AMENDMENT NO. 1
to
AMENDED AND RESTATED CREDIT AGREEMENT AND OTHER AGREEMENTS
This Amendment No. 1 to Amended and Restated Credit Agreement and Other
Agreements ("Amendment No. 1"), is made by and among XXXXXX X. XXXXXXX XX, an
individual having an office at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
(the "Lender" or "Xxxxxxx"), DELTA COMPUTEC INC., a New York corporation having
its principal place of business located at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("DCI"), and DELTA DATA NET, INC., a New York corporation having
its principal place of business located at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("DDI"). DCI and DDI are referred to collectively as the Borrower.
W I T N E S S E T H
A. WHEREAS, the Borrower and the Xxxxxxx entered into a certain letter
agreement dated May 1, 1995 (the "1995 Letter Agreement"), pursuant to which
Xxxxxxx loaned to Borrower $400,000 as part of Xxxxxxx'x commitment (the
"Xxxxxxx Commitment", as defined in the 1995 Letter Agreement) to fund a portion
of an overadvance facility (the "Overadvance Facility", as defined in the 1995
Letter Agreement) which was entered into, also as of May 1, 1995, between the
Borrower and the Borrower's then commercial lender, National Canada Finance
Corp. ("NCFC"); and
B. WHEREAS, the annual interest rate which NCFC charged to the Borrower
with regard to the Overadvance Facility was, as of May 1, 1995, two and one half
percent (2 and 1/2%) over the prime rate of NCFC, with the annual interest rate
on the Overadvance Facility increasing to the annual interest rate of four and
one-half percent (4 and 1/2%) over the prime rate of NCFC in the event of
maturity, by acceleration or otherwise, of the Overadvance Facility; and
C. WHEREAS, as of October 27, 1995, by a certain amendment No. 5 to the
then existing credit agreement between the Borrower and NCFC (such credit
agreement, and all amendments thereto, collectively the "NCFC Agreement"), the
annual interest rate on the Overadvance Facility was increased to three percent
(3%) over the prime rate of NCFC, with the annual interest rate on the
Overadvance Facility increasing to five percent (5%) over the prime rate of NCFC
in the event of maturity, by acceleration or otherwise, of the Overadvance
Facility; and
D. WHEREAS, pursuant to the 1995 Letter Agreement, the Borrower agreed to
pay to Xxxxxxx interest on the outstanding amount of the Xxxxxxx Commitment at
the same rate of interest paid to NCFC pursuant to the NCFC Agreement; and
E. WHEREAS, the Borrower and the Lender desire to reduce the amount of
interest payable by the Borrower with regard to the Xxxxxxx Commitment, such
reduction to be effective as of October
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10, 1996, the date of the Amended and Restated Credit Agreement (the "October
1996 Credit Agreement"); and
F. WHEREAS, in addition to the Xxxxxxx Commitment, between July 25,
1996, and October 9, 1996, Xxxxxxx also made certain additional loan advances
(the "Additional Advances") to the Borrower in the aggregate amount of
$633,600, which Additional Advances were acknowledged by a series of documents
executed contemporaneously with the Additional Advances (the "Additional
Advance Documents"); and
G. WHEREAS, with regard to the Additional Advances, Xxxxxxx also charged
the Borrower the annual interest rate which NCFC charged to the Borrowers with
regard to the Overadvance Facility as set forth in WHEREAS paragraphs B and C,
above; and
H. WHEREAS, the Borrower agreed to pay to Xxxxxxx interest on the
outstanding amount of the Additional Advances at the same rate of interest paid
to NCFC pursuant to the NCFC Agreement; and
I. WHEREAS, the Borrower and the Xxxxxxx desire to reduce the amount of
interest payable by the Borrower with regard to the Additional Advances, such
reduction to be effective as of October 10, 1996, the date of the October 1996
Credit Agreement; and
J. WHEREAS, the Borrower and the Lender entered into the October 1996
Credit Agreement as of October 10, 1996; and
K. WHEREAS, the Borrower and the Lender desire to amend the October 1996
Credit Agreement to provide for an increased Borrowing Base relative to the
Loans (as those terms are defined in the October 1996 Credit Agreement) which
may exist from time to time from Lender to Borrower.
NOW, THEREFORE, it is agreed as follows:
1. Incorporation of Recitals. The recitals set forth in the WHEREAS
paragraphs of this Amendment No. 1 are intended to be, and are, incorporated
into this Amendment No. 1 as a part hereof.
2. Amendment to 1995 Letter Agreement. (a) The parties hereto agree that,
from and after October 10, 1996, paragraph 6 of the 1995 Letter Agreement be,
and it hereby is, amended to decrease the rate of interest applicable to the
Xxxxxxx Commitment from the same rate of interest paid to NCFC pursuant to the
NCFC Agreement to the same interest rate as is charged to the Borrowers under
the October 1996 Credit Agreement.
(b) The first sentence of paragraph 6 of the 1995 Letter Agreement is
hereby deleted in its entirety and the following sentences are hereby
substituted in its place and stead:
"Until the maturity date of the Xxxxxxx Commitment, whether by
acceleration or otherwise, the Borrower agrees
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to pay interest on the outstanding principal balance of the Xxxxxxx
Commitment at the rate of one and three quarters of one percent (1
3/4%) per annum above the highest prime rate published from time to
time in the "Money Rates" column of the Wall Street Journal or any
successor to such publication ("Prime Rate") as it may change from
time to time based upon a 360-day year for the actual number of days
the Xxxxxxx Commitment is 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 Xxxxxxx Commitment at a rate equal to three
and three quarters percent (3 3/4%) per annum above the Prime Rate."
(c) Except as amended by this Amendment No. 1, the terms and
conditions of the 1995 Letter Agreement insofar as they relate to the Xxxxxxx
Commitment are hereby reaffirmed in their entirety.
3. Amendment to Additional Advance Documents. (a) The parties hereto agree
that, from and after October 10, 1996, each document representing any of the
Additional Advances be, and they hereby are, amended to decrease the rate of
interest applicable to the Xxxxxxx Commitment from the same rate of interest
paid to NCFC pursuant to the NCFC Agreement to the same interest rate as is
charged to the Borrower under the October 1996 Credit Agreement.
(b) The portions of any and all Additional Advance Documents relating
to the payment of interest by the Borrowers on the Additional Advances are
hereby deleted in their entirety and the following sentences are hereby
substituted, or, if necessary, added, in the place and stead of any reference to
interest payable by the Borrower in the Additional Advance Documents:
"Until the maturity date of the Advance represented by this document
(the "Advance"), whether by acceleration or otherwise, the Borrower
agrees to pay interest on the outstanding principal balance of the
Advance at the rate of one and three quarters of one percent (1 3/4%)
per annum above the highest prime rate published from time to time in
the "Money Rates" column of the Wall Street Journal or any successor
to such publication ("Prime Rate") as it may change from time to time
based upon a 360-day year for the actual number of days the Advance is
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 Advance at a
rate equal to three and three quarters percent (3 3/4%) per annum
above the Prime Rate."
(c) Except as amended by this Amendment No. 1, the terms and
conditions of the Additional Advance Documents are hereby reaffirmed in their
entirety.
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4. Amendment to October 1996 Credit Agreement. (a) The parties hereto agree
that, from and after November 18, 1996, paragraph 2.1 of the October 1996 Credit
Agreement be, and it hereby is, amended to add to the Borrowing Base any
positive check balance shown by the internal records of the Borrower in the
operating account maintained by the Borrower at Manufacturers & Traders Trust
Company, and any checks or instruments of payment in the hands of either the
Borrower or NCFC and in transit for deposit to the Borrower's Manufacturers &
Traders Trust Company operating account.
(b) Paragraph 2.1 of the October 1996 Credit Agreement is hereby
revised by deleting the period (".") after the words "SAI/Delta's Eligible
Receivables" and by adding the following words thereafter:
", together with one hundred percent of any positive check book
balance shown by the internal records of the Borrower relative to the
Borrower's operating account maintained by the Borrower at
Manufacturers & Traders Trust Company, and any checks or instruments
of payment in the hands of either the Borrower or NCFC and in transit
for deposit to the Borrower's Manufacturers & Traders Trust Company
operating account."
(c) Lender hereby waives any non-compliance which may have existed
with regard to the Borrowing Base for the period between October 10, 1996, and
the date of this Amendment No. 1.
(d) Except as amended by this Amendment No. 1, the terms and
conditions of the October 1996 Credit Agreement are hereby reaffirmed in their
entirety.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed and delivered by the proper and duly authorized officers as of the date
first above written.
/s/ Xxxxxx X. Xxxxxxx XX
Xxxxxx X. Xxxxxxx XX
DELTA COMPUTEC INC.
By: /s/ Xxxx XxXxxx
Xxxx XxXxxx, President
DELTA DATA NET, INC.
By: /s/ Xxxx XxXxxx
Xxxx XxXxxx, President
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