EXHIBIT 10.54
CREDIT AGREEMENT
AMENDMENT NO. 4
This sets forth the Agreement made as of May 1, 1995, between
DELTA COMPUTEC INC. ("DCI") and DELTA DATA NET, INC. ("DDI"), both of which
are New York corporations with their executive offices at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (collectively "Borrower"), and NATIONAL
CANADA FINANCE CORPORATION, a Delaware corporation with an office at Suite
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Lender").
Recitals
A. Borrower and Lender are parties to a Credit Agreement dated
April 1, 1994, which was subsequently amended by Amendment No. 1 dated as
of November 17, 1994, Amendment No. 2 dated as of January 24, 1995, and
Amendment No. 3 dated as of April 3, 1995. Hereafter, the Credit
Agreement, as amended is referred to as the "Credit Agreement." The Credit
Agreement establishes a Revolving Credit Facility for Borrower for Loans
based upon a "Borrowing Base" of Eligible Receivables and Inventory as set
forth in the Credit Agreement, up to a maximum amount of $4,500,000 (the
"Revolving Credit Facility"). The Revolving Credit Facility terminates
April 30, 1997.
B. Borrower has need of additional financing ("Overadvances")
over and above amounts otherwise available to Borrower on its Borrowing
Base. Borrower's largest shareholder, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇ ("▇▇▇▇▇▇▇") has
therefore committed to make loans of up to $400,000 to Borrower, and Lender
has agreed to lend up to an additional $300,000 on the terms and conditions
set forth in this Amendment No. 4 (collectively, the "Overadvance
Facilities").
C. Borrower and Lender are entering this Amendment No. 4 to make
provision for the additional loans under Overadvance Facilities, and to
amend certain of the financial covenants contained in the Credit Agreement.
TERMS
NOW, THEREFORE, in consideration of the matters recited and of the
mutual promises contained herein, Borrower and Lender agree as follows:
1. Defined Terms. Capitalized terms not otherwise defined in
this Amendment shall have the meaning defined in the Credit Agreement.
2. Overadvance Facilities. A new Section 9 is added to the
Credit Agreement to read as follows:
"SECTION 9. OVERADVANCE FACILITIES.
Section 9.1 Overadvances. "Overadvances" shall mean Loans to
Borrower in excess of the amount which would otherwise be available to
Borrower pursuant to the Borrowing Base as set forth in the Credit
Agreement.
Section 9.2 ▇▇▇▇▇▇▇ Overadvance Facility. Attached as Exhibit A
is a copy of an Agreement dated May 1, 1995 between Borrower and their
principal shareholder, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇ ("▇▇▇▇▇▇▇"), pursuant to which
▇▇▇▇▇▇▇ agreed to make loans to Borrower up to a maximum amount of
$400,000. Hereafter, this Agreement between ▇▇▇▇▇▇▇ and Borrower is
referred to as the "▇▇▇▇▇▇▇ Commitment" and loans made pursuant to it are
sometimes referred to as the "▇▇▇▇▇▇▇ Overadvance Facility."
Section 9.3 NCFC Overadvance Facility. Subject to the conditions
precedent hereafter set forth, Lender agrees that to the extent that
Overadvances are needed over and above the ▇▇▇▇▇▇▇ Overadvance Facility,
Lender will lend Borrower up to an additional Three Hundred Thousand
Dollars ($300,000) (the "NCFC Overadvance Facility") on the terms and
conditions set forth in this Section 9.
Section 9.4 Conditions Precedent. Lender's obligation to make
additional Loans under the NCFC Overadvance Facility shall be subject to
the satisfaction of the following condition's:
(a) Borrower shall not be in default under the Credit Agreement or
the ▇▇▇▇▇▇▇ Commitment;
(b) ▇▇▇▇▇▇▇ shall have fully funded his Commitment to lend
$400,000 and these loans shall be outstanding;
(c) The total outstanding principal amount of Loans pursuant to
the ▇▇▇▇▇▇▇ Commitment and the NCFC Overadvance Facility shall not exceed
$700,000; and
(d) The total principal amount of all Loans by Lender to Borrower
under both the Revolving Credit Facility and the NCFC Overadvance Facility
shall not exceed $4,500,000.
(e) Borrower shall have executed and delivered to Lender a new
promissory note in the form of the attached Exhibit B and in the principal
amount of $4,500,000 to evidence all Loans made pursuant to the Credit
Agreement including the NCFC Overadvance Facility.
Section 9.5 Termination and Maturity Date. Lender's commitment
to make Loans to Borrower under the NCFC Overadvance Facility shall
terminate on April 30, 1996 (the "Termination Date"), and all Loans made
pursuant to the NCFC Overadvance Facility, including all accrued interest,
shall be due and payable in full on the same date (the "Overadvances
Maturity Date"). Lender may sooner terminate its obligation to make Loans
under the Revolving Credit Facility or the NCFC Overadvance Facility if the
▇▇▇▇▇▇▇ Commitment is terminated prior to April 30, 1996, or in default, or
in the event of a Declaration of Default as provided in the Credit
Agreement.
Section 9.6 Interest. Until the Overadvances Maturity Date,
whether by acceleration or otherwise, the Borrower agrees to pay interest
on the outstanding principal balance of all Loans made pursuant to the NCFC
Overadvance Facility at the rate of two and one-half percent (2 1/2%) per
annum above the National Bank of Canada prime rate as announced in the
United States ("Prime Rate") as it may change from time to time based upon
a 360-day year for the actual number of days the Overadvance Loans are
outstanding. After maturity, whether by acceleration or otherwise,
Borrower agrees to pay interest on the outstanding principal balance of the
Overadvance Loans at a rate equal to four and one-half percent (4 1/2%) per
annum above the Prime Rate.
Section 9.7 Order of Repayments. Lender, Borrower and ▇▇▇▇▇▇▇
agree that Loans under the NCFC Overadvance Facility shall be repaid, with
all accrued interest, in full before any repayment of loans made pursuant
to the ▇▇▇▇▇▇▇ Overadvance Facility.
Section 9.8 Commitment Fee. In consideration of Lender's
agreement to the NCFC Overadvance Facility, Borrower shall pay Lender a
commitment fee of $1,500.00 upon execution of this Agreement.
Section 9.9 ▇▇▇▇▇▇▇ Commitment. ▇▇▇▇▇▇▇ agrees that the ▇▇▇▇▇▇▇
Commitment will not be modified or amended without the prior written
consent of Lender.
Section 9.10 Other Provisions. Except to the extent they are
inconsistent with the provisions of this Section 9, all provisions of the
Credit Agreement relating to Revolving Credit Loans also apply to and
govern Loans made under the NCFC Overadvances Facility.
3. Amendment of Covenants. Borrower and Lender wish to amend the
negative covenants set forth in Sections 6.3, 6.20 and 6.21 of the Credit
Agreement to read as follows:
"6.3 Borrowed Money. Incur other indebtedness for borrowed
money except (a) indebtedness described on Schedule 3 to the Credit
Agreement, (b) indebtedness permitted by Section 6.14 of the Credit
Agreement, (c) indebtedness from the Lender, (d) indebtedness to
▇▇▇▇▇▇▇ under the ▇▇▇▇▇▇▇ Commitment provided that the principal
amount shall not exceed $400,000, and (e) intercompany transfers
between DCI, DDI, and SAI/DELTA, INC.
6.20 Pre-tax Income. Permit Borrower's loss for its month ending
April 30, 1995 to be greater than ($50,000.00). Thereafter, during
each of the next six months through October 31, 1995, Borrowers net
income for the month Before Income Taxes and Extraordinary Items
shall not be less than $0.00. After October 31, 1995, Borrower's
Income Before Income Taxes and Extraordinary Items shall be tested
monthly, not cumulatively, and covenant levels shall be determined
based upon Borrower forecasts for its fiscal year ending October 31,
1996.
6.21 Interest Coverage Ratio. Permit the ratio of Borrower's
earnings before payment or allowance for interest or income taxes
payable thereon ("E.B.I.T.") to Borrower's interest expense to be
less than the following during the following time periods:
Time Period Ratio
----------- -----
2/1/95 to 4/30/95 0.50:1
5/1/95 to 7/31/95 1.00:1
8/1/95 to 10/31/95 1.00:1
Covenant levels for quarters ending after October 31, 1995 shall be
determined using Borrowers' forecasts for its fiscal year ending
October 31, 1996.
All other loan covenants shall continue as provided in the Credit
Agreement.
4. Reaffirmation of Obligations. Except as hereby amended, all
terms of the Credit Agreement shall remain in full force and effect.
Further, Borrower ratifies and reaffirms its obligations under the Credit
Agreement, the Supplemental Agreements, the Promissory Note, and all other
Obligations to Lender.
5. Joinder. ▇▇▇▇▇▇▇ joins in this Agreement insofar as it
relates to the ▇▇▇▇▇▇▇ Commitment and the ▇▇▇▇▇▇▇ Overadvances Facility.
6. Counterparts. This Amendment may be executed in counterparts
which, when taken together, will constitute one original of this Agreement.
The foregoing is established by the following signatures of the
parties.
LENDER: BORROWER:
NATIONAL CANADA FINANCE DELTA COMPUTEC INC.
CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, President
Assistant Vice President
DELTA DATA NET, INC.
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President ▇▇▇▇ ▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Consent of Guarantor
SAI/DELTA, INC. ("Guarantor"), a Florida corporation, is a
Guarantor of all Loans to Borrower by Lender under an Unlimited Continuing
Guaranty (the "Guaranty") dated April 3, 1995. Guarantor hereby consents
to Amendment No. 4 to the Credit Agreement and ratifies and reaffirms its
obligations under the Guaranty, its General Security Agreement dated April
3, 1995 in favor of Lender as Secured Party, and under all related
documents, agreements, and instruments.
SAI / DELTA, INC.
By ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇,
President
