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10(y). First Amendment dated March 28, 1997, to the Credit Agreement dated May
31, 1994.
FIRST AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of March
28, 1997 (this "Amendment"), is among KEITHLEY INSTRUMENTS, INC., an Ohio
corporation (the "Company"), KEITHLEY INSTRUMENTS, GMBH, a corporation organized
and existing under the laws of the Federal Republic of Germany (the "Borrowing
Subsidiary" and, collectively with the Company, the "Borrowers" or each a
"Borrower") the banks set forth on the signature pages hereof (collectively, the
"Banks") and NBD BANK, a Michigan banking corporation, as agent for the Banks
(in such capacity, the "Agent").
RECITALS
--------
A. The Borrowers, the Agent and the Banks are parties to a
Credit Agreement, dated as of May 31, 1994 (as now and hereafter amended, the
"Credit Agreement"), pursuant to which the Banks 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 Banks 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
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Upon fulfillment of the conditions set forth in Article 3
hereof, the Credit Agreement shall be amended as follows:
1.1 Section 1.1 shall be amended as follows:
(a) The definition of "Commitment" shall be amended
by deleting the last sentence of such definition in its entirety.
(b) The definition of "Floating Rate" shall be
amended by deleting clause (a) therein in its entirety and inserting the
following in place thereof: "(a) zero percent (0%) per annum".
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(c) The definition of "Leverage Ratio" shall be
deleted in its entirety and the following shall be inserted in place thereof:
"LEVERAGE RATIO" shall mean, as of any date, the
ratio of the Consolidated Funded Debt of the Company
and its Subsidiaries to the Consolidated Total
Capitalization of the Company and its Subsidiaries.
(d) The definition of "Multicurrency Rate" shall
be amended by deleting clause (a) in its entirety and inserting the following
in place thereof: "(a) Applicable Margin".
(e) The definition of "Termination Date" shall be
amended by deleting clause (a) in its entirety and inserting the following in
place thereof: "March 28, 2002".
(f) The following definitions shall be added in
appropriate alphabetical order:
"APPLICABLE MARGIN" shall mean with respect to any
Multicurrency Rate Loan or facility fee, as the case
may be, the applicable percentage set forth in the
table below as adjusted on the first day of each
fiscal quarter of the Company based upon the Leverage
Ratio for the fiscal quarter immediately preceding
the fiscal quarter most recently ended and shall
remain in effect until the next change to be effected
pursuant to this definition:
Applicable Margin
-----------------
====================================================================================
Leverage Ratio Multi-currency Facility Fee
Rate Loan
--------------------------------------------------- --------------------------------
Less than .30:1.0 0.275% 0.125%
--------------------------------------------------- ------------------ -------------
Greater than or equal to .30:1.0 but less than
.38:1.0 0.35% 0.15%
--------------------------------------------------- ------------------ -------------
Greater than or equal to .38:1.0 0.55% 0.20%
--------------------------------------------------- ------------------ -------------
"FIRST AMENDMENT EFFECTIVE DATE" shall mean
March 28, 1997.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of the
end of any fiscal quarter, the ratio of (a)
Consolidated EBITDA of the Company and its
Subsidiaries for such period, plus the maximum amount
of all rents and other payments paid or required to
be paid during such period under any operating lease
in respect of which the Company or any of its
Subsidiaries is obligated as lessee or
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user, to (b) the sum of Consolidated Interest Expense
for such period, plus the maximum amount of all rents
and other payments paid or required to be paid during
such period under any operating lease in respect of
which the Company or any of its Subsidiaries is
obligated as lessee or user.
"FUNDED DEBT" of any person shall mean, as of any
date, the sum of all interest bearing Indebtedness
(including obligations under Capital Leases) of such
person, other than Indebtedness which is subordinated
to Indebtedness owing to the Agent and the Banks
under the Loan Documents in form and substance
satisfactory to the Banks minus invested cash in
excess of $1,500,000.
"NET WORTH" of any person shall mean, as of any date,
the amount of any capital stock, paid in capital and
similar equity accounts plus (or minus in the case of
a deficit) the capital surplus and retained earnings
of such person and the amount of any foreign currency
translation adjustment account shown as a capital
account of such person.
"TOTAL CAPITALIZATION" of any person shall mean, as
of any date, the sum of the Funded Debt of such
person plus the Net Worth of such person.
(g) The following definitions shall be deleted from
Section 1.1 together with all references to such defined terms in the Credit
Agreement: "Applicable Tranche B Commitment Fee", "Applicable Multicurrency Rate
Margin", "Applicable Floating Rate Margin", "Current Assets" and "Current
Liabilities", "Debt Service Coverage Ratio" and "Tangible Net Worth".
1.2 Section 2.1(b) shall be amended by deleting the
reference to "Tranche A Commitment" in the last sentence and inserting
"Commitment" in place thereof.
1.3 Section 2.1(c) shall be deleted and the following
shall be inserted in place thereof:
(a) LIMITATION ON AMOUNT OF LOANS. Notwithstanding
anything in this Agreement to the contrary, the
aggregate principal amount of the Loans made by any
Bank at any time outstanding shall not exceed the
amount of its respective Commitment as of the date
any such Loan is made.
1.4 Section 2.3 shall be deleted and the following shall
be inserted in place thereof:
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2.3 FEES. (a) The Borrowers agree to pay to
each Bank a facility fee on the daily average amount
of its respective Commitment, for the period from the
Effective Date to but excluding the Termination Date,
at a per annum rate equal to the Applicable Margin.
Accrued facility fees shall be payable quarterly in
arrears on the last Business Day of each March, June,
September and December, commencing on the first such
Business Day occurring after the Effective Date, and
on the Termination Date.
(b) The Borrowers agree to pay to the
Agent an agency fee for its services as Agent under
this Agreement in such amounts as may from time to
time be agreed upon by the Company and the Agent.
1.5 Sections 5.2(a), (b), (c) and (d) shall be deleted
in their entirety and the following shall be inserted in place thereof:
(a) [Intentionally Reserved.]
(b) NET WORTH. Permit or suffer the Consolidated Net
Worth of the Company and its Subsidiaries to be less
than the sum of (i) $24,000,000 plus (ii) an amount
equal to 50% of Cumulative Net Income (without
reduction for net loss) of the Company and its
Subsidiaries for each fiscal year of the Company
ending after the First Amendment Effective Date.
(c) FIXED CHARGE COVERAGE RATIO. Permit or suffer the
Consolidated Fixed Charge Coverage Ratio of the
Company and its Subsidiaries to be less than (i) for
the fiscal quarter ending March 31, 1997, 2.0 to 1.0,
(ii) for the fiscal quarter ending June 30, 1997,
2.25 to 1.0 ,and (iii) as of the last day of each
fiscal quarter thereafter, 2.75 to 1.0., in each
case, calculated for the four (4) consecutive fiscal
quarters then ending.
(d) LEVERAGE RATIO. Permit or suffer the
Consolidated Leverage Ratio of the Company and its
Subsidiaries to be greater than .45 to 1.0 at any
time.
1.6 The "Commitment Amount" set forth in the signature
block of each Bank shall be amended by deleting the entire parenthetical
reference directly below the reference to such Bank's Commitment Amount, by
deleting the "Commitment Amount" set forth next to the
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name of each Bank and inserting in place thereof the amount set forth below next
to the name of such Bank:
Commitment Amount
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NBD Bank $15,000,000
KeyBank National Association $10,000,000
ARTICLE 2.
REPRESENTATIONS
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Each Borrower represents and warrants to the Agent and the
Banks 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 IV of the
Credit Agreement are true on and as of the date hereof with the same force and
effect as if made on and as of the date hereof.
2.4 No Event of Default or any event or condition which
might become an Event of Default with notice or lapse of time, or both, 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 the Borrowers, the
Agent and the Banks.
3.2 The Company shall have delivered to the Agent
resolutions adopted by the Board of Directors of the Company, certified by an
officer of the Company as being in full force and effect without amendment as of
the date hereof, authorizing the Company to execute this Amendment.
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3.3 An opinion of legal counsel for the Company with
respect to the matters contained in Sections 2.1 and 2.2 hereof and otherwise in
form and substance satisfactory to the Banks shall have been delivered to the
Agent.
3.4 The Borrowers shall have executed new Revolving Credit
Notes in favor of each Bank reflecting the Commitment Amounts set forth in
Section 1.6 of this Amendment.
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ARTICLE 4.
MISCELLANEOUS.
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41. 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 The Company acknowledges and agrees that the Agent
and the Banks 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 Banks 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 Bank, any participant lender or any of their successors or assigns.
4.4 Except as expressly amended hereby, each Borrower
agrees that the Credit Agreement, the Notes and all other documents and
agreements executed by the Borrower in connection with the Credit Agreement in
favor of the Agent or any Bank 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.
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IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of March 28, 1997.
KEITHLEY INSTRUMENTS, INC.
/s/ Ronald M. Rebner
By: _________________________________
Chief Financial Officer
Its: _______________________________
KEITHLEY INSTRUMENTS, GMBH
/s/ H. Hamm
By: _________________________________
Managing Director
Its: _______________________________
NBD BANK, as Agent and Individually as a Bank
/s/ Winifred S. Pinet
By: _________________________________
First Vice President
Its: _______________________________
KEYBANK NATIONAL ASSOCIATION,
SUCCESSOR BY MERGER TO SOCIETY
NATIONAL BANK
/s/ Thomas J. Purcell
By: _________________________________
Vice President
Its: _______________________________
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