EXHIBIT 10.8
FIRST AMENDMENT TO REVOLVING CREDIT
AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (the
"Agreement") is entered into as of September 10, 2001 by and among Robotic
Vision Systems, Inc., a corporation organized under the laws of the State of
Delaware ("Robotic") (successor by merger to CiMatrix LLC, a limited liability
company organized under the laws of the State of Delaware ("CiMatrix"), Acuity
Imaging LLC, a limited liability company organized under the laws of the State
of Delaware ("Acuity"), Systemation Engineered Products, Inc., a corporation
organized under the laws of the State of Wisconsin ("Systemation"), Vanguard
Automation, Inc., a corporation organized under the laws of the State of
Delaware ("Vanguard") and Northeast Robotics LLC, a limited liability company
organized under the laws of the State of Delaware ("Northeast Robotics")) (each
a "Borrower" and collectively "Borrowers"), the financial institutions which are
now or which hereafter become a party hereto (collectively, the "Lenders" and
individually a "Lender") and PNC BANK, NATIONAL ASSOCIATION ("PNC"), as agent
for Lenders (PNC, in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrowers and PNC entered into a Revolving Credit and
Security Agreement dated April 28, 2000 (as may be further amended) (the "Loan
Agreement"); and
WHEREAS, CiMatrix, Acuity, Systemation, Vanguard and Northeast
Robotics have been merged into Robotic; and
WHEREAS, the Borrowers and PNC have agreed to modify the terms of
the Loan Agreement as set forth in this Agreement.
NOW, THEREFORE, in consideration of PNC's continued extension of
credit and the agreements contained herein, the parties agree as follow:
AGREEMENT
1. ACKNOWLEDGMENT OF BALANCE. Borrowers acknowledge that the most
recent statement of account sent to Borrower with respect to the Obligations is
correct.
2. MODIFICATIONS. The Loan Agreement be and hereby is modified as
follows:
A. The following definitions contained in Subsection I.1.2 of the
Loan Agreement are hereby deleted and new definitions are substituted therefor
to read as follows:
"Maximum Revolving Advance Amount" shall mean $10,000,000
subject to the permanent reductions to the Maximum Revolving
Advance Amount pursuant to Section 2.13 hereof.
""Revolving Interest Rate" shall mean an interest rate per
annum equal to the Base Rate plus one percent (1%) with
respect to Domestic Rate Loans.
"Undrawn Availability" at a particular date shall mean an
amount equal to (a) the Formula Amount minus (b) fees and
expenses for which Borrowers are liable but which have not
been paid or charged to Borrowers Account, plus (c) cash of
the Borrowers in Blocked Accounts or in accounts of the
Borrowers with the Agent.
B. Definitions of the following terms contained in Subsection I.1.2
of the Loan Agreement are hereby deleted: "Eurodollar Rate" and "Eurodollar Rate
Loan."
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C. Subsections 2.1(a)(y)(i),(ii) and (iii) are hereby deleted and a
new Subsection 2.1(a)(y)(i),(ii) and (iii) are substituted therefor to read as
follows:
(i) Intentionally left blank
(ii) up to the lesser of (A) 80%, subject to the provisions of
Section 2.1(c) hereof ("Inventory Advance Rate"), of the value
of the EXIM Bank Guaranteed Inventory or (B) $6,000,000 in the
aggregate at any one time, plus
(iii) up to the lesser of 90%, subject to the provisions of
Section 2.1(c) hereof (the "EXIM Receivables Advance Rate"),
of the value of the EXIM Bank Guaranteed Receivables (the EXIM
Receivables Advance Rate and the Inventory Advance Rate shall
be referred to, collectively, as the "Advance Rates");
provided, however, that in no event shall (A) the sum of
2.1(a)(y)(ii) and 2.1(a)(y)(iii) exceed $10,000,000 or (B) the
ratio of 2.l(a)(y)(ii) to 2.1(a)(y)(iii) exceed 4.0:1.0 or
such other ratio as may be required by the EXIM Borrower
Agreement, minus
D. Subsection 2.2(a) is hereby deleted and a new Subsection 2.2(a)
is substituted therefor to read as follows:
(a) Borrowing Agent on behalf of any Borrower may notify Agent
prior to 11:00 a.m. on a Business Day of a Borrower's request
to incur, on that day, a Revolving Advance hereunder. Should
any amount required to be paid as interest hereunder, or as
fees or other charges under this Agreement or any other
agreement with Agent or Lenders, or with respect to any other
Obligation, become due, same shall be deemed a request for a
Revolving Advance as of the date such payment is due, in the
amount required to pay in full such interest, fee, charge or
Obligation under this Agreement or any other agreement with
Agent or Lenders, and such request shall be irrevocable.
E. Subsections 2.2(b), (c), (d), (e), (f) and (g) and Subsection
2.4(c) are hereby deleted from the Loan Agreement.
F. Subsection 2.8 is hereby deleted and a new Subsection 2.8 is
substituted therefor to read as follows:
2.8 Letters of Credit. Subject to the terms and conditions
hereof, Agent shall issue or cause the issuance of Letters of
Credit ("Letters of Credit") on behalf of any Borrower;
provided, however, that Agent will not be required to issue or
cause to be issued any Letters of Credit to the extent that
the face amount of such Letters of Credit would then cause the
sum of (i) the outstanding Revolving Advances plus (ii)
outstanding Letters of Credit to exceed the lesser of (x) the
Maximum Revolving Advance Amount or (y) the Formula Amount;
provided, further, however, that Agent will not be required to
issue or cause to be issued any Letters of Credit to the
extent that the face amount of such Letters of Credit issued
for such Borrower would then cause the sum of (i) the
outstanding Revolving Advances to such Borrower plus (ii) the
amount available to be drawn under outstanding Letters of
Credit issued or caused to be issued on behalf of such
Borrower to exceed the lesser of (x) the Maximum Revolving
Advance Amount or (y) the Formula Amount. The maximum amount
of outstanding Letters of Credit shall not exceed $1,700,000
in the aggregate at any time. All disbursements or payments
related to Letters of Credit shall be deemed to be Domestic
Rate Loans consisting of Revolving Advances and shall bear
interest at the Revolving Interest Rate for Domestic Rate
Loans; Letters of Credit that have not been drawn upon shall
not bear interest.
G. Subsection 2.14 is hereby deleted and a new Subsection 2.14 is
substituted therefor to read as follows:
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2.14 Use of Proceeds. Borrowers shall apply the proceeds of
Advances to (i) pay fees and expenses relating to this
transaction and (ii) to provide for their working capital
needs.
H. Subsections 3.1 and 3.2(a) are hereby deleted and new Subsections
3.1 and 3.2(a) are substituted therefor to read as follows:
3.1 Interest. Interest on Advances shall be payable in arrears
on the first day of each month with respect to Domestic Rate
Loans. Interest charges shall be computed on the actual
principal amount of Advances outstanding during the month (the
"Monthly Advances") at a rate per annum equal to the
applicable Revolving Interest Rate. Whenever, subsequent to
the date of this Agreement, the Base Rate announced by PNC
changes, the Revolving Interest Rate shall be increased or
decreased without notice or demand of any kind by an amount
equal to the amount of such change in the Base Rate as of the
effective date of such change. Upon and after the occurrence
of an Event of Default, and during the continuation thereof',
(i) the Obligations shall bear interest at the applicable
Revolving Interest Rate for Domestic Loans plus two percent
(2%) per annum (as applicable, the "Default Rate").
3.2 Letter of Credit Fees.
(a) Borrowers shall pay (x) to Agent, for the benefit of
Lenders, fees for each Letter of Credit for the period from
and excluding the date of issuance of same to and including
the date of expiration or termination, equal to the average
daily face amount of each outstanding Letter of Credit
multiplied by (i) one and one-half percent (1.50%) per annum
with respect to Trade Letters of Credit or (ii) the Base Rate
plus one percent (1%) with respect to Standby Letters of
Credit, such fees to be calculated on the basis of a 360-day
year for the actual number of days elapsed and to be payable
monthly in arrears on the first day of each month and on the
last day of the Term (y) to Agent, for the benefit of the
Issuer, one-quarter percent (.25%) of the face amount of each
Standby Letters of Credit, and (z) to the Issuer, any and all
fees and expenses as agreed upon by the Issuer and the
Borrowing Agent in connection with any Letter of Credit,
including, without limitation, in connection with the opening,
amendment or renewal of any such Letter of Credit and any
acceptances created thereunder and shall reimburse Agent for
any and all fees and expenses, if any, paid by Agent to the
Issuer (all of the foregoing fees, the "Letter of Credit
Fees"). All such charges shall be deemed earned in full on the
date when the same are due and payable hereunder and shall not
be subject to rebate or proration upon the termination of this
Agreement for any reason. Any such charge in effect at the
time of a particular transaction shall be the charge for that
transaction, notwithstanding any subsequent change in the
Issuer's prevailing charges for that type of transaction. All
Letter of Credit Fees payable hereunder shall be deemed earned
in full on the date when the same are due and payable
hereunder and shall not be subject to rebate or proration upon
the termination of this Agreement for any reason.
At the Agent's request at any time while an Event of Default
is continuing, Borrowers will cause cash to be deposited and
maintained in an account with Agent, as cash collateral, in an
amount equal to one hundred and five percent (105%) of the
outstanding Letters of Credit, and each Borrower hereby
irrevocably authorizes Agent, in its discretion, on such
Borrower's behalf and in such Borrower's name, to open such an
account and to make and maintain deposits therein, or in an
account opened by such Borrower, in the amounts required to be
made by such Borrower, out of the proceeds of Receivables or
other Collateral or out of any other funds of such Borrower
coming into any Lender's possession at any time. Agent will
invest such cash collateral (less applicable reserves) in such
short-term money-market items as to which Agent and such
Borrower mutually agree and the net return on such investments
shall be credited to such
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account and constitute additional cash collateral. No Borrower
may withdraw amounts credited to any such account except upon
cure or waiver of such Event of Default as long as no other
Event of Default is then continuing or upon payment and
performance in full of all Obligations and termination of this
Agreement or if the amounts held therein exceed the amounts
available to be drawn under such Letters of Credit plus
amounts drawn and outstanding thereunder by more than 105%.
I. Subsections 3.7 and 3.8 are hereby deleted from the Loan
Agreement.
J. Subsection 4.15(h) is hereby deleted and a new Subsection 4.15(h)
is substituted therefor to read as follows:
(h) Establishment of a Lockbox Account, Dominion Account. All
funds of the Borrowers, including but not limited to all
proceeds of Collateral, shall, at the direction of Agent, be
deposited by Borrowers into a lockbox account, dominion
account or such other "blocked account" ("Blocked Accounts")
as Agent may require pursuant to an arrangement with such bank
as may be selected by Borrowers and be acceptable to Agent.
Borrowers shall issue to any such bank, an irrevocable letter
of instruction directing said bank to transfer such funds so
deposited to Agent, either to any account maintained by Agent
at said bank or by wire transfer to appropriate account(s) of
Agent. All funds deposited in such Blocked Account shall
immediately become the property of Agent to be applied against
the Obligations or in accordance with any cash management
arrangement with the Agent and Borrowers shall obtain the
agreement by such bank to waive any offset rights against the
funds so deposited. Neither Agent nor any Lender assumes any
responsibility for such blocked account arrangement, including
without limitation, any claim of accord and satisfaction or
release with respect to deposits accepted by any bank
thereunder. Alternatively, Agent may establish depository
accounts ("Depository Accounts") in the name of Agent at a
bank or banks for the deposit of such funds and Borrowers
shall deposit all funds, including proceeds of Collateral, or
cause same to be deposited, in kind, in such Depository
Accounts of Agent in lieu of depositing same to the Blocked
Accounts.
K. Subsection 6.5 is hereby deleted and a new Subsection 6.5 is
substituted therefor to read as follows:
6.5 Net Worth. Maintain a Net Worth in amounts not less than:
$85,697,000 at June 30, 2001; $71,700,000 at September 30,
2001; $67,000,000 at December 31, 2001; $65,000,000 at March
31, 2002; $66,000,000 at June 30, 2002, and $72,000,000 at
September 30, 2002 and, subsequent to September 30, 2002, Net
Worth must increase each fiscal quarter thereafter by an
amount no less than $2,000,000. For the purposes of
determining Net Worth: (i) revaluations of Intangibles will
not be considered; and (ii) writedowns of the valuation of
Inventory for the fiscal fourth quarter in amounts up to
$5,000,000 will not be considered.
L. A new Subsection 6.14 is hereby added to the Loan Agreement to
read as follows:
6.14 Minimum Undrawn Availability. Maintain at all times an
Undrawn Availability of at least $3,000,000.
M. Subsection 7.6 is hereby deleted and a new Subsection 7.6 is
substituted therefor to read as follows:
7.6 Capital Expenditures. Other than the assumption of up to
$5,000,000 of capitalized leases in connection with Permitted
Acquisitions (as described in paragraph (i) of the definition
of Permitted Acquisitions), contract for, purchase or make any
expenditure or commitments for fixed or capital assets
(including capitalized leases and
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capitalized software) in any fiscal year in an aggregate
amount for all Borrowers in excess of $10,000,000, less the
amount of any assumed capitalized leases in connection with
any Permitted Acquisitions.
N. Subsections 9.7 and 9.8 are hereby deleted and new Subsections
9.7 and 9.8 are substituted therefor to read as follows:
9.7 Annual Financial Statements. Furnish Agent within ninety
(90) days after the end of each fiscal year of Borrowers,
financial statements of Borrowers on a consolidating and
consolidated basis including, but not limited to, statements
of income and stockholders' equity and cash flow from the
beginning of the current fiscal year to the end of such fiscal
year and the balance sheet as at the end of such fiscal year,
all prepared in accordance with GAAP applied on a basis
consistent with prior practices, and in reasonable detail and
reported upon without qualification by an independent
certified public accounting firm selected by Borrowers and
satisfactory to Agent (the "Accountants"). The report of the
Accountants shall be accompanied by a statement of the
Accountants certifying that (i) they have caused the Loan
Agreement to be reviewed, (ii) in making the examination upon
which such report was based either no information came to
their attention which to their knowledge constituted an Event
of Default or a Default under this Agreement or any related
agreement or, if such information came to their attention,
specifying any such Default or Event of Default, its nature,
when it occurred and whether it is continuing, and such report
shall contain or have appended thereto calculations which set
forth Borrowers' compliance with the requirements or
restrictions imposed by Sections 6.5, 7.6 and 7.11 hereof. In
addition, the reports shall be accompanied by a certificate of
each Borrower's Chief Financial Officer which shall state
that, based on an examination sufficient to permit him to make
an informed statement, no Default or Event of Default exists,
or, if such is not the case, specifying such Default or Event
of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by such Borrower with
respect to such event, and such certificate shall have
appended thereto calculations which set forth Borrowers'
compliance with the requirements or restrictions imposed by
Sections 6.5, 7.6 and 7.11 hereof.
9.8 Quarterly Financial Statements. Furnish Agent within
forty-five (45) days after the end of each fiscal quarter, an
unaudited balance sheet of Borrowers on a consolidated and
consolidating basis and unaudited statements of income and
stockholders' equity and cash flow of Borrowers on a
consolidated and consolidating basis reflecting results of
operations from the beginning of the fiscal year to the end of
such quarter and for such quarter, prepared on a basis
consistent with prior practices and complete and correct in
all material respects, subject to normal and recurring year
end adjustments that individually and in the aggregate are not
material to the business of Borrowers. The reports shall be
accompanied by a certificate signed by the Chief Financial
Officer of each Borrower, which shall state that, based on an
examination sufficient to permit him to make an informed
statement, no Default or Event of Default exists, or, if such
is not the case, specifying such Default or Event of Default,
its nature, when it occurred, whether it is continuing and the
steps being taken by Borrowers with respect to such default
and, such certificate shall have appended thereto calculations
which set forth Borrowers' compliance with the requirements or
restrictions imposed by Sections 6.5, 7.6 and 7.11 hereof and,
additionally, shall furnish to Agent a detailed report of
Borrowers' cost-cutting efforts, including, but not limited
to, salary reductions, facility closings, research and
development reductions and reductions of other administrative
expenses.
3. SATISFACTION OF NATIONAL BANK OF CANADA OBLIGATION. The Agent
acknowledges that the obligation of Borrowers to the National Bank of Canada has
been fully paid and satisfied and that a certain $15,000,000 Amended and
Restated Revolving Credit Note dated as of June 12, 2000 from the Borrowers in
favor of the National Bank of Canada has been paid in full and released.
4. ACKNOWLEDGMENTS. Borrowers acknowledge and represent that:
A. the Loan Agreement and the Other Documents, as amended hereby,
are in full force and effect without any defense, claim, counterclaim, right or
claim of set-off;
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B. to the best of their knowledge, no default by the Agent or
Lenders in the performance of their duties under the Loan Agreement or the Other
Documents has occurred;
C. all representations and warranties of the Borrower contained
herein and in the Other Documents are true and correct in all material respects
as of this date, except for any representation or warranty that specifically
refers to an earlier date;
D. Borrowers have taken all necessary action to authorize the
execution and delivery of this Agreement; and
E. this Agreement is a modification of an existing obligation and is
not a novation.
5. WAIVERS.
A. Borrowers have advised that Robotic, on November 21, 2000,
acquired the outstanding shares of Abante Automation, Inc., and on January 3,
2001, acquired the outstanding shares of Auto Image ID, Inc. In connection with
such acquisitions the Agent hereby waives Borrowers failure to comply with
Subsections 6.9, 7.1(c), 7.4 and 7.8 of the Loan Agreement.
B. Borrowers also have advised the Agent that the financial
statements prepared and delivered to the Agent for the period beginning October
1, 1999 and ending March 31, 2001 were not prepared in accordance with GAAP and,
accordingly in connection therewith, Agent waives Borrowers failure to comply
during the above stated period with the requirements set forth in the Loan
Agreement pursuant to Subsections 6.8 and 9.7.
6. CONSENT TO SALE OF ASSETS. The Agent agrees that it will, upon
delivery by the Borrower of a purchase and sale agreement reasonably
satisfactory to the Agent for the sale of the assets of Borrower's material
handling business, consent to the sale of such assets, and in connection
therewith release all security interests and authorize the Borrower to terminate
all UCC Financing Statements with respect to such assets, provided that the
Agent receives a fully executed copy of the purchase and sale agreement with all
exhibits and schedules thereto within ten (10) days subsequent to the execution
of such purchase and sale agreement.
7. PRECONDITIONS. As preconditions to the effectiveness of any of
the modifications, consents, or waivers contained herein, the Borrowers shall
deliver to the Agent, simultaneously with the execution hereof: (i) Secretary's
Certificates of each Borrower containing Resolutions authorizing the execution
of this Agreement and the Second Amended and Restated Revolving Credit Note;
(ii) an executed original of the $10,000,000 Second Amended and Restated
Revolving Credit Note; (iii) an amendment and waiver fee in the amount of
$100,000; and (iv) Agent's counsel's fees.
8. POSTCONDITIONS. Within sixty (60) days of the date hereof, the
Borrowers shall deliver to the Agent, with respect to the merger of CiMatrix,
Acuity, Systemation, Vanguard and Northeast Robotics into Robotic: (i) certified
certificates of merger reflecting said mergers in each of the applicable
jurisdictions; (ii) certified certificates of good standing indicating that
Robotic has qualified to do business in each jurisdiction where the merged
entities were qualified to do business (unless Robotic has formally withdrawn
from such jurisdiction); (iii) searches evidencing that all UCC Financing
Statements of the merged entities have been amended to reflect the name of
Robotic in all jurisdictions where filings were originally made against the
merged entities; and (iv) opinion of Borrower's counsel as to the effectiveness
of the various mergers and indicating that Robotic is the successor to all of
the merged entities. Additionally, within fifteen (15) days of the date hereof,
the Borrowers must provide evidence to the Agent that the Agent has dominion and
control over all of Borrowers' funds as required by Subsection 4.15(h). Failure
by the Borrowers to comply with the provisions contained herein shall be deemed
a Default under the Loan Agreement.
9. MISCELLANEOUS. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without reference to
that state's conflicts of law principles. This Agreement, the Loan Agreement and
the Other Documents constitute the sole agreement of the parties with respect to
the subject matter thereof and supersede all oral negotiations and prior
writings with respect to the subject matter thereof. No amendment of this
Agreement, and no waiver of any one or more of the provisions hereof shall be
effective unless
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set forth in writing and signed by the parties hereto. The illegality,
unenforceability or inconsistency of any provision of this Agreement shall not
in any way affect or impair the legality, enforceability or consistency of the
remaining provisions of this Agreement, the Loan Agreement or the Other
Documents. This Agreement, the Loan Agreement and the Other Documents are
intended to be consistent. However, in the event of any inconsistencies among
this Agreement, the Loan Agreement and any of the Other Documents, the terms of
this Agreement, then the Loan Agreement, shall control. This Agreement may be
executed in any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed an original, but all such
counterparts shall together constitute one and the same agreement.
10. DEFINITIONS. The terms used herein and not otherwise defined or
modified herein shall have the meanings ascribed to them in the Loan Agreement.
The terms used herein and not otherwise defined or modified herein or defined in
the Loan Agreement shall have the meanings ascribed to them by the Uniform
Commercial Code as enacted in New York.
IN WITNESS WHEREOF, the undersigned have signed and sealed this
Agreement the day and year first above written.
ROBOTIC VISION SYSTEMS, INC.
BY:
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NAME: XXX X. XXXXX
TITLE: PRESIDENT
PNC BANK, NATIONAL ASSOCIATION
BY:
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NAME: XXXXXXXX XXXXXXX-NURSE
TITLE: VICE PRESIDENT
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