AMENDMENT NO. 1
TO
CREDIT AGREEMENT
Amendment No. 1, dated June 21, 1999 (the "Amendment"), to Credit
Agreement, dated as of December 18, 1998 (this "Agreement"), is entered into by
and among MLC HOLDINGS, INC., a Delaware corporation ("Holdings"), MLC GROUP,
INC., a Virginia corporation ("MLC"), and MLC FEDERAL, INC., a Virginia
corporation ("Federal") as borrowers (collectively, the "Borrowers" and
individually, a "Borrower"), the banking institutions signatories thereto and
named in Exhibit A attached to the Agreement and such other institutions that
hereafter become a "Bank" pursuant to ss. 11.4 of the Agreement (collectively,
the "Banks" and individually, a "Bank") and First Union National Bank, a
national banking association, as agent for the Banks under the Agreement ("First
Union," which shall mean its capacity as agent unless specifically stated
otherwise).
Preliminary Statement
WHEREAS, the Borrowers, the Banks and First Union desire to amend the
Agreement in the manner hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and promises
hereinafter set forth and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Section 1.1 of Agreement. The definition of "Ordinary Course Sale
----------------------------
or Financing" in Section 1.1 of the Agreement shall be and is hereby
amended and restated to be as follows:
""Ordinary Course Sale or Financing" shall mean each of the following
to occur in the ordinary course of business of any Borrower:
(a) the sale (including the installment or conditional sale) by
such Borrower of Inventory and Equipment so long as such Borrower
receives from such sale 100% of the fair market value, based on
equipment sold in the ordinary course and not in distress-sale
circumstances, of the Inventory and Equipment being sold;
1
(b) the financing (including refinancing) by such Borrower of
Inventory and Equipment pursuant to this Agreement and the other
Loan Documents, so long as such Borrower receives from such
financing 100% of the fair market value, based on equipment sold
in the ordinary course and not in distress-sale circumstances, of
the Inventory and Equipment being financed; provided, however,
that except to the extent otherwise provided in clause (d) below
in connection with the simultaneous sale or financing of any Lease
described therein (i) any Lien granted by such Borrower to such
lender in connection with such financing (which may be a first
priority Lien) shall not attach to any property of any Borrower
other than the specific financed Inventory and Equipment, and (ii)
the Debt of such Borrower to such lender in connection with such
financing shall be without recourse to any Borrower except with
respect to such Borrower's interest in the specific financed
Inventory and Equipment;
(c) the sale by such Borrower of its ownership interest in any
Inventory and Equipment which has been refinanced in an Ordinary
Course Sale or Financing described in clause (b) above; and
(d) the sale, financing (including refinancing) by such Borrower
of any Lease providing for the lease of Inventory and Equipment so
long as such Borrower receives from such sale or financing 100% of
the Net Present Value of Lease Payments for the Leases being sold
or financed; provided, however, that, except to the extent
otherwise provided in the clause (b) above in connection with the
simultaneous financing of Inventory and Equipment (i) any Lien
granted by such Borrower to such lender in connection with any
such financing (which may be a first priority Lien) shall not
attach to any property of any Borrower other than the specific
financed Lease, and (ii) the Debt of such Borrower to such lender
in connection with such financing shall be without recourse to any
Borrower except with respect to such Borrower's interest in the
specific financed Lease.
Notwithstanding the foregoing, a financing transaction described in
clauses (b) or (d) above shall still qualify as an Ordinary Course Sale
or Financing even if the Debt of such Borrower to such lender in
connection with such financing is with recourse to such Borrower, as
long as the total of such recourse financing for all Borrowers, in the
aggregate, is not more than 15% of the total amount of such financing
in effect for all Borrowers at any time under clauses (b) and (d)."
2. Section 4.3(b) of Agreement. Section 4.3.(b) titled "Landlord's
-------------------------------
Waivers" shall be deleted and the following shall be and is hereby substituted
therefor:
" (b) Left Intentionally Blank."
3. Section 5.1(c) of Agreement. Section 5.1(c) of the Agreement
-------------------------------
shall be and is hereby amended and restated to be as follows:
" (c) Compliance Certificate. Within sixty (60) calendar days after the
end of each of the first three Fiscal Quarters of each Fiscal Year and
within one hundred and thirty (130) calendar days after the end of each
Fiscal Year, a Compliance Certificate signed by the chief financial
officer or treasurer of Holdings."
4. Section 5.1(h) of Agreement. Section 5.1(h) of the Agreement
----------------------------------
shall be and is hereby amended and restated to be as follows:
2
" (h) Monthly Accounts Receivable Aging Report. No later than thirty
(30) days after the end of each calendar month for the first 11 months
of each Fiscal Year and no later than sixty (60) days after the end of
each Fiscal Year, an Accounts Receivable Aging Report signed by the
chief financial officer, treasurer or controller of Holdings. In the
case of the first two calendar months of each Fiscal Quarter, the
information contained in this report need not include Buy/Sell
Contract-Related Receivables or AMC Receivables (less than or over 120
days) as referenced in Exhibit F hereto."
5. Section 5.1(i) of Agreement. Section 5.1(i) of the Agreement
----------------------------------
shall be and is hereby amended and restated to be as follows:
" (i) Quarterly Residuals Report. Within sixty (60) calendar days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
and within one hundred and thirty (130) calendar days after the end of
each Fiscal Year, a Residuals Report signed by the chief financial
officer, treasurer or controller of Holdings."
6. Section 5.1(j) of Agreement. Section 5.1(j) of the Agreement
----------------------------------
shall be and is hereby amended and restated to be as follows:
" (j) Quarterly Inventory Report. No later than sixty (60) calendar
days after the end of each of the first three Fiscal Quarters of each
Fiscal Year and no later than one hundred and thirty (130) calendar
days after the end of each Fiscal Year, a Quarterly Inventory Report
signed by the chief financial officer, treasurer or controller of
Holdings."
7. Section 6.3 of Agreement. Section 6.3 of the Agreement shall be and
----------------------------
is hereby amended and restated to be as follows:
" 6.3. Guarantees. Guarantee or otherwise in any way become or be
responsible for indebtedness or obligations (including working capital
maintenance, take-or-pay contracts) of any other Person (including but
not limited to any Subsidiary of any Borrower), contingently or
otherwise, in any amounts that would exceed an aggregate of
$15,000,000 for all Borrowers."
8. Exhibit D to Agreement; Amendment to Security Agreement. Exhibit D
------------------------------------------------------------
to the Agreement and the Security Agreement shall be and is hereby amended by
inserting the phrase "Except for the premises leased at 000 Xxxxxxx Xxxxxxx,
Xxxxxxx, Xxxxxxxx," at the beginning of Section 11(A).
9. Representations and Warranties. The Borrowers hereby affirm all the
----------------------------------
representations and warranties made in the Agreement, including but not limited
to Article 3 thereof, on and as of the date hereof as if originally given on
this date.
10. Covenants. The Borrowers hereby confirm that they are in compliance
--------------
with and have complied with each and every covenant set forth in the Agreement,
including but not limited to Articles 5, 6 and 7 thereof, on and as of the date
hereof.
3
11. Affirmation. The Borrowers hereby affirm their absolute and
-----------------
unconditional promise to pay to each Bank and First Union National Bank, as
agent under the Agreement, the Loans and all other amounts due under the
Agreement and any other Loan Document on the maturity date(s) provided in the
Agreement or any other Loan Document, as such documents may be amended hereby.
12. Corporate Authorization and Delivery of Documents. Each Bank shall
------------------------------------------------------
have received (a) a certificate signed by the secretary or assistant secretary
of each Borrower certifying all action taken by each Borrower and any other
necessary Person to authorize this Amendment, the incumbency of the persons
signing this amendment, and attaching any resolutions adopted by each Borrower
in connection with said authorization, and (b) and such other documents as any
Bank shall require.
13. Effect of Amendment. This Amendment amends the Agreement only to
------------------------
the extent and in the manner herein set forth, and in all other respects the
Agreement is ratified and confirmed.
14. Counterparts. This Amendment may be signed in any number of
------------------
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment
to be duly executed by their duly authorized representatives as of the date
first above written.
MLC HOLDINGS, INC.
By: ______________________________
Name:
Title:
MLC GROUP, INC.
By: ______________________________
Name:
Title:
MLC FEDERAL, INC.
By: ______________________________
Name:
Title:
4
FIRST UNION NATIONAL BANK, for itself
and as Agent
By: ______________________________
Name:
Title:
BANK LEUMI USA
By: ______________________________
Name:
Title:
XXXXX BANK N.A.
By: ______________________________
Name:
Title:
WACHOVIA BANK, N.A.
By: ______________________________
Name:
Title:
SUMMIT BANK
By: ______________________________
Name:
Title:
5
KEYBANK NATIONAL ASSOCIATION
By: ______________________________
Name:
Title:
