Exhibit 99.01
NORTH FORK BUSINESS CAPITAL
SECOND AMENDMENT
SECOND AMENDMENT, dated as of June 30, 2006 (this
"Amendment"), to the Loan and Security Agreement, dated as of August 1, 2005 as
subsequently modified or amended (the "Loan Agreement"), among Del Global
Technologies Corp. ("Del Global"), RFI Corporation and Del Medical Imaging Corp.
(collectively, the "Borrowers") and North Fork Business Capital Corporation (the
"Lender"). Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.
W I T N E S S E T H :
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WHEREAS, the Borrowers and the Lender are parties to the Loan
Agreement, under which the Lender has agreed to make, and has made, Loans and
other extensions of credit and accommodations to the Borrowers on the terms and
subject to the conditions set forth therein; and
WHEREAS, the Borrowers have requested that the Lender agree,
and the Lender has agreed, to amend certain provisions of the Loan Agreement,
each upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, the Borrowers and the Lender agree as follows:
SECTION 1. AMENDMENTS TO THE LOAN AGREEMENT. Effective as of
the date hereof, the Loan Agreement is amended as follows:
(a) Section 2.1(a) is amended and restated as follows:
"(a) The Lender agrees, subject to Section 2.5 and
the other terms and conditions of this Agreement, to
make loans (the "Revolving Credit Loans") to the
Borrowers, from time to time from the Closing Date to
but excluding the Expiration Date, at the
Administrative Borrower's request to the Lender, in
an aggregate principal amount at any one time
outstanding which, when combined with the aggregate
undrawn amount of all unexpired Letters of Credit,
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does not exceed (i) 85% of Eligible Receivables PLUS
(ii) 40% of Eligible Inventory, all of the foregoing
LESS such reserves as the Lender may establish in its
sole discretion including, without limitation, (A) so
long as the Shareholder Subordinated Indebtedness has
not (I) been refinanced with new subordinated debt on
terms and conditions satisfactory to the Lender or
(II) had its maturity date extended to a date that is
at least ninety days after the Expiration Date, the
Lender and the Borrowers agree that, commencing March
1, 2006, there shall be an additional reserve (the
"Sinking Fund Reserve") of $100,000, which reserve
shall increase by $100,000 on the first Business Day
of each of April, 2006 and May, 2006. No payments
shall be made by Borrowers to the Sinking Fund
Reserve for the period from June 1, 2006 through
September 30, 2006. On the first Business Day of
October, 2006, such reserve shall increase by
$200,000; on the first Business Day of November,
2006, such reserve shall increase by $500,000; on the
first Business Day of each of December, 2006,
January, 2007 and February, 2007 such reserve shall
increase by $300,000; and on the first Business Day
of March, 2007 such reserve shall increase by
$200,000; and (B) a reserve in an amount equal to
twice the amount of any dilution of the Borrower's
Receivables from time to time (the "Borrowing Base");
PROVIDED, HOWEVER, that in no event shall the
aggregate amount of the Revolving Credit Loans and
the Letters of Credit outstanding at any time (x) in
respect of Eligible Inventory exceed $2,000,000 or
(y) exceed the Maximum Amount of the Revolving
Facility."
(b) Section 9.1 is amended by adding the following as Section
9.1(o):
"(o) the Borrowers shall fail to receive, by October
31, 2006, a dividend in the amount of $1,500,000,
from its subsidiary, Villa Sistemi (the "Villa
Sistemi Dividend"), which Villa Sistemi Dividend
shall constitute Collections and shall be deposited
into the Blocked Account.
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall
become effective when, and only when, the Lender shall have received (a)
counterparts of this Amendment, duly executed by the Borrowers, and (b) payment
of the costs and expenses (including, without limitation, reasonable attorneys'
fees) incurred by the Lender in connection with this Amendment.
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.
Each Borrower represents and warrants as follows:
(a) Such Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York
or Delaware, as the case may be, and is qualified to do business under
the laws of such other jurisdictions in which its failure to so qualify
could have a Material Adverse Effect.
(b) The execution, delivery and performance by such Borrower
of this Amendment (i) are within such Borrower's corporate powers, have
been duly authorized by all necessary corporate action and do not
contravene (A) such Borrower's Governing Documents, (B) any Requirement
of Law or (C) any Material Contract and (ii) will not result in or
require the creation or imposition of any Lien upon or with respect to
any property now owned or hereafter acquired by such Borrower.
(c) No authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority or other Person is
required for the due execution, delivery and performance by such
Borrower of this Amendment.
(d) This Amendment and the Loan Agreement as amended hereby
constitute the legal, valid and binding obligations of such Borrower
enforceable against such Borrower in accordance with their respective
terms except as enforceability may be limited by (i) bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) general principles of equity.
(e) Except as specified in Schedule 6.1(r) to the Loan
Agreement, there is no pending or, to the best of such Borrower's
knowledge after due inquiry, threatened litigation, contested claim,
investigation, arbitration or governmental proceeding by or against
such Borrower before any court, Governmental Authority or arbitrator
which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect or which purports to affect the
legality, validity or enforceability of this Amendment or the Loan
Agreement as amended hereby.
(f) Except as previously waived in writing by the Lender, no
Default has occurred and is continuing.
SECTION 4. REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT.
(a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement," "hereunder," "hereof," "herein" and
words of like import, and each reference in the other Loan Documents to
the Loan Agreement shall mean and be a reference to the Loan Agreement
as amended hereby.
(b) Except as specifically waived or amended above, (i) the
Loan Agreement and each other Loan Document shall remain in full force
and effect and are hereby ratified and confirmed by each of the parties
hereto and (ii) the Lender shall not be deemed to have waived any
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rights or remedies it may have under the Loan Agreement, any other Loan
Document or applicable law.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of or an amendment to any right, power or remedy of the Lender
under any of the Loan Documents, or constitute a waiver of or an
(c) amendment to any provision of any of the Loan Documents.
SECTION 5. COSTS AND EXPENSES. The Borrowers agree to pay, on
demand, all reasonable out-of-pocket costs and expenses incurred by the Lender
in connection with the preparation, negotiation and execution of this Amendment
(including, without limitation, the reasonable fees and expenses of counsel to
the Lender).
SECTION 6. COUNTERPARTS; TELECOPIED SIGNATURES. This Amendment
may be executed in counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. This
Amendment may be executed and delivered by telecopier or other facsimile
transmission with the same force and effect as if the same were a fully executed
and delivered original manual counterpart.
SECTION 7. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION
WITH THIS AMENDMENT, WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE,
SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
DEL GLOBAL TECHNOLOGIES CORP.
By: /s/ Xxxx Xxxx
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Xxxx Xxxx
Treasurer
RFI CORPORATION
By: /s/ Xxxx Xxxx
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Xxxx Xxxx
Treasurer
DEL MEDICAL IMAGING CORP.
By: /s/ Xxxx Xxxx
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Xxxx Xxxx
Treasurer
NORTH FORK BUSINESS CAPITAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Senior Vice President, SCO
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