EXHIBIT 10.25(B)
1st Amendment to Loan and
Security Agreement
Borrower: Osicom Technologies, Inc., a Delaware corporation
(formerly known as Cray Communications, Inc.)
Address: 0000 00xx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Date: April 16, 1999
This First Amendment (the "Amendment") to Loan and Security Agreement (the
"Loan Agreement") is entered into by and between Coast Business Credit(R), a
division of Southern Pacific Bank (fka Southern Pacific Thrift & Loan
Association) ("Coast"), and Osicom Technologies, Inc., a Delaware corporation,
formerly known as Cray Communications, Inc. ("Borrower"). The Loan Agreement and
Schedule, as modified by this Amendment, shall for all purposes be deemed to be,
and the same shall constitute an integral part of the Loan Agreement and
Schedule. (Definitions and certain terms used in this Amendment shall have the
meanings set forth in the Loan Agreement, the Schedule and all other documents
and agreements executed in connection therewith or in furtherance thereof).
For good and valuable consideration, receipt of which is hereby
acknowledged, the Loan Agreement is hereby amended in the following respects:
SECTION 1 OF THE LOAN AGREEMENT (with respect to Loans) is supplemented as
follows:
A subsection 1.1a is added which reads as follows:
1.1a Letters of Credit. At the request of Borrower, Coast may, in its sole
discretion, arrange for the issuance of letters of credit for the account of
Borrower (collectively, "Letters of Credit"), by issuing guarantees to the
issuer of the letter of credit or by other means. All Letters of Credit shall be
in form and substance satisfactory to Coast in its sole discretion. The
aggregate face amount of all outstanding Letters of Credit from time to time
shall not exceed the amount shown on the Schedule (the "Letter of Credit
Sublimit"), and shall be reserved against Loans which would otherwise be
available hereunder. Borrower shall pay all bank charges for the issuance of
Letters of Credit. Any payment by Coast under or in connection with a Letter of
Credit shall constitute a Loan hereunder on the date such payment is made. Each
Letter of Credit shall have an expiration date no later than thirty (30) days
prior to the Maturity Date. Borrower hereby agrees to indemnify, save, and hold
Coast harmless from any loss, cost, expense, or liability, including, without
limitation, payments made by Coast, expenses, and reasonable attorneys' fees
incurred by Coast
arising out of or in connection with any Letters of Credit. Borrower agrees to
be bound by the regulations and interpretations of the issuer of any Letters of
Credit guarantied by Coast and opened for Borrower's account or by Coast's
interpretations of any Letter of Credit issued by Coast for Borrower's account,
and Borrower understands and agrees that Coast shall not be liable for any
error, negligence, or mistake, whether of omission or commission, in following
Borrower's instructions or those contained in the Letters of Credit or any
modifications, amendments, or supplements thereto. Borrower understands that
Letters of Credit may require Coast to indemnify the issuing bank for certain
costs or liabilities arising out of claims by Borrower against such issuing
bank. Borrower hereby agrees to indemnify and hold Coast harmless with respect
to any loss, cost, expense, or liability incurred by Coast under any Letter of
Credit as a result of Coast's indemnification of any such issuing bank. The
provisions of this Agreement, as it pertains to Letters of Credit, and any other
present or future documents or agreements between Borrower and Coast relating to
Letters of Credit are cumulative.
Except as expressly modified herein, all other terms and conditions of
Section 1 of the Loan Agreement, as previously modified or amended, remain
unchanged.
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SECTION 1 OF THE SCHEDULE (with respect to the Credit Limit) is amended to read
as follows:
1. CREDIT LIMIT
(Section 1.1): Loans in a total amount at any time outstanding
not to exceed the lesser of a total of $7,000,000
(the "Maximum Dollar Amount"), or the sum of (a) and
(b) below:
(a) Loans (the "Receivable Loans") in an amount
not to exceed 79% of the amount of
Borrower's Eligible Receivables (as defined
in Section 8 above) for the month of April,
1999 and decreasing by 1% per month
thereafter until such time as the advance
rate reaches 75%, at which point the maximum
advance rate shall remain at 75%. The
advance rate on the Receivable Loans may be
increased, in Coast's sole and absolute
discretion, to an amount not to exceed 80%
of Borrower's Eligible Receivables if Coast,
in it sole and absolute discretion,
determines that dilution of Receivables has
been and is, in Coast's opinion, likely to
continue at a rate that is 10% or less, plus
(b) Loans (the "Inventory Loans") in an amount
not to exceed the lesser of:
(1) 30% of the value of Borrower's Eligible
Inventory (as defined in Section 8 above),
calculated at the lower of cost or market
value and determined on a first-in,
first-out basis, or
(2) $1,500,000.00.
(c) A Term Loan (the "Equipment Loan") in the
original principal amount of $478,000. The
Equipment Loan will be repayable in 36 equal
monthly installments of principal with the
first principal installment due on May 31,
1999 and continuing on the last day of each
month thereafter. The Equipment Loan is
evidenced by that certain Secured Term Note
of even date herewith.
(Section 1.1A): Letter of Credit
Sublimit: $500,000
Except as expressly modified herein, all other terms and conditions of
Section 1 of the Schedule, as previously modified or amended, remain unchanged.
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SECTION 3 OF THE SCHEDULE (with respect to Fees) is amended to read as follows:
3. FEES
Amendment Fee: $20,000, fully earned and payable on the effective date of this
Amendment.
Except as expressly modified herein, all other terms and conditions of
Section 3 of the Schedule, as previously modified or amended, remain unchanged.
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SECTION 4 OF THE SCHEDULE (with respect to Maturity Date and Early Termination
Fee) is amended to read as follows:
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4. Maturity Date
(Section 6.1): 2/1/02 subject to automatic renewal as provided in
Section 6.1 above, and early termination as provided
in Section 6.2 above.
Early Termination Fee
(Section 6.2): An amount equal to 2% of the Maximum Dollar Amount
(as defined in the Schedule), if termination occurs
on or before February 1, 2000; and 1.5% of the
Maximum Dollar Amount, if termination occurs after
February 1, 2000 but prior to the Maturity Date,
including any automatic renewals thereof pursuant to
Section 6.1 of the Loan Agreement.
Except as expressly modified herein, all other terms and conditions of
Section 4 of the Schedule, as previously modified or amended, remain unchanged.
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SECTION 6 OF THE SCHEDULE (with respect to Borrower information) is amended to
read as follows:
Trade Names of Borrower
(Section 3.2): Case; Case Communications; Case Data-Tel; Case Rixon; Cray
Communications; Xxxxx Communications; Osicom; Osicom Technologies
Except as expressly modified herein, all other terms and conditions of
Section 6 of the Schedule, as previously modified or amended, remain unchanged.
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Borrower: Coast:
OSICOM TECHNOLOGIES, INC., COAST BUSINESS CREDIT(R), a division of
a Delaware corporation, fka Cray Southern Pacific Bank, fka Southern
Communications, Inc. Pacific Thrift & Loan Association
By /s/ Xxxxxxxxxxx Xxx By /s/ Xxxxxxx Xxxxxx
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Title Treasurer/Secretary Title VP
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