EXHIBIT 10.8
AMENDMENT AGREEMENT NUMBER EIGHT
TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT AGREEMENT NUMBER EIGHT TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of November 12, 2002, is entered into between and among,
on the one hand U.S. BANK NATIONAL ASSOCIATION, as a lender and as the arranger
and administrative agent ("Agent") for the lenders that become members of the
Lender Group pursuant to the terms of the Agreement (as that term is defined
below) (such lenders, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), and, on the other hand, 3D SYSTEMS CORPORATION, a Delaware
corporation ("Parent"), and each of Parent's Subsidiaries identified on the
signature pages hereof (such Subsidiaries, together with Parent, are referred to
hereinafter each individually as a "Borrower," and individually and
collectively, jointly and severally, as the "Borrowers") and amends that certain
Loan and Security Agreement, dated as of May 21, 2001, between and among Agent
and Borrowers, as amended by that certain Amendment Agreement Number One to Loan
and Security Agreement, dated July 26, 2001, that certain Amendment Agreement
Number Two to Loan and Security Agreement, dated August 16, 2001, that certain
letter agreement, dated August 30, 2001, that certain Amendment Agreement Number
Three to Loan and Security Agreement, dated October 1, 2001, that certain
Amendment Agreement Number Four to Loan and Security Agreement, dated as of
November 1, 2001, that certain Amendment Agreement Number Five to Loan and
Security Agreement, dated as of December 20, 2001, that certain Amendment
Agreement Number Six to Loan and Security Agreement, dated as of August 30,
2002, and that certain Amendment Agreement Number Seven to Loan and Security
Agreement, dated October 1, 2002 (as amended, the "Agreement"). All terms which
are defined in the Agreement shall have the same definition when used herein
unless a different definition is ascribed to such term under this Amendment, in
which case, the definition contained herein shall govern. This Amendment is
entered into in light of the following facts:
RECITALS
WHEREAS, Borrowers have requested that Lenders agree to change (i) the
Leverage Ratio, (ii) the Senior Debt to EBITDA Ratio, and (iii) Minimum Fixed
Charge Coverage Ratio.
WHEREAS, Lenders have agreed to Borrowers' requests on the condition that
Borrowers agree to: (i) a permanent reduction in the Maximum Revolver Amount and
agree to prepay a portion of the outstanding balance under the Term Loan, (ii)
the addition of a Minimum Net Profit Covenant, (iii) a change in the pricing for
the Advances and the Term Loan, and (iv) the other terms and conditions
contained in this Amendment.
WHEREAS, Borrowers have agreed to the terms and the conditions required by
Lenders.
NOW, THEREFORE, the parties agree as follows:
1. The definitions of "Applicable Margin", "EBITDA", "Fixed Charge Coverage
Ratio", "Leverage Ratio", "Maximum Revolver Amount", and "Senior Debt to EBITDA
Ratio" contained in Section 1.1 of the Agreement are deleted in their entirety
and are replaced with the following:
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'Applicable Margin' means, with respect to any Obligation on the first
day of the first month following the delivery of financial statements
pursuant to Section 6.3, the margin as provided below based upon the
Leverage Ratio.
Applicable Margin For:
Leverage Ratio LIBOR Rate Loans Prime Rate Loans
- ------------------------------- ---------------- ----------------
Less than 1.5:1.0 2.00% .25%
Less than 2.0:1.0, but equal
to or greater than 1.5:1.0 2.25% .50%
Less than 2.5:1.0, but equal
to or greater than 2.0:1.0 2.50% .75%
Equal to 2.5:1.0 2.75% 1.00%
Less than 5.0:1.0, but equal
to or greater than 2.51:1.0 5.00% 3.25%
Less than 7.50:1.0, but equal
to or greater than 5.0:1.0 5.25% 3.50%
Less than 11.50:1.0, but
equal to or greater than
7.50:1.0 5.50% 3.75%
Equal to or greater than
11.50:1.0 5.75% 4.00%
'EBITDA' means, with respect to any fiscal period, Parent's and its
Subsidiaries' consolidated net earnings (or loss) from normal business
operations (as determined by Agent in its Permitted Discretion), plus
interest expense, income taxes, and depreciation and amortization for such
period, as determined in accordance with GAAP.
'Fixed Charge Numerator' means, as of the time that the Fixed Charge
Coverage Ratio is being determined, the amount equal to EBITDA for the 12
month period then ended (except as provided in the definition of Excess
Cash Flow above), minus all taxes paid during such period, minus all
distributions to shareholders (other than shareholders that are also
Borrowers) made during such period, minus unfinanced Capital Expenditures
made during such period, provided, however, that solely for the four fiscal
quarters commencing with the fiscal quarter ending on or about March 31,
2003 and ending with the fiscal quarter ending on December 31, 2003, for
purposes of this calculation, EBITDA shall be annualized based upon
calendar year to date results as of the fiscal quarter then ending.
'Fixed Charge Coverage Ratio' means, as of the end of the most
recently concluded fiscal quarter of Parent, the ratio of (i) the Fixed
Charge Numerator; to (ii) the aggregate amount of all regularly scheduled
principal payments which will become due and payable in respect of long
term debt by Borrowers during the immediately
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succeeding four fiscal quarters, plus all interest payments due and payable
by Borrowers during the 12 month period then ended (provided, however, that
for the four fiscal quarters commencing with the fiscal quarter ending on
or about March 31, 2003 and ending with the fiscal quarter ending on
December 31, 2003 the interest payments shall be annualized based on actual
payments made during such period).
'Leverage Ratio' means, as of the end of the most recently concluded
fiscal quarter of Borrowers, the ratio of interest bearing Debt outstanding
as of the end of such fiscal quarter to EBITDA calculated as follows: (y)
for the fiscal year of Borrowers commencing on January 1, 2003 and ending
on December 31, 2003, EBITDA shall be calculated as of the end of each
fiscal quarter of Borrowers and shall be annualized based upon calendar
year to date results as of the end of such fiscal quarter then ending, and
(z) commencing with the fiscal quarter of Borrowers ending on or about
March 31, 2004 and for each fiscal quarter of Borrowers thereafter, the
EBITDA shall be calculated for the four fiscal quarter period of Borrowers
ended with the most recent fiscal quarter of Borrowers in such financial
statements.
'Maximum Revolver Amount' means $9,650,000.
'Senior Debt to EBITDA Ratio' means, as of the end of the most
recently concluded fiscal quarter of Borrowers, the ratio of all then
outstanding Senior Debt to EBITDA calculated as follows: (y) for the fiscal
year of Borrowers commencing on January 1, 2003 and ending on December 31,
2003, EBITDA shall be calculated as of the end of each fiscal quarter of
Borrowers and shall be annualized based upon calendar year to date results
as of the end of such fiscal quarter then ending, and (z) commencing with
the fiscal quarter of Borrowers ending on or about March 31, 2004 and for
each fiscal quarter of Borrowers thereafter, the EBITDA shall be calculated
for the four fiscal quarter period of Borrowers ended with the most recent
fiscal quarter of Borrowers in such financial statements.
2. Section 2.1(a)(y)(i) of the Agreement is deleted and replaced with the
following:
(i) $4,825,000,
3. Section 2.2 of the Agreement is amended by replacing the payment grid
contained in that Section with a new payment grid as follows:
Date Installment Amount
==================================== =======================================
Commencing on December 1, 2002 and Accrued and unpaid interest
continuing on the same day of each
month until February 1, 2007
On November 12, 2002 A principal installment of $2,400,000
plus all accrued and unpaid interest on
the portion of the Term Loan owing to
Bank of the West
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Commencing on March 1, 2003 and Quarterly principal installments equal
continuing on the same day of to the lesser of the outstanding
every third month thereafter outstanding principal balance of the
Term Loan or $750,000 each
On June 1, 2006 The unpaid principal balance, plus
accrued interest
4. Section 7.20 (a) of the Agreement is deleted and replaced with the
following:
(a) Fail to maintain:
(i) SENIOR DEBT TO EBITDA RATIO. A Senior Debt to EBITDA Ratio of
not more than 2.0:1 for each fiscal quarter during the term of this
Agreement.
(ii) MAXIMUM LEVERAGE RATIO. A Leverage Ratio of not more than of
3.0:1, for each of the four fiscal quarters commencing with the fiscal
quarter ending December 31, 2002, and ending with the fiscal quarter
ending on or about September 30, 2003, and a Leverage Ratio of not
more that 2.75:1 for each fiscal quarter commencing with the fiscal
quarter ending December 31, 2003, and for each fiscal quarter
thereafter for the remaining term of this Agreement.
(iii) FIXED CHARGE COVERAGE RATIO. A Fixed Charge Coverage Ratio
of not less than: (1) 1.00:1.00, for fiscal quarter ending on or about
March 31, 2003, (2) 1.20:1.00, for fiscal quarter ending on or about
June 30, 2003; (iii) 1.25:1.00, for fiscal quarter ending on or about
September 30, 2003 and thereafter.
(iv) TANGIBLE NET WORTH. Tangible Net Worth of at least
$23,000,000, increased by 50% of Borrowers' net income for each fiscal
quarter during the term of this Agreement.
(v) MINIMUM NET INCOME. Commencing with the fiscal quarter ending
on or about March 31, 2003 and as of the last day of each fiscal
quarter thereafter, Borrowers shall have (on a consolidated basis) net
income from normal business operations (as determined by Agent in its
Permitted Discretion) of no less than $1.00.
5. Schedule C-1 to the Agreement is hereby replaced with the Schedule C-1
attached to this Amendment.
6. Borrowers shall pay Agent an amendment fee in the amount of $65,000 plus
all costs, fees (including attorney's fees) and expenses incurred in connection
with the drafting and negotiation of this Amendment.
7. This Amendment shall be deemed effective as of the date first
hereinabove written and shall have no retroactive effect whatsoever. Except as
specifically amended herein, the Agreement shall remain in full force and effect
without any other changes, amendments or modifications.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
3D SYSTEMS CORPORATION,
a Delaware corporation as Administrative
Borrower and as a Borrower
By: /S/ E. JAMES SELZER
----------------------------------------
Title: CFO
-------------------------------------
3D SYSTEMS, INC.,
a California corporation as a Borrower
By: /S/ E. JAMES SELZER
----------------------------------------
Title: CFO
-------------------------------------
3D CAPITAL CORPORATION,
a California corporation, as a Borrower
By: /S/ E. JAMES SELZER
----------------------------------------
Title: CFO
-------------------------------------
3D SYSTEMS FRANCE SARL,
as a Borrower
By:
----------------------------------------
Title:
-------------------------------------
3D SYSTEMS GMBH,
as a Borrower
By:
----------------------------------------
Title:
-------------------------------------
U.S. BANK NATIONAL
ASSOCIATION, as Agent and
as a Lender
By: /S/ KAREN K. BROWN
----------------------------------------
Karen K. Brown, Sr. Vice President
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REAFFIRMATION OF GUARANTY
The undersigned has executed a Continuing Guaranty ("Guaranty") in
favor of Lenders respecting the obligations of Borrowers owing to Lenders. The
undersigned acknowledges the terms of the above Amendment and reaffirms and
agrees that the Guaranty remains in full force and effect; nothing in such
Continuing Guaranty obligates Lenders to notify the undersigned of any changes
in the financial accommodations made available to Borrowers or to seek
reaffirmations of the Guaranty; and no requirement to so notify the undersigned
or to seek reaffirmations in the future shall be implied by the execution of
this reaffirmation.
3D HOLDINGS, LLC,
a Delaware limited liability company
By: /S/ E. JAMES SELZER
----------------------------------------
Title: CFO
-------------------------------------
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Schedule C-1
Commitments
Revolver Term Loan
Lender Commitment Commitment Total Commitment
- ------------- -------------- ------------- ----------------
U.S. Bank $9,650,000 $10,350,000 $20,000,000
-------------- ------------- ----------------
All Lenders $9,650,000 $10,350,000 $20,000,000
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