THIS DOCUMENT IS A COPY OF THE EXHIBIT FILED ON OCTOBER 24, 1996
PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
AMENDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated Credit Agreement is made as of the 10th day of
October, 1996 by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, an individual having an office
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Lender"), DELTA COMPUTEC
INC. a New York corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("DCI"), and DELTA DATA NET, INC., a New
York corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇("▇▇▇"). DCI and DDI are referred to collectively as
the "Borrowers".
W I T N E S S E T H:
WHEREAS, the Borrower and National Canada Finance Corp. ("NCFC") entered
into a certain Credit Agreement dated as of April 1, 1994, as amended by Credit
Agreement Amendment No. 1 dated November 17, 1994, Credit Agreement Amendment
No. 2 dated January 24, 1995, Credit Agreement Amendment No. 3 dated April 3,
1995, Credit Agreement Amendment No. 4 dated May 1, 1995 and Credit Agreement
Amendment No. 5 dated October 27, 1995 (as amended, the Credit Agreement"); and
WHEREAS, the Borrower executed and delivered to NCFC a Promissory Note
dated April 1, 1994, as amended and restated by an Amended and Restated
Promissory Note dated May 1, 1995 and as further amended and restated by a Third
Amended and Restated Promissory Note dated October 27, 1995 (as amended and
restated, the "Promissory Note"); and
WHEREAS, on the date hereof, NCFC is assigning to the Lender all but
$750,000 of the indebtedness owed to NCFC by DCI evidenced by the Credit
Agreement and the Promissory Note; and
WHEREAS, the Borrower and the Lender desire to enter into a new agreement
which amends and restates, in its entirety, the portions of the Credit Agreement
and the Promissory Note evidencing the indebtedness which NCFC is assigning to
the Lender.
NOW, THEREFORE, it is agreed as follows:
1. Defined Terms.
1.1 Capitalized terms used but not otherwise defined herein have the
following meanings in this Agreement:
"Account Debtor" means a person or entity obligated to pay a
receivable.
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"Additional Collateral" means (a) all general intangibles of the
Borrower of every kind and description, including without limitation
federal, state and local tax refund claims of all kinds, whether now
existing or hereafter arising; (b) all of the Borrower's deposit
accounts, whether now owned or hereafter credited, wherever located;
(c) all monies, securities, instruments, cash and other property of
the Borrower and the proceeds thereof, now or hereafter held or
received by, or in transit to, the Lender from or for the Borrower,
and (d) all books, records, customer lists, ledger cards, computer
programs, computer tapes, disks, printouts and records, and other
property and general intangibles at any time evidencing or relating to
any of the foregoing, whether now in existence or hereafter created;
and all proceeds of the foregoing and all proceeds of any insurance on
the foregoing.
"Collateral" means Receivables, Inventory, Equipment, Patents,
Field Spare Parts, Trademarks and Additional Collateral.
"Declaration" a declaration of the occurrence of an Event of
Default.
"Eligible Receivables" means the net amount of those Receivables
which continually meet the following requirements: (a) the account is
due and payable not more than 90 days from the date of the invoice
evidencing the Receivable; (b) the Receivable arose from the
performance of services by the Borrower which have been fully and
satisfactorily performed or from the absolute sale or lease of goods
by the Borrower in which the Borrower had the sole and complete
ownership and the goods have been shipped or delivered to the Account
Debtor evidencing which the Borrower or the Lender has the possession
of shipping and delivery receipts; (c) the Receivable is not subject
to any prior or subsequent assignment, claim, lien or security
interest other than that of the Lender; (d) the Receivable is not
subject to setoff, counterclaim, defense, allowance or adjustment
other than discounts for prompt payment shown on the invoice, or to
dispute, objection or complaint by the Account Debtor concerning its
liability on the Receivable and the goods, the sale or lease of which
gave rise to the Receivable, have not been returned, rejected, lost or
damaged; (e) the Receivable arose in the ordinary course of business;
(f) no petition in bankruptcy or other application for relief under
the Bankruptcy Code or other insolvency law has been filed with
respect to the Account Debtor, and the Account Debtor has not made an
assignment for the benefit of creditors, become insolvent or suspended
or terminated business, and the Account Debtor is generally paying its
debts as they become due; (g) the Account Debtor is not an affiliate,
subsidiary, officer, shareholder or employee of the Borrower, nor
owned or controlled by any such entity; (h) the Account Debtor
maintains its chief executive office in the United States and is
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organized under the laws of the United States or a state thereof, or
payment of the Receivable is secured by a letter of credit acceptable
to the Lender; (i) the full amount reflected on the Borrower's books
and on any invoice delivered to the Lender relating to any Receivable
is owing to the Borrower and no partial prepayments thereon have been
made; (j) the Lender's security interest in the Receivable is a
perfected first lien; (k) the Receivable does not arise from a
consignment or other arrangement pursuant to which the subject
Inventory is returnable if not sold or otherwise disposed of by the
Account Debtor; and (l) the Receivable is not of a class, type or
category which the Lender hereafter reasonably determines, on notice
to the Borrower, is not eligible for inclusion in the Borrowing Base
under Section 2.1 of this Agreement.
"Equipment" means all machinery, equipment, furniture, fixtures,
tools, parts, supplies and motor vehicles, now owned and hereafter
acquired by the Borrower of whatsoever name, nature, kind or
description, wherever located, and all additions and accessions
thereto and replacements or substitutions therefor, and all proceeds
thereof and all proceeds of any insurance thereon.
"Inventory" means all inventory, as defined in the New York
Uniform Commercial Code.
"Loans" means all advances or loans made to the Borrower by the
Lender pursuant to this Agreement.
"Maturity Date" means December 10, 1996.
"Obligations" means all loans, advances, debts, liabilities,
obligations and duties owing by the Borrower to the Lender of every
kind and description, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, pursuant to this
Agreement and the Loans and to no other transaction, whether such
obligations are form time to time reduced and thereafter increased, or
entirely extinguished and thereafter reincurred, including without
limitation, all interest, fees, charges, expenses and attorneys' fees
chargeable to the Borrower or incurred by the Lender in connection
with this Agreement.
"Patents" means all of the Borrower's right, title and interest,
present and future, in and to (a) all letters patent of the United
States or any other country, all right, title and interest therein and
thereto, and all registrations and recordings thereof, including
without limitation applications, registrations and recordings in the
United States Patent and Trademark Office or in any similar office or
agency of the United States and any State thereof or any other country
or any political subdivision thereof; all
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whether now owned or hereafter acquired by the Borrower; and (b) all
reissues, continuations, continuations-in-part or extensions thereof
and all licenses thereof; and all proceeds of the foregoing and all
proceeds of any insurance on the foregoing.
"Receivables" means (a) all of the Borrower's now owned and
hereafter acquired accounts, chattel paper, documents and instruments,
and all proceeds of the foregoing and all proceeds of any insurance on
the foregoing; (b) all of the Borrower's rights, remedies, security
and liens, in, to and in respect of the accounts, including without
limitation, rights of stoppage in transit, replevin, repossession and
reclamation and other rights and remedies of an unpaid vendor, lienor
or secured party, guarantees or other contracts of suretyship with
respect to the accounts, deposits or other security for the obligation
of any debtor or obligor in any way obligated on or in connection with
any accounts and credit and other insurance, and all proceeds of the
foregoing and all proceeds of any insurance on the foregoing; and (c)
all of the Borrower's right, title and interest, present and future,
in, to and in respect of, all goods relating to, or which by sale have
resulted in, accounts, including without limitation all goods
described in invoices or other documents or instruments with respect
to, or otherwise representing or evidencing any accounts and all
returned, reclaimed or repossessed goods, and all proceeds of the
foregoing and all proceeds of any insurance on the foregoing.
"SAI/Delta" means SAI/Delta, Inc., a Florida corporation.
"Subordinated Debentures" means the following outstanding
Debentures issued by the Borrower: (i) 8% Subordinated Debenture dated
October 28, 1992, in the original principal amount of $600,001.00,
payable to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, as amended and restated, and now due
on January 31, 1998; and (ii) 8% Subordinated Debenture dated October
31, 1992, in the original principal amount of $475,000.00, payable to
Dataspan Systems, Inc. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇ Data Net, Inc., due October
3, 1997.
"Supplemental Agreements" means any and all agreements,
instruments, documents, security agreements, guaranties, mortgages,
financing statements, assignment agreements, repurchase agreements and
supplements thereto granting or intending to grant to lender any lien,
security interest, pledge, assignment or indemnification to secure the
obligations.
"Trademarks" means all of the Borrower's right, title and
interest, in and to (a) all trademarks, trade names, trade styles,
service marks, prints and labels on which
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said trademarks, trade names, trade styles and service marks have
appeared or appear, designs and general intangibles of like nature,
now existing or hereafter adopted or acquired, all right, title and
interest therein and thereto, and all registrations and recordings
thereof, including without limitation applications, registrations and
recordings in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof, or
any other country or any political subdivision thereof, all whether
now owned or hereafter acquired by the Borrower; (b) all reissues,
extensions or renewals thereof and all licenses thereof; and (c) the
goodwill of the business symbolized by each of the Trademarks, and all
customer lists and other records of the Borrower relating to the
distribution of products bearing the Trademarks; and all proceeds of
the foregoing and all proceeds of any insurance on the foregoing.
1.2 UCC Definitions. The words "debtor", "secured party",
"collateral", "perfection", "authorization", "consent", "security
agreement", "proceeds", "financing statement", "assignee", "assignment",
action , "creditor", "goods", "equipment", "inventory", "accounts",
"documents", "instruments", "chattel paper", and "general intangibles", and
all other terms used in this Agreement and in all documents referred to
herein shall have the meanings given such terms in the New York Uniform
Commercial Code.
1.3 Accounting Terms. All accounting terms used but not defined in
this Agreement shall be construed in accordance with generally accepted
accounting principles consistently applied.
2. Terms of Borrowing.
2.1 Borrowing Base. As long as neither DCI nor DDI are in default of
any of their Obligations to the Lender, the Lender may lend to the
Borrower, and the Borrower may borrow from the Lender, from time to time,
up to an aggregate outstanding principal amount at any time of $2,550,000,
or such lesser amount which is 105% (subject to reduction as set forth on
Schedule 2.1) of DCI's, DDI's and SAI/Delta's Eligible Receivables.
2.2 Borrowing Base Reports Etc. For purposes of computing the
Borrowing Base, the Borrower shall furnish to the Lender information
adequate to identify Receivables and Inventory at times and in form and
substance as may be required by the Lender. Without limiting the foregoing,
the Borrower shall provide to the Lender in form and content satisfactory
to the Lender (a) a Borrowing Certificate in the form mutually agreeable to
Borrower and Lender to be provided at least weekly and at such other
intervals as the Lender may request in the event a Loan would exceed the
Borrowing Base as calculated by the
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Lender; and (b) monthly, within 15 days after month-end, an Accounts
Receivable Aging based on invoice date and listed in sequence by number.
From time to time, the Borrower shall provide the Lender with such other
schedules and information as the Lender may reasonably request. Together
with such schedules, the Borrower shall, upon the reasonable request of the
Lender, furnish copies of customers' invoices or the equivalent, and
original shipping or delivery receipts for all merchandise sold, and the
Borrower warrants the genuineness thereof. The Borrower further warrants
that all Receivables are and will be bona fide existing obligations created
by the sale and delivery of merchandise or the rendition of services to
customers in the ordinary course of business, free of liens, encumbrances
and security interests, except as permitted hereunder, and unconditionally
owed to the Borrower and, to the best of the Borrower's knowledge, without
defense, offset or counterclaim.
2.3 Loans.
(a) Subject to the terms of this Agreement, the Borrower may
receive Loans upon request made by a person authorized by the Borrower
no later than 1:00 p.m. Rochester, New York time in a writing
satisfactory to the Lender; provided that no Loan shall be made which,
by itself or together with the principal balance then outstanding of
prior Loans, would cause the total outstanding principal balance of
the Loans to exceed the Borrowing Base described in paragraph 2.1 of
this Agreement.
(b) Subject to the required terms of payment set forth in
Paragraph 2.5 below, the Borrower may make principal payments upon its
indebtedness for Loans in its discretion and until maturity as
provided in Paragraph 2.5(a), may reborrow subject to the limits set
forth in this Agreement.
2.4 Interest.
(a) Until the Maturity Date, whether by acceleration or
otherwise, the Borrower agrees to pay interest on the outstanding
principal balance of the Loans at the rate of one and three quarters
of one percent (1 3/4%) per annum above the highest prime rate
published form 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 Loans are 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 Loans at a rate equal to three and three
quarters percent (3 3/4%) per annum above the Prime Rate.
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(b) Any change in the Prime Rate shall, without notice to the
Borrower, be effective hereunder commencing at the same time such new
rate becomes effective.
2.5 Payments.
(a) The Borrower further agrees to pay the outstanding principal
and accrued interest on the Loans on the earlier of (i) the Maturity
Date; or (ii) the occurrence of an event of default under Paragraph
7.1 below in respect of which the Lender has delivered a Declaration.
In addition, the Borrower agrees to make, on demand, such principal
payments as are necessary so that the unpaid principal balance of the
Loans does not at any time exceed the Borrowing Base. Without limiting
the right of the Lender to demand payment as provided herein, the
Borrower shall pay accrued interest on the first day of each month
commencing the month following the date of this Agreement and
continuing until all of the Obligations are paid in full.
(b) Each payment received by the Lender shall be applied first to
interest accrued and billed and the balance, if any, to principal,
provided that if there has occurred an event of default under
Paragraph 7.1 below, the Lender may apply payments in the Lender's
absolute discretion.
(c) Any non-cash payment of Loans, i.e, payment in other than
immediately available U.S. funds, shall be deemed paid, for purposes
of calculating the principal amount available for borrowing under this
Agreement, on the date such non-cash payments are received by the
Lender; however, for the purpose of calculating interest pursuant to
Paragraph 2.4 of this Agreement, such payments shall be deemed to have
been received two (2) days after actual receipt of such payment by the
Lender. Notwithstanding the foregoing, if any such non-cash payment
presented for collection by the Lender is not paid in Lender may,
without prior notice to the Borrower, reverse the provisional credit
which has been given, and make appropriate adjustments to the amount
of principal and interest due, and the amount of the Borrowing Base
available.
2.6 Prepayment. The Borrower shall have the right to prepay the
outstanding principal balance of the Loans in whole, at any time, or in
part, from time to time.
2.7 Fees and Expenses.
(a) Audit Fees. The Borrower shall pay to the Lender field
examination fees in the amount of $400 per day per examiner for all
audits or field examinations of the Borrower conducted in reasonable
scope at reasonable intervals and shall reimburse the Lender for all
reasonable airfare, hotel
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accommodations and other out-of-pocket expenses in connection with
such audits or examinations.
(b) Expenses. If the Obligations are placed in the hands of any
attorneys employed by the Lender for collection, the Borrower agrees
to pay on demand, the Lender's reasonable attorneys' fees, together
with reasonable costs and expenses, whether or not a legal proceeding
or action is commenced, including those incurred in a bankruptcy or
insolvency proceeding.
2.8 Purpose of Line of Credit. The Borrower agrees to use the
proceeds of the Loans solely as working capital and for general
corporate purposes.
2.9 Collection of Receivables. After the occurrence of an event
of default hereunder in respect of which the Lender has delivered a
Declaration, the Lender or its designee may notify Account Debtors
that Receivables have been assigned to the Lender or of the Lender's
security interest therein and collect them directly and charge the
collection costs and expenses to the Borrower's account; but, unless
and until the Lender does so or gives the Borrower other instructions,
the orrower shall make collection of all Receivables. Until credited
to the Borrower's account as hereinafter set forth, all payments of
Receivables through a lock box arrangement to be established with the
Lender shall be held by the Lender as collateral for payment and/or
performance of the Borrower's Obligations to the Lender.
2.10 Returns, Credits. Etc. Any merchandise which is returned by
an Account Debtor or otherwise recovered shall be set aside, marked
with the Lender's name and held by the Borrower as the Lender's
trustee, and shall remain part of the Lender's security. The Borrower
shall notify the Lender promptly of all returns and recoveries and, on
request, deliver the merchandise to the Lender. The Borrower shall
also notify the Lender promptly of all disputes and claims exceeding
$25,000 in the aggregate, and settle or adjust them at no expense to
the Lender, but no discount, credit or allowance (other than in the
ordinary course of the Borrower's business) shall be granted to any
Account Debtor, and no returns of merchandise (other than in the
ordinary course of the Borrower's business) shall be accepted by the
Borrower without the Lender's consent. After the occurrence of an
event of default hereunder in respect of which the Lender has
delivered a Declaration, the Lender may settle or adjust disputes and
claims directly with Account Debtors for amounts and upon terms which
the Lender reasonably determines, on notice to the Borrower, to be
advisable, and in all cases the Lender will credit the Borrower's
account with only the net amounts received by the Lender in payment of
such Receivables.
2.11 Further Assurance. Upon the Lender's request, the Borrower
shall appropriately ▇▇▇▇ the Borrower's books of account to disclose
the Lender's security interest in all the Borrower's Receivables, and
shall perform all other steps reasonably requested by the Lender to
create and maintain in the Lender's favor a valid first priority
security interest, or lien in or on all Receivables and all other
security held by or for the Lender.
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2.12 Power of Attorney. The Borrower appoints the Lender, or any
person whom the Lender may designate as its attorney, with power of
attorney to sign the Borrower's name on such financing statements as
may be necessary to perfect the Lender's security interest in the
Collateral; and, after the occurrence of an event of default hereunder
in respect of which the Lender has delivered to the Borrower a
Declaration to endorse the Borrower's name on any checks, notes,
acceptances, money orders, drafts or other forms of payment or
security that may come into the Lender's possession; to sign the
Borrower's name on any invoice or ▇▇▇▇ of lading relating to any
Receivables, on verifications of accounts, notices of assignment and
notices to customers; to notify the post office authorities to change
the address for delivery of the Borrower's mail to an address
designated by the Lender; to send requests for verification of
Receivables to Account Debtors; and to do all things necessary to
carry out this Agreement. The Borrower ratifies and approves all acts
of such attorney. Neither the Lender nor the attorney will be liable
for any acts or omissions nor for any error of judgment or mistake of
fact or law. This power, being coupled with an interest, is
irrevocable so long as any Receivables in which the Lender has a
security interest remain unpaid or until the Obligations have been
fully satisfied. the Lender may file one or more financing statements
disclosing the Lender's security interest without the Borrower's
signature appearing thereon.
3. Collateral.
3.1 Security Interest. As security for payment and performance of all
Obligations, the Borrower hereby assigns and grants to the Lender a
continuing security interest in the Collateral. The Lender shall retain its
security interest in all Collateral, until all Obligations have been
finally and irrevocably satisfied.
3.2 Possession of Collateral. After the occurrence of an event of
default hereunder in respect of which the Lender has delivered to the
Borrower a Declaration, the Lender will at all times have the right to take
physical possession of the Collateral and to maintain such possession of
the Collateral on the Borrower's premises or to remove the Collateral or
any part thereof to such other places as the Lender may desire. If the
Lender exercises its right to take possession
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of the Collateral, the Borrower shall, upon the Lender's demand, assemble
the Collateral and make it available to the Lender at a place reasonably
convenient to the Lender.
3.3 Location of Collateral. All Collateral is owned by the Borrower
free of all other liens and encumbrances, except as set forth on Schedule 1
hereto and shall be kept by the Borrower at the location(s) set forth in
Schedule 2 hereto; and the Borrower will not (without the Lender's prior
written approval) remove the Collateral therefrom, except for the purposes
of sale or lease in the regular course of the Borrower's business.
3.4. Limitation on Disposition of Assets. The Borrower will not sell,
exchange or otherwise dispose of the Collateral, or any part thereof, or
any interest therein without the express written consent of the Lender
other than (a) finished products or field spare parts sold in the ordinary
course of business, and (b) fully depreciated obsolete equipment or
equipment which is replaced by items of comparable kind and value. In the
event of any other sale, exchange or other disposition of the Collateral or
any part thereof or any interest therein (and no such sale, exchange or
other disposition is hereby otherwise authorized or consented to), the
security interest of the Lender shall nevertheless continue in said
Collateral (including all proceeds, cash and non-cash) notwithstanding said
sale, exchange or other disposition; all of said proceeds shall remain
Collateral hereunder and shall be transferred and paid over to the Lender
immediately following said sale, exchange or other disposition, and shall
be applied at the option of the Lender to the payment of Obligations due
hereunder; and the receipt by the Lender of all or any of said proceeds
shall not be deemed or construed to be an authorization or consent of the
Lender to such sale, exchange or other disposition of said Collateral.
3.5 Further Assurances Regarding Inventory. The Borrower shall perform
any and all steps reasonably requested by the Lender to perfect the
Lender's security interest in the Inventory, such as leasing warehouses to
the Lender or the Lender's designee, placing and maintaining signs,
appointing custodians, executing and filing financing or continuation
statements in form and substance satisfactory to the Lender, maintaining
stock records and transferring Inventory to warehouses. If any Inventory is
in the possession or control of any of the Borrower's agents or processors,
the Borrower shall notify such agents or processors of the Lender's
security interest therein, and, upon request, instruct them to hold all
such Inventory for the Lender's account and subject to the Lender's
instructions. A physical listing of all Inventory, wherever located, shall
be taken by the Borrower at least annually and whenever requested by the
Lender, and a copy of each
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such physical listing shall be supplied to the Lender. the Lender may
examine and inspect the Inventory at any reasonable time during regular
business hours.
3.6 Compliance. The Borrower will comply with the terms and conditions
of any leases covering the premises wherein the Collateral is located and
any orders, ordinances, laws or statutes of any city, state or other
governmental department having jurisdiction with respect to such premises
or the conduct of business thereon.
3.7 Discharge of Liens. The Lender may, at its option, discharge any
taxes, liens, security interests or other encumbrances at any time levied
or placed on the Collateral, and the Lender may pay insurance premiums or
procure insurance and otherwise pay for the maintenance and preservation of
the Collateral and the Borrower will reimburse the Lender on demand for any
payment made or expense incurred by the Lender pursuant to the foregoing
authority, with interest at the rate provided in this Agreement.
3.8 Corporate Existence, Properties. The Borrower will at all times
maintain, preserve and protect all franchises, patents, and trade names and
preserve all the remainder of its property used or useful in the conduct of
its business and keep the same in good condition and repair (normal wear
and tear and obsolescence excepted), and from time to time make, or cause
to be made, all needed and proper repairs, renewals, replacements,
betterments and improvements thereto, and will pay or cause to be paid,
except when the same may be contested in good faith, all rent due on any
premises where any property is held or may be held, so that the business
carried on in connection therewith may be continuously conducted.
3.9 Insurance. The Borrower will have and maintain insurance at all
times with respect to all Collateral against risks of fire (including
so-called extended coverage), theft and such risks as the Lender may
require containing such terms, in such form, and for such periods, and
written by such companies as may be satisfactory to the Lender, such
insurance to be payable to the Lender and the Borrower as their interests
may appear; each policy of insurance shall have a loss payee endorsement in
form satisfactory to the Lender providing (a) that loss or damage, if any
under the policy, shall be payable to the Lender, as secured party, as its
interests may appear; (b) that the insurance as to the interest of the
Lender shall not be invalidated by any act or neglect of the insured or
owner of the property described in said policy, nor by any foreclosure, or
other proceeding, nor by any change in the title of ownership of said
property, nor by the occupation of the premises where the property is
located for purposes more hazardous than are permitted by said policy; (c)
that, if the policy is canceled at
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any time by the insurance carrier, in such case the policy shall continue
in force for the benefit of the Lender for not less than thirty (30) days
after written notice of cancellation to the Lender from the insurance
carrier; and (d) that the policy will not be reduced or canceled at the
request of the insured nor will said loss payee endorsement be amended or
deleted without thirty (30) days' prior written notice to the Lender from
the insurance carrier. The Borrower will furnish the Lender with
certificates or other evidence satisfactory to the Lender of compliance
with the foregoing insurance provisions, and, after the occurrence of an
event of default hereunder in respect of which the Lender shall have
delivered to the Borrower a Declaration, the Lender may act as attorney for
the Borrower in obtaining, adjusting, settling, and canceling such
insurance and receiving and endorsing any drafts. The Borrower hereby
assigns to the Lender any and all monies which may become due and payable
under any policy insuring the Collateral covered by this Agreement,
including return of unearned premiums, and hereby directs any insurance
company issuing any such policy to make payment directly to the Lender and
authorizes the Lender, at its option: (i) to apply such monies in payment
on account of any Obligation hereunder, whether or not due, and remit any
surplus to the Borrower; or (ii) to return said funds to the Borrower for
the purpose of replacement of the Collateral. The Borrower will also at all
times maintain necessary workers' compensation insurance and such other
insurance as may be required by law or as may be reasonably required in
writing by the Lender.
4. Representations and Warranties.
4.1 Representations and Warranties. DCI and DDI each warrants and
represents to the Lender that (a) each Borrower is and shall at all times
hereafter be a corporation duly organized and existing in good standing
under the laws of the state of its incorporation and qualified and licensed
to do business in any other state in which its ownership of property or its
conduct of business requires it to be so qualified and/or licensed; (b)
each Borrower has the right and power and is duly authorized to enter into
this Agreement and the Supplemental Agreements; (c) the execution by each
Borrower of this Agreement and the Supplemental Agreements shall not
constitute a breach of any provision contained in either Borrower's
Certificate of Incorporation or By-Laws or contained in any agreement to
which either Borrower is now or hereafter becomes a party; (d) the
performance by each Borrower of all of the terms and provisions contained
in this Agreement and in the Supplemental Agreements' shall not constitute
a default or an event of default under any agreement to which each Borrower
is now or hereafter a party; (e) the Borrower has good and indefeasible
title to the Collateral; (f) all financial statements and information
relating to each Borrower which have been or may hereafter be delivered by
each Borrower to the Lender are true and correct and have been
12
Page 151 of 207 Pages
prepared in accordance with generally accepted accounting principles, and
there has been no material adverse change in the financial condition of
either Borrower since the submission of any such financial information to
the Lender; and (g) there are no actions or proceedings which are pending
or threatened against either Borrower which might result in any material
adverse change in the Borrower's financial condition or which might in any
material way affect any of the assets of the Borrower.
[Intentionally left blank]
5. Affirmative Covenants. The Borrower agrees as follows:
5.1 Monthly Financial Reports. To furnish to the Lender, within thirty
(30) days after the end of each calendar month, internally prepared
consolidated and consolidating financial reports of the operations of the
Borrower for such month and for the fiscal year-to-date, certified by the
Chief Financial Officer of the Borrower.
5.2 Quarterly Financial Reports. To furnish to the Lender, within
forty-five (45) days after the end of each fiscal quarter, internally
prepared 10Q financial consolidated reports of the Operations of the
Borrower for such quarter, certified by the Chief Financial Officer of the
Borrower.
5.3 Annual Statements. To furnish to the Lender within the earlier to
occur of the date that such credited financial statement are filed by DCI
with the Securities and Exchange Commission or one hundred twenty (120)
days after the end of each of the Borrower's fiscal years, audited
financial statements consisting of a balance sheet, income statement and
associated cash flows of the Borrower for such year prepared on a
consolidated and consolidating basis, in accordance with generally accepted
accounting principles, by a firm of independent certified public
accountants satisfactory to the Borrower and the Lender and certified by
the Borrower's Chief Financial Officer.
5.4 Forecast. For each fiscal year of the Borrower during the term
hereof, furnish to the Lender a consolidated and consolidating financial
forecast for the Borrower's upcoming fiscal year, consisting of monthly
projections of the Borrower's balance sheet, income statement, cash flows,
and Loan availability. Such reports shall be furnished to the Lender within
the first thirty (30) days of the
13
Page 152 of 207 Pages
Borrower's fiscal year. Anything to the contrary notwithstanding, so long
as DDI is not actively conducting business, the financial reports,
statements and forecasts to be furnished pursuant to paragraphs 5.1 and 5.4
need not contain information concerning DDI.
5.5 Certification. The reports required under Paragraph 5.1 through
5.4 shall be accompanied by a certificate of the chief financial officer of
the Borrower (i) certifying that no event of default under Paragraph 7.1 of
this Agreement has occurred or, if such an event has occurred, the nature
of the event of default and the action which the Borrower proposes to take
to cure it, and (ii) with computations demonstrating compliance with the
covenants contained in this Agreement.
5.6 Securities Regulation Reports. Promptly after the sending or
filing thereof, to furnish copies of all proxy statements, financial
statements and reports which the Borrower sends to its stockholders, and
copies of all regular, periodic and special reports, and all registration
statements which the Borrower files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor,
or with any national securities exchange.
5.7 Management. To notify the Lender thirty (30) days prior to any
reasonably foreseeable change in the management of the Borrower.
5.8 Taxes. To pay promptly all tax assessments and other governmental
charges, provided, however, that nothing herein contained shall be
interpreted to require the payment of any tax assessments and other
governmental charges long as its validity is being contested in good faith
in appropriate proceedings diligently pursued, provided such contest does
not impair the rights and security of the Lender.
5.9 Maintenance of Property. To maintain and keep its real and
personal property in good condition and in compliance with applicable
federal, state and local laws, rules and regulations.
5.10 Litigation. To notify the Lender of any litigation instituted
against the Borrower and any judgments entered against the Borrower in any
court involving more than $250,000 in the aggregate at any one time which
is not covered by insurance or where the insurance coverage is questioned
by the carrier.
5.11 Corporate Existence. To maintain each Borrower's corporate
existence in good standing.
14
Page 153 of 207 Pages
5.12 Other Information. To furnish such other information and at such
times as may be reasonably requested by the Lender.
5.13 Environmental Matters. To comply with all applicable
environmental laws and regulations, and to promptly correct any violation
of any applicable environmental law or regulation.
5.14 Audits. To permit the Lender and its agents at all reasonable
times and from time to time during normal business hours to examine, audit,
and make extracts from, or copies of, any of the Borrower's books, ledgers,
reports and other records and to otherwise verify all or any Collateral in
any manner the Lender considers appropriate.
5.15 Ownership. To notify the Lender within five (5) business days of
any change in voting control of either DCI or DDI.
6. Negative Covenants. The Borrower will not, without the prior written
consent of the Lender:
6.1 Capital Expenditures. Expend for fixed assets, or enter into
leases which must be capitalized under generally accepted accounting
principles (but excluding field spare parts), or make leasehold
improvements during any one fiscal year in an aggregate amount in excess of
$100,000.
6.2 Liens. Create or permit to exist against any of its property or
assets, real or personal, tangible or intangible, now owned or hereafter
acquired, any mortgage or other lien or encumbrance, except (a) liens and
mortgages listed on Schedule l hereto; (b) liens for taxes not delinquent
or being contested in good faith and by appropriate proceedings; (c) liens
granted to the Lender; and (d) liens granted to NCFC.
6.3 Borrowed Money. Incur other indebtedness for borrowed money,
except (a) indebtedness described on Schedule 3 hereto, (b) indebtedness
permitted by Section 6.14 hereof, (c) indebtedness to the Lender, (d)
intercompany transfers between DCI, DDI and SAI/Delta; and (e) indebtedness
to NCFC.
6.4 Sell Real Property. Sell or dispose of any presently owned real
property.
6.5 Sell Fixed Assets. Sell or dispose of a substantial portion of
presently owned fixed assets, such as furniture, fixtures, and equipment,
except as required for normal replacement due to age and/or obsolescence,
provided (a) the same are replaced by fixed assets of equal value and
quality or
15
Page 154 of 207 Pages
(b) the Borrower delivers to the Lender written notice of such sale or
disposition and remits the proceeds of such sale or disposition to reduce
the outstanding principal balance of the Loans, and following such sale or
disposition the Borrower is in compliance with the Borrowing Base.
6.6 Declare Dividends. Declare any dividends or make any other
distribution on any shares of its capital stock or set apart any sum for
the payment of any such dividends.
6.7 Capital Stock. Purchase or retire any of its capital stock.
6.8 Purchase Other Business. Purchase or acquire all or substantially
all of the property, assets, or business of any other person, firm or
corporation.
6.9 Contingent Debt. Assume, guarantee, endorse, contingently agree to
purchase, or otherwise become liable upon the obligation of any person,
firm, or corporation, except (a) by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business, or (b) guarantees of any obligations owed to
the Lender.
6.10 Purchase Stock: Merge or Consolidate. Enter into any merger or
consolidation, or purchase or acquire the obligations or stock of, or any
other interest in, any person, firm, corporation, or other enterprise
whatsoever, except the purchase of direct obligations of the United States
of America or of any state, county, or municipality.
6.11 Sale-Leaseback. Directly or indirectly enter into any arrangement
whereby the Borrower shall sell or transfer all or any substantial part of
its fixed assets then owned by it and shall thereafter or thereupon rent or
lease such property or a substantial part thereof.
6.12 Accounts Receivable. Sell, assign, transfer, or dispose of any of
its Receivables, except to the Lender.
6.13 Loans. Make loans or advances to any person, firm, or
corporation.
6.14 Lease of Real and Personal Property. Enter into any arrangements
for the lease of real or personal property where the annual lease payments
for all such leases would exceed in the aggregate $350,000.00 in any fiscal
year.
16
Page 155 of 207 Pages
6.15 Prepay Debt. Make any prepayment in regard to any indebtedness
that is subordinated in any respect to indebtedness owing to the Lender.
6.16 ERISA Compliance.
(a) Engage in any "prohibited transaction" (as such term is
defined in Section 406 or Section 2003(a) of the Employee Retirement
Income Security Act of 1974 and the regulations thereunder, as now or
hereafter in effect, ("ERISA"));
(b) Incur any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) whether or not waived; or
(c) Terminate any pension plan in a manner which could result in
the imposition of a lien on any property of the Borrower or any
affiliate pursuant to Section 4068 of Erlsa.
6.17 [Intentionally Omitted].
6.18 [Intentionally Omitted].
6.19 [Intentionally Omitted].
6.20 [Intentionally Omitted].
6.21 [Intentionally Omitted].
6.21 Subordinated Debentures. Make any principal payments on any of
the Subordinated Debentures prior to the dates upon which such payments are
scheduled to be made under the Subordinated Debentures.
7. Default.
7.1 Events of Default. If one or more of the following events of
default shall occur, the Lender, at its option, may terminate the
Borrower's right to receive any further Loans, and regardless of whether
the Lender exercises such option, the indebtedness of the Borrower under
this Agreement and any note or other agreement executed pursuant hereto
shall become immediately due and payable upon declaration to that effect
delivered by the Lender to the Borrower:
(a) Default shall be made by the Borrower (i) in the payment of
any principal or interest payable under this Agreement within ten (10)
days when due or (ii) in the payment of any fees or other expenses due
and payable in pursuant to this Agreement or any other document
executed and delivered to the Lender in connection with this Agreement
within ten (10) days
17
Page 156 of 207 Pages
after the Lender notifies the Borrower that such fees or expenses are
due;
(b) Default shall be made in (i) the due observance and
performance of any term, covenant, or agreement contained in this
Agreement (other than Section 6 of this Agreement) or in any other
present or future agreement, note, or instrument between or among the
Borrower and the Lender, including, without limitation, any default
under any Supplemental Agreements and, to the extent such default is
capable of being cured, such default shall remain uncured for a period
of twenty (20) days after the Lender notifies the Borrower in writing
of such default, or (ii) the due observance and performance of any
term, covenant, or agreement contained in Section 6 of this Agreement;
(c) any representation or warranty made in this Agreement or any
certificate or statement furnished pursuant to or in connection with
this Agreement shall prove to have been false in any material respect
at the date of which the facts therein set forth were certified, or
shall have omitted any substantial contingent or unliquidated
liability or claim against the Borrower, or if upon the date of the
execution of this Agreement there shall have been any material adverse
change in any of the material facts disclosed on any such statement,
which change shall not have been disclosed to the Lender in writing at
or prior to the time of such execution;
(d) the termination of existence or business, failure of, or the
making of an assignment for the benefit of creditors by, the Borrower;
(e) the entry of any judgment or judgments against the Borrower
aggregating as to any one of them at any one time in excess of
$250,000 which shall remain unsatisfied, undischarged, or unsecured
for a period of thirty (30) days or as to which a stay of execution
shall not have been obtained within thirty (30) days of the entry
thereof; provided, however, the Borrower may not, however, be declared
in default by reason of the entry of any such judgment so long as the
same shall be contested in good faith by appropriate proceedings
diligently conducted, and proper security be given therefor;
(f) if any governmental agency or department shall take control
of a substantial part of the property of the Borrower and shall
continue such control for thirty (30) days;
(g) if any tax lien is filed against the property of the Borrower
and remains unsatisfied, undischarged, or unsecured for a period of
thirty (30) days unless such lien is
18
Page 157 of 207 Pages
contested in good faith by proper proceedings diligently conducted;
(h) failure by the Borrower to generally pay its debts as such
debts become due;
(i) a material decrease in the value of the Collateral, or any
other collateral securing payment of the Obligations.
(j) if the Borrower (i) shall file a petition or request for
liquidation, reorganization, arrangement, adjudication as a bankrupt,
relief as a debtor or other relief under the bankruptcy, insolvency or
similar laws of the United States of America or any state or territory
thereof or any foreign jurisdiction, now or hereafter in effect; (ii)
shall make a general assignment for the benefit of creditors; (iii)
shall consent to the appointment of a receiver or trustee for the
Borrower or any of its assets, including, without limitation, the
appointment of or taking possession by a "custodian" as defined in the
federal Bankruptcy Code; (iv) make any, or send notice of any
intended, bulk sale; or (v) shall execute a consent to any other type
of insolvency proceeding (under the federal Bankruptcy Code or
otherwise) or any formal or informal proceeding for the dissolution or
liquidation of, or settlement of claims against or winding up of
affairs of, the Borrower; provided, however, that the consent by DDI
to the transfer of its assets to NCFC in March 1996, and the
subsequent sale and disposition of those assets by NCFC, and the
termination of DDI's business operations, is not deemed to be an event
of default under paragraph 7.1(d), (j) or (k).
(k) the appointment of a receiver, trustee, custodian or officer
performing similar functions for the Borrower or any of its assets,
including, without limitation, the appointment of or taking possession
by a "custodian" as defined in the federal Bankruptcy Code; or the
filing against the Borrower of a request or petition for liquidation,
reorganization, arrangement, adjudication as a bankrupt or other
relief under the bankruptcy, insolvency or similar laws of the United
States of America or any state or territory thereof or any foreign
jurisdiction, now or hereafter in effect; or the institution against
the Borrower of any other type of insolvency (under the federal
Bankruptcy Code otherwise) or of any formal or informal proceeding for
the dissolution or liquidation of, settlement of claims against or
winding up of affairs of the Borrower, and the failure to have such
appointment vacated or such petition or proceeding dismissed within
sixty (60) days after such appointment, filing or institution.
7.2 Rights of the Lender. Upon the occurrence of an event of default
under Section 7.1 hereof: (a) the Lender
19
Page 158 of 207 Pages
shall have, in addition to all other rights provided herein, the rights and
remedies of a secured party under the New York Uniform Commercial Code; and
(b) the Lender may sell and deliver any or all Receivables and any or all
other security and Collateral held by the Lender or for the Lender at
public or private sale upon prior notice to the Borrower if required by
law, for cash, upon credit or otherwise, at such prices and upon such terms
as are commercially reasonable; and (c) in addition to all other sums due
the Lender, the Borrower will pay to the Lender upon demand all costs and
expenses incurred by the Lender, including reasonable attorneys' fees and
expenses, to obtain or enforce payment of Receivables or Obligations, or in
the prosecution or defense of any action or proceeding either against the
Lender or against the Borrower concerning any matter arising out of or
connected with this Agreement or the Collateral or Obligations and all
Supplemental Agreements, if any, or otherwise due pursuant to the terms of
this Agreement. Any requirement of reasonable notice shall be met if such
notice is mailed postage prepaid to the Borrower at the Borrower's address
as set forth herein at least ten (10) days before the time of sale or other
disposition. The Lender may be the purchaser at any such sale, if it is
public, and, in the event the Lender is the purchaser, the Lender shall
have all the rights of a good faith, bona fide purchaser for value from a
secured party after default. The proceeds of sale shall be applied first to
all costs and expenses of sale, including reasonable attorneys' fees and
expenses, and second to the payment (in whatever order the Lender elects)
of all Obligations, and any remaining proceeds shall be applied in
accordance with the provisions of Part 5 of Article 9 of the New York
Uniform Commercial Code. The Borrower shall remain liable to the Lender for
any deficiency. Failure by the Lender to exercise any right, remedy or
option under this Agreement or any present or future Supplemental Agreement
or in any other agreement between the Borrower and the Lender, or delay by
the Lender in exercising the same will not operate as a waiver. No waiver
by the Lender will be effective unless it is in writing and then only to
the extent specifically stated. Neither the Lender nor any party acting as
the Lender's attorney pursuant to paragraph 2.12 hereof shall be liable for
any good faith error of judgment or mistake of fact or law. The Lender's
rights and remedies under this Agreement will be cumulative and not
exclusive of any other right or remedy which the Lender may have.
8. Other Provisions.
8.1 Joint and Several Obligations. The obligations of DCI and DDI
under this Agreement and the Supplemental Agreements shall be joint and
several.
8.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall
20
Page 159 of 207 Pages
be deemed to have been duly given or made when delivered by hand, or one
(1) business day after being delivered to a courier for overnight delivery,
or five (5) business days after being deposited in the mail, certified or
registered mail, with return receipt requested, addressed to the addresses
set forth in the preamble to this Agreement, or to such other address as
may be hereafter notified by the respective parties hereto.
8.3 Setoff. All sums at any time standing to the Borrower's credit on
the Lender's books and all of the Borrower's property at any time in the
Lender's possession, or upon or in which the Lender has a lien or security
interest shall be security for all Obligations. In addition to and not in
limitation of the above, with respect to any deposits or property of the
Borrower in the Lender's possession or control, now or in the future, the
Lender shall have the right after default and demand hereunder to setoff
all or any portion thereof, at any time, against any Obligations hereunder,
without prior notice or demand to the Borrower.
8.4 Counsel Fees and Expenses. The Borrower agrees to pay all
reasonable counsel fees and expenses, including recording and filing fees,
incurred by the Lender in connection with the financing evidenced by this
Agreement as well as any reasonable fees and expenses of counsel which the
Lender may hereafter reasonably incur in protecting, enforcing, increasing
or releasing any security held by the Lender. The Borrower specifically
authorizes the Lender to pay all such fees and expenses and charge the same
to its loan account.
8.5 Further Assurance. The Borrower agrees that at any time, or from
time to time, upon the written request of the Lender, the Borrower will
execute and deliver such further documents and do such other acts and
things as the Lender may reasonably request in order to fully effect the
purposes of this Agreement and the Supplemental Agreements.
8.6 Construction. This Agreement and the Supplemental Agreements may
not be amended orally.
8.7 Successors. All rights of the Lender hereunder shall inure to the
benefit of its successors and assigns, and all Obligations of the Borrower
shall bind the successors and assigns of the Borrower.
8.8 Duration of Lien. All Collateral described in this Agreement shall
remain Collateral as security for the performance of all Obligations of the
Borrower under this Agreement until all monies required to be paid under
this Agreement have been finally and irrevocably paid in full and all
Obligations on the part of the Borrower to be paid, kept and
21
Page 160 of 207 Pages
performed under this Agreement have been paid, kept and performed.
8.9 Payments. The acceptance of any check, draft or money order
tendered in full or partial payment of any Obligation hereunder is
conditioned upon and subject to the receipt of final payment in cash.
8.10 Exhibits and Schedules. All exhibits and schedules referred to
herein and annexed hereto are hereby incorporated into this Agreement and
made a part hereof.
8.11 Governing Law. This Agreement shall be governed and construed in
accordance with the internal laws of the State of New York, without regard
to principles of conflicts of law.
8.12 WAIVER OF RIGHT TO TRIAL BY JURY. THE BORROWER AND THE LENDER
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY
KIND OR NATURE IN ANY COURT IN WHICH AN ACTION MAY BE COMMENCED ARISING OUT
OF THIS AGREEMENT, THE COLLATERAL AND SUPPLEMENTAL AGREEMENTS OR ANY
ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OF DISPUTE BETWEEN THE
BORROWER AND THE LENDER.
8.13 CONSENT TO JURISDICTION. THE BORROWER AND THE LENDER AGREE THAT
ANY ACTION OR PROCEEDING TO ENFORCE, OR ARISING OUT OF, THIS AGREEMENT OR
ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH, MAY BE COMMENCED IN NEW YORK
STATE IN MONROE COUNTY, OR IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF NEW YORK, AND THE BORROWER WAIVES PERSONAL SERVICE OF
PROCESS AND AGREES THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR
PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY SERVED AND SHALL CONFER
PERSONAL JURISDICTION IF SERVED BY REGISTERED OR CERTIFIED MAIL TO THE
BORROWER, OR AS OTHERWISE PROVIDED BY THE LAWS OF NEW YORK STATE OR THE
UNITED STATES.
8.14 Reaffirmation. (a) DDI hereby reaffirms its obligations to
▇▇▇▇▇▇▇ pursuant to a Restated and Amended Subordinated Debenture in the
face amount of $600,001, due January 31, 1998 (the "▇▇▇▇▇▇▇ Debenture"),
and DCI reaffirms its guaranty of the ▇▇▇▇▇▇▇ Debenture.
(b) (i) DCI and DDI hereby reaffirm their obligations to ▇▇▇▇▇▇▇
to repay to ▇▇▇▇▇▇▇ $400,000 which ▇▇▇▇▇▇▇ advanced to the Borrowers
pursuant to an Overadvance Agreement entered into between ▇▇▇▇▇▇▇,
NCFC and the Borrowers in May, 1995, and (ii) DCI hereby reaffirms its
obligation to ▇▇▇▇▇▇▇ to repay to ▇▇▇▇▇▇▇ $500,000 additional advances
which ▇▇▇▇▇▇▇ has advanced to DCI between the date of the Overadvance
Agreement and the date of this Agreement.
22
Page 161 of 207 Pages
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by the proper and duly authorized officers as of the date
first above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
DELTA COMPUTEC INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name:
Title:
DELTA DATA NET, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name:
Title:
23
Page 162 of 207 Pages
SCHEDULE 1
----------
Secured Party Collateral Debtor
------------------------------ ------------------------ --------------------
▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ Assoc. Communications Equipment Delta Data Net, Inc.
First United Leasing Communications Equipment Delta Data Net, Inc.
VMX Credit Corp. Computer Equipment Delta Data Net, Inc.
Canon Financial Services Communications Equipment Delta Data Net, Inc.
▇▇▇▇ Atlantic Systems Leasing Computer Equipment Delta Computec Inc.
▇▇▇▇▇▇ ▇▇▇▇▇ Company Computer Equipment Delta Computec Inc.
National Canada Finance Corp. Spare Parts Inventory Delta Computec Inc.
Page 163 of 207 Pages
SCHEDULE 2
----------
Collateral Locations
Chicago Rochester
DCI c/o Harris Bank ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
3rd Floor
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dallas Teterboro
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Houston Washington
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Philadelphia
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Page 164 of 207 Pages
SCHEDULE 2.1
------------
The eligibility factor for Eligible Inventory during the term of this
Agreement shall be as follows:
105% for the month of October, 1996.
103 3/4% for the month of November, 1996.
102 1/2% for the month of December, 1996.
Page 165 of 207 Pages
SCHEDULE 3
----------
Permitted Indebtedness (for Borrowed Money)
▇▇▇▇ Atlantic Systems Capital Lease dated ________________.
8% Subordinated Debenture dated October 28, 1992, in the original principal
amount of $600,001.00, payable to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, as amended and restated,
and not due on January 31, 1998.
%8 Subordinated Debenture dated October 31, 1992, in the original principal
amount of $475,000.00, payable to Dataspan Systems, Inc. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Dated Net, Inc., due October 3, 1997.
Amended and Restated Promissory Note dated as of October 10, 1996, of Delta
Computec Inc. in the original principal amount of $750,000, payable to National
Canada Finance Corp.
Page 166 of 207 Pages
SCHEDULE 3(f)
-------------
Trade Names
1. DCI
2. The DCI Companies
3. PC Reserve
4. R & M Associates
5. Data Net
6. Data Span
7. SAI/Delta
8. Computer Support Inc.
9. Delta CompuTec Inc.
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