EXHIBIT 10.4.7
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "Agreement") is made as
of August 29, 1997 by and between BITSTREAM INC., a Delaware corporation with a
place of business at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Borrower") and BANKBOSTON, N.A., successor by merger with BayBank, N.A.,
formerly known as BayBank, with an address at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Bank").
WHEREAS, the Bank and the Borrower have entered into a loan arrangement
as of July 14, 1995, evidenced by, among other documents (the "Loan Documents"),
a certain Credit Agreement dated as of July 14, 1995 by and between the Borrower
and the Bank (as may be amended, the "Credit Agreement"). Terms used but not
defined herein are used with the meanings ascribed to them in the Credit
Agreement.
WHEREAS, the Borrower has requested, and the Bank has agreed, to amend
certain terms of the Loan Documents, as more particularly set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties hereto
agree, effective as of the date hereof, as follows:
1. The Credit Agreement shall be amended by deleting the
definition of "Borrowing Base" in Section 1.1 on Page 2 and inserting
in lieu thereof the following text:
""Borrowing Base" shall mean at any time an amount
equal to (as shown on the Bank's records at any time) eighty
percent (80%) of all Eligible Accounts."
2. The Credit Agreement shall be amended by deleting in its
entirety the definition of "Eligible International Account" in Section
1.1 on Page 4.
3. The Credit Agreement shall be amended by deleting the
definition of "Maximum Credit Amount" in Section 1.1 on Page 7 and
inserting in lieu thereof the following text:
""Maximum Credit Amount" shall mean Two Million and
00/100 Dollars ($2,000,000.00)."
4. The Credit Agreement shall be amended by deleting in its
entirety the definition of "Prime Rate" in Section 1.1 on Page 8 and
inserting in lieu thereof in Section 1.1 on Page 2 after the definition
of "Banking Day" the following text:
""Base Rate" shall mean the higher of (a) the annual
rate of interest announced from time to time by the Bank at
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its head office in Boston, Massachusetts as its "Base Rate" or
(b) one half of one percent (1/2%) above the overnight federal
funds effective rate as published by the Board of Governors of
the Federal Reserve System, as in effect from time to time.
All references herein to the Prime Rate are deemed to refer to
the Base Rate."
5. The Credit Agreement shall be amended by deleting the
definition of "Revolving Credit Facility Termination Date" in Section
1.1 on Page 9 and inserting in lieu thereof the following text:
""Revolving Credit Facility Termination Date" shall
mean the earlier of (a) written demand of the Bank to the
Borrower and (b) July 15, 1998."
6. The Credit Agreement shall be amended by deleting in
Section 2.2 on Page 11 the following text:
"The interest rate for any portion of the outstanding
principal balance of the Revolving Credit Note shall be
computed at a per annum rate equal to the lesser of (a) the
Prime Rate plus two percent (2%) and (b) the Prime Rate plus
two percent (2%) minus the product of 0.25% and the number of
Rate Reduction Events that have occurred; provided, however,
that in no event shall the interest rate be less than Prime
plus one percent (1%)."
and substituting in lieu thereof the following text:
"The interest rate for any portion of the outstanding
principal balance of the Revolving Credit Note shall be
computed at a per annum rate equal to the Base Rate."
7. The Credit Agreement shall be amended by deleting Section
2.9 on Page 14 and inserting in lieu thereof the following text:
"2.9 Revolving Credit Facility Fee. In addition to
the interest described above, the Borrower shall pay to the
Bank a non-refundable facility fee, payable on the date
hereof, of $7,500.00, representing 0.375% of the Maximum
Credit Amount at the closing of this Agreement."
8. The Credit Agreement shall be amended by deleting in its
entirety Section 9.1 on Page 30 and inserting in lieu thereof the
following text:
"9.1 Profitability. The Borrower shall not incur an
operating loss of greater than: (i) $1,000,000.00 for fiscal
year 1997, exclusive of acquisition and non-recurring charges
incurred during the second quarter of 1997, and (ii)
$500,000.00 for the first two quarters of fiscal 1998."
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9. The Credit Agreement shall be amended by deleting in its
entirety Section 9.2 on Page 30-31 and inserting in lieu thereof the
following text:
"9.2 Ratio of Total Liabilities to Tangible Net
Worth. The Borrower shall not permit the ratio of its Total
Liabilities to Tangible Net Worth as at the end of each month
to exceed the ratio of 0.75:1."
10. The Credit Agreement shall be amended by deleting in its
entirety Section 9.3 on Page 31 and inserting in lieu thereof the
following text:
"9.3 Quick Ratio. The Borrower shall maintain at the
end of each quarter a Quick Ratio of no less than 2.00:1."
11. The Credit Agreement shall be amended by deleting in its
entirety Section 9.6 on Page 31.
12. The Credit Agreement shall be amended by deleting in its
entirety Section 10.8 on Page 34 and inserting in lieu thereof the
following text:
"10.8 Maintenance of Accounts. The Borrower shall
maintain the Bank as its depository for its principal
depository account, which account shall contain a minimum
balance at all times of $4,000,000.00."
13. The Credit Agreement shall be amended by deleting the
notice provision in Section 15.2 on Page 42 as it pertains to the
addresses of the parties and inserting in lieu thereof the following
text:
"If to the Borrower: Bitstream Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Vice President, Finance and
Administration
With a copy to: Xxxx X. Xxxxxxx, General Counsel
Bitstream Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
If to the Bank: BankBoston, N.A.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Vice President
With a copy to: Xxxxxx & Xxxxxxxxxx
Xxxxx Xxxxxx Xxxxx
00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esquire"
14. The Security Agreement dated as of July 14, 1995 by and
between the Borrower and the Bank, as may have been amended, is hereby
terminated, and the Bank hereby releases the security interest secured
thereunder.
15. The Patent and License Security Agreement dated as of July
14, 1995 by and between the Borrower and the Bank, as may have been
amended, is hereby terminated, and the Bank hereby releases the
security interest secured thereunder.
16. The Trademark and License Security Agreement dated as of
July 14, 1995 by and between the Borrower and the Bank, as may have
been amended, is hereby terminated, and the Bank hereby releases the
security interest secured thereunder.
17. The Bank hereby releases any and all other security
interests created pursuant to the Loan Documents, including, without
limitation, any filings made by the Borrower in favor of the Bank with
the U.S. Copyright Office.
18. Conditions. The effectiveness of this Agreement shall be
subject to the compliance by the Borrower with its representations,
warranties, covenants and agreements contained herein and in the Loan
Documents after giving effect to the amendments thereto contemplated
hereby, and to the prior satisfaction of the following further
conditions:
18.1 Corporate Due Diligence. The Borrower shall
deliver to the Bank evidence that all necessary corporate actions in
connection with the making of this Agreement and the transactions
contemplated hereby and thereby have been taken by the Borrower.
18.2 Bank's Expenses. The Borrower shall pay all of
the Bank's reasonable out-of-pocket expenses, including the attorneys'
fees and disbursements of the Bank's counsel, Xxxxxx & Xxxxxxxxxx, in
connection with this Agreement, the transactions contemplated hereby
and the matters referred to herein and the Loan Documents.
18.3 General. All instruments and legal and corporate
proceedings in connection with this Agreement and the transactions
contemplated hereby shall be satisfactory in form and substance to the
Bank and its counsel, and the Bank and its counsel shall have received
copies of all documents, including records of corporate authority,
which the Bank and its counsel may have requested in connection
therewith.
19. Representations and Warranties. The Borrower hereby
represent and warrants that:
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19.1 Authority. The Borrower has taken all action
necessary to enter into this Agreement and all agreements and
instruments executed by the Borrower in connection herewith.
19.2 Incorporation of Representations and Warranties.
The representations and warranties set forth in each of the Loan
Documents, after giving effect to the within amendments, are true and
correct on and as of the date hereof.
19.3 No Default, Etc. No breach of any of the Loan
Documents exists on the date hereof.
20. Covenants and Agreements. The Borrower hereby reaffirms
each of the covenants and agreements of the Borrower set forth in each
of the Loan Documents. As hereby amended, the Loan Documents are hereby
ratified and confirmed in all respects.
21. Miscellaneous. The invalidity or unenforceability of any
term or provision hereof shall not affect the validity or
enforceability of any other term or provision hereof. The headings in
this Agreement are for convenience of reference only and shall not
alter or otherwise affect the meaning hereof.
This Agreement may be executed in any number of counterparts which
together shall constitute one instrument and shall be governed by and construed
in accordance with the laws (other than the conflict of law rules) of The
Commonwealth of Massachusetts and shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
Executed as a sealed instrument as of the day and year first written
above.
WITNESS: BITSTREAM INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: V.P. Engineering
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WITNESS: BANKBOSTON, N.A.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
--------------------- -----------------------
Name: Xxxxxxx X. Xxxxxxx
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Title: Vice President
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