EXHIBIT 10(b)
Document 2
AMENDMENT NO. 3
AND
FORBEARANCE TO AND UNDER
THE REVOLVING CREDIT AGREEMENT
AMENDMENT NO. 3 AND FORBEARANCE (this "AMENDMENT AND FORBEARANCE"), dated
as of December 4, 1998, to and under the Credit Agreement, dated as of March 18,
1998, by and among ROBOTIC VISION SYSTEMS, INC., a Delaware corporation
(the "BORROWER"), the Lenders party thereto and THE BANK OF NEW YORK, as
administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVE
AGENT") as heretofore amended and as may heretofore be amended, modified and
supplemented from time to time (the "CREDIT AGREEMENT").
RECITALS
A. Capitalized terms used herein which are not defined herein shall
have the respective meanings ascribed thereto in the Credit Agreement.
B. As more fully described on Schedule I hereto (i) certain Events of
Default have occurred and are continuing as of the fiscal quarter ended
September 30, 1998 (the "EXISTING EVENTS OF DEFAULT") and (ii) certain
additional Events of Default are anticipated to occur in the future during
the period ended January 29, 1999 (the "ANTICIPATORY EVENTS OF DEFAULT"; and
together with the Existing Events of Default, the "FORBEARANCE EVENTS OF
DEFAULT")).
C. The Borrower has requested that the Administrative Agent and the
Lenders agree (i) to amend certain provisions of the Credit Agreement to
provide for the application of the gross proceeds from the sale of the
Borrower's Aircraft Safety Division, (ii) to consent, pursuant to the terms
of the Credit Agreement, to the sale of the Borrower's Aircraft Safety
Division, (iii) to release from the liens created pursuant to the Security
Agreement referred to in the Credit Agreement the assets of the Borrower's
Aircraft Safety Division, and (iv) to forbear from exercising rights under
the Loan Documents with respect to the Forbearance Events of Default, in each
case to the extent and in the manner set forth below, and the Administrative
Agent and the Lenders executing this Amendment and Forbearance are willing to
do so subject to the terms and conditions hereof.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. FORBEARANCE. (a) The Administrative Agent, the Lenders and
the Borrower hereby acknowledge the existence, as of the date hereof, of the
Existing Events of Default, and hereby acknowledge the future occurrence, on
the dates described on Schedule I hereto, of the Anticipatory Events of
Default. Subject to the satisfaction of the conditions set forth in Section 3
hereof and so long as no Event of Default (other than the Forbearance Events
of Default) shall have occurred and be continuing under the Credit Agreement,
the Administrative Agent and the Lenders
hereby agree to forbear, until the expiration of the Forbearance Period, from
commencing any lawsuit or taking any action to enforce any of their
respective and remedies under the Loan Documents (including, without
limitation, disposing of or collecting upon any Collateral granted to secure
payment under the Loan Documents) in connection with the Forbearance Events
of Default; PROVIDED, HOWEVER, that such forbearance shall extend only to the
foregoing specific Forbearance Events of Default and not to any other
Defaults or Events of Default now existing or occurring after the Amendment
No. 3 Effective Date and shall not in any way or manner restrict the
Administrative Agent or the Lenders from exercising any rights or remedies
they may have after the expiration or termination of the Forbearance Period.
(b) The Administrative Agent and the Lenders hereby agree that during the
Forbearance Period, the provisions of Section 3.1(b) of the Credit Agreement
shall not apply and the default rate of interest described in such section
shall not accrue and shall not be deemed to have accrued, at any time prior
to or during the Forbearance Period (although interest shall continue to
accrue at the rates otherwise applicable) as to any amounts payable or
outstanding under the Credit Agreement; PROVIDED, that during the Forbearance
Period all Revolving Loans shall be maintained as ABR Advances and may not be
converted to Eurodollar Advances.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. (a) Section 1.1 of the
Credit Agreement is hereby amended by adding the following new definitions in
appropriate alphabetical order:
"AMENDMENT NO. 3": shall mean that certain
Amendment No. 3 and Forbearance to and under the
Credit Agreement, dated as of December __, 1998.
"AMENDMENT NO. 3 EFFECTIVE DATE": shall have the
meaning set forth in Section 3 of Amendment No. 3.
"FORBEARANCE EVENTS OF DEFAULT": shall have the
meanings set forth in Recital B of Amendment No. 3.
"FORBEARANCE PERIOD": shall mean the period
commercing on the Amendment No. 3 Effective Date
and ending on the earliest to occur of (i) January
29, 1999, and (ii) the occurrence and continuance of
any Event of Default other than the Forbearance
Events of Default.
"PURCHASE AGREEMENT": shall mean that certain Asset
Purchase Agreement dated November 16, 1998 by and
between Rosemount Aerospace Inc. (the "PURCHASER")
and the Borrower, a true and correct copy of which
has heretofore been delivered to the Administrative
Agent.
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(b) Section 2.4(b) of the Credit Agreement is hereby amended by deleting
the word "and" immediately following subsection (ii) thereof, by deleting the
period at the end of subsection (iii) thereof and inserting in lieu thereof a
semi-colon and the word "and", and by inserting the following new subsection
(iv) at the end thereof:
"(iv) by an amount equal to (x) 50% of the Base
Purchase Price (as defined in the Purchase
Agreement) and (y) 50% of the Adjusted Balance
(as defined in Exhibit G to the Purchase
Agreement), it being understood and agreed that,
notwithstanding anything to the contrary
contained in subsection (i) above, the Borrower
shall be permitted to retain, for working capital
purposes (A) 50% of the Base Purchase Price
(subject to the payment of the legal fees and
expenses set forth in Section 3 to Amendment No.
3), (B) 100% of the first $75,000 of the Balance
payable to the Buyer (as defined in the Purchase
Agreement and described in Exhibit B to the
Purchase Agreement) and (C) 50% of the Adjusted
Balance."
(c) Section 7.1 of the Credit Agreement is hereby amended by deleting the
word "and" immediately following subsection (h) thereof, by deleting the
period at the end of subsection (i) thereof and inserting in lieu thereof a
semi-colon, and by inserting the following new subsections (j), (k), (l) and
(m) at the end thereof:
"(j) each of the following, in each case within
10 days of the end of such fiscal month, for the
immediately preceding fiscal month and separately
for the Borrower, each of the Subsidiaries,
divisions and major vendors and customers: (A) a
summary aging schedule of accounts receivable,
(B) a schedule of inventory (raw material, work
in process and finished goods), (C) a schedule of
payables and (D) schedules of revenue by
bookings, shipments and backlog, all in form
acceptable to the Administrative Agent;
(k) collateral audits (at the Borrower's expense)
of the Borrower and any Subsidiaries and
divisions as the Administrative Agent or Required
Lenders shall direct, on a semi-annual basis or
such other basis as the Administrative Agent and
the Required Lenders may from time to time
reasonably require in their sole discretion;
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(1) no later than the second to last Business Day
in each week, and in each case, separately for
the Borrower, each of the Subsidiaries and
divisions (A) a schedule of sales for the
immediately preceding week, (B) a schedule of
anticipated cash receipts and disbursements for
the immediately succeeding thirteen weeks and
(C) a schedule of actual cash receipts and
disbursements for the immediately preceding
thirteen weeks; and
(m) bi-monthly, a status update on the
Borrower's efforts to obtain subordinated
financing and/or equity investments and proposed
asset dispositions outside the ordinary course
of business."
(d) Section 8.6 of the Credit Agreement is hereby amended by inserting
the following new subsection (e) at the end thereof:
"(e) notwithstanding anything to the contrary
set forth in this Section 8.6, and subject to
the terms of Section 2.4(b)(iv) hereof, the sale
and disposition of the assets of the Borrower's
Aircraft Safety Division pursuant to the terms
of the Purchase Agreement, it being agreed that,
upon the occurrence of the Amendment No. 3
Effective Date, the Lenders shall be deemed to
have consented to, and do hereby authorize the
Administrative Agent to release any Liens the
Administrative Agent may have on the assets so
being sold or disposed of."
(e) Section 11.4(a) of the Credit Agreement is hereby amended by
inserting the words "and the reasonable fees, charges and disbursements of a
consultant retained by the Administrative Agent or the Lenders" immediately
following the words "the reasonable fees, charges and disbursements of
counsel," appearing in clause (i) thereof, and is hereby further amended by
inserting the following words and the end of clause (i) thereof:
"in addition thereto, to pay or reimburse the
Lenders for the reasonable fees, charges and
disbursements for one counsel selected by the
Lenders, in connection with the preparation,
negotiation and execution of any amendment,
supplement or modification to any of the Loan
Documents (whether or not executed or
effective), any documents prepared in connection
therewith and the consummation of the
transactions contemplated thereby and"
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SECTION 3. This Amendment and Forbearance shall not become effective
until the date (the "Amendment No. 3 Effective Date") on which each of the
following has occurred:
(a) The Administrative Agent shall have executed this Amendment and
Forbearance and shall have received the consent thereto of each of the
Lenders, the Borrower and the Subsidiary Guarantors;
(b) The Purchaser shall have advised the Administrative Agent (by
telephone, confirmed by facsimile transmission) that, concurrently with the
Amendment No. 3 Effective Date and the release by the Administrative Agent of
the liens created pursuant to the Security Agreement on the asset of the
Borrower's Aircraft Safety Division, it has transmitted the Base Purchase
Price (as defined in the Purchase Agreement), by wire transfer of immediately
available funds, into an account under the exclusive dominion and control of
the Administrative Agent;
(c) The transactions contemplated by the Purchase Agreement shall have
been consummated by not later than December 11, 1998;
(d) The Borrower and the Subsidiary Guarantors shall have executed and
delivered an amendment and restatement of the Security Agreement in form and
substance satisfactory to the Administrative Agent, together with executed
UCC-3 and UCC-2 amendment statements for filing in appropriate jurisdictions;
(e) The Administrative Agent shall have received the favorable opinion
of counsel to the Borrower and the Subsidiary Guarantors, in form and
substance satisfactory to the Administrative Agent;
(f) The Borrower, through its direction referred to in the last phrase
of this sentence, shall have caused provision to be made for payment of (i)
the past due legal expenses of Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel to the
Administrative Agent, in the amount of $33,672.03 and the additional
reasonable fees and disbursements of such firm prior to the Amendment No. 3
Effective Date and (ii) the reasonable legal fees and disbursements of
Xxxxxx, Rodin & Xxxxxxx LLP, counsel for the Lenders, in connection with the
negotiation, preparation and execution of this Amendment and Forbearance, and
the documents and certificates executed in connection therewith, it being
agreed that, by its execution at the foot hereof, the Borrower shall be
deemed to have directed the Administrative Agent to debit such amounts in (i)
and (ii) herein from the portion of the Base Purchase Price permitted to be
retained by the Borrower as provided for in Section 2.4(b)(iv) of the Credit
Agreement, and for the balance thereof to be transferred into the Borrower's
operating account (Account No. 690-0000000) maintained with the
Administrative Agent;
(g) (i) The Borrower shall be in compliance with all of the terms and
provisions set forth in the Credit Agreement (excluding the forbearance
Events of Default) to be observed and performed by it; (ii) all
representations and warranties contained in Article 4 of the Credit Agreement
(excluding the Forbearance Events of Default) shall be true and correct in
all material respects on and as of the Amendment No. 3 Effective Date with
the same effect as if made on and as of such date except to the extent such
representations and warranties expressly related to an earlier date; and (iii)
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after giving effect to this Amendment and Forbearance, no Event of Default or
event which upon notice or lapse of time or both would constitute an Event of
Default shall have occurred and be continuing (other than the Forbearance
Events of Default); and
(h) The Administrative Agent shall have received such other documents as
it shall reasonably request.
SECTION 4. The Borrower agrees to pay to Errunet, Xxxxxx & Xxxxxx, LLP
and Xxxxxx, Rodin & Xxxxxxx LLP any reasonable fees and disbursements of such
firms in connection with the transactions contemplated hereby (including
those incurred subsequent to the Amendment No. 3 Effective Date in connection
with post-closing matters including, without limitation, filing of UCC-3 and
UCC-2 amendments) promptly upon the presentation of an invoice therefor. The
Borrower authorizes and directs the Administrative Agent to debit the
Borrower's account referred to above and pay such amounts no earlier than
three (3) days subsequent to such presentation.
SECTION 5. By their execution at the foot hereof, each of the Borrower
and each Subsidiary Guarantor hereby reaffirms and admits the validity and
enforce ability of the Credit Agreement and the other Loan Documents and all
of its obligations thereunder and admits that it has no defense, offset or
counterclaim thereto.
SECTION 6. This Amendment and Forbearance and the consents hereto may be
executed in any number of counterparts, each of which shall be an original and
all of which shall constitute one agreement. It shall not be necessary in
making proof of this Amendment and Forbearance and the consents hereto to
produce or account for more than one counterpart signed by the party to be
charged.
SECTION 7. This Amendment and Forbearance is being delivered in and is
intended to be performed in the State of New York and shall be construed and
enforceable in accordance with, and be governed by, the internal laws of the
State of New York without regard to principles of conflict of laws.
SECTION 8. Upon compliance with the provisions of Section 3 hereof, the
Lenders shall be deemed to have consented to the Borrower's sale of its
Aircraft Safety Division and directed the Administrative Agent to release
form the liens created by the Security Agreement the assets of the Borrower's
Aircraft Safety Division.
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ROBOTIC VISION SYSTEMS, INC.
AMENDMENT NO. 3 AND FORBEARANCE
TO AND UNDER THE CREDIT AGREEMENT
IN WITNESS WHEREOF, the Borrower and the Administrative Agent have
caused this Amendment and Forbearance to be duly executed and delivered by
their proper and duly authorized officers as of the day and year first above
written.
ROBOTIC VISION SYSTEMS, INC.
By: Xxx X. Xxxxxx
-------------------------------
Name: Xxx X. Xxxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
THE BANK OF NEW YORK, individually
and as Administrative Agent
By: Xxxxxx X. Xxxxxxxx
-------------------------------
Name: XXXXXX X. XxXXXXXX
-----------------------------
Title: VICE PRESIDENT
----------------------------
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ROBOTIC VISION SYSTEMS, INC.
AMENDMENT NO. 3 AND FORBEARANCE
TO AND UNDER THE CREDIT AGREEMENT
CONSENTED TO:
FIRST UNION NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: Vice President
----------------------------
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ROBOTIC VISION SYSTEMS, INC.
AMENDMENT NO. 3 AND FORBEARANCE
TO AND UNDER THE CREDIT AGREEMENT
CONSENTED TO:
FLEET BANK, N.A.
By: Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: SVP
----------------------------
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ROBOTIC VISION SYSTEMS, INC.
AMENDMENT NO. 3 AND FORBEARANCE
TO AND UNDER THE CREDIT AGREEMENT
CONSENTED TO:
SYSTEMATION ENGINEERED PRODUCTS, INC.
VANGAURD AUTOMATION, INC.
By: Xxx X. Xxxxx
-------------------------------
Name: Xxx X. Xxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
NORTHEAST ROBOTICS LLC
By: Robotic Vision Systems, Inc.
as Sole Member and Manager
of Acuity Imaging LLC,
As Sole Member and Manager
By: Xxx X. Xxxxx
-------------------------------
Name: Xxx X. Xxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
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ROBOTIC VISION SYSTEMS, INC.
AMENDMENT NO. 3 AND FORBEARANCE
TO AND UNDER THE CREDIT AGREEMENT
CONSENTED TO:
ACUITY IMAGING LLC
By: Robotic Vision Systems, Inc.
as Sole Member and Manager
By: Xxx X. Xxxxx
-------------------------------
Name: Xxx X. Xxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
CIMATRIX LLC
By: Robotic Vision Systems, Inc.
as Sole Member and Manager
By: Xxx X. Xxxxx
-------------------------------
Name: Xxx X. Xxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
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SCHEDULE I
FORBEARANCE EVENTS OF DEFAULT
(i) EXISTING EVENTS OF DEFAULT
Section 8.14(a) Leverage Ratio
Section 8.14(b) Ratio of Total Liabilities to Tangible Net Worth
Section 8.14(c) Consolidated Working Capital
Section 8.14(d) Quick Ratio
Section 8.14(e) Consolidated Tangible Net Worth
(ii) ANTICIPATORY EVENTS OF DEFAULT
Same as (i) above
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