Exhibit 10.1

 

CREDIT FACILITY AGREEMENT AMENDMENT 1

This CREDIT FACILITY AGREEMENT AMENDMENT 1 (“Amendment 1”) is made as of August
26, 2014, by and among TRANSCAT, INC. (“Borrower”), a corporation formed under
the laws of the State of Ohio with offices at 35 Vantage Point Drive, Rochester,
New York 14624, and MANUFACTURERS AND TRADERS TRUST COMPANY (“Lender”), a New
York banking corporation, with offices at 255 East Avenue, Rochester, New York
14604.

WHEREAS, Borrower and Lender are parties to a Credit Facility Agreement dated
September 20, 2012 (as amended, modified and supplemented from time to time, the
“Credit Agreement”), pursuant to which the Lender has made certain loans and
financial accommodations available to Borrower;

WHEREAS, Borrower has requested that the Lender amend the Credit Agreement,
among others to increase the amount of the credit facilities and the Lender is
willing to accommodate Borrower's request on the terms and conditions
hereinafter set forth;

WHEREAS, Borrower is entering into this Amendment 1 with the understanding and
agreement that, except as specifically provided herein, none of the Lender’s
rights or remedies as set forth in the Credit Agreement or any other Loan
Document is being waived or modified by the terms of this Amendment 1;

NOW, THEREFORE, in consideration of the agreements and provisions herein
contained, effective on the Amendment 1 Effective Date (defined below), the
parties hereby agree as follows:

1. Definitions. Any capitalized term used but not otherwise defined in this
Amendment 1 shall have the meaning ascribed to such term in the Credit
Agreement, and the interpretations set forth in the Credit Agreement shall apply
to this Amendment 1.

2. Amendments to Credit Agreement. Subject to Section 3 below, effective on the
Amendment 1 Effective Date, the Credit Agreement is hereby amended as follows:

(a) Section 1.1 of the Credit Agreement is hereby amended to add the following
definitions:

“Amendment 1” means Credit Facility Agreement Amendment 1 made between Borrower
and Lender effective as of the Amendment 1 Effective Date.

“Amendment 1 Effective Date” means August 26, 2014.

(b) Section 1.1 of the Credit Agreement is hereby amended to modify subsection
(k) of the definition of “Permitted Acquisition” to read in its entirety as
follows:

 

 

(k)no more than an aggregate of $15,000,000 of Acquisitions may be financed,
directly or indirectly, with the Revolving Credit Facility in any Fiscal Year.

(c) Section 1.1 of the Credit Agreement is hereby amended to modify the
following definition to read in its entirety as follows:

“Revolving Credit Termination Date” means September 20, 2018, or such later date
as may be agreed by the Lender in its sole discretion in writing.

(d) Section 2.1 of the Credit Agreement is hereby amended to read in its
entirety as follows:

2.1 Revolving Credit Commitment. The Lender agrees, subject to the terms and
conditions of this Agreement, to make Revolving Credit Loans to the Borrower
from time to time during the period from the Amendment 1 Effective Date up to
but not including the Revolving Credit Termination Date in an aggregate
principal amount not to exceed at any time outstanding Thirty Million Dollars
($30,000,000) (the “Revolving Credit Commitment”) minus the amount of then
outstanding Letter of Credit Obligations. Expressly subject thereto, the
Borrower may borrow, prepay pursuant to Section 3.3(b), and reborrow under this
Section 2.1.

(e) The lead in paragraph of Section 3.6(a) is hereby amended to read in its
entirety as follows:

(a) Change in Law. If the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law), treatment of the transactions contemplated by the Loan Documents as highly
leveraged transactions, or any Change in Law shall:

(f) Section 7.8(a)(iv) of the Credit Agreement is hereby amended to read in its
entirety as follows:

(iv) provided no Default has occurred that has not been waived in writing by the
Lender, the Borrower may purchase stock of the Borrower and pay cash dividends;
provided, however, such purchases and cash dividends shall not exceed (A) an
aggregate amount of $10,000,000, and (B) an aggregate of $3,000,000 in any
Fiscal Year.

(g) Exhibit B to the Credit Agreement is hereby amended to read in its entirety
in the form of Exhibit B attached to Amendment 1.

3. Conditions to Effectiveness of this Amendment 1. This Amendment 1 is subject
to satisfaction of each of the following conditions to the satisfaction of the
Lender:

 

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(a) The Lender shall have received such Loan Documents as Lender may request, in
form and substance satisfactory to the Lender, including an Amended and Restated
Revolving Credit Note, Reaffirmation of Guaranties and Security Agreements,
Reaffirmation and Supplement to Pledge Security Agreement, and United Scale &
Engineering Corporation Stock Certificate and Stock Power.

(b) The Borrower and Loan Parties shall have delivered favorable customary
opinions of their counsel, in form and substance satisfactory to the Lender.

(c) The Loan Parties shall have delivered the certificates of their respective
corporate secretaries or authorized officers certifying as to (i) resolutions
duly adopted by their boards of directors or other respective governing bodies
authorizing the execution, delivery and performance of Amendment 1 and the
related Loan Documents and the consummation of the transactions contemplated
hereby and thereby, as applicable, which resolutions shall remain in full force
and effect so long as any of the Obligations are outstanding and the Commitment
has not been terminated, (ii) their Organizational Documents and (iii) the
incumbency of the officers authorized to execute, deliver and perform Amendment
1 and the Loan Documents.

(d) The Loan Parties shall have paid (i) all filing fees and Taxes related to
the Obligations and the perfection of any interests under the Security Documents
and (ii) all other fees and expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Amendment 1 Effective Date.

(e) The Loan Parties and Transmation (Canada) Inc. shall have delivered to the
Lender certificates of good standing from appropriate governmental officials to
the effect that they respectively are validly subsisting in good standing in the
jurisdictions of formation.

(f) The Borrower shall have delivered to the Lender evidence reasonably
satisfactory to the Lender that its proposed acquisition of Ulrich Metrology
Inc. qualifies as a Permitted Acquisition.

4. Representations and Warranties. In order to induce Lender to enter into this
Amendment 1 and take the other actions provided for herein, Borrower represents
and warrants to each Lender that the following statements are true and correct
in all respects:

(a) Authority. Each of the Loan Parties has the requisite corporate power and
authority to execute and deliver this Amendment 1 and any other Loan Documents
delivered in connection therewith, and to perform its obligations hereunder and
under such Loan Documents (as amended or modified hereby) to which it is a
party. The execution, delivery and performance by each of the Loan Parties of
this Amendment 1 and the other Loan Documents delivered in connection herewith
have been duly approved by all necessary corporate or company action and no
other corporate or company proceedings are necessary to consummate such
transactions.

(b) Enforceability. This Amendment 1 and the related Loan Documents have been
duly executed and delivered by the Loan Parties. This Amendment 1 and the
related Loan Documents are the legal, valid and binding obligations of the Loan
Parties, enforceable against each of them respectively in accordance with their
terms, and are in full force and effect.

 

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(c) Representations and Warranties. The representations and warranties contained
in the Credit Agreement and in this Amendment 1 are correct on and as of the
date hereof as though made on and as of the date hereof other than such
representations or warranties that, by their terms, are specifically made as of
a date other than the date hereof, all of which shall have been true and correct
as of the applicable stated date.

(d) Capitalization. Schedule 4(D) attached to this Amendment 1 sets forth, as of
the Amendment 1 Effective Date, the capital structure of each Loan Party,
including classes and, in the case of Subsidiaries, the identity of the
registered and beneficial owner of the Equity Interests of each. All of the
outstanding Equity Interests of Loan Parties are duly authorized, validly issued
and fully paid. The Borrower or another Loan Party, as the case may be, has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive all Restricted Payments with respect to, all Equity Interests
indicated on Schedule 4(D) as owned by the Borrower, or such Loan Party. All
Equity Interests and all existing (as of the date hereof) contracts, debentures,
securities, rights, options, warrants, calls or similar commitments of any
character calling for or relating to the issuance of, purchase or receipt of, or
redemption or retirement of, Equity Interests of the Loan Parties are shown on
Schedule 4(D). There is no agreement of holders of Equity Interests, repurchase
or redemption agreement, contract, debenture, security, right, option, warrant,
call or similar commitment of any character calling for or relating to the
issuance of, purchase or receipt of, or redemption or retirement of, Equity
Interests of any of the Loan Parties except as described in Schedule 4(D).

(e) Litigation. Except as set forth on Schedule 4(E), as of the date hereof
there is no action, suit or proceeding at law or in equity by or before any
court or any Governmental Authority pending or, to the knowledge of the Loan
Parties threatened against or affecting the Loan Parties.

(f) No Contravention. The execution, delivery and performance of this Amendment
1 by the Borrower have received all necessary governmental approvals, if any,
and do not contravene any law of contractual restrictions binding on Borrower.

(g) No Default. No event has occurred and is continuing that constitutes a
Default or an Event of Default.

5. General Confirmations and Amendments.

(a) Continuing Effect. Except as specifically provided herein, the Credit
Agreement and the other Loan Documents shall remain in full force and effect in
accordance with their respective terms and are hereby ratified and confirmed in
all respects.

(b) No Waiver. The execution, delivery and effectiveness of this Amendment 1
shall not, except as expressly provided herein, operate as a modification,
acceptance or waiver of any right, power or remedy of the Lender under any of
the Loan Documents, nor constitute a waiver of any provision of the Loan
Documents, except as specifically set forth herein.

 

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(c) Reference to and Effect on the Loan Documents. Upon and after the
effectiveness of this Amendment 1, each reference in the Credit Agreement to
“this Agreement,” “hereunder,” “hereof” or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to “the Credit
Agreement,” “thereof” or words of like import referring to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as modified and amended
hereby.

To the extent that any terms and conditions in any of the Loan Documents shall
contradict or be in conflict with any terms or conditions of the Credit
Agreement, after giving effect to this Amendment 1, such terms and conditions
are hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Credit Agreement as modified or amended hereby.

6. Miscellaneous.

(a) Governing Law. This Amendment 1 shall be governed by, and construed in
accordance with, the internal laws of the State of New York.

(b) Severability. The provisions of this Amendment 1 are severable, and if any
subsection or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision in this Amendment 1 in any jurisdiction.

(c) Counterparts. This Amendment 1 may be executed in any number of
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.

(d) Binding Effect; Assignment. This Amendment 1 shall be binding upon and inure
to the benefit of Borrower and the Lender and their respective successors and
assigns; provided, however, that the rights and obligations of Borrower under
this Amendment 1 shall not be assigned or delegated without the prior written
consent of the Lender.

IN WITNESS WHEREOF, the parties have caused this Amendment 1 to be executed by
their duly authorized representatives by their signatures below as of the date
first above written.

[Signature Pages Follow]

 

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MANUFACTURERS AND TRADERS TRUST COMPANY

 

 

By: /s/ Curt S. Provenzo    

Curt S. Provenzo

Vice President

 

 

 

 

 

 

TRANSCAT, INC.

 

 

By: /s/ John J. Zimmer    

John J. Zimmer

Senior Vice President of

Finance, Chief Financial Officer

and Corporate Secretary

 

 

 

 

 

 

 

Signature Page – Credit Facility Agreement 1

 

 

EXHIBIT B
FORM OF REVOLVING CREDIT NOTE

AMENDED AND RESTATED REVOLVING CREDIT NOTE

 

$30,000,000 August 26, 2014

 

This Amended and Restated Revolving Credit Note (“Note”) continues and evidences
in part the obligations evidenced by, and amends, replaces and restates in its
entirety, the Revolving Credit Note, dated September 20, 2012, made by Transcat,
Inc. (“Borrower”), a corporation organized under the laws of the State of Ohio,
in favor of Manufacturers and Traders Trust Company, a New York banking
corporation (“Lender”).

Borrower, for value received, hereby promises to pay to the order of Lender, the
principal sum of Thirty Million Dollars ($30,000,000) or if less, the amount of
the Revolving Credit Loans loaned by the Lender to Borrower pursuant to the
Credit Agreement (defined below), in lawful money of the United States of
America and in immediately available funds, with interest on the unpaid
principal balance hereof, for the period such balance is outstanding, at the
rates of interest as provided in the Credit Agreement. Payments shall be due and
payable on the dates and as provided in the Credit Agreement, with a final
payment on the Revolving Credit Termination Date.

The date and amount of each Revolving Credit Loan made by the Lender to the
Borrower under the Credit Agreement, and each payment of principal thereof,
shall be recorded by the Lender on its books. The Lender’s records shall be
presumed to be accurate absent manifest error.

This is a Revolving Credit Note referred to in that certain Credit Facility
Agreement, dated as of September 20, 2012 by and between Borrower and Lender (as
the same has been and in the future may be modified, supplemented and replaced
from time to time, the “Credit Agreement”), and evidences the Revolving Credit
Loans made thereunder. All capitalized terms not defined herein shall have the
meanings given to them in the Credit Agreement, and the terms of the Credit
Agreement applicable to this Note are incorporated herein.

Borrower waives presentment, notice of dishonor, protest and any other notice or
formality with respect to this Note.

TRANSCAT, INC.

 

 

By:      

Senior Vice President of

Finance, Chief Financial Officer

and Corporate Secretary

 

 

 

Exhibit B

 

 

SCHEDULE 4(d)
EQUITY INTERESTS OF LOAN PARTIES AND RELATED MATTERS

As of August 6, 2014, 6,792,034 of the Borrower’s 30,000,000 authorized shares
of common stock, par value $.50 per share, were issued and outstanding.

 

As of the Closing Date, the following subsidiaries are wholly-owned by the
Borrower:

Transmation (Canada) Inc.

WTT Real Estate Acquisition, LLC

United Scale & Engineering Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 4(e)
LITIGATION

Quality Calibration Service, Inc. v. Transcat, Inc., Case No. 14CV868 (E.D.
Wis.): On July 23, 2014, Quality Calibration Service, Inc. filed an action in
the United States District Court for the Eastern District of Wisconsin alleging
trademark infringement against Borrower. Borrower has not yet been served with
the complaint, and the parties have been in discussions to attempt to resolve
the matter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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