EXHIBIT 10.1
NINTH AMENDMENT OF LOAN AND SECURITY AGREEMENT
This Ninth Amendment of Loan and Security Agreement (the "Ninth Amendment")
is entered into as of September 30, 2003, between and among U.S. BANK NATIONAL
ASSOCIATION, as a lender and as the arranger and administrative agent (the
"Agent") for the lenders that become members of the Lender Group pursuant to the
terms of the Loan Agreement (as that term is defined below) (such lenders,
together with their respective successors and assigns, are referred to below
individually as a "Lender" and collectively as the "Lenders"), and 3D SYSTEMS
CORPORATION (the "Parent"), and each of Parent's Subsidiaries identified on the
signature pages of this Ninth Amendment (such Subsidiaries, together with the
Parent, are referred to below individually as a "Borrower," and individually and
collectively, jointly and severally, as the "Borrowers").
RECITALS
A. The Borrowers and the Lenders are parties to a Loan and Security
Agreement dated as of May 21, 2001. That agreement, as amended by the first
through eighth amendments thereof and by the first and second waiver agreements
with respect thereto, is referred to in this Ninth Amendment as the "Loan
Agreement."
B. Pursuant to the terms of the Loan Agreement, the Lenders extend a
revolving credit facility to the Borrowers. Capitalized terms used in this Ninth
Amendment that are not defined herein have the meanings assigned to such terms
in the Loan Agreement.
C. An Event of Default exists under the Loan Agreement as a result of the
Borrowers' failure to comply with the financial covenants contained in Section
7.20(a) of the Loan Agreement (the "Existing Financial Covenant Defaults").
Furthermore, the Obligations are scheduled to mature on September 30, 2003.
D. The Borrowers have asked the Lenders to extend the maturity date of the
Obligations through October 31, 2003, and to waive the Existing Financial
Covenant Defaults. The Lenders are willing to do so, subject to the terms and
conditions set forth in this Ninth Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which hereby are acknowledged, the parties to this Ninth Amendment agree as
follows:
TERMS AND CONDITIONS
ARTICLE I
CONDITIONS SUBSEQUENT
1.1 CONDITIONS SUBSEQUENT. This Ninth Amendment, and the Lenders'
obligations hereunder, shall not be effective until all of the following events
occur:
-1-
(a) EXECUTION OF THE NINTH AMENDMENT. The Borrowers shall have executed
this Ninth Amendment and delivered it to the Agent;
(b) REAFFIRMATION OF THE GUARANTY. 3D Holdings, LLC, shall have executed
and delivered to U.S. Bank the form of Acknowledgment, Consent, and
Reaffirmation of Guaranty set forth in Annex I to this Ninth Amendment;
(c) PAYMENT OF LOAN EXTENSION FEE. The Borrowers shall have paid the
Lenders the $10,000 loan extension fee owed pursuant to paragraph 2.2 of this
Ninth Amendment; and
(d) LEGAL FEES. The Borrowers shall have paid the Lenders $1,975 to
reimburse the Lenders for legal fees incurred in connection with this Ninth
Amendment.
If all of the above-described conditions subsequent have not been satisfied (or
waived in writing by the Agent) by October 1, 2003, this Ninth Amendment shall
be of no force and effect and the parties' rights and obligations shall continue
to be governed by the Loan Agreement (without giving effect to this Ninth
Amendment). If the foregoing conditions subsequent are satisfied by October 1,
2003, the modifications described herein shall continue to be effective and
thereafter references in this Ninth Amendment to the Loan Agreement and
references in the Loan Agreement to the Agreement shall mean the Loan Agreement
(or the Agreement, as applicable), as amended hereby.
ARTICLE II
MODIFICATION OF THE REVOLVING CREDIT FACILITY
2.1 EXTENSION OF THE LENDERS' COMMITMENT TO PROVIDE THE REVOLVING CREDIT
FACILITY. Upon the effective date of this Ninth Amendment, the Lenders shall
extend their commitment to provide credit to the Borrowers pursuant to the
revolving credit facility described in Section 2.1 of the Loan Agreement through
October 31, 2003, subject to the terms of the Loan Agreement (as amended
hereby). Accordingly, upon the effective date of this Ninth Amendment, the
definition of "Maturity Date" contained in Section 1.1 of the Loan Agreement
shall be modified, amended, and restated as follows:
"Maturity Date" means October 31, 2003; provided, however, that if
Borrowers receive from a prospective lender that would qualify as an
Eligible Transferee a commitment letter to refinance in full all of
the outstanding Obligations, then the "Maturity Date" shall mean the
earlier of (a) November 30, 2003, or (b) the date on which the
commitment to provide funding, as set forth in the commitment letter,
shall expire."
2.2 REVOLVING CREDIT FACILITY EXTENSION FEE. Upon the effective date of
this Ninth Amendment, the Borrowers shall pay the Lenders $10,000 in
consideration of the Lenders' agreement to extend the Lenders' commitment in
respect of the revolving credit facility governed by Section 2.1 of the Loan
Agreement on the basis set forth in this Ninth Amendment.
-2-
2.3 REDUCTION IN LENDING COMMITMENT. As of October 1, 2003, the Lenders'
maximum commitment in respect of the revolving credit facility described in
Section 2.1 of the Loan Agreement shall decrease to $8,800,000. Accordingly,
following the effective date of this Ninth Amendment, the definition of "Maximum
Revolver Amount" contained in Section 1.1 of the Loan Agreement shall be
modified, amended, and restated as follows:
"Maximum Revolver Amount" means $8,800,000.
Upon the effective date of this Ninth Amendment, Schedule C-1 attached to this
Ninth Amendment shall replace and supersede Schedule C-1 to the Loan Agreement.
2.4 MODIFICATION OF THE BORROWING BASE. The second sentence of Section
2.1(a) of the Loan Agreement hereby is modified, amended, and restated as
follows:
"For purposes of this Agreement, 'Borrowing Base,' as of any date of
determination, shall mean the result of:
(x) 90% of the amount of Eligible Foreign Accounts, plus 80% of the
amount of Eligible Domestic Accounts, plus 60% of the amount of
Eligible Foreign Subsidiary Accounts, plus
(y) the least of
(i) $4,825,000
(ii) 50% of the value of Eligible Inventory, and
(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)."
ARTICLE III
COLLATERAL FOR THE BORROWERS' OBLIGATIONS
3.1 CONTINUED VALIDITY OF THE SECURITY INTERESTS AND LIENS IN THE
COLLATERAL. The Borrowers hereby expressly reaffirm and acknowledge the validity
of the Loan Documents, the accuracy of the information contained in those
documents, and the Borrowers' grants of security interests and liens in favor of
the Lenders in the Collateral. The Borrowers acknowledge and agree that the Loan
Documents, and the security interests and liens created by those agreements in
the Collateral, secure payment of the Obligations. Furthermore, the Borrowers
acknowledge and agree that the Loan Documents, and the security interests and
liens created thereby in the Collateral, shall continue in full force and effect
after the execution of this Ninth Amendment.
-3-
3.2 OTHER DOCUMENTS. The Borrowers hereby agree that until the Borrowers
satisfy the Obligations in full and the Lenders have no further commitment to
extend credit to the Borrowers, the Borrowers promptly shall execute and deliver
to the Agent all documents reasonably deemed necessary or desirable by the Agent
to create, evidence, perfect, or continue the Lenders' security interests or
liens in all or any portion of the Collateral. In addition, the Borrowers hereby
authorize the Agent to take such actions that the Agent deems necessary or
desirable in its reasonable discretion to perfect (or continue the perfection
of) the Lenders' security interests and liens in all or any portion of the
Collateral (including, but not limited to, filing financing statements).
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 WAIVER OF EXISTING FINANCIAL COVENANT DEFAULTS. The Lenders hereby
agree that, on the effective date of this Ninth Amendment, the Events of Default
resulting from the Existing Financial Covenant Defaults shall be waived.
4.2 RELEASE OF CLAIMS. The Borrowers hereby release and forever discharge
the Agent, the Lenders, and their agents, principals, successors, assigns,
employees, officers, directors, and attorneys, and each of them, of and from any
and all claims, demands, damages, suits, rights, defenses, offsets, or causes of
action of every kind and nature that the Borrowers (or any of them) have or may
have as of the date they execute this Ninth Amendment, whether known or unknown,
contingent or matured, foreseen or unforeseen, asserted or unasserted,
including, but not limited to, all claims for compensatory, general, special,
consequential, incidental, and punitive damages, attorney fees, and equitable
relief. In that regard, the Borrowers hereby agree to waive and relinquish, and
by executing this Ninth Amendment shall be deemed to have waived and
relinquished to the fullest extent permitted by law, the provisions, rights, and
benefits of Section 1542 of the California Civil Code, which provides that:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
Furthermore, the Borrowers hereby waive any and all provisions, rights, and
benefits conferred by any laws of any state or territory of the United States,
or principles of common law, that are similar, comparable, or equivalent to
Section 1542 of the California Civil Code. The Borrowers recognize that the
Borrowers may discover after the effective date of this Ninth Amendment facts in
addition to or different from those that the Borrowers know or believe to be
true with respect to the subject matter of the released claims but hereby
stipulate and agree that as of the effective date of this Ninth Amendment the
Borrowers fully, finally, and forever settle and release any and all released
claims, known or unknown, as described above.
4.3 LEGAL ADVICE OBTAINED. The Borrowers acknowledge that they have
obtained the advice of legal counsel prior to signing this Ninth Amendment and
that each of the Borrowers executes this Ninth Amendment voluntarily, with full
knowledge of its significance,
-4-
and with the express intention of effecting the legal consequences provided by
Section 1541 of the California Civil Code (namely, the extinguishment of
obligations except for the executory provisions of this Ninth Amendment).
4.4 EXPENSES OF THE LENDERS. The Borrowers shall reimburse the Lenders for
all expenses incurred by the Lenders in connection with their banking and
lending relationship with the Borrowers, including, but not limited to,
collateral appraisals, collateral examination and inspection costs, and the
reasonable fees and expenses of legal counsel for the Lenders in connection with
the analysis of the existing banking relationship among the Borrowers and the
Lenders, the preparation, negotiation, closing, administration, amendment,
modification, and enforcement of the Loan Agreement (as amended by this Ninth
Amendment), or the agreement evidenced thereby; the preservation, protection, or
disposition of the Collateral (or the Lenders' security interests therein); or
as required by applicable law, rules, policies, and regulations. The amounts
owed by the Borrowers pursuant to the preceding sentence of this Ninth Amendment
are part of the Obligations secured by the Collateral and shall be paid by the
Borrowers within ten days of the date that the Agent provides the Borrowers with
written notice requesting payment of such costs and expenses, or on the Maturity
Date, whichever occurs first.
ARTICLE V
GENERAL TERMS AND CONDITIONS
5.1 CAPTIONS. Any captions for the sections of this Ninth Amendment are for
convenience only and do not control or affect the meaning or construction of any
of the provisions of this Ninth Amendment.
5.2 SEVERABILITY. If any term, condition, or provision of this Ninth
Amendment, or any other document or instrument referred to in this Ninth
Amendment, is held invalid for any reason, such offending term, condition, or
provision shall be stricken therefrom, and the remainder of this Ninth Amendment
shall not be affected thereby.
5.3 NEGOTIATED AGREEMENT. This Ninth Amendment is a negotiated agreement.
In the event of any ambiguity in this Ninth Amendment, such ambiguity shall not
be subject to a rule of contract interpretation that would cause the ambiguity
to be construed against any of the parties to this Ninth Amendment.
5.4 VOLUNTARY AND ENTIRE AGREEMENT. The only consideration for the
execution of this Ninth Amendment is the consideration expressly recited herein.
The Loan Agreement (as amended hereby) and the other agreements and instruments
referred to in this Ninth Amendment remain in full force and effect and set
forth and constitute the entire agreement among the Lenders and the Borrowers
with respect to the Obligations and the Collateral for the Obligations. No oral
promise or agreement of any kind or nature, other than those that have been
reduced to writing and set forth herein or in the other written agreements among
the Lenders and the Borrowers, has been made among the Lenders and the
Borrowers. The Borrowers acknowledge that they have been represented by legal
counsel in connection with the negotiation and execution of this Ninth Amendment
and the other agreements and instruments referred to in this
-5-
Ninth Amendment. The Borrowers voluntarily executed this Ninth Amendment and the
other agreements and instruments referred to in this Ninth Amendment.
5.5 CONTINUED EFFECTIVENESS OF THE LOAN DOCUMENTS. The Loan Documents
remain in full force and effect in accordance with their terms, as modified by
this Ninth Amendment.
5.6 CONSTRUCTION AND CONFLICT WITH OTHER AGREEMENTS. In the event of any
conflict between the terms of this Ninth Amendment and the terms of any other
agreements or instruments referred to in this Ninth Amendment, the terms of this
Ninth Amendment shall control.
5.7 JURY TRIAL WAIVER. THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. THE
PARTIES HERETO REPRESENT THAT EACH HAS REVIEWED THIS AGREEMENT AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
5.8 WRITING REQUIREMENT. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES, AND
COMMITMENTS MADE BY U.S. BANK AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER
CREDIT EXTENSIONS THAT ARE NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER'S RESIDENCE, MUST BE IN WRITING, EXPRESS
CONSIDERATION, AND BE SIGNED BY U.S. BANK TO BE ENFORCEABLE.
U.S. BANK NATIONAL ASSOCIATION, 3D SYSTEMS CORPORATION,
as Agent and as a Lender a Delaware corporation as Administrative
Borrower and as a Borrower
By /s/ Raymond R. Anderson
-------------------------------
Raymond R. Anderson By /s/ Peter White
Authorized Officer -----------------------------------
Title: VP
3D CAPITAL CORPORATION,
a California corporation, as Borrower
By /s/ Peter White
-----------------------------------
Title: VP
-6-
3D SYSTEMS FRANCE SARL,
as a Borrower
By /s/ Peter White
-----------------------------------
Title: VP
3D SYSTEMS GMBH,
as a Borrower
By /s/ Peter White
-----------------------------------
Title: VP
-7-
ANNEX I
ACKNOWLEDGMENT, CONSENT, AND REAFFIRMATION OF GUARANTY
3D Holdings, LLC ("3D Holdings") has executed a Continuing Guaranty (the
"Guaranty") in favor of the Lenders whereby it unconditionally guaranteed
payment and performance of the obligations of the Borrowers owing to the
Lenders. 3D Holdings acknowledges the terms of the foregoing Ninth Amendment of
Loan and Security Agreement and reaffirms and agrees that the Guaranty remains
in full force and effect. Nothing in the Guaranty obligates the Lenders to
notify the undersigned of any changes in the financial accommodations the
Lenders make available to the Borrowers, or to seek reaffirmations of the
Guaranty. No requirement to so notify the undersigned, or to seek reaffirmations
in the future, shall be implied by the execution of this document.
3D Holdings hereby releases and forever discharges the Agent, the Lenders,
and each of their agents, principals, successors, assigns, employees, officers,
directors, and attorneys, and each of them, of and from any and all claims,
demands, damages, suits, rights, defenses, offsets, or causes of action of every
kind and nature that 3D Holdings has or may have as of the date it executes this
document, whether known or unknown, contingent or matured, foreseen or
unforeseen, asserted or unasserted, including, but not limited to, all claims
for compensatory, general, special, consequential, incidental, and punitive
damages, attorney fees, and equitable relief. In that regard, 3D Holdings hereby
agrees to waive and relinquish, and by executing this reaffirmation shall be
deemed to have waived and relinquished to the fullest extent permitted by law,
the provisions, rights, and benefits of Section 1542 of the California Civil
Code, which provides that:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
Furthermore, 3D Holdings hereby waives any and all provisions, rights, and
benefits conferred by any laws of any state or territory of the United States,
or principles of common law, that are similar, comparable, or equivalent to
Section 1542 of the California Civil Code. 3D Holdings recognizes that it may
discover after the effective date of this document facts in addition to or
different from those that 3D Holdings knows or believes to be true with respect
to the subject matter of the released claims but hereby stipulates and agrees
that as of the effective date of this document 3D Holdings fully, finally, and
forever settles and releases any and all released claims, known or unknown, as
described above.
3D Holdings acknowledges that it has obtained the advice of legal counsel
prior to signing this document and executed this document voluntarily, with full
knowledge of its significance, and with the express intention of effecting the
legal consequences provided by Section 1541 of the California Civil Code.
Dated as of September 30, 2003.
3D HOLDINGS, LLC,
a Delaware limited liability company
By /s/ Peter White
------------------------------------------
Title: VP
2
SCHEDULE C-1
COMMITMENTS
Revolver Term Loan
Lender Commitment Commitment Total Commitment
- ---------------------- --------------------- ---------------------- ---------------------
U.S. Bank $8,800,000 -0- $8,800,000
All Lenders $8,800,000 -0- $8,800,000