EXHIBIT 10.1
FOURTH AMENDMENT, dated as of September 25, 1998 (this "AMENDMENT"), to the
CREDIT AGREEMENT, dated as of October 2, 1997, as amended by the Global
Amendment and Assignment and Acceptance, dated as of October 20, 1997, the
Second Amendment, dated as of March 13, 1998, and the Third Amendment, dated
as of May 8, 1998 (as further amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), among AXIOHM TRANSACTION
SOLUTIONS, INC. (f/k/a DH Technology, Inc.), a California corporation (the
"BORROWER"), the several banks and other financial institutions or entities
from time to time parties to the Credit Agreement (the "LENDERS"), XXXXXX
BROTHERS INC., as arranger, XXXXXX COMMERCIAL PAPER INC., as syndication
agent (in such capacities, the "SYNDICATION AGENT"), and UNION BANK OF
CALIFORNIA, N.A., as administrative agent (the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, the Borrower, the Syndication Agent, the Administrative Agent and
the Lenders are parties to the Credit Agreement; and
WHEREAS, the parties wish to amend the Credit Agreement to effectuate certain
changes requested by the Borrower and the Administrative Agent, all as set
forth in this Amendment;
NOW THEREFORE, in consideration of the premises, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. Unless otherwise defined herein and except as set forth in
this Amendment, terms defined in the Credit Agreement are used herein as
therein defined.
SECTION 2. AMENDMENT OF CREDIT AGREEMENT.
2.1 AMENDMENTS TO SECTION 1.1 OF THE CREDIT AGREEMENT. (a) The following
definitions are hereby added to Section 1.1 of the Credit Agreement in their
proper alphabetical order:
"'FQE 1', 'FQE 2' or 'FQE 3' shall mean, respectively, the last day
of the Borrower's first, second and third fiscal quarters. The first fiscal
quarter of each fiscal year begins on the Sunday closest to the last day of
the prior calendar year, and continues for 13 calendar weeks. The second and
third fiscal quarters continue for successive periods of 13 weeks each, and
the fourth fiscal quarter continues for the period of 13 or 14 weeks, as the
case may be, until the end of such fiscal year."
"'FYE' shall mean the end of the designated fiscal year of the
Borrower. Each fiscal year ends on the Saturday following closest to the last
day of the designated year (which Saturday may fall in the succeeding
calendar year)."
(b) The definition of the term "Applicable Margin" is hereby amended
by deleting such definition in its entirety and by substituting in lieu
thereof the following:
"'APPLICABLE MARGIN': for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Page 26
Base Rate Eurodollar
Loans Loans
----- -----
Revolving Credit Loans and
Swing Line Loans 2.00% 3.00%
Tranche A Term Loans 2.00% 3.00%
Tranche B Term Loans 2.25% 3.25%
; PROVIDED, that on and after the first Adjustment Date occurring at least
one year after the Merger, the Applicable Margin with respect to Revolving
Credit Loans, Swing Line Loans, Tranche A Term Loans and Tranche B Term Loans
will be determined pursuant to the relevant Pricing Grid."
(c) The definition of the term "Consolidated Fixed Charge Coverage
Ratio" is hereby amended by deleting such definition in its entirety and by
substituting in lieu thereof the following:
"'CONSOLIDATED FIXED CHARGE COVERAGE RATIO': for any period, the
ratio of (a) Consolidated EBITDA for such period less the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such period
on account of Capital Expenditures (excluding the principal amount of
Indebtedness incurred in connection with such expenditures) to (b)
Consolidated Fixed Charges for such period."
(d) The definition of the term "Consolidated Fixed Charges" is
hereby amended by deleting such definition in its entirety and by
substituting in lieu thereof the following:
"'CONSOLIDATED FIXED CHARGES': for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period and (b)
scheduled payments made during such period on account of principal of
Indebtedness (other than Indebtedness of the types described in clauses (f),
(g) and (k) of the definition thereof) of the Borrower or any of its
Subsidiaries (including scheduled principal payments in respect of the Term
Loans), minus any Net Cash Proceeds received by the Borrower during such
period in connection with an Asset Sale."
(e) The definition of the term "Consolidated EBITDA" is hereby
amended by deleting "1998" in clause (g) thereof and by replacing it with
"1999."
(f) The definition of the term "Net Cash Proceeds" is hereby amended
by deleting clause (b) thereof and by substituting in lieu thereof the
following:
"(b) in connection with any issuance or sale of equity securities or
debt securities or instruments or the incurrence of loans, the cash proceeds
received by the Borrower from such issuance or incurrence, net of attorneys'
fees, investment banking fees, accountants' fees and other professional fees,
underwriting discounts and commissions and other reasonable fees and expenses
actually incurred in connection therewith."
(g) The definition of the term "Pricing Grid" is hereby amended by
deleting such definition in its entirety and by substituting in lieu thereof
the following:
"'PRICING GRID': the pricing grids attached hereto as Annex A."
2.2 AMENDMENT TO SECTION 2.10 OF THE CREDIT AGREEMENT. Section 2.10(a) of the
Credit Agreement is hereby amended by deleting such Section 2.10(a) in its
entirety and by substituting in lieu thereof the following:
"(a) Unless the Required Prepayment Lenders shall otherwise agree,
if any Capital Stock or Indebtedness shall be issued or Incurred by the
Borrower or any of its Subsidiaries (excluding any Indebtedness Incurred in
accordance with Section 7.2 or Capital Stock issued in accordance with
Section 7.9), an amount equal to 100% of the Net Cash Proceeds of any
Indebtedness Incurred and 50% of the Net Cash Proceeds of any Capital Stock
issued shall be applied on the date of such issuance or Incurrence toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.10(d)."
Page 27
2.3 AMENDMENT TO SECTION 2.16(b) OF THE CREDIT AGREEMENT. Section 2.16(b) of
the Credit Agreement is hereby amended by deleting such Section 2.16(b) in
its entirety and by substituting in lieu thereof the following:
"(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made PRO RATA
according to the respective outstanding principal amounts of the Term Loans
then held by the Term Loan Lenders (except as otherwise provided in Section
2.16(d)). The amount of each principal prepayment of the Term Loans shall be
applied to reduce the then remaining installments of the Tranche A Term Loans
and Tranche B Term Loans, as the case may be, in the inverse order of their
respective maturities. Notwithstanding the foregoing, in the case of
principal prepayments of the Term Loans with Net Cash Proceeds of any Capital
Stock issued by the Borrower or any of its Subsidiaries in accordance with
Section 2.10(a), such prepayments shall be applied to reduce the then
remaining installments of the Tranche A Term Loans and Tranche B Term Loans,
as the case may be, PRO RATA based upon the then remaining principal amount
thereof. Amounts prepaid on account of the Term Loans may not be reborrowed."
2.4 AMENDMENT TO SECTION 7.1 OF THE CREDIT AGREEMENT. Section 7.1 of the
Credit Agreement is hereby amended by deleting such Section 7.1 in its
entirety and by substituting in lieu thereof the following:
"7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to
the Closing Date) ending with any fiscal quarter set forth below to exceed
the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FYE 1997 5.50 to 1.00
FQE 1 1998 5.50 to 1.00
FQE 2 1998 5.50 to 1.00
FQE 3 1998 5.50 to 1.00
FYE 1998 5.50 to 1.00
FQE 1 1999 5.75 to 1.00
FQE 2 1999 5.75 to 1.00
FQE 3 1999 5.50 to 1.00
FYE 1999 5.25 to 1.00
FQE 1 2000 5.25 to 1.00
FQE 2 2000 5.25 to 1.00
FQE 3 2000 5.25 to 1.00
FYE 2000 4.75 to 1.00
FQE 1 2001 4.75 to 1.00
FQE 2 2001 4.75 to 1.00
FQE 3 2001 4.75 to 1.00
FYE 2001 3.75 to 1.00
FQE 1 2002 3.75 to 1.00
FQE 2 2002 3.75 to 1.00
FQE 3 2002 3.75 to 1.00
FYE 2002 3.00 to 1.00
Thereafter 3.00 to 1.00
; PROVIDED, that for the purposes of determining the ratio described
above for the fiscal quarters of the Borrower ending FYE 1997, FQE 1
1998 and FQE 2 1998, Consolidated EBITDA for the relevant period shall
be deemed to equal Consolidated EBITDA for such fiscal quarter (and, in
the case of the latter two such determinations, each previous fiscal
quarter commencing after the Closing Date) MULTIPLIED BY 4, 2 and 4/3,
respectively.
Page 28
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower (or, if less, the number of full fiscal
quarters subsequent to the Closing Date) ending with any fiscal quarter
set forth below to be less than the ratio set forth below opposite such
fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- --------------
FYE 1997 1.75 to 1.00
FQE 1 1998 1.50 to 1.00
FQE 2 1998 1.70 to 1.00
FQE 3 1998 1.90 to 1.00
FYE 1998 1.80 to 1.00
FQE 1 1999 1.75 to 1.00
FQE 2 1999 1.75 to 1.00
FQE 3 1999 1.80 to 1.00
FYE 1999 1.90 to 1.00
FQE 1 2000 1.90 to 1.00
FQE 2 2000 1.90 to 1.00
FQE 3 2000 1.90 to 1.00
FYE 2000 2.00 to 1.00
FQE 1 2001 2.00 to 1.00
FQE 2 2001 2.00 to 1.00
FQE 3 2001 2.00 to 1.00
FYE 2001 2.50 to 1.00
FQE 1 2002 2.50 to 1.00
FQE 2 2002 2.50 to 1.00
FQE 3 2002 2.50 to 1.00
FYE 2002 3.00 to 1.00
Thereafter 3.00 to 1.00
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
FQE 3 1998 1.45 to 1.00
FYE 1998 1.25 to 1.00
FQE 1 1999 1.15 to 1.00
FQE 2 1999 1.05 to 1.00
FQE 3 1999 1.05 to 1.00
FYE 1999 1.05 to 1.00
FQE 1 2000 1.05 to 1.00
FQE 2 2000 1.05 to 1.00
FQE 3 2000 1.05 to 1.00
FYE 2000 1.10 to 1.00
FQE 1 2001 1.10 to 1.00
FQE 2 2001 1.10 to 1.00
FQE 3 2001 1.10 to 1.00
FYE 2001 1.15 to 1.00
FQE 1 2002 1.15 to 1.00
FQE 2 2002 1.15 to 1.00
FQE 3 2002 1.15 to 1.00
FYE 2002 1.25 to 1.00
Thereafter 1.25 to 1.00"
Page 29
2.5 AMENDMENT TO SECTION 7.12 OF THE CREDIT AGREEMENT. Section 7.12 of the
Credit Agreement is hereby amended by deleting such Section 7.12 in its entirety
and by substituting in lieu thereof the following:
"7.12 LIMITATION ON CHANGES IN FISCAL PERIODS. Permit the
fiscal year of the Borrower to end on a day other than as
described in the definition of "FYE" or change the
Borrower's method of determining fiscal quarters."
2.6 AMENDMENT TO ANNEX A OF THE CREDIT AGREEMENT. Annex A of the Credit
Agreement is hereby amended by deleting such Annex A in its entirety and by
substituting in lieu thereof the following:
"PRICING GRID FOR REVOLVING CREDIT LOANS, SWING LINE LOANS AND
TRANCHE A TERM LOANS
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Consolidated Leverage Ratio Applicable Margin Applicable Margin for
for Eurodollar Loans Base Rate Loans
---------------------------------------------------------------------------------------------------------
Greater than or equal to 5.00 to 1.00 3.00% 2.00%
---------------------------------------------------------------------------------------------------------
Less than 5.00 to 1.00 but greater than 2.75% 1.75%
or equal to 4.25 to 1.00
---------------------------------------------------------------------------------------------------------
Less than 4.25 to 1.00 but greater than 2.50% 1.50%
or equal to 3.50 to 1.00
---------------------------------------------------------------------------------------------------------
Less than 3.50 to 1.00 but greater than 2.25% 1.25%
or equal to 3.00 to 1.00
---------------------------------------------------------------------------------------------------------
Less than 3.00 to 1.00 but greater than 2.00% 1.00%
or equal to 2.50 to 1.00
---------------------------------------------------------------------------------------------------------
Less than 2.50 to 1.00 1.75% 0.75%
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
PRICING GRID FOR TRANCHE B TERM LOANS
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Consolidated Leverage Ratio Applicable Margin Applicable Margin for
for Eurodollar Loans Base Rate Loans
---------------------------------------------------------------------------------------------------------
Greater than or equal to 5.00 to 1.00 3.25% 2.25%
---------------------------------------------------------------------------------------------------------
Less than 5.00 to 1.00 3.00% 2.00%
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Changes in the Applicable Margin with respect to Revolving Credit Loans,
Tranche A Term Loans and Tranche B Term Loans resulting from changes in the
Consolidated Leverage Ratio shall become effective on the date (the
"ADJUSTMENT DATE") on which financial statements are delivered to the Lenders
pursuant to Section 6.1 (but in any event not later than the 45th day after
the end of each of the first three quarterly periods of each fiscal year or
the 90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial
statements are delivered, the Consolidated Leverage Ratio as at the end of
the fiscal period that would have been covered thereby shall for the purposes
of this definition be deemed to be greater than 5.00 to 1.00. In addition, at
all times while an Event of Default shall have occurred and be continuing,
the Consolidated Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 5.00 to 1.00. Each determination of the
Consolidated Leverage Ratio pursuant to this definition shall be made with
respect to the period of four consecutive fiscal quarters of the Borrower
ending at the end of the period covered by the relevant financial statements."
Page 30
SECTION 3. MISCELLANEOUS.
3.1 EFFECTIVENESS. This Amendment shall become effective as of the date
hereof (the "EFFECTIVE DATE") when (i) the Administrative Agent shall have
received counterparts of this Amendment, duly executed and delivered by the
Borrower, the Administrative Agent and the Required Lenders and (ii) each
Lender shall have received an amendment fee equal to 0.375% of the total
Commitment as of the date hereof paid on a PRO RATA basis to each Lender.
3.2 REPRESENTATIONS AND WARRANTIES. After giving effect to the amendments
contained herein, on the Effective Date, the Borrower hereby (i) confirms,
reaffirms and restates the representations and warranties set forth in
Section 4 of the Credit Agreement; PROVIDED that each reference in such
Section 4 to "this Agreement" shall be deemed to be a reference both to this
Amendment and to the Credit Agreement as amended by this Amendment and (ii)
confirms that no Default or Event of Default shall have occurred and be
continuing.
3.3 CONTINUING EFFECT; NO OTHER AMENDMENTS. Except as expressly amended or
waived hereby, all of the terms and provisions of the Credit Agreement and
the other Loan Documents are and shall remain in full force and effect. The
amendments contained herein shall not constitute an amendment or waiver of
any other provision of the Credit Agreement or the other Loan Documents or
for any purpose except as expressly set forth herein.
3.4 COUNTERPARTS. This Amendment may be executed in any number of
counterparts by the parties hereto, each of which counterparts when so
executed shall be an original, but all the counterparts shall together
constitute one and the same instrument.
3.5 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
3.6 EXPENSES. The Borrower agrees to pay or reimburse the Administrative
Agent for all of its out-of-pocket costs and expenses incurred in connection
with the preparation, negotiation and execution of this Amendment, including,
without limitation, the fees and disbursements of counsel to the
Administrative Agent.
Page 31
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
AXIOHM TRANSACTION SOLUTIONS, INC.
By:
Title:
UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent and as a Lender
By:
Title:
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent and as a Lender
By:
Title:
SOUTHERN PACIFIC BANK
By:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
Title:
By:
Title:
BSB BANK & TRUST COMPANY
By:
Title:
Page 32
IMPERIAL BANK, A CALIFORNIA
BANKING CORPORATION
By:
Title:
MELLON BANK, N.A.
By:
Title:
SOCIETE GENERALE
By:
Title:
BANQUE NATIONALE DE PARIS
By:
Title:
BALANCED HIGH-YIELD FUND I LTD.
By: BHF-Bank Aktiengesellschaft,
acting through its New York
Branch, as attorney-in-fact
By:
Name:
Title:
By:
Name:
Title:
