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Exhibit 10.27
FIRST AMENDMENT TO CREDIT AGREEMENT
(Borrowing Base)
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (Borrowing Base)(this
"Amendment") dated effective as of April 15, 1997 (the "Effective Date"), is by
and between XETEL CORPORATION ("Borrower"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association whose principal office is located
in Houston, Texas (the "Bank").
PRELIMINARY STATEMENT
The Bank and the Borrower have entered into a Credit Agreement (with
Borrowing Base) dated as of August 23, 1996 (the "Credit Agreement"). The
"Agreement", as used in the Credit Agreement, shall also refer to the Credit
Agreement as amended by this Amendment. All capitalized terms defined in the
Credit Agreement and not otherwise defined herein shall have the same meanings
herein as in the Credit Agreement. The Bank and the Borrower have agreed to
amend the Credit Agreement to the extent set forth herein, and in order to,
among other things, renew, modify and increase the Commitment.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Bank and the Borrower hereby agree as
follows:
Section 1. Revolving Credit Note. Section 1.1 of the Credit Agreement
is amended by redesignating the same as Section 1.1.A and by substituting the
following for the Section 1.1.A of the Credit Agreement:
"Subject to the terms and conditions hereof, the Bank agrees to make
loans ("Revolving Loan" or "Revolving Loans") to Borrower from time to
time before the Termination Date, not to exceed at any one time
outstanding for Borrower the lesser of the Borrowing Base or
$10,000,000.00 (the "Commitment"), Borrower having the right to borrow,
repay and reborrow. Each Revolving Loan and Repayment must be at least
the minimum amount required in the Revolving Note. The Revolving Loans
may only be used for supporting Borrower's accounts receivable and
inventory. The Bank and the Borrower agree that Chapter 15 of the Texas
Credit Code shall not apply to this Agreement, the Revolving Note or any
Revolving Loan. The Revolving Loans shall be evidenced by and shall
bear interest and be payable as provided in the promissory note of
Borrower dated the Effective Date (together with any and all renewals,
extensions, modifications, replacements, and rearrangements thereof and
substitutions therefor, the "Revolving Note") which is given in renewal,
modification and increase of that certain promissory note dated August
23, 1996 in the original principal amount of $7,000,000.00 (including
all prior notes of which said note represents a renewal, extension,
modification, increase, substitution, rearrangement or replacement
thereof, the "Renewed Note"). The parties hereto agree that there is as
of the Effective Date an outstanding principal balance of $-0- under the
Revolving Note leaving a balance as of the Effective Date of
$10,000,000.00 under the Commitment available for Revolving Loans
subject to the terms and conditions of this Agreement. "Termination
Date" means the earlier of (a) August 31, 1998; or (b) the date
specified by Bank pursuant to Section 6.1 hereof.
Section 2. The Credit Agreement is amended by adding a new Section
1.1.B to read as follows:
"ADVANCE TERM NOTE 1.1.B Bank agrees to extend an advance loan
converting to a term loan on the Advance Termination Date (as defined
in the Advance Term Note) in the amount of $2,500,000.00 ("Advance/Term
Loan" or "Advance/Term Loans") to Borrower as evidenced by a promissory
note in proper form in the original principal amount of $2,500,000.00
dated April 3, 1997 and maturing August 31, 2000 (together with any and
all renewals, extensions, modifications and replacements thereof and
substitutions therefor, the "Advance/Term Note")." The Advance/Term
Loans shall be for the purpose of financing Borrower's leasehold
improvements."
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Section 3. The Credit Agreement is amended by adding a new Section
1.1.C to read as follows:
"LOANS AND NOTES 1.1.C "Loan" or "Loans" shall refer to each and all
Revolving Loans and all Advance/Term Loans. "Note" or "Notes" shall
refer to each and both of the Revolving Note and the Advance/Term Note."
Section 3. Section 1.4 of the Credit Agreement is amended by
substituting the following for Section 1.4 of the Credit Agreement:
"In consideration of the Commitment, Borrower will pay a Commitment Fee
(computed on the basis of the actual number of days elapsed in a year
comprised of 360 days) of one-eighth (1/8) of one percent (1%) on the
Revolving Loan based on the daily average difference between the
Commitment and the principal balance of the Revolving Note from the date
hereof to the Termination Date. The Commitment Fee is due and payable
quarterly in arrears beginning on September 30, 1996."
Section 4. Section 7.4 of the Credit Agreement is amended as follows:
"All representations, warranties, covenants and agreements made by or on
behalf of Borrower in connection with the Loan Documents will survive
the execution and delivery of the Loan Documents; will not be affected
by any investigation made by any Person, and will bind Borrower and the
successors, trustees, receivers and assigns of Borrower and will benefit
the successors and assigns of the Bank; provided that Bank's agreement
to make Loans to Borrower will not inure to the benefit of any successor
or assign of Borrower except for an approved merger or business
combination. Except as otherwise provided herein, the term of this
Agreement will be until the later of the final maturity of the Revolving
Note or the Term Note, whichever is later and the full and final payment
of all Obligations and all amounts due under the Loan Documents."
Section 5. Section 7.6 of the Credit Agreement is amended as follows:
"EXPENSES 7.6 Any provision to the contrary notwithstanding, and
whether or not the transactions contemplated by this Agreement are
consummated, Borrower agrees to pay on demand all reasonable, direct
out-of-pocket expenses (including, without limitation, the fees and
expenses of counsel for Bank) in connection with the negotiation,
preparation, execution, filing, recording, modification, supplementing
and waiver of the Loan Documents and the making, servicing and
collection of the Loans. Notwithstanding anything contained herein to
the contrary, Borrower shall not pay more than $1,500.00 for any single,
annual field analysis of Borrower's assets. Borrower agrees to pay
Bank's standard Documentation Preparation and Processing Fee for
preparation, negotiation and handling of this Agreement not to exceed
the amount of $1,500.00. Borrower also agrees to pay Bank a transaction
fee of $8,500.00, which fee is due and payable upon the execution of
this Amendment. The obligations of the Borrower under this and the
following section will survive the termination of this Agreement."
Section 6. Exhibit A of the Credit Agreement is hereby amended by
replacing prior Exhibit A with the Exhibit A attached hereto and hereby
incorporated into this Amendment and the Credit Agreement for all purposes.
Section 7. Exhibit C of the Credit Agreement is hereby amended by
replacing prior Exhibit C with the Exhibit C attached hereto and hereby
incorporated into this Amendment and the Credit Agreement for all purposes.
Section 8. The Borrower hereby represents and warrants to the Bank that
after giving effect to the execution and delivery of this Amendment: (a) the
representations and warranties set forth in the Credit Agreement are true and
correct on the date hereof as though made on and as of such date; and (b) no
Event of Default, or event which with passage of time, the giving of notice or
both would become an Event of Default, has occurred and is continuing as of the
date hereof.
Section 9. This Amendment shall become effective as of the Effective
Date upon its execution and delivery by each of the parties named in the
signature lines below.
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Section 10. The Borrower further acknowledges that each of the other
Loan Documents is in all other respects ratified and confirmed, and all of the
rights, powers and privileges created thereby or thereunder are ratified,
extended, carried forward and remain in full force and effect except as the
Credit Agreement is amended by this Amendment.
Section 11. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed an original and all of which taken
together shall constitute but one and the same agreement.
Section 12. This Amendment shall be included within the definition of
"Loan Documents" as used in the Agreement.
Section 13. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND AS APPLICABLE, THE LAWS OF
THE UNITED STATES OF AMERICA.
THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS & COMMERCE
CODE, AND REPRESENTS 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.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed effective as of the Effective Date.
BORROWER: XETEL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
BANK: TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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