EXHIBIT 10.4
AMENDMENT TO LOAN AGREEMENT
AND MODIFICATION OF NOTES
THIS AMENDMENT TO LOAN AGREEMENTAND MODIFICATION OF NOTES
("AMENDMENT") dated as of April 23, 1998 (the "AMENDMENT EFFECTIVE DATE") is
made and entered into by and between XXXXX SYSTEMS, INC., a Texas corporation
(the "BORROWER") and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION ("LENDER"), a
national banking association.
RECITALS:
WHEREAS, the Borrower and the Lender are parties to a Loan Agreement dated
as of August 30, 1996, as amended by documents dated as of November 29, 1996,
August 4, 1997 and December 24, 1997 (the "LOAN AGREEMENT"); and
WHEREAS, the Borrower executed and delivered to the Lender (i) the Note
(as defined in the Loan Agreement), (ii) that certain promissory note dated
August 4, 1997 in the original principal amount of $600,000 (the "$600,000
NOTE") and (iii) that certain promissory note dated November 29, 1996 in the
original principal amount of $300,000 (the "$300,000 NOTE"); and
WHEREAS, the Borrower and the Lender have agreed, on the terms and
conditions herein set forth, that the Loan Agreement, the Note, the $600,000
Note and the $300,000 Note be amended in certain respects;
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, IT IS AGREED:
SECTION 1. DEFINITIONS. Terms used herein which are defined in the Loan
Agreement shall have the same meanings when used herein unless otherwise
provided herein.
SECTION 2. AMENDMENTS TO THE LOAN AGREEMENT. On and after the Amendment
Effective Date:
(a) PARAGRAPH 2(C) of the Loan Agreement is hereby amended to read in its
entirety as follows:
(c) On the earlier of June 30, 1998 or the payment in full of the
Facility Debt, Borrower shall pay to Lender, in consideration of the
execution by Lender of that certain Amendment to Loan Agreement and Letter
of Credit Agreement dated as of December 24, 1997, a fee in the amount of
$75,000.00.
(b) PARAGRAPH 3 of the Loan Agreement is hereby amended to read in its
entirety as follows:
3. MANDATORY PREPAYMENTS; PROCEEDS REALIZED FROM NON- PRODUCING
ASSETS.
(a) Borrower shall from time to time on demand by Lender made
at any time on after June 30, 1998 prepay the Loans (or provide
Cover for Letter of Credit Liabilities) in such amounts as shall be
necessary so that at all times the aggregate outstanding amount of
(x) the sum of the aggregate principal amount of all Loans
outstanding plus the aggregate amount of the Letter of Credit
Liabilities shall be less than or equal to (y) the Maximum Credit
Available Amount.
(b) Promptly upon receipt thereof, Borrower will apply (or
cause its applicable Subsidiary to apply) to the Facility Debt a
portion of the proceeds realized from the sale, transfer or other
disposition of any of the Non-Producing Assets (net of the
reasonable costs and expenses payable to unaffiliated third parties
in connection with the applicable sale, transfer or other
disposition) in an amount equal to the lesser of (i) the Borrowing
Base Deficiency or (ii) the sum of two (2) times the next scheduled
payment required under PARAGRAPH 3(A) hereof PLUS fifty percent
(50%) of the balance of such proceeds.
SECTION 3. MODIFICATION OF NOTES.
(a) PARAGRAPH 3(A) of the Note is hereby amended to read in its entirety
as follows:
(a) Accrued and unpaid interest on the unpaid principal balance of
this note shall be due and payable (i) on May 1, 1998 and (ii) on the
first (1st) day of each succeeding calendar month thereafter before the
Maturity Date. In addition, all accrued and unpaid interest on the unpaid
principal balance of this note shall be due and payable at the Maturity
Date.
(a) PARAGRAPH 3(A) of the $600,000 Note is hereby amended to read in its
entirety as follows:
(a) Accrued and unpaid interest on the unpaid principal balance of
this note shall be due and payable (i) on May 1, 1998 and (ii) on the
first (1st) day of each succeeding calendar month thereafter before
December 31, 2004. In addition, all accrued and unpaid interest on the
unpaid principal balance of this note shall be due and payable at December
31, 2004.
(a) PARAGRAPH 3(A) of the $300,000 Note is hereby amended to read in its
entirety as follows:
(a) Accrued and unpaid interest on the unpaid principal balance of
this note shall be due and payable (i) on May 1, 1998 and (ii) on the
first (1st) day of each succeeding calendar month thereafter before
November 30, 2003. In addition, all accrued and unpaid interest on the
unpaid principal balance of this note shall be due and payable at November
30, 2003.
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SECTION 4. LIMITATIONS. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or waiver
or modification of, any other term or condition of the Loan Agreement or any of
the other Credit Documents, or (b) except as expressly set forth herein,
prejudice any right or rights which the Lender may now have or may have in the
future under or in connection with the Loan Agreement, the Credit Documents or
any of the other documents referred to therein. Except as expressly modified
hereby or by express written amendments thereof, the terms and provisions of the
Loan Agreement, the Notes, and any other Credit 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
Amendment and any of the foregoing documents, the terms of this Amendment shall
be controlling. The representations and warranties made in each Credit Document
are true and correct in all material respects on and as of the Amendment
Effective Date.
SECTION 5. PAYMENT OF EXPENSES. The Borrower agrees, whether or not the
transactions hereby contemplated shall be consummated, to reimburse and save the
Lender harmless from and against liability for the payment of all reasonable
substantiated out-of-pocket costs and expenses arising in connection with the
preparation, execution, delivery, amendment, modification, waiver and
enforcement of, or the preservation of any rights under this Amendment,
including, without limitation, the reasonable fees and expenses of any local or
other counsel for the Lender, and all stamp taxes (including interest and
penalties, if any), recording taxes and fees, filing taxes and fees, and other
charges which may be payable in respect of, or in respect of any modification
of, the Loan Agreement and the other Credit Documents. The provisions of this
Section shall survive the termination of the Loan Agreement and the repayment of
the Loans.
SECTION 6. GOVERNING LAW. This Amendment and the rights and obligations of
the parties hereunder and under the Loan Agreement shall be construed in
accordance with and be governed by the laws of the State of Texas and the United
States of America.
SECTION 7. DESCRIPTIVE HEADINGS, ETC. The descriptive headings of the
several Sections of this Amendment are inserted for convenience only and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.
SECTION 8. ENTIRE AGREEMENT. This 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 Amendment.
SECTION 9. COUNTERPARTS. This 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.
SECTION 10. AMENDED DEFINITIONS. As used in the Loan Agreement (including
all Exhibits thereto) and all other instruments and documents executed in
connection therewith, on and subsequent to the Amendment Effective Date the term
(i) "Agreement" shall mean the Loan Agreement as amended
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by this Amendment, and (ii) references to any and all other Credit Documents
shall mean such documents as amended as contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective duly authorized offices as of
the date first above written.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SS.26.02
THIS AMENDMENT AND ALL OTHER CREDIT DOCUMENTS EXECUTED BY ANY OF THE
PARTIES BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF
TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
XXXXX SYSTEMS, INC.,
a Texas corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
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CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, a national banking
association
By: ______________________________
Name: ____________________________
Title: ___________________________
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The undersigned hereby join in the execution of this Amendment to evidence
their consent hereto and its acknowledgment that the Credit Documents executed
by the undersigned shall continue to apply to the Loan Agreement, as amended
hereby.
CHEM-WAY SYSTEMS, INC.,
a Texas corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
WAY ENERGY SYSTEMS, INC.,
a Delaware corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
DIAMOND MINI MART, INC.,
a Texas corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
EDCO, INC.,
a Texas corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
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XXXXX OIL COMPANY, INC.,
a Texas corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
EDCO ENVIRONMENTAL SYSTEMS, INC.,
a Texas corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
IN & OUT MINI MART, INC.,
a Texas corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
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