FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First
Amendment") is dated as of the 15th day of August , 2000 among
GERBER SCIENTIFIC, INC. (the "Borrower"), WACHOVIA BANK, N.A., as
Agent (the "Agent") and WACHOVIA BANK, N.A., FLEET NATIONAL BANK,
ABN AMRO BANK N.V., FIRST UNION NATIONAL BANK, XXXXXX TRUST AND
SAVINGS BANK, BANQUE NATIONALE DE PARIS, THE CHASE MANHATTAN
BANK, MELLON BANK, N.A. and CITIZENS BANK OF MASSACHUSETTS
(collectively, the "Banks");
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Banks executed and
delivered that certain Credit Agreement, dated as of the 15th day
of May 1998 (the "Credit Agreement");
WHEREAS, the Borrower has requested and the Agent and the
Banks have agreed to certain amendments to the Credit Agreement,
subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above
premises and other good and valuable consideration, the receipt
and sufficiency of which hereby is acknowledged by the parties
hereto, the Borrower, the Agent and the Banks hereby covenant and
agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Credit Agreement
shall have the meaning assigned to such term in the Credit
Agreement. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in
the Credit Agreement shall from and after the date hereof refer
to the Credit Agreement as amended hereby.
2. Amendment to Section 1.01. Section 1.01 of the Credit
Agreement hereby is amended by adding the following new
definitions of "Amendment Effective Date" and "Repatriation
Loans" in proper alphabetical order:
"Amendment Effective Date" means August 15, 2000.
"Repatriation Loan" means an intercompany loan made
from the Borrower, any Guarantor or any Material Foreign
Subsidiary to any Foreign Subsidiary that is not a Material
Foreign Subsidiary, but only to the extent that the majority
of the proceeds thereof are used in a series of dividends to
be paid up through the corporate ownership chain within 30
days of the making of such loan ultimately resulting in a
dividend to the Borrower or any Guarantor.
3. Amendment to Section 2.05. Section 2.05 of the Credit
Agreement hereby is amended by deleting Section 2.05(a) in its
entirety and substituting the following therefor:
(a) "Applicable Margin" means:
(i) for the period commencing on the Amendment
Effective Date to the first Performance Pricing
Determination Date following the Amendment Effective Date,
(x) for any Base Rate Loan, 0.0%, and (z) for any Fixed Rate
Loan, 0.675%; and
(ii) from and after the first Performance Pricing
Determination Date occurring after the Amendment Effective
Date, (x) for any Base Rate Loan, 0.00% and (y) for each
Fixed Rate Loan, the percentage determined on each
Performance Pricing Determination Date by reference to the
table set forth below and the Leverage Ratio for the
quarterly or annual period ending immediately prior to such
Performance Pricing Determination Date.
Leverage Ratio Applicable Margin
< 2.0 to 1.0 0.50%
>= 2.0 to 1.0 but
< 2.5 to 1.0 0.60%
>= 2.5 to 1.0 but
< 3.0 to 1.0 0.675%
>= 3.0 to 1.0 but
< 3.25 to 1.0 0.875%
>= 3.25 1.075%
In determining interest for purposes of this Section
2.05 and fees for purposes of Section 2.06(ii), the Borrower
and the Banks shall refer to the Borrower's most recent
consolidated quarterly and annual (as the case may be)
financial statements delivered pursuant to Section 5.01(a)
or (b), as the case may be. If such financial statements
require a change in interest pursuant to this Section 2.05
or fees pursuant to Section 2.06(ii), the Borrower shall
deliver to the Agent, along with such financial statements,
a notice to that effect, which notice shall set forth in
reasonable detail the calculations supporting the required
change. The "Performance Pricing Determination Date" is the
date on which such financial statements are delivered
pursuant to Section 5.01(a) or (b), as applicable. Any such
required change in interest and fees shall become effective
on such Performance Pricing Determination Date, and shall be
in effect until the next Performance Pricing Determination
Date, provided that: (x) for Fixed Rate Loans, changes in
interest shall only be effective for Interest Periods
commencing on or after the Performance Pricing Determination
Date; and (y) no fees or interest shall be decreased
pursuant to this Section 2.05 or Section 2.06(ii) if a
Default is in existence on the Performance Pricing
Determination Date.
4. Amendment to Section 2.06. Section 2.06 of the Credit
Agreement hereby is amended by deleting Section 2.06 in its
entirety and substituting the following therefor:
SECTION 2.06. Fees. The Borrower shall pay to the
Agent: (i) for the sole account of the Agent, the fees
payable to it pursuant to the Agent's Letter Agreement,
payable at the times specified therein; and (ii) for the
ratable account of each Bank, a facility fee, calculated in
the manner provided in the last paragraph of Section
2.05(a)(ii), if applicable, on the aggregate daily amount of
such Bank's Commitment (without taking into account the
amount of the outstanding Loans made by such Bank), at a
rate per annum equal to: (x) for the period commencing on
the Amendment Effective Date to the first Performance
Pricing Determination Date following the Amendment Effective
Date, 0.20%; and (y) from and after the first Performance
Pricing Determination Date following the Amendment Effective
Date, the percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below
and the Leverage Ratio for the quarterly or annual period
ending immediately prior to such Performance Pricing
Determination Date:
Leverage Ratio Facility Fee
< 2.0 to 1.0 0.125%
>= 2.0 to 1.0 but
< 2.5 to 1.0 0.150%
>= 2.5 to 1.0 but
< 3.0 to 1.0 0.20%
>= 3.0 to 1.0 but
< 3.25 to 1.0 0.250%
>= 3.25 to 1.0 0.30%
Such facility fees shall accrue from and including the
Closing Date up to the Termination Date and shall be payable
on each March 31, June 30, September 30 and December 31 and
on the Termination Date.
5. Amendment to Section 5.15. Section 5.15 of the Credit
Agreement hereby is amended by deleting Section 5.15 in its
entirety and substituting the following therefor:
SECTION 5.15. Restricted Payments. The Borrower will
not declare or make any Restricted Payment during any Fiscal
Year unless, after giving effect thereto, no Default shall
be in existence or be created thereby; provided that during
any periods that the Leverage Ratio exceeds 3.0 to 1.0, the
aggregate amount of all Restricted Payments made during such
periods that the Leverage Ratio exceeds 3.0 to 1.0 on
account of the purchase, redemption, retirement or
acquisition of any shares of the Borrower's Capital Stock
shall not exceed $7,500,000.
6. Amendment to Section 5.16. Section 5.16 of the Credit
Agreement hereby is amended by deleting Section 5.16 in its
entirety and substituting the following therefor:
SECTION 5.16. Loans or Advances. Neither the Borrower
nor any of its Material Subsidiaries shall make loans or
advances to any Person except as permitted by Section 5.17
and except:
(i) loans or advances to employees (other than travel
advances) not exceeding $1,000,000 in the aggregate
principal amount outstanding at any time, in each case made
in the ordinary course of business and consistent with
practices existing on March 31, 1998;
(ii) deposits required by government agencies or public
utilities;
(iii) loans or advances from (1) the Borrower to any
Guarantor or to Spandex PLC or (2) from any Guarantor to the
Borrower or any other Guarantor or (from and after the Offer
Termination Date) to Spandex PLC or (3) from any Subsidiary
to the Borrower or to any Guarantor;
(iv) existing loans and advances described on Schedule
5.16 in an aggregate outstanding principal amount not
exceeding $24,062,192 at any one time;
(v) loans or advances made by the Borrower or any
Guarantor to a Material Foreign Subsidiary, provided that
such loans and advances are evidenced by one or more
Intercompany Notes which have been pledged to the Agent
pursuant to the Intercompany Note Pledge Agreement;
(vi) loans or advances made by the Borrower, any
Guarantor or any Material Foreign Subsidiary to Foreign
Subsidiaries that are not Material Foreign Subsidiaries
consisting of Repatriation Loans (but only to the extent
such loans and advances constitute Repatriation Loans, with
the amount of any particular loan or advance which does not
constitute a Repatriation Loan being subject to clause
(vii)), provided that such loans and advances are evidenced
by one or more Intercompany Notes which have been pledged to
the Agent pursuant to the Intercompany Note Pledge
Agreement, and provided further that the aggregate amount of
all Repatriation Loans outstanding at any time after the
Amendment Effective Date shall not exceed $10,000,000; and
(vii) loans or advances made by the Borrower, any
Guarantor or any Material Foreign Subsidiary to any Foreign
Subsidiary, not otherwise permitted by this Section 5.16 and
not exceeding $15,000,000 in the aggregate outstanding;
provided that after giving effect to the making of any
loans, advances or deposits permitted by this Section, no
Default shall be in existence or be created thereby.
7. Amendment to Section 5.21. Section 5.21 of the Credit
Agreement hereby is amended by deleting Section 5.21 in its
entirety and substituting the following therefor:
SECTION 5.21. Leverage Ratio. The Leverage Ratio will
not at any time exceed: (i) from the Amendment Effective
Date through and including January 31, 2001, 3.5 to 1.0;
(ii) from February 1, 2001 through and including April 30,
2001, 3.25 to 1.0; and (iii) at all times thereafter, 3.0 to
1.0.
8. Amendment to Section 5.22. Section 5.22 of the Credit
Agreement hereby is amended by deleting Section 5.22 in its
entirety and substituting the following therefor:
SECTION 5.22. Consolidated Fixed Charges Coverage
Ratio. At the end of each Fiscal Quarter, the Consolidated
Fixed Charges Coverage Ratio shall not have been less than:
(i) for the Fiscal Quarter ended July 31, 2000, 1.30 to 1.0;
(ii) for the Fiscal Quarter ended October 31, 2000, 1.35 to
1.0; (iii) for the Fiscal Quarter ended January 31, 2001,
1.40 to 1.0; and (iv) for each Fiscal Quarter thereafter,
1.50 to 1.0.
9. Amendment to Compliance Certificate (Exhibit F). The
Compliance Certificate (Exhibit F to the Credit Agreement) hereby
is amended by deleting Sections 1, 5 and 6 thereof and
substituting the following new sections therefor:
1. Loans and Advances (Section 5.16)
Neither the Borrower nor any of its Material
Subsidiaries shall make loans or advances to any
Person except as permitted by Section 5.17 and
except:
(i) loans or advances to employees (other
than travel advances) not exceeding $1,000,000 in
the aggregate principal amount outstanding at any
time, in each case made in the ordinary course of
business and consistent with practices existing on
March 31, 1998;
(ii) deposits required by government agencies
or public utilities;
(iii) loans or advances from (1) the Borrower
to any Guarantor or to Spandex PLC or (2) from any
Guarantor to the Borrower or any other Guarantor
or (from and after the Offer Termination Date) to
Spandex PLC or (3) from any Subsidiary to the
Borrower or to any Guarantor;
(iv) existing loans and advances described on
Schedule 5.16 in an aggregate outstanding
principal amount not exceeding $24,062,192 at any
one time;
(v) loans or advances made by the Borrower or
any Guarantor to a Material Foreign Subsidiary,
provided that such loans and advances are
evidenced by one or more Intercompany Notes which
have been pledged to the Agent pursuant to the
Intercompany Note Pledge Agreement;
(vi) loans or advances made by the Borrower,
any Guarantor or any Material Foreign Subsidiary
to Foreign Subsidiaries that are not Material
Foreign Subsidiaries consisting of Repatriation
Loans (but only to the extent such loans and
advances constitute Repatriation Loans, with the
amount of any particular loan or advance which
does not constitute a Repatriation Loan being
subject to clause (vii)), provided that such loans
and advances are evidenced by one or more
Intercompany Notes which have been pledged to the
Agent pursuant to the Intercompany Note Pledge
Agreement, and provided further that the aggregate
amount of all Repatriation Loans outstanding at
any time after the Amendment Effective Date shall
not exceed $10,000,000; and
(vii) loans or advances made by the Borrower,
any Guarantor or any Material Foreign Subsidiary
to any Foreign Subsidiary, not otherwise permitted
by this Section 5.16 and not exceeding $15,000,000
in the aggregate outstanding; provided that after
giving effect to the making of any loans, advances
or deposits permitted by this Section, no Default
shall be in existence or be created thereby.
(a) To Employees $
----------
Limitation $ 1,000,000
(b) Loans or advances made by the
Borrower, any Guarantor or
any Material Foreign
Subsidiary to Foreign
Subsidiaries that are not
Material Foreign Subsidiaries
consisting of Repatriation
Loans (outstanding after the $
Amendment Effective Date) ----------
Limitation $ 10,000,000
(c) Loans or advances made by the
Borrower, any Guarantor or
any Material Foreign
Subsidiary to any Foreign
Subsidiary not otherwise $
permitted. ----------
Limitation $ 15,000,000
5. Leverage Ratio (Section 5.21)
The Leverage Ratio will not at any time exceed:
(i) from the Amendment Effective Date through and
including January 31, 2001, 3.5 to 1.0; (ii) from
February 1, 2001 through and including April 30,
2001, 3.25 to 1.0; and (iii) at all times
thereafter, 3.0 to 1.0.
(a) Consolidated Total Debt
Schedule 1 $
----------
(b) Consolidated EBITDA
Schedule 2 $
----------
(c) Actual ratio of (a) to (b) to 1.0
----
Maximum Ratio [3.5 to 1.0]
[3.25 to 1.0]
[3.0 to 1.0]
6. Consolidated Fixed Charges Coverage Ratio (Section 5.22)
At the end of each Fiscal Quarter, the
Consolidated Fixes Charges Coverage Ratio shall
not have been less than: (i) for the Fiscal
Quarter ended July 31, 2000, 1.30 to 1.0: (ii) for
the Fiscal Quarter ended October 31, 2000, 1.35 to
1.0; (iii) for the Fiscal Quarter ended January
31, 2001, 1.40 to 1.0; and (iv) for each Fiscal
Quarter thereafter, 1.50 to 1.0.
(a) Consolidated EBITDA
Schedule 2 $
----------
(b) Consolidated Capital
Expenditure $
Schedule 3 ----------
(c) Sum of (a) less (b) $
----------
(d) Consolidated Interest Expense $
Schedule 2 ----------
(e) Consolidated Dividends $
Schedule 4 ----------
(f) Consolidated Taxes $
Schedule 2 ----------
(g) Sum of (d), plus (e), plus (f) $
----------
(h) Actual ratio of (c) to (g) to 1.0
----
Minimum ratio [1.30 to 1.0]
[1.35 to 1.0]
[1.40 to 1.0]
[1.50 to 1.0]
10. Restatement of Representations and Warranties. The Borrower
hereby restates and renews each and every representation and
warranty heretofore made by it in the Credit Agreement and the
other Loan Documents as fully as if made on the date hereof and
with specific reference to this First Amendment and all other
loan documents executed and/or delivered in connection herewith.
11. Effect of Amendment. Except as set forth expressly
hereinabove, all terms of the Credit Agreement and the other Loan
Documents shall be and remain in full force and effect, and shall
constitute the legal, valid, binding and enforceable obligations
of the Borrower. The amendments contained herein shall be deemed
to have prospective application only, unless otherwise
specifically stated herein.
12. Ratification. The Borrower hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth
in the Credit Agreement and the other Loan Documents effective as
of the date hereof.
13. Counterparts. This First Amendment may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the
same instrument.
14. Section References. Section titles and references used in
this First Amendment shall be without substantive meaning or
content of any kind whatsoever and are not a part of the
agreements among the parties hereto evidenced hereby.
15. No Default. To induce the Agent and the Banks to enter into
this First Amendment and to continue to make advances pursuant to
the Credit Agreement, the Borrower hereby acknowledges and agrees
that, as of the date hereof, and after giving effect to the terms
hereof, there exists (i) no Default or Event of Default and
(ii) no right of offset, defense, counterclaim, claim or
objection in favor of the Borrower arising out of or with respect
to any of the Loans or other obligations of the Borrower owed to
the Banks under the Credit Agreement.
16. Further Assurances. The Borrower agrees to take such
further actions as the Agent shall reasonably request in
connection herewith to evidence the amendments herein contained
to the Borrower.
17. Governing Law. This First Amendment shall be governed by,
and construed and interpreted in accordance with, the laws of the
State of Georgia.
18. Conditions Precedent. This First Amendment shall become
effective only upon (i) execution and delivery of this First
Amendment by each of the parties hereto; (ii) execution and
delivery of the Consent and Reaffirmation of Guarantors at the
end hereof by each of the Guarantors; (iii) the amendment, in a
manner satisfactory to the Agent in its sole discretion, of all
agreements and other related documents related to other Debt of
the Borrower which would or could reasonably be expected to be in
default without such amendment; (iv) payment by the Borrower to
Wachovia Securities, Inc. (the "Arranger"), for the account and
sole benefit of the Arranger, such fees and other amounts at such
times as set forth in that certain letter agreement among the
Borrower, the Agent and the Arranger dated as of July 28, 2000;
and (v) payment by the Borrower to the Agent, for the ratable
account of each Bank consenting to this First Amendment by August
14, 2000, of an amendment fee equal to 0.05% of each consenting
Bank's outstanding Commitment.
[Signatures contained on the following pages]
IN WITNESS WHEREOF, the Borrower, the Agent and each of the
Banks has caused this First Amendment to be duly executed, under
seal, by its duly authorized officer as of the day and year first
above written.
GERBER SCIENTIFIC, INC.,
as Borrower (SEAL)
By:
-----------------------------
Name:
Title:
WACHOVIA BANK, N.A., ABN AMRO BANK N.V.,
as Agent and as a Bank as a Bank
By: By:
------------------ ----------------------------
Name: Name:
Title: Title:
By:
----------------------------
Name:
Title:
FLEET NATIONAL BANK, XXXXXX TRUST AND SAVINGS BANK,
as a Bank as a Bank
By: By:
----------------- ---------------------------
Name: Name:
Title: Title:
FIRST UNION NATIONAL BANK, BNP PARIBAS,
(as successor to
Banque Nationale de Paris),
as a Bank as a Bank
By: By:
---------------- ---------------------------
Name: Name:
Title:
By:
-------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, CITIZENS BANK OF MASSACHUSETTS,
as a Bank as a Bank
By: By:
-------------------- ------------------------
Name: Name:
Title: Title:
MELLON BANK, N.A.,
as a Bank
By:
--------------------
Name:
Title:
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the
foregoing First Amendment to Credit Agreement (the "First
Amendment"), (ii) consents to the execution and delivery of the
First Amendment by the parties thereto and (iii) reaffirms all of
its obligations and covenants under the Guaranty Agreement dated
as of May 15, 1998 executed by it, and agrees that none of such
obligations and covenants shall be affected by the execution and
delivery of the First Amendment. This Consent and Reaffirmation
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one
and the same instrument.
GERBER TECHNOLOGY, INC.,
a Connecticut corporation (SEAL)
GERBER SCIENTIFIC PRODUCTS, INC.,
a Connecticut corporation (SEAL)
XXXXXX XXXXXX OPTICAL, INC.,
a Delaware corporation (SEAL)
By
------------------------------
Name:
Title:
