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FIRST AMENDMENT TO CREDIT AGREEMENT

Loan Agreement

FIRST AMENDMENT TO CREDIT AGREEMENT | Document Parties: BANK OF AMERICA, N.A. | GERBER SCIENTIFIC INTERNATIONAL LTD | HSBC BANK USA, NATIONAL ASSOCIATION | JP MORGAN CHASE BANK NA | MERRILL LYNCH CAPITAL CORPORATION | RBS CITIZENS, NA | SOVEREIGN BANK | SPANDEX LIMITED You are currently viewing:
This Loan Agreement involves

BANK OF AMERICA, N.A. | GERBER SCIENTIFIC INTERNATIONAL LTD | HSBC BANK USA, NATIONAL ASSOCIATION | JP MORGAN CHASE BANK NA | MERRILL LYNCH CAPITAL CORPORATION | RBS CITIZENS, NA | SOVEREIGN BANK | SPANDEX LIMITED

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Title: FIRST AMENDMENT TO CREDIT AGREEMENT
Governing Law: Massachusetts     Date: 12/8/2008
Industry: Computer Peripherals     Law Firm: Cummings Lockwood;Goodwin Procter     Sector: Technology

FIRST AMENDMENT TO CREDIT AGREEMENT, Parties: bank of america  n.a. , gerber scientific international ltd , hsbc bank usa  national association , jp morgan chase bank na , merrill lynch capital corporation , rbs citizens  na , sovereign bank , spandex limited
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Exhibit 10.2

 

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT (this " Amendment ") dated as of November 21, 2008 by and among GERBER SCIENTIFIC, INC., GERBER SCIENTIFIC INTERNATIONAL INC., as Borrowers, GERBER COBURN OPTICAL INTERNATIONAL, INC., GERBER SCIENTIFIC UK, LTD., SPANDEX LTD., and GERBER SCIENTIFIC INTERNATIONAL LTD., as the Initial Guarantors, VIRTEK VISION INTERNATIONAL INC., VIRTEK LASER SYSTEMS NORTH AMERICA, INC., VIRTEK EUROPEAN HOLDINGS INC., (the “ Virtek Guarantors ”, and together with Initial Guarantors, the “ Guarantors ”), the several banks and other financial institutions and lenders from time to time party hereto (the " Lenders "), and RBS CITIZENS, N.A., in its capacity as administrative agent for the Lenders (the " Agent ").

 

WITNESSETH:

 

WHEREAS, the Borrowers, the Initial Guarantors, the Lenders and the Agent are each party to that certain Credit Agreement dated as of January 31, 2008 (the “ Credit Agreement ”) pursuant to which the Lenders established a $125,000,000 revolving credit facility for the benefit of the Borrowers.

 

WHEREAS, the Borrowers previously informed the Agent and the Lenders that Gerber Scientific, Inc. (“ Gerber ”) desired to indirectly acquire all of the capital stock of Virtek Vision International Inc. (“ Virtek Public ”) (the “ Virtek Acquisition ”).

 

WHEREAS, the Borrowers requested a waiver of the terms of clause (iv) of the definition of Permitted Acquisition as such clause applies to the Virtek Acquisition (the “ Acquisition Waiver ”) and the Majority Lenders granted such Acquisition Waiver on August 28, 2008.

 

WHEREAS, Gerber, acting through Gerber Scientific International LTD, has consummated the Virtek Acquisition.

 

WHEREAS, pursuant to Section 8.8 of the Credit Agreement the Virtek Guarantors are required to become Guarantors under the Credit Agreement.

 

WHEREAS, the Borrowers have requested certain adjustments to the definitions of EBIT and EBITDA as a result of the Virtek Acquisition and the Majority Lenders have agreed to such adjustments.

 

NOW, THEREFORE, for and in consideration of the mutual premises, covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.   Defined Terms .  Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement.

 

Section 2.   Amendment of Credit Agreement .   Section 1.1 of the Credit Agreement is hereby amended by deleting the definitions of Consolidated EBIT and Consolidated EBITDA in their entirety and substituting therefor the following:

 

“‘ 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, provided , however , that for each of the four quarter periods ending October 31, 2008, January 31, 2009, April 30, 2009 and July 31, 2009 Consolidated EBIT shall be increased by (i) the non-cash “inventory step up” for such period associated with the inventory of the Virtek Guarantors and their Subsidiaries purchased by the Borrowers on the date of the Virtek Acquisition and (ii) the non-cash expense required to be taken by the Parent in the amount of the difference between the ceiling and the spot rate on its hedging agreement in connection with the Virtek Acquisition relating to Canadian Dollar fluctuations not to exceed $750,000 U.S. Dollars in the aggregate.”

 

“‘ 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 provided , however , that for each of the four quarter periods ending October 31, 2008, January 31, 2009, April 30, 2009 and July 31, 2009 Consolidated EBITDA shall be increased by (i) the non-cash “inventory step up” for such period associated with the inventory of the Virtek Guarantors and their Subsidiaries purchased by the Borrowers on the date of  the Virtek Acquisition and (ii) the non-cash expense required to be taken by the Parent in the amount of the difference between the ceiling and the spot rate on its hedging agreement in connection with the Virtek Acquisition relating to Canadian Dollar fluctuations not to exceed $750,000 U.S. Dollars in the aggregate.”

 

Section 3.   Amendment of Credit Agreement Schedules .  Each of the Schedules to the Credit Agreement is hereby amended and restated by deleting the Schedules attached to the Credit Agreement in their entirety and substituting therefor the Schedules attached hereto as Exhibit A .

 

Section 4.   Conditions Precedent .  The effectiveness of this Amendment is subject to the truth and accuracy of the representations set forth in Section 7 below and shall become effective upon receipt by the Agent of:

 

(a)           Counterparts of this Amendment duly executed by each of the Loan Parties, the Agent and the Majority Lenders.

 

(b)           A joinder of security agreement executed by Virtek Laser Systems North America, Inc. (“ Virtek U.S. ”).

 

(c)           A general security agreement executed by Virtek Public.

 

(d)           A general security agreement executed by Virtek European Holdings Inc. (“ Virtek Private ”).

 

(e)           A share pledge executed by Virtek Public with regard to shares of Virtek Private.

 

(f)           A share pledge executed by Virtek Public with regard to shares of Virtek U.S.

 

(g)           Powers of attorney with respect to pledge of shares of Virtek Private.

 

(h)           Stock certificates representing all shares of Virtek Private.

 

(i)           An Intellectual Property Security Agreement executed by Virtek U.S.

 

(j)           The opinions of (i) Cummings & Lockwood LLC, United States counsel to the Loan Parties and (ii) Goodmans, LLP Canadian counsel to the Guarantors, each dated the date of execution of this Agreement.

 

(k)           Copies of the resolutions of the Board of Directors or equivalent body of each of  the Loan Parties (other than Gerber Scientific UK, LTD and Spandex Limited) authorizing the execution, delivery and performance of this Amendment and the other Loan Documents to which such Loan Party is a party, certified by the Secretary or an Assistant Secretary (or Clerk or Assistant Clerk) of such Loan Party (which certificate shall state that such resolutions are in full force and effect).

 

(l)           Certificates from an offi


 
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