EXHIBIT 10.31
WAIVER AND THIRD AMENDMENT TO LOAN AGREEMENT
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This WAIVER AND THIRD AMENDMENT TO LOAN AGREEMENT ("Amendment") is entered
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into as of February 29, 2000 (the "Amendment Date"), by and among RF
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MONOLITHICS, INC., a Delaware corporation ("Borrower"), BANC ONE LEASING
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CORPORATION ("BOLC"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION ("Bank"), a
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national banking association, acting in its capacity as "Bank" under the Loan
Documents and as collateral agent for itself and BOLC (in such capacity "Secured
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Party").
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RECITALS:
A. Pursuant to that certain Letter Loan Agreement dated as of March 8,
1996, by and between Borrower and Bank (as amended by that certain First
Amendment to Loan Agreement dated as of December 31, 1997 between Borrower and
Bank and that certain Second Amendment to Loan Agreement dated as of July 15,
1999 between Borrower and Bank, and as such agreement may be further amended,
restated, or otherwise modified from time to time, the "Loan Agreement"), Bank
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has agreed to provide to Borrower a secured credit facility as set forth
therein.
B. Borrower has requested that Bank amend certain provisions of the Loan
Agreement.
C. Subject to satisfaction of the conditions set forth herein, Bank is
willing to amend the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1.
Definitions
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Section 1.1. Definitions. Unless otherwise defined in this Amendment,
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each capitalized term used in this Amendment has the meaning given to such term
in the Loan Agreement (as amended by this Amendment). As used herein, the
following terms shall mean as follows:
"Lease Agreements" means that certain Master Lease Agreement dated as
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of November 3, 1995 between Borrower, as "Lessee," and BOLC, as "Lessor,"
including, without limitation all "Schedules" (as defined therein) and
amendments thereto, as such agreement may be amended, restated, or
otherwise modified from time to time.
"Security Agreement" means that certain Security Agreement dated as of
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March 8, 1996 executed by Borrower in favor of Bank, as such agreement may
be amended, restated, or otherwise modified from time to time.
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 1
ARTICLE 2.
Waiver of Events of Default
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Section 2.1. Waiver of Events of Default. Pursuant to paragraph 11(b) of
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the Loan Agreement, Borrower is required to comply with all covenants,
agreements, and terms of each of the Loan Documents, and pursuant to paragraph
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11(e) the occurrence of an event permitting third party creditors to accelerate
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the maturity of indebtedness in excess of $250,000 constitutes an Event of
Default. Pursuant to paragraph 9(a) of the Loan Agreement, Borrower was
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required maintain, as of the last day of each quarter of each fiscal year of
Borrower, a ratio of (a) current assets minus inventory, to (b) current
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liabilities plus the unpaid principal balance of the Revolving Line of Credit,
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of not less than 1.25 to 1.00 (the "Quick Ratio Covenant"). Additionally,
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pursuant to paragraph 9(d) of the Loan Agreement, Borrower was required to
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maintain, as of the end of each fiscal quarter, a ratio of (a) net income after
taxes, plus depreciation, amortization, interest expense, and lease and rent
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expense, for the 12 month period ending with such fiscal quarter, to (b) current
maturities of long-term leases, plus interest expense, lease and rent expense,
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for such 12 month period, of not less than 2.0 to 1.0 (the "Fixed Charge
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Coverage Ratio Covenant"). For the fiscal quarter ended November 30, 1999,
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Borrower failed to maintain each of the Quick Ratio Covenant and the Fixed
Charge Coverage Ratio Covenant. Borrower has also notified Bank of certain
defaults under the Lease Agreements which could result in acceleration of the
payments due thereunder. Borrower's failure to maintain the Quick Ratio
Covenant and the Fixed Charge Coverage Ratio Covenant (collectively, the
"Violated Covenants") for the fiscal quarter ended November 30, 1999,
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constitutes an Event of Default under Section 11(b) of the Loan Agreement and
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the default under the Lease Agreements (the "Lease Default") constitutes an
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Event of Default under paragraph 11(e) of the Loan Agreement (collectively, the
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"Existing Defaults"). Effective as of February 29, 2000, and subject to the
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conditions precedent contained herein, Bank hereby waives the Existing Defaults
resulting from Borrower's failure to comply with the Violated Covenants and the
Lease Defaults.
ARTICLE 3.
Amendments to Loan Agreement
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Section 3.1. Amendment to Paragraph 1 of the Loan Agreement. Effective as
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of the Amendment Date, paragraph 1 of the Loan Agreement is hereby amended and
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restated in its entirety to read as follows:
1. Loan. Subject to the terms and conditions set forth in this Loan
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Agreement and the other agreements, instruments, and documents at any time
evidencing, securing, governing, guaranteeing, and/or pertaining to the
Indebtedness, as hereinafter defined (collectively, together with this Loan
Agreement, referred to hereinafter as the "Loan Documents"), Bank and
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Borrower hereby agree as follows:
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 2
Subject to the terms and conditions set forth herein, Bank agrees to lend
to Borrower, on a revolving basis from time to time during the period
commencing on the date hereof and continuing through and including 11:00
a.m. (Dallas, Texas time) on December 31, 2000 (the "Termination Date"),
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such amounts as Borrower may request hereunder; provided, however, the
total principal amount outstanding at any time shall not exceed the lesser
of (i) an amount equal to the Borrowing Base (as such term is defined
hereinbelow), or (ii) $7,500,000 (the "Revolving Line of Credit"). In its
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sole discretion, Bank may elect to make loans available to Borrower under
the Revolving Line of Credit in excess of the availability under the
Borrowing Base on one or more occasions, but in the event Bank agrees to do
so, Bank shall not thereby be deemed to have changed the limits of the
Borrowing Base or to be obligated to exceed such limits on any other
occasion. If at any time the aggregate principal amount outstanding under
the Revolving Line of Credit shall exceed an amount equal to the Borrowing
Base, unless Bank otherwise consents, Borrower agrees to immediately repay
to Bank such excess amount, plus all accrued but unpaid interest thereon.
Subject to the terms and conditions hereof, Borrower may borrow, repay, and
reborrow hereunder. All sums advanced hereunder, together with all accrued
but unpaid interest thereon, shall be due and payable in full on the
Termination Date. The sums advanced under the Revolving Line of Credit
shall be used for working capital purposes. In accordance with the terms
of the Note (as such term is defined hereinbelow), Borrower shall give Bank
prior notice of each requested advance hereunder specifying (i) the
aggregate amount of such requested advance, and (ii) the requested date of
such advance, with such advances to be requested in a form satisfactory to
Bank. The advances under the Revolving Line of Credit shall be
collectively called the "Loan". The term "Indebtedness", as used herein,
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shall mean the Loan and all other indebtedness owing from time to time to
Bank by Borrower.
As used in this Loan Agreement, the term "Borrowing Base" shall have the
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meaning set forth hereinbelow:
An amount equal to eighty percent (80.0%) of Borrower's Eligible
Accounts, plus twenty-five percent (25.0%) of Borrower's Eligible
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Inventory; provided, however, the outstanding amount advanced against
Eligible Inventory at any time shall not exceed $1,000,000, plus one
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hundred percent (100%) of the balance of cash and ninety percent
(90.0%) of the value of U.S. Treasury securities, respectively, held
in the securities account described in paragraph 3(d) hereof.
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As used herein, the term "Eligible Accounts" shall mean at any time, an
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amount equal to the aggregate net invoice or ledger amount owing on all
trade accounts receivable of Borrower for goods sold or leased or services
rendered in the ordinary course of business, in which Bank has a perfected,
first priority lien, after deducting (without duplication): (i) each
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 3
such account that is unpaid ninety (90) days or more after the original
invoice date thereof, (ii) the amount of all discounts, allowances,
rebates, credits, and adjustments to such accounts, (iii) the amount of all
contra accounts, set-offs, defenses, or counterclaims asserted by or
available to the account debtors, (iv) all accounts with respect to which
goods are placed on consignment or subject to a guaranteed sale or other
terms by reason of which payment by the account debtor may be conditional,
(v) all accounts with respect to which Borrower has furnished a payment
and/or performance bond and that portion of any accounts for or
representing retainage, if any, until all prerequisites to the immediate
payment of retainage have been satisfied, (vi) all accounts owing by
account debtors for which there has been instituted a proceeding in
bankruptcy or reorganization under the United States Bankruptcy Code or
other law, whether state or federal, now or hereafter existing for relief
of debtors, (vii) all accounts owing by any Affiliate (as such term is
defined hereinbelow) of Borrower, (viii) all accounts in which the account
debtor is the United States or any department, agency, or instrumentality
of the United States, except to the extent an acknowledgment of assignment
to Bank of such account in compliance with the Federal Assignment of Claims
Act and other applicable laws has been received by Bank, (ix) all accounts
due Borrower by any account debtor whose principal place of business is
located outside the United States and its territories; provided that if any
such account is supported by either a letter of credit or an agreement of
indemnity or insurance, each in form and substance satisfactory to Bank,
Bank may, in its discretion, include such accounts, or any portion thereof,
in "Eligible Accounts", (x) all accounts subject to any provision
prohibiting assignment or requiring notice of or consent to such
assignment, (xi) that portion of all account balances owing by any single
account debtor which exceeds twenty-five percent (25.0%) of the aggregate
of all accounts which are owing to Borrower by all account debtors, and
(xii) any other accounts deemed unacceptable by Bank in its discretion
exercising its reasonable credit judgment; provided, however, if more than
ten percent (10.0%) of the then balance owing by any single account debtor
does not qualify as an Eligible Account under the foregoing provisions,
then the aggregate amount of all accounts owing by such account debtor
shall be excluded from Eligible Accounts.
As used herein, the term "Eligible Inventory" shall mean as of any date,
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the aggregate value of all inventory of raw materials (excluding
specifically work in progress and packaging materials, supplies, finished
goods, and any advertising costs capitalized into inventory) then owned by
Borrower and held for use in the ordinary course of Borrower's business, in
which Bank has a first priority lien, excluding (i) inventory which is
damaged, defective, obsolete, or otherwise unusable in the ordinary course
of Borrower's business, (ii) inventory which is not in the possession of
Borrower or which has been rejected by Borrower for any reason, and (iii)
inventory subject to any consignment arrangement between Borrower and any
other person or entity. For purposes of this definition, Eligible Inventory
shall be
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 4
valued at the lower of cost (excluding the cost of labor) or market value.
Section 3.2. Amendment to Paragraph 2 of the Loan Agreement. Effective as
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of the Amendment Date, paragraph 2 of the Loan Agreement is hereby amended and
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restated in its entirety to read as follows:
2. Promissory Note. The Loan shall be evidenced by a promissory note
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(herein called, together with any renewals, extensions, and increases
thereof, the "Note"), duly executed by Borrower, in the stated principal
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amount of $7,500,000 and in form and substance acceptable to Bank.
Interest on the Note shall accrue at the rate set forth therein. The
principal of and interest on the Note shall be due and payable in
accordance with the terms and conditions set forth in the Note and in this
Loan Agreement.
Section 3.3. Amendment to Paragraph 3 of the Loan Agreement. Effective as
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of the Amendment Date, paragraph 3 of the Loan Agreement is hereby amended by
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adding thereto, immediately following clause (c), a new clause (d) which shall
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read in its entirety as follows:
(d) That certain collateral account No. 00X000000 styled "RF
Monolithics, Inc. Collateral With Bank One" established by Borrower with
Banc One Securities Corporation.
Additionally, the following sentence is added at the end of paragraph 3 and
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shall read in its entirety as follows:
Upon request of Borrower, if no Default or Event of Default exists
under any Loan Document and if the Borrowing Base, calculated only with
respect to Eligible Accounts and Eligible Inventory, exceeds the
outstanding balance of the Loans, Bank shall cause Secured Party to release
to Borrower the securities held in the securities account described in
paragraph 3(d) to the extent requested by Borrower.
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Section 3.4. Amendment to Paragraph 8 of the Loan Agreement. Effective as
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of the Amendment Date, clause (d) and clause (e) of paragraph 8 of the Loan
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Agreement are hereby amended and restated in their entirety to read as follows:
(d) Liens. Except in connection with purchase money indebtedness
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permitted in clause (e) of this paragraph 8, incur, create, assume, or
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permit to exist any lien or other encumbrance on any of its assets or
properties, including, without limitation, the Collateral, other than the
liens granted to Bank pursuant to the Loan Documents and the liens set
forth on Schedule 8(d) of this Loan Agreement.
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(e) Indebtedness. Create, incur, permit to exist, or assume any
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indebtedness for borrowed money or issue or assume any other note,
debenture, bond, or other evidences of
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 5
indebtedness of others (all such indebtedness being referred to herein as
"Debt"), other than (i) Debt owing to Bank, (ii) Debt described on Schedule
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8(e) hereof, and any extensions, renewals, or refinancings of such Debt so
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long as (A) the principal amount of such Debt after such extension,
renewal, or refinancing shall not exceed the principal amount of such Debt
which was outstanding immediately prior to such extension, renewal, or
refinancing and (B) such Debt shall not be secured by any assets other than
assets securing such Debt, if any, prior to such extension, renewal, or
refinancing, and (iii) purchase money Debt and equipment leases (the amount
of such each lease being the value of the property subject to such lease on
the date of such lease) (A) not in excess of $500,000 in the aggregate
incurred in any fiscal year of Borrower, (B) set forth on Schedule (8)(e),
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and (C) as otherwise approved by Bank.
Section 3.5. Amendment to Paragraph 9 of the Loan Agreement. Effective as
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of the Amendment Date, paragraph 9 of the Loan Agreement is hereby amended and
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restated in its entirety to read as follows:
9. Financial Covenants. Until (i) the Note and all other obligations
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and liabilities of Borrower under this Loan Agreement and the other Loan
Documents are fully paid and satisfied, and (ii) Bank has no further
commitment to lend hereunder, Borrower will at all times maintain the
following financial covenants:
(a) Quick Ratio. Borrower will, beginning as of November 30,
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2000 and at all times thereafter, maintain a ratio of (1) current
assets minus inventory, to (2) current liabilities plus the unpaid
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principal balance of the Revolving Line of Credit, of not less than
1.25 to 1.00.
(b) Tangible Net Worth. Borrower will, at all times, maintain
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its Tangible Net Worth at not less than $29,500,000.
(c) Liabilities/Tangible Net Worth. Borrower will at all times
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maintain a ratio of (1) total liabilities, to (2) Tangible Net Worth,
of not greater than 0.50 to 1.00.
(d) Fixed Charge Ratio. Borrower will, beginning as of November
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30, 2000 and at all times thereafter, maintain a ratio of (1) net
income after taxes, plus depreciation, amortization, interest expense,
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and long-term lease and rent expense, for the twelve (12) months
ending as of any date of determination, to (2) without duplication (A)
current maturities of long-term debt as of the date of determination,
plus (B) current maturities of capitalized leases as of the date of
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determination, plus (C) interest expense for the preceding twelve (12)
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months, plus (D) lease and rent expense for the preceding twelve (12)
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months, of not less than 2.00 to 1.00.
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 6
(e) Minimum EBITDA. Borrower will not, as of the end of each of
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the fiscal quarters of Borrower set forth below, permit the sum of its
net income, plus depreciation, amortization, interest expense, and
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income taxes for the three (3) month period ending with such fiscal
quarter to be less than the amount set forth opposite the applicable
period in the table below:
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Period Minimum EBITDA
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Three months ending February 29, 2000 -$666,000
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Three months ending May 31, 2000 $1,007,000
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Three months ending August 31, 2000 $2,069,000
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As used herein, the term "Tangible Net Worth" means, as of any date,
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Borrower's total assets excluding all intangible assets, less total
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liabilities excluding any indebtedness owing by Borrower which has been
subordinated by written agreement to all indebtedness now or hereafter
owing by Borrower to Lender, such agreement to be in form and substance
acceptable to Lender. Unless otherwise specified, all accounting and
financial terms and covenants set forth above are to be determined
according to generally accepted accounting principles, consistently
applied.
Section 3.6. Amendment to Paragraph 10 of the Loan Agreement. Effective
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as of the Amendment Date, paragraph 10 of the Loan Agreement is hereby amended
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by adding thereto, immediately following clause (d), the following new clauses
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(e),(f),(g), and(h) which shall read in their entirety as follows:
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(e) Borrowing Base Report. A borrowing base report signed by a
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responsible officer of Borrower, within fifteen (15) days after the end of
each month, in form and detail satisfactory to Bank.
(f) Accounts Receivable Aging. An accounts receivable aging report
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within fifteen (15) days after the end of each month, in form and detail
satisfactory to Bank.
(g) Payables Aging. An accounts payable aging report within fifteen
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(15) days after the end of each month, in form and detail satisfactory to
Bank.
(h) Inventory Listing. A list of Borrower's inventory by location and
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type (to include the following: raw materials, work in process, and
finished goods) within fifteen (15) days after the end of each month, in
form and detail satisfactory to Bank.
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 7
Section 3.7. Amendment to Paragraph 11(e) of the Loan Agreement.
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Effective as of the Amendment Date, paragraph 11(e) of the Loan Agreement is
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hereby amended and restated in its entirety to read as follows:
(e) The occurrence of any event which permits the acceleration of the
maturity of any indebtedness in excess of $250,000 owing by Borrower to any
third party under any agreement or understanding or the occurrence of any
default in the payment, performance, or observance of any obligation under
any loan, credit agreement, or lease in which Borrower or any subsidiary
(direct or indirect) of Bank One Corporation (which is Bank's ultimate
parent corporation) is the creditor or lessor.
Section 3.8. Addition of Schedule 8(d) to the Loan Agreement. Effective
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as of the Amendment Date, Schedule 8(d) is hereby added to the Loan Agreement in
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its entirety to read as set forth in Exhibit A attached hereto.
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Section 3.9. Addition of Schedule 8(e) to the Loan Agreement. Effective
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as of the Amendment Date, Schedule 8(e) is hereby added to the Loan Agreement in
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its entirety to read as set forth in Exhibit B attached hereto.
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ARTICLE 4.
Amendments to Security Agreement
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Section 4.1. Amendment to the Introductory Paragraph of the Security
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Agreement. Effective as of the Amendment Date, the introductory paragraph of
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the Security Agreement is hereby amended and restated in its entirety to read as
follows:
THIS SECURITY AGREEMENT ("Agreement") is made as of the 8th day of
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March, 1996, by RF Monolithics, Inc. (hereinafter called "Debtor"), in
favor of BANK ONE, TEXAS, NATIONAL ASSOCIATION, acting in its capacity as
agent for itself and Banc One Leasing Corporation ("BOLC") (Bank One,
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Texas, National Association and its successors and assigns being referred
to hereinafter as "Secured Party"). Debtor hereby agrees with Secured
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Party as follows:
Section 4.2. Amendment to Paragraph 1 of the Security Agreement.
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Effective as of the Amendment Date, paragraph 1 of the Security Agreement is
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hereby amended as follows:
(a) clause (iii) of paragraph 1(c) of the Security Agreement is hereby
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amended and restated in its entirety to read as follows:
(iii) All equipment of whatsoever kind and character used or usable
in Borrower's business, together with all replacements, accessories,
additions, substitutions, and accessions to all of the foregoing, all
records relating in any way to all of the foregoing (including, without
limitation, any computer software, whether on tape, disk,
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 8
card, strip, or cartridge or any other form), and all PROCEEDS thereof,
including insurance payable by reason of loss or damage to such property.
(b) paragraph 1(d) of the Security Agreement is hereby amended and
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restated in its entirety to read as follows:
(d) The term "Indebtedness" shall mean (i) all indebtedness,
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obligations, and liabilities of Debtor to the Creditors (as hereinafter
defined) (including, without limitation, all indebtedness, liabilities, and
obligations of Debtor to Bank pursuant to the Loan Documents and of Debtor
to BOLC pursuant to that certain Master Lease Agreement dated as of
November 3, 1995 between Debtor and BOLC) of any kind or character, now
existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or
joint and several, and regardless of whether such indebtedness,
liabilities, and obligations may, prior to their acquisition by the
Creditors, be or have been payable to or in favor of a third party and
subsequently acquired by the Creditors (it being contemplated that the
Creditors may make such acquisitions from third parties), including,
without limitation, all indebtedness, liabilities, and obligations of
Borrower to any Creditor now existing or hereafter arising by note, draft,
acceptance, guaranty, endorsement, letter of credit, assignment, purchase,
overdraft, discount, indemnity agreement, lease agreement, or otherwise,
(ii) all accrued but unpaid interest on any of the indebtedness,
liabilities, and obligations described in clause (i) preceding, (iii) all
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indebtedness, liabilities, and obligations described in clauses (i) and
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(ii) preceding, (iv) all costs and expenses incurred by Secured Party in
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connection with the collection and administration of all or any part of the
indebtedness, liabilities, and obligations described in clauses (i), (ii),
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and (iii) preceding or the protection or preservation of, or realization
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upon, the collateral securing all or any part of such indebtedness,
liabilities, and obligations, including, without limitation, all reasonable
attorneys' fees, and (v) all renewals, extensions, modifications, and
rearrangements of the indebtedness, liabilities, and obligations described
in clauses (i), (ii), (iii), and (iv) preceding.
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(c) paragraph 1(e) of the Security Agreement is hereby amended and
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restated in its entirety to read as follows:
(e) The term "Loan Documents" shall mean the certain Letter Loan
Agreement of even date herewith, as such agreement may be amended,
restated, or otherwise modified, between Borrower and Secured Party (the
"Loan Agreement") and all instruments and documents evidencing, securing,
governing, and/or pertaining to the Indebtedness.
(d) paragraph 1(f) of the Security Agreement is hereby amended and
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restated in its entirety to read as follows:
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 9
(f) The term "Obligated Party" shall mean any party other than Debtor
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who secures, guarantees, and/or is otherwise obligated to pay all or any
portion of the Indebtedness.
(e) paragraph 1(g) of the Security Agreement is hereby amended and
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restated in its entirety to read as follows:
(g) The term "Bank" shall mean Bank One, Texas, National Association,
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acting in its individual capacity, its successors and assigns, including,
without limitation, any party to whom Bank, or its successors and assigns
may assign its rights and interests under this Agreement.
(f) paragraph 1(h) is hereby added to the Security Agreement and shall
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read in its entirety as follows:
(h) The term "Creditor" shall mean each of Bank One, Texas, National
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Association, Banc One Leasing Corporation, and their respective successors
and assigns, and "Creditors" means all of such entities, collectively.
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Section 4.3. Amendment to Paragraph 2 of the Security Agreement.
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Effective as of the Amendment Date, paragraph 2 of the Security Agreement is
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hereby amended and restated in its entirety to read as follows:
2. Security Interest. As security for the Indebtedness, Debtor hereby
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grants to Secured Party, for the benefit of the Creditors, a continuing
security interest in the Collateral.
Section 4.4. Amendment to Paragraph 4(a) of the Security Agreement.
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Effective as of the Amendment Date, the third sentence of paragraph 4(a) of the
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Security Agreement is hereby amended and restated in its entirety to read as
follows:
Debtor will cause any financing statement or other security instrument
with respect to the Collateral to be terminated, except as may exist or as
may have been filed in favor of Secured Party, Bank, or BOLC.
Section 4.5. Amendment to Paragraph 7(a) of the Security Agreement.
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Effective as of the Amendment Date, paragraph 7(a) of the Security Agreement is
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hereby amended by amending the term "Borrower" contained therein to read
"Debtor".
Section 4.6. Amendment to Paragraph 7(b) of the Security Agreement.
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Effective as of the Amendment Date, paragraph 7(b) of the Security Agreement is
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hereby amended and restated in its entirety to read as follows:
(b) Default Under Other Loan Documents and Master Lease. The
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occurrence of an event of default under any of the
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 10
Loan Documents or under the Master Lease Agreement referred to in
clause (i) of the definition of Indebtedness; or
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Section 4.7. Amendment to Paragraph 8(b) of the Security Agreement.
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Effective as of the Amendment Date, paragraph 8(b) of the Security Agreement is
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hereby amended by adding thereto, the following sentence at the end of such
paragraph.
Notwithstanding any other provision of this Agreement, unless Bank consents
otherwise, in the event the Secured Party applies the proceeds of any
Collateral to payment of the Indebtedness, all of the Indebtedness owing to
Bank shall be paid in full before any of such proceeds may be applied to
any of the Indebtedness owing to BOLC.
Section 4.8. Amendment to Paragraph 8(c) of the Security Agreement.
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Effective as of the Amendment Date, the phrase "...to pay all amounts to which
Secured Party is...." contained in paragraph 8(c) of the Security Agreement is
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hereby amended and restated to read "...to pay all amounts to which Secured
Party or any Creditor is...."
Section 4.9A. Amendment to Paragraph 9 of the Security Agreement.
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Effective as of the Amendment Date, the phrase "Secured Party, and its officers,
directors, employees, agents and representatives (each an "Indemnified Person")"
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contained in the first sentence of paragraph 9 of the Security Agreement is
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hereby amended and restated to read "Secured Party, each Creditor, and their
respective officers, directors, employees, agents, and representatives (each an
"Indemnified Person")".
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Section 4.10. Addition of Paragraph 11 of the Security Agreement.
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Effective as of the Amendment Date, a new paragraph 11 is hereby added to the
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Security Agreement which shall read in its entirety as follows:
10. Appointment and Acceptance of Agency and Duties. The Creditors
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hereby appoint Secured Party to act as their agent to serve as the secured
party on their behalf under this Agreement and any other agreement
providing or pertaining to collateral provided by Debtor or any other
person or entity as security for the Indebtedness. Secured Party accepts
the agency hereby created and agrees to perform the duties herein required
of Secured Party, and to exercise the rights, powers, and privileges herein
conferred upon Secured Party as agent, upon and subject to the terms and
conditions hereof, and agrees to hold its interest in, and to receive and
disburse proceeds of, the Collateral, and any other property held as
collateral security for the Indebtedness, but only upon the terms of this
Agreement. Notwithstanding the foregoing, under no circumstances shall
Secured Party be liable in its individual capacity for any of the
obligations of Debtor evidenced by or arising under any other agreement
between Secured Party and Debtor or any Creditor and Debtor.
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 11
ARTICLE 5.
Conditions
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Section 5.1. Items to be Delivered By Borrower. The effectiveness of this
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Amendment is subject to Borrower's delivery to Bank of each of the following
items prior to or simultaneously with execution and delivery of this Amendment:
(a) Amendment Documents. Each other agreement, certificate, document,
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or instrument required by Bank or BOLC (including, without limitation, an
amendment to the Lease Agreements) to be executed or delivered by Borrower
or any other party in connection with this Amendment or the transactions
contemplated in connection herewith (the "Amendment Documents"), duly
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executed or delivered by the parties thereto; and
(b) Amendment Fee. Payment to Bank of a fee of $2,000 in respect of
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the amendments contained herein.
Section 5.2. Other Conditions. This Amendment shall become effective upon
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the following conditions precedent being performed to Bank's and BOLC's
satisfaction. Borrower's failure to comply with the following conditions shall
be an Event of Default under the Loan Agreement:
(a) Continued Effect of Representations and Warranties. All
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representations and warranties contained in the Loan Documents (as amended
hereby) shall be true, correct, and complete in all material respects (as
determined by Bank in its sole discretion) except as disclosed otherwise to
Bank in writing and as acceptable to Bank or representations specifically
relating to a prior date or no longer relevant due to the occurrence of an
event or circumstances specifically permitted hereunder or by any other
Loan Document;
(b) Absence of Default. No Default or Event of Default shall have
------------------
occurred and be continuing (after giving effect to this Amendment);
(c) Corporate Proceedings. All corporate proceedings taken in
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connection with the transactions contemplated by this Amendment and all
other agreements, documents, and instruments executed and/or delivered
pursuant hereto, and all legal matters incident thereto, shall be
satisfactory to Bank and its legal counsel;
(d) Fees and Expenses. Payment or reimbursement to Bank for all
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expenses, costs, and fees (including, without limitation, fees and costs of
Bank's legal counsel and fees and costs associated with Bank's field
examination of Borrower and appraisals of Borrower's equipment) incurred
by, or due to, Bank in connection with negotiating and documenting this
Amendment and the other Amendment Documents to the extent invoiced or
otherwise billed by Bank to Borrower;
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 12
(e) Additional Information. Bank and BOLC shall have received such
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additional agreements, certificates, documents, instruments, and
information as Bank, BOLC, or their respective legal counsel may request to
effect the transactions contemplated hereby.
Section 5.3. Other Agreements. In addition to the conditions set forth in
----------------
Section 5.1 and Section 5.2 of this Amendment, Borrower agrees as follows:
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(a) On or before March 31, 2000, at Borrower's cost not in excess of
$19,500, Borrower will provide Bank with an appraisal of all of Borrower's
equipment in form acceptable to Bank and performed by an appraiser
acceptable to Bank.
(b) Within thirty (30) days of the Amendment Date, Borrower will
provide to Secured Party a landlord waiver or subordination agreement, in
form acceptable to Secured Party executed and delivered by each landlord of
any premises where any Collateral is located.
Borrower agrees that failure to comply with the terms of this Section 5.3 shall
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constitute an Event of Default under the Loan Agreement.
ARTICLE 6.
Representations and Warranties
------------------------------
Section 6.1. Representations and Warranties. Borrower hereby represents
------------------------------
and warrants to Bank, BOLC, and Secured Party that, as of the date of and after
giving effect to this Amendment:
(a) the execution, delivery, and performance of this Amendment and any
and all other Amendment Documents executed and/or delivered in connection
herewith have been authorized by all requisite action on the part of
Borrower and will not violate Borrower's certificate of incorporation,
bylaws, or other similar constituent documents;
(b) except as set forth in Exhibit C hereto, all representations and
---------
warranties set forth in the Loan Agreement, the other Loan Documents, and
the Lease Agreements are true and correct in all material respects as if
made again on and as of such date (except as disclosed otherwise to Bank
and BOLC in writing and as acceptable to Bank and BOLC or representations
specifically relating to a prior date or no longer relevant due to the
occurrence of an event or circumstances specifically permitted hereunder,
by any other Loan Document, or the Lease Agreements);
(c) no Default or Event of Default has occurred and is continuing; and
(d) the Loan Agreement and the other Loan Documents (as amended by
this Amendment) are and remain legal, valid, binding, and enforceable
obligations of each of the parties thereto.
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 13
ARTICLE 7.
Miscellaneous
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Section 7.1. The waiver specifically described in Section 2.1 of this
-----------
Amendment shall not constitute and shall not be deemed a waiver of any other
Default or Event of Default, whether arising as a result of the further
violation of the Violated Covenants, additional default under the Lease
Agreements, or otherwise, or a waiver of any rights or remedies arising as a
result of such other Defaults or Events of Default.
Section 7.2. Governing Law. THIS AMENDMENT, AND ALL DOCUMENTS AND
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INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAWS OF THE STATE OF TEXAS.
Section 7.3. Agreement Remains in Effect; No Waiver. Except as expressly
--------------------------------------
provided herein, all terms and provisions of the Loan Agreement, the other Loan
Documents, and the Lease Agreements shall remain unchanged and in full force and
effect and are hereby ratified and confirmed. No delay or omission by Bank,
BOLC, or Secured Party in exercising any power, right, or remedy shall impair
such power, right, or remedy or be construed as a waiver thereof or an
acquiescence therein, and no single or partial exercise of any such power,
right, or remedy shall preclude other or further exercise thereof or the
exercise of any other power, right, or remedy under the Loan Agreement, the
other Loan Documents, the Lease Agreements, or otherwise.
Section 7.4. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made in this Amendment, any other Loan Document,
or the Lease Agreements shall survive the execution and delivery of this
Amendment and the other Loan Documents, and no investigation by Bank or BOLC or
any closing shall affect the representations and warranties or the right of Bank
or BOLC to rely upon them.
Section 7.5. Reference to Loan Documents. Each of the Loan Documents,
---------------------------
including, without limitation, the Loan Agreement, the Amendment Documents, and
any and all other agreements, documents, or instruments now or hereafter
executed and/or delivered pursuant to the terms hereof or pursuant to the terms
of the Loan Agreement as amended hereby, are hereby amended so that any
reference in such Loan Documents to the Loan Agreement shall mean a reference to
the Loan Agreement as amended hereby, and the term Loan Documents as defined in
the Loan Agreement and as used in any of the "Loan Documents" includes, without
limitation, the Amendment Documents.
Section 7.6. 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 7.7. Successors and Assigns. This Amendment is binding upon and
----------------------
shall inure to the benefit of Borrower, Bank, BOLC, and Secured Party and their
respective successors in
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 14
interest and assigns. Borrower may not assign any right, power, duty, or
obligation hereunder without the prior written consent of Bank, BOLC, and
Secured Party.
Section 7.8. Headings. The headings, captions, and arrangements used in
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this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 7.9. Expenses of Bank. As provided in the Loan Agreement,
----------------
Borrower agrees to pay on demand all, third party out-of-pocket costs and
expenses incurred by Bank in connection with the preparation, negotiation, and
execution of this Amendment, the Amendment Documents, or any other Loan
Documents executed pursuant hereto and any and all amendments, modifications,
and supplements thereto (including, without limitation, fees and costs of Bank's
legal counsel and fees and costs associated with Bank's field examination of
Borrower and appraisals of Borrower's equipment) and all costs and expenses
incurred by Bank in connection with the enforcement or preservation of any
rights under the Loan Agreement, as amended hereby, or any other Loan Document,
including, without limitation, the costs and fees of Bank's legal counsel.
Section 7.10. Counterparts. This Amendment may be executed simultaneously
------------
in one or more multiple originals and on telecopy counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.
Section 7.11. Waiver of Claims and Defenses. To induce Bank, BOLC, and
-----------------------------
Secured Party to enter into this Amendment, Borrower represents and warrants
that as of the Amendment Date there are no claims or offsets against or defenses
or counterclaims to Borrower's obligations under the Loan Documents or the Lease
Agreements, and Borrower waives any and all such claims, offsets, defenses, or
counterclaims whether known or unknown, arising prior to the Amendment Date.
Additionally, Borrower hereby releases Bank, BOLC, and Secured Party and each of
their respective legal representatives, successors, affiliates, parent,
subsidiaries, predecessors, assigns, shareholders, partners, trustees,
beneficiaries, administrators, heirs, former and current officers, directors,
agents, attorneys, and employees, and its respective successors, assigns, heirs,
executors, and administrators (collectively, the "Creditor Parties") from any
----------------
and all claims, actions, suits, causes of action, accounts, judgments,
agreements, promises, executions, debts, damages, demands, rights, obligations,
liabilities, and controversies now in existence concerning or in connection with
the Loan Agreement, this Amendment, any other Loan Document, or the Lease
Agreements (collectively, the "Claims") of every nature and description, in law
------
or in equity, whether known or unknown, foreseen or unforseen, and regardless of
whether Borrower hereafter discovers any facts which may give rise to any Claim.
THIS AMENDMENT, TOGETHER WITH THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THE LEASE AGREEMENTS, AS WRITTEN, 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 AGREEMENTS BETWEEN THE PARTIES.
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 15
IN WITNESS WHEREOF, Borrower, Bank, BOLC, and Secured Party have caused
this Amendment to be executed and delivered by their duly authorized officers
effective as of the date first written above.
BORROWER:
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RF MONOLITHICS, INC.
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
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Title: President & CEO
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BANK:
----
BANK ONE, TEXAS, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
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Title: VP
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BOLC:
----
BANC ONE LEASING CORPORATION
By: /s/ Xxxxxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxxxxx X. Xxxxxxxx
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Title: Assistant Vice President
-----------------------------
SECURED PARTY:
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BANK ONE, TEXAS, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
------------------------------
Title: VP
-----------------------------
WAIVER AND THIRD AMENDMENT TO LETTER LOAN AGREEMENT - Page 16
