THIRD AMENDMENT TO LOAN AGREEMENT
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THIS THIRD AMENDMENT ("Amendment") made as of this 10th day of October,
2001 among MANCHESTER TECHNOLOGIES, INC., formerly known as Manchester Equipment
Co., Inc. a New York corporation having its principal place of business at 000
Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Borrower"), MANCHESTER
INTERNATIONAL LTD., a New York corporation having its principal place of
business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("International" or a
"Guarantor"), MANTECH COMPUTER SERVICES, INC., a New York corporation having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("ManTech" or a "Guarantor"), MEC LEASING GROUP, LTD., a New York corporation
having its principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 ("MEC" or a "Guarantor"), MANCHESTER SOLUTIONS, INC., a New York
corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("Solutions" or a "Guarantor"), ELECTROGRAPH SYSTEMS,
INC., a New York corporation having its principal place of business at 000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Electrograph" or a "Guarantor"), COASTAL
OFFICE PRODUCTS, INC., a Maryland corporation having its principal place of
business at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("Coastal" or a
"Guarantor"), MEC SUPPORT SERVICES, INC., a New York corporation having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("MSS"
or a "Guarantor"), CLOSE OUTS 0X.XXX, INC., a New York corporation having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("Close Outs" or a "Guarantor"), MEC INTERNET SERVICES, INC., a New York
corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("MEC" or a "Guarantor"), 47 XXXXXXXXX.XXX, INC., a
New York corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("47 Computers" or a "Guarantor"), 0X.XXX, INC., a New
York corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("4U" or a "Guarantor"), ALMOST NEW 0X.XXX, INC., a
New York corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("Almost New" or a "Guarantor"), ODD LOTS 0X.XXX,
INC., a New York corporation having its principal place of business at 000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Odd Lots" or a "Guarantor") TEXPORT
TECHNOLOGY GROUP, INC., a New York corporation having its principal place of
business at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx ("Texport" or a
"Guarantor"), MARKETPLACE 0X.XXX, INC., a New York corporation having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("Marketplace" or a "Guarantor"), LEARNING TECHNOLOGY GROUP, LLC, a New York
limited liability company having its principal place of business at 000 Xxxxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx ("Learning" or a "Guarantor"), and XXXXXXX CONSULTING
GROUP, INC., a _________ corporation having its principal place of business at
000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxx 00000 ("Xxxxxxx" or a "Guarantor"), and
CITIBANK, N.A., successor to European American Bank, having an office at 000
Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Citibank" or a "Bank")
and CITIBANK, N.A., successor to European American Bank, as agent for the Banks
(the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantors, the Agent and the Banks entered
into a Loan Agreement dated as of the 25th day of June, 1999, which Loan
Agreement has heretofore been amended pursuant to that certain First Amendment
dated as of August 14, 2000 and that certain Second Amendment dated as of March
27, 2001 (as so amended, the "Agreement"); and
WHEREAS, the Banks have made loans to the Borrower as evidenced by
certain notes of the Borrower and specifying interest to be paid thereon; and
WHEREAS, the Borrower has acquired Xxxxxxx; and
WHEREAS, Xxxxxxx is required pursuant to the terms of the Agreement to
become a party to the Agreement and to guaranty all of the Borrower's
obligations thereunder; and
WHEREAS, the Borrower has not dissolved its subsidiary Marketplace 0X.xxx,
Inc. as contemplated in the Second Amendment to the Agreement; and
WHEREAS the Borrower and the Guarantors have requested that the Agent
and the Banks agree to:
(i) extend the Maturity Date to January 31, 2005; and
(ii) amend certain financial covenants.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Guarantors, the Agent and the Banks do hereby
agree as follows:
1. Defined Terms. As used in this Amendment, capitalized terms, unless
otherwise defined, shall have the meanings set forth in the Agreement.
2. Representations and Warranties. As an inducement for the Agent and the
Banks to enter into this Amendment, the Borrower and each Guarantor represents
and warrants as follows:
A. That with respect to the Agreement and the Loan Documents executed in
connection therewith and herewith:
(i) There are no defenses or offsets to the
Borrower's or any Guarantor's obligations under the Agreement
as amended hereby, the Notes or any of the Loan Documents or
any other agreements in favor of the Banks referred to in the
Agreement, and if any such defenses or offsets exist without
the knowledge of the Borrower or any Guarantor, the same are
hereby waived.
(ii) All of the representations and warranties made
by the Borrower and any Guarantor in the Agreement as amended
hereby are true and correct in all material respects as if
made on the date hereof, except for those made with respect to
a particular date, which such representations and warranties
are restated as of such date; and provided further that the
representations and warranties set forth in Section 4.01(f) of
the Agreement shall relate to the consolidated financial
statements of the Borrower and its Consolidated Affiliates for
the fiscal year ended July 31, 2000 and the 9 month fiscal
period ended April 30, 2001.
(iii) As of the date hereof, there are no Loans
outstanding.
3. Amendment to EAB's Name. All references to European American Bank
contained in the Agreement and the other Loan Documents shall be deemed amended
to be references to the name "Citibank, N.A." and all references to EAB
contained in the Agreement and the other Loan Documents shall be deemed amended
to be references to the name "Citibank."
4. Marketplace 0X.xxx, Inc. The Borrower's subsidiary Marketplace 0X.xxx,
Inc. has not been dissolved and remains a party to the Agreement, as amended
hereby.
5. Xxxxxxx. By the execution of this Amendment, Xxxxxxx agrees that it
shall be a party to the Agreement, as amended hereby.
6. Amended Definitions. The definition of the term Maturity Date in Article
I of the Agreement is hereby amended to read as follows:
"Maturity Date" means January 31, 2005.
7. Amendments. The following amendments are hereby made to the
Agreement:
(a) Section 5.02(l) is hereby amended to read as follows:
"(l) Losses. Incur a net loss for any fiscal year or in any
consecutive four (4) quarter period."
(b) Section 5.03(a) is hereby amended to read as follows:
"(a) Minimum Consolidated Tangible Net Worth. The Borrower
and its Consolidated Affiliates will maintain at all times a
Consolidated Tangible Net Worth of not less than
$29,000,000.00, to be tested at the end of each fiscal
quarter."
8. Effectiveness. This Amendment shall become effective upon the
occurrence of the following events and the receipt and satisfactory review by
the Agent and its counsel of the following documents:
(a) The Agent shall have received this Amendment, duly
executed by the Borrower and each Guarantor.
(b) The Agent shall have received copies of any and all
modifications of the documentation referred to in Section 3.01 of the Agreement
which could result in a Material Adverse Change.
(c) The Agent shall have received an amendment and extension
fee in the amount of $37,500.00.
(d) The Agent's counsel shall have been paid their fees and
disbursements in the amount of $____________ in connection with this Amendment.
(e) The Agent shall have received from Xxxxxxx an executed
Guaranty.
(f) The Agent shall have received from Xxxxxxx certified (as
of the date of this Amendment) copies of the resolutions of the Boards of
Directors and the shareholders of Xxxxxxx, authorizing and approving the
Agreement as amended hereby, its Guaranty and any other Loan Document applicable
to it, and the execution, delivery and performance thereof and certified copies
of all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Agreement as amended hereby, its Guaranty
and the other Loan Documents.
(g) The Agent shall have received from Xxxxxxx a certificate
of the Secretary (attested to by another officer) of Xxxxxxx certifying (i) the
names and true signatures of the officer or officers of Xxxxxxx authorized to
sign the Agreement as amended hereby, its Guaranty and any other Loan Documents
to be delivered hereunder on behalf of Xxxxxxx; (ii) a copy of Xxxxxxx'x by-laws
as complete and correct on the date of this Agreement; and (iii) the stock
ownership of Xxxxxxx.
(h) The Agent shall have received from Xxxxxxx a true and
complete copy of its certificate of incorporation and all amendments thereto and
a certificate of existence and good standing with respect to Xxxxxxx from the
Secretary of State (or equivalent officer) of the state of incorporation of
Xxxxxxx and from the Secretary of State (or equivalent officer) of any state in
which Xxxxxxx is authorized to do business.
(i) The Agent shall have received from the Borrower an amended
and restated letter setting forth the annual administrative fees as mutually
agreed between the Borrower and the Agent.
9. Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
10. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
11. Ratification. Except as hereby amended, the Agreement and all other
Loan Documents executed in connection therewith shall remain in full force and
effect in accordance with their originally stated terms and conditions. The
Agreement and all other Loan Documents executed in connection therewith, as
amended hereby, are in all respects ratified and confirmed.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the year and date first above written.
CITIBANK, N.A., as Agent
By:____________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
CITIBANK, N.A.
By:____________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
MANCHESTER TECHNOLOGIES, INC.
By:____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President
EACH OF THE GUARANTORS LISTED ON
SCHEDULE A HERETO
By:____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President
LEARNING TECHNOLOGY
GROUP, LLC
By: MANCHESTER TECHNOLOGIES, INC.
By:____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President
SCHEDULE A
MANCHESTER INTERNATIONAL LTD.
MANTECH COMPUTER SERVICES, INC.
MEC LEASING GROUP, LTD.
MANCHESTER SOLUTIONS, INC.
ELECTROGRAPH SYSTEMS, INC.
COASTAL OFFICE PRODUCTS, INC.
MEC SUPPORT SERVICES, INC.
CLOSE OUTS 0X.XXX, INC.
MEC INTERNET SERVICES, INC.
47 XXXXXXXXX.XXX, INC.
0X.XXX, INC.
ALMOST NEW 0X.XXX, INC.
ODD LOTS 0X.XXX, INC.
MARKETPLACE 0X.XXX, INC.
TEXPORT TECHNOLOGY GROUP, INC.
XXXXXXX CONSULTING GROUP, INC.
