EXHIBIT 10.10
SECOND AMENDMENT TO REVOLVING CREDIT
AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT
(the "Agreement") is entered into as of December 19, 2001 by and among Robotic
Vision Systems, Inc., a corporation organized under the laws of the State of
Delaware (the "Borrower"), 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 Borrower and PNC entered into a Revolving Credit and
Security Agreement dated April 28, 2000 (as has been and may be further amended,
the "Loan Agreement"); and
WHEREAS, the Borrower 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. Borrower acknowledges 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 definition contained in Subsection I.1.2 of the
Loan Agreement is hereby deleted and a new definition is substituted therefor to
read as follows:
"Borrower" or "Borrowers" shall mean Robotic Vision Systems,
Inc., as successor by merger to CiMatrix LLC, Acuity Imaging LLC, Systemation
Engineered Products, Inc., Vanguard Automation, Inc. and Northeast Robotics LLC.
B. The following definitions are hereby added to Subsection I.1.2 of
the Loan Agreement to read as follows:
"Eligible Foreign Credit Insurance Backed Receivables" shall
mean and include each Receivable of Borrower arising in the ordinary course of
Borrower's business that is supported by foreign credit insurance. For purposes
under this definition, a Receivable shall not be deemed eligible unless such
Receivable (i) is subject to Agent's first priority perfected security interest
and no other Lien (other than Permitted Encumbrances), (ii) is evidenced by an
invoice or other documentary evidence satisfactory to Agent, and (iii) is
satisfactory to Agent and EXIM Bank in all other respects.
"Foreign Credit Insurance Backed Receivables Advance Rate"
shall have the meaning set forth in Section 2.1(a)(y)(iv) hereof.
C. Subsection 2.1(a) is hereby deleted and a new Subsection 2.1(a)
is substituted therefor to read as follows:
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2.1 (a) Revolving Advances. Subject to the terms and conditions set
forth in this Agreement including, without limitation, Section
2.1(b), each Lender, severally and not jointly, will make loans (the
"Revolving Advances") to Borrower in aggregate amounts outstanding
at any time equal to such Lender's Commitment Percentage of the
lesser of (x) the Maximum Revolving Advance Amount less the
aggregate amount of drawings outstanding and additional amounts
available to be drawn under Letters of Credit or (y) an amount equal
to the sum of:
(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; plus
(iv) up to 85%, subject to the provisions of Section 2.1(c)
hereof ("Foreign Credit Insurance Backed Receivables
Advance Rate"), of the value of Eligible Foreign Credit
Insurance Backed Receivables (the EXIM Receivables
Advance Rate, the Inventory Advance Rate and the Foreign
Credit Insurance Backed Receivables 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), 2.1(a)(y)(iii) and 2.1(a)(y)(iv) exceed
$10,000,000 or (B) the ratio of 2.l(a)(y)(ii) to
2.1(a)(y)(iii) exceed 3.0:2.0 or such other ratio as may
be required by the EXIM Borrower Agreement, minus
(v) a reserve in the amount of $1,000,000, minus
(vi) the aggregate maximum amount of drawings outstanding and
additional amounts available under Letters of Credit,
minus
(vii) such other reserves as Agent in good faith may
reasonably deem proper and necessary from time to time.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i), (ii),
(iii) and (iv) minus (y) Section 2.1(a)(y)(v), (vi) and (vii) at any
time and from time to time shall be referred to as the "Formula
Amount"; provided, however, with the written consent of the Required
Lenders, the Formula Amount shall also include on a pro forma basis,
EXIM Bank Guaranteed Inventory, EXIM Bank Guaranteed Receivables and
Eligible Foreign Credit Insurance Backed Receivables of any Person
to be acquired in a Permitted Acquisition. The Revolving Advances
shall be evidenced by one or more secured promissory notes
(collectively, as each may be amended, restated, modified and/or
replaced from time to time, the "Revolving Credit Notes")
substantially in the form attached hereto as Exhibit 2.1(a).
D. Subsection 3.2 is hereby deleted and new Subsection 3.2 is
substituted therefor to read as follows:
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
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of Credit or (ii) three and one-half percent (3.50%) 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 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%.
(b) Facility Fee. If' for any fiscal quarter during the Term, the
average daily unpaid balance of the Revolving Advances for each day
of such fiscal quarter does not equal the Maximum Revolving Advance
Amount, then Borrowers shall pay to Agent for the ratable benefit of
Lenders a fee at a rate equal to 3/8 of one percent (.375%) per
annum on the amount by which the Maximum Revolving Advance Amount
exceeds such average daily unpaid balance. Such fee shall be payable
to Agent in arrears on the last day of each fiscal quarter.
E. 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:
$36,100,000 at December 31, 2001; $29,400,000 at March 31, 2002;
$25,300,000 at June 30, 2002; $29,700,000 at September 30, 2002;
$30,000,000 at December 31, 2002 and $32,800,000 at March 31, 2003.
F. Subsection 6.14 is hereby deleted and a new Subsection 6.14 is
substituted therefor to read as follows:
6.14 Minimum Undrawn Availability. Maintain at all times an Undrawn
Availability of at least $1,000,000.
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G. Subsection 13.1 is hereby deleted and new Subsection 13.1 is
substituted therefor to read as follows:
13.1 Term. This Agreement, which shall inure to the benefit of and
shall be binding upon the respective successors and permitted
assigns of the Borrower, Agent and each Lender, shall become
effective on the date hereof and shall continue in full force and
effect until April 30, 2003 (the "Termination Date") unless sooner
terminated as herein provided. Borrower may terminate this Agreement
at any time upon ninety (90) days' prior written notice upon payment
in full of the Obligations and any applicable prepayment fees set
forth in Section 2.13 herein.
3. WAIVER OF PRIOR DEFAULT BY THE BORROWER. The Borrower
acknowledges that it is in default of the Net Worth covenant contained in
Section 6.5 of the Loan Agreement for the period ended September 30, 2001. The
Agent, on behalf of the Lenders, hereby waives the Borrower's default under such
covenant solely for such period.
4. ACKNOWLEDGMENTS. Borrower acknowledges and represents 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;
B. to the best of its 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. Borrower has 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. PRECONDITIONS. As preconditions to the effectiveness of any of
the modifications, consents, or waivers contained herein, the Borrower shall
deliver to the Agent, simultaneously with the execution hereof: (i) Secretary's
Certificate of the Borrower containing a Resolution authorizing the execution of
this Agreement; (ii) an accommodation fee in the amount of $20,000; (iii) an
EXIM Bank fee in the amount of $150,000; and (iv) Agent's counsel's fees.
6. POSTCONDITIONS. Within forty-five (45) days of the date hereof,
the Borrower shall provide the Agent with an appraisal of its Inventory in form
and substance satisfactory to Agent. Failure by the Borrower to comply with the
provision contained herein shall be deemed a Default under the Loan Agreement.
7. 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 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.
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8. 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: /s/ Xxx X. Xxxxx
-------------------------------------
NAME: XXX X. XXXXX
TITLE: PRESIDENT
PNC BANK, NATIONAL ASSOCIATION
BY: /s/ Xxxxxxxx Xxxxxxx-Nurse
-------------------------------------
NAME: XXXXXXXX XXXXXXX-NURSE
TITLE: VICE PRESIDENT
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