Exhibit
10.35


 





 


AMENDMENT


 


No 1


 


to


 


CREDIT
AGREEMENT


 


Between


 


Schaublin
S.A.


Delémont


 


(hereinafter referred to as the «Borrower» or
«Schaublin»)


 


and


 


CREDIT
SUISSE


 


(hereinafter referred to as the «Bank»)


 


Dated 8, November 2004


 





















 


Whereas the Borrower has
requested the Bank for various amendments to the original credit agreement,
dated December 8, 2003, and


 


Whereas the Bank is
prepared to approve the amendment requests as stated below under the
corresponding clauses of the credit agreement. All terms and conditions not
specifically mentioned in this amendment agreement will remain in place as
agreed in the Credit Agreement between Credit Suisse and Schaublin SA, dated December 8,
2003.


 


The Borrower and the Bank
agree on the following amendments:


 


1.2                               Amounts and Commitments


 


The Bank has agreed to
make available to the Borrower under the Facility B an amount not to exceed CHF
4’000’000,- (Swiss Francs four million and o/oo; previously Swiss Francs two
million and o/oo).


 


3.3                               Margin


 


The applicable interest
margin on Advances drawn under Facility A and B depends on the Debt Capacity
Ratio.


 


The «Debt Capacity Ratio»
is defined as senior bank debt divided by earnings before interests, taxes,
depreciation and amortization («EBITDA») and is calculated on a consolidated
basis, i.e. for Schaublin and all its subsidiaries. In the context of «Debt
Capacity Ratio» the Senior Bank Debt is being defined as the amount due to the
Bank as of the end of the measuring period, after giving effect to the
principal payment due on such date.


 


Until receipt of the
consolidated accounts of Schaublin as of March 31, 2005, the applicable
interest margin shall be 2.00%. Thereafter, the applicable interest Margin
shall be adjusted for all drawings on an annual basis as of July 1 of the
respective year, based upon the annual consolidated accounts of Schaublin,
according to the following pricing grid:


 


	
  Debt Capacity Ratio:

  	
   

  	
  Margin:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  >2.75x

  	
   

  	
  4.50

  	
  %

  
	
  >2.50x
  and < 2.75x

  	
   

  	
  2.50

  	
  %

  
	
  >2.25x
  and < 2.50x

  	
   

  	
  2.25

  	
  %

  
	
  >1.75x
  and < 2.25x

  	
   

  	
  2.00

  	
  %

  
	
  >1.25x
  and < 1.75x

  	
   

  	
  1.75

  	
  %

  
	
  >1.00x
  and < 1.25x

  	
   

  	
  1.50

  	
  %

  
	
  <
  1.00x

  	
   

  	
  1.25

  	
  %

  



 


2





















 


7.3                               Specific Undertakings


 


The
specific undertakings requested are amended as follows:


 


Schaublin
agrees that until all of its and its subsidiaries’ liabilities under the Credit
Agreement have been discharged and no commitment is outstanding:


 


(a)          it will remit annual audited accounts of Schaublin, including a
covenant compliance certificate pursuant to Clause 7.3.(d) hereafter,
within 120 days after the end of each financial year;


 


(b)         it will remit annual audited accounts of Schaublin Holding within 120
days after the end of each financial year;


 


(c)          it will remit semi-annual consolidated financial key figures of
Schaublin SA and its subsidiaries, including a covenant compliance certificate
pursuant to Clause 7.3.(d) hereafter, within 90 days after the end of each
financial semester. These consolidated financial key figures shall contain at
least (1) revenues, (2) order backlog, (3) EBITDA, (4) total
debt, and (5) all other relevant figures to calculate the financial
covenants;


 


(d)         it will remit on a semi-annual basis a covenant compliance certificate,
as defined hereafter in Annex C, showing a detailed calculation of each financial
covenant and signed by the Chief Financial Officer of Schaublin;


 


(e)          it will remit annual audited accounts of all its subsidiaries 120 days
after the end of each financial year;


 


(f)            it will remit annual consolidated budgets of
Schaublin and its subsidiaries and a restated three-year business plan with key
financial projections within 30 days after their completion, but no later than April 30
of each year;


 


(g)         it represents and warrants that it has no knowledge of any past,
present or future fact related to the environment, health and safety, which
could materially affect it and/or any of its subsidiaries in a negative way.


 


	
  SIGNED
  on behalf of each of the parties:

  	
   

  
	
   

  	
   

  
	
  Delémont,
  8, November 2004

  	
   

  
	
   

  	
   

  
	
  The Bank:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CREDIT SUISSE

  	
  /s/ Claude Saucy

  	
   

  	
  /s/ Philippe
  Gay-Crosier

  
	
   

  	
  Claude Saucy

  	
   

  	
  Philippe Gay-Crosier

  
	
  The Borrower:

  	
   

  
	
   

  	
   

  
	
  Schaublin S.A.

  	
  /s/
  Michael S. Gostomski

  	
   

  
	
   

  	
   

  
	
  Third Party:

  	
   

  
	
   

  	
   

  
	
  Schaublin Holding SA

  	
  /s/
  Michael S. Gostomski

  	
   

  
					



 


3





















 


	
  Minimum Net Worth

  	
   

  
	
   

  	
   

  
	
  Consolidated Share
  Capital

  	
   

  	
   

  	
   

  
	
  + Consolidated Reserves

  	
   

  	
   

  	
   

  
	
  + Consolidated Retained
  Earnings

  	
   

  	
   

  	
   

  
	
  + Subordinated
  shareholder loans

  	
   

  	
   

  	
   

  
	
  Net Worth

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Covenant Minimum

  	
   

  
	
   

  	
   

  
	
  Maximum Debt Capacity
  Ratio

  	
   

  
	
   

  	
   

  
	
  Consolidated Senior
  Bank Debt “A”

  	
   

  	
   

  	
   

  
	
  Consolidated EBITDA (as
  determined in i) above) “B”

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Maximum Debt Capacity
  Ratio (“A” divided by “B”)

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Covenant Maximum

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Minimum Inventory
  Turnover Rate

  	
   

  
	
   

  	
   

  
	
  Cost of Goods sold “A”

  	
   

  	
   

  	
   

  
	
  Inventory “B”

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Minimum Inventory
  Turnover Rate (“A” divided by “B”)

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Covenant Minimum

  	
   

  	
  1.00x

  	
   

  
	
   

  	
   

  
	
   

  	
  Schaublin SA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name, Title)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Date)

  
						



 


4





















 


ANNEX C


 


COMPLIANCE
CERTIFICATE


 


The undersigned officer
of Schaublin SA hereby certifies that he is the Chief Financial Officer of
Schaublin SA, and that as such he is authorized to execute this compliance
certificate required to be furnished pursuant to the Credit Agreement, dated December 8,
2003, and to the Amendment No 1, dated November 08, 2004, and further
certifies that:


 


Attached hereto is a copy
of the Borrower’s consolidated semi-annual statements for the period ending [                      ],
which contains the consolidated balance sheet and the related consolidated
statements of income and cash flows of Schaublin and all of its subsidiaries,
setting forth in each case in comparable form the figures for the previous year
(collectively the “Financial Statements”).


 


The Financial Statements
are complete and correct in all material respects and were prepared in
reasonable detail and in accordance with the Generally Accepted Accounting
Principles (FER or International Financial Reporting Standards – IFRS) applied
consistently throughout the periods reflected therein.


 


The undersigned has no
knowledge of any Default or Event of Default.


 


The following
calculations as of [                        ]
support the statement made in paragraph 3 above with respect to the Credit
Agreement.


 


	
  Minimum Interest
  Coverage Ratio

  	
   

  
	
   

  	
   

  
	
  Total Interest Expenses

  	
   

  	
   

  	
   

  
	
  - Total Interest Income

  	
   

  	
   

  	
   

  
	
  Total Net Interest
  Expenses “B”

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Consolidated Net Income

  	
   

  	
   

  	
   

  
	
  + Taxes

  	
   

  	
   

  	
   

  
	
  + Total Net Interest
  Expenses “B”

  	
   

  
	
  ./. Extraordinary
  Non-operating Items

  	
   

  	
   

  	
   

  
	
  EBIT

  	
   

  	
   

  	
   

  
	
  + Amortization of
  Goodwill

  	
   

  	
   

  	
   

  
	
  + Depreciation

  	
   

  	
   

  	
   

  
	
  EBITDA “A”

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Minimum Interest
  Coverage Ratio (“A” divided by “B”)

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Covenant Minimum

  	
   

  	
  7.50x

  	
   

  



 


5