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EXHIBIT 6.2
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (hereinafter called this "First
Amendment") is by and between TOTAL BUILDING SYSTEMS, INC., a Texas corporation
(hereinafter called the "Borrower") and COMPASS BANK, a Texas banking
association (hereinafter called the "Lender") whose address is 00 Xxxxxxxx
Xxxxx, X.X. Xxx 0000, Xxxxxxx, Xxxxx 00000-0000.
WITNESSETH:
WHEREAS, on March 12, 1998, the Borrower and the Lender entered into a
Loan Agreement (hereinafter called the "Agreement") whereby, upon the terms and
conditions therein stated, the Lender agreed to make loans to the Borrower up to
the aggregate amount of $1,000,000.00 to be used by the Borrower for the
purposes set forth in Section 2.4 of the Agreement; and
WHEREAS, Xxxxxxx X. XxXxxxx and JoyVer Investments, L.L.C. have
requested that certain loan in the aggregate amount of $3,765,000.00 from
Lender, and Lender agrees to lend such additional monies subject to the terms
and conditions of the loan documents evidencing such loan and the terms and
conditions of this First Amendment; and
WHEREAS, the Borrower and the Lender mutually desire to amend certain
aspects of the Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
GENERAL TERMS
Section 1.1 Terms Defined in Agreement. As used in this First
Amendment, except as may otherwise be provided in Section 1.2 hereof, all
capitalized terms which are defined in the Agreement shall have the same meaning
herein as therein, all of such terms and their definitions being incorporated
herein by reference.
Section 1.2 New Terms. The following terms are hereby amended or added
to Section 1.1 of the Loan Agreement:
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"BORROWING BASE AND COMPLIANCE CERTIFICATE" shall mean that
certain report in the form of Exhibit "A" attached and made a part of the First
Amendment to Loan Agreement.
"DEED OF TRUST" shall mean that certain Deed of Trust with
Security Agreement and Assignment of Rents and Leases of even date herewith
executed by JoyVer Investments, L.L.C. and Xxxxxxx X. XxXxxxx to Xxx Xxxxx as
Trustee for Compass Bank.
"FIRST AMENDMENT TO SECURITY AGREEMENT" shall mean the First
Amendment to Security Agreement of even date with the First Amendment, by and
between the Borrower and the Lender.
"NOTES" shall mean the Revolving Note, the Term Note, and any
other note heretofore or hereafter executed and delivered by Borrower, Xxxxxxx
X. XxXxxxx, or JoyVer Investments, L.L.C. together with all renewals, increases,
replacements, extensions, and rearrangements of any of the foregoing, as may be
entered into from time to time by Borrower and Lender.
"OBLIGATIONS" shall mean all indebtedness, obligations, and
liabilities of Borrower, Xxxxxxx X. XxXxxxx ("XXXXXXX"), or JoyVer Investments,
L.L.C. ("JoyVer") to Lender of every nature and description, now or hereafter
existing or arising, whether such indebtedness is direct or indirect, primary or
secondary, fixed or contingent or arises out of or is evidenced by a promissory
note, deed of trust, security agreement, open account, overdraft, endorsement,
surety agreement, guaranties, or otherwise, including, without limitation, all
such obligations, liabilities, and indebtedness of Borrower, XxXxxxx, or JoyVer
to Lender under or in connection with the Loan Documents. Obligations shall
include all renewals, extensions and rearrangements of any of the above
described obligations and indebtedness.
"SECURITY INSTRUMENTS" shall mean the Security Agreement, the
Deed of Trust, and any and all other heretofore and hereafter existing security
and other agreements which create or xxxxx x xxxx or security interest as
security for the Revolving Note, Term Note, or other Obligations.
"TERM NOTE" shall mean a promissory note of even date with the
First Amendment, in the original principal amount of $3,765,000.00, executed by
JoyVer and XxXxxxx to the order of Lender, as the same may be amended, restated,
replaced, substituted, modified, increased, and rearranged from time to time.
"TERM NOTE COMMITMENT FEE" shall mean a fee in the amount of
one-half of one percent (0.5%) of the difference between the amount of the Term
Note and the amount of the Term Note used to refinance the property described in
Exhibit "A."
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Section 1.3 Confirmation and Extent of Changes. All terms which are
defined in Section 1.1 of the Agreement shall remain unchanged except as
specifically provided in Section 1.2 of this First Amendment.
ARTICLE 2
AMOUNT AND TERMS OF LOAN
Section 2.1 Term Loan. A new Section 2.10 is hereby added to the
Agreement as follows:
2.10 "Term Loan. Subject to the full, complete, and timely
satisfaction by JoyVer and XxXxxxx of each of the conditions
precedent described in Sections 6.1 and 6.2, and relying on the
representations and warranties of Borrower set forth herein,
Lender agrees to make a single advance term loan to JoyVer and
XxXxxxx in the amount of $3,765,000.00, which loan shall be
evidenced by the execution and delivery by JoyVer and XxXxxxx of
the Term Note."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations Repeated. The representations and
warranties of the Borrower contained in the Agreement, the Loan Documents and
the other Security Instruments and otherwise made in writing by or on behalf of
the Borrower pursuant to the Agreement, the Loan Documents and the other
Security Instruments were true and correct when made, and are true and correct
in all material respects at and as of the time of delivery of this First
Amendment, except for such changes in the facts represented and warranted as are
not in violation of the Agreement, this First Amendment or the other Security
Instruments.
Section 3.2 Security Instruments. All Loan Documents to which the
Borrower is a party shall secure the Notes and all of the Obligations of the
Borrower to the Lender as such Obligations are increased and modified by this
First Amendment, whether or not such Loan Documents shall be expressly amended
or supplemented in connection herewith.
Section 3.3 Compliance with Obligations. The Borrower has performed
and complied with all agreements and conditions contained in the Agreement and
the Loan Documents required to be performed or complied with by the Borrower
prior to or at the time of delivery of this First Amendment.
Section 3.4 Defaults. There exists, and after giving effect to this
First Amendment will exist, no Event of Default, or any condition, or act which
constitutes, or with notice or lapse of time (or both) would constitute an Event
of Default under the Agreement or any loan agreement, note agreement, or trust
indenture to which the Borrower is a party.
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Section 3.5 No Amendments. Nothing in Article 3 of this First
Amendment is intended to amend any of the representations or warranties
contained in the Agreement.
ARTICLE 4
AFFIRMATIVE COVENANTS
Section 4.1 Affirmative Covenants of Borrower. A new Section
4.1(c)(ix) is hereby added to the Agreement as follows:
4.1(c) "(ix) On or before January 31st of each year, a financial
statement from JoyVer Investments, L.L.C. including
therein a statement of cash flow and balance sheet and a
tax return upon the filing thereof."
ARTICLE 5
NEGATIVE COVENANTS
Section 5.1 Negative Covenants of Borrower. Sections 5.1(l) through
5.1(n) of the Agreement are hereby amended to read in their entirety as follows:
5.1(1) "Permit Borrower's Tangible Net Worth to be less than
$2,300,000.00;"
5.1(m) "Permit at any time the Debt to Tangible Net Worth
Ratio of Borrower to be more than the ratio of 1.5 to 1;"
5.1(n) "Permit at any time the Current Ratio of Borrower to
be less than the ratio of 1.5 to 1;"
Section 5.2 Consecutive Losses. A new Section 5.1(s) is hereby added
to read in its entirety as follows:
5.1(s) "Incur a loss for two consecutive quarters;"
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ARTICLE 6
CONDITIONS
The Lender has relied upon the representations and warranties
contained in this First Amendment in agreeing to the amendments and supplements
to the Agreement set forth herein and the amendments and supplements to the
Agreement set forth herein are conditioned upon and subject to the accuracy of
each and every representation and warranty of the Borrower made or referred to
herein, to the performance by the Borrower of its obligations to be performed
under the Agreement and the Security Instruments on or before the date of this
First Amendment and to the following further conditions:
Section 6.1 The Term Note. JoyVer and XxXxxxx shall have duly and
validly issued, executed and delivered to the Lender the Term Note.
Section 6.2 First Amendment to Security Agreement. The Borrower shall
have duly and validly executed and delivered to the Lender this First Amendment
and the First Amendment to Security Agreement.
Section 6.3 Ratification of Guaranty. The Guarantor shall have duly
and validly issued, executed and delivered to the Lender a ratification of the
Guaranty in form satisfactory to Lender.
Section 6.4 Secretary's Certificate. The Lender shall have received
certificates of the Secretary or Assistant Secretary of the Borrower setting
forth (i) resolutions of its board of directors in form and substance
satisfactory to the Lender with respect to the Term Note, this First Amendment,
the First Amendment to Security Agreement, and any other Security Instruments
provided herein and the officers of the Borrower authorized to sign such
instruments, and (ii) specimen signatures of the officers so authorized.
Section 6.5 Term Note Commitment Fee. JoyVer and XxXxxxx shall have
paid the Term Note Commitment Fee to Lender.
Section 6.6 Events of Default. Section 7.1(a) of the Agreement is
hereby amended to read in its entirety as follows:
"7.1(a) The failure to pay when due any fee or payment under
this agreement, the Revolving Note, the Term Note, any of the
other Obligations, or any other obligations arising under or
in connection with any of the Loan Documents;"
Section 6.7 Satisfaction of Conditions of the Agreement. All
conditions referred to in Section 6 of the Agreement shall have been satisfied.
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ARTICLE 7
MISCELLANEOUS
Section 7.1 Extent of Amendments. Except as otherwise expressly
provided herein, the Agreement, the Security Instruments, the Notes and the
other instruments and agreements referred to therein are not amended, modified
or affected by this First Amendment. Except as expressly set forth herein, all
of the terms, conditions, covenants, representations, warranties and all other
provisions of the Agreement are herein ratified and confirmed and shall remain
in full force and effect.
Section 7.2 References. On and after the date on which this First
Amendment becomes effective, the terms, "this Agreement," "hereof," "herein,"
"hereunder" and terms of like import, when used herein or in the Agreement
shall, except where the context otherwise requires, refer to the Agreement, as
amended by this First Amendment.
Section 7.3 Counterparts. This First Amendment may be executed in two
or more counterparts, and it shall not be necessary that the signatures of all
parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed as of the 10th day of August, 1998.
BORROWER: TOTAL BUILDING SYSTEMS,
a Texas corporation
By: /s/ Xxxxxxx X. XxXxxxx
Xxxxxxx X. XxXxxxx
President and Chief Executive
Officer
LENDER:
COMPASS BANK,
a Texas banking association
By: /s/ Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
Senior Vice President
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EXHIBIT "A"
FORM OF BORROWING BASE AND COMPLIANCE CERTIFICATE
This certificate dated as of _______1998, is prepared pursuant to
Section 4.1(c)(ii) of certain Loan Agreement dated as of March 12, 1998 (the
"Loan Agreement"), between Total Building Systems, Inc. ("Company"), and Compass
Bank ("Bank"). Unless otherwise defined in this certificate, capitalized terms
shall have the meaning given to them in the Loan Agreement.
The Company hereby certifies (a) that no Event of Default has
occurred or is continuing, (b) all of the representations and warranties made by
the Company in the Loan Agreement are true and correct in all material respects
on the date of this certificate as if made on this date, (c) no payments owing
by the Company to an operator of a facility at which Inventory of Borrower is
located are past due by more than 30 days, and (d) that as of ___________, 199_,
the following amounts and calculations were true and correct:
I. BORROWING BASE:
(A)
1 . Total Accounts $
minus
2. Total Ineligible Accounts $
Accounts
equals
3. Eligible Accounts
$
x 80%
equals Borrowing Base $
(Not to exceed
$1,000,000.00)
Plus
(B) The aggregate outstanding
unpaid advances under $
Revolving Note
equals
(C) Excess (Deficit) $
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11. FINANCIAL COVENANTS (calculated in accordance with Loan Agreement):
(A) Tangible Net Worth $
($2,300,000)
(B) Debt to Tangible Net Worth Ratio:
1. Debt
2. Tangible Net Worth
3. Ratio of B. I. to B.2
(not more than
1.5 to 1)
(C) Current Ratio
1. Total Current Assets $
2. Total Current Liabilities $
3. Ratio of C.1 to C.2 $
(not less than
1.5 to 1)
(D) Fixed Charge Coverage Ratio
1. (i) EBITDA plus (ii) Current
maturities of Capitalized Lease
Obligations
2. (i) Current maturities of long
term Debt plus (ii) current
maturities of Capitalized Lease
Obligations plus (iii) Interest Expense $
3. Ratio of (D.1) to (D.2)
(not less than 1.25 to 1)
(E) The Company has / has not incurred a loss in the two (2) calendar quarters
immediately preceding the date of this Compliance Certificate.
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I HEREBY CERTIFY THAT THE FOREGOING REPRESENTATIONS AND
STATEMENTS ARE TRUE AND CORRECT AS OF THE DATE HEREOF.
TOTAL BUILDING SYSTEMS, INC.
a Texas corporation
By:
Xxxxxxx X. XxXxxxx, President
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