CAPITAL CALL AGREEMENT
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THIS CAPITAL CALL AGREEMENT (this "Agreement") is entered into as of July
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___, 2004 among Xxxxx Xxxxx, an individual (the "Capital Call Investor"), The
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GSI Group, Inc., a Delaware corporation ("Borrower"), and Congress Financial
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Corporation (Central), an Illinois corporation, in its capacity as Agent for
Lenders (as defined in the Loan Agreement defined below) ("Agent").
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RECITALS
A. Reference is made to that certain Loan and Security Agreement dated
as of the date hereof among Borrower, the Persons named therein as Guarantors,
Agent and the Persons signatory thereto from time to time as Lenders (as from
time to time amended, restated, supplemented or otherwise modified, the "Loan
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Agreement") pursuant to which Lenders have agreed to make Loans to, and incur
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Letter of Credit Accommodations for the benefit of, Borrower. All capitalized
terms used but not otherwise defined herein have the meanings given to them in
the Loan Agreement.
B. The Capital Call Investor has a substantial ownership interest in
Borrower, and, as such, benefits from the credit facilities made available to
Borrower under the Loan Agreement.
C. In order to induce Agent and Lenders to continue to make the Loans and
incur Letter of Credit Accommodations, the Capital Call Investor has committed
to provide Excess Availability support to Borrower (either in the form of common
equity or subordinated participation loans) upon the terms and conditions all as
more fully described herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Capital Call Investor,
Borrower and Agent hereby agree as follows:
1. Capital Call Commitment. From and after the date hereof through the
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Termination Date (as defined in Section 8 hereof), the Capital Call Investor
shall make or cause to be made from time to time an investment (the "Capital
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Call Investment") in Borrower upon demand by Agent at any time when Excess
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Availability is less than $5,000,000. Each Capital Call Investment shall be in
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an amount sufficient to cause Excess Availability to be at least $10,000,000
(the "Required Investment Amount"). Agent may make demand for the Capital Call
Investment at any time and from time to time from and after the date hereof
through the Termination Date. The Capital Call Investment will be made in
accordance with Section 3 below not later than ten (10) days after demand by
Agent (the "Capital Call Date").
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2. Representations and Warranties. The Capital Call Investor represents,
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warrants and covenants that:
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(a) the execution, delivery and performance of this Agreement is a
legal, valid and binding obligation of the Capital Call Investor enforceable
against him in accordance with its terms, except as the enforcement thereof may
be subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
and (ii) general principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or at law); and
(b) he has, as of the date hereof, and shall, at all times prior to the
termination of this Agreement, maintain available capital to call in an amount
sufficient to enable it to honor its obligations hereunder.
3. Third Party Beneficiary. The Capital Call Investor acknowledges
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that Lenders are third party beneficiaries of this agreement and that Agent is
entitled to enforce the same on behalf of Lenders.
4. Investment Mechanics. On or prior to any applicable Capital Call Date,
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the Capital Call Investor shall either (a) make an investment by purchasing
common stock of Borrower for an aggregate consideration equal to the Required
Investment Amount, which amount shall in turn be used by Borrower to prepay the
Revolving Loans or (b) enter into a junior participation agreement in the form
of Exhibit A hereto pursuant to which he shall purchase subordinated
participation interests in the outstanding Revolving Loans in an amount equal to
the Required Investment Amount.
5. Governing Law; Successors. This Agreement shall be governed by the
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internal laws of the State of Illinois and shall bind and inure to the benefit
of the parties and their respective heirs, successors and assigns.
6. Entire Agreement; Amendments. This Agreement constitutes the entire
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agreement and supersedes all other oral or written agreements among the parties
hereto with respect to the matters covered hereby and thereby. This Agreement
and the terms hereof may only be modified, amended, supplemented or waived by
the written agreement of all parties hereto. This Agreement shall constitute a
Financing Agreement.
7. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8. Termination. This Agreement shall terminate upon the payment in full
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of all Obligations and the termination of the Loan Agreement (the "Termination
Date").
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By:
Name:
Title:
THE GSI GROUP, INC.
By:
Name:
Title:
Xxxxx Xxxxx, individually and not as a director
or officer of The GSI Group, Inc.
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EXHIBIT A
FORM OF JUNIOR PARTICIPATION AGREEMENT
[Attached]
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