Exhibit 10.1
FIRST AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of June 27, 2005 (this "Amendment"), by and among SCAN-OPTICS, INC., a
Delaware limited liability company (the "Borrower"), SCAN-OPTICS LIMITED, a
United Kingdom company limited by shares ("SOL"), SCAN-OPTICS (CANADA), LTD., a
Canadian corporation formed under the Business Corporation Act of Canada ("SOC"
and, together with SOL, collectively, the "Guarantors'), the lenders party
hereto (the "Lenders"), and PATRIARCH PARTNERS AGENCY SERVICES, LLC, a Delaware
limited liability company, as agent for the Lenders (in such capacity, the
"Agent").
RECITALS
WHEREAS, Borrower, Guarantors, Lenders and Agent entered into and are
parties to that certain Third Amended and Restated Credit Agreement, dated as of
March 30, 2004 (as amended, restated, supplemented or otherwise modified prior
to the date hereof, the "Credit Agreement");
WHEREAS, Borrower has requested, and Lenders and Agent have agreed, to
amend the Credit Agreement to increase the Revolving Credit Commitment (as such
term is defined in the Credit Agreement), but only to the extent and on the
terms set forth expressly herein; and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, the parties thereto agree as follows:
AGREEMENT
1. Defined Terms. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings given to them in the Credit Agreement.
2. Amendments to Credit Agreement. The Credit Agreement is hereby amended
as follows:
(a) Addition of New Defined Terms in Section 1.1. The following new
definitions are added to Section 1.1 of the Credit Agreement in appropriate
alphabetical order:
"First Amendment" means that certain First Amendment to Third
Amended and Restated Credit Agreement, dated as of June 27,
2005, by and among Borrower, Guarantors, Lenders and Agent.
"First Amendment Date" means the date on which the First
Amendment becomes effective pursuant to the terms set forth
therein.
"Temporary Adjustment Period" means the period from and after
the First Amendment Date to and including June 30, 2005.
(b) Amendment to Definition of "Revolving Credit Commitment". The
definition of "Revolving Credit Commitment" in Section 1.1 of the Credit
Agreement is hereby amended by deleting the reference to "Section 2.1(b)" and
replacing with a reference to "Schedule 2.1(b)".
(c) Amendment to Section 2.1(b)(ii). Section 2.1(b)(ii) of the Credit
Agreement is hereby amended by deleting the last sentence of subclause (A)
thereof and replacing it with the following:
Notwithstanding anything to the contrary contained herein, and
subject to the terms and conditions set forth herein and in
the First Amendment, each Lender agrees during the Temporary
Adjustment Period to increase its Revolving Credit Commitment
to the amount set forth across its name on Schedule 2.1(b)
under the column for the Temporary Adjustment Period. On July
1, 2005, without any notice or further action, the amount of
each Lender's Revolving Credit Commitment shall automatically
be reduced to the amount set forth such Lender's name on
Schedule 2.1(b) under the column for the period on and after
July 1, 2005.
(d) Addition of New Schedule 2.1(b). The Credit Agreement is hereby amended
by inserting Schedule 2.1(b) attached hereto as new Schedule 2.1(b) to the
Credit Agreement in correct numerical order.
(e) Funding Notice. The certifications of the Borrower in any Funding
Notice of the Borrower executed and delivered to the Agent in connection with
any Borrowing under the Revolving Credit Commitment during the Temporary
Adjustment Period may be qualified with reference to the Disclosure Update
Schedule and Schedule 4.1(a), each as attached hereto.
3. Effectiveness. This Amendment shall become effective as of the date
first referenced above, but only upon receipt by the Agent of (a) a counterpart
of this Amendment duly executed and delivered by each signatory hereto and (b)
payment in full in cash of the invoiced and unpaid fees and expenses of the
Agent's professionals (including, without limitation, the Agent's attorneys).
4. Representations and Warranties. The Borrower and each Guarantor hereby
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represents and warrants to the Lenders and the Agent that the representations
and warranties of such Borrower or such Guarantor contained in the Credit
Agreement, as such representations and warranties are modified as set forth in
the Disclosure Update Schedule attached hereto, are true and correct in all
material respects on and as of the date hereof as if made on and as of the date
hereof other than as referred to herein, provided that each reference to the
Credit Agreement therein shall be deemed to be a reference to the Credit
Agreement as amended hereby and except to the extent such representations and
warranties expressly relate to a different specific date in which case such
representations and warranties shall be true and correct in all material
respects as of such date. To induce the Agent and Lenders to enter into this
Amendment, Borrower and each Guarantor additionally represents and warrants
that:
(a) After giving effect to this Amendment, no Default or Event of Default,
has occurred and is continuing, except as otherwise set forth on Schedule 4.1(a)
attached hereto. For the avoidance of doubt, the Agent and Lenders do not waive,
and the making of Revolving Loans during the Temporary Adjustment Period shall
not be construed as a waiver of, any Default of Event of Default described in
Schedule 4.1(a) or any remedies or rights they have respect thereto.
(b) There exist no cause of action, offsets, claims, counterclaims or
defenses against Agent or Lenders with respect to the obligations under the
Credit Agreement or any other Credit Document.
(c) Except for Permitted Encumbrances, Agent has valid, continuing and duly
perfected first and prior liens on and a first priority security interest in the
Collateral.
(d) Borrower has taken all necessary corporate action to authorize the
execution, delivery and performance of this Amendment.
(e) This Amendment has been duly executed and delivered by such Person and
constitutes such Person's legal, valid and binding obligations, enforceable in
accordance with its terms, except as such enforceability may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(f) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or third
party is required in connection with the execution, delivery or performance by
such Person of this Amendment.
5. No Other Amendment or Waiver. This Amendment shall not constitute an
amendment or waiver of any provision of the Credit Agreement not expressly
referred to herein and shall not be construed as a waiver or consent to any
further or future action on the part of Borrower that would require a waiver or
consent of the Agent. Except as expressly modified hereby, all the terms,
provisions and conditions of the Credit Agreement are and shall remain unchanged
and shall continue in full force and effect.
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6. Continuing Guaranty. By its execution of this Amendment, each Guarantor
hereby acknowledges that it has reviewed the terms and provisions of this
Amendment and consents to the provisions of this Amendment. Such Guarantor
hereby confirms that its Guarantee will continue to guaranty and/or secure, as
the case may be, to the fullest extent possible the payment and performance of
all obligations of such Guarantor in respect of the Obligations including,
without limitation, the Term Loan, the Revolving Loans and the Overadvance
Loans.
7. Release. The Borrower hereby releases the Lenders and Agent and each of
their respective subsidiaries, affiliates, members, partners, officers,
employees, representatives, agents, managers, counsel, directors, successors and
assigns, both present and former, from any and all actions, causes of action,
claims, demands, damages and liabilities of whatever kind or nature, in law or
in equity, now known or unknown, suspected or unsuspected to the extent that any
of the foregoing arises from any action or failure to act on or prior to the
date hereof.
8. Acknowledgments.
(a) The Borrower acknowledges, ratifies and reaffirms the validity and
enforceability of the Credit Agreement and all Liens and security interests
granted thereunder or under any other Credit Document to Lenders and Agent as
collateral security for its Obligations and acknowledges that all such Liens and
security interests and all Collateral pledged as security for the Obligations
continue to be and remain collateral for the Obligations from and after the date
hereof.
(b) The Borrower acknowledges that as of June 27, 2005, prior to giving
effect to this Amendment, the aggregate outstanding principal amount of the
Revolving Loans is $2,500,000.
9. Miscellaneous. The terms of this Amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. This Amendment may be executed by telecopy in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same document. Transmission by telecopier of an
executed counterpart of this Amendment shall be deemed to constitute due and
sufficient delivery of such counterpart. Each fully executed counterpart of this
Amendment shall be deemed to be a duplicate original.
10. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER, AND ALL CLAIMS, DISPUTES AND MATTERS ARISING HEREUNDER OR
RELATED HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
11. Severability. Wherever possible, each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any
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provision of this Amendment shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provision
of this Amendment.
[Remainder of page left intentionally blank]
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IN WITNESS WHEREOF, the parties hereto have caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: SCAN-OPTICS, INC.
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By: /s/ Xxxx X. Xxxxxx
----------------------
Name: Xxxx X. Xxxxxx
Title: President and CEO
GUARANTORS: SCAN-OPTICS LIMITED
----------
By: /s/ Xxxx X. Xxxxxx
----------------------
Name: Xxxx X. Xxxxxx
Title: Director
SCAN-OPTICS (CANADA), LTD.
By: /s/ Xxxx X. Xxxxxx
----------------------
Name: Xxxx X. Xxxxxx
Title: Director
S-1
AGENT: PATRIARCH PARTNERS AGENCY SERVICES, LLC
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By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
Title: Manager
S-2
LENDERS: XXXXX XX 2005-1, LIMITED
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By: Patriarch Partners XIV, LLC,
its Collateral Manager
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
Title: Manager
Address for Notices:
c/o Patriarch Partners XIV, LLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx
ZOHAR CDO 2003-1, LIMITED
By: Patriarch Partners VIII, LLC,
its Collateral Manager
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
Title: Manager
Address for Notices:
c/o Patriarch Partners VIII, LLC
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx
X-0
SCHEDULE 2.1(b)
REVOLVING CREDIT COMMITMENTS
----------------------------------------------- -------------------------------- ----------------------------------
Lender Revolving Credit Commitment Revolving Credit Commitment On
During Temporary Adjustment and After July 1, 2005
Period
----------------------------------------------- -------------------------------- ----------------------------------
Xxxxx XX 2005-1, Limited $3,400,000 $2,500,000
----------------------------------------------- -------------------------------- ----------------------------------
Zohar CDO 2003-1, Limited $0 $0
----------------------------------------------- -------------------------------- ----------------------------------
Total $3,400,000 $2,500,000
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