EXHIBIT 10.53
CREDIT AGREEMENT
AMENDMENT NO. 3
This sets forth the Agreement made as of April 3, 1995, between DELTA
COMPUTEC INC. ("DCI") and DELTA DATA NET, INC. ("DDI"), both of which are New
York corporations with their executive offices at 0000 Xxx Xxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000 (collectively "Borrower"), and NATIONAL CANADA FINANCE
CORPORATION, a Delaware corporation with an office at Suite 0000, Xxxx Xxxxx
Tower, 000 Xxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000 ("Lender").
Recitals
A. Borrower and Lender are parties to a Credit Agreement dated April 1,
1994 pursuant to which Lender established a Revolving Credit Facility for
Borrower for up to a maximum amount of $4,000,000 (the "Revolving Credit
Facility"). Borrower and Lender subsequently entered into Amendment No. 1 to the
Credit Agreement to increase the Revolving Credit Facility to a maximum of
$5,000,000 and to modify certain other provisions of the Credit Agreement, and
Amendment No.2 to the Credit Agreement to redefine the Borrowing Base, modify
certain of the financial covenants contained in the Credit Agreement for fiscal
year 1995, and to waive Borrower's non-compliance with certain of the financial
covenants for Borrower's fiscal quarter ended October 31, 1994. Hereafter, the
Credit Agreement, as amended, is referred to as the "Credit Agreement."
B. Borrower has advised Lender that DCI is acquiring the common stock of
SAI/DELTA, INC. ("SAI/DELTA"), a Florida corporation, representing the remaining
66% of the capital stock of SAI/DELTA not already owned by DCI, under
substantially the same terms and conditions set forth in the Stock Purchase
Agreement attached as Exhibit A. As set forth in this Amendment No. 3 to the
Credit Agreement, Lender has consented to the above stock purchase by Borrower
as it pertains to section 6.10 of the Credit Agreement, and Borrower and Lender
have agreed to amend the Credit Agreement to 1) redefine the Borrowing Base; 2)
eliminate the existing overadvance on the Revolving Credit Facility; and 3)
correct a typographical error in Section 2.4 of the Credit Agreement.
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. Consent to Stock Acquisition. Lender hereby consents, pursuant to
Section 6.10 of the Credit Agreement, to DCI's purchase of the remaining 66% of
the capital stock of SAI/DELTA not already owned by DCI, under the terms of a
Stock Purchase Agreement entered into by DCI on March 15, 1995 with an effective
date of December 1, 1994.
3. Redefinition of "Borrowing Base". Section 2.1 of the Credit Agreement
which defines the Borrowing Base for the Revolving Credit Facility is amended to
(i) increase the amount of DCI Eligible Receivables included in the Borrowing
Base from 70% to 80%, (ii) decrease the maximum amount of DDI's Eligible
Inventory included in the Borrowing Base to a maximum of $500,000, (iii) add 80%
of SAI/DELTA's Eligible Receivables to the Borrowing Base, and (iv) reduce the
maximum amount of the Revolving Credit Facility to $4,500,000. Accordingly,
Section 2.1 of the Credit Agreement is amended to read as follows:
2.1 Borrowing Base. As long as neither DCI nor DDI are in default of any
of their Obligations to Lender, Lender agrees to lend to Borrower,
and Borrower agrees to borrow from Lender, from time to time, up to
that amount (hereinafter referred to as the "Borrowing Base") which
is the lesser of:
a. The sum of:
(1) Eighty percent (80%) of DCI's Eligible Receivables;
(2) Eighty percent (80%) of DDI's Eligible Receivables;
(3) Eighty percent (80%) of Intronet's Eligible Receivables;
(4) Forty percent (40%) of DDI's Eligible Inventory up to a
maximum of Five Hundred Thousand Dollars ($500,000);
and
(5) Eighty percent (80%) of SAI/DELTA's Eligible Receivables;
or
b. Four Million Five Hundred Thousand Dollars
($4,500,000.00), including Letter of Credit Obligations,
in the aggregate at any one time outstanding.
4. Eliminate Unplanned Overadvance. The Lender's authorization of the
unplanned advances previously made to Borrower totaling $250,000 in excess of
the Borrowing Base (the "Overadvance") shall expire as of April 3, 1995.
5. Correction of Typographical Error. Section 2.4.a of the Credit
Agreement, which sets forth the interest rates on the outstanding principal
balance of the Loans before and after maturity, is amended to correct a
typographical error regarding the interest rate on the outstanding principal
balance of the Loans after maturity. Accordingly, Section 2.4.a of the Credit
Agreement is amended to read as follows:
2.4 Interest.
a. Until the Maturity Date, whether by acceleration or otherwise,
the Borrower agrees to pay interest on the outstanding principal
balance of the Loans at the rate of one and one-half percent
(1- 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 Loans are outstanding which may
result in a higher effective annual rate. After maturity,
whether by acceleration or otherwise, the Borrower agrees to
pay interest on the outstanding principal balance of the Loans
at a rate equal to three and one-half percent (3- 1/2%) per
annum above the Prime Rate.
6. 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.
7. 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/ Xxxx XxXxxx
By: /s/ Xxxxxxx X. Xxxxxxx President
Xxxxxxx X. Xxxxxxx
Assistant Vice President
DELTA DATA NET, INC.
By: /s/ Xxxx XxXxxx
By: /s/ Xxxxxx X. Xxxxx President
Xxxxxx X. Xxxxx
Vice President
