Exhibit 10.4
AMENDMENT TO BUSINESS CREDIT AND SECURITY AGREEMENT
(Amendment No. 6)
This Amendment to Business Credit and Security Agreement ("Amendment") is made
by and among Deutsche Financial Services Corporation ("DFS"), Elcom Services
Group, Inc. ("Elcom Services"), and xxxxx.xxx, inc. ("xxxxx.xxx") (Elcom
Services and xxxxx.xxx are referred to herein collectively as "Borrower"). This
Amendment hereby supercedes and replaces in its entirety any prior Amendment No.
6 dated the date hereof.
WHEREAS, DFS and Borrower are parties to that certain Business Credit
and Security Agreement dated March 1, 1997, as amended ("Agreement"); and
WHEREAS, DFS and Borrower desire to amend the Agreement as provided
herein.
NOW, THEREFORE, for and in consideration of the premises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, DFS and Borrower agree as follows:
1. Definitions/Elcom Group. The following definition shall be added
to the Agreement as if originally set forth therein:
"Elcom Group" shall mean Elcom and all of the subsidiaries of
Elcom including, without limitation, Elcom Services, xxxxx.xxx,
Elcom International Limited, a corporation organized and existing
under the laws of the United Kingdom, and all of the subsidiaries
of Elcom International Limited.
2. Reports. Section 3.12(a) is hereby deleted in its entirety and
replaced with the following:
"(a) Weekly Reports. Borrower agrees to provide DFS with a report
each week, or more frequently if requested by DFS, in such form
as is satisfactory to DFS, including supporting information
regarding, but not limited to, a Borrowing Base Certificate, the
current value of Borrower's liquid assets and the current amounts
outstanding under each of Borrower's lines of credit (including
the Credit Facility) (the "Weekly Report"). The Weekly Report
will be received by DFS each Thursday after the date of the
Agreement by noon (in the event that DFS is not open for business
on a Thursday then the Weekly Report will be due by noon of the
next business day that DFS is open for business), or more
frequently if so requested by DFS."
3. Financial Covenants. Sections 9.3.1(a), 9.3.1(b) and 9.3.1(c) are
hereby deleted in their entirety and replaced with the following:
(a) Borrower agrees that on a consolidated basis with the Elcom
Group, it will at all times maintain the following:
(i) a Tangible Net Worth plus Subordinated Debt in the
combined amount of not less than Thirty-Five Million
Dollars ($35,000,000.00);
(ii) a ratio of Debt to Tangible Net Worth plus Subordinated
Debt of not more than Three and one-half to one
(3.5:1.0);
(b) Borrower agrees that on a consolidated basis with the Elcom
Group, it will achieve, as of each fiscal quarter-end
commencing with the fiscal quarter ending March 31, 2001,
before tax income, excluding any expense charges relating to
the Intangibles, as determined in accordance with GAAP, of
not less than one dollar ($1.00); and
(c) Borrower agrees that it will achieve before tax income in
the amounts set forth in the letter agreement between
Borrower and DFS dated as of June 12, 2000.
The paragraph beginning "For purposes of this paragraph" shall
remain unchanged.
4. Default/Remedies. The following subsections (v) and (w) shall be
added to Section 10 of the Agreement as if originally set forth
therein:
(v) Elcom Group Limited is in default to Deutsche
Financial Services (UK) Limited pursuant to the terms
of the Standard Conditions for the Sale and Purchase
of Debts dated as of December 3, 1997, as amended, or
pursuant to any other agreement entered into by and
between Deutsche Financial Services (UK) Limited and
Elcom Group Limited.
(w) Elcom International, Inc. ("Guarantor") shall fail to
have pledged to DFS certificate(s) of deposit valued
at not less than $15,000,000 (the "Collateral")
pursuant to that certain Collateral Pledge Agreement
and Limited Power of Attorney between DFS and
Guarantor (the "Collateral Agreement"), or shall
otherwise be in default under the Collateral
Agreement.
5. Conditions Precedent. Notwithstanding the foregoing, this Amendment
shall not be effective unless and until satisfaction of the following
terms and conditions, each as acceptable to DFS, in its sole
discretion:
(a) execution and delivery of this Amendment by all
parties hereto.
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(b) a reaffirmation of Guarantor's existing
guaranties of the obligations of Borrower to DFS.
(c) execution and delivery of the Collateral
Agreement by Guarantor, in form and substance
acceptable to DFS.
(d) execution and delivery of an Incumbency
Certificate and Officer's Certificate by Guarantor
certifying as to the adoption of certain resolutions
of the Board of Directors attached thereto, in form
and substance acceptable to DFS.
(e) delivery to DFS of the certificates constituting
the Collateral, properly endorsed in favor of DFS.
(f) receipt of an agreement from Fleet Bank to waive
its rights of offset in the Collateral, in form and
substance acceptable to DFS.
(g) execution of an amendment to Standard Conditions
for the Sale and Purchase of Debts between Elcom
Group Limited and Deutsche Financial Services (UK)
Limited, in form and substance acceptable to each
party thereto.
(h) such other and further documents and agreements
as DFS may determine in connection with any of the
foregoing.
6. No Other Modifications. Except as expressly modified or amended
herein, all other terms and provisions of the Agreement shall remain
unmodified and in full force and effect and the Agreement, as hereby
amended, is ratified and confirmed by DFS and Borrower.
7. Capitalized Terms. Except as otherwise defined herein, all
capitalized terms will have the same meanings set forth in the
Agreement.
IN WITNESS WHEREOF, DFS, Elcom Services and xxxxx.xxx have executed
this Amendment as of the 12th day of June, 2000.
ELCOM SERVICES GROUP, INC.
ATTEST:
/s/ Xxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
(Assistant) Secretary
Print Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
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XXXXX.XXX, INC.
ATTEST:
/s/ Xxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
(Assistant) Secretary
Print Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Xxxx Xxxxxxxxx
Print Name: Xxxx Xxxxxxxxx
Title: Vice President of Operations
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Guarantor Consent and Agreement
The undersigned Guarantor hereby acknowledges and consents to the terms of the
foregoing Amendment to Business Credit and Security Agreement (Amendment No. 6),
and does hereby ratify and confirm each and every guaranty of Borrower
(inclusive of xxxxx.xxx) in all respects.
ELCOM INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxxx
Print Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
Date: June 12, 2000
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AMENDMENT TO BUSINESS CREDIT AND SECURITY AGREEMENT
(Amendment No. 5)
This Amendment to Business Credit and Security Agreement ("Amendment") is made
by and among Deutsche Financial Services Corporation ("DFS"), Elcom Services
Group, Inc. ("Elcom Services"), and xxxxx.xxx, inc. ("xxxxx.xxx") (Elcom
Services and xxxxx.xxx are referred to herein collectively as "Borrower").
WHEREAS, DFS and Borrower are parties to that certain Business Credit
and Security Agreement dated March 1, 1997, as amended ("Agreement"); and
WHEREAS, DFS and Borrower desire to amend the Agreement as provided
herein.
NOW, THEREFORE, for and in consideration of the premises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, DFS and Borrower agree as follows:
1. Total Credit Facility. The first sentence of Section 3.1 is hereby
deleted in its entirety and replaced with the following:
"In consideration of Borrower's payment and
performance of its Obligations and subject
to the terms and conditions contained in
this Agreement, DFS agrees to provide, and
Borrower agrees to accept, an aggregate
credit facility (the "Credit Facility") of
up to Fifty Million Dollars ($50,000,000)
("Total Credit Limit")."
2. Floorplan Inventory Loan Facility. The first sentence of Section
3.2 is hereby deleted in its entirety and replaced with the
following:
"Subject to the terms of this Agreement, DFS
may provide to Borrower floorplan financing
for the acquisition of Inventory from
vendors approved by DFS in DFS' reasonable
credit judgment (each advance being a
"Floorplan Inventory Loan"), up to an
aggregate unpaid principal amount at any
time not to exceed Twenty-Five Million
Dollars ($25,000,000) (collectively, the
"Floorplan Inventory Loan Facility")."
3. Total Working Capital Credit Limit.
"3.1 Total Working Capital Credit Limit. The first sentence of
Section 3.3 is hereby deleted in its entirety and replaced with
the following:
"Subject to the terms of this Agreement, DFS
agrees, for so long as no Default exists, to
provide to Borrower, and Borrower agrees to
accept, working capital financing (each
advance being a "Working
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Capital Loan") on
Eligible Accounts and Eligible Inventory in
the maximum aggregate unpaid principal
amount at any time equal to the lesser of
(i) the Borrowing Base and (ii) Twenty-Five
Million Dollars ($25,000,000) ("Total
Working Capital Credit Limit")."
3.2 Interest. Section 3.3 (c) of the Agreement is hereby deleted
in its entirety and replaced with the following:
" (c) Interest. Borrower agrees to pay
interest to DFS, on the Daily contract
Balance owed under Borrower's Working
Capital Loans at a rate that is equal to the
Prime Rate plus one-quarter of one
percentage point (0.25%) per annum ("Base
Working Capital Loan Interest Rate")."
4. Overadvance Facility. Section 3.4 is hereby deleted in its
entirety and replaced with the following:
"This Section has been intentionally left blank."
5. Term of Agreement. The first paragraph of Section 4.1 is hereby
deleted in its entirety and replaced with the following:
"4.1 Termination. Commencing March 1, 2000,
this Agreement may be terminated by either
party hereto upon not less than one hundred
twenty (120) days prior written notice to
the other party (except that it may be
terminated by DFS in the exercise of its
rights and remedies upon default by
Borrower). Upon termination by Borrower,
Borrower must (a) make payment to DFS of all
Obligations and (b) make payment to DFS of
the fee described in Section 4.3 below. No
termination shall relieve Borrower from any
Obligations to DFS arising out of Loans made
prior to the date of termination."
6. Conditions Precedent. Notwithstanding the foregoing, this
Amendment shall not be effective unless and until satisfaction of
the following terms and conditions, each as acceptable to DFS, in
its sole discretion:
(a) execution and delivery of this
Amendment by all parties hereto.
(b) a reaffirmation of Elcom
International, Inc. existing
guaranties of the obligations of
Borrower to DFS.
(c) execution of an amendment to the
Participation Agreement dated
February 14, 1997, as amended,
between DFS and BankBoston, N.A.
("BankBoston"), in form and
substance acceptable to each party
thereto.
(d) the written consent of
BankBoston to this amendment.
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(e) satisfaction of all of the
conditions precedent in that certain
waiver letter delivered by DFS to
Borrower.
(f) such other and further documents
and agreements as DFS may determine
in connection with any of the
foregoing.
7. No Other Modifications. Except as expressly modified or amended
herein, all other terms and provisions of the Agreement shall
remain unmodified and in full force and effect and the agreement,
as hereby amended, is ratified and confirmed by DFS and Borrower.
8. Capitalized Terms. Except as otherwise defined herein, all
capitalized terms will have the same meanings set forth in the
Agreement.
IN WITNESS WHEREOF, DFS, Elcom Services, and xxxxx.xxx have executed
this Amendment as of the 10 day February, 2000.
ELCOM SERVICES GROUP, INC.
ATTEST:
/s/ X.X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
(Assistant) Secretary
Print Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
XXXXX.XXX, INC.
ATTEST:
/s/ X.X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
(Assistant) Secretary
Print Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
DEUTSCHE FINANCIAL SERVICES CORPOPRATION
By: /s/ Xxxxxx Xxxxxxxx
Print Name: Xxxxxx Xxxxxxxx
Title: Vice President, General Manager
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Participant Consent and Agreement
The undersigned ("Participant") is a party to that certain First Amended and
Restated Participation Agreement with DFS dated as of February 14, 1997, as
amended (the "Participation Agreement"), concerning its participation in credit
facilities extended to Elcom Services Group, Inc. and xxxxx.xxx, inc. by DFS.
The undersigned hereby acknowledges and agrees to the terms of the foregoing
Amendment to Business Credit and Security Agreement (Amendment No. 5), and does
hereby ratify and confirm its Participation Agreement in all respects.
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Senior Vice President
Date: March 17, 2000
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Guarantor Consent and Agreement
The undersigned Guarantor hereby acknowledges and consents to the terms of the
foregoing Amendment to Business Credit and Security Agreement (Amendment No. 5),
and does hereby ratify and confirm each and every guaranty of Borrower
(inclusive of xxxxx.xxx) in all respects.
ELCOM INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
Print Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
Date: February 10, 2000
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