SECOND AMENDMENT TO REVOLVING LOAN AGREEMENT,
PROMISSORY NOTE AND OTHER LOAN DOCUMENTS
THIS
AGREEMENT made as of
this 29th day of September 2006 between SYNERGX
SYSTEMS INC. ("Borrower"), a corporation organized and
existing pursuant to the
laws of the State of
Delaware, having an address at 209 Lafayette Drive,
Syosset, New York
11791, and TD BANKNORTH, N.A., successor by merger to
HUDSON
UNITED BANK ("Lender"), a New Jersey corporation, with a place of business at
1000 MacArthur Boulevard, Mahwah, New Jersey 07430.
W I T N E S S E T H:
WHEREAS:
A. Borrower
entered into a
revolving loan
agreement with Hudson United Bank
("Hudson") on October
9, 2003 and pursuant to such revolving loan agreement,
Borrower executed and
delivered to Lender its promissory note in the original
principal amount
of THREE MILLION AND NO/100 (3,000,000.00) DOLLARS (the
Revolving Note);
B. Borrower
subsequently requested
that Hudson continue
to provide
financing
under the Revolving
Loan and otherwise
modify the terms and
conditions of the
aforementioned revolving loan agreement;
C. Lender agreed to continue to provide financing under the Revolving Loan and
to otherwise modify
certain other terms
and conditions of the
aforementioned
revolving loan agreement strictly in accordance with the terms and
conditions of
a first amendment to
revolving loan
agreement, promissory
note and other loan
documents dated April
11, 2005 (the revolving loan agreement dated October 9,
2003 as amended by the first amendment to revolving loan
agreement,
promissory
note and other loan documents dated April 11, 2005 are hereinafter
collectively
referred to as, the "Loan Agreement");
D. Borrower
has now requested that Lender extend the maturity date of the
Revolving Loan and the Revolving Note, release General Sound (Texas) Company
from its guaranty of
the obligations
of Borrower to Lender and make
certain
other modifications
and changes to the terms and conditions of the Loan
Agreement; and
E. Lender has agreed to extend the maturity date of the
Revolving Loan and the
Revolving Note, to
release General Sound
(Texas) company from
its guaranty of
the obligations
of Borrower to Lender
and to make certain other modifications
and changes to the terms and conditions of the Loan
Agreement strictly as set
forth in this Agreement.
NOW
THEREFORE, in
consideration of the
foregoing, and for
other good and
valuable
consideration, the
receipt and sufficiency of which are hereby
acknowledged, the undersigned hereto agree as follows:
1. Section
1.24 of the Loan
Agreement is deleted
in its entirety and replaced
with the following:
"1.24 "Guarantor"
shall mean Casey
Systems Inc. and any
other Person who
shall, at any time, agree to be a guarantor surety for
Borrower."
2. Section 1.28 of the Loan Agreement is amended to read as
follows:
"1.28 "Loan Interest
Rate" shall mean the
Prime Rate plus
one-quarter of
one (1/4) percent per
annum until January
31, 2006 and
thereafter
the "Base
Rate" (as hereinafter
defined) of Lender plus one-quarter of one (1/4)
percent
per annum. The "Base Rate" shall mean the fluctuating rate of
interest announced
from time to time by Lender as its "Base Rate." Any interest that has the Base
Rate as a factor will change immediately upon Lender's
announcement of its
new
rate. The Base Rate is not necessarily the lowest rate
charged by Lender on its
loans and is set by
Lender in its sole discretion. If the Base Rate index
becomes unavailable
during the term of the Loan, Lender may designate a
substitute index.
Interest shall be computed by the Bank on the basis of actual
days elapsed, divided by a 360-day year."
3. Section 1.39 of the Loan Agreement is amended to read as
follows:
"1.39. "Prime
Rate" means the fluctuating rate of interest, which is
determined
periodically,
announced from time to
time by Hudson United Bank as
its "Prime Rate."
4. Section 1.45 of the Loan Agreement is amended to read as
follows:
"1.45 "Termination Date" shall mean the earlier of January 31,
2008, or the
date on which Lender terminates this Agreement pursuant to Section 12.1 of
this
Agreement."
5. Section 14.3 of the Loan Agreement is amended by changing the
name and
address for notice to Lender to read as follows:
"If to Lender: TD Banknorth, N.A.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
Attn: David S.
Yanagisawa
Senior Vice President
Tel:
(201)236-2773
Fax:
(201)236-1935"
6. Section 9.19 of the Loan Agreement is amended to read as
follows:
"9.19. Effective
Tangible Net Worth. Permit Borrower's Effective Tangible
Net Worth, to be tested quarterly, to be less than:
Amount
Time Period
$5,232,000.00*
September 29, 2006 to
January 31, 2008
*which number shall increase effective as of September 30, 2006
and each fiscal year thereafter by an amount equal to
twenty-five (25) percent of Borrower's net profit as set forth
in the financial statements referred to in Article 6."
7. Section 9.20 of the Loan Agreement is amended to read as
follows:
"9.20. Debt to
Effective Tangible Net Worth. Cause, suffer or permit
Borrower's Debt to
Effective Tangible Net
Worth Ratio for the period set forth
below to be greater than the levels set forth below, tested
quarterly:
Ratio
Time Period
1.5 to 1.0
October 2003 to
January 31, 2008"
8. The Loan Agreement is further amended by adding a new Section
9.21 to read as
follows:
"9.21 Debt Service Coverage Ratio. Cause, suffer or permit Borrower's
Debt
Service Coverage
Ratio (as hereinafter defined) to be less than 1.20 to
1.0,
tested annually
commencing September
30, 2006. Debt Service
Coverage Ratio is
defined as net income plus depreciation plus amortization
expe
