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EXHIBIT 10.37
FIRST AMENDMENT TO REVOLVING
CREDIT AND SECURITY AGREEMENT
This FIRST AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this
"Amendment") is made and entered into this 15th day of May, 2000, by and among
ELTRAX SYSTEMS, INC., a Minnesota corporation ("Eltrax"); ELTRAX TECHNOLOGY
SERVICES GROUP, INC., a Georgia corporation ("Technology"); ELTRAX ASP GROUP,
LLC, a Georgia limited liability company ("ASP"); SQUIRREL SYSTEMS, INC., a
Georgia corporation ("Squirrel"); SENERCOMM, INC., a Florida corporation
("Senercomm"); ELTRAX CUSTOMER CARE GROUP, INC., a Georgia corporation
("Customer Care"); ELTRAX INTERNATIONAL, INC., a Pennsylvania corporation
("International"); and ELTRAX HOSPITALITY GROUP, INC., a Georgia corporation
("Hospitality"; Eltrax, Technology, ASP, Squirrel, Senercomm, Customer Care,
International and Hospitality, each a "Borrower" and collectively the
"Borrowers"); the financial institutions which are now or which hereafter
become a party hereto (collectively, the "Lenders" and individually a "Lender");
and PNC Bank, NATIONAL ASSOCIATION, a national banking association ("PNC"), as
collateral and administrative agent for Lenders (PNC, together with its
successors and assigns in such capacity, the "Agent").
RECITALS:
Agent, Lenders and Borrowers are parties to a certain Revolving Credit and
Security Agreement dated March 14, 2000 (as amended at any time, the "Credit
Agreement") pursuant to which Lender has made certain revolving credit loans to
Borrower.
The parties desire to amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. DEFINITIONS. All capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such terms in the
Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of the
condition precedent set forth in Section 5 hereof, the Credit Agreement is
hereby amended as follows:
a. By inserting the following as a new Section 3.10 immediately
following the existing Section 3.9:
3.10 NON-DIVESTMENT WARRANTS. Unless, prior to January 1, 2001,
Borrowers have consummated a Permitted Sale of all or part of the
Hospitality Division and Agent has received all net cash proceeds from such
disposition in an amount not less than $20,000,000 for application to the
Obligations in accordance with this Agreement, Eltrax shall issue,
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ratably to each Lender, on or before January 15, 2001, warrants for the
purchase of shares of common stock of Eltrax, with such warrants to have
an aggregate value of at least $500,000. Such warrants shall be issued on
terms and conditions acceptable to Lenders, including, without limitation,
the following terms: (a) the exercise price for purchasing common stock of
Eltrax pursuant to such warrants shall be $0.01 per share; (b) such
warrants shall include demand and incidental registration rights and
anti-dilution provisions as are customary; (c) such warrants shall include
customary indemnification provisions and rights of first refusal; and
(d) such warrants shall include put rights which shall be exercisable
immediately upon the issuance of the warrants and which shall have a value
of not less than $500,000 on the date the warrants are issued. As used
herein, the value of the warrants shall be determined by Agent using
valuation methodologies customary for warrants issued to lending
institutions in similar situations or otherwise, in Agent's sole
discretion.
b. By deleting Section 6.10 in its entirety and inserting the following
in lieu thereof:
6.10 UNDRAWN AVAILABILITY. At all times before June 1, 2000, Borrowers
shall have Undrawn Availability at all times of at least $1,000,000. At
all times on or after June 1, 2000, Borrowers shall have Undrawn
Availability at all times at least equal to the amount shown below for the
applicable period.
Required
Period Minimum Availability
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During the first month of each Fiscal Quarter $3,000,000
During the second month of each Fiscal Quarter $2,000,000
During the third month of each Fiscal Quarter $3,000,000
3. LIMITED WAIVER OF DEFAULT. An Event of Default has occurred and
currently exists under the Credit Agreement as a result of the Borrowers'
breach of Section 6.5 of the Credit Agreement for the Fiscal Quarter ending
March 31, 2000 (the "Designated Default"). Each Borrower represents and
warrants that the Designated Default is the only Defaults or Event of Default
that exists under the Credit Agreement and the other Loan Documents as of the
date hereof. Subject to the satisfaction of the condition precedent set forth
in Section 5 hereof, Lenders hereby waive the Designated Default in existence
on the date hereof. In no event shall such waiver be deemed to constitute a
waiver of (a) any Default or Event of Default other than the Designated Default
in existence on the date of this Amendment or (b) Borrowers' obligation to
comply with all of the terms and conditions of the Credit Agreement and other
Loan Documents from and after the date hereof. Notwithstanding any prior,
temporary mutual disregard of the terms of any contracts between the parties,
Borrower hereby agrees that it shall be required strictly to comply with all of
the terms of the Loan Documents on and after the date hereof.
4. CHANGE OF CONTROL. Each Borrower acknowledges and agrees that an
Event of Default will occur under the Credit Agreement due to the occurrence of
a Change of Control unless a replacement officer for Xxx X. Xxxxxxx,
satisfactory to Agent, is elected on or before June 18, 2000.
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5. CONDITIONS PRECEDENT. The effectiveness of the amendments contained
in Section 2 hereof and the limited waiver pursuant to Section 3 hereof are
subject to Agent receiving, for the benefit of Lenders, an amendment and waiver
fee of $250,000 in immediately available federal funds.
6. RATIFICATION AND REAFFIRMATION. Each Borrower hereby ratifies and
reaffirms the Obligations, each of the Loan Documents and all of such
Borrower's covenants, duties, indebtedness and liabilities under the Loan
Documents.
7. ACKNOWLEDGEMENTS AND STIPULATIONS. Each Borrower acknowledges and
stipulates that the Credit Agreement and the other Loan Documents executed by
Borrowers are legal, valid and binding obligations of Borrowers that are
enforceable against Borrowers in accordance with the terms thereof; all of the
Obligations are owing and payable without defense, offset or counterclaim (and
to the extent there exists any such defense, offset or counterclaim on the date
hereof, the same is hereby waived by Borrowers); the security interests and
liens granted by Borrowers in favor of Lender are duly perfected, first
priority security interests and liens, except as permitted under the Credit
Agreement; and the unpaid principal amount of the Revolving Advances on and as
of the close of business on May 11, 2000, totaled $10,798,623.88.
8. REPRESENTATIONS AND WARRANTS. Each Borrower represents and warrants
to Lender, to induce Lender to enter into this Amendment, that no Default or
Event of Default exists on the date hereof; the execution, delivery and
performance of this Amendment have been duly authorized by all requisite
corporate action on the part of each Borrower and this Amendment has been duly
executed and delivered by Borrower, and all of the representations and warrants
made by Borrowers in the Credit Agreement are true and correct on and as of the
date hereof.
9. BREACH OF AMENDMENT. This Amendment shall be part of the Credit
Agreement and a breach of any of any representation, warranty or covenant
herein shall constitute an Event of Default.
10. EXPENSES OF AGENT AND LENDERS. Borrowers agree to pay, ON DEMAND,
all costs and expenses incurred by Agent and Lenders in connection with the
preparation, negotiation and execution of this Amendment and any other Loan
Documents executed pursuant hereto and any and all amendments, modifications,
and supplements thereto, including, without limitation, the costs and fees of
Agent's and Lenders' legal counsel and any taxes or expenses associated with or
incurred in connection with any instrument or agreement referred to herein or
contemplated hereby.
11. EFFECTIVENESS; GOVERNING LAW. This Amendment shall be effective upon
acceptance by Agent and Lenders (notice of which acceptance is hereby waived),
whereupon the same shall be governed by and construed in accordance with the
internal laws of the State of Georgia.
12. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
13. NO NOVATION, ETC. Except as otherwise expressly provided in this
Amendment, nothing herein shall be deemed to amend or modify any provision of
the Credit Agreement or any of the other Loan Documents, each of which shall
remain in full force and effect. This Amendment is not intended to be, nor
shall it be construed to create, a novation or accord and satisfaction, and the
Credit Agreement as herein modified shall continue in full force and effect.
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14. COUNTERPARTS; TELECOPIED SIGNATURES. This Amendment may be executed
in any number of counterparts and by different parties to this Amendment on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall
be deemed to be an original signature hereto.
15. FURTHER ASSURANCES. Each Borrower agrees to take such further
actions as Lender shall reasonably request from time to time in connection
herewith to evidence or give effect to the amendments set forth herein or any
of the transactions contemplated hereby.
16. SECTION TITLES. Section titles and references used in this Amendment
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreements among the parties hereto.
17. RELEASE OF CLAIMS. TO INDUCE AGENT AND LENDERS TO ENTER INTO THIS
AMENDMENT, EACH BORROWER HEREBY RELEASES, ACQUITS AND FOREVER DISCHARGES AGENT,
LENDERS, AND ALL OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS
OF AGENT AND LENDERS, FROM ANY AND ALL LIABILITIES, CLAIMS, DEMANDS, ACTIONS OR
CAUSES OF ACTION OF ANY KIND OR NATURE (IF THERE BE ANY), WHETHER ABSOLUTE OR
CONTINGENT, DISPUTED OR UNDISPUTED, AT LAW OR IN EQUITY, OR KNOWN OR UNKNOWN,
THAT SUCH BORROWER NOW HAS OR EVER HAD AGAINST AGENT OR ANY LENDER ARISING
UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS OR OTHERWISE. EACH
BORROWER REPRESENTS AND WARRANTS TO AGENT AND LENDERS THAT SUCH BORROWER HAS
NOT TRANSFERRED OR ASSIGNED TO ANY PERSON ANY CLAIM THAT SUCH BORROWER EVER HAD
OR CLAIMED TO HAVE AGAINST AGENT OR ANY LENDER.
18. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE PARTIES HERETO EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT COUNTERCLAIM OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
AMENDMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal in, and delivered by their respective duly authorized
officers on the date first written above.
ATTEST: ELTRAX SYSTEMS, INC.
/s/ Xxxxxxx X. Xxxxxxx III By: /s/ Xxxxxxx X. X'Xxxxxx
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XXXXXXX X. XXXXXXX, III, XXXXXXX X. X'XXXXXX,
Secretary Chairman of the Board
[CORPORATE SEAL]
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ATTEST: ELTRAX TECHNOLOGY SERVICES
GROUP, INC.
/s/ Clunet X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, III
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CLUNET X. XXXXX, Secretary Name: Xxxxxxx X. Xxxxxxx, III
[CORPORATE SEAL] Title: Treasurer
ATTEST: ELTRAX ASP GROUP, LLC
/s/ Clunet X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, III
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CLUNET X. XXXXX, Secretary Name: Xxxxxxx X. Xxxxxxx, III
[CORPORATE SEAL] Title: Treasurer
ATTEST: SQUIRREL SYSTEMS, INC.
/s/ Clunet X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, III
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CLUNET X. XXXXX, Secretary Name: Xxxxxxx X. Xxxxxxx, III
[CORPORATE SEAL] Title: Treasurer
ATTEST: SENERCOMM, INC.
/s/ Clunet X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, III
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CLUNET X. XXXXX, Secretary Name: Xxxxxxx X. Xxxxxxx, III
[CORPORATE SEAL] Title: Treasurer
ATTEST: ELTRAX CUSTOMER CARE GROUP, INC.
/s/ Clunet X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, III
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CLUNET X. XXXXX, Secretary Name: Xxxxxxx X. Xxxxxxx, III
Title: Treasurer
[CORPORATE SEAL]
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ATTEST: ELTRAX INTERNATIONAL, INC.
/s/ Clunet X. Xxxxx By: Xxxxxxx X. Xxxxxxx, III
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CLUNET X. XXXXX, Secretary Name: Xxxxxxx X. Xxxxxxx, III
Title: Treasurer
[CORPORATE SEAL]
ATTEST: ELTRAX HOSPITALITY GROUP, INC.
/s/ Clunet X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, III
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CLUNET X. XXXXX, Secretary Name: Xxxxxxx X. Xxxxxxx, III
Title: Treasurer
[CORPORATE SEAL]
PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: Vice President
Commitment Percentage: 100%
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