TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Amendment") is made and entered into as of January 16, 1998, by
and among TELTRONICS, INC., a Delaware corporation (hereinafter
referred to as "Teltronics"), with its chief executive office and
principal place of business at 0000 Xxxxxxxxx Xxxxxxxxxx Xxx,
Xxxxxxxx, Xxxxxxx 00000; AT SUPPLY, INC., a Texas corporation
(hereinafter referred to as "ATS"), with its chief executive
office and principal place of business at 0000 Xxxxxxx Xxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxx 00000; and INTERACTIVE SOLUTIONS, INC.,
a Delaware corporation (hereinafter referred to as
"Interactive"), with its chief executive office and principal
place of business at 0000 Xxxxxxxxx Xxxxxxxxxx Xxx, Xxxxxxxx,
Xxxxxxx 00000 (Teltronics, ATS and Interactive are hereinafter
referred to collectively as "Borrowers" and individually as a
"Borrower"); and THE CIT GROUP/CREDIT FINANCE, INC., a Delaware
corporation (hereinafter referred to as "Lender"), with an office
at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
RECITALS:
Lender and Borrowers are parties to a certain Loan and
Security Agreement dated October 28, 1994, as amended by a
certain letter agreement dated December 27, 1994, a certain
Second Amendment to Loan and Security Agreement dated as of
December 29, 1995, a certain letter agreement dated March 11,
1996, a certain letter agreement dated May 14, 1996, a certain
letter agreement dated June 4, 1996, a certain letter agreement
dated July 31, 1996, a certain Seventh Amendment to Loan and
Security Agreement dated January 13, 1997, a certain Eighth
Amendment to Loan and Security Agreement dated February 11, 1997,
and a certain Ninth Amendment to Loan and Security Agreement and
First Note Modification Agreement dated July 23, 1997 (as at any
time amended, the "Loan Agreement"), pursuant to which Lender has
made revolving credit and term loans to Borrowers.
The parties now desire to further amend the Loan Agreement
as hereinafter set forth.
NOW, THEREFORE, for and in consideration of TEN DOLLARS
($10.00) in hand paid and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as
follows:
1. DEFINITIONS. All capitalized terms used in this
Amendment, unless otherwise defined herein, shall have the
meaning ascribed to such terms in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement
is hereby amended as follows:
(a) Subsection (ii) of Section 10.1(b) is hereby
deleted in its entirety and the following new subsection (ii) is
hereby substituted in lieu thereof:
(ii) Eligible Inventory Percentage:
Teltronics: Raw Materials-20%
Finished Goods-24%
ATS: 45%
Interactive: Raw Materials-20%
Finished Goods-24%
(b) Subsection (c) of Section 10.1 of the Loan
Agreement is hereby deleted in its entirety and the following new
subsection (c) is hereby substituted in lieu thereof:
(c) Inventory Sublimit: at any time, the
lesser of (a) $2,000,000 or (b) 75% of the amount
of (Eligible Accounts outstanding at such time
multiplied by the Eligible Accounts Percentage);
provided, however, the inventory of ATS included
in this Inventory Sublimit shall not exceed
$800,000.
3. AMENDMENT FEE. In consideration of the amendments
contained herein, Borrowers hereby jointly and severally agree to
pay to Lender a fee of $5,000 which fee shall be fully earned and
charged to Borrowers' loan account upon their execution of this
Amendment.
4. RATIFICATION AND REAFFIRMATION. Each Borrower
hereby ratifies and reaffirms each of the loan documents executed
in connection with or pursuant to the Loan Agreement
(collectively, the "Loan Documents") and all of each Borrower's
covenants, duties, indebtedness and liabilities thereunder.
5. ACKNOWLEDGMENTS AND STIPULATIONS. Each Borrower
acknowledges and stipulates that the Loan Agreement and the other
Loan Documents executed by Borrowers are legal, valid and binding
obligations of each Borrower that are enforceable against each
Borrower in accordance with the terms thereof; all of the
Obligations are owing and payable without defense, offset or
counterclaim (and to the extent there exists any such defense,
offset or counterclaim on the date hereof, the same is hereby
waived by each Borrower); and the security interests and liens
granted by each Borrower in favor of Lender are duly perfected,
first priority security interests and liens.
6. REPRESENTATIONS AND WARRANTIES. Each Borrower
represents and warrants to Lender, to induce Lender to enter into
this Amendment, that no default or Event of Default exists on the
date hereof; the execution, delivery and performance of this
Amendment have been duly authorized by all requisite corporate
action on the part of each Borrower and this Amendment has been
duly executed and delivered by each Borrower; and all of the
representations and warranties made by each Borrower in the Loan
Agreement are true and correct on and as of the date hereof.
7. EXPENSES OF LENDER. Each Borrower jointly and
severally agrees to pay, on demand, all costs and expenses
incurred by Lender in connection with the preparation,
negotiation and execution of this Amendment and any other Loan
Documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including, without
limitation, the costs and fees of Lender's legal counsel and any
taxes or expenses associated with or incurred in connection with
any instrument or agreement referred to herein or contemplated
hereby.
8. EFFECTIVENESS; GOVERNING LAW. This Amendment
shall be effective upon acceptance by Lender in New York, New
York (notice of which acceptance is hereby waived), whereupon the
same shall be governed by and construed in accordance with the
internal laws of the State of New York.
9. SUCCESSORS AND ASSIGNS. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.
10. NO NOVATION, ETC.. Except as otherwise expressly
provided in this Amendment, nothing herein shall be deemed to
amend or modify any provision of the Loan Agreement or any of the
other Loan Documents, each of which shall remain in full force
and effect. This Amendment is not intended to be, nor shall it
be construed to create, a novation or accord and satisfaction,
and the Loan Agreement as herein modified shall continue in full
force and effect.
11. COUNTERPARTS; TELECOPIED SIGNATURES. This
Amendment may be executed in any number of counterparts and by
different parties to this Agreement on separate counterparts,
each of which, when so executed, shall be deemed an original,
but all such counterparts shall constitute one and the same
agreement. Any signature delivered by a party by facsimile
transmission shall be deemed to be an original signature hereto.
12. FURTHER ASSURANCES. Each Borrower agrees to take
such further actions as Lender shall reasonably request from time
to time in connection herewith to evidence or give effect to the
amendments set forth herein or any of the transactions
contemplated hereby.
13. SECTION TITLES. Section titles and references
used in this Amendment shall be without substantive meaning or
content of any kind whatsoever and are not a part of the
agreements among the parties hereto.
14. RELEASE OF CLAIMS. To induce Lender to enter into
this Amendment, each Borrower hereby releases, acquits and
forever discharges Lender, and all officers, directors, agents,
employees, successors and assigns of Lender, from any and all
liabilities, claims, demands, actions or causes or actions of any
kind or nature (if there be any), whether absolute or contingent,
disputed or undisputed, at law or in equity, or known or unknown,
that such Borrower now has or ever had against Lender arising
under or in connection with any of the Loan Documents or
otherwise.
15. WAIVER OF JURY TRIAL. To the fullest extent
permitted by applicable law, the parties hereto each hereby
waives the right to trial by jury in any action, suit,
counterclaim or proceeding arising out of or related to this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed under seal, and delivered by their
respective duly authorized officers as of the date first written
above.
TELTRONICS, INC.
("Borrower")
By: Xxxx X. Xxxxxxx,
President
AT SUPPLY, INC.
("Borrower")
By: Xxxx X. Xxxxxxx,
Chairman of the Board
[Signatures continued on following page]
INTERACTIVE SOLUTIONS, INC.
("Borrower")
By: Xxxx X. Xxxxxxx,
Chairman of the Board
Accepted in New York, New York:
THE CIT GROUP/CREDIT FINANCE,
INC. ("Lender")
By: Xxx Xxxxx
Title: Assistant Secretary
CONSENT AND REAFFIRMATION
The undersigned guarantors of the Obligations of each
Borrower at any time owing to Lender hereby (i) acknowledge
receipt of a copy of the foregoing Tenth Amendment to Loan and
Security Agreement; (ii) consent to Borrowers' execution and
delivery thereof and of the other documents, instruments or
agreements Borrowers agree to execute and deliver pursuant
thereto; (iii) agree to be bound thereby; and (iv) affirm that
nothing contained therein shall modify in any respect whatsoever
its respective guaranty of the Obligations and reaffirm that such
guaranty is and shall remain in full force and effect.
IN WITNESS WHEREOF, each of the undersigned has executed
this Consent and Reaffirmation on and as of the date of such
Tenth Amendment to Loan and Security Agreement.
TTG ACQUISITION CORP.
By: Xxxx X. Xxxxxxx,
Chairman of the Board
XXXXXX X. XXXXXXX (SEAL)
TELTRONICS/SRX, INC.
By: Xxxx X. Xxxxxxx,
Chairman of the Board
