Exhibit 10.63
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
----------------------------------------------
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of October 14, 1998, is entered into by and between SANWA
BUSINESS CREDIT CORPORATION, a Delaware corporation ("Lender"), and each of
EDUCATIONAL INDUSTRIAL SALES INCORPORATED, a California corporation ("EISI"),
XXXXXX MEDIA SALES, INC., a Texas corporation ("Xxxxxx"), X. XXXXXXXXXXXX
ENTERPRISES, INC., a Texas corporation ("Xxxxxxxxxxxx"), and EIS MERGER
SUBSIDIARY, INC., a Delaware corporation ("Subsidiary"), with reference to the
following facts:
RECITALS
--------
A. EISI, Alford, Xxxxxxxxxxxx and Electronic Integrated Solutions, a
California corporation (the "Parent," and collectively with EISI, Alford, and
Xxxxxxxxxxxx, the "Borrowers") and Lender are parties to that certain Loan and
Security Agreement, dated as of September 3, 1998 (the "Loan Agreement"),
pursuant to which Lender was provided the Borrowers with certain credit
facilities on a joint and several liability basis.
B. The Borrowers have informed Lender of their intention to cause the
Parent to reincorporate in Delaware by means of (i) the establishment and
chartering of Subsidiary as a wholly-owned subsidiary of Parent in Delaware and
(ii) the merger of the Parent with and into Subsidiary, with Subsidiary being
the resulting entity of such merger (the "Parent Reincorporation").
C. Concurrently with the completion of the Parent Reincorporation,
the name of Subsidiary will be changed to Intellisys Group, Inc.
D. Pursuant to Section 10.2(a) of the Loan Agreement, the Parent
---------------
Reincorporation is a transaction that requires Lender's prior written consent.
E. Lender is willing to issue its prior written consent hereby to the
Parent Reincorporation on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereby agree as follows:
1. Defined Terms. All initially capitalized terms used in this Amendment
-------------
without definition shall have the respective meanings assigned thereto in the
Loan Agreement.
2. Consent to the Parent Reincorporation. Pursuant to Section 10.2(a) of
-------------------------------------
the Loan Agreement, Lender hereby consents to the Parent Reincorporation.
Lender shall issue such additional consents in writing as the Borrowers may
request to indicate Lender's prior written consent to the Parent
Reincorporation.
3. Addition of Subsidiary as a Borrower. By its signature below,
------------------------------------
Subsidiary hereby acknowledges and agrees that it hereby will become a
"Borrower" for all purposes under the
Loan Agreement and all other related loan documents executed by the Borrowers.
Without limiting the foregoing, Subsidiary hereby acknowledges and agrees that
it shall become jointly and severally liable with the other Borrowers for all of
the Obligations. By their respective signatures below, EISI, Xxxxxx and
Xxxxxxxxxxxx acknowledge and consent to the Parent Reincorporation and to
Subsidiary's joinder hereby as a jointly and severally liable "Borrower" for all
purposes under the Loan Agreement and all other related loan documents. The
Borrowers hereby acknowledge and agree that all references to the term
"Borrower" and "Borrowers" appearing in the Loan Agreement or in any of the
other related loan documents are hereby deemed to be amended to include
Subsidiary.
4. Further Assurances. Subsidiary and each of the other Borrowers hereby
------------------
agree to execute and deliver to Lender any and all financing statements and
other agreements, documents or instruments which Lender may reasonably request
in order to give effect to the Parent Reincorporation and Subsidiary's joinder
hereunder as a Borrower.
5. Conditions Precedent. The effectiveness of this Amendment shall be
--------------------
subject to the prior satisfaction of each of the following conditions:
a. Execution and Delivery of this Amendment. Lender shall have
----------------------------------------
received this Amendment, duly executed by each of the Borrowers,
including Subsidiary;
b. Constituent Documents of Subsidiary. Lender shall have received
-----------------------------------
a true and correct copy of the Certificate of Incorporation and
the Bylaws of Subsidiary;
c. Opinion Letter. Lender shall have received an opinion letter of
--------------
counsel to the Borrowers in form and substance acceptable to
Lender, confirming that the Parent Reincorporation has been
consummated and addressing such other matters as Lender may
request;
d. Acknowledgment of Guarantor. The Guarantor shall have confirmed
---------------------------
the continuing validity and effectiveness of his guaranty of the
Obligations by executing the Acknowledgment of Guarantor attached
to this Amendment; and
e. Amendment Fee. In consideration of Lender's agreement to enter
-------------
into this Amendment and to permit the Parent Reincorporation, the
Borrowers shall pay to Lender an amendment fee (the "Amendment
Fee") in the amount of $1,500. The Borrowers acknowledge and
agree that Lender may charge the full amount of the Amendment Fee
to the Borrowers' revolving loans account.
6. No Other Amendments. Except as expressly amended hereby, the Loan
-------------------
Agreement shall remain unaltered and in full force and effect.
2
IN WITNESS WHEREOF, the parties have executed this Amendment by their
respective duly authorized officers as of the date first set forth above.
SANWA BUSINESS CREDIT CORPORATION,
a Delaware corporation
By /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Title Vice President
--------------------------------------
EDUCATIONAL INDUSTRIAL SALES INCORPORATED,
a California corporation
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title Chairman and President
-------------------------------------
XXXXXX MEDIA SALES, INC.,
a Texas corporation
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title President
-------------------------------------
X. XXXXXXXXXXXX ENTERPRISES, INC., a Texas
corporation
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title President
-------------------------------------
EIS MERGER SUBSIDIARY, INC., a Delaware
corporation
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title President
-------------------------------------
3
