AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
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AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this "AMENDMENT") dated as
of July 9, 2004 by and among The GSI Group, Inc., a Delaware corporation
("BORROWER"), Assumption Leasing Company, Inc., an Illinois corporation the
"GUARANTOR"), the lenders ("LENDERS") from time to time party to the Loan
Agreement (as defined below) and Congress Financial Corporation (Central), an
Illinois corporation, in its capacity as agent for Lenders (in such capacity,
"AGENT").
R E C I T A L S:
WHEREAS, Agent, the Lenders, Borrower and Guarantors are parties to that
certain Loan and Security Agreement dated as of October 31, 2003 (the "Loan
Agreement"; capitalized terms used and not defined herein shall have the
meanings assigned to them in the Loan Agreement, as amended hereby);
WHEREAS, Borrower and Guarantors have requested that the Agent and Lenders
Agree to certain amendments as set forth herein; and
WHEREAS, Agent and the Lenders have granted their approval to
such amendments upon the terms and conditions contained herein,
NOW, THEREFORE, in consideration of the premises contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendment to Loan Agreement. Immediately upon the satisfaction
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of each of the applicable conditions precedent set forth in Section 2 of this
Amendment, the following amendments to the Loan Agreement shall become effective
as of the date hereof:
(a) Section 1 of the Loan Agreement is hereby amended
by amending and restating clause (b)(i) of the definition of "Excess
Availability" to read as follows:
"(i) the amount of all then outstanding and
unpaid Obligations of Borrower (other than Term Loan Obligations and the
▇▇▇▇▇ Participation Obligations), plus".
(b) Section 1 of the Loan Agreement is hereby amended
by amending and restating the definition of "Maximum Term Credit" to read
as follows:
"Maximum Term Credit" shall mean $20,781,959.26, as of July 9, 2004.
(c) Section 1 of the Loan Agreement is hereby amended
by amending and restating the parenthetical in the definition of "Obligor" to
read as follows:
"(including, without limitation, Guarantors and ▇▇▇▇▇ ▇▇▇▇▇)".
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(d) Section 1 of the Loan Agreement is hereby amended
by adding a new defined term "▇▇▇▇▇ Participation Obligations" to Section
1 in its proper alphabetical place which shall read as follows:
"▇▇▇▇▇ Participation Obligations" shall mean the aggregate amount of
Revolving Loans purchased by ▇▇▇▇▇ ▇▇▇▇▇ from the Revolving Lenders pursuant to
the terms of any junior participation agreements entered into among ▇▇▇▇▇ ▇▇▇▇▇,
Agent and the Lenders, together with all accrued and unpaid interest on such
purchased Revolving Loans."
(e) Section 2.3(a) of the Loan Agreement is hereby amended
by amending and restating Section 2.3(a) to read as follows:
"(a) The parties hereto acknowledge that the Term Lenders
funded a $12,500,000 term loan on October 21, 2003 of which $6,181,959.26
remains outstanding as of July 9, 2004. Subject to and upon the terms and
conditions contained herein, in addition to the Revolving Loans and Letter
of Credit Accommodations under Sections 2.1 and 2.2 hereof, each Term Lender
severally (and not jointly) agrees to fund its Pro Rata Share of an additional
term loan to Borrower in the original principal amount of $14,600,000 on July 9,
2004 (collectively, with the outstanding original term loan in the amount of
$6,181,959.26, the "Term Loan"). The Term Loan is (A) to be repaid, together
with interest and other amounts, in accordance with this Agreement and the other
Financing Agreements and (B) secured by all of the Collateral (subject to the
application of proceeds provisions contained herein). The entire unpaid
principal amount of the Term Loan and all accrued and unpaid interest thereon
shall be due and payable on the earlier of the Term Loan Termination Date or the
acceleration of the Obligations. Except for the making of the Term Loan as set
forth in this Section, Borrower shall have no right to request and Term Lenders
shall have no obligation to make any additional loans or advances to Borrowers
under this Section and any repayments of the Term Loan shall not be subject to
any readvance to or reborrowing by Borrower. The parties hereto agree and
acknowledge that proceeds from the funding of the Term Loan in the amount of
$14,600,000 on July 9, 2004 shall be applied by Borrower to pay for $352,000 in
fees owing to Term Lenders on July 9, 2004 with the balance used to repurchase
948,052 shares of stock in the Borrower held by ▇▇▇▇▇ ▇▇▇▇▇ which purchased
stock will be included as treasury stock in the Borrower's books, pursuant to
resolutions adopted by the Borrower. The parties hereto acknowledge that Term
Lenders may fund only $14,248,000 of the additional Term Loan on July 9, 2004
after giving effect to the netting of such fees but that the total Term Loan
advanced to Borrower on July 9, 2004 shall be deemed to be $14,600,000."
(f) Section 2.3(b) of the Loan Agreement is hereby amended
by adding a new sentence to the end of Section 2.3(b) to read as follows:
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"Upon the making of any prepayment under this Section
2.3(b), Borrower shall maintain Excess Availability of at least $10,000,000
for a period of thirty (30) consecutive days commencing on the date of such
prepayment."
(g) Section 6.4 of the Loan Agreement is hereby amended by (i)
deleting the "; and" from the end of clause (C); (ii) replacing the period
at the end of clause (D) with "; and"; and (iii) inserting a new clause
(E) to read as follows:
(E) no payment of principal or interest shall be
made on, and no proceeds of Collateral shall be applied against, the Revolving
Loans consisting of the ▇▇▇▇▇ Participation Obligations until such time as all
other Obligations (excluding the ▇▇▇▇▇ Participation Obligations) are paid in
full and the Commitments of the Revolving Lenders have terminated."
(h) Section 9.9(g) of the Loan Agreement is hereby amended
by replacing the amount of "$2,500,000" set forth in clause (i) of such Section
with the amount of "$5,000,000".
(i) Section 9.11 of the Loan Amendment is hereby amended
by amending and restating clause (d) of Section 9.11 to read as follows:
"(d) Borrower may (i) make a one time repurchase of
948,052 shares of its common stock from ▇▇▇▇▇ ▇▇▇▇▇ on or prior to July 31,
2004 with proceeds from the Term Loan as described in Section 2.3(a); provided,
that with respect --------
to this clause (i), (A) no Event of Default has occurred and is continuing
immediately before, and immediately after giving effect to, such repurchase and
(B) Borrower is in compliance with Section 10.12 of the Indenture at the time
of, and after giving effect to, such dividend, (ii) pay dividends, to the extent
permitted by applicable law, in an aggregate amount of up to $83,333 in any
calendar month; provided, that with respect to this clause (ii), (A) no Event of
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Default has occurred and is continuing immediately before, and immediately after
giving effect to, such dividend and (B) Borrower is in compliance with Section
10.12 of the Indenture at the time of, and after giving effect to, such
dividend, and (iii) in addition to any dividends permitted under clause (ii)
above, pay additional dividends once each calendar year, to the extent permitted
by applicable law, in an aggregate amount of up to $1,000,000 in any calendar
year; provided, that with respect to this clause (iii), (A) such dividend is
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payable only once per calendar year, commencing on December 15, 2004 and on each
anniversary thereof, (B) no Event of Default has occurred and is continuing
immediately before, and immediately after giving effect to, such dividend, (C)
Borrower is in compliance with Section 10.12 of the Indenture at the time of,
and after giving effect to, such dividend and (D) Borrower has Excess
Availability of at least $10,000,000 after giving effect to such dividend. Upon
the making of any dividend under clause (iii) above, Borrower shall maintain
Excess Availability of at least $10,000,000 for a period of thirty (30)
consecutive days commencing on the date of such dividend."
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(j) Section 10.1 of the Loan Agreement is amended by (i)
deleting the word "or" at the end of clause (o); (ii) replacing the period at
the end of clause (p) with ";or" and (iii) adding a new clause (q) to read as
follows:
"(q) there shall be a termination of that certain Consulting
Agreement dated as of July 1, 2004 between ▇▇▇▇▇ ▇▇▇▇▇ and Borrower (other than
as a result of the death or disability of ▇▇▇▇▇ ▇▇▇▇▇); or an event resulting in
a "Cause" (as defined in Section 5(c) of such Consulting Agreement) shall have
occurred; or such Consulting Agreement shall be the subject of an amendment,
modification or waiver which has not received the prior written approval of
Required Revolving Lenders and Required Term Lenders.
Section 2. Conditions to Effectiveness of Amendment. This Amendment shall
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be effective upon satisfaction of the following conditions precedent:
2.1. This Amendment shall have been executed and delivered by Agent, the
Lenders, Borrower and Guarantor;
2.2. The representations and warranties contained herein shall be true and
correct in all respects;
2.3. Agent shall have received a duly executed Acknowledgment and Consent
from the Guarantor;
2.4. Lenders shall have received an executed copy of a consulting agreement
between ▇▇▇▇▇ ▇▇▇▇▇ and Borrower, which shall be in form and substance
satisfactory to Lenders;
2.5. Agent shall have received an executed copy of a capital call agreement
among ▇▇▇▇▇ ▇▇▇▇▇, Borrower and Agent, which shall be in form and substance
satisfactory to Agent;
2.6. Ableco shall have received, for the ratable benefit of the Term
Lenders, an amendment fee from Borrower equal to $352,000 which shall be earned
in full and due payable on the date hereof and such fee shall be netted from the
proceeds of the Term Loan funded on July 9, 2004;
2.7. The Agent shall have received, for the ratable benefit of the Revolving
Lenders, an amendment fee from Borrower equal to $75,000 which shall be earned
in full and due and payable on the date hereof;
2.8. Agent shall have received a copy of resolutions of Borrower certified
by the secretary of Borrower as duly adopted, which resolutions approve the
transactions contemplated by this Amendment;
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2.9. Agent and Lenders shall have received an opinion from Borrower's
counsel as to the transactions contemplated by this Amendment, in form and
substance satisfactory to Lenders; and
2.10. Agent and Lenders have received a final copy of that certain Duff &
▇▇▇▇▇▇ valuation of Borrower's voting common stock, which shall be in form and
substance satisfactory to Agent and Lenders.
Section 3. Representations and Warranties. In order to induce the Agent and
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Lenders to enter into this Amendment, each of Borrower and Guarantor represents
and warrants to Agent and the Lenders, upon the effectiveness of this Amendment,
which representations and warranties shall survive the execution and delivery of
this Amendment that:
3.1. No Default; etc. No Event of Default and no event or condition which,
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merely with notice or the passage of time or both, would constitute an Event of
Default, has occurred and is continuing after giving effect to this Amendment or
would result from the execution or delivery of this Amendment or the
consummation of the transactions contemplated hereby.
3.2. Corporate Power and Authority: Authorization. Each of Borrower and
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Guarantor has the corporate power and authority to execute and deliver this
Amendment and the execution and delivery by Borrower and Guarantor of this
Amendment has been duly authorized by all requisite corporate action by Borrower
or such Guarantor.
3.3. Execution and Delivery. Each of Borrower and Guarantor has duly
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executed and delivered this Amendment.
3.4. Enforceability. This Amendment constitutes the legal, valid and
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binding obligation of Borrower and Guarantor, enforceable against Borrower and
Guarantor in accordance with its respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' right generally, and by general
principles of equity.
3.5. Representations and Warranties. All of the representations and
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warranties contained in the Loan Agreement and in the other Financing Agreements
(other than those which speak expressly only as of a different date) are true
and correct as of the date hereof after giving effect to this Amendment.
Section 4. Miscellaneous.
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4.1. Effect; Ratification. Each of Borrower and Guarantor acknowledges that
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all of the reasonable legal expenses incurred by Agent and Lenders in
connection herewith shall be reimbursable under Section 9.20 of the Loan
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Agreement. The Amendments set forth herein are effective solely for the
purposes set forth herein and shall be limited precisely as written, and shall
not be deemed to (i) be a consent to any amendment, waiver or modification of
any other term or condition of the Loan Agreement or of any other Financing
Agreement except as provided herein or (ii) prejudice any right or rights that
Agent or any Lender may now have or may have in the future under or in
connection with the Loan Agreement or any other Financing Agreement. Each
reference in the Loan Agreement to "this Agreement," "herein," "hereof" and
words of like import and each reference in the other Financing Agreements to the
"Loan Agreement" shall mean the Loan Agreement as amended hereby. This
Amendment shall be construed in connection with and as part of the Loan
Agreement and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Agreement and each other Financing Agreement,
except as waived herein are hereby ratified and confirmed and shall remain in
full force and effect.
4.2. Counterparts. This Amendment may be executed in any number of
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counterparts, each such counterpart constituting an original but all together
one and the same instrument.
4.3. Governing Law. This Amendment shall be governed by, and construed and
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interpreted in accordance with, the internal laws of the State of Illinois.
4.4. Condition Subsequent. The Borrower agrees that within thirty (30) days
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after the date hereof, it will (a) obtain a key man life insurance policy
on ▇▇▇▇▇ ▇▇▇▇▇ from an insurer reasonably acceptable to Agent in the face amount
of $10,000,000 and (b) enter into an assignment agreement in favor of Agent (and
will obtain a written acknowledgement from such insurer) assigning all of
Borrower's rights to payment under such policy to Agent as additional collateral
security for the Obligations. Failure to so comply with this condition
subsequent shall result in an Event of Default under the Loan Agreement.
[Signature Page Follows]
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[Signature Page to Amendment to Loan and Security Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
to Loan and Security Agreement as of the date first above written.
BORROWER:
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THE GSI GROUP, INC.
By:
Name:
Title
GUARANTOR:
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ASSUMPTION LEASING COMPANY, INC.
By:
Name:
Title
AGENT:
-----
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By:
Name:
Title
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REVOLVING LENDERS:
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CONGRESS FINANCIAL CORPORATION (CENTRAL)
By:
Name:
Title
FLEET CAPITAL CORPORATION
By:
Name:
Title
TERM LENDERS:
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ABLECO FINANCE LLC, on behalf of itself
and its affiliate assigns
By:
Name:
Title
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Acknowledgement and Consent
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The undersigned has heretofore executed and delivered to Agent and the
Lenders that certain Guaranty Agreement dated as of October 31, 2003 (the
"Guaranty") in favor of Agent for the benefit of Lenders. The undersigned
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hereby consents to the Amendment No. 1 to the Loan and Security Agreement dated
as of July 9, 2004 set forth above ("Amendment") and confirms that the Financing
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Agreements executed and delivered by it and all of the obligations of such
undersigned thereunder remain in full force and effect. The undersigned
acknowledges and agrees that, notwithstanding the execution and delivery of the
Amendment, the Guaranty executed and delivered by such undersigned to the Agent
remains in full force and effect and the rights and remedies of the Agent and
the Lenders thereunder and the obligations of such undersigned thereunder remain
in full force and effect and shall not be affected, impaired or discharged
hereby. The undersigned acknowledges and agrees that the consent of such
undersigned to any further waivers, consents or amendments to the Loan Agreement
shall not be required as a result of this waiver having been obtained. The
undersigned further acknowledges that the Agent and the Lenders are relying on
the assurance set forth herein in extending and maintaining credit outstanding
to the Borrower.
GUARANTOR:
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ASSUMPTION LEASING COMPANY, INC.
By:
Name:
Title
