EXHIBIT 10(F)
[Letterhead of AmSouth Bank]
April 1, 2002
Xxxxxx Industries, Inc.
Attention: Xx. Xxxxx X. Xxxxxx
Vice President and Chief Financial Officer
X.X. Xxx 000
Xxxxxxxx, Xxxxxxx 00000
Re: Line of Credit (Account #120435-524769); Loan Agreement dated January
7, 1993, as amended April 5, 1994, February 17, 1995, March 15, 1995,
March 28, 1996, August 28, 1997, January 1, 2000, December 29, 2000,
January 31, 2001, March 15, 2001, May 15, 2001, June 15, 2001,
September 1, 2001, October 15, 2001, October 31, 2001, November 9,
2001, November 19, 2001, November 26, 2001, December 19, 2001 and
January 11, 2002 (collectively "Loan Agreement") by and among Xxxxxx
Industries, Inc. ("Xxxxxx Industries") and AmSouth Bank ("the Bank").
In this letter capitalized terms shall be given the meanings indicated
in the Loan Agreement and/or in this letter.
Dear Xx. Xxxxxx:
I am writing this letter to you concerning the indebtedness ("Indebtedness")
referenced above of Xxxxxx Industries to the Bank and your recent request that
the Loan Agreement be amended to effect an extension of the Line of Credit
Termination Date. You have also requested a waiver of certain covenants included
in the Loan Agreement.
In response to your requests, the Bank hereby amends the Loan Agreement as
follows:
A. The definition of "Line of Credit Termination Date" in Section
1.02 is amended as follows:
LINE OF CREDIT TERMINATION DATE shall mean the earlier to
occur of (a) the date on which an Event of Default occurs or
(b) July 1, 2002 (or such later termination date as the
Borrower and the Lender hereafter agree on in a written
extension agreement pursuant to Section 3).
Effective as of April 1, 2002, all references in the Loan Documents to the "Loan
Agreement" shall mean the Loan Agreement, as heretofore modified and amended and
as further modified and amended hereby.
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In all other respects, the Loan Agreement shall remain in full force and effect
in accordance with its terms.
In addition to the foregoing, the Bank waives any default or Event of Default
arising out of the Borrower's failure to comply with Sections 8.09, 8.11, 8.12,
8.13 and 8.20 of the Loan Agreement with respect to the fiscal periods ended
through March 31, 2002.
We are also aware that Xxxxxx Industries is in discussions to obtain financing
in an amount of up to $2.0 million from M-TIN, LLC (the "M-TIN Loan"). We
understand that the indebtedness will be secured by a first mortgage in favor of
M-TIN, LLC on Xxxxxx Industries' real property located in the Alabama counties
of Colbert, Limestone and Lauderdale (the "Properties"). We acknowledge and
consent to Xxxxxx Industries obtaining the M-TIN Loan and waive the covenants
contained in Sections 8.02 and 8.03 of the Loan Agreement dated January 7, 1993,
as amended, with respect to the proposed transaction with M-TIN, LLC. We also
waive with respect to the M-TIN Loan the agreement contained in our letter to
Xxxxxx Industries dated October 22, 2001, which requires that one half of the
proceeds of any loan obtained by Xxxxxx Industries which is secured by the
Properties be paid to AmSouth Bank to reduce the Company's line of credit.
In addition, the Bank agrees that the payment of the fee in the amount of One
Hundred Thousand and No/100 Dollars ($100,000) due to be paid to the Bank by
Xxxxxx Industries on April 1, 2002 (the "Maturity Fee"), is extended to July 1,
2002; provided, however, that if Xxxxxx Industries pays in full all amounts
outstanding under the Line of Credit Note on or before April 30, 2002, Xxxxxx
Industries shall not be obligated to pay the Maturity Fee; and, provided
further, that if Xxxxxx Industries pays in full all amounts outstanding under
the Line of Credit Note following April 30, 2002, but on or before May 31, 2002,
Xxxxxx Industries shall be obligated to pay only one-half of the Maturity Fee
($50,000.00).
To evidence the acceptance of the foregoing amendments and agreements on the
terms and conditions set forth herein, please sign and return to me the enclosed
copy of this letter agreement. By so signing the enclosed copy of this letter
agreement, Xxxxxx Industries acknowledges and agrees to the following terms and
conditions of such amendments and agreements:
1. This letter agreement shall not be deemed to be an accord and
satisfaction of the Indebtedness or any other obligation owed to the
Bank.
2. All collateral that now secures all or any of the Indebtedness shall
continue to secure same. Nothing in this letter agreement diminishes
any security interest or lien that the Bank has in any assets securing
the Indebtedness. All of the collateral, rights, security, and
guarantees that the Bank now has to secure any of the Indebtedness due
from Xxxxxx Industries shall remain in full force and effect and are
hereby ratified and confirmed.
3. The Bank reserves all of its rights and remedies under the Loan
Agreement, the Security Documents, any other Loan Documents, and/or
applicable law, in respect of any Event(s) of
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Default. The current non-exercise by the Bank of any rights and
remedies which it may have shall not constitute a release or waiver of
any of its rights and/or remedies or a release or waiver of any
Event(s) of Default under the Loan Agreement, the Security Documents,
or any other Loan Documents, except for the Waiver provided in this
letter agreement. The Bank specifically reserves the right to invoke
any and all rights and remedies at any time in its sole discretion.
4. Xxxxxx Industries hereby releases, satisfies, cancels, waives, acquits,
and forever discharges the Bank, its directors, officers, employees,
agents, attorneys, successors and assigns, of and from any and all
claims, demands, actions, or causes of action of any kind or character,
arising at any time in the past, up to and including the date of this
letter agreement, which relate or pertain in any way to the
Indebtedness and/or collection of them.
5. The Indebtedness is owed by Xxxxxx Industries to the Bank for the
amount (exclusive of outstanding letters of credit, ACH exposures and
the Bank's attorneys fees) herein stated and there are no defenses,
setoffs, or counterclaims with respect thereto:
Payoff as of
General Description Obligation No. 4/1/02
------------------------------------- --------------------------- --------------------------
Line of Credit #524769 $5,705,956.37
6. Xxxxxx Industries agrees to pay the Indebtedness strictly and promptly
in accordance with the terms of the applicable promissory notes or
other debt instruments, as specifically modified by the Loan Agreement
and this letter agreement.
7. Xxxxxx Industries shall pay to the Bank a fee in the total amount of
Ten Thousand and No/100 Dollars ($10,000.00), $5,000 of which (the
"Closing Fee") shall be payable upon the execution of this letter
agreement and $5,000 of which shall be payable on April 30, 2002.
Subject to the terms and conditions otherwise applicable to the making
of Advances under the Loan Agreement, Xxxxxx Industries may request and
receive an Advance to pay the Closing Fee.
8. In the event Xxxxxx Industries does not pay in full all amounts
outstanding under the Line of Credit on or before June 30, 2002, Xxxxxx
Industries will issue to the Bank warrants to purchase common stock in
Xxxxxx Industries equal to ten percent (10%) of the outstanding shares
of Xxxxxx Industries for a per share purchase price to be agreed upon
by the Bank and Xxxxxx Industries. Xxxxxx Industries and the Bank agree
to negotiate in good faith and establish the per share purchase price
on or before April 5, 2002. The failure by the parties to establish the
per share purchase price by April 5, 2002, shall constitute an Event of
Default under the Loan Agreement.
9. Xxxxxx Industries agrees to grant to the Bank a mortgage in the
Properties (the "Second Mortgage"), subject to the first priority
mortgage in favor of M-TIN, LLC. The Second
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Mortgage shall be subordinate to the mortgage in favor of M-TIN, LLC
securing only the M-TIN Loan and shall further provide that it shall
also be subordinated to any financing obtained by Xxxxxx Industries
which replaces the M-TIN Loan, provided such substitute financing does
not exceed $2 million. The Bank will be subordinated to the amount of
any such replacement financing in an amount which is the lesser of (i)
the amount outstanding on the M-TIN Loan at the time of the replacement
financing, or (ii) $2 million. Further, in the event Xxxxxx Industries
obtains replacement financing which is secured by the Properties and is
in excess of $2 million, Xxxxxx Industries shall pay to the Bank one
half of the amount received in excess of $2 million to reduce the
Indebtedness. Xxxxxx Industries and the Bank will enter into
documentation deemed necessary by the parties to effect the Second
Mortgage on or before April 5, 2002.
10. Xxxxxx Industries agrees to pay to the Bank's counsel, Xxxxxx, Xxx &
Xxxx, P.A., on or before April 30, 2002, all of its attorney's fees
incurred in connection with this amendment, the Second Mortgage and/or
the collection of the Indebtedness.
Very truly yours,
/s/ XXXXXXX XXXXXXXX
Xxxxxxx Xxxxxxxx
Vice President
cc: Xxxxxx X. Xxxxxxxx III, Esq.
S. Dagnal Xxxx, Esq.
ACCEPTED AND AGREED TO BY:
XXXXXX INDUSTRIES, INC.
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Its Vice President and Chief Financial Officer
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