Exhibit 10.1
AMENDMENT NO. 1 TO CREDIT AGREEMENT
Dated as of November 1, 1998
AMENDMENT No. 1 to Credit Agreement (this "Amendment") by and among TRIDEX
CORPORATION, a Connecticut corporation ("Tridex"), PROGESSIVE SOFTWARE, INC., a
North Carolina corporation, ("PSI"), ULTIMATE TECHNOLOGY CORPORATION, a New York
corporation ("UTC", and collectively, together with TRIDEX, and PSI, the
"Borrowers" and each, individually a "Borrower"), and FLEET NATIONAL BANK, a
national banking association organized under the laws of the United States of
America (the "Bank").
PRELIMINARY STATEMENTS:
A. The Borrowers and the Bank have entered into the Credit Agreement
as of April 17, 1998. Capitalized terms used herein and not otherwise defined
herein shall have the meanings given thereto in the Credit Agreement, as
amended.
B. The Borrowers and the Bank have agreed to amend the Credit
Agreement, as hereinafter set forth.
SECTION 1. Amendments. The Facility Documents are, effective as of
the date hereof and subject to the satisfaction of the conditions precedent set
forth in Section 2 hereof, hereby amended as follows:
(a) The first sentence of Section 2.1(a) of the Credit Agreement is
hereby amended and restated in full to read as follows:
Subject to the terms and conditions of this Agreement, the Bank
agrees to make revolving loans ("Working Capital Loans") to the
Borrowers from time to time from and including the date hereof to
and including the Revolving Credit Termination Date, up to but not
exceeding in the aggregate principal amount at any one time
outstanding the amount of the Working Capital Commitment, and
provided that the aggregate outstanding principal amount of Working
Capital Loans shall at no time exceed the Borrowing Base; provided
further that until such time as Tridex obtains from the selling
stockholder of PSI a reduction in the purchase price paid for PSI,
by way of indemnification from such selling stockholder or otherwise
and until such time as Tridex complies with the remaining provisions
of this Section 2.1(a), the sum of $2,000,000 will be deemed to be
added to the outstanding amount of Working Capital Loans from time
to time in determining remaining availability under the Borrowing
Base. In addition, any and all of such purchase price reduction
received by such Borrower in cash shall be paid by such Borrower
immediately to the Bank, and the value of any and all proceeds of
such purchase price reduction received by such
Borrower in the form of Tridex common stock shall be paid by such
Borrower to the Bank as soon as practicable after receipt thereof,
such Borrower to use its commercially reasonable best efforts to
convert such stock to cash as expeditiously as possible, and in all
events such payment shall be made to the Bank no later than 120 days
after receipt by such Borrower of such stock. All payments to the
Bank by a Borrower pursuant to this Section 2.1(a) shall be applied
to reduce the existing Term Loan, with all such payments being
applied in the inverse order of their maturity.
Upon full payment to the Bank of all amounts referred to in
the preceding paragraph, the provisions of the first sentence of Section
2.1(a) of the Credit Agreement in effect immediately before this Amendment
shall once again be in full force and effect.
(b) Section 8.4 of the Credit Agreement is hereby deleted in its
entirety and is hereby amended and restated in full to read as follows:
Section 8.4. Minimum Interest Coverage Ratio. The Borrowers,
on a consolidated basis, shall maintain an Interest Coverage Ratio
of not less than the ratios set forth below in respect of the
following periods:
2.0 to 1.0 for the three month period ending
December 31, 1998;
2.0 to 1.0 for the three month period ending
March 31, 1999;
2.0 to 1.0 for the three month period ending
June 30, 1999; and
2.0 to 1.0 as of the end of each quarter thereafter for the
twelve month period then ended (a rolling twelve month
calculation measured as of the end of each such successive
quarter).
(c) Section 8.5 of the Credit Agreement is hereby deleted in its
entirety and is hereby amended and restated in full to read as follows:
Section 8.5. Minimum Fixed Charge Coverage Ratio. The
Borrowers, on a consolidated basis, shall maintain a Fixed Charge
Coverage Ratio of not less than the ratios set forth below in
respect of the following:
1.25 to 1.0 for the three month period ending
December 31, 1998;
1.50 to 1.0 for the three month period ending
March 31, 1999;
1.50 to 1.0 for the three month period ending
June 30, 1999; and
1.50 to 1.0 as of the end of each quarter thereafter for the
twelve month period then ended (a rolling twelve month
calculation measured as the end of each successive quarter).
SECTION 2. Conditions of Effectiveness. This Amendment shall become
effective when, and only when, the Bank shall have received counterparts of this
Amendment executed by the Borrowers and the Bank, and Section 1 hereof shall
become effective when, and only when, the Bank shall have additionally received
all of the following documents or items, each document (unless otherwise
indicated) being dated the date of receipt thereof by the Bank (which date shall
be the same for all such documents), in form and substance satisfactory to the
Bank:
(a) Certified copies of (i) the resolutions of the Board of
Directors of each of the Borrowers approving this Amendment and the matters
contemplated hereby and (ii) all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Amendment and
the matters contemplated hereby.
(b) A certificate of the Secretary or an Assistant Secretary of each
of the Borrowers certifying the names and true signatures of the officers of the
Borrower authorized to sign this Amendment and the other documents to be
delivered hereunder.
(c) An amendment fee equal to $70,000, for the account of the Bank,
which fee shall be applied $35,000 in respect of the Working Capital Commitment
and $35,000 in respect of the Term Loan.
SECTION 3. Representations and Warranties of Each of the Borrowers.
Each Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
(b) The execution, delivery and performance by the Borrower of this
Amendment and the Facility Documents, as amended hereby, to which it is or is to
be a party are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action and do not contravene (i) the Borrower's
charter or by-laws, (ii) any law or any contractual restriction binding on or
affecting the Borrow, or result in, or require, the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest or other charge,
encumbrance or preferential arrangement of any nature upon or with respect to
any of the properties now owned or hereafter acquired by the Borrower.
(c) No authorization, approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Borrower of this Amendment or
any of the Facility Documents, as amended hereby, to which it is or is to be a
party.
(d) This Amendment and each of the other Facility Documents as
amended hereby, constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms.
(e) The Credit Agreement and the Security Agreement creates valid
and perfected first priority security interests and liens in and to the
Collateral covered thereby enforceable against all third parties in all
jurisdictions, securing the payment of all Obligations, and the execution,
delivery and performance of this Amendment do not adversely affect the aforesaid
security interests and liens of the Credit Agreement and the Security Agreement.
(f) Except as set forth in the Credit Agreement, there is no pending
or threatened action or proceeding affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition or operations of the
Borrower or any Subsidiary. There is no pending or threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator which purports to affect the legality,
validity or enforceability of this Amendment or any of the other Facility
Documents, as amended hereby.
(g) The Facility Documents existing on the date hereof constitute
legal, valid and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms. After giving effect to the
amendments provided for in this Amendment, no event has occurred and is
continuing which constitutes a Default or an Event of Default.
SECTION 4. Reference to and Effect on the Facility Documents.
(a) Upon the effectiveness of Section 1 hereof, on and after the
date hereof each reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import, and each reference in
any Facility Documents to the Credit Agreement or any other Facility Document,
shall mean and be a reference to the Credit Agreement or such other Facility
Document as amended hereby.
(b) Except as specifically amended or modified pursuant to this
Amendment, the provisions of the Credit Agreement, the Notes and the other
Facility Documents shall remain in full force and effect and are hereby ratified
and confirmed. Without limiting the generality of the foregoing, the Credit
Agreement, the Security Agreement and all of the Collateral described therein do
and shall continue to secure the payment of all indebtedness and liabilities of
the Borrowers to the Banks and the Bank under the Credit Agreement and the other
Facility Documents, as amended hereby.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Bank or the Banks
under any of the Facility Documents, nor constitute a waiver of any provision of
any of the Facility Documents.
(d) Notwithstanding anything to the contrary herein, the Bank agrees
that the failure of the Borrowers to comply with the financial covenants set
forth in Sections 8.2, 8.3, 8.4 and 8.5 of the Agreement in respect of the
period ending September 30, 1998, shall not constitute in the Event Default,
provided that the financial covenants set forth in Article 8 as amended shall
remain in full force and effect in respect of all periods ending subsequent to
September 30, 1998.
SECTION 5. Costs, Expenses and Taxes. Each of the Borrowers agrees
to pay on demand all costs and expenses of the Bank in connection with the
preparation, execution and delivery of this Amendment and the other instruments
and documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Bank with respect
thereto and with respect to advising the Bank as to its rights and
responsibilities hereunder and thereunder. Each of the Borrowers further agrees
to pay on demand all costs and expenses, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this Amendment
and the other instruments and documents to be delivered hereunder, including,
without limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 5. In addition, each of the Borrowers
shall pay any and all stamp and other taxes payable or determined to be payable
in connection with the execution and delivery of this Amendment and the other
instruments and documents to be delivered hereunder, and agrees to save the Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
SECTION 6. Execution in Counterparts. This 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 taken together shall constitute but one and the
same instrument.
SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
TRIDEX CORPORATION
By _____________________________________
Xxxxxx X. Xxxxxxxx, Treasurer
Address for Notices:
00 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
ULTIMATE TECHNOLOGY CORPORATION
By ____________________________________
Xxxxxx X. Xxxxxxxx, Treasurer
Address for Notices:
000 Xxxxxx Xxxx
Xxxxxx, XX 00000
PROGRESSIVE SOFTWARE INC.
By ____________________________________
Xxxxxx Xxxxxxxx, Treasurer
Address for Notices:
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
FLEET NATIONAL BANK
By ____________________________________
Xxxxxxxxx X. Xxxxxxx, Vice President
Address for Notices:
Fleet National Bank
Xxx Xxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxxx
Vice President
Facsimile No.: (000) 000-0000
