the Credit Agreement and all other documents executed in connection
therewith and otherwise available. Each Borrower represents and warrants that it
is not aware of any claims or causes of action against the Agent or any Lender,
any participant lender or any of their successors or assigns.
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4.4 Except as expressly amended hereby, each Borrower agrees that the
Credit Agreement and all other Loan Documents are ratified and confirmed and
shall remain in full force and effect and that it has no set off, counterclaim
or defense with respect to any of the foregoing. Terms used but not defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
4.5 This Amendment may be signed upon any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of August 1, 2002.
KEITHLEY INSTRUMENTS, INC.
By: /s/ Mark J. Plush
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Its: Vice President and Chief Financial Officer
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KEITHLEY INSTRUMENTS GMBH
By: /s/ Mark J. Plush
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Its: Managing Director
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BANK ONE, NA, as Agent, LC Issuer and Lender
By: /s/ James M. Malz
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Its: First Vice President, Division Manager
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