Exhibit 10.9
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS AGREEMENT made as of the 21st day of December, 1994 by and between
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COMMAND SYSTEMS INCORPORATED, a Connecticut corporation having its chief
executive office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Debtor"), and PEOPLE'S BANK, a Connecticut banking corporation having an
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Secured Party").
W I T N E S S E T H:
WHEREAS, Debtor and Secured party are parties to a Loan and Security
Agreement dated November 30, 1993 (the "Loan Agreement") pursuant to which
Secured Party provided Debtor with a term loan in the amount of Five Hundred
Twenty Thousand and 00/100 Dollars ($520,000.00) (the "Term Loan") evidenced by
a Term Loan Promissory Note dated November 30, 1993, a revolver/term loan in the
amount of Eighty Thousand and 00/100 Dollars ($80,000.00) (the "Revolver/Term
Loan") evidenced by a Revolver/Term Loan Promissory Note dated November 30, 1993
and Secured Party also agreed, from time to time, in its sole discretion, to
extend commercial revolving loans in the maximum aggregate principal amount of
up to Two Hundred Thousand and 00/100 Dollars ($200,000.00) to Debtor (the "Line
of Credit Loans") evidenced by a Line of Credit Promissory Note dated November
30, 1993 (the Term Loan, the Revolver/Term Loan, and the Line of Credit Loan are
hereinafter sometimes collectively referred to as the "Loans"); and
WHEREAS, Debtor has requested that Secured Party modify the terms of the
Loan and Security Agreement to provide for Line of Credit Loans in an amount not
to exceed One Million and 00/100 Dollars ($1,000,000.00) with a committed term
of April 15, 1996, and to eliminate the Term Loan and the Revolver/Term Loan.
NOW THEREFORE, in consideration of the foregoing and in further
consideration of the mutual covenants herein contained, the parties hereto agree
as follows:
1. The Loan Agreement is hereby amended as follows:
(a) Paragraph 2(p) is hereby deleted in its entirety;
(b) Paragraph 2(r) is hereby deleted in its entirety;
(c) Paragraph 4 of the Loan Agreement is hereby deleted in its
entirety;
(d) Paragraph 5 of the Loan Agreement is hereby deleted in its
entirety and the following substituted in lieu therefore:
"5. AMOUNT IN TERMS OF THE LINE OF CREDIT LOANS. Pursuant to the
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terms of this Agreement and upon the satisfaction of the conditions
precedent referred to in Paragraph 14 hereof, Secured Party may, in the
exercise of its sole discretion, make Line of Credit Loans to Debtor
upon its request, which in the
aggregate do not exceed the lesser of One Million and 00/100 Dollars
($1,000,000.00) or fifty percent (50%)(or such greater or lesser percentage as
Secured Party may, from time to time, determine) of Qualified Accounts plus One
Hundred Fourteen Thousand and 00/100 Dollars ($114,000.00), which amount
represents real estate equity value accepted by Secured Party in connection with
▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ (the
"Real Estate Equity"). The Line of Credit Loans and each of them shall be made
on the following terms and conditions:
(a) The principal amount of the Line of Credit Loans, or such part
thereof as may be from time to time outstanding, shall be evidenced by Debtor's
Promissory Note, in the form of Exhibit I-2 annexed hereto and made a part
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hereof (hereinafter referred to as the "Line of Credit Note"), with appropriate
insertions of names, dates, and amounts, which shall be guaranteed by Guarantor.
The Line of Credit Note shall be in the maximum aggregate principal amount
which Secured Party, from time to time, intends to lend to Debtor,
notwithstanding availability of the Line of Credit Loans which might otherwise
exist because of the amount of then Qualified Accounts and Real Estate Equity.
The Line of Credit Note shall be in the amount of One Million and 00/100 Dollars
($1,000,000.00). Nothing contained in this subparagraph (a) shall be deemed to
prohibit Secured Party from lending in excess of the principal amount of the
outstanding Line of Credit Note, to delimit the definition of "Obligations"
contained herein or to constitute a waiver, release or subordination by Secured
Party of the security interest in the Collateral herein granted by Debtor and
Secured Party as security for the Obligations;
(b) In the event Debtor desires a Line of Credit Loan it may request the
same by delivering to Secured Party a request for advance, in the form of
Exhibit J and a Borrowing Base Certificate in the form of Exhibit K, each
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annexed hereto and made a part hereof. The Line of Credit Loans shall be made by
Secured Party depositing the proceeds thereof in Debtor's demand deposit account
maintained by it with Secured Party;
(c) The aggregate principal amount of the Line of Credit Loans from time
to time outstanding shall bear interest at a rate per annum equal to one and
one-half (1.5) percentage points above the Prime Rate which at the date hereof
is eight and one-half percent (8.5%), so that the initial rate of interest
payable hereunder shall be ten percent (10.0%); provided, however, that the rate
of interest charged hereunder shall never exceed the maximum amount, if any,
allowable by law. In the event the Prime Rate is either increased or decreased,
the rate of interest on the Line of Credit Loans then outstanding shall be
adjusted on the day the Prime Rate is so changed so as to reflect such increase
or decrease in the Prime Rate. Interest shall be payable monthly on the
fifteenth day of each month and shall be charged on the daily principal balance
of the Line of Credit Loans from time to time outstanding on the basis of a
three hundred sixty (360) day year, and the outstanding principal amount owed
on the Line of Credit Loans, together with all interest accrued thereon, shall
be due and payable in full on April 15, 1996 unless the Line of Credit is
extended pursuant to subparagraph (e) herein. Debtor hereby authorizes Secured
Party to debit Debtor's operating account with Secured Party for each monthly
interest payment owed;
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(d) The Line of Credit Loans made by Secured Party to Debtor
pursuant to this Paragraph 5 shall be recorded in an account on the books
of Secured Party bearing Debtor's name ("Debtor's Account"). There shall
also be recorded in Debtor's Account all payments made by Debtor on the
Line of Credit Loans, proceeds of the Collateral received by Secured Party
which are, in the exercise of Secured Party's sole discretion, applied by
Secured Party to the Line of Credit Loans, interest and expenses and other
appropriate debits and credits as herein provided. Secured Party shall
from time to time render and send to Debtor a statement of Debtor's
Account showing the outstanding aggregate principal balance of the Line of
Credit Loans, together with interest and other appropriate debits and
credits as of the date of the statement. The statement of Debtor's account
shall be considered correct in all respects and accepted by and be
conclusively binding upon Debtor unless Debtor makes specific written
objection thereto within fifteen (15) days after the date the statement of
Debtor's Account is sent;
(e) In the event Debtor requests and Secured Party agrees at
any time to release all or any portion of the Collateral in consideration
for a prepayment from any Person other than Secured Party, Debtor agrees
to pay to Secured Party a collateral release fee in the amount of two
percent (2%) of the committed original principal balance of the Line of
Credit Loans.
(f) The provisions of this Paragraph 5 shall continue in
effect until April 15, 1996, and from year to year thereafter, unless
terminated as to future transactions by Secured Party giving not less than
thirty (30) days written notice of termination prior to April 15, 1996 or
prior to the end of any such one (1) year period to Debtor, provided,
however, that Secured Party may also terminate the provisions of this
Paragraph 5 at any time upon the happening of an Event of Default. No such
termination shall (i) in any way affect or impair the security interest
granted to Secured Party hereunder or any other rights of the Secured
Party hereunder or under any other agreements, instruments or documents
required to be executed and delivered to Secured Party pursuant to the
terms of this Agreement, arising prior to any such termination or by
reason thereof, (ii) relieve Debtor of any obligation to Secured Party
under this Agreement, any such other agreement, instrument or document, or
otherwise, until all the Obligations are fully paid and performed, or
(iii) affect any right or remedy of Secured Party hereunder or under any
such other agreement, instrument or document."
(e) Paragraph 6 of the Loan Agreement is hereby deleted in its entirety.
(f) Paragraph 7(a) of the Loan Agreement is hereby deleted in its
entirety and the following substituted in lieu therefore:
"(a) Maintain (i) a debt to tangible net worth plus
subordinated debt ratio of 3.50 to 1.00; (ii) a current ratio of no less
than 1.25 to 1.00; and (iii) a minimum net profit before taxes of Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) for fiscal year
1994 and Three Hundred-Thousand and 00/100 Dollars ($300,000.00) for
fiscal year 1995, as determined in each instance by generally accepted
accounting principles consistently applied from year to year."
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(g) Subparagraph (j) of Paragraph 8 is hereby added to the Loan
Agreement as follows:
"(j) Debtor shall maintain a certified public accountant
satisfactory to Secured Party and shall not change such certified
public accountants without prior notice to and consent from Secured
Party."
(h) Paragraph 13 of the Loan Agreement is hereby deleted in its
entirety and the following substituted in lieu therefore:
"13. Default Provisions.
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(a) The Line of Credit Note shall forthwith become due
and payable, without presentment, protest, demand, or notice of any
kind, if Debtor becomes insolvent (including in said term an
inability to pay its debts as they mature) or bankrupt, or makes an
assignment for the benefit of its creditors, or consents to the
appointment of a trustee or receiver of all or a substantial part of
its properties or such appointment is made without its consent, or if
bankruptcy, reorganization, arrangement, receivership, or liquidation
proceedings are instituted by or against Debtor,
(b) Secured Party may at its option declare the Line of
Credit Note due and payable whereupon the same shall become due and
payable forthwith, without presentment, protest, demand, or notice of
any kind in any of the following cases:
(i) If any payment of principal or interest or
any other payment required by the terms hereof or by the Line
of Credit Note or by any other instrument, agreement or
document executed and delivered to Secured Party pursuant to
the terms hereof shall not be fully paid when demand (to the
extent the same is payable on demand) is made for the payment
of the same or within ten (10) days after the same shall fall
due if payable other than on demand;
(ii) If any payment of principal or interest or
any other payment required by any of the obligations of Debtor
for money borrowed by it from any third Person shall not be
fully paid when demand is made for the payment of the same (to
the extent payable on demand) or when the same shall fall due,
or if any of said obligations shall become or be declared in
default;
(iii) If any warranty or representation by Debtor
contained herein or in any related agreement, instrument or
document, or in any statement furnished by Debtor to Secured
Party proves incorrect in any respect;
(iv) If default exists in the due observance of
any of the covenants or agreements of Debtor set forth in this
Agreement, or in any other agreement, instrument or document
executed and delivered to Secured Party pursuant to the terms
of this Agreement, or
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(v) If a judgment is entered against Debtor and remains
unsatisfied for a period of thirty (30) days."
2. Debtor represents and warrants to Secured Party that all of the
representations and warranties Debtor has set forth in the Loan Agreement, as
amended hereby, are true and correct and are hereby remade.
3. Except as modified herein, all other items, provisions, and
conditions of the Loan Agreement remain unmodified and are in full force and
effect.
4. DEBTOR ACKNOWLEDGES THAT THE TRANSACTIONS DESCRIBED HEREIN ARE
COMMERICAL TRANSACTIONS AND WAIVES ITS RIGHTS TO NOTICE AND HEARING UNDER
CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH SECURED
PARTY MAY DESIRE TO USE, AND FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR
PAYMENT, NOTICE OF NONPAYMENT, PROTEST, AND NOTICE OF PROTEST, AND NOTICE OF ANY
RENEWALS OR EXTENSIONS OF THE NOTE, AND ALL RIGHTS UNDER ANY STATUTE OF
LIMITATIONS.
5. DEBTOR HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT,
ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY
RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART AND/OR
THE ENFORCEMENT OF ANY OF SECURED PARTY'S RIGHTS AND REMEDIES. DEBTOR
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY, AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement this 21st day of December, 1994.
Signed, Sealed, and Delivered
in the Presence of: COMMAND SYSTEMS INCORPORATED
/s/ [SIGNATURE APPEARS HERE] By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its
/s/ [SIGNATURE APPEARS HERE]
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PEOPLE'S BANK
/s/ [SIGNATURE APPEARS HERE] By: /s/ [SIGNATURE APPEARS HERE]
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Its Commercial Banking Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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STATE OF CONNECTICUT
ss. Hartford
COUNTY OF HARTFORD
On this 21st day of December, 1994, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
as President of COMMAND SYSTEMS INCORPORATED, signer and sealer of the foregoing
instrument, and acknowledged the same to be his/her free act and deed and the
free act and deed of said corporation, before me.
[SIGNATURE APPEARS HERE]
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Commissioner of the Superior Court
STATE OF CONNECTICUT
ss. Hartford
COUNTY OF HARTFORD
On this 23rd day of December, 1994, personally appeared ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, as Commercial Banking Officer of PEOPLE'S BANK, signer and sealer of
the foregoing instrument, and acknowledged the same to be his/her free act and
deed and the free act and deed of said banking corporation, before me.
/s/ ▇▇▇▇▇ ▇. Murzzo
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Notary Public
My Commission Expires March 31, 1998
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