THIRD AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
Exhibit
10.5
THIRD
AMENDMENT TO REVOLVING CREDIT
THIS
THIRD AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (“Amendment”) is
made effective this 20th day of November, 2006, by and between ADDVANTAGE
TECHNOLOGIES GROUP, INC.,
an
Oklahoma corporation (“Borrower”) and BANK
OF OKLAHOMA, N.A.
(“Lender”).
RECITALS
A. Reference
is made to the Revolving Credit and Term Loan Agreement between Borrower and
Lender dated September 30, 2004, amended September 30, 2005 and amended
September 30, 2006 (as amended, the “Credit Agreement”), pursuant to which
exists a $7,000,000 Revolving Line and an $8,000,000 Term Loan. Terms used
herein shall have the meanings ascribed to them in the Credit Agreement unless
otherwise defined herein.
B. Borrower
has requested that Lender renew the $7,000,000 Revolving Line and establish
a
new Term Loan in the amount of $2,760,000 to enable Borrower to acquire certain
property located in Broken Arrow, Oklahoma; and Lender is willing to accommodate
such requests pursuant to the terms and conditions set forth in this
Amendment.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, Borrower
and Lender do hereby agree as follows:
1. AMENDMENT
TO THE CREDIT AGREEMENT.
| 1.1. |
Section
1.37 (Note) is hereby amended to additionally include the $2,760,000
Promissory Note.
|
| 1.2. |
The
Pricing Grid attached as Schedule "1.38" to the Credit Agreement
is hereby
amended and replaced by the Pricing Grid attached as Schedule
"1.2"
to this Amendment.
|
| 1.3. |
A
new Section 2.4 is hereby added to the Credit Agreement, to
wit:
|
“2.4.
$2,760,000
Term Loan.
Subject to the terms and conditions of this Agreement, the Lender agrees to
loan
to Borrower $2,760,000, to be further evidenced by the $2,760,000 Term Note.
The
purpose of the advance under the $2,760,000 Term Note is to enable Borrower
to
purchase certain property located in Broken Arrow, Oklahoma (“Property”). At
closing, the Borrower shall execute and deliver to Lender the Mortgage Related
Documents.”
| 1.4. |
The
term “Mortgage Related Documents” shall mean, separately and collectively,
the following, all of which must be in form and content satisfactory
to
Lender:
|
| (i) |
Title
insurance commitment (with a title insurance policy with thirty days
of
funding).
|
| (ii) |
Survey.
|
| (iii) |
Insurance
certificates (hazard and
liability).
|
| (iv) |
Flood
zone verification.
|
| (v) |
Environmental
information.
|
| (vi) |
A
Mortgage in form and content as set forth on Schedule
“1.5 (vi)”
attached to this Amendment.
|
| (vii) |
Appraisal.
|
| (viii) |
Any
other documents or agreements required by
Lender.
|
| 1.5. |
Section
8.3 (Effective Net Worth) is hereby amended to replace the amount
“$15,000,000” with “$20,000,000”.
|
2. CONDITIONS
PRECEDENT.
2.1. Borrower
shall execute and /or deliver to Lender the following:
2.1.1. This
Amendment;
2.1.2. The
$7,000,000 promissory Note in form and content set forth on Schedule
“2.1.2”
to
this Amendment;
2.1.3. The
$2,760,000 Term Loan, in form and content set forth on Schedule
“2.1.3”
to
this Amendment;
2.1.4. The
Mortgage Related Documents;
2.1.5. Updated
authority resolutions from the Borrower and each of the Guarantors, in form
and
content as set on
forth on Schedule
“2.1.5”
to
this Amendment;
2.1.6. Certificates
of Good Standing from the Borrower and each of the Guarantors; and
2.1.7. any
other instruments, documents or agreements reasonably requested by Lender in
connection herewith.
3. Representations.
As
inducement for Lender to agree to this Amendment, the Borrower represents and
warrants to Lender as follows: (i) all representations and warranties set forth
in the Credit Agreement and other Loan Documents remain true and correct as
of
the date hereof, and all schedules remain true and correct; (ii) no Initial
Default or Matured Default exists under the Credit Agreement or any other Loan
Documents, and none shall arise as a result of the execution and performance
under this Amendment and/or any documents executed and/or delivered by Borrower
in connection herewith.
4. Ratification
of and Amendment to Documents.
Borrower hereby ratifies and confirms the Credit Agreement, together with all
security agreements, financing statements, instruments, documents and/or
agreements executed and/or delivered by Borrowers to Lender in connection
therewith (ALoan
Documents@),
and
Borrower acknowledges, agrees, represents and warrants that the Loan Documents
are in full force and effect, binding and enforceable in accordance with their
terms.
5. Ratification
of Guaranty.
Each
Guarantor, by execution of the ratification following the signature page hereof,
hereby agrees to the renewal of the $7,000,000 Revolving Line and the
establishment of the $2,760,000 term loan, and hereby ratifies and confirms
its
Guaranty Agreement; and further confirms that, after giving effect to the
amendments provided for herein, the Guaranty Agreement shall continue in full
force and effect, and that each representation and warranty set forth therein
remains true and correct as of the date hereof, and that the guaranteed
indebtedness additionally includes the $2,760,000 Promissory Note, together
with
extensions and renewals thereto.
6. Governing
Law and Binding Effect.
This
Amendment shall be governed by and construed in accordance with the laws of
the
State of Oklahoma, and it, together with all documents executed and delivered
in
connection herewith, shall be binding upon the parties hereto, their respective
successors and assigns.
7. USA
Patriot Act Notification.
IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
fight the funding of terrorism and money laundering activities, Federal law
requires all financial institutions to obtain, verify, and record information
that identifies each person or entity that opens an account, including any
deposit account, treasury management account, loan, other extension of credit,
or other financial services product. What this means for Borrower: When Borrower
opens an account, if Borrower is an individual, Lender will ask for Borrower's
name, taxpayer identification number, residential address, date of birth, and
other information that will allow Lender to identify Borrower, and, if Borrower
is not an individual, Lender will ask for Borrower's name, taxpayer
identification number, business address, and other information that will allow
Lender to identify Borrower. Lender may also ask, if Borrower is an individual,
to see Borrower's driver’s license or other identifying documents, and, if
Borrower is not an individual, to see Borrower's legal organizational documents
or other identifying documents.
8.
Fees.
Borrower shall not be obligated to pay the attorney fees incurred by Bank in
connection with the preparation of this Amendment.
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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.
"Borrower"
ADDVANTAGE
TECHNOLOGIES GROUP, INC.,
an
Oklahoma corporation
By
/s/
Xxxxxxx X. Xxxxxxx
Xxx
Xxxxxxx, President and Chief
Executive
Officer
“Lender"
BANK
OF OKLAHOMA, N.A.
By
/s/
W. Xxxx Xxxxxx
W.
Xxxx
Xxxxxx, Assistant Vice President
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RATIFICATION
OF GUARANTY
As
inducement for the Lender to enter into the Third Amendment to Revolving Credit
and Term Loan Agreement (“Amendment”) dated effective November 20, 2006, to
which this Ratification is affixed, the undersigned Guarantors each hereby
agree
to Section 5 of the Amendment and further hereby ratifies and confirms its
Guaranty Agreement.
Tulsat
Corporation,
an
Oklahoma corporation
By
/s/
Xxxxx X. Xxxxxxx
Xxxxx
Xxxxxxx, President
ADDvantage
Technologies Group of Missouri, Inc.,
a
Missouri corporation
By
/s/
Xxxxx X. Xxxxxxx
Xxxxx
Xxxxxxx, Vice President
ADDvantage
Technologies Group of Nebraska, Inc.,
a
Nebraska corporation
By
/s/
Xxxxxxx X. Xxxxxxx
Xxx
Xxxxxxx, Vice President
ADDvantage
Technologies Group of Texas, Inc.,
a
Texas corporation
By
/s/
Xxxxxxx X. Xxxxxxx
Xxx
Xxxxxxx, Vice President
NCS
Industries, Inc.,
a
Pennsylvania corporation
By
/s/
Xxxxx X. Xxxxxxx
Xxxxx
Xxxxxxx, President
Tulsat-Atlanta,
L.L.C.,
an
Oklahoma limited liability company
(a
subsidiary of Tulsat Corporation)
By:
ADDvantage Technologies Group, Inc.,
Its
sole member and Manager
By
/s/
Xxxxx X. Xxxxxxx
Xxxxx
Xxxxxxx, Chairman of the Board
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Schedule
"1.2"
(Note
Rate Pricing Grid)
|
Leverage
Ratio
(Funded
Debt to EBITDA)
|
Prime
Option
Line
Note $8,000,000 $2,760,000 Term Note Term Note
|
LIBOR
Option
Line
Note $8,000,000 $2,760,000
Term
Note Term Loan
|
|||||||
|
>3.00x
|
-0.25%
|
0.25%
|
N/A
|
2.50%
|
3.00%
|
1.50%
|
|||
|
>2.25x
<=3.00x
|
-0.50%
|
0.00%
|
N/A
|
2.25%
|
2.75%
|
1.50%
|
|||
|
>1.50x
<=2.25x
|
-0.75%
|
-0.25%
|
N/A
|
2.00%
|
2.50%
|
1.50%
|
|||
|
<
1.50x
|
-1.00%
|
-0.50%
|
N/A
|
1.75%
|
2.25%
|
1.50%
|
|||
The
Note Rate shall be determined in accordance with the foregoing table based
on
the Leverage Ratio as reflected in the then most recent Financials. Adjustments,
if any, to the Note Rate shall be effective five (5) Business Days after the
Lender has received the applicable Financials. If the Borrower fails to deliver
the Financials to the Lender at the time required pursuant to Section 6.1,
then
the Note Rate shall include the highest Margin set forth in the foregoing table
until five (5) Business Days after such Financials are so
delivered.
The
term “Financials” means the annual or quarterly consolidated financial
statements of the Borrower required to be delivered pursuant to Section 6.1
of
the Revolving Credit and Term Loan Agreement.
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Schedule
"2.1.5"
(Updated
Authority Resolutions:
1. Secretary's
Certificate of ADDvantage Technologies Group, Inc.
2. Secretary's
Certificate of ADDvantage Technologies Group of Missouri, Inc.
3. Secretary's
Certificate of NCS Industries, Inc.
4. Secretary's
Certificate of ADDvantage Technology Group of Nebraska, Inc.
5. Secretary's
Certificate of Tulsat Corporation
6. Limited
Liability Company Certificate of Tulsat-Atlanta, L.L.C.
7. Secretary's
Certificate of ADDvantage Technology Group of Texas,
Inc.
