SECOND AMENDMENT TO AMENDMENT AND RESTATEMENT
OF CREDIT AGREEMENT
THIS SECOND AGREEMENT ("SECOND AMENDMENT"), dated effective as of May 2,
1997, is made and entered into by and among 1st TECH CORPORATION, a Delaware
corporation, DARKHORSE SYSTEMS, INCORPORATED, a Delaware corporation, and
TANISYS TECHNOLOGY, INC., a Wyoming corporation (collectively the
"BORROWERS"), and THE CHASE MANHATTAN BANK, a New York banking corporation
("LENDER").
RECITALS:
WHEREAS, Borrowers and Lender are parties to that certain Amendment and
Restatement of Credit Agreement dated as of February 21, 1997, as previously
amended pursuant to the terms of that certain First Amendment to Amendment
and Restatement of Credit Agreement ("FIRST AMENDMENT") dated effective March
21, 1997, by and among Borrowers and Lender (said Credit Agreement, as
previously amended by the First Amendment, being hereinafter referred to as
the "CREDIT AGREEMENT"); and
WHEREAS, Borrowers and Lender have agreed, on the terms and conditions
herein set forth, that the Credit Agreement be further amended in certain
respects.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and warranties herein set forth, and for other
good and valuable consideration, the receipt and sufficiency which are hereby
acknowledged and confessed, Borrowers and Lender do hereby agree as follows:
SECTION 1. GENERAL DEFINITIONS. Capitalized terms used herein which are
defined in the Credit Agreement shall have the same meanings when used herein.
SECTION 2. AMENDMENT OF MAXIMUM AMOUNT OF COMMITMENT. SECTION 1.1.b of
the Credit Agreement is hereby amended and restated in its entirety to
hereafter be and read as follows:
MAXIMUM AMOUNT OF COMMITMENT 1.1.B The "Maximum Amount" of the
Commitment shall be $4,500,000.
SECTION 3. AMENDMENT OF ADVANCE RATE FOR BORROWING BASE. SECTION
1.2(b)(/i) of the Credit Agreement is hereby amended and restated in its
entirety to hereafter be and read as follows:
(i) The Advance Rate (the amount by which Net Eligible
Receivables is multiplied in the Borrowing Base Certificate) shall be
seventy-three percent (73%).
SECTION 4. AMENDMENT OF NEGATIVE COVENANTS. SECTION 5.1 of the Credit
Agreement is hereby amended and restated in its entirety to hereafter be and
read as follows:
INDEBTEDNESS 5.1 Create, incur, or permit to exist, or assume
or guaranty, directly or indirectly, or become or remain liable with
respect to, any Indebtedness, contingent or otherwise, EXCEPT: (a)
Indebtedness to Bank, or secured by Liens permitted by this Agreement,
or otherwise approved in writing by Bank, and renewals and extensions
(but not increases) thereof; (b) current accounts payable and
unsecured current liabilities, not the result of borrowing, to
vendors, suppliers and Persons providing services or for expenditures
for goods and services normally required by it in the ordinary course
of business, all on ordinary trade terms; and (c) Indebtedness to any
shareholders of any Borrower for the purpose of funding any working
capital shortfall of Borrowers arising on or after May 2, 1997, so
long as (i) such Indebtedness to shareholders is not secured by any
Liens on any Property of any Borrower, and (ii) such Indebtedness is
subordinated in payment to the Indebtedness owing to Bank under the
terms of this Agreement pursuant to terms that are satisfactory to,
and approved in writing by, Bank in its discretion (such subordination
terms to include, without limitation, a prohibition on any payment of
any such Indebtedness owing to shareholders prior to the full and
complete payment of the Indebtedness owing to Bank under this
Agreement and the termination of the Commitment in accordance with the
other terms of this Agreement).
SECTION 5. REPRESENTATIONS AND WARRANTIES. Borrowers represent and
warrant to Lender that the representations and warranties contained in
SECTION 3 of the Credit Agreement and in all of the other Loan Documents are
true and correct in all material respects on and as of the effective date
hereof as though made on and as of such effective date. Borrowers hereby
certify that no reported event has occurred and is continuing which
constitutes a Default or an Event of Default under the Credit Agreement, as
amended hereby, or which, upon the giving of notice or the lapse of time, or
both, would constitute a Default or an Event of Default. Borrowers also
hereby certify that no Borrower has any current actual knowledge of any event
that has occurred and is continuing which constitutes a Default or Event of
Default under the Credit Agreement, as amended hereby, or which, upon the
giving of notice or the lapse of time, or both, would constitute a Default or
Event of Default. Additionally, Borrowers hereby represent and warrant to
Lender that the resolutions of the Board of Directors of 1st Tech
Corporation, Darkhouse Systems, Incorporated and Tanisys Technology, Inc.
which are set out in the following described Secretary's Certificates remain
in full force and effect as of the effective date hereof and have not been
modified, amended, superseded or revoked:
(a) That certain Borrowing Resolution for Corporations/Professional
Associations and Secretary's Certificate dated June 18, 1996, executed and
delivered to Lender by the Secretary of 1st Tech Corporation in connection
with the Credit Agreement;
(b) That certain Borrowing Resolution for Corporations/Professional
Associations and Secretary's Certificate dated June 18, 1996, executed and
delivered to Lender by the Secretary of Darkhorse Systems, Incorporated in
connection with the Credit Agreement;
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(c) That certain Borrowing Resolution for Corporations and
Secretary's Certificate dated April 2, 1997, executed and delivered to
Lender by the Secretary of Tanisys Technology, Inc. in connection with the
First Amendment; and
(d) That certain Tanisys Technology, Inc. Certificate of Corporate
Resolution dated as of March 20, 1997, executed and delivered to Lender by
the Secretary of Tanisys Technology, Inc. in connection with the First
Amendment.
SECTION 6. CONDITIONS. This Second Amendment shall not become effective
until Lender has been provided, in Proper Form, with a copy of the letter of
intent which has been entered into by and among Borrowers and a third party
lender for the purpose of refinancing any and all Indebtedness outstanding
under the credit facility governed by the Credit Agreement (Borrowers
previously represented to Lender that such letter of intent has been entered
into and is currently in full force and effect).
SECTION 7. RATIFICATION. Borrowers hereby ratify and confirm that both
the Note and the Credit Agreement, as amended hereby, are in full force and
effect and are binding and enforceable against each Borrower in accordance
with the terms thereof. Additionally, Borrowers (and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, by
his joinder below) confirm and ratify that the liens, security interests and
assignments granted in each and all Security Documents previously executed
and delivered in connection with the Loans (and ratified and supplemented by
the terms of the First Amendment) are in full force and effect and continue
to secure the Loans and all other Indebtedness of Borrowers which is now or
hereafter outstanding under the Credit Agreement, as amended hereby, and any
other Loan Documents. Without limitation, such Security Documents include
(a) those certain General Security Agreements dated effective May 20, 1996,
executed and delivered by 1st Tech Corporation and Darkhorse Systems,
Incorporated, respectively, (b) that certain Security Agreement-Pledge of
Certificate of Deposit and Assignment of Deposit Accounts dated effective May
20, 1996, executed and delivered by 1st Tech Corporation, (c) that certain
Third Party Security Agreement-Pledge dated effective May 20, 1996, executed
and delivered by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and (d) that certain Third Party Security
Agreement-Accounts and General Intangibles dated effective December 17, 1996,
executed and delivered by Tanisys.
SECTION 8. LIMITATIONS. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or
waiver, amendment or modification of, any other term or condition of the
Credit Agreement or any of the other Loan Documents, or (b) except as
expressly set forth herein, prejudice any right or rights which Lender may
now have or may have in the future under or in connection with the Credit
Agreement, the Loan Documents or any of the other documents referred to
therein. Except as expressly modified or amended hereby, the terms and
provisions of the Credit Agreement, the Notes and any other Loan Documents or
any other documents or instruments executed in connection with any of the
foregoing are and shall remain in full force and effect. In the event of a
conflict between this Second Amendment and any of the foregoing documents,
the terms of this Second Amendment shall be controlling.
SECTION 9. PAYMENT OF EXPENSES. Borrowers agree, whether or not the
transactions hereby contemplated shall be consummated, to reimburse and save
Lender harmless from and against liability for the payment of all reasonable
substantiated out-of-pocket costs and expenses arising in
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connection with the preparation, execution, delivery, amendment,
modification, waiver and enforcement of, or the preservation of any rights
under this Second Amendment, including, without limitation, the reasonable
fees and expenses of counsel for Agent and other charges which may be payable
in respect of, or in respect of any modification of, the Credit Agreement and
the other Loan Documents. The provisions of this Section shall survive the
termination of the Credit Agreement and the repayment of the Loans.
SECTION 10. DESCRIPTIVE HEADINGS, ETC. The descriptive headings of the
several Sections of this Second Amendment are inserted for convenience only
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
SECTION 11. ENTIRE AGREEMENT. This Second Amendment and the documents
referred to herein represent the entire understanding of the parties hereto
regarding the subject matter hereof and supersede all prior and
contemporaneous oral and written agreements of the parties hereto with
respect to the subject matter hereof, including, without limitation, any
commitment letters regarding the transactions contemplated by this Second
Amendment.
SECTION 12. COUNTERPARTS; FACSIMILE SIGNATURES. This Second Amendment
may be executed in any number of counterparts and by different parties on
separate counterparts and all of such counterparts shall together constitute
one and the same instrument. Complete sets of counterparts shall be lodged
with Borrowers and Lender. To facilitate the execution and delivery of this
Second Amendment and any other Loan Documents required by Lender in
connection herewith, the parties hereto may execute and exchange facsimile
counterparts of the signature pages of this Second Amendment and any of such
other Loan Documents required by Lender in connection herewith, and facsimile
counterparts of such signatures pages shall serve as originals of this Second
Amendment and any such other Loan Documents.
SECTION 13. REFERENCES TO CREDIT AGREEMENT. As used in the Credit
Agreement (including all Exhibits thereto) and all other Loan Documents, on
and subsequent to the effective date hereof, the term "Agreement" shall mean
the Credit Agreement, as amended by this Second Amendment.
SECTION 14. RELEASE OF CLAIMS. BORROWERS (AND ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, BY HIS
JOINDER BELOW) EACH HEREBY RELEASE, DISCHARGE, AND ACQUIT FOREVER LENDER,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, AND EACH OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND COUNSEL FROM ANY AND ALL CLAIMS
EXISTING AS OF THE EFFECTIVE DATE HEREOF (OR THE DATE OF ACTUAL EXECUTION
HEREOF BY THE APPLICABLE PERSON OR ENTITY, IF LATER). AS USED HEREIN, THE
TERM "CLAIMS" SHALL MEAN ANY AND ALL LIABILITIES, CLAIMS, DEFENSES, DEMANDS,
ACTIONS, CAUSES OF ACTION, JUDGMENTS, COSTS OR EXPENSES (INCLUDING, WITHOUT
LIMITATION, COURT COSTS, PENALTIES, ATTORNEYS' FEES, DISBURSEMENTS, AND
AMOUNTS PAID IN SETTLEMENT) OF ANY KIND AND CHARACTER WHATSOEVER RELATING TO
THE LOANS AND THE CREDIT FACILITY GOVERNED BY THE CREDIT AGREEMENT, INCLUDING
WITHOUT LIMITATION, CLAIMS FOR BREACH OF CONTRACT, BREACH OF COMMITMENT, OR
FAILURE TO ACT IN GOOD FAITH, IN EACH CASE WHETHER NOW KNOWN OR UNKNOWN,
SUSPECTED OR UNSUSPECTED, ASSERTED OR UNASSERTED, OR
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PRIMARY OR CONTINGENT, AND WHETHER ARISING OUT OF WRITTEN DOCUMENTS,
UNWRITTEN UNDERTAKINGS, COURSE OF CONDUCT, TORT, VIOLATION OF LAWS, OR
REGULATIONS OR OTHERWISE. THIS RELEASE SHALL BE BINDING UPON BORROWERS, ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, AND THEIR RESPECTIVE HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed and delivered by their respective duly authorized offices
as of the date first above written.
1ST TECH CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and CEO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and COO
TANISYS TECHNOLOGY, INC.,
a Wyoming corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and CEO
DARKHORSE SYSTEMS, INCORPORATED,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and CEO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and COO
THE CHASE MANHATTAN BANK,
a New York banking corporation,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
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The undersigned (a) acknowledges and consents to the execution of the
foregoing Second Amendment, (b) confirms that any Security Agreement
previously executed or joined in by the undersigned with respect to the
Indebtedness governed by the Credit Agreement applies and shall continue to
apply to all Indebtedness evidenced by or arising pursuant to the Credit
Agreement, as amended hereby, or any other Loan Documents, notwithstanding
the execution and delivery of this Second Amendment by Borrowers and Lender,
(c) acknowledges that without this consent and confirmation, Lender would not
agree to the modifications of the Credit Agreement which are evidenced by the
foregoing Second Amendment, and (d) joins in the execution and delivery of
the ratification provisions of SECTION 7 of the foregoing Second Amendment
and the release of claims provisions of SECTION 14 of the foregoing Second
Amendment.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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