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UNITED STATES |
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WASHINGTON, D.C. 20549 |
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FORM 8-K |
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CURRENT REPORT |
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PURSUANT TO SECTION 13 OR 15 (d) OF |
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Date of Report (Date of earliest event reported): January 31, 2008 |
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GERBER SCIENTIFIC, INC. (Exact name of Registrant as specified in its charter) |
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Connecticut |
1-5865 |
06-0640743 |
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(State or other jurisdiction of incorporation) |
(Commission File No.) |
(I.R.S. Employer |
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83 Gerber Road West, South Windsor, Connecticut |
06074 |
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(Address of principal executive offices) |
(Zip Code) |
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Registrant's Telephone Number, including area code: 860-644-1551 |
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Not Applicable |
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(Former name or former address, if changes since last report) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry Into a Material Definitive Agreement
On January 31, 2008, Gerber Scientific, Inc. (the "Company") completed a refinancing of its senior secured credit facility and entered into a Credit Agreement, dated as of January 31, 2008 (the "Credit Agreement"), among the Company, certain subsidiaries of the Company, JP Morgan Chase Bank N.A., HSBC Bank USA, National Association, Merrill Lynch Capital Corporation, Bank of America, N.A., Sovereign Bank as documentation agent, Citizens Bank of Massachusetts ("Citizens") as administrative agent, and RBS Greenwich Capital as sole lead arranger. The Credit Agreement provides for a $125.0 million senior secured credit facility (the "Credit Facility"), of which up to $125.0 million may be revolving credit loans. In addition, the Company may elect, subject to compliance with specified conditions, to solicit the lenders under the Credit Agreement to increase by up to $25.0 million the total principal amount of borrowings available under the Credit Facility. At closing, the Company borrowed approximately $46.0 million under the Credit Facility. The Company used $43.0 million of such borrowings to repay all amounts under the Company's former senior secured credit facility, which was subsequently terminated, $0.9 million to pay financing costs, and $2.1 million for working capital purposes.
All amounts outstanding under the Credit Facility will be payable on the maturity date of January 31, 2013. Revolver borrowings under the Credit Facility are in effect for one, two, three, six, or twelve months, and accrue interest, payable at one, two, and three months at an annual rate equal to the specified London Interbank Offered Rate ("LIBOR") plus a specified margin, which fluctuates based on the Company's ratio of total funded debt to consolidated EBITDA (as defined for purposes of the Credit Agreement).
The Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The Company is subject to financial covenants under the Credit Agreement which are generally less restrictive and afford the Company greater operational flexibility than the covenants in the Company's former senior secured credit facility. The Company is required, as of the end of each fiscal quarter, to maintain financial ratios, which include a minimum consolidated EBIT to consolidated interest expense ratio and a maximum total funded debt to consolidated EBITDA ratio (as each such ratio is defined for purposes of the Credit Agreement). The Company is also required to comply with an annual maximum consolidated capital expenditures covenant.
The Credit Facility obligations are secured by first priority liens on, and security interests in, selected assets of the Company and its subsidiaries in the United Kingdom and Canada. The Credit Facility obligations are also secured by the pledge of capital stock of the Company and its subsidiaries in Australia, Belgium, Canada and the United Kingdom.
Citizens served as the administrative agent, collateral agent and security trustee under the Company's former senior secured credit facility.
On January 31, 2008, the Company issued a news release announcing the completion of the refinancing of its senior secured credit facility. A copy of the news release is filed as Exhibit 99.1 to this report and is incorporated in this Item 1.01 by reference in its entirety.
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The information set forth under Items 1.02 and 2.03 of this report and the Credit Agreement filed as Exhibit 10.1 to this report are incorporated in this Item 1.01 by reference in their entirety.
Item 1.02 Termination of a Material Definitive Agreement
The information set forth under Item 1.01 of this report is incorporated in this Item 1.02 by reference in its entirety.
The Company used borrowings under the credit facility described in Item 1.01 of this report to repay in full amounts outstanding under Credit and Security Agreements dated October 31, 2005, as amended, among the Company, certain subsidiaries of the Company, Sovereign Bank, the Export-Import Bank of the United States, and Citizens Bank of Massachusetts as administrative agent, collateral agent and security trustee. Upon the Company's repayment in full of all amounts outstanding under the senior secured credit facility, the facility and all security arrangements and related rights thereunder were terminated. As of closing date, borrowings under the revolving line were approximately $37.6 million, borrowings under an acquisition loan were approximately $4.7 million, and borrowings under the term loan were approximately $0.7 million, and such borrowings accrued interest at annual rates of approximately 6.0%, 7.16%, and 6.0%, respectively. The revolving line had a maturity date of November 1, 2008, the acquisition loan had a maturity date of December 1, 2009 and the term loan had a maturity date of November 1, 2010. The credit facility obligations were secured by first priority liens on, and security interests in, selected assets of the Company and its subsidiaries in the United Kingdom and Canada, including inventory, accounts receivable, and real estate and leasehold improvements. The credit facility obligations were also secured by the capital stock of the Company and its subsidiaries in the United Kingdom and Canada.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth under Item 1.01 of this report is incorporated in this Item 2.03 by reference in its entirety.
Pursuant to the Credit Agreement, the Company and certain of its wholly owned subsidiaries may become obligated, as borrowers, up to a maximum of $125.0 million principal amount of senior secured indebtedness outstanding at any one time under the Credit Facility. The payment of all outstanding principal, interest and other amounts owing under the Credit Agreement may be declared immediately due and payable upon the occurrence of an event of default to the extent provided in the Credit Agreement and related credit documents and applicable law. The Credit Agreement contains customary events of default, including failure by the borrowers to make payment when due, failure by the borrowers to comply with specified covenants, conditions or agreements, and specified events of bankruptcy, insolvency, or similar events affecting the borrowers.
Item 9.01 Financial Statements and Exhibits.
(d) The Company herewith files the following exhibits:
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Exhibit No. |
Description of Exhibit |
| 10.1 | Credit Agreement, dated as of January 31, 2008, among the Company, certain subsidiaries of the Company, JP Morgan Chase Bank N.A., HSBC Bank USA, National Association, Merrill Lynch Capital Corporation, Bank of America, N.A., Sovereign Bank as documentation agent, Citizens Bank of Massachusetts as administrative agent, and RBS Greenwich Capital as sole lead arranger. |
| 99.1 | News release, dated January 31, 2008, issued by the Company |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GERBER SCIENTIFIC, INC. |
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(Registrant) |
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Date: |
February 6, 2008 |
By: |
/s/ WILLIAM V. GRICKIS, JR. |
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William V. Grickis, Jr. |
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EXHIBIT INDEX
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Exhibit No. |
Description of Exhibit |
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10.1 |
Credit Agreement, dated as of January 31, 2008, among the Company, certain subsidiaries of the Company, JP Morgan Chase Bank N.A., HSBC Bank USA, National Association, Merrill Lynch Capital Corporation, Bank of America, N.A., Sovereign Bank as documentation agent, Citizens Bank of Massachusetts as administrative agent, and RBS Greenwich Capital as sole lead arranger. |
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99.1 |
News release, dated January 31, 2008, issued by the Company |
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Exhibit 10.1
CREDIT AND GUARANTY AGREEMENT
Dated as of January 31, 2008
Among
GERBER SCIENTIFIC, INC.,
GERBER SCIENTIFIC INTERNATIONAL, INC.,
as Borrowers,
THE GUARANTORS PARTY HERETO,
as Guarantors,
THE LENDERS PARTY HERETO,
as Lenders,
RBS CITIZENS, N.A,
as Administrative Agent for the Lenders,
SOVEREIGN BANK,
as Documentation Agent,
and
RBS SECURITIES CORPORATION
D/B/A RBS GREENWICH CAPITAL,
as Sole Lead Arranger and Book Runner.
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS............................................................. 1
Section 1.1. Definitions.............................................................................................................. 1
Section 1.2. Accounting Terms.................................................................................................. 17
Section 1.3. Construction of Terms............................................................................................ 17
ARTICLE 2. THE REVOLVING CREDIT........................................................................................... 17
Section 2.1. The Revolving Credit.............................................................................................. 17
Section 2.2. Making of Revolving Credit Advances.................................................................... 17
Section 2.3. Interest on Base Rate Loans................................................................................... 19
Section 2.4. Election of LIBOR Pricing Options; Alternative Currencies...................................... 19
Section 2.5. Additional Payments............................................................................................... 20
Section 2.6. Letters of Credit..................................................................................................... 20
Section 2.7. Swingline Credit..................................................................................................... 22
Section 2.8. Interest on Swingline Loans..................................................................................... 23
Section 2.9. Refunded Swingline Loans; Swingline Loan Participations........................................ 23
Section 2.10. Computation of Interest, Etc................................................................................. 24
Section 2.11. Fees..................................................................................................................... 25
Section 2.12. Set‑Off................................................................................................................ 25
Section 2.13. Sharing of Payments............................................................................................. 25
Section 2.14. Reduction of Commitment by the Borrowers......................................................... 26
Section 2.15. Increased Costs, Etc............................................................................................ 26
Section 2.16. Changed Circumstances....................................................................................... 27
Section 2.17. Use of Proceeds.................................................................................................. 28
Section 2.18. Incremental Commitments.................................................................................... 28
Section 2.19. Replacement of Lenders....................................................................................... 30
ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES........................................................... 30
Section 3.1. Conditions to First Revolving Credit Advance; Swingline Loan................................ 30
Section 3.2. Conditions to All Revolving Credit Advances; Swingline Loans; Letters of Credit..... 32
ARTICLE 4. PAYMENT AND REPAYMENT.................................................................................... 33
Section 4.1. Mandatory Prepayment.......................................................................................... 33
Section 4.2.Voluntary Prepayments............................................................................................ 33
Section 4.3. Payment and Interest Cutoff.................................................................................... 34
Section 4.4. Payment or Other Actions on Non‑Business Days................................................... 34
Section 4.5. Method, Timing and Application of Payments.......................................................... 34
Section 4.6. Payments Not at End of Interest Period................................................................... 35
Section 4.7. Taxes..................................................................................................................... 36
ARTICLE 5. REPRESENTATIONS AND WARRANTIES................................................................ 38
Section 5.1. Corporate Existence, Charter Documents, Etc........................................................ 38
Section 5.2. Principal Place of Business; Location of Records..................................................... 38
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Section 5.3. Qualification........................................................................................................... 38
Section 5.4. Subsidiaries............................................................................................................ 38
Section 5.5. Corporate Power................................................................................................... 38
Section 5.6. Valid and Binding Obligations................................................................................. 39
Section 5.7. Other Agreements.................................................................................................. 39
Section 5.8. Payment of Taxes................................................................................................... 39
Section 5.9. Financial Statements............................................................................................... 40
Section 5.10. Other Materials Furnished.................................................................................... 40
Section 5.11. Stock................................................................................................................... 40
Section 5.12. Changes in Condition........................................................................................... 41
Section 5.13. Assets, Licenses, Patents, Trademarks, Etc.......................................................... 41
Section 5.14. Litigation.............................................................................................................. 41
Section 5.15. Pension Plans....................................................................................................... 42
Section 5.16. Outstanding Indebtedness..................................................................................... 42
Section 5.17. Environmental Matters.......................................................................................... 42
Section 5.18. Governmental Regulations.................................................................................... 43
Section 5.19. Margin Stock....................................................................................................... 43
Section 5.20. Solvency.............................................................................................................. 43
Section 5.21. Labor Matters...................................................................................................... 43
Section 5.22. Advantageous Business Relationships.................................................................... 44
ARTICLE 6. REPORTS AND INFORMATION................................................................................. 44
Section 6.1. Interim Financial Statements and Reports................................................................ 44
Section 6.2. Annual Financial Statements; Budget....................................................................... 44
Section 6.3. Notice of Defaults.................................................................................................. 45
Section 6.4. Notice of Litigation................................................................................................. 45
Section 6.5. Communications with Others.................................................................................. 45
Section 6.6. Reports to other Creditors...................................................................................... 45
Section 6.7. Communications with Independent Public Accountants............................................ 46
Section 6.8. Environmental Reports............................................................................................ 46
Section 6.9. Permitted Acquisitions............................................................................................ 46
Section 6.10. Miscellaneous...................................................................................................... 46
ARTICLE 7. FINANCIAL COVENANTS......................................................................................... 47
Section 7.1. Ratio of Consolidated EBIT to Consolidated Interest Expense................................ 47
Section 7.2. Ratio of Total Funded Debt to Consolidated EBITDA............................................ 47
Section 7.3. Consolidated Capital Expenditures......................................................................... 47
ARTICLE 8. AFFIRMATIVE COVENANTS..................................................................................... 47
Section 8.1. Existence and Business........................................................................................... 47
Section 8.2. Taxes and Other Obligations.................................................................................. 47
Section 8.3. Maintenance of Properties and Leases.................................................................... 48
Section 8.4. Insurance............................................................................................................... 48
Section 8.5. Records, Accounts and Places of Business............................................................. 48
Section 8.6. Inspection.............................................................................................................. 48
Section 8.7. Maintenance of Accounts....................................................................................... 49
Section 8.8. Newly Acquired Subsidiaries................................................................................. 49
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Section 8.9. Environmental........................................................................................................ 49
ARTICLE 9. NEGATIVE COVENANTS........................................................................................... 49
Section 9.1. Restrictions on Indebtedness.................................................................................. 49
Section 9.2. Restriction on Liens................................................................................................ 50
Section 9.3. Investments............................................................................................................ 51
Section 9.4. Dispositions of Assets............................................................................................. 52
Section 9.5. Assumptions, Guaranties, Etc. of Indebtedness of Other Persons............................. 52
Section 9.6. Mergers, Etc.......................................................................................................... 52
Section 9.7. ERISA................................................................................................................... 53
Section 9.8. Distributions........................................................................................................... 53
Section 9.9. Sale and Leaseback................................................................................................ 53
Section 9.10. Transactions with Affiliates.................................................................................... 53
Section 9.11. No Impairment of Cross-Streaming, Upstreaming, Downstreaming or Liens........... 54
Section 9.12. Hazardous Substances.......................................................................................... 54
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES................................................................. 54
Section 10.1. Events of Default.................................................................................................. 54
Section 10.2. Remedies............................................................................................................. 56
Section 10.3. Distribution of Proceeds....................................................................................... 57
ARTICLE 11. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES........................................... 57
Section 11.1. Actions by Lenders.............................................................................................. 57
Section 11.2. Actions by Loan Parties........................................................................................ 58
ARTICLE 12. SUCCESSORS AND ASSIGNS.................................................................................. 59
Section 12.1. General................................................................................................................ 59
Section 12.2. Assignments......................................................................................................... 59
ARTICLE 13. THE AGENT................................................................................................................. 61
Section 13.1. Authorization and Action...................................................................................... 61
Section 13.2. Agent's Reliance, Etc............................................................................................ 61
Section 13.3. Agent as a Lender................................................................................................ 62
Section 13.4. Lender Credit Decision......................................................................................... 62
Section 13.5. Indemnification of Agent....................................................................................... 62
Section 13.6. Successor Agent.................................................................................................. 63
Section 13.7. Fonde de Pouvoir................................................................................................. 63
Section 13.8. No Other Duties, Etc............................................................................................ 64
Section 13.9. Amendment of Article 13...................................................................................... 64
ARTICLE 14. GUARANTY................................................................................................................. 65
Section 14.1. Guaranty.............................................................................................................. 65
Section 14.2. Continuing Guaranty............................................................................................. 65
Section 14.3. Effect of Debtor Relief Laws................................................................................ 66
Section 14.4. Partial Waiver of Subrogation............................................................................... 66
Section 14.5. Subordination....................................................................................................... 67
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Section 14.6. Waiver................................................................................................................. 67
Section 14.7. Full Force and Effect............................................................................................ 68
Section 14.8. Negative Pledge................................................................................................... 68
Section 14.9. Additional Guarantors.......................................................................................... 68
ARTICLE 15. MISCELLANEOUS..................................................................................................... 68
Section 15.1. Notices................................................................................................................ 68
Section 15.2. Merger................................................................................................................. 69
Section 15.3. Governing Law; Consent to Jurisdiction................................................................ 69
Section 15.4. Counterparts; Replacement of Instruments............................................................ 70
Section 15.5. Expenses and Indemnification............................................................................... 70
Section 15.6. Confidentiality...................................................................................................... 71
Section 15.7. Usury Limitation................................................................................................... 72
Section 15.8. Joint and Several Obligations................................................................................ 72
Section 15.9. Judgment............................................................................................................. 72
Section 15.10. Reliance on Representations and Actions of Gerber............................................. 73
Section 15.11. Platform............................................................................................................. 73
Section 15.12. WAIVER OF JURY TRIAL; VENUE............................................................... 74
Section 15.13. USA Patriot Act................................................................................................. 75
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Swingline Note
Exhibit B Form of Notice of Revolving Credit Borrowing
Exhibit C Form of Compliance Certificate
Exhibit D Form of Pricing Notice
Exhibit E Form of Opinion of Borrowers' Counsel
Exhibit F Form of Assignment and Acceptance Agreement
Schedule 1 Schedule of Commitment Percentages
Schedule 2 Pricing Schedule
Schedule 2.6 Schedule of Existing Letters of Credit
Schedule 5.2 Schedule of Principal Places of Business
Schedule 5.4 Schedule of Subsidiaries
Schedule 5.9 Schedule of Financial Statements
Schedule 5.11 Schedule of Issued and Outstanding Stock
Schedule 5.13 Schedule of Licenses, Patents, Copyrights and Trademarks
Schedule 5.15 Schedule of Pension Plans
Schedule 5.16 Schedule of Indebtedness, Liens, Charges and Encumbrances
Schedule 5.17 Environmental Matters
Schedule 8.4 Schedule of Insurance
Schedule 8.8 Schedule of Excluded Subsidiaries
Schedule 15.1 Notices
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT is entered into as of January 31, 2008 by and among GERBER SCIENTIFIC, INC., a Connecticut corporation ("Gerber"), and GERBER SCIENTIFIC INTERNATIONAL INC., a Connecticut corporation ("Gerber International"), as borrowers, each of GERBER COBURN OPTICAL INTERNATIONAL, INC., GERBER SCIENTIFIC UK, LTD., SPANDEX LTD., and GERBER SCIENTIFIC INTERNATIONAL LTD., as guarantors, the lenders from time to time party hereto, RBS CITIZENS, N.A., a national banking association, as administrative agent for the lenders from time to time party hereto, SOVEREIGN BANK, as documentation agent, and RBS SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL, as sole lead arranger and bookrunner.
Recitals
WHEREAS, the Borrowers have requested that the Lenders provide certain credit facilities and make other financial accommodations to the Borrowers; and
WHEREAS, the Lenders and the Agent are each willing to accommodate such request for credit upon and subject to the terms, conditions and provisions of the Loan Documents, including without limitation, the Agent having a security interest in the Collateral and with the priority as set forth in the Security Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
Section 1.1. Definitions. In addition to the terms defined elsewhere in this Agreement, unless otherwise specifically provided herein, the following terms shall have the following meanings for all purposes when used in this Agreement, and in any note, agreement, certificate, report or other document made or delivered in connection with this Agreement:
"Affiliate" as applied to any Person, shall mean any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Person, whether through the ownership of voting securities or by contract or otherwise.
"Agent" shall mean RBS Citizens, N.A., in its capacity as agent for the Lenders, and its successors in that capacity.
"Agreement" shall mean this Credit and Guaranty Agreement, as amended or supplemented from time to time. References to Articles, Sections, Exhibits, Schedules and the like refer to the Articles, Sections, Exhibits, Schedules and the like of this Agreement unless otherwise indicated, as amended and supplemented from time to time.
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"Alternative Currency" shall mean Canadian Dollars, Australian Dollars, British Pounds Sterling, Hong Kong Dollars, Euros and each other currency (other than U.S. Dollars), that is approved in writing by the Agent and the Issuing Bank.
"Alternative Currency Equivalent" shall mean, at any time, with respect to any amount denominated in U.S. Dollars, the equivalent amount thereof in the applicable Alternative Currency as determined by the Agent at such time on the basis of the Spot Rate (as of the date of determination) for the purchase of such Alternative Currency with U.S. Dollars.
"Alternative Currency Loan" shall mean any Revolving Credit Advance denominated in an Alternative Currency.
"Alternative Currency Sublimit" shall mean US$50,000,000. The Alternative Currency Sublimit is part of, and not in addition to, the Maximum Revolving Credit Amount.
"Applicable Base Rate" shall mean the sum of (a) the Base Rate plus (b) the Base Rate Margin, as each is in effect from time to time.
"Applicable LIBOR Rate" shall mean the sum of (a) the LIBOR Lending Rate plus (b) the LIBOR Rate Margin, as each is in effect from time to time.
"Applicable Period" shall have the meaning ascribed thereto in Section 6.1.
"Approved Fund" shall mean a Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
"Australian Dollars" shall mean the lawful currency of Australia.
"Assignment and Acceptance Agreement" shall mean an Assignment and Acceptance Agreement substantially in the form of Exhibit F hereto.
"Base Rate" shall mean the greater of (a) the Prime Rate and (b) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if necessary, to the next 1/8 of 1%).
"Base Rate Loan" shall mean any Revolving Credit Advance bearing interest at a fluctuating rate determined by reference to the Applicable Base Rate. All Base Rate Loans shall be denominated in U.S. Dollars.
"Base Rate Margin" shall mean a rate per annum determined in accordance with the Pricing Schedule.
"Borrowers" shall mean Gerber and Gerber International.
"British Pounds Sterling" shall mean the lawful currency of the United Kingdom.
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"Business Day" shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that (a) when used in connection with a LIBOR Rate Loan in any currency, the term "Business Day" shall also include any day on which banks are not open for dealings in deposits in such currency in the London interbank market and (b) when used in connection with any LIBOR Rate Loan denominated in Euro, the term "Business Day" shall also exclude any day on which TARGET is not open for the settlement of payments in Euro.
"Canadian Dollars" shall mean the lawful currency of Canada.
"Capital Expenditure" shall mean amounts paid or Indebtedness incurred by any Person in connection with the purchase or lease by such Person of assets that would be required to be capitalized and shown on the balance sheet of such Person in accordance with GAAP.
"Capitalized Lease" shall mean any lease which is or should be capitalized on the balance sheet of the lessee in accordance with generally accepted accounting principles and Statement of Financial Accounting Standards No. 13.
"Capitalized Lease Obligations" shall mean the amount of the liability reflecting the aggregate discounted amount of future payments under all Capitalized Leases calculated in accordance with generally accepted accounting principles and Statement of Financial Accounting Standards No. 13.
"Change in Control" shall mean (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities Exchange Commission thereunder), of Equity Interests representing more than 30% of the aggregate ordinary voting power or the aggregate equity value represented by the issued and outstanding Equity Interests in Gerber or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Gerber by Persons who were neither (i) nominated by the board of directors of Gerber nor (ii) appointed by directors so nominated.
"Closing Date" shall mean the date on which all of the conditions set forth in Section 3.1 have been satisfied.
"Collateral" shall mean any and all assets of the Loan Parties subject to Liens under the Security Documents.
"Commitment Percentage" shall mean as to each Lender its percentage interest in the Maximum Revolving Credit Amount as set forth on Schedule 1 hereto.
"Compliance Certificate" shall mean a certificate in the form of Exhibit C hereto and executed by the Chief Executive Officer, Chief Financial Officer or Vice President of Finance of the Borrowers.
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"Consolidated" and "Consolidating," and "consolidated" and "consolidating" when used with reference to any term, mean that term (or the terms "combined" and "combining", as the case may be, in the case of partnerships, joint ventures and Affiliates that are not Subsidiaries) as applied to the accounts of Gerber (or other specified Person) and all of its Subsidiaries (or other specified Persons), or such of its Subsidiaries as may be specified, consolidated (or combined) in accordance with generally accepted accounting principles and with appropriate deductions for minority interests in Subsidiaries, as required by generally accepted accounting principles.
"Consolidated Current Liabilities" shall mean, at any date as of which the amount thereof shall be determined, all liabilities of Gerber and its Subsidiaries which should properly be classified as current in accordance with generally accepted accounting principles consistently applied, including, without limitation, all fixed prepayments of, and sinking fund payments with respect to, Indebtedness and all estimated taxes of Gerber and its Subsidiaries required to be made within one year from the date of determination.
"Consolidated EBIT" shall mean for any period the sum of (a) Consolidated Net Income and (b) all amounts deducted in computing Consolidated Net Income in respect of (i) Consolidated Interest Expense, and (ii) taxes based on or measured by income, in each case for the period under review.
"Consolidated EBITDA" shall mean for any period the sum of (a) Consolidated Net Income and (b) all amounts deducted in computing Consolidated Net Income in respect of (i) Consolidated Interest Expense, (ii) taxes based on or measured by income, (iii) consolidated depreciation and amortization expense, in each case for the period under review, and (iv) all non-cash expenses incurred in connection with the termination of the Existing Credit Agreement.
"Consolidated Interest Expense" shall mean, for any period, interest expense for such period of Gerber and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean the net income (or deficit) from operations of Gerber and its Subsidiaries, after taxes, determined in accordance with generally accepted accounting principles consistently applied.
"Costs of Collection" shall mean (a) any and all reasonable and documented sums advanced by the Agent after the occurrence and during the continuance of an Event of Default in order to preserve the Collateral or preserve its security interest in the Collateral and (b) in the event of any proceeding for the collection or enforcement of any obligations or liabilities after the occurrence and during the continuance of an Event of Default the reasonable and documented expenses of re‑taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral or of any exercise by the Agent of its rights hereunder and under the Loan Documents, together with reasonable attorneys' fees and court costs.
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"Credit Participants" shall have the meaning set forth in Section 12.2(f) hereof.
"Default" shall mean an Event of Default or an event or condition which with the passage of time or giving of notice, or both, would become such an Event of Default.
"Defaulting Lender" shall have the meaning set forth in Section 11.1 hereof.
"Distribution" shall mean as to any Person: (a) the declaration or payment of any dividend on or in respect of any shares of any class of capital stock of such Person, other than dividends payable solely in shares of common stock of such Person, (b) the purchase, redemption, or other acquisition or retirement of any shares of any class of capital stock of such Person directly or indirectly, (c) any other distribution on or in respect of any shares of any class of capital stock of such Person, (d) any setting apart or allocating any sum for the payment of any dividend or distribution, or for the purchase, redemption or retirement of any shares of capital stock of such Person and (e) any payment of, principal of, interest on, or fees or any other amounts with respect to Subordinated Indebtedness.
"Eligible Assignee" shall mean (a) any Lender, any Affiliate of any Lender and any Approved Fund of any Lender; and (b) (i) a commercial bank organized under the laws of the United States or any state thereof, (ii) a savings and loan association or savings bank organized under the laws of the United States or any state thereof; (iii) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided that (A) such bank is acting through a branch or agency located in the United States or (B) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country; and (iv) any other entity that is an "accredited investor" (as defined in Regulation D under the Securities Act) that extends credit or buys loans in the ordinary course including insurance companies, mutual funds and lease financing companies; provided that no Loan Party nor any Affiliate of a Loan Party shall be an Eligible Assignee.
"Environmental Law" means any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, or any federal, state, county or local statute, regulation, ordinance, order or decree relating to public health, welfare, the environment, worker health or safety, or the handling, manufacturing, processing, generation, storage or disposal of Hazardous Substances, whether now existing or hereafter enacted.
"Equity Interest" shall mean (a) shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or (b) warrants, options or other rights to acquire such shares or interests.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.
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"ERISA Affiliate" shall mean any entity that would be considered a single employer with Gerber or any Subsidiary under Section 4001(b) of ERISA or part of the same "controlled group" as Gerber or any Subsidiary for purposes of Section 302(d)(8)(C) of ERISA.
"EURIBOR" shall mean, in relation to any Loan in Euro, (a) the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period, displayed on the appropriate page of the internationally recognized service as selected by the Agent; or (b) if the service ceases to be available, for any reason, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by leading banks in the European interbank market, as of the specified time on the quotation day for the offering of deposits in Euro for a period comparable to the Interest Period of the relevant Loan.
"Euro" means the lawful currency of the participating member states introduced in accordance with the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.
"Event of Default" shall have the meaning set forth in Section 10.1 hereof.
"Excluded Collateral" shall mean: (a) pledges of cash and cash equivalents to Travelers Insurance Company to secure obligations of the Borrowers or their Subsidiaries under or in connection with property and casualty insurance policies issued by Travelers Insurance Company (or any successor insurers) for the benefit of the Borrowers or their Subsidiaries; provided, however, that the amount of such pledges shall not exceed $2,000,000 in the aggregate at any one time, (b) any agreements now existing which by their terms prohibit the granting of a security interest therein or assignment thereof; provided, however, that if the UCC or any other law now or hereafter permits the granting of a security interest or assignment thereof notwithstanding such terms, such contracts and agreements shall not be Excluded Collateral, and (c) equipment subject to a capitalized lease or purchase money lien permitted hereunder that prohibits the granting of any other lien on such equipment; provided, however, that such equipment shall not be Excluded Collateral upon the release of such capitalized lease or purchase money lien (d) stock or other equity interests in Subsidiaries which are not Guarantors, and (e) all real property owned by a Loan Party, the fixtures thereupon, and personal property generally used solely in the operation of such real property (including without limitation, service equipment, heating ventilation and air conditioning equipment, phones, heating, lighting, air conditioning, ventilating, plumbing, electrical or other mechanical equipment, refrigeration, security and control systems, building operation and maintenance equipment, sprinkler and irrigation facilities and equipment).
"Existing Credit Agreement" shall mean the Loan and Security Agreement dated as of October 31, 2005 by and among the Borrowers, Citizens Bank of Massachusetts and the other parties thereto, as amended, restated or otherwise modified from time to time.
"Existing Letters of Credit" shall mean the Issuing Bank's letters of credit issued for the account of one or more Loan Parties and described on Schedule 2.6 hereto.
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"Federal Funds Effective Rate" shall mean for any day, a fluctuating interest rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by the Agent.
"Fee Letter" shall have the meaning set forth in Section 2.11(b) hereof.
"Foreign Security Documents" shall mean the documents described in clauses (b), (c), and, to the extent they relate to assets of foreign Loan Parties, (d) of the definition of Security Documents.
"Fund" shall mean any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.
"Gerber Australia" shall mean Gerber Scientific International (Australia) Pty. Ltd.
"Gerber Belgium" shall mean Gerber Technology NV/SA.
"Gerber Technology" shall mean Gerber Technology, Ltd.
"Generally accepted accounting principles" or "GAAP" shall mean accounting principles generally accepted in the United States of America as defined by controlling pronouncements of the Financial Accounting Standards Board, as from time to time supplemented and amended.
"Guarantor" shall mean each of the Persons set forth on the signature pages hereto as a "Guarantor" and each other wholly-owned Subsidiary of Gerber that may hereafter become a Guarantor hereunder in accordance with the provisions of Section 14.9 hereof.
"Guaranty" or "Guarantee" or "Guaranties" shall include any arrangement whereby a Person is or becomes liable in respect of any Indebtedness or other obligation of another and any other arrangement whereby credit is extended to another obligor on the basis of any promise of a guarantor, whether that promise is expressed in terms of an obligation to pay the Indebtedness of such obligor, or to purchase or lease assets under circumstances that would enable such obligor to discharge one or more of its obligations, or to maintain the capital, the working capital, solvency or general financial condition of such obligor, whether or not such arrangement is listed in the balance sheet of the guarantor or referred to in a footnote thereto.
"Hong Kong Dollars" shall mean the lawful currency of the Hong Kong Special Administrative Region.
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"Indebtedness" shall mean, as to any Person, all obligations, contingent and otherwise, which in accordance with generally accepted accounting principles consistently applied should be classified upon such Person's balance sheet as liabilities, but in any event including (i) liabilities secured by any Lien on property owned or acquired by such Person whether or not the liability secured thereby shall have been assumed, (ii) letters of credit open for account, (iii) obligations under banker's acceptance facilities, (iv) Capitalized Lease Obligations and (v) all obligations on account of Guaranties, endorsements and any other contingent obligations of a similar nature in respect of the Indebtedness of others whether or not reflected on such balance sheet or in a footnote thereto.
"Indemnified Taxes" has the meaning specified in Section 4.7(a) hereof.
"Interest Period" shall mean with respect to each LIBOR Rate Loan, the period commencing on the date of such LIBOR Rate Loan and ending one, two, three, six or, if available to all Lenders, twelve months thereafter, as the Borrowers may request as provided in Sections 2.2(a) or 2.4 hereof, provided, that:
(a) any Interest Period (other than an Interest Period determined pursuant to clause (c) below) that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Business Day of a calendar month;
(c) any Interest Period that would otherwise end after the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date; and
(d) notwithstanding clause (c) above, no Interest Period shall have a duration of less than one month, and if any Interest Period applicable to any LIBOR Rate Loan would be for a shorter period, such Interest Period shall not be available hereunder.
"Interest Rate Protection Agreement" means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement, interest rate floor agreement or other similar agreement or arrangement.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.
"Investment" shall mean (a) any stock, evidence of Indebtedness or other security of another Person, (b) any loan, advance, contribution to capital, extension of credit (except for trade and customer accounts receivable for inventory sold or services rendered in the ordinary course of business and payable in accordance with the terms thereof set in the ordinary course of business) to another Person, and (c) any purchase of
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(i) stock or other securities of another Person or (ii) any business or undertaking of another Person (whether by purchase of assets or securities), and any commitment or option to make any such purchase if, in the case of an option, the aggregate consideration paid for such option was in excess of $100.
"Issuing Bank" shall mean RBS Citizens, N.A., in its capacity as the issuer of Letters of Credit hereunder, and any successor to RBS Citizens, N.A. in such capacity. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall include any such affiliate with respect to Letters of Credit issued by such affiliate.
"Lender Obligations" shall mean all present and future obligations and Indebtedness of the Borrowers or any Subsidiary owing to the Agent or the Lenders (a) under this Agreement or any other Loan Document, including, without limitation, the obligations to pay the Indebtedness from time to time evidenced by the Revolving Credit Notes or the Swingline Note, to reimburse the Issuing Bank for any drawings paid under Letters of Credit, obligations to pay interest, commitment fees, balance deficiency fees, charges, expenses and indemnification from time to time owed under any Loan Document and Costs of Collection and (b) under any Secured Interest Rate Protection Agreements.
"Lenders" shall mean (a) initially, each Lender listed on the signature pages hereof as "Lenders", (b) any other Person who becomes a Successor Lender hereunder in accordance with the terms of Section 12.2 hereof, (c) with respect to Swingline Loans, the Swingline Lender, and (d) their respective successors.
"Letter of Credit" shall mean the Existing Letters of Credit and any letter of credit issued pursuant to Section 2.6.
"Letter of Credit Exposure" shall mean, at any time, the sum of (a) the Maximum Drawing Amount with respect to all Letters of Credit and (b) all unpaid Reimbursement Obligations.
"Letter of Credit Sublimit" shall mean US$20,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Maximum Revolving Credit Amount. For the purposes of determining the Letter of Credit Sublimit Letters of Credit denominated in an Alternative Currency shall be converted into the U.S. Dollar equivalent as of the date of such determination.
"LIBOR Lending Rate" shall mean, relative to any LIBOR Rate Loan to be made, continued or maintained as, or converted into, a LIBOR Rate Loan for any Interest Period, a rate per annum determined pursuant to the following formula:
LIBOR Lending Rate = LIBOR Rate
(1.00 -
LIBOR Reserve Percentage)
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"LIBOR Pricing Option" shall mean the option granted to the Borrowers pursuant to Section 2.4 hereof to have interest on all or a portion of the Loans computed on the basis of the Applicable LIBOR Rate for an applicable Interest Period.
"LIBOR Rate" shall mean, relative to any Interest Period for LIBOR Rate Loans, (i) the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) as calculated by the British Bankers' Association and obtained through a nationally recognized service such as the Dow Jones Market Service (Telerate) or Reuters (the "Service") at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for the relevant currency with a maturity comparable to such Interest Period; and (ii) if the Alternative Currency is in Euro, at the EURIBOR Rate provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the "LIBOR Rate" shall be the interest rate per annum determined by Agent to be the average of the rates per annum at which deposits in the relevant currency are offered for such Interest Period to major banks in the London interbank market or the European interbank market as the case may be at approximately 11:00 a.m. London time on the date that is two (2) Business Days prior to the beginning of such Interest Period. Each determination by the Agent pursuant to this definition shall be conclusive absent manifest or mathematical error.
"LIBOR Rate Fixing Day" shall mean, in the case of any LIBOR Rate Loan, the second Business Day preceding the Business Day on which an Interest Period begins.
"LIBOR Rate Loan" shall mean any Loan hereunder upon which interest will accrue on the basis of a formula including as a component thereof the LIBOR Rate. The expiration date of any LIBOR Rate Loan shall be the last day of the Interest Period applicable to such LIBOR Rate Loan. LIBOR Rate Loans may be denominated in U.S. Dollars or in an Alternate Currency.
"LIBOR Rate Margin" shall mean a rate per annum determined in accordance with the Pricing Schedule.
"LIBOR Reserve Percentage" shall mean, relative to any day of any Interest Period for LIBOR Rate Loans, the maximum aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) under any regulations of the Board of Governors of the Federal Reserve System (the "Board") or other governmental authority having jurisdiction with respect thereto as issued from time to time and then applicable to assets or liabilities consisting of "Eurocurrency Liabilities", as currently defined in Regulation D of the Board, having a term approximately equal or comparable to such Interest Period.
"Lien" shall mean any lien, mortgage, pledge, assignment (only for the purposes of creating a security interest), security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement or any lease in the
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nature thereof) and, solely in the case of securities, any option, trust or other preferential arrangement having the practical effect of any of the foregoing.
"Liquid Securities" shall mean Investments described in clauses (a) through (d) of the definition of Permitted Investments.
"Loan" shall mean any Revolving Credit Advance or Swingline Loan outstanding hereunder or made to the Borrowers by the Lenders pursuant to Article 2 of this Agreement, and "Loans" means all of such loans, collectively.
"Loan Documents" shall mean this Agreement, the Revolving Credit Notes, the Swingline Note, the Security Documents, any Secured Interest Rate Protection Agreements any Notices of Revolving Credit Borrowing hereunder and any other present or future agreement from time to time entered into between Gerber or any Subsidiary and the Agent or the Lenders in connection with this Agreement, each as from time to time amended or supplemented, and all statements, reports and certificates delivered by the Borrowers to the Agent or the Lenders in connection therewith.
"Loan Parties" means the Borrowers and each Guarantor.
"Majority Lenders" shall mean, at any time, the Lenders (excluding Defaulting Lenders) having made greater than fifty percent (50%) of the outstanding principal amount of the Loans (excluding Loans made by a Defaulting Lender) hereunder, or, if no Loans are outstanding, the Lenders (excluding Defaulting Lenders) having aggregate Commitment Percentages of greater than fifty percent (50%) (excluding Commitment Percentages of Defaulting Lenders).
"Material Adverse Effect" shall mean any event, fact, circumstance, change in, or effect on, the operations, business, properties, or condition (financial or otherwise) of any Borrower or Guarantor, which individually, in the aggregate or on a cumulative basis with any other events, facts, circumstances, changes in, or effects on, the Borrowers and Guarantors, taken as a whole, has had or would reasonably be expected to have a material adverse effect on (a) the ability of the Borrowers and Guarantors taken as a whole to (i) operate or conduct business in substantially the manner in which such business is operated or conducted on the Closing Date, or (ii) perform or pay any Lender Obligations, (b) the assets, properties, business, operations, or condition (financial or otherwise) of the Borrowers and Guarantors taken as a whole, (c) the validity or enforceability of this Agreement or any of the other Loan Documents or any of the rights or remedies of the Agent or any Lender hereunder or thereunder or (d) the value, enforceability, or collectibility of the collateral under the Security Documents. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event in and of itself does not have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing events would result in a Material Adverse Effect.
"Maximum Drawing Amount" means the maximum aggregate amount that the beneficiaries may at any time draw under outstanding Letters of Credit, as such aggregate
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amount may be reduced from time to time pursuant to the terms of the Letters of Credit. For the purposes of determining the Maximum Drawing Amount Letters of Credit denominated in an Alternative Currency shall be converted into the U.S. Dollar equivalent as of the date of such determination.
"Maximum Revolving Credit Amount" shall mean, subject to Section 2.18, as of any date of determination, the lesser of (a) $125,000,000 and (b) the amount to which the Maximum Revolving Credit Amount may have been reduced pursuant to Section 2.14 hereof; provided that if the obligation of the Lenders to make further Revolving Credit Advances is terminated upon the occurrence of an Event of Default, the Maximum Revolving Credit Amount as of any date of determination thereafter shall be deemed to be $0. For the purposes of determining the Maximum Revolving Credit Amount Revolving Credit Advances denominated in an Alternative Currency shall be converted into the U.S. Dollar equivalent as of the date of such determination.
"Notes" shall mean the Revolving Credit Notes and the Swingline Note.
"Notice of Revolving Credit Borrowing" shall have the meaning set fort in Section 2.2(a).
"Other Taxes" has the meaning specified in Section 4.7(b) hereof.
"Patriot Act" shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
"Pension Plan" shall mean an employee benefit plan or other plan sponsored, maintained or contributed to by Gerber, any Subsidiary or any ERISA Affiliate as described in Section 4021(a) of ERISA.
"Permitted Acquisition" shall mean the acquisition by, or merger into, any Loan Party, of any Person or the assets or business of any Person constituting an operating business engaged in the same business line or a business reasonably related thereto as Gerber or a Subsidiary; provided, however, that (i) such acquisition or merger is accretive to Consolidated EBITDA based on the target's results for the most recently ended twelve-month period, (ii) after the consummation of any such acquisition or merger, the Borrowers will be in compliance with all covenants both before and on a pro forma basis after such acquisition or merger (as evidenced by a certificate of the Borrowers certifying such pro forma compliance in the case of any Permitted Acquisition in excess of $10,000,000), (iii) such Permitted Acquisition has been approved by the Board of Directors of each of the constituent parties thereto, (iv) after the consummation of any such acquisition or merger, the ratio of (A) Total Funded Debt of Gerber and its Subsidiaries to (B) Consolidated EBITDA, on a pro forma basis, shall be less than 2.5-to-1, and (v) after the consummation of any such acquisition or merger, Gerber and its Subsidiaries shall have cash, Liquid Securities and/or borrowing availability under this Agreement in an aggregate amount in excess of $15,000,000.
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"Permitted Investments" shall mean: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or the United Kingdom (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America or the United Kingdom), in each case maturing within one year from the date of acquisition thereof; (b)investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard and Poor's Ratings Service or from Moody's Investors Service, Inc.; (c) investments in certificates of deposit, banker's acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $1,000,000,000; (d) investments in money market mutual funds that are rated AAA by Standard & Poor's Rating Service, (e) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, and (f) tender bonds the payment of which is supported by a letter of credit issued by a recognized United States financial institution.
"Permitted Liens" shall have the meaning set forth in Section 9.2 hereof.
"Person" shall mean an individual, corporation, partnership, joint venture, association, estate, joint stock company, trust, organization, business, or a government or agency or political subdivision thereof.
"Pledge Agreement" shall mean the Pledge Agreement dated as of January 31, 2008 executed by Gerber and each Subsidiary that owns stock of any Guarantor in favor of the Agent, as amended as of the date hereof, and as further amended and in effect from time to time.
"Pricing Notice" shall have the meaning set forth in Section 2.4 hereof.
"Pricing Schedule" shall mean Pricing Schedule attached hereto as Schedule 2.
"Prime Rate" shall mean the variable per annum rate of interest so designated from time to time by the Agent as its prime rate. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer.
"Reimbursement Obligations" means (a) the Borrowers' obligations to reimburse the Issuing Bank on account of any drawing under any Letter of Credit and (b) without duplication, the Borrowers' obligation to reimburse any Lender on account of any drawing under any Letters of Credit. For the purposes of determining Reimbursement Obligations, Letters of Credit denominated in an Alternative Currency shall be converted into the U.S. Dollar equivalent as of the date of such determination.
"Related Subsidiary" shall mean, with respect to any wholly-owned Subsidiary of Gerber, any other wholly-owned Subsidiary or Subsidiaries of Gerber which conduct
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substantially all of their operations in the same foreign jurisdiction and constitute one business unit.
"Reportable Event" shall mean an event reportable to the Pension Benefit Guaranty Corporation under Section 4043 of Title IV of ERISA (other than any event for which the notice requirement is waived by the regulations thereunder).
"Revolving Commitments" shall mean the commitments of the Lenders to make Revolving Credit Advances in accordance with the terms hereof, which in the aggregate shall not exceed the Maximum Revolving Credit Amount.
"Revolving Credit Advance" shall mean any loan or advance from any Lender to the Borrowers pursuant to Section 2.1 this Agreement.
"Revolving Credit Notes" shall mean the Revolving Credit Notes substantially in the form of Exhibit A-1 hereto executed by the Borrowers in favor of each Lender to evidence the Revolving Credit Advances to be made by the Lenders from time to time hereunder.
"Revolving Credit Termination Date" shall mean January 31, 2013.
"Secured Interest Rate Protection Agreement" shall mean any Interest Rate Protection Agreement entered into by a Loan Party and a party which is and remains a Lender throughout the term of such Interest Rate Protection Agreement.
"Security Agreement" shall mean the Security Agreement dated as of the date hereof by and among the Borrowers, Gerber Coburn Optical International, Inc. and RBS Citizens, N.A., as collateral agent, as amended, restated or otherwise modified from time to time.
"Security Documents" shall mean (a) the Security Agreement, the Pledge Agreement, (b) the General Security Agreement, Pledge of Debentures, Delivery Order-Debenture and Power of Attorney and Deed of Hypothec to secure Payment of Debentures by and between the Agent and Gerber Scientific International Ltd. dated as of the date hereof, (c) the Debenture by and among the Agent, Gerber Scientific UK Limited and Spandex Limited dated as of the date hereof, the Charge over Shares by and between the Agent and Gerber Scientific International, Inc. dated as of the date hereof and (d) any other security agreements, debentures, pledge agreements, charges, deposit account control agreements and other similar documents and agreements of the Loan Parties or other Persons that secure the Lender Obligations.
"Solvent" shall mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person; (b) the present fair salable value of the assets of such Person, as part of a going concern, is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and
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liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person's property would constitute an unreasonably small capital. The amount of contingent liabilities (such as litigation, guarantees and pension plan liabilities) at any time shall be computed as the amount which, in light of all the facts and circumstances existing at the time, represents the amount which can reasonably be expected to become an actual or matured liability.
"Spot Rate" shall mean, for a currency, the rate quoted by the Agent as the spot rate for the purchase of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. (in the applicable time zone) on the date two (2) Business Days prior to the date as of which the foreign exchange computation is made; provided that the Agent may obtain such spot rate from another financial institution designated by the Agent if the Agent does not have as of the date of determination a spot buying rate for any such currency.
"Stock" shall mean all shares, options, warrants, general or limited partnership interests or other equivalents (regardless of how designated) of or in a corporation, partnership or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended).
"Subordinated Indebtedness" shall mean Indebtedness of any Borrower which is subordinated to the Indebtedness of the Borrowers hereunder and under the Revolving Credit Notes or the Swingline Note and to all other Lender Obligations, on terms and conditions approved in writing by the Agent.
"Subsidiary" shall mean any Person of which Gerber or other specified parent shall now or hereafter at the time own, directly or indirectly through one or more Subsidiaries or otherwise, sufficient voting stock (or other beneficial interest) to entitle it to elect at least a majority of the board of directors or trustees or similar managing body.
"Swap Termination Value" shall mean, in respect of any one or more Interest Rate Protection Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Interest Rate Protection Agreements, for any date, the amount(s) determined as the mark-to-market value(s) for such Interest Rate Protection Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Interest Rate Protection Agreements (which may include a Lender or any Affiliate of a Lender).
"Swingline Commitment" has the meaning specified in Section 2.7 hereof.
"Swingline Lender" shall mean RBS Citizens, N.A.
"Swingline Loan" has the meaning specified in Section 2.7 hereof.
"Swingline Loan Account" has the meaning specified in Section 2.7 hereof.
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"Swingline Loan Closing Date" has the meaning specified in Section 2.7 hereof.
"Swingline Note" shall mean the Swingline Note in substantially the form of Exhibit A-2 hereto executed by the Borrowers to the order of the Swingline Lender to evidence the Swingline Loans.
"Swingline Loan Notice" has the meaning specified in Section 2.7 hereof.
"Swingline Participation Amount" has the meaning specified in Section 2.9(c) hereof.
"TARGET" means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system.
"Tax" or "Taxes" shall mean all present or future fees, taxes (including, without limitation, income taxes, sales taxes, use taxes, stamp taxes, value-added taxes, excise taxes, ad valorem taxes and property taxes (personal and real, tangible and intangible)), levies, assessments, withholding and other charges and impositions of any nature, plus all related interest, penalties, fines and additions to tax, now or hereafter imposed by any federal, state, local or foreign government of other taxing authority.
"Total Funded Debt" of any Person means, without duplication, Indebtedness under this Agreement, in the case of the Borrowers, and all other Indebtedness for borrowed money of any such Person (including the Borrowers).
"Treasury Regulations" shall mean the regulations promulgated under the Internal Revenue Code, as amended from time to time (including corresponding provisions of succeeding regulations).
"U.S. Dollar Equivalent" shall mean, at any time, (a) with respect to any amount denominated in U.S. Dollars, such amount; and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in U.S. Dollars as determined by the Agent at such time on the basis of the Spot Rate (as of the date of determination) for the purchase of U.S. Dollars with, such Alternative Currency.
"2007 Financial Statements" shall mean the Consolidated Balance Sheet of Gerber and its Subsidiaries as of April 30, 2007 and the related Consolidated Statements of Operations, Cash Flows and Changes in Shareholders' Equity for the fiscal year then ended and notes to such financial statements.
"UCC" shall mean the Massachusetts Uniform Commercial Code, Massachusetts General Laws c. 106, as amended from time to time.
"Unasserted Lender Obligations" shall mean, at any time, Lender Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (except for (i) the principal of and interest on, and fees relating to, any Indebtedness and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under Letters of Credit) in respect of which no claim or demand for payment has been made (or,
16
in the case of Lender Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.
"U.S. Dollars", "Dollars" and "$" shall mean the lawful currency of the United States.
Section 1.2. Accounting Terms. All accounting terms used and not defined in this Agreement shall be construed in accordance with generally accepted accounting principles consistently applied, and all financial data required to be delivered hereunder shall be prepared in accordance with such principles.
Section 1.3. Construction of Terms. As used herein, the masculine, feminine or neuter gender, and the singular or plural number, shall be deemed to be or to include the other genders or number, as the case may be, whenever the context so indicates or requires.
Section 2.1. The Revolving Credit.
(a) Subject to the terms and conditions of this Agreement and so long as there exists no Default, at any time prior to the Revolving Credit Termination Date, each Lender, severally and not jointly, shall make such Revolving Credit Advances to the Borrowers as the Borrowers may from time to time request, by notice to the Agent in accordance with Section 2.2, in an aggregate amount (i) as to each Lender, not to exceed at any time such Lender's Commitment Percentage of the Maximum Revolving Credit Amount less its Commitment Percentage of the Letter of Credit Exposure, and (ii) as to all Lenders, not to exceed the Maximum Revolving Credit Amount less the Letter of Credit Exposure. The outstanding principal amount of the Revolving Credit Advances, together with all accrued interest and other fees and charges related thereto, shall be repaid in full on the Revolving Credit Termination Date. On the Closing Date, the Borrowers shall execute and deliver to each Lender who so requests a Revolving Credit Note to evidence the Revolving Credit Advances from time to time made by such Lender to the Borrowers hereunder.
(b) Subject to the foregoing limitations and the provisions of Section 4.2, the Borrowers shall have the right to make prepayments reducing the outstanding balan