EXHIBIT 10.22
EXECUTION COPY
AMENDMENT TO
THE THIRD AMENDED AND RESTATED TERM CREDIT AGREEMENT
This Amendment to the Third Amended and Restated Term Credit
Agreement, dated as of November 1, 2002 (this "Amendment"), by and among IBM
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CREDIT CORPORATION, a Delaware corporation ("Lender"), DIGITAL ANGEL SHARE
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TRUST, a statutory trust organized and governed by the laws of the State of
Delaware ("Tranche A Borrower"), APPLIED DIGITAL SOLUTIONS, INC. (formerly
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known as "Applied Cellular Technology, Inc."), a Missouri corporation
("Tranche B Borrower"; Tranche A Borrower and Tranche B Borrower are each
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referred to herein as a "Borrower" or, collectively, "Borrowers"), ACT
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COMMUNICATIONS INC., ACT-GFX CANADA, INC., ADS BAY AREA, INC., ADS MONTEREY,
INC., ADSI TELECOMM SERVICES OF MARYLAND, INC., ADSI TELECOMM SERVICES,
INC., ADVANCED TELECOMM OF MARYLAND, INC., ADVANCED TELECOMM OF PITTSBURGH,
ADVANCED TELECOMMUNICATIONS, INC., THE AMERICOM GROUP, INC., APPLIED DIGITAL
ORACLE PRACTICE, INC., APPLIED DIGITAL SOLUTIONS FINANCIAL CORP., ARJANG,
INC., BALVA FINANCIAL CORPORATION, BLUE STAR ELECTRONICS, INC., BOSTEK,
INC., COMPUTER EQUITY CORPORATION, CYBERTECH STATION, INC., ELITE COMPUTER
SERVICES, INC., FEDERAL CONVENTION CONTRACTORS, INC., FEDERAL SERVICES,
INC., GOVERNMENT TELECOMMUNICATIONS, INC., INDEPENDENT ACQUISITION, INC.,
INFORMATION TECHNOLOGY SERVICES, INC., INFOTECH USA, INC., PDS ACQUISITION
CORP., INTELLESALE, INC., MICRO COMPONENTS INTERNATIONAL INCORPORATED,
NEIRBOD CORP., NORCOM RESOURCES INCORPORATED, PERIMETER ACQUISITION CORP.,
XXXXXXX RE-MARKETING, INC., PRECISION POINT CORPORATION, SERVICE TRANSPORT
COMPANY, SYSCOMM INTERNATIONAL CORPORATION, TELEDATA CONCEPTS, INC., THERMO
LIFE ENERGY CORP. F/K/A ADVANCED POWER SOLUTIONS, INC., U.S. KITE & KEY
CORP. F/K/A U.S. ELECTRICAL PRODUCTS CORP., VERICHIP CORPORATION, WEBNET
SERVICES, INC., and WYR, INC., (together with Borrowers, each, a "Loan
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Party" or, collectively, the "Loan Parties").
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RECITALS
WHEREAS, the Loan Parties and Lender have entered into that certain
Third Amended and Restated Term Credit Agreement, originally dated as of
March 1, 2002 and amended as of September 30, 2002 (as amended, supplemented
or otherwise modified through the date hereof, the "Credit Agreement").
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WHEREAS, the Loan Parties have requested that Lender hereby amend
Section 7.1 of the Credit Agreement on the terms set forth in this
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Amendment; and
WHEREAS, the Lender is willing to agree to such requested amendment
to Section 7.1 of the Credit Agreement, upon the terms and conditions set
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forth herein.
NOW THEREFORE, in consideration of the premises set forth herein,
and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
DEFINITIONS. All capitalized terms not otherwise defined herein shall have
the respective meanings set forth in the Credit Agreement.
CONDITIONS PRECEDENT. This Amendment shall become effective upon receipt of
this Amendment by Lender from the Loan Parties, duly executed by each Loan
Party and Lender.
AMENDMENT. The Credit Agreement is hereby amended as follows:
Section 7.1(A)(ii) of the Credit Agreement is hereby amended by deleting
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such Section 7.1(A)(ii) thereof in its entirety and substituting therefor
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the following Section 7.1(A)(ii):
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"(ii) The ratio of Consolidated Current Assets to Consolidated
Current Liabilities of MAS at any time during any period set forth below
shall not be less than the ratio set forth opposite such period below:
Quarter Ended Current Ratio
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June 30, 2002 1.8:1
September 30, 2002 1.05:1
December 31, 2002 1.09:1; and
Section 7.1(B) of the Credit Agreement is hereby amended by deleting such
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Section 7.1(B) thereof in its entirety and substituting therefor the
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following Section 7.1(B):
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"(i) Tranche B Borrower will not permit, directly or indirectly,
Consolidated EBITDA for any period set forth below to be less than the
minimum requirement set forth opposite such period below (cumulatively):
Quarter Ended Minimum Requirement
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September 30, 2002 (U.S.$4,768,300)
December 31, 2002 (U.S.$7,648,300)
(ii) Consolidated EBITDA of MAS at any time during any period
set forth below shall not be less than the minimum requirement set forth
opposite such period below (cumulatively):
Quarter Ended Minimum Requirement
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September 30, 2002 (U.S.$338,000)
December 31, 2002 U.S.$732,000
REPRESENTATIONS AND WARRANTIES. On and as of the date hereof and after
giving effect to this Amendment, each Loan Party hereby confirms, reaffirms
and restates the representations and warranties set forth in Section 5 of
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the Credit Agreement except to the extent that such representations and
warranties expressly relate to a specific earlier date (in which case each
Loan Party hereby confirms, reaffirms and restates such representations and
warranties as of such
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earlier date); provided that reference to the Credit Agreement in such
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representations and warranties shall be deemed to refer to the Credit
Agreement as amended or waived prior to the date hereof and pursuant to this
Amendment.
RIGHTS AND REMEDIES. Lender reserves any and all rights and remedies that
Lenders now have or may have in the future with respect to Loan Parties,
including any and all rights or remedies which Lender may have in the future
as a result of Borrowers' failure to comply with any financial covenants to
Lender.
RATIFICATION OF CREDIT AGREEMENT. Except as specifically amended hereby, all
provisions of the Credit Agreement shall remain in full force and effect.
Each Loan Party hereby ratifies, confirms and agrees that the Credit
Agreement, as amended hereby, and the performance of Obligations by the Loan
Parties thereunder, represent valid and enforceable obligations of each such
Loan Party, and is not subject to any claims, offsets or defense. The
amendments provided for herein are limited to the specific Sections of the
Credit Agreement specified herein and shall not constitute an amendment or
waiver of, or an indication of the Lender's willingness to amend or waive,
any other provisions of the Credit Agreement or the same Sections for any
other date or time period (whether or not such other provisions or
compliance with such Sections for another date or time period are affected
by the circumstances addressed in this Amendment).
EXPENSES. The Loan Parties agree to pay and reimburse Lender for all its
costs and expenses incurred in connection with the preparation and delivery
of this Amendment, including, without limitation, the fees and disbursements
of Xxxxx, Day, Xxxxxx & Xxxxx, special New York counsel to Lender.
GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
COUNTERPARTS. This Amendment may be executed by one or more of the parties
to this Amendment on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this
Amendment signed by the parties hereto shall be delivered to Borrowers and
Lender.
INDEMNIFICATION. Each Loan Party hereby agrees to indemnify and hold
harmless Lender and each of its respective officers, directors, consultants,
advisors, agents and assigns (collectively, the "Indemnified Persons")
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against all losses, claims, damages, liabilities or other expenses
(including attorneys' fees and court costs now or hereinafter arising from
the enforcement of this Amendment, the "Losses") to which any of them may
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become subject insofar as such Losses arise out of or are based upon any
event, circumstance or condition (a) occurring or existing on or before the
date of this Amendment relating to any financing arrangements Lender may
from time to time have with (i) a Loan Party, (ii) any Person that shall be
acquired by a Loan Party or (iii) any Person that a Loan Party may acquire
all or substantially all of the assets of, or (b) directly or indirectly,
relating to the execution and delivery of, or performance of any
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Obligations under, the Credit Agreement and the other Restructuring
Documents or this Amendment or the consummation of the transactions
contemplated hereby or thereby or to any of the Collateral or to any act or
omission of the Loan Parties in connection therewith; provided, that the
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parties hereto hereby agree that nothing herein shall be deemed to modify
the maximum amount of liability of SysComm under the Stock Pledge Agreement
or the SysComm Guaranty. Notwithstanding the foregoing, the Loan Parties
shall not be obligated to indemnify Lender for any Losses incurred by Lender
which are a result of Lender's gross negligence or willful misconduct. The
indemnity provided herein shall survive the termination of this Amendment.
NOTICES. Except as otherwise expressly provided in the Credit Agreement, any
notice required or desired to be served, given or delivered hereunder or
under any other Restructuring Documents shall be in writing, and shall be
served, given or delivered in accordance with Section 9.18 of the Credit
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Agreement to the following addresses or number as indicated below:
(a) If to Lender at: (b) If to a Borrower at:
IBM Credit Corporation Applied Digital Solutions, Inc.
0000 Xxxxxxxxx Xxxxxxx 000 Xxxxx Xxxx Xxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000 Xxxx Xxxxx, Xxxxxxx 00000
Attention: Regional Manager, East Attention: Xxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
IBM Global Financing
Special Handling Group
Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
With a copy to: With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx Xxxxx, Xxxxxxx, Creme & Xxxxxx, P.C.
000 Xxxx 00xx Xxxxxx 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq. Attention: Xxxx Creme, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
LIMITATION OF LIABILITY. It is expressly understood and agreed by the
parties hereto that (a) this Amendment is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as
trustee of the Tranche A Borrower, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of Tranche A Borrower is
made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the
purpose for binding only Tranche A Borrower, (c) nothing herein contained
shall be construed as creating any liability on Wilmington Trust Company,
individually or
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personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties
hereto and by any Person claiming by, through or under the parties hereto
and (d) under no circumstances shall Wilmington Trust Company be personally
liable for the payment of any indebtedness or expenses of Tranche A Borrower
or be liable for the breach or failure of any Obligation, representation,
warranty or covenant made or undertaken by Tranche A Borrower under this
Amendment, the Credit Agreement or any other Restructuring Documents.
[Remainder of this page has been left intentionally blank]
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EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
IBM CREDIT CORPORATION, APPLIED DIGITAL SOLUTIONS, INC.,
as Lender as Tranche B Borrower and Tranche A
Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Manager, Global Special Handling Title: Senior Vice President
DIGITAL ANGEL SHARE TRUST, ADS MONTEREY, INC.,
as Tranche A Borrower and Tranche B as Loan Party
Guarantor
By: Wilmington Trust Company, not in its
individual capacity but solely as Trustee
By: /s/ Xxxx St. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Wilmington Trust Company Name: Xxxxxx X. Xxxxxxxxxx
Title: Trustee Title Treasurer
THERMO LIFE ENERGY CORP. f/k/a THE AMERICOM GROUP, INC.,
ADVANCED POWER SOLUTIONS, INC., as Loan Party
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President Title: Treasurer
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APPLIED DIGITAL SOLUTIONS BALVA FINANCIAL CORPORATION,
FINANCIAL CORP., as Loan Party
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President Title: Assistant Treasurer
COMPUTER EQUITY CORPORATION, [INTENTIONALLY OMITTED]
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer
[INTENTIONALLY OMITTED] FEDERAL CONVENTION CONTRACTORS, INC.,
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer
FEDERAL SERVICES, INC., GOVERNMENT
as Loan Party TELECOMMUNICATIONS, INC.,
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer Title: Assistant Treasurer
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INFORMATION TECHNOLOGY INFOTECH USA, INC.,
SERVICES, INC., as Loan Party
as Loan Party
By: /s/ Xxxxx XxXxxxxxxx By: /s/ Xxxxx XxXxxxxxxx
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Name: Xxxxx XxXxxxxxxx Name: Xxxxx XxXxxxxxxx
Title: President Title: President
PDS ACQUISITION CORP., PERIMETER ACQUISITION CORP.,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer Title: Assistant Treasurer
PRECISION POINT CORPORATION, SYSCOMM INTERNATIONAL
as Loan Party CORPORATION,
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx XxXxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxx XxXxxxxxxx
Title: Vice President Title: President
U.S. KITE & KEY CORP. f/k/a VERICHIP CORPORATION,
U.S. ELECTRICAL PRODUCTS CORP., as Loan Party
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer Title: Vice President
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WEBNET SERVICES, INC., ACT COMMUNICATIONS INC.,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer Title: Vice President
ACT-GFX CANADA, INC., ADS BAY AREA, INC.,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President Title: President
ADSI TELECOMM SERVICES, INC., ADSI TELECOMM SERVICES OF
as Loan Party MARYLAND, INC.,
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President Title: President
ADVANCED TELECOMM OF ADVANCED TELECOMM OF
MARYLAND, INC., PITTSBURGH,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President Title: President
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ADVANCED TELECOMMUNICATIONS, ARJANG, INC.,
INC., as Loan Party
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President Title: President
BLUE STAR ELECTRONICS, INC., BOSTEK, INC.,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer Title: Assistant Treasurer
CYBERTECH STATION, INC., ELITE COMPUTER SERVICES, INC.,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer Title: Assistant Treasurer
INDEPENDENT ACQUISITION, INC., INTELLESALE, INC.,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: President Title: Treasurer
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MICRO COMPONENTS NEIRBOD CORP.,
INTERNATIONAL INCORPORATED, as Loan Party
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer Title: Assistant Treasurer
NORCOM RESOURCES XXXXXXX RE-MARKETING, INC.,
INCORPORATED, as Loan Party
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------------- -----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer Title: Assistant Treasurer
SERVICE TRANSPORT COMPANY, TELEDATA CONCEPTS, INC.,
as Loan Party as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------------- -----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Assistant Treasurer Title: President
WYR, INC., APPLIED DIGITAL ORACLE
as Loan Party PRACTICE, INC.,
as Loan Party
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------------- -----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer Title: President
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EXECUTION COPY
November 1, 2002
Digital Angel Share Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Re: Unanimous Written Consent of the Advisory Board of the Digital Angel
Share Trust (the "Trust")
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Dear Sirs:
Dear Sirs:
Pursuant to Section 4.02(e) of the Trust Agreement, dated as of March 1,
2002, between Wilmington Trust Company, as trustee, and Applied Digital
Solutions, Inc. ("ADS"), the Advisory Board members of the Trust hereby
unanimously consent to the execution, delivery and performance by the Trust
of the Amendment to the Third Amended and Restated Term Credit Agreement,
dated as of November 1, 2002, by and among lBM Credit Corporation, the
Trust, ADS and certain other parties signatory thereto, in the form attached
hereto as Exhibit A.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
/s/ J. Xxxxx Xxxxxxxx
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J. Xxxxx Xxxxxxxx
