Exhibit 10(e)
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Amendment") is made
effective as of the ____ day of December, 1999, by and between RELM
COMMUNICATIONS, INC., RELM WIRELESS CORPORATION, RXD, INC. (jointly, severally
and collectively, "Borrower") and SUMMIT COMMERCIAL/GIBRALTAR CORP. ("Lender").
BACKGROUND
A. Pursuant to that certain Loan and Security Agreement dated February
26, 1999, by and between Borrower and Bank, Bank agreed to extend certain credit
facilities to Borrower.
B. Borrower and Bank have agreed to amend the Loan Agreement as
described herein.
C. All capitalized terms used herein and not separately defined shall
have the meanings provided for such terms in the Loan Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. Definitions.
1.1 Borrowing Base. Section 1.5 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"1.5 "Borrowing Base" means (a) the sum of (i) an amount up to 85%
of the Eligible Receivables, plus (ii) the lesser of (A)
$3,750,000.00 or (B) the sum of (1) an amount up to 50% of the Value
of that portion of Eligible Inventory consisting of finished goods
and (2) an amount up to 20% of the Value of that portion of Eligible
Inventory consisting of raw materials, minus (b) the Letter of
Credit Reserve, minus (c) the sum of (i) a reserve in the amount of
One Hundred Thousand Dollars ($100,000.00), (ii) the Fort Orange
Note Reserve and (iii) the Mortgaged Property Reserve."
1.2 Fort Orange Note Reserve. The following definition is hereby
added to and made a part of Section 1 of the Loan Agreement as Section 1.27A
thereof:
"1.27A "Fort Orange Note Reserve" means, at all times after the sale
of the Fort Orange Note, an amount equal to Three Hundred Fifty
Thousand Dollars ($350,000.00)."
1.3 Mortgaged Property Reserve. The following definition is hereby
added to and made a part of Section 1 of the Loan Agreement as Section 1.41A
thereof:
"1.41A "Mortgaged Property Reserve" means, at all times after the
sale of the Mortgaged Property, an amount equal to Six Hundred Fifty
Thousand Dollars ($650,000.00)."
2. Sale of Fort Orange Note. Lender consents to the sale by Borrower of
the Fort Orange Note for an amount equal to One Million Two Hundred Fifty
Thousand Dollars ($1,250,000.00) (the "Note Sale Proceeds"). Borrower shall
cause the purchaser of the Fort Orange Note to pay the Note Sale Proceeds
directly to Lender. Lender shall apply the Note Sale Proceeds to reduce the
outstanding principal balance under the Line. Upon receipt by Lender in
immediately available funds of the Note Sale Proceeds, Lender shall deliver the
original Fort Orange Note to the purchaser thereof and shall release its
security interest therein.
3. Sale of Mortgaged Property. Lender consents to the sale by Borrower
of the Mortgaged Property. Borrower represents and warrants that the proceeds of
the sale of the Mortgaged Property remaining after paying all indebtedness
secured by any mortgage liens encumbering the Mortgaged Property and all closing
costs in connection with the sale of the Mortgaged Property shall equal One
Million Two Hundred Thousand Dollars ($1,200,000.00) (the"Property Sale
Proceeds"). Borrower shall cause the purchaser of the Mortgaged Property to pay
the Property Sale Proceeds directly to Lender. Lender shall apply the Property
Sale Proceeds to reduce the outstanding principal balance under the Line.
4. Amendment Fee. On the date hereof, Borrower shall pay to Lender an
amendment fee equal to Ten Thousand Dollars ($10,000.00), which fee may be
charged to the Line.
5. Additional Documents; Further Assurances. Borrower shall execute and
deliver or cause to be executed and delivered to Lender any and all documents,
agreements, corporate resolutions, certificates and opinions as Lender shall
request in connection with the execution and delivery of this Amendment or any
documents in connection herewith, all of which shall be in form and content
acceptable to Lender in its sole discretion.
6. Further Agreements and Representations of Borrower. Borrower does
hereby:
(1) ratify, confirm and acknowledge that, as amended hereby,
the Loan Agreement and the other Loan Documents are valid, binding and in full
force and effect;
(2) covenant and agree to perform all of its obligations under
the Loan Agreement and the other Loan Documents, as amended;
(3) acknowledge and agree that as of the date hereof Borrower
has no defense, set-off, counterclaim or challenge against the payment of any
sums owing under the Lender Indebtedness or the enforcement of any of the terms
of the Loan Agreement or the other Loan Documents, as amended;
(4) acknowledge and agree that all representations and
warranties of Borrower contained in the Loan Agreement and/or the other Loan
Documents, as amended, are true, accurate and correct on and as of the date
hereof as if made on and as of the date hereof;
(5) represent and warrant that no Event of Default exists or
will exist upon the delivery of notice, passage of time or both, and all
information described in the foregoing Background is true and accurate; and
(6) acknowledge and agree that nothing contained herein and no
actions taken pursuant to the terms hereof is intended to constitute a novation
of the Loan Agreement or any of the other Loan Documents and does not constitute
a release, termination or waiver of any of the liens, security interests, rights
or remedies granted to the Bank therein, which liens, security interests, rights
and remedies are hereby ratified, confirmed, extended and continued as security
for the Bank Indebtedness.
7. Costs and Expenses. In addition to the fee set forth in Section 4
hereof, upon execution of this Amendment, Borrower shall pay to Lender all costs
and expenses incurred by Lender in connection with the review, preparation and
negotiation of this Amendment and all documents in connection therewith,
including, without limitation, all of Lender's attorneys' fees and costs.
8. Inconsistencies. To the extent of any inconsistency between the
terms, conditions and provisions of this Amendment and the terms, conditions and
provisions of the Loan Agreement or the other
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Loan Documents, the terms, conditions and provisions of this Amendment shall
prevail. All terms, conditions and provisions of the Loan Agreement and the
other Loan Documents not inconsistent herewith shall remain in full force and
effect.
9. Construction. All references to the Loan Agreement therein or in any
other Loan Documents shall be deemed to be a reference to the Loan Agreement as
amended hereby.
10. No Waiver. Nothing contained herein is intended to nor shall it
constitute a waiver by Lender of any rights and remedies available to it at law
or in equity or as provided in the Loan Agreement or in the Loan Documents.
11. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
12. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed the day and year first above written.
RELM COMMUNICATIONS, INC.
By: ____________________________________
Xxxxxxx X. Xxxxx, Vice President/CFO
(CORPORATE SEAL)
RELM WIRELESS CORPORATION
By: ____________________________________
Xxxxxxx X. Xxxxx, Vice President/CFO
(CORPORATE SEAL)
RXD, INC.
By: ____________________________________
Xxxxxxx X. Xxxxx, Vice President/CFO
(CORPORATE SEAL)
SUMMIT COMMERCIAL/GIBRALTAR CORP.
By:___________________________________
Name/Title:___________________________
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The undersigned, intending to be legally bound hereby, acknowledge and
agree (a) to the terms of the foregoing Amendment; (b) that the foregoing
Amendment shall not in any way adversely affect or impair the obligations of the
undersigned to Lender under those certain Surety Agreements from the undersigned
to Lender, each dated February 26, 1999, or under any documents in connection
therewith or collateral thereto; and (c) that such Surety Agreement and all such
other documents are hereby ratified, confirmed and continued as of this ______
day of December, 1999.
EDGO PROPERTIES, INC.
By: ____________________________________
Xxxxxxx X. Xxxxx, Vice President/CFO
(CORPORATE SEAL)
RELM COMMUNICATIONS OF FLORIDA, INC.
By: ____________________________________
Xxxxxxx X. Xxxxx, Vice President/CFO
(CORPORATE SEAL)
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