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EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND SECURITY AGREEMENT (this
"Amendment"), dated as of October 31, 1997, is by and among Genicom Corporation
(the "Borrower"), the subsidiaries of the Borrower identified on the signature
pages hereto (the "Guarantors"), the several lenders identified on the
signature pages hereto (each a "Lender" and, collectively, the "Lenders") and
NationsBank of Texas, N.A., as agent for the Lenders (in such capacity, the
"Agent"). Capitalized terms used herein which are not defined herein and which
are defined in the Credit Agreement shall have the same meanings as therein
defined.
W I T N E S S E T H
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent
entered into that certain Amended and Restated Credit Agreement dated as of
September 5, 1997 (the "Existing Credit Agreement").
WHEREAS, the parties have agreed to amend the Existing Credit
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the 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:
PART I
DEFINITIONS
SUBPART I.1 Certain Definitions. Unless otherwise defined herein or
the context otherwise requires, the following terms used in this Amendment,
including its preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement
as amended hereby.
"Amendment No. 1 Effective Date" is defined in Subpart III.1.
SUBPART I.2 Other Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the meanings provided in the Amended Credit
Agreement.
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PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II. Except as so amended, the Existing Credit Agreement and all
other Credit Documents shall continue in full force and effect.
SUBPART II.1 Amendments to Section 1.1.
(a) The following definitions are hereby added to Section
1.1 of the Existing Credit Agreement in appropriate alphabetical
order:
"Acquisition Purchase Price" means the aggregate
purchase price for an Acquisition (including any assumption of
liabilities (other than current working capital liabilities
not constituting Indebtedness) in connection therewith, but
excluding any portion of the purchase price of any such
Acquisition consisting of Capital Stock of the Borrower.
"NCS Assets" means any assets acquired by the
Borrower pursuant to the terms of the NCS Purchase Agreement.
"NCS Purchase Agreement" means (i) that certain
Purchase Agreement between Novadyne and Genicom Corporation
dated on or about November 15, 1997 (including all schedules
and exhibits thereto) and (ii) all collateral agreements
referred to in such Purchase Agreement.
"Novadyne" means Novadyne Computer Systems, Inc., a
Delaware corporation.
SUBPART II.2 Amendments to Section 6.15. Section 6.15 of the
Existing Credit Agreement is hereby amended in its entirety to read as follows:
6.15 Purpose of Loans and Letters of Credit. The proceeds
of the Loans hereunder shall be used solely by the Borrower for
general corporate purposes of the Borrower and its Subsidiaries,
including, but not limited to, (1) working capital advances, (2)
capital expenditures in the ordinary course of business, (3) Permitted
Investments (4) refinancing of existing Indebtedness and (5) the
purchase of NCS Assets pursuant to the NCS Purchase Agreement. The
Letters of Credit shall be used only for or in connection with appeal
bonds, reimbursement obligations arising in connection with
performance, surety and reclamation bonds, reinsurance, domestic or
international trade transactions and obligations not otherwise
aforementioned relating to transactions entered into by the Borrower
in the ordinary course of business.
SUBPART II.3 Amendments to Section 7.11. Subsections (a), (b) and
(c) of Section 7.11 of the Existing Credit Agreement are hereby amended in
their entireties to read as follows:
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7.11 Financial Covenants.
(a) Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth at all times shall be no less than:
(i) as of the last day of the third fiscal quarter
for the fiscal year 1997, the sum of $12,500,000, increased by
an amount equal to 100% of the proceeds received from all
Equity Transactions occurring after the Closing Date;
(ii) as of the last day of the fourth fiscal quarter
for the fiscal year 1997 and the last day of the first fiscal
quarter for the fiscal year 1998, the sum of $6,000,000,
increased by an amount equal to (A) 50% of the Consolidated
Net Income (without deduction for any losses) for each fiscal
quarter commencing with the fourth fiscal quarter for the
fiscal year 1997 through and including the fiscal quarter then
ended, plus (B) 100% of the proceeds received from all Equity
Transactions occurring after the Closing Date;
(iii) as of the last day of the second fiscal quarter
for the fiscal year 1998, the sum of $9,000,000, increased by
an amount equal to (A) 50% of the Consolidated Net Income
(without deduction for any losses) for each fiscal quarter
commencing with the fourth fiscal quarter for the fiscal year
1997 through and including the fiscal quarter then ended, plus
(B) 100% of the proceeds received from all Equity Transactions
occurring after the Closing Date; and
(iv) as of the last day of the third fiscal quarter
for the fiscal year 1998 and the last day of each fiscal
quarter thereafter, the sum of $12,500,000, increased by an
amount equal to (A) 50% of the Consolidated Net Income
(without deduction for any losses) for each fiscal quarter
commencing with the fourth fiscal quarter for the fiscal year
1997 through and including the fiscal quarter then ended, plus
(B) 100% of the proceeds received from all Equity Transactions
occurring after the Closing Date.
(b) Consolidated Funded Debt Coverage Ratio. The
Consolidated Funded Debt Coverage Ratio at each Calculation Date shall
be no greater than the following proportions:
Period Ratio
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As of the last day of 5.25 to 1.00
the third fiscal quarter
of fiscal year 1997
As of the last day of the 6.50 to 1.00
fourth fiscal quarter of
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fiscal year 1997
As of the last day of the 6.25 to 1.00
first fiscal quarter of fiscal
year 1998 of the Borrower
and its Subsidiaries
As of the last day of 5.75 to 1.00
the second fiscal quarter
of fiscal year 1998 of
the Borrower and its
Subsidiaries
As of the last day of 4.75 to 1.00
the third fiscal quarter
of fiscal year 1998 of
the Borrower and its
Subsidiaries
As of the last day of 3.75 to 1.00
the fourth fiscal quarter
of fiscal year 1998 of
the Borrower and its
Subsidiaries
As of the last day of 3.50 to 1.00
the first fiscal quarter
of fiscal year 1999 of
the Borrower and its
Subsidiaries
As of the last day of 3.25 to 1.00
the second fiscal quarter
of fiscal year 1999 of
the Borrower and its
Subsidiaries
As of the last day of 3.00 to 1.00
the third fiscal quarter
of fiscal year 1999
of the Borrower and its
Subsidiaries and thereafter
(c) Consolidated Fixed Charge Coverage Ratio. The
Consolidated Fixed Charge Coverage Ratio at each Calculation Date
shall be no less than the following proportions:
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Period Ratio
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For the period occurring 1.25 to 1.00
from the Closing Date
through the next to last
day of the third fiscal
quarter of fiscal year 1998
of the Borrower and its
Subsidiaries
For the period occurring 1.75 to 1.00
from the last day of the
third fiscal quarter of
fiscal year 1998 of the
Borrower and its
Subsidiaries and thereafter
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SUBPART II.4 Amendments to Section 8.4. Subsection (c) of Section
8.4 of the Existing Credit Agreement is hereby amended in its entirety to read
as follows:
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc.
The Borrower will not, nor will it permit any of its Subsidiaries to:
**********
(c) enter into any Acquisition transaction (in a single
transaction or a series of related transactions) except (i) for any
Acquisition having an Acquisition Purchase Price less than $5,000,000
provided that the Acquisition Purchase Price of all such Acquisitions
(including any Acquisition permitted pursuant to clauses (v) and (vi)
below) occurring during any fiscal year of the Borrower does not
exceed $20,000,000, (ii) as otherwise permitted by Section 8.4(a) and
Section 8.5, (iii) for any Acquisition with respect to which the
purchase price consists entirely of Capital Stock of the acquiring
Person, (iv) for the acquisition of Property in the ordinary course of
business for fair consideration, (v) for the purchase on or before
December 15, 1997 of the NCS Assets pursuant to the terms of the NCS
Purchase Agreement and (vi) for other Acquisitions by the Borrower or
any of its Subsidiaries, but only to the extent that, no later than 14
days prior to such Acquisition, the Agent and the Lenders shall have
received a certificate of the chief financial officer or treasurer of
the Borrower providing facts or computations in reasonable detail
demonstrating that (A) the Acquisition Purchase Price of any such
Acquisition individually does not exceed $10,000,000, (B) the
Acquisition Purchase Price of all such Acquisitions (including any
Acquisition permitted pursuant to clauses (i) and (v) above) occurring
during any fiscal year of the Borrower does not exceed $20,000,000
and (C) after giving effect on a Pro Forma Basis to such Acquisition
(including but not limited to any
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Indebtedness to be incurred or assumed by the Borrower or any of its
Subsidiaries in connection therewith), no Default or Event of Default
would exist hereunder.
SUBPART II.5 Amendments to Section 9.1. The "." at the end of
existing subsection (j) of Section 9.1 of the Existing Credit Agreement is
hereby deleted and a ";" and the word "or" are hereby substituted therefor and
the following new subsection (k) is hereby added to Section 9.1 of the Existing
Credit Agreement immediately succeeding such subsection (j):
9.1 Events of Default. An Event of Default shall exist upon
the occurrence of any of the following specified events (each an
"Event of Default"):
**********
(k) Purchase Price. The Acquisition Purchase
Price (including any post-closing adjustments), paid by the
Borrower and/or any of its Subsidiaries pursuant to the NCS
Purchase Agreement shall exceed $17,100,000.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART III.1 Amendment No. 1 Effective Date. This Amendment shall
be and become effective as of the date hereof (the "Amendment No. 1 Effective
Date") when all of the conditions set forth in this Subpart 3.1 shall have been
satisfied, and thereafter this Amendment shall be known, and may be referred
to, as "Amendment No. 1."
SUBPART III.1.1 Execution of Counterparts of Amendment. The
Agent shall have received counterparts (or other evidence of
execution, including telephonic message, satisfactory to the Agent) of
this Amendment, which collectively shall have been duly executed on
behalf of each of the Borrower, the Guarantors and the Required
Lenders.
SUBPART III.1.2 Pledged Collateral.
(a) The Borrower and each Domestic Subsidiary of the
Borrower will cause all of its real (whether leased or owned) property
(including any NCS Assets) located in the United States of America and
deemed to be material by the Agent or the Required Lenders in its or
their sole reasonable discretion, and all of its personal property
(including any NCS Assets) deemed to be material by the Agent or the
Required Lenders in its or their sole reasonable discretion (including
without limitation 100% of its equity ownership interest in its
Domestic Subsidiaries) to be subject at all times to first priority,
perfected and, in the case of real property (whether leased or owned),
title insured Liens in favor of the Agent pursuant to the terms and
conditions of the Collateral Documents.
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(b) The Agent shall have received, in a form and
substance satisfactory to the Agent:
(i) duly executed UCC financing statements for
each appropriate jurisdiction as is necessary, in the Agent's
sole discretion, to perfect the Agent's security interest in
Collateral consisting of NCS Assets;
(ii) such patent/trademark/copyright filings as
requested by the Agent in order to perfect the Agent's
security interest in Collateral consisting of NCS Assets; and
(iii) such estoppel letters, consents and waivers
as may be required by the Agent from the landlords of each
leased location of Collateral consisting of NCS Assets.
SUBPART III.1.3 Corporate Existence. The Agent shall have
received all documents it may reasonably request relating to the
existence and good standing of each of the Credit Parties, the
corporate or other necessary authority for and the validity of this
Amendment, and any other matters relevant thereto, all in form and
substance reasonably satisfactory to the Agent.
SUBPART III.1.4 Legal Opinion. The Agent shall have received
a legal opinion of McGuire, Woods, Battle & Xxxxxx, counsel for the
Credit Parties in form and substance reasonably satisfactory to the
Agent.
SUBPART III.1.5 Officer's Certificate. The Agent shall have
received a certificate executed by the chief financial officer of the
Borrower as of the Amendment No. 1 Effective Date stating that,
immediately after giving effect to this Amendment and the transactions
contemplated hereby, (i) each of the Credit Parties is Solvent, (ii)
no Default or Event of Default exists and (iii) the representations
and warranties set forth in the Existing Credit Agreement are true and
correct in all material respects.
SUBPART III.1.6 Material Adverse Change. Except as otherwise
previously disclosed in writing to the Lenders, no material adverse
change shall have occurred since December 29, 1996 in the condition
(financial or otherwise), business or management of the Borrower or of
the Borrower and its Subsidiaries taken as a whole.
SUBPART III.1.7 NCS Purchase Agreement. The Agent shall have
received a copy, certified by the chief financial officer of the
Borrower as true and complete, of the NCS Purchase Agreement and of
each other document or instrument executed by the Borrower in
connection with the NCS Purchase Agreement, in form and substance
satisfactory to the Agent in each case as originally executed and
delivered, and, no amendment or modification thereof shall have been
entered into on or prior to the date hereof which shall not have been
approved by the Agent.
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SUBPART III.1.8 Consummation of NCS Purchase Agreement. The
Agent shall have received evidence satisfactory to it that (i) the NCS
Purchase Agreement shall have been consummated in compliance with
applicable law and regulatory approvals and in accordance with the
terms thereof and (ii) the Acquisition Purchase Price in connection
therewith (without giving effect to post-closing adjustments) paid by
the Borrower and/or any of its Subsidiaries for the purchase of the
NCS Assets pursuant to the NCS Purchase Agreement does not exceed
$16,100,000.
SUBPART III.1.9 Other Items. The Agent shall have received
such other documents, agreements or information which may be
reasonably requested by the Agent.
PART IV
MISCELLANEOUS
SUBPART IV.1 Representations and Warranties. Borrower hereby
represents and warrants to the Agent and the Lenders that, after giving effect
to this Amendment, (a) no Default or Event of Default exists under the Credit
Agreement or any of the other Credit Documents and (b) the representations and
warranties set forth in Section 6 of the Existing Credit Agreement are, subject
to the limitations set forth therein, true and correct in all material respects
as of the date hereof (except for those which expressly relate to an earlier
date).
SUBPART IV.2 Cross-References. References in this Amendment to any
Part or Subpart are, unless otherwise specified, to such Part or Subpart of
this Amendment.
SUBPART IV.3 Instrument Pursuant to Existing Credit Agreement. This
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered and applied in accordance with the terms and provisions
of the Existing Credit Agreement.
SUBPART IV.4 References in Other Credit Documents. At such time as
this Amendment No. 1 shall become effective pursuant to the terms of Subpart
3.1, all references in the Credit Documents to the "Credit Agreement" shall be
deemed to refer to the Credit Agreement as amended by this Amendment No. 1. and
all references in the Credit Documents to the "Security Agreement" shall be
deemed to refer to the Security Agreement as amended by this Amendment No. 1.
SUBPART IV.5 Counterparts. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SUBPART IV.6 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF
VIRGINIA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
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SUBPART IV.7 Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
[The remainder of this page has been left blank intentionally]
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IN WITNESS WHEREOF the parties hereto have caused this Amendment to be
duly executed on the date first above written.
BORROWER:
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GENICOM CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
GUARANTORS:
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GENICOM INTERNATIONAL HOLDINGS CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
GENICOM INTERNATIONAL SALES CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
DELMARVA TECHNOLOGIES CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
RASTEK CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
[Signatures Continued]
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ENTERPRISING SERVICE SOLUTIONS CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
PRINTER SYSTEMS CORPORATION
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
THE PRINTER CONNECTION, INC.
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
PRINTER SYSTEMS INTERNATIONAL, LTD.
By /s/ Xxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
[Signatures Continued]
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LENDERS:
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NATIONSBANK OF TEXAS, N.A.
By /s/ Xxxxxx Xxxx
Title: Senior Vice President
CREDITANSTALT-BANKVEREIN
By /s/Xxxxxxxxx X. Xxxxxx
Title: Senior Vice President
By
---------------------------------------
Title:
DEEPROCK & COMPANY
By: Xxxxx Xxxxx Management,
as Investment Advisor
By /s/Payson X. Xxxxxxxxx
Title: Vice President
CRESTAR BANK
By /s/ Xxxxxxx X. Xxxxxxx
Title: Vice President
THE XXXXX NATIONAL BANK OF WASHINGTON, D.C.
By /s/ Xxxxxxx X. Xxxxx
Title: Vice President
[Signatures Continued]
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FLOATING RATE PORTFOLIO
By: Chancellor LGT Senior Secured
Management, Inc., as attorney-in-fact
By /s/ Xxxxx Xxxxx
Title: Managing Director
KZH HOLDING CORPORATION III
By /s/Xxxxxxxx Xxxxxx
Title: Authorized Agent
XXXXXX XXXXXXX SENIOR FUNDING, INC.
By /s/ Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By
---------------------------------------
Title:
CERES FINANCE LTD.
By /s/Xxxxx Egglishaw
Title: Director
AERIES FINANCE LTD.
By /s/ Xxxxxx Xxxxxxx
Title: Director
[Signatures Continued]
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BANK OF SCOTLAND
By /s/Xxxxx Xxxx Tat
Title: Vice President
NATIONAL CITY BANK OF KENTUCKY
By /s/Xxxx Xxxx
Title: Vice President
AGENT:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By Xxxxxx Xxxx
Title: Senior Vice President
