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EXHIBIT 10.0
TMCI ELECTRONICS, INC.
TOUCHE MANUFACTURING COMPANY, INC.
TOUCHE ELECTRONICS, INC.
ENTERPRISE INDUSTRIES, INC.
TRINITY ELECTRONICS, INC.
TRY-DIE, INC.
0000 XXXXXX XXXXX
XXX XXXX, XX 00000
October 15, 1998
Fleet Capital Corporation
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Re: Second Amendment To Loan And Security Agreement
Gentlemen:
Reference is made to the Loan and Security Agreement dated as of March 2,
1998 (as amended, the "Loan Agreement"), among Fleet Capital Corporation, as
Lender, and TMCI Electronics, Inc. ("TMCI"), Touche Manufacturing Company, Inc.,
Touche Electronics, Inc., Enterprise Industries, Inc., Trinity Electronics, Inc.
and Try-Die, Inc. (collectively, the "Borrowers"), as Borrowers. All capitalized
terms used herein that are not otherwise specifically defined herein shall have
the meanings given such terms in the Loan Agreement.
The Borrowers have incurred and anticipate continuing to incur Overadvances
under the Loan Agreement. The Borrowers have agreed with Lender to cause such
Overadvances to be reduced and repaid in accordance with the schedule provided
herein. Accordingly, subject to the terms and conditions hereof, the Lender and
Borrowers agree as follows:
1. Amendments.
a. Overadvance Repayment. Section 1.4 is added to the Loan Agreement as
follows:
"1.4 Overadvances. Notwithstanding the provisions of subsection
3.2.1 that require that Overadvances be repaid on demand, Lender
agrees that Overadvances may be incurred and may remain
outstanding in an aggregate amount not in excess of the amount
set forth below for the period corresponding thereto:
Maximum
Overadvance Amount Period
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$1,500,000 10/15/98 - 10/21/98
$1,475,000 10/22/98 - 10/29/98
$1,450,000 10/29/98 - 11/4/98
$1,425,000 11/5/98 - 11/11/98
$1,400,000 11/11/98 - 11/15/98
0 11/16/98 - and thereafter
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All Overadvances made hereunder shall accrue interest on the
principal amount outstanding at the end of each at a fluctuating
rate per annum equal to .25% plus the Prime Rate. All
Overadvances are and shall be deemed to be Obligations under this
Agreement and the other Loan Documents and secured by all of the
Collateral. Until such time as the Overadvances are paid in full,
all proceeds from any Collateral including, without limitation,
from the sale of any assets of the Borrowers or tax refunds
payable to the Borrowers and payments made to Borrowers from any
other source, including, without limitation, from the issuance of
equity or subordinated Indebtedness by any Borrower shall,
subject to the Lender's rights to approve any such transaction
under the Loan Agreement, be paid to Lender to be applied to
repay the Overadvances."
2. Reserve. Pursuant to Section 1.1.1. of the Loan Agreement, Borrowers
acknowledge and agree that Lender has established a $1,000,000 inventory
reserve. This reserve shall be maintained in effect until such time as the
Lender determines, in its sole discretion, that the Borrowers' inventory
monitoring and reporting systems are fully operational and satisfactory to
the Lender. In the event that the Lender agrees to the release of this
inventory reserve, any Revolving Credit Loans then available will be used
first to repay any outstanding Overadvances, as determined by Lender.
3. Fee. Borrowers shall pay Lender a continuing Overadvance Fee of $50,000 for
each period of thirty (30) days or any portion thereof that Overadvances
are outstanding, payable on the fifteenth (15th) day of each month
commencing on October 15, 1998 and continuing thereafter until the
Overadvances are paid in full and no longer are outstanding.
4. Confirmation of Representations and Warranties. The Borrowers represent and
warrant that (a) the representations and warranties made in the Loan
Documents are true, correct and complete on the date hereof; (b) they are
in compliance with all the covenants and agreements contained in the Loan
Documents; and (c) except as explicitly waived by the Lender in its letter
to the Borrowers dated August 13, 1998, no Default or Event of Default
exists or has occurred and is continuing under the Loan Documents. The
Borrowers acknowledge and agree that they are unconditionally liable for
the full, prompt and complete performance and payment of all Obligations
arising under the Loan Documents or otherwise, without defenses,
counterclaims or setoffs of any kind or nature. The Lender, by entering
into this Amendment, does not waive any rights and remedies it may have
under the Loan Documents or otherwise, including, without limitation,
arising or resulting from any Default or Event of Default, and all of such
rights and remedies are hereby expressly reserved.
5. Authority. Each Borrower represents and warrants that it is a corporation
duly organized and in good standing under the laws of its state or other
jurisdiction of incorporation and is duly qualified as a foreign
corporation and in good standing in all states or other jurisdictions where
the nature and extent of the business transacted by it or the ownership of
assets makes such qualification necessary, except for those jurisdictions
in which the failure to so qualify would not have a material adverse effect
on the financial condition,
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results of operation or businesses of Borrower or the rights of Lender
hereunder or under any of the other Financing Documents. Each Borrower
represents and warrants that the execution, delivery and performance of
this Amendment is within the corporate powers of each Borrower, has been
duly authorized and are not in contravention of law or the terms of the
certificates of incorporation, by-laws, or other organizational
documentation of such Borrower, or any indenture, agreement or undertaking
to which such Borrower is a party or by which such Borrower or its property
are bound. Each Borrower represents and warrants that this Amendment
constitutes the legal, valid and binding obligation of each Borrower
enforceable in accordance with its terms.
6. Miscellaneous. This Amendment shall be deemed to be a Loan Document under
the Loan Agreement. The Borrowers agree to pay all reasonable attorneys'
fees incurred by Lender in connection with the negotiation and preparation
of this Amendment and the instruments and documents prepared in connection
herewith. This Amendment supersedes all prior correspondence and
discussions relating to the subject matter hereof. This Amendment shall be
governed and construed under the laws of the State of Connecticut and is
subject to all the rights and waivers, including the waiver of jury trial,
set forth in the Loan Agreement. Except as explicitly set forth herein, the
Borrowers confirm that the Loan Agreement and other Loan Documents have not
been amended or modified and, as amended hereby, continue in full force and
effect.
7. Confirmation of Guaranty. The undersigned Guarantor consents to the
execution and performance of this Amendment by the Borrowers. The Guarantor
confirms and agrees that this Amendment and the performance by the
Borrowers of the transactions contemplated herein shall not limit,
restrict, extinguish or otherwise impair the liability of the Guarantor to
the Lender with respect to the full and punctual payment and performance of
the Obligations in accordance with the terms of the Guaranty by the
undersigned Guarantor, the terms of which are hereby ratified and confirmed
in all respects.
8. PREJUDGMENT REMEDY WAIVER; COMMERCIAL TRANSACTION.
EACH BORROWER HEREBY WAIVES RIGHTS AS IT MAY HAVE TO NOTICE AND/OR HEARING
UNDER ANY APPLICABLE FEDERAL OR STATE LAWS INCLUDING, WITHOUT LIMITATION,
CONNECTICUT GENERAL STATUTES SECTION 52-278A, ET SEQ. AS AMENDED,
PERTAINING TO THE EXERCISE BY LENDER OF SUCH RIGHTS AS THE LENDER MAY HAVE,
INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO SEEK PREJUDGEMENT REMEDIES
AND/OR DEPRIVE BORROWERS OF OR AFFECT THE USE OF OR POSSESSION OR ENJOYMENT
OF ANY BORROWER'S PROPERTY PRIOR TO THE RENDITION OF A FINAL JUDGMENT
AGAINST ANY BORROWER. EACH BORROWER FURTHER WAIVES ANY RIGHT IT MAY HAVE TO
REQUIRE LENDER TO PROVIDE A BOND OR OTHER SECURITY AS A PRECONDITION TO OR
IN CONNECTION WITH ANY PREJUDGMENT REMEDY SOUGHT BY AGENT AND LENDER, AND
WAIVE ANY OBJECTION TO THE ISSUANCE OF SUCH PREJUDGMENT REMEDY BASED ON ANY
OFFSETS, CLAIMS, DEFENSES
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OR COUNTERCLAIMS TO ANY ACTION BROUGHT BY ANY LENDER. EACH BORROWER HEREBY
REPRESENTS, COVENANTS AND AGREES THAT THE PROCEEDS OF THE LOANS EVIDENCED
BY THIS AGREEMENT SHALL BE USED FOR GENERAL COMMERCIAL PURPOSES AND THAT
SUCH LOANS CONSTITUTE A "COMMERCIAL TRANSACTION" AS DEFINED BY THE STATUTES
OF THE STATE OF CONNECTICUT.
Executed as an instrument under seal as of the date first written above.
WITNESS: BORROWERS:
TMCI ELECTRONICS, INC.
TOUCHE MANUFACTURING
COMPANY, INC.
TOUCHE ELECTRONICS, INC.
ENTERPRISE INDUSTRIES, INC.
TRINITY ELECTRONICS, INC.
TRY-DIE, INC.
By:
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Name:
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Title:
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GUARANTOR:
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Xxxxxxx Xxxxx, Individually
Accepted and Agreed:
LENDER:
FLEET CAPITAL CORPORATION
By:
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Name:
---------------------------
Title:
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