TENTH AMENDMENT AND WAIVER
TENTH AMENDMENT AND WAIVER dated as of December 29, 2000 (this "Tenth
Amendment") with respect to the Credit Agreement dated as of July 12, 1996, as
amended by the First Amendment to Credit Agreement dated as of September 27,
1996, Amendment Two and Waiver to Credit Agreement dated as of July 4, 1997,
Amendment Three to Credit Agreement (With Consent) dated as of August 13, 1997,
Amendment Four to Credit Agreement dated as of April 8, 1998, Amendment Five and
Consent and Waiver to Credit Agreement dated as of March 1, 1999, Amendment Six
dated as of May 1, 1999, Amendment Seven and Consent and Waiver to Credit
Agreement dated as of October 13, 1999, Amendment Eight and Consent and Waiver
to Credit Agreement dated as of January 19, 2000, and Amendment Nine and Consent
and Waiver to Credit Agreement dated as of March 31, 2000 (the "Credit
Agreement"), among PSC Scanning, Inc., formerly known as SpectraScan, Inc. which
was the successor by merger to PSC Acquisition, Inc. (the "Borrower"), PSC Inc.
("PSC"), the lenders party thereto (the "Lenders") and Fleet National Bank, as
administrative agent (the "Administrative Agent").
W I T N E S S E T H :
-------------------
WHEREAS, pursuant to the Credit Agreement, the Lenders have made Advances
and other extensions of credit to the Borrower which remain outstanding;
WHEREAS, certain Events of Default have occurred and are continuing; and
WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders, and the Administrative Agent and the Lenders are willing to, waive
certain Events of Default and defer during the Waiver Period (as defined below)
the payment of the Deferred Default Spread (as defined below), but only on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. Unless otherwise defined herein, capitalized
terms used herein have the meanings assigned in the Credit Agreement and the
other Loan Documents, and the following terms shall have the following meanings:
"Deferred Default Spread": the spread between (a) the
contractual rate of interest due on the Advances pursuant to Section
2.07(a) of the Credit Agreement and (b) the default rate of interest
due on the Advances accruing upon the occurrence and during the
continuance of a Default pursuant to Section 2.07(b) of the Credit
Agreement.
"Expiration Date": March 31, 2001.
"Effective Date": the first date on which the conditions
precedent specified in Article VI of this Tenth Amendment shall have
been satisfied or the satisfaction thereof shall have been waived in
accordance with the terms hereof.
"F/X Commitment": as defined in Section 5.1(d).
"F/X Lender" means Key Bank or such other Lender that agrees
to be the F/X Lender.
"Waiver Period": the period beginning on the Effective Date
and ending on the earlier of (a) the Termination Date or (b) the
Expiration Date.
"Specified Events of Default": Events of Default arising or
which may arise in respect of (i) Section 6.01(c) as a result of the
Borrower's failure to satisfy covenants contained in Sections 5.04(a),
(b), (c), (d), and (e) of the Credit Agreement and (ii) 6.01(e) of the
Credit Agreement in connection with the Borrower's failure to make
certain payments to Spectra-Physics, Inc. pursuant to the terms of the
Subordinated Installment Promissory Note dated July 12, 1996.
"Termination Date": the date on which there is an event of
termination as provided in Article III of this Tenth Amendment.
ARTICLE II
LIMITATION ON REMEDIES
Section 2.1. Waiver. Subject to the terms and conditions
hereof, the Administrative Agent and the Lenders hereby agree to waive during
the Waiver Period the Specified Events of Default.
Section 2.2. Deferral. The Administrative Agent and the
Lenders hereby agree to defer payment by the Borrower of the Deferred Default
Spread during the Waiver Period; provided, that the Deferred Default Spread
shall be paid in full in cash immediately upon the earlier of the Termination
Date or the Expiration Date; it being understood that during the Waiver Period
the Borrower shall continue to pay the contractual rate of interest due on the
Advances pursuant to Section 2.07(a) of the Credit Agreement.
ARTICLE III
WAIVER EVENTS OF TERMINATION
Upon the occurrence of any of the following events:
(a) the Borrower or any other Loan Party shall
default in the observance or performance of any agreement or covenant
contained in this Tenth Amendment;
(b) the occurrence of a Default or Event of Default
(other than the Specified Events of Default); or
(c) the exercise of any rights or remedies by the
holders of Subordinated Debt, including without limitation, the
acceleration of any amounts due or to become due under the Subordinated
Debt Documents;
then, and in any such event, the provisions of Article II of this Tenth
Amendment shall immediately and automatically terminate and thereafter such
Article shall have no force or effect.
ARTICLE IV
AMENDMENTS TO CREDIT AGREEMENT
Section 4.1. Amendments to Section 1.1 (Definitions). (a)
Section 1.1 of the Credit Agreement is hereby amended by (i) deleting the
definitions of Eligible Assignee and Fixed Charge Coverage Ratio, and (ii)
inserting the following definitions in their proper alphabetical order:
"Eligible Assignee" means (a) with respect to any Facility
(other than the Letter of Credit Facility), (i) a Lender; (ii) an
Affiliate of a Lender; (iii) a commercial bank organized under the laws
of the United States, or any State thereof, and having total assets in
excess of $500,000,000; (iv) a savings and loan association or savings
bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $500,000,000; (iv) a
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with
the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency
located in the United States; (vi) the central bank of any country that
is a member of the OECD; (vii) a finance company, insurance company or
other financial institution or fund (whether a corporation, partnership
trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $500,000,000; and (viii)
any other Person approved by the Administrative Agent or any Person
authorized by the Administrative Agent to grant such approval, such
approval not to be unreasonably withheld or delayed, and (b) with
respect to the Letter of Credit Facility, a Person that is an Eligible
Assignee under subclause (iii) or (v) of clause (a) of this definition
and is approved by the Administrative Agent or any Person authorized by
the Administrative Agent to grant such approval, such approval not to
be unreasonably withheld or delayed; provided, however, that neither
any Loan Party nor any Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
"Eligible Inventory" means inventory, calculated on a
"first-in, first-out" basis, less work-in process, cartons, labels,
obsolescence reserves and any other reserves deemed necessary by the
Administrative Agent in its sole discretion.
"Eligible Receivable Aging Report" means the detailed report
identifying as of the last Business Day of each week the Borrower's
Domestic and Foreign Accounts Receivable, in form and substance
satisfactory to the Administrative Agent, and which shall be duly
certified by the Borrower's Chief Executive Officer or Chief Financial
Officer.
"Eligible Receivables" means Receivables (a) with respect to
domestic shipments within 90 days of the invoice date and (b) with
respect to international shipments within 150 days of the invoice date,
in each case, and as otherwise acceptable to the Administrative Agent
in its sole discretion.
"Eligible Inventory Report" means the detailed report
identifying as of the last Business Day of each month the Borrower's
Eligible Inventory, in form and substance satisfactory to the
Administrative Agent, and which shall be duly certified by the
Borrower's Chief Executive Officer or Chief Financial Officer.
"Tenth Amendment" means the Tenth Amendment and Waiver dated
as of December 29, 2000 with respect to the Credit Agreement.
Section 4.2 Amendments to Section 2.01 (The Advances). (a)
Section 2.01(c) of the Credit Agreement is hereby amended by inserting the
following sentence immediately prior to the period at the end of said section:
"Notwithstanding anything to the contrary set forth herein,
each Working Capital Advance shall be made as a Prime Rate
Advance.".
(b) Section 2.01(d) of the Credit Agreement is hereby amended
by deleting the reference to "$5,000,000" and inserting in lieu thereof a
reference to "$2,000,000".
Section 4.3. Amendment to Section 2.06 (Prepayments). Section
2.06(b) of the Credit Agreement is hereby amended by inserting immediately
before the period at the end of said Section the following:
"provided, further, that Net Cash Proceeds received pursuant
to clause (ii) above shall be applied first to the Working
Capital Facility as set forth in clause (vi) below and shall
permanently reduce the aggregate Working Capital Commitments
on a pro rata basis, and second, the balance, if any, ratably
to the Term Loan Facility and to the installments thereof in
inverse order of maturity".
Section 4.4. Amendment to Section 2.07 (Interest). Section
2.07 of the Credit Agreement is hereby amended by inserting a new paragraph (d)
as follows:
"(d) Waiver Period Interest. Notwithstanding the foregoing,
the Borrower shall pay interest on the unpaid principal amount
of each Advance (i) during the period beginning on the
Effective Date (as defined in the Tenth Amendment) through and
including December 31, 2000, at the Prime Rate plus 1.50% and
(ii) during the period beginning on January 1, 2001 through
and including March 31, 2000, at the Prime Rate plus 2.00%.
The Borrower shall pay interest on a monthly basis in arrears.
"
Section 4.5. Amendments to Section 5.03 (Reporting Require-
ments). (a) Section 5.03(b) of the Credit Agreement is hereby amended by delet-
ing Section 5.03(b) in its entirety and inserting in lieu thereof the following:
"As soon as available and in any event within thirty (30) days
after the end of each month, the Borrower shall submit for
itself, PSC and all of their Subsidiaries, a Consolidated
statement of income and a Consolidated statement of cash
flows, for (i) each month, beginning on the first day of each
month and ending on the last day of such month, and (ii) the
period commencing on the first day of the then-current Fiscal
Year and ending with the last day of the most recent month, in
each case, duly certified by the Borrower's Chief Executive
Officer or Chief Financial Officer";
(b) Section 5.03 of the Credit Agreement is hereby amended by
inserting in said Section a new paragraph (w) as follows:
"(w) The Borrower shall submit to the Administrative Agent
within fifteen (15) days after the end of each month, an
Inventory Report for the immediately preceding month.";
(c) Section 5.03 of the Credit Agreement is hereby amended by
inserting in said Section a new paragraph (x) as follows:
"(x) The Borrower shall submit to the Administrative Agent on
Tuesday of each week, an Accounts Receivable Aging Report for
the immediately preceding week; provided, that amounts with
respect to PSC Japan K.K., PSC Asia Pacific Pty, Limited and
PSC SRL shall be reported on a monthly basis."
Section 4.6. Amendment to Article V. Article V of the Credit
Agreement is hereby amended by inserting a new Section 5.05 as follows:
"Section 5.05. Collateral Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding
or any Lender Party shall have any Commitment hereunder, PSC
will:
(a) Minimum Eligible Accounts Receivable. Maintain
(i) at all times, Eligible Receivables having a value equal to
at least $37,500,000 and (ii) as at the end of each month,
Eligible Receivables having a value equal to at least
$39,000,000; provided, however, if on any date of
determination Eligible Receivables are less than the amounts
set forth above, (x) the Borrower shall, within one Business
Day of the Administrative Agent's receipt of an Eligible
Receivable Aging Report, permanently reduce the Working
Capital Commitments by an amount equal to such shortfall and
(y) the amounts set forth above shall be deemed to be reduced
by an equal amount.
(b) Minimum Eligible Inventory. Maintain at all
times, Eligible Inventory having a value equal to at least
$15,000,000; provided, however, if on any date of
determination Eligible Inventory is less than the amount set
forth above, (x) the Borrower shall, within one Business Day
of the Administrative Agent's receipt of an Eligible Inventory
Report, permanently reduce the Working Capital Commitments by
an amount equal to such shortfall and (y) the amount set forth
above shall be deemed to be reduced by an equal amount.".
Section 4.7. Amendment to Schedule 1 (Commitments and
Applicable Lending Offices). Schedule 1 to the Credit Agreement is hereby
amended by deleting said Schedule in its entirety and inserting in lieu thereof
the Schedule 1 attached hereto as Exhibit A. Schedule 1, as amended hereby,
shall show Working Capital Commitments in the aggregate amount of $45,000,000
and Term Loan Commitments in the aggregate amount of $67,500,000.
ARTICLE V
OVERRIDE AGREEMENTS OF THE BORROWERS
Section 5.1 Override Agreements. (a) Continued Availability.
Notwithstanding anything to the contrary in the Credit Agreement, during the
Waiver Period the Borrower shall be permitted (i) to borrow, prepay, in whole or
in part, and reborrow, in accordance with the terms and conditions hereof (A)
Working Capital Advances and (B) Swing Line Advances, which, in each case, shall
be Prime Rate Advances, (ii) enter into Hedge Agreements pursuant to Section
5.1(d) of this Amendment, and (iii) to open Letters of Credit; provided,
however, notwithstanding anything to the contrary in the Credit Agreement,
during the Waiver Period the Borrower shall not be permitted to borrow in excess
of $40,000,000 (which amount shall include the aggregate amount of the F/X
Commitment) without the prior consent of the Administrative Agent and the
Lenders.
(b) Principal Payments. Notwithstanding anything to the
contrary set forth in the Credit Agreement, the $2,500,000 principal payment due
on December 31, 2000 with respect to the Term Loan Advances shall be paid as
follows: (i) $833,333.33 on December 31, 2000, (ii) $833,333.33 on January 31,
and (iii) $833,333.33 on February 28, 2001.
(c) Financial Covenants. (i) Minimum Consolidated EBITDA.
During the Waiver Period, the Borrower shall not permit consolidated EBITDA for
the periods set forth below, measured on a cumulative basis, to be less than the
amounts set forth opposite such period:
Period Amount
------ ------
October 1 - October 31, 2000 $ 100,000
October 1 - November 30, 2000 $ 500,000
October 1 - December 31, 2000 $ (6,000,000)
For purposes of this Tenth Amendment, during the fourth quarter of the year
2000, inventory write-offs and asset write-downs aggregating Ten Million Dollars
($10,000,000) or less will be disregarded in calculating consolidated EBITA.
Following delivery of the Business Plan (as defined below), the Administrative
Agent shall reasonably determine the appropriate consolidated EBITDA levels for
January, February and March 2001 and shall deliver a written schedule of such
amounts to the Borrower. This Borrower shall not permit consolidated EBITDA for
such periods, measured on a cumulative basis, to be less than the amounts set
forth on such schedule.
(ii) Capital Expenditures. During the Waiver Period, the
Borrower shall not make or commit to make Capital Expenditures for the
periods set forth below, measured on a cumulative basis, in excess of
the amounts set forth opposite such period:
Period Amount
------ ------
October 1 - October 31, 2000 $ 250,000
October 1 - November 30, 2000 $ 500,000
October 1 - December 31, 2000 $1,000,000
Following delivery of the Business Plan (as defined below), the
Administrative Agent shall reasonably determine the appropriate Capital
Expenditure levels for January, February and March 2001 and shall
deliver a written schedule of such amounts to the Borrower. The
Borrower shall not permit Capital Expenditures for such periods,
measured on a cumulative basis, to be more than the amounts set forth
on such schedule.
(d) F/X Hedging Facility. (i) Notwithstanding anything to the
contrary set forth in the Credit Agreement, the Borrower may maintain during the
Waiver Period Hedge Agreements with the F/X Lender covering a notional amount of
$6,000,000 (the "F/X Commitment"). During the Waiver Period, the Working Capital
Commitment shall be reduced by the amount of the F/X Commitment, which reduction
shall be allocated pro rata among the Working Capital Lenders.
(ii) The F/X Lender shall furnish to the Administrative Agent
on the first Business Day of each week a written report summarizing the
Borrower's swap transactions with the F/X Lender. The payment by the
F/X Lender of any amount owing by the F/X Lender under any such Hedge
Agreements shall constitute for all purposes of this Agreement the
making by the F/X Lender of an Advance, which shall be a Prime Rate
Advance, in such amount. If the Borrower fails to pay the F/X Lender on
account of any Hedge Agreement, upon written demand by the F/X Lender,
with a copy of such demand to the Administrative Agent, each Working
Capital Lender shall purchase from the F/X Lender, and the F/X Lender
shall sell and assign to each such Working Capital Lender, such
Lender's Pro Rata Share of such outstanding Advance as of the date of
such purchase, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of the F/X
Lender, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal
amount of such Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to
the F/X Lender. The Borrower hereby agrees to each such sale and
assignment.
(e) Borrowings. Notwithstanding anything to the contrary set forth in the
Credit Agreement, during the Waiver Period, each Notice of Borrowing shall be
made directly to the attention of Xxxxxx X. Xxxxxx (Fleet National Bank, 000
Xxxxxxxxxxx Xxxxxx Xxxxxxxxxx, Xxxxx Xxxxxx 00000; Fax: 000-000-0000) and shall
be accompanied by a certificate signed by the Borrower's Chief Executive Officer
or Chief Financial Officer stating that, as of the date of the Borrowing, the
Borrower is in compliance with the terms of the Credit Agreement and this Tenth
Amendment.
(f) Cash Management Services. (i) Promptly following the Effective Date,
the Borrower shall enter into an agreement with the Administrative Agent
providing for the establishment and continual maintenance of a lockbox account
(the "Lock-Box") and a blocked account (the "Blocked Account") for the
collection of all the Borrower's Receivables and other Collateral. In
conjunction therewith, the Borrower shall promptly direct all account debtors
and other obligors to direct all payments owing to the Borrower to the Lock-Box.
All monies on deposit in the Lock-Box shall be promptly transferred to the
Blocked Account. All checks and other payment instruments that constitute
proceeds of Receivables or other Collateral received directly by the Borrower
shall be held in trust and promptly upon receipt, delivered to the Blocked
Account. Amounts in the Blocked Account shall, on a daily basis, be applied to
repayment of the Working Capital Facility and may not be directly withdrawn.
(ii) All amounts deposited in or any investments with respect
to the Lock-Box and the Blocked Account shall at all times be subject
to the exclusive dominion and control of the Administrative Agent.
(iii) For purposes of calculating interest on the Working
Capital Advances, all amounts received in the Blocked Account will be
deemed to have been applied to the Working Capital Facility on the 2nd
Business Day after the date of receipt. For purposes of calculating the
availability under the Working Capital Commitments, all amounts
received in the Blocked Account (A) before 1:00 p.m. (EST) will be
deemed to have been applied to the Working Capital Facility on the
Business Day after the date of receipt and (B) after 1:00 p.m. (EST)
will be deemed to have been applied to the Working Capital Facility on
the 2nd Business Day after the date of receipt. In the event there are
not sufficient, available funds in the Borrower's operating account
when debited and/or charged under this paragraph, under the Blocked
Account or otherwise, the Borrower agrees to immediately pay such
amounts to the Administrative Agent in immediately available funds.
(g) Financial Advisor; Investment Banker. The Borrower shall, during the
Waiver Period, continue the retention of (i) Xxxxxxx Xxxxx & Company, or another
investment banker reasonably acceptable to the Administrative Agent and the
Lenders (the "Investment Banker") and (ii) FTI/Xxxxxxxx & Xxxxx, or another
financial advisor reasonably acceptable to the Administrative Agent and the
Lenders (the "Financial Advisor").
(h) Business Plan; Cash Flow Forecast; Progress Reports. (i) The Borrower
shall deliver a detailed "bottom-up" business plan for fiscal year 2001 (the
"Business Plan.") to the Administrative Agent and the Lenders on or before
January 15, 2001. The Business Plan shall include, on a monthly basis, for the
twelve month period beginning January 1, 2001, (a) Consolidated forecasts
detailing cash flow and Collateral levels, (b) Consolidated pro forma profit and
loss statements, and (c) Consolidated balance sheets. The Business Plan shall
identify (x) all sources of revenue and expenses, including without limitation,
intended executive compensation, (y) the nature of all proposed Capital
Expenditures, and (z) all human resource actions, including without limitation,
impacts on staffing levels and itemized severance costs. The Business Plan shall
contemplate both a realization of the sale of the real property located at 000
Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000 and a sale of the Borrower's automation
division, as well as a scenario where neither sale occurs prior to January 31,
2001. The Business Plan shall be in form and substance satisfactory to the
Administrative Agent.
(ii) The Borrower shall deliver a thirteen week rolling cash flow forecast
(the "Cash Flow Forecast") to the Administrative Agent and the Lenders on
or before Wednesday of each week. The Cash Flow Forecasts shall detail all
sources and uses of cash on a weekly basis and shall report any variances
from the prior week. The Cash Flow Forecasts shall be in form and substance
satisfactory to the Administrative Agent.
(iii) The Borrower shall, on or before the last Friday of each month,
deliver to the Administrative Agent and the Lenders monthly written
progress reports prepared by the Investment Banker with the first report to
be delivered on or before January 5, 2001. The progress reports shall
provide updates regarding the Borrower's marketing efforts in connection
with certain of its divisions and real property, including with respect to
the valuation of such divisions and real property, and shall be in form and
substance satisfactory to the Administrative Agent.
(iv) Upon request, the Lenders shall be provided reasonable access to the
Financial Advisor and the Investment Banker and copies of all information
provided to either.
(i) Retention of Advisors by Administrative Agent. In the event the
Administrative Agent or its counsel determines to retain a financial advisor
and/or an investment banker, the Borrower hereby agrees to pay or reimburse the
Administrative Agent for all reasonable fees and out-of-pocket expenses incurred
in connection therewith.
(j) Perfection. In the event the Lenders determine to perfect their
interests in the Borrower's foreign subsidiaries the Borrower shall assist the
Administrative Agent in perfecting the Lenders' interests in each such companies
and shall reimburse the Administrative Agent for all costs and out-of-pocket
expenses incurred in connection therewith.
(k) Field Examinations. The Borrower agrees that the Administrative Agent,
its counsel or any other professional representing the Administrative Agent, may
conduct independent field examinations of the Borrower's books and records, as
often as the Administrative Agent, in its sole discretion, deems necessary. The
Borrower agrees to fully cooperate with such independent field examinations and
agrees to reimburse the Administrative Agent on demand for the costs associated
with any such independent field examinations.
(l) Appraisals. The Borrower shall cooperate with the Administrative
Agent's undertaking of updated appraisals of real estate and
machinery/equipment. The Borrower agrees to reimburse the Administrative Agent
on demand for the costs associated with such appraisals.
(m) Dividends. Notwithstanding anything to the contrary contained in the
Credit Agreement, neither the Borrower nor PSC shall declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of their capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to their
stockholders as such, make any distribution of assets, capital stock, warrants,
rights, options, obligations or securities to their stockholders as such or
issue or sell any capital stock, or any warrants, rights or options to acquire
such capital stock, or permit any of their Subsidiaries to do any of the
foregoing or permit any of their Subsidiaries to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of PSC or the Borrower
or any warrants, rights or options to acquire such capital stock or to issue or
sell any capital stock, or any warrants, rights or options to acquire such
capital stock except with the prior written consent of the Administrative Agent.
(n) Dissolution of Certain Subsidiaries; Limitation on Transfer of Assets.
The Borrower and PSC hereby agree that GAP Technologies, Inc. ("GAP") and GEO
Labs, Inc. ("GEO") shall be dissolved on or before January 31, 2001. No assets,
rights or other interests in property of the Borrower, PSC or any of their
subsidiaries shall be transferred to GAP or GEO. No assets, rights or other
interests in property of the Borrower, PSC or any of their domestic subsidiaries
shall be transferred to any of their foreign subsidiaries.
(o) Costs and Expenses. In furtherance of the provisions of Section 8.04 of
the Credit Agreement, the Borrower and PSC hereby agree that the Administrative
Agent shall be entitled, upon one Business Day's notice to the Borrower, to
debit any operating account of either the Borrower or PSC to collect costs and
expenses to which the Administrative Agent is entitled pursuant to Section 8.04
of the Credit Agreement.
(p) Acknowledgement. The Administrative Agent and the Lenders acknowledge
that the payment required under Section 4(a) of the Subdebt Waiver (as defined
below) shall not constitute Subordinated Indebtedness (as defined in the
Securities Purchase Agreement) and shall not be subject to disgorgement pursuant
to Section 10 of the Securities Purchase Agreement.
Section 5.2 Override Agreements Deemed Agreements under the Credit
Agreement. For purposes of the Credit Agreement, the agreements of the Borrower
contained in this Article V shall be deemed to be, and shall be, agreements
under the Credit Agreement.
ARTICLE VI
CONDITIONS PRECEDENT
This Tenth Amendment shall not become effective unless and until each of
the conditions precedent set forth below have been satisfied or the satisfaction
thereof shall have been waived in accordance with the terms hereof:
(a) Receipt by the Administrative Agent of counterparts of this Tenth
Amendment, duly executed and delivered by the Borrower and the Guarantors;
(b) Receipt by the Administrative Agent of a fully executed amendment and
waiver (the "Subdebt Waiver") to the Securities Purchase Agreement dated as of
July 12, 1996, as amended, in form and substance satisfactory to the
Administrative Agent, which shall, among other things, acknowledge that any
obligations of the Borrower incurred in connection with the F/X Facility shall
be deemed Superior Indebtedness (as defined in the Securities Purchase
Agreement).
(c) Receipt by the Administrative Agent of all documents requested by the
Administrative Agent in respect of Collateral.
(d) Receipt by the Administrative Agent of payment in full in cash of its
invoiced and unpaid fees and out-of-pocket expenses incurred in connection with
the preparation and execution of this Tenth Amendment, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
(e) Receipt by the Administrative Agent of an Eligible Receivables Aging
Report and Eligible Inventory Report.
(f) Receipt by the Administrative Agent of those portions of the fees
referred to in Sections 8.2(b) and (c) that are due and owing on the Effective
Date.
ARTICLE VII
INTERPRETATION
Section 7.1 Continuing Effect of the Credit Agreement. The Borrower, the
Guarantors, the Administrative Agent and the Lenders hereby acknowledge and
agree that the Credit Agreement shall continue to be and shall remain in full
force and effect in accordance with its terms, as amended by this Tenth
Amendment. Any terms or conditions contained in the Tenth Amendment shall
control over any inconsistent term(s) or condition(s) in the Credit Agreement or
the other Loan Documents.
Section 7.2 No Limitation on Remedies after Waiver Period. The Borrower and
the Guarantors hereby acknowledge and agree that, at the end of the Waiver
Period, the provisions of Article II of this Tenth Amendment shall become of no
force and effect and the Administrative Agent and the Lenders shall be free, in
accordance with the Credit Agreement and the other Loan Documents, to declare
the Advances and all other amounts outstanding under the Credit Agreement to be
due and payable and to exercise and enforce, or to take steps to exercise and
enforce, all other rights, powers, privileges and remedies available to them
under the Credit Agreement, any other Loan Document or applicable law on account
of the Specified Events of Default (or any other Default or Event of Default) as
if this Tenth Amendment had not been entered into by the parties hereto.
Section 7.3 No Waiver; Other Defaults or Events of Default. (a) Nothing
contained in this Tenth Amendment shall be construed or interpreted or is
intended as a waiver of any rights, powers, privileges or remedies that the
Administrative Agent or the Lenders have or may have under the Credit Agreement
or any other Loan Document on account of the Specified Events of Default, except
as expressly provided herein.
(b) Nothing contained in this Tenth Amendment shall be construed or
interpreted or is intended as a waiver of or limitation on any rights, powers,
privileges or remedies that the Administrative Agent or the Lenders have or may
have under the Credit Agreement or any other Loan Document on account of any
Default or Event of Default other than the Specified Events of Default.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Representations and Warranties. The Borrower and the Guarantors
hereby represent and warrant as of the date hereof that, after giving effect to
this Tenth Amendment, (a) no Default or Event of Default has occurred and is
continuing, except the Specified Events of Default, and (b) all representations
and warranties of the Borrower and the Guarantors contained in the Loan
Documents (with such term being deemed to include this Tenth Amendment and the
Credit Agreement) are true and correct in all material respects with the same
effect as if made on and as of such date, except that Section 6.01 of the Credit
Agreement shall be deemed to exclude any Specified Events of Default.
Section 8.2 Payment of Fees and Expenses. (a) The Borrower agrees to pay or
reimburse the Administrative Agent upon demand, for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation of
this Tenth Amendment, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent.
(b) The borrower further agrees to pay to the Administrative Agent, for the
account of each Lender on a pro-rata basis, an extension fee in the amount
$500,000 (the "Extension Fee"). The Extension Fee shall be deemed to be earned
on the Effective Date and shall be payable as follows: (i) $350,000 on the
Effective Date and (ii) $150,000 on the earlier of the Termination Date or the
Expiration Date. It is understood that in the event that the Borrower shall
repay in full its obligations under the Credit Agreement and the other Loan
Documents prior to the earlier of the Termination Date or the Expiration Date,
the second installment of the Extension Fee shall be decreed waived.
(c) The Borrower further agrees to pay to the Administrative Agent, for its
own account, an agency fee in the amount of $5,000 per month (the "Monthly
Agency Fee"). The Monthly Agency Fee shall be paid on the first Business Day of
each month, except that the Monthly Agency Fee for November and December 2000
shall be due on the Effective Date.
Section 8.3 Counterparts. This Tenth Amendment may be executed by the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
Section 8.4 GOVERNING LAW. THIS TENTH AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS TENTH AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 8.5 Reservation of Rights. Notwithstanding anything contained in
this Tenth Amendment to the contrary, the Borrower and each Loan Party
acknowledges that the Administrative Agent and the Lenders do not waive, and
expressly reserve, the right to exercise, at any time during the Waiver Period,
any and all of their rights and remedies under (a) the Credit Agreement, any
other Loan Document and applicable law in respect of the Specified Events of
Default against any Person other than the Borrower or any Loan Party and (b) the
Credit Agreement, any other Loan Document and applicable law in respect of any
Default or Event of Default other than the Specified Events of Default.
Section 8.6 Consent of Guarantors. Each Guarantor hereby (a) consents to
the transactions contemplated hereby and (b) acknowledges and agrees that the
guarantees (and all security therefor) contained in the Credit Agreement and the
other Loan Documents previously executed by it is, and shall remain, in full
force and effect after giving effect to this Tenth Amendment and all other prior
modifications to the Credit Agreement.
Section 8.7 Waiver. The Borrower and the Guarantors hereby release, waive,
and forever relinquish all claims, demands, obligations, liabilities and causes
of action of whatever kind or nature, whether known or unknown, which any of
them have, may have, or might assert at the time of execution of the Tenth
Amendment or in the future against the Administrative Agent, the Lenders and/or
their respective parents, affiliates, participants, officers, directors,
employees, agents, attorneys, accountants, consultants, successors and assigns,
directly or indirectly, which occurred, existed, was taken, permitted or begun
prior to the execution of the Tenth Amendment, arising out of, based upon, or in
any manner connected with (i) any transaction, event, circumstance, action,
failure to act or occurrence of any sort or type, whether known or unknown, with
respect to the Credit Agreement, any other Loan Document and/or the
administration thereof or the Obligations created thereby; (ii) any discussions,
commitments, negotiations, conversations or communications with respect to the
refinancing, restructuring or collection of any Obligations related to the
Credit Agreement, any other Loan Document and/or the administration thereof or
the Obligations created thereby, or (iii) any matter related to the foregoing.
Section 8.8 Confirmation of Indebtedness. The Borrower and the Guarantors
hereby confirm and acknowledge that, as of the Effective Date, (i) the Borrower
is truly and justly indebted to the Lenders, without defense, counterclaim or
offset of any kind, (ii) the Borrower is liable to the Lenders in respect of
Advances in the aggregate principal amount of $101,500,000, and (iii) each
Guarantor is contingently liable to the Lenders pursuant to such guarantee.
IN WITNESS WHEREOF, the parties hereto have caused this Tenth Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the date first above written.
PSC SCANNING, INC.
By:
Title:
FLEET NATIONAL BANK, as
Agent, Issuing Bank and a Lender
By:
Title:
CITIZENS BANK OF
MASSACHUSETTS, as a Lender
By:
Title:
HSBC BANK USA, as a Lender
By:
Title:
KEY BANK, as a Lender
By:
Title:
THE CHASE MANHATTAN
BANK, as a Lender
By:
Title:
M&T BANK, as a Lender
By:
Title:
ACKNOWLEDGED AND AGREED
PSC INC.
By: ______________________
Title:
PSC AUTOMATION, INC.
By: ________________________
Title:
INSTAREAD CORPORATION
By:
--------------------------
Title:
PERCON INCORPORATED
By:
-------------------------
Title:
PSC BELGIUM, INC.
By:
-------------------------
Title:
EXHIBIT A
SCHEDULE I
Working Capital Term Loan
Lender Commitments Commitments
Fleet National Bank $7,920,000 $11,880,000
Citizens Bank of Massachusetts $6,120,000 $9,180,000
HSBC Bank USA $6,120,000 $9,180,000
Key Bank $9,000,000 $13,500,000
The Chase Manhattan Bank $7,920,000 $11,880,000
M&T Bank $7,920,000 $11,880,000
