EXHIBIT 10.6
AMENDMENT AGREEMENT NUMBER SIX
TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT AGREEMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of August 30, 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, and that certain Amendment Agreement Number Five to Loan and
Security Agreement, dated as of December 20, 2001 (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 (i) to include in the
Borrowing Base the accounts of Foreign Subsidiaries which satisfy criteria for
eligibility as may be established by Lenders, (ii) to the sale by 3D Systems,
Inc., from time to time of certain Accounts in an aggregate amount not to exceed
$5,000,000 with the proceeds being used to reduce the outstanding Advances,
(iii) to the inclusion of Subordinated Debt in the calculation of Tangible Net
Worth, and (iv) to extend the deadline for Borrowers to complete certain
unsatisfied conditions subsequent contained in the Agreement.
WHEREAS, Lenders have agreed to Borrowers' requests on the condition that
Borrowers agree to a change in the definition of "Required Lenders," that the
Foreign Subsidiaries whose accounts are to be considered for the Borrowing Base
become "Borrowers" under the Agreement and to the other terms and conditions
contained in this Amendment.
WHEREAS, Borrowers have agreed to a change in the definition of "Required
Lenders," to the requirement that the Foreign Subsidiaries whose accounts are to
be considered for the Borrowing Base become "Borrowers" under the Agreement and
to the other terms and the conditions required by Lenders.
Page 1
NOW, THEREFORE, the parties agree as follows:
1. AMENDMENTS.
1.1 The definitions of "MAXIMUM REVOLVER AMOUNT" and "REQUIRED
LENDERS" and "TANGIBLE NET WORTH" contained in SECTION 1.1 of the Agreement are
deleted in their entirety and are replaced with new definitions of "MAXIMUM
REVOLVER AMOUNT" and "REQUIRED LENDERS" and "TANGIBLE NET WORTH" as follows:
"MAXIMUM REVOLVER AMOUNT" means $13,500,000.
"REQUIRED LENDERS" means, at any time, (i) if there are only two
Lenders, then both Lenders, and (ii) if there are more than two
Lenders, Lenders whose Pro Rata Shares aggregate 66-2/3% of the Total
Commitments, or if the Commitments have been terminated irrevocably,
66-2/3% of the Obligations then outstanding.
"TANGIBLE NET WORTH" means, as of any date of determination, the
result of (a) the sum of (i) the total stockholder's equity of Parent
and its Subsidiaries, and (ii) the aggregate amount of the outstanding
Subordinated Debt, MINUS (b) the sum of (i) all Intangible Assets of
Parent and its Subsidiaries, and (ii) all amounts due to Parent and
its Subsidiaries from Affiliates, PROVIDED that the affect of any
cumulative foreign currency translation adjustments shall be excluded
from Tangible Net Worth.
1.2 Subpart (i) of the definition of COLLATERAL is deleted in its
entirety and is replaced with a new subpart (i) as follows:
(i) the lesser of (i) 65% of the shares of each class of Stock of each
direct or indirect Subsidiary (whether present or future) of
Borrowers; provided, however, that if a Foreign Subsidiary becomes a
Borrower, then the foregoing percentage shall be immediately increased
to 100%, or (ii) all of the shares of each class of Stock of each such
Subsidiary, in each case owned as of the Closing Date or thereafter
acquired by Borrowers or any direct or indirect Subsidiary of
Borrowers,
1.3 The definitions of "ADDITIONAL COLLATERAL" and "FOREIGN SUBSIDIARY
GUARANTIES" are deleted in their entirety.
1.4 New definitions of "ELIGIBLE FOREIGN SUBSIDIARY," "ELIGIBLE
FOREIGN SUBSIDIARY Account," "FOREIGN SUBSIDIARY ACCOUNT" and "MANAGEMENT BODY"
are added to the Agreement as follows:
"ELIGIBLE FOREIGN SUBSIDIARY" means a Foreign Subsidiary (i) that is
formed under the laws of, and maintains its principal place of
Page 2
business, registered office or chief executive office in, the United
Kingdom, Germany or France, (ii) that has executed and delivered to
Agent documentation required by Lender in order for such Foreign
Subsidiary to become a Borrower under the Agreement and other Loan
Documents, (iii) that has executed and delivered to Agent security
agreements, fixed charges, floating charges and any other agreements
or documents necessary to create and perfect Agent's Lien on the
Foreign Subsidiary's present and future assets, including without
limitation, the Foreign Subsidiary Accounts and inventory to secure
the Obligations as a Borrower, and any other documents necessary to
perfect Agent's Lien on present and future assets of such Foreign
Subsidiary, including without limitation, its Foreign Subsidiary
Accounts and inventory, (iv) the Secretary of which, or a member of
the Board of Directors or Management Body of which, has executed and
delivered to Agent certificates attesting to the resolutions of such
Foreign Subsidiary's Board of Directors or Management Body authorizing
its execution, delivery, and performance of loan documents and
security documents in favor of Agent on behalf of the Lender Group and
authorizing specific officers, directors or members of its Management
Body of such Foreign Subsidiary to execute the same, and (v) that has
delivered to Agent an opinion of legal counsel acceptable to Agent for
such Foreign Subsidiary which contains, without limitation, opinions
as to the validity and enforceability of the loan documents and
related security documents, and the perfection and priority of Agent's
Lien on the Foreign Subsidiary's present and future assets, including,
without limitation, its Foreign Subsidiary Accounts and inventory.
"ELIGIBLE FOREIGN SUBSIDIARY ACCOUNT" means a Foreign Subsidiary
Account (i) created by one of the Eligible Foreign Subsidiaries in the
ordinary course of its business and the corresponding Account Debtor's
principal place of business, registered office or chief executive
office is located in a country that is a member of the European Union,
(ii) that arises out of such Foreign Subsidiary's sale of goods or
rendition of services, (iii) that complies with each of the
representations and warranties respecting Eligible Accounts made by
Borrowers under the Loan Documents, and (iv) that is not excluded as
eligible by virtue of one or more of the ineligibility criteria set
forth in clauses (a) through (q) contained in the definition of
Eligible Accounts (without regard to the ineligibility criterion
contained in clause (g) of the definition of Eligible Account).
"FOREIGN SUBSIDIARY ACCOUNTS" means all of a Foreign Subsidiary's now
owned or hereafter acquired right, title, and interest with
Page 3
respect to "accounts" (as that term is defined in the Code), and any
and all supporting obligations in respect thereof.
"MANAGEMENT BODY" means any governing or management body of a Foreign
Subsidiary that has the authority to bind such Foreign Subsidiary.
1.5 SECTION 2.1(A) of the Agreement is deleted in its entirety and is
replaced with a new SECTION 2.1(A) as follows:
(a) Subject to the terms and conditions of this Agreement, (i) from
and after the closing of the Tender Offer through August 31, 2002,
each Lender with a Revolver Commitment shall make advances
(collectively, the "Advances") to Borrowers of its Pro Rata Share of
the amount required to finance Borrowers' financial obligations
arising in connection with the consummation of the Tender Offer, the
Merger, and the other transactions contemplated by the Merger
Agreement and the Merger, as well as any other use of proceeds
permitted under SECTION 7.17; provided, however, that the aggregate
outstanding amount of all such Advances shall not exceed the lesser of
(1) the Maximum Revolver Commitment, and (2) the amount that would be
calculated as the Borrowing Base (as defined below) if the accounts of
the Foreign Subsidiaries were deemed assets of Borrowers and (ii)
commencing on September 1, 2002 and at all times thereafter during the
first 3 years of the term of this Agreement, each Lender with a
Revolver Commitment agrees (severally, not jointly or jointly and
severally) to make additional Advances to Borrowers in an amount at
any one time outstanding not to exceed such Lender's Pro Rata Share of
an amount equal to THE LESSER OF (i) the Maximum Revolver Amount LESS
the amount of the outstanding Advances, LESS the Letter of Credit
Usage and LESS the Foreign Exchange Reserve, or (ii) the Borrowing
Base LESS the amount of the outstanding Advances, less the Letter of
Credit Usage and LESS the Foreign Exchange Reserve. For purposes of
this Agreement, "BORROWING BASE," as of any date of determination,
shall mean the result of:
(x) 80% of the amount of Eligible Foreign Accounts and Eligible
Domestic Accounts, plus 60% of the amount of Eligible
Foreign Subsidiary Accounts, PLUS
(Y) THE LOWEST OF
(i) $6,750,000,
(ii) 50% of the value of Eligible Inventory, and
Page 4
(iii) 100% of the amount of credit availability created by
CLAUSE (X) above, MINUS
(z) the aggregate amount of reserves, if any, established by
Agent under SECTION 2.1(B).
1.6 The second sentence of SECTION 2.5 of the Agreement is deleted in
its entirety and is replaced with a new second sentence as follows:
The preceding sentence shall not apply to that portion of the
Overadvances, if any, that arises between the Closing Date and
September 1, 2002, which would be eliminated if the accounts of the
Foreign Subsidiaries arising from the sale of goods or rendition of
services were deemed to be Accounts of the Borrowers.
1.7 SECTION 3.2(B) of the Agreement is deleted in its entirety and is
replaced with the following:
(b) on or before October 1, 2002, deliver to Agent the duly executed
Control Agreements, and each such Control Agreement shall be in full
force and effect; PROVIDED, HOWEVER, that no Control Agreements shall
be required with respect to the following accounts so long as total
funds in each account does not exceed at any time the amount indicated
in parentheses after such account: (i) Account Number 1465-3-01690 at
Bank of America, Woodland Hills, California ($25,000); (ii) Account
Number 89189018 at Bank of America, Hong Kong ($25,000); (iii) Account
Number 606-8019524 at Wells Fargo Bank, Denver, Colorado ($50,000);
(iv) Account number 800-922-7 at Royal Bank of Canada, Chelston Park,
Collymore Rock, St. Michael ($25,000); and (v) Account Number
21105003738322 at Bank of America, San Francisco, California ($25,000;
provided that if this account has not been closed by December 1, 2002,
a Control Agreement must be in place with respect to such account by
such date).
1.8 SECTION 3.2(F) of the Agreement is deleted in its entirety and is
replaced with the following:
(f) on or before October 1, 2002, deliver to Agent such Collateral
Access Agreements from lessors, warehousemen, bailees, and other third
persons as Agent may require in its Permitted Discretion.
1.9 SECTION 3.2(H) of the Agreement is deleted in its entirety and is
replaced with the following:
(h) on or before October 1, 2002, all information and opinions
reasonably required by Agent's United Kingdom counsel in order
Page 5
to issue an opinion reasonably satisfactory to Agent shall have been
delivered by Borrowers to Agent's United Kingdom counsel.
1.10 SECTION 4.9 of the Agreement is deleted in its entirety and is
replaced with a new SECTION 4.9 as follows:
4.9 [INTENTIONALLY OMITTED].
1.11 Subsection (a)(iv) of SECTION 7.20 of the Agreement is deleted in
its entirety and is replaced with a new SECTION 7.20 (A)(IV) as follows:
(IV) [INTENTIONALLY OMITTED].
1.12 SECTION 8.14 of the Agreement is deleted in its entirety and is
replaced with a new SECTION 8.14 as follows:
If on August 31, 2002, the Borrowers are not in compliance with the
Borrowing Base or have Overadvances and such non-compliance or
Overadvances are not cured by September 1, 2002; or
1.13 SECTION 9.2 of the Agreement is deleted in its entirety and is
replaced with a new SECTION 9.2 as follows:
9.2 [INTENTIONALLY OMITTED].
2. PERMITTED SALE OF ACCOUNTS. Notwithstanding the provisions of Sections
4.1 and 7.4 of the Agreement to the contrary, Borrowers have requested that the
Required Lenders agree to a sale by Borrowers of certain Accounts, free and
clear of any Agent Liens (the "PROPOSED SALE OF ACCOUNTS"). The Required Lenders
consent to the request of Borrowers subject to the following terms and
conditions:
2.1 Borrowers shall only be permitted to sell Accounts that are not
Eligible Accounts. The amount (based upon the gross invoice amount) of
uncollected Accounts sold by Borrowers shall not exceed, at any one time,
$5,000,000.
2.2 Not less than 5 Business Days prior to the date the Proposed Sale
of Accounts is to be completed, Borrower shall have delivered to Agent a copy of
the proposed purchase agreement pursuant to which the Proposed Sale of Accounts
is to be consummated (the "PURCHASE AGREEMENT"). Borrowers shall not complete
the Proposed Sale of Accounts if the terms and conditions of the Purchase
Agreement are not approved by Agent prior to the date the Proposed Sale of
Accounts is to be completed.
2.3 Not less than 3 Business Days prior to the date the Proposed Sale
of Accounts is to be completed, Borrower shall have delivered to Agent the
following:
2.3.1 A schedule listing all of the Accounts to be sold (the
"Sale Accounts"), which schedule shall include the identity of each Account
Debtor, the amount of
Page 6
each invoice corresponding to the Accounts being sold, a copy of each invoice
and an explanation why such Accounts are not Eligible Accounts.
2.3.2 An assignment of sale proceeds executed by Borrowers and
the purchaser of the Accounts being sold pursuant to the Proposed Sale of
Accounts, which shall contain terms and conditions satisfactory to Agent, in its
sole discretion, including, without limitation, an assignment in favor of Agent
on behalf of the Lender Group of all proceeds payable to Borrowers under the
Purchase Agreement (the "Sale Proceeds"), free and clear of any rights of offset
that might exist in favor of such purchaser, and an acknowledgement from such
purchaser that it shall not purchase any Accounts, other than the Sale Accounts,
without the prior written consent of Agent, on behalf of the Required Lenders.
2.4 On the date Sale Accounts are sold pursuant to a corresponding
Purchase Agreement, Agent shall receive a wire transfer of all Sale Proceeds.
The Sale Proceeds shall be applied as follows:
2.4.1 First, to any costs, fees and expenses, if any, due and
owing pursuant to Section 2.6(a) of the Agreement as the result of the
prepayment of a LIBOR Rate Loan.
2.4.2 Second, to the outstanding Obligations arising under
Section 2.1 of the Agreement.
3. EFFECTIVE DATE OF THIS AMENDMENT, COUNTERPARTS. 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. This Amendment may be executed in multiple
counterparts, all of which shall be considered one and the same.
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
----------------------------------
Page 7
3D CAPITAL CORPORATION,
a California corporation, as a Borrower
By: /S/ E. JAMES SELZER
-------------------------------------
Title: CFO
----------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as Agent and as a Lender
By: /S/ FRANCIS S. LIM
-------------------------------------
Francis S. Lim, Vice President
UNITED CALIFORNIA BANK,
as a Lender
By: /S/ DAVID G. KRONEN
-------------------------------------
Title: VICE PRESIDENT
----------------------------------
Page 8
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
----------------------------------
Page 9