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EXHIBIT 6.3
SECOND AMENDMENT
TO LOAN AGREEMENT
This is the Second Amendment (the "Amendment"), dated as of May 1,
1999, to the Loan Agreement dated as of May 12, 1998 (the "Agreement") by and
between, TOTAL BUILDING SYSTEMS INC., a Texas corporation (the "Company"), and
COMPASS BANK, a bank organized and existing under the laws of the State of
Alabama (the "Bank").
RECITALS
Recitals. The Company has requested that the Bank waive certain
defaults, modify certain provisions contained in the Agreement and extend the
maturity of the Revolving Note until August 1, 1999 and subject to the terms and
conditions hereinafter stated, the Bank is willing to do so. Therefore, the
Company and the Bank hereby agree as follows, intending to be legally bound:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. Section 1.1 "DEFINED TERMS" of the
Agreement is hereby amended by deleting in its entirety the definition for
"Termination Date" and substitute therefor the following:
"Termination Date" shall mean the earlier to occur of (a)
August 1, 1999, or (b) the date on which an Event of Default shall
occur.
ARTICLE II
WAIVERS
Section 2.1 Waivers of Financial Covenant Defaults. The parties hereto
agree that the
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Borrower is currently not in compliance with the following financial covenants:
(a) Section 5.1 (11) - Minimum Net Worth Test;
(b) Section 5.1 (m) - Debt to Tangible Net Worth Ratio;
(c) Section 5.1 (n) - Current Ratio Test; and
(d) Section 5.1 (p) - Fixed Charge Coverage Test.
The Bank hereby waives the defaults on the above-referenced sections of
the Agreement through and as of the date hereof, only.
Section 2.2 Waiver of Financial Statement Defaults. The parties hereto
agree that as of the execution hereof the Borrower is currently not in
compliance with the following financial reporting requirements:
(a) Section 4.1(c)(i) - Unaudited Monthly Statement for the
month of April, 1999;
(b) Section 4.1 (c)(ii) - Monthly Borrowing Base and
Compliance Certificate for the month of April, 1999;
(c) Section 4.1 (c)(iii) - Monthly Aging of Accounts
Receivable for the month of April, 1999;
(d) Section 4.1 (c)(iv) - Quarterly Certificate of Accounts
Payable for the quarter ending March 31, 1999;
(e) Section 4.1 (c)(v) - Annual Audit of Financial Statement
for the 1998 fiscal year; and
(f) Section 4.1 (c)(viii) - Annual Financial Statement of
Xxxxxxx X. XxXxxxx for the 1998 calendar year;
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The Bank hereby waives the defaults on the above referenced section of
the Agreement through and as of the date hereof, only.
The Borrower hereby covenants and agrees to deliver, within TEN (10)
days of the date hereof, current copies of each of the foregoing, with the
exception of the Annual Audited Financial Statement.
Any prior failure by the Bank to require timely compliance with the
financial covenant ratios and the financial reporting requirements described
above, is not a waiver by the Bank of the Borrower's obligation to hereafter
timely comply with these provisions of the Agreement.
ARTICLE III
AMENDMENT
Section 3.1 Amendment to Agreement. In addition to extending the
maturity of the Revolving Note, (which is accomplished by redefining the
Termination Date to mean August 1, 1999), the Bank hereby amends Section 4.1
(c)(v) of the Agreement, (which requires the Borrower to provide an audited
financial statement for the Borrower's fiscal year-end December 31, 1998 by May
1, 1999) to require the audited financial statement be delivered on or before
August 1, 1999.
ARTICLE IV
VERIFICATION OF AMOUNT OWING
Section 4.1 Balance Due on the Revolving Note. The parties hereto agree
that as of the date hereof, there was an outstanding principal balance due and
owing on the Revolving Note of $1,000,000.00.
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ARTICLE V
CONSENT OF GUARANTORS AND PLEDGOR
Section 5.1 Guarantor's and Pledgor's Consent and Ratification.
Repayment of the Revolving Note is guaranteed by Xxxxxxx X. XxXxxxx (the
"Guarantor") pursuant to the terms of that certain Guaranty Agreement executed
on or about March 12, 1998 (the "Guaranty"). The repayment of the Revolving Note
is also secured by certain Deed of Trust with Security Agreement and Assignment
of Rents (the "Deed of Trust") executed by Joyver Investments, LLC (the
"Pledgor") in favor of a trustee for the benefit of the Bank and filed for
record under Xxxxxx County Clerk's File No. T263282 and covering that 12.6637
acre tract of land, more or less, out of the X. X. Xxxxxxx Survey. The Guarantor
and Pledgor join herein to (i) acknowledge and consent to each of the terms and
provisions of this Agreement; (ii) ratify and confirm the Guaranty and Deed of
Trust previously executed in favor of the Bank; (iii) agree that the Guaranty
and Deed of Trust are in full force and effect and that the terms and provisions
of those Guaranty and Deed of Trust cover and pertain to the Revolving Note and
the documents executed in connection therewith; (iv) acknowledge that there are
no claims or offsets against, or defenses or counterclaims to, the terms and
provisions of the Guaranty or Deed of Trust or the obligations evidenced
thereby; (v) certify that their representations and warranties contained in the
Guaranty and Deed of Trust remain true and correct as of the date hereof; and
(vi) acknowledge that the Bank has satisfied and performed its covenants and
obligations under the Guaranty and Deed of Trust and under the other loan
documents executed in connection therewith and that no prior action or failure
to act by or on behalf of the Bank has, or will, give rise to any cause of
action or a claim against the Bank for breach of the Guaranty or Deed of Trust
or other documents executed in connection therewith.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent, unless specifically
waived by Bank:
a. Bank shall have received from the Company duly executed
copies of this Amendment;
b. The representations and warranties contained herein, in the
Agreement, as amended hereby, and/or in each other document, instrument
and agreement executed in
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connection with or relating to the Agreement or this Amendment (hereinafter
individually referred to as a "Loan Document" and collectively referred to as
the "Loan Documents") shall be true and correct as of the date hereof, as if
made on the date hereof,
c. No Event of Default shall have occurred and be continuing
and no Default shall exist; and
d. All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto, shall be
satisfactory to Bank.
ARTICLE VII
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 7.1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. The Company and Bank agree that the Agreement, as amended hereby, and
the other Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.
Section 7.2 Representations and Warranties. The Company hereby
represents and warrants to the Bank that (i) the execution, delivery and
performance of this Amendment and any and all other Loan Documents executed
and/or delivered in connection herewith have been authorized by all requisite
corporate action on the part of the Company and will not violate the Articles of
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Incorporation or Bylaws of the Company, (ii) the representations and warranties
contained in the Agreement, as amended hereby, and any other Loan Document are
true and correct on and as of the date hereof as though made on and as of the
date hereof, except to the extent such representations and warranties relate to
an earlier date, (iii) the Company is in full compliance with all covenants and
agreements contained in the Agreement, as amended hereby, and (iv) the Company
has not amended its Articles of Incorporation or Bylaws since the date of
execution of the Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other document or
documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
Bank or any closing shall affect the representations and warranties or the right
of Bank to rely upon them.
Section 8.2 Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement, as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement, as amended hereby.
Section 8.3 Expenses of Bank. As provided in the Agreement, the Company
agrees to pay
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on demand all reasonable costs and expenses incurred by Bank in connection with
the preparation, negotiation and execution of this Amendment and the other Loan
Documents executed pursuant hereto and any and all amendments, modifications,
and supplements thereto, including, without limitation, the reasonable costs and
fees of Bank's legal counsel, and all reasonable costs and expenses incurred by
Bank in connection with the enforcement or preservation of any rights under the
Agreement, as amended hereby, or any other Loan Document, including, without
limitation, the reasonable costs and fees of Bank's legal counsel.
Section 8.4 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 8.5 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE
IN HOUSTON, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
Section 8.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Bank and the Company and their respective
successors and assigns, except the Company may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Bank.
Section 8.7 Counterparts. This Amendment may be executed in one or more
counterparts,
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each of which when so executed shall be deemed to be an original, but all of
which when taken together shall constitute one and the same instrument.
Section 8.8 Effect of Waiver. No consent or waiver, express or implied,
by Bank to or for any breach of or deviation from any covenant or condition of
the Agreement shall be deemed a consent or waiver to or of any other breach of
the same or any other covenant, condition or duty.
Section 8.9 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 8.10 FINAL AGREEMENT. THE AGREEMENT, AS AMENDED HEREBY AND THE
OTHER LOAN DOCUMENTS 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.
Section 8.11 WAIVER OF JURY TRIAL/ARBITRATION. THE PARTIES HERETO
EXPRESSLY ACKNOWLEDGE THAT THE PROVISIONS OF SECTION 9.14 (WAIVER OF TRIAL BY
JURY) AND SECTION 9.15 (ARBITRATION) CONTINUE TO APPLY TO THE AGREEMENT AND TO
THE PROVISIONS OF THIS SECOND AMENDMENT
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
effective as of the date first written above and executed this 30th day of June,
1999.
THE COMPANY:
TOTAL BUILDING SYSTEMS, INC., a Texas
corporation
By: /s/ Xxxxxxx X. XxXxxxx
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Name: Xxxxxxx X. XxXxxxx
Title: Chairman
THE GUARANTOR:
/s/ Xxxxxxx X. XxXxxxx
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XXXXXXX X. XxXXXXX
THE PLEDGOR:
JOYVER INVESTMENTS, L.L.C.
a Texas limited liability company
By: /s/ Xxxxxxx X. XxXxxxx
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Name: Xxxxxxx X. XxXxxxx
Title: Member
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THE BANK:
COMPASS BANK,
a bank organized and existing under the laws of
the State of Alabama
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
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