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EXHIBIT 4.0
AS OF JUNE 8, 2001 (THE "REPLACEMENT DATE"), THIS MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS SUPERSEDES AND REPLACES IN ITS ENTIRETY THAT CERTAIN
MODIFICATION AGREEMENT AND AMENDMENT TO LOAN DOCUMENTS EXECUTED BY BORROWER AND
BANK ON JULY 19, 2000 (THE "FORMER MODIFICATION"). THE FORMER MODIFICATION SHALL
BE OF NO FORCE OR EFFECT AS OF THE REPLACEMENT DATE.
MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS
THIS MODIFICATION AGREEMENT AND AMENDMENT TO LOAN DOCUMENTS is being
entered into as of the 8th day of June, 2001 by and between COMPASS BANK, a
state banking corporation ("Bank") and OPTIMATION, INC., an Alabama corporation
("Borrower").
PREAMBLE
On July 9, 1999, Bank and Borrower executed that certain Revolving
Credit and Security Agreement (the "Agreement"), Revolving Credit Commercial
Note in the principal amount of SIX HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS
($650,000.00) (the "Note"), and other Loan Documents, providing for a line of
credit in the maximum aggregate amount of SIX HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($650,000.00) (the "Revolving Line"). The Borrower has requested and the
Bank has agreed to, among other things, (i) decrease the aggregate principal
amount available under the Revolving Line to SIX HUNDRED TWENTY THOUSAND AND
NO/100 DOLLARS ($620,000.00), (ii) extend the due date to November 1, 2001, and
(iii) modify certain covenants.
Accordingly, the Bank and Borrower have agreed that the Revolving Line
shall be modified and that the documents and instruments evidencing, securing,
relating to, guaranteeing, or executed or delivered in connection with the
Revolving Line (collectively the "Loan Documents") shall be amended as set forth
below.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the mutual agreements
of the parties as set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
to induce the Bank to modify the Revolving Line, the parties, intending to be
legally bound hereby, agree as follows:
1. AMENDMENT OF LOAN AGREEMENT. The Loan Agreement shall be and the
same hereby is amended as follows:
(A) The first paragraph of Page 1 shall be deleted in its entirety
and in place thereof shall be substituted:
"This Revolving Credit and Security Agreement (the
"Agreement") is executed and delivered this 9th day of July,
1999 by and between OPTIMATION, INC., an Alabama corporation
("Borrower"), with its chief executive office and its
principal place of business at 0000 Xxx Xxxxxxx Xxxxxx, Xxxxx
X-0, Xxxxxxxxxx, Xxxxxxx 00000, and COMPASS BANK, an Alabama
banking corporation ("Bank"), with its principal offices at
000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000. Borrower has
applied to Bank for a revolving line of credit not to exceed
an aggregate principal amount at any one time outstanding the
sum of Six Hundred Twenty Thousand and No/100 Dollars
($620,000.00) to be evidenced by a Revolving Credit Commercial
Note (the "Note") in such amount, and to be secured by a
security interest in all of the Collateral (as defined herein)
now owned or hereafter acquired by Borrower on the terms
hereinafter set forth."
(B) Section 1.10 shall be deleted in its entirety and in place
thereof shall be substituted:
""Loan Documents" shall mean and include the Note, this
Agreement and any other agreement, document or instrument now
or hereafter evidencing, securing, guaranteeing (including,
without limitation, Continuing Limited Guaranty executed in
connection herewith by Xxxxxx and Xxxxxx Xxxxx (up to
$166,250.00) and Continuing Unlimited
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Guaranty executed in connection herewith by Nematron
Corporation (such individuals and entities are jointly and
severally included within the term "guarantor" as the same is
used in this Agreement)) or relating to the Revolving Line or
any other Liability, obligation or indebtedness of Borrower to
Bank, as the same may be amended."
(C) Section 3.1 shall be deleted in its entirety and in place
thereof shall be substituted:
"From the date hereof until November 1, 2001, or such future
date to which the expiration date of the Revolving Line may be
extended, subject to the terms and conditions of this
Agreement and Borrower's and all guarantor's performance of
and compliance with each of the Loan Documents, and so long as
no event of default hereunder or under any of the other Loan
Documents shall have occurred or be continuing, Bank agrees to
extend to Borrower an open-end credit line on the basis of the
following advance formula (such advance formula being
hereinafter referred to as the "Borrowing Base"): eighty
percent (80%) of the value of Borrower's Eligible Accounts
Receivable, not to exceed $620,000.00 at any one time
outstanding, plus fifty percent (50%) of the value of
Borrower's Eligible Inventory, not to exceed $350,000.00 at
any one time, and provided that in no event shall the
aggregate sum of all advances made by Bank to Borrower at any
one time outstanding hereunder exceed the sum of $620,000.00.
Within such limits and subject to the terms of this Agreement,
Borrower may borrow, repay without penalty or premium, and
re-borrow hereunder, from the date of this Agreement until the
Maturity Date. It is expressly understood and agreed that Bank
shall have no obligation to make an advance under the
Revolving Line if the amount of such advance together with the
amount outstanding under the Revolving Line exceeds or would
exceed the lesser of (i) $620,000.00 or (ii) the Borrowing
Base."
(D) Section 3.3 is hereby amended by deleting the amount
"$650,000.00" and substituting in place thereof the amount
"$620,000.00".
(E) Section 7.1 (iii) shall be deleted in its entirety and in
place thereof shall be substituted: "annual personal financial
statements of Xxxxxx and Xxxxxx Xxxxx and quarterly internally
prepared financial statements from Nematron Corporation".
(F) Section 7.4 shall be deleted in its entirety and in place
thereof shall be substituted:
"Borrower shall maintain a minimum Tangible Net Worth of not
less than $850,000."
(G) Section 14 is hereby amended by deleting the date "June 1,
2000" and substituting in place thereof "November 1, 2001".
2. EFFECT ON LOAN DOCUMENTS. Each of the Loan Documents shall be deemed
amended as set forth herein to the extent necessary to carry out the intent of
this Agreement; provided, however, all terms, conditions, representations,
warranties and agreements contained in each of the Loan Documents not amended by
this Agreement shall remain in full force and effect and are hereby reaffirmed.
IN WITNESS WHEREOF, the parties have caused this Agreement to be fully
executed as of the date first set forth above.
BORROWER:
Attest: OPTIMATION, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
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Its: Secretary Its: President
BANK:
Witness: COMPASS BANK
/s/ Xxxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxxxx
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Its: Senior Vice President
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