EXHIBIT 10.18
THIS THIRD AMENDMENT AGREEMENT dated as of March 1, 2000 (this
"Amendment") among Automatic Systems Developers, Inc., a New York corporation
(the "Borrower"), ASD Group, Inc., a Delaware corporation ("Holdings"); the
financial institutions which are now or hereafter become a party to the Credit
Agreement (as defined below) (the "Lenders") and PNC Bank, National Association,
as agent for the Lenders (in such capacity, the "Agent"). As of the date hereof,
PNC Bank, National association is and always has been the only Lender under the
Credit Agreement. In its capacity as the sole Lender and the Agent under the
Credit Agreement, PNC Bank, National Association is hereinafter sometimes
referred to as "PNC."
W I T N E S S E T H:
WHEREAS, the Borrower and PNC have entered into a Revolving Credit,
Term Loan and Security Agreement dated as of December 18, 1997 (as the same may
be amended, modified, supplemented or restated from time to time, the "Credit
Agreement"; the terms defined in the Credit Agreement are used in this Amendment
as in the Credit Agreement unless otherwise defined in this Amendment) (High
Technology Computers, Inc., a New York corporation was also a party to the
Credit Agreement and the Restructuring Agreement and Amendments referred to
below, but has since been merged into the Borrower); and
WHEREAS, prior to the data hereof, certain Defaults and Events of
Default of the Borrower had occurred under the Credit Agreement;
WHEREAS, the parties to the Credit Agreement reached an agreement in
connection with, among other things, such Defaults and Events of Default
pursuant to that certain Agreement dated as of June 26, 1998 (as the same may be
amended, modified, supplemented or restated from time to time, the
"Restructuring Agreement");
WHEREAS, the parties thereto amended the Restructuring Agreement
pursuant to the First Amendment Agreement dated as of March 10, 1999;
WHEREAS, prior to the date hereof, certain additional Defaults and
Events of Default of the Borrower had occurred under the Restructuring Agreement
and the Credit Agreement;
WHEREAS, such parties desire and are willing, on the terms and
conditions set forth below, to modify further certain terms of Restructuring
Agreement and the Credit Agreement.
NOW, THEREFORE, in consideration of the mutual premises herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto have agreed to amend the
Restructuring Agreement as hereinafter set forth:
SECTION 1A. Amendment to the Restructuring Agreement. The Restructuring
Agreement is, subject to the satisfaction of the conditions to effectiveness set
forth in Section 2 hereof, hereby amended as follows:
(a) Paragraph D of the Recitals is hereby amended by deleting such
Recital in its entirety and substituting in lieu thereof the
following:
"As of the Third Amendment Effective Data (as defined in the Third
Amendment hereto dated as of December 30, 1999 by and among the parties
hereto), the maximum credit facility provided by the Credit Agreement
is a revolving loan of up to $5,000,000."
(b) Section 8(b) is hereby amended deleting all references to the date
"June 23, 2000" contained therein and inserting in lieu thereof: "October 30,
2000".
(c) Section 9 (Over-Advance) is hereby amended by deleting such Section
in its entirety and substituting in lieu thereof of the following:
"Over-Advance.
(a) The parties agree that there shall exist an over-advance
in the aggregate principal amount of $1,500,000 (the "Over-Advance).
All repayments of the Over-Advance made pursuant to Sections 9(b) and
(c) below (i) shall permanently reduce the Over-Advance and,
consequently, the maximum credit facility provided by the Credit
Agreement (which as of the date hereof is $5,000,000), in each case on
a dollar-for-dollar basis and (ii) may not be reborrowed.
(b) The Borrower agrees to use its best efforts to sell the
real property listed on Schedules A and B to the First Amendment dated
as of March 10, 1999 (each property described thereon a "Property", and
collectively, the "Properties"). At such time as any of the Properties
is sold, then the proceeds of such sale shall be paid to PNC to be
applied to repay the Over-Advance.
(c) Notwithstanding anything in Sections 9(a) or (b) to the
contrary, the Over-Advance shall be repaid in full and thereafter
permanently reduced on the date of acceleration of the amounts due
under the Credit Agreement."
SECTION 1B. Amendment to the Credit Agreement. The Credit Agreement is,
subject to the satisfaction of the conditions to effectiveness set forth in
Section 2 hereof, hereby amended as follows:
(a) Amendment to Section 1.2: General Terms. The definition of the term
"Revolving Interest Rate" is hereby amended by deleting such definition in its
entirety and inserting in lieu thereof the following:
"'Revolving Interest Rate' shall mean an interest rate per
annum equal to the sum of the Base Rate plus one percent (1.00%)."
(b) Amendment to Article IX: Additional Monthly Statement. Article IX
is hereby amended by adding at the end thereof the following new subsection:
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"9.17 Additional Monthly Statements. Furnish the Agent within
forty-five (45) days after the end of each month, a profit and loss statement
and balance sheet (i) reflecting results of operations from the beginning of the
fiscal year to the end of such month and (ii) comparing such results to (x) the
monthly projections for the current fiscal year and (y) the results of the same
month in the preceding fiscal year. Such profit and loss statement and balance
sheet shall be prepared on a basis consistent with prior practices and be
complete and correct in all material respects, subject to normal year-end
adjustment."
SECTION 1C. Waiver. PNC hereby waives any default (i) arising under the
Credit Agreement or the Restructuring Agreement, (ii) which has been known to
PNC and (iii) which is in effect prior to the date hereof.
SECTION 2. Conditions to Effectiveness. This Amendment shall become
effective only upon the satisfaction of all of the following conditions
precedent (the date of satisfaction of such conditions being referred to herein
as the "Third Amendment Effective Date"):
(a) Each of the parties hereto shall have duly executed and delivered
this Amendment (whether the same or different copies) and PNC shall have
received a copy signed by each of the Borrower and Holdings (collectively, the
"Principal Parties");
(b) PNC shall have received, if requested, the favorable opinions of
counsel as PNC may reasonably request, in form and substance satisfactory to
PNC;
(c) PNC shall have received a certificate signed by the Borrower
stating that each of the representations and warranties contained in Section 3
hereof are true and correct on and as of the Amendment Effective Date as though
made on and as of such date;
(d) PNC shall have received payment in full of all of the fees and
expenses due and payable pursuant to Section 5 hereof;
(e) Since November 8, 1999, Holdings shall have made to the Borrower a
capital contribution of at least $1,000,000;
(f) The current indebtedness of the Borrower in the amount of $118,000
owing to Xxxxx Xxxxxxxxx shall be evidenced by a note, which note shall (i) be
expressly subordinated to the indebtedness of the Borrower owing to the Lender
pursuant to the Intercreditor and Subordination Agreement dated as of the date
hereof between Xxxxx Xxxxxxxxx and PNC, (ii) bear no interest as long as any
amounts are outstanding under the Credit Agreement or any of the Other Documents
and (iii) be endorsed over the PNC Business Credit;
(g) PNC shall have received such other documents, including, but not
limited to, amendments, modifications, supplements or restatements of any Other
Documents, opinions, approvals or appraisals as PNC may reasonably request.
SECTION 3. Representations and Warranties. In order to induce PNC to
enter into this
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Amendment, each of the Principal Parties hereby represents and warrants to PNC
that (i) it has the full capacity and legal right to execute, deliver and
perform its obligations under this Amendment and the Other Documents to which it
is a party, and each of the Principal Parties has taken all appropriate action
necessary to authorize the execution and delivery of, and the performance of its
obligations under, this Amendment and the Other Documents, (ii) the Credit
Agreement and the Restructuring Agreement (each as amended by this Amendment),
this Agreement and the Other Documents, constitute legal, valid and binding
obligations of each of the Principal Parties enforceable against it in
accordance with its terms; subject to the effect of any applicable bankruptcy,
insolvency, reorganization or moratorium or similar laws affecting the rights of
creditors generally, (iii) the representations and warranties contained in the
Credit Agreement and the Restructuring Agreement and in each of the Other
Documents, to which it is a party are true and correct on and as of the
Amendement Effective Date as though made on and as of such date, except for
changes which have occurred and which were not prohibited by the terms of the
Credit Agreement or Restructuring Agreement or are being consented to by PNC in
this Amendment, (iv) no Default or Event of Default (other than those expressly
waived herein) has occurred and is continuing, or would result from the
execution, delivery and performance by each of the Principal Parties of the
Credit Agreement and Restructuring Agreement (each as amended by this
Amendment), this Amendment or any of the Other Documents, to which it is a
party, (v) none of the Principal Parties is in default in the payment or
performance of any of its obligations under any mortgage, indenture, security
agreement, contract, undertaking or other agreement or instrument to which it is
a party or which purports to be binding upon it or any of its properties or
assets, which default would have a material adverse effect on its properties,
assets or financial condition, (vi) each of the Principal Parties is in
compliance with all applicable statutes, laws, rules, regulations, orders and
judgements, the contravention or violation of which would have material adverse
effect on its properties, assets or condition (financial or otherwise), (vii) no
material adverse change in its properties, assets or in the condition (financial
or otherwise) has occurred, and (viii) no litigation or administrative
proceeding of or before any court or governmental body or agency is now pending,
nor, to the best knowledge of each of the Principal Parties upon reasonable
inquiry, is any such litigation or proceeding now threatened against each of the
Principal Parties or any of its properties, nor, to the best knowledge of each
of the Principal Parties upon reasonable inquiry, is there a valid basis for the
initiation of any such litigation or proceeding, which if adversely determined
(after giving effect to all applicable insurance coverage then in existence)
would have a material adverse effect on its properties, assets or condition
(financial or otherwise).
SECTION 4. Reference to and Effect on the Documents.
(a) Each reference in the Credit Agreement or the Restructuring
Agreement, as the case may be, to "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each reference to the Credit Agreement in
the Other Documents other than the Credit Agreement and Restructuring Agreement,
shall mean and be a reference to the Credit Agreement and Restructuring
Agreement, as the case may be, as amended hereby.
(b) Except as specifically provided herein, the Credit Agreement and
Restructuring Agreement and all Other Documents, and all other documents,
agreements, instruments or writings entered into in connection therewith, shall
remain in full force and effect and are hereby
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ratified, confirmed and acknowledged by each of the Principal Parties. The
amendments and waivers set forth above are limited precisely as written and
shall not be deemed to (i) be a consent to any waiver or modification of any
other term or condition of the Credit Agreement and Restructuring Agreement or
any document delivered pursuant thereto or (ii) prejudice any right or rights
which PNC may now or in the future have in connection with the Credit Agreement
and Restructuring Agreement or the Other Documents.
(c) Except as specifically provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of PNC under the Credit Agreement and the Restructuring
Agreement or any of the Other Documents nor constitute a waiver or modification
of the Credit Agreement and the Restructuring Agreement and any provision of any
of the Other Documents nor a waiver of any now existing or hereafter arising
Defaults or Events of Default. A default under the Restructuring Agreement as
amended hereby shall be an Event of Default under the Credit Agreement.
SECTION 5. Fees and Expenses. Each of the Principal Parties hereby
agrees to pay, on a joint and several basis, PNC on demand for all costs,
expenses, charges and taxes (other than any income taxes relating to income of
PNC), including, without limitation, all reasonable fees and disbursements of
counsel, incurred by PNC in connection with the negotiation, preparation,
reproduction, execution, delivery, administration and enforcement of this
Amendment and any Other Documents, to be delivered hereunder.
SECTION 6. Governing Law. This Amendment and the rights and obligations
of the parties hereunder shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of New York, without regard
for its conflict of laws principles.
SECTION 7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
SECTION 8. Successors. This Amendment shall be binding upon the
successors, assigns, heirs, executors and administrators of the parties hereto.
SECTION 9. Counterparts. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Amendment by signing any such
counterpart.
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IN WITNESS WHEREOF, each of the undersigned has executed this Amendment
or has caused this Amendment to be executed by its duly authorized officer, as
of the date first above written.
AUTOMATIC SYSTEMS DEVELOPERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxx
Title: Chief Operating Officer
ASD GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxx
Title: Chief Operating Officer
PNC BANK, NATIONAL ASSOCIATION, as
sole Lender and as Agent
By: /s/
--------------------------------------
Name:
Title:
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