FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND, SECURITY AGREEMENT (this "Amendment") is
made as of the 3rd day of September, 1998 by and among XXXXXXXX TECHNOLOGIES OF
MINNESOTA, INC. ("GTM"), a Minnesota corporation with its principal place of
business at 00000 Xxxxxxx Xxx., Xxxxxx, Xxxxxxxxx 00000, XXXXXXXX TECHNOLOGIES
OF GEORGIA, INC. ("GTG"), a Georgia corporation with its principal place of
business at 000 Xxxxxxx Xxx., Xxxxxxx, Xxxxxxx 00000 (collectively referred to
herein as "Borrower"), XXXXXXXX TECHNOLOGIES, INC., a Delaware corporation
("GTI"), XXXXXXXX ACQUISITION CORP., a Delaware corporation ("GAC"), XXXXXX
XXXXX ("XXXXX"), XXXXXXX XXXXXXX ("XXXXXXX") and XXXXXX XXXXXXXX ("XXXXXXXX")
(GTI, GAC, Xxxxx, Xxxxxxx and Xxxxxxxx being collectively referred to herein as
"Guarantors") and XXXXXX FINANCIAL, INC., a Delaware corporation, with offices
at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Lender").
RECITALS:
A. Pursuant to the terms and conditions of that certain Loan and Security
Agreement dated as of January 29, 1998 (the "Loan Agreement"), Lender made the
following Loan to Borrowers:
(i) A Revolving Loan, in the Maximum Revolving Loan Amount of the lesser
of (a) 85% of the aggregate (for both Borrowers combined), outstanding
amount of Eligible Accounts; or (b) $1,700,000.00 (the "Revolving Loan");
and
(ii) A Term Loan in an amount equal to the lesser of (a) 80% of the
aggregate (for both Borrowers combined), forced liquidation value of
Borrower's Equipment, or (b) $1,900,000.00, as evidenced by a Term Note
dated as of January 29, 1998 (the "Equipment Note"); and
(iii) A Term Loan in an amount equal to the lesser of (a) 50% of the
aggregate fair market value of either both borrowers' interest in the Real
Property, or (b) $1,400,00.00, as evidenced by a Term Note dated as of
January 29, 1998 (the "Real Property Note").
B. The Revolving Loan, Equipment Note and Real Property Note me secured by
the Agreement granting Lender a security interest in certain "Collateral", as
more particularly described therein, a Multi-State Mortgage, Assignment of Rents
and Security Agreement encumbering certain real property located in Xxxxx
County, Minnesota (the "Minnesota Mortgage"), a Deed to Secure Debt, Assignment
of Rents and Security Agreement encumbering certain real property located in
Butts County, Georgia, (the "Georgia Mortgage") and certain Guaranties of
Payment dated as of January 29, 1998, executed by each of the Guarantors in
favor of Lender (the "Guaranties"). The Agreement, Equipment Note, Real Property
Note, Minnesota Mortgage, Georgia Mortgage, the Guaranties and all other
documents now or hereafter executed by the Borrowers or the Guarantors to
evidence or secure the Loans are sometimes collectively referred to herein as
the "Loan Documents".
C. Borrowers desire to acquire certain assets (the "New Assets") from
United Waste Service, Inc. ("United") pursuant to the terms and provisions of an
Asset Purchase Agreement
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dated September 4, 1998 (the "Asset Purchase Agreement") and to finance the
acquisition with a Term Loan from Lender secured by the Collateral in accordance
with the Agreement. Lender desires to make the new Term Loan to Borrowers for
the acquisition of the New Assets, and to modify certain covenants and
provisions of the Agreement.
D. Borrowers and Lender desire to modify the terms and provisions of the
Loan Documents as hereinafter provided. The Guarantors desire to join in the
execution of this Amendment to acknowledge their consent to the modifications
set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration in hand paid, the receipt and sufficiency of which is
hereby acknowledged, Lender, Borrowers and Guarantors agree as follows:
1. Any term defined in the "Loan Documents" (as such term is herein
defined) and used in this Amendment shall have the same meaning as assigned to
such term in the Loan Documents.
2. Contemporaneously with the execution of this Agreement and as a
condition to Lender's obligation to advance a new $850,000 Term Loan (the
"Additional Term Loan") to be used for the acquisition of the New Assets,
Borrowers shall cause each of the following conditions to be satisfied:
(a) The Borrowers shall execute and deliver to Lender a Promissory
Note-Equipment dated as of September 3, 1998 in the amount of $850,000.00 (the
"Additional Term Loan Note").
(b) The Borrowers shall cause United to execute and deliver to Lender a
Landlord Waiver in form and substance satisfactory to Lender.
(c) The Borrowers shall, execute and deliver to Lender such UCC statements
and other documents as Lender may require to grant and perfect the Lender's
security interest in the New Assets. Upon receipt thereof, the New Assets shall
become a part of the Collateral securing the Loans, including the Additional
Term Loan.
(d) The Borrowers shall cause the following documents to be delivered to
Lender:
(i) Certified copy of the Articles of Incorporation of GTG;
(ii) Certificate of Good Standing of GTG;
(iii) Certified resolution of GTG authorizing execution of this
Amendment;
(iv) Certified copy of the Certificate of Incorporation of GTM;
(v) Certificate of Good Standing of GTM;
(vi) Certified resolution of GTM authorizing the execution of
this Amendment;
(vii) Certified copy of the Articles of Incorporation of GAC;
(viii) Certificate of Good Standing of GAC;
(ix) Certified resolution of GAC authorizing the acquisition of
the New Assets and execution of this Amendment;
(x) Certified copy of the Certificate of Incorporation of GTI;
(xi) Certificate of Good Standing of GTI;
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(xii) Certified resolution of GTI authorizing the execution of this
Amendment; and
(xiii) An opinion letter of Borrowers' counsel, in form and
substance satisfactory to Lender.
Upon satisfaction of all of the foregoing conditions and notification by
Xxxx Xxxxxxxx of Borrowers that Borrowers are prepared to close the acquisition
of the New Assets, Lender shall, and is hereby directed to disburse the
Additional Term Loan by wire transfer to NationsBank, Dallas, Texas, ABA No.
000000000 for deposit to the account of Republic Services, Inc., Account Number
3751040219.
3. Effective as of the date hereof, the Agreement is hereby modified in
the following respects:
(a) The "Maximum Revolving Loan Amount" as defined in Section 2.1 of
the Agreement is defined as and shall hereafter mean the lesser of (i) 85% of
the aggregate (for both Borrowers combined) outstanding amount of Eligible
Accounts; or (ii) $1,079,000.00.
(b) Borrowers shall cause to be prepared and delivered to Lender an
updated appraisal of all of the Equipment, including the New Assets, in form and
substance satisfactory to Leader, within thirty (30) days after the date of this
Amendment and, thereafter, annually, on or before August 15 of each year. Upon
receipt and approval of the initial appraisal by Lender, the definition of
"Eligible Accounts" as provided in Section 2.1 of the Agreement shall be
modified to read as follows:
(6) Accounts with respect to which the account debtor is the United
States of America, unless the affected Borrower has, with respect to
such account, complied with the Federal Assignment of Claims Act of
1940 as amended (31 U.S.C. Section 3727 et seq.), or any state, any
municipality, or any department, agency or instrumentality thereof,
in the aggregate in excess of (x) eighty percent (80%) of the forced
liquidation value of the Equipment, excluding Borrowers' office
furniture, fixtures and equipment, as based upon the appraised value
thereof from time to time, less (y) the outstanding principal
balance of the Equipment Term Loan and the Additional Term Loan as
of September 1 of each year hereof.
(c) In addition to the financial statements and other reports listed
on the Reporting Addendum attached to the Agreement, Borrowers shall hereafter
deliver to Lender a certification each month, in the form attached hereto as
Exhibit A, detailing the receivables from abatement contracts with the federal
government, any state, any municipality or any department, agency or
instrumentality thereof.
4. If there is any conflict or inconsistency between the provisions of
this Amendment and the provisions of the Notes, the Mortgages or the other Loan
Documents, the provisions of this Agreement shall control.
5. (a) Borrowers hereby represent and warrant to, and covenant with Lender
that:
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(i) Borrowers are the owners of the Collateral, free and clear of all
claims, liens, interests, charges and encumbrances except those
evidenced by the Loan Documents;
(ii) At the date hereof, the "Loan Documents" (as such term is herein
defined) are in full force and effect, and Borrowers are not in
default in the payment of any sums, charges or obligations under the
Loan Documents or in the payment or performance of any covenants,
agreements or conditions of Borrowers contained in the Loan
Documents, except for the covenant with respect to capital
expenditure limits set forth in Section 6.2 of the Agreement, as
previously disclosed to Lender;
(iii) At the date hereof, Borrowers have no right or claim of set-off,
discount deduction, defense or counterclaim which could be asserted
in any action brought to enforce the Loan Documents;
(iv) At the date hereof, the Guaranties are in full force and effect and
neither Borrowers nor the Guarantors have any right or claim of
set-off, discount, deduction, defense or counterclaim which could be
asserted in any action brought to enforce the Guaranties or any of
them;
(v) Lender is not in default in the performance or observance of any of
its covenants, agreements and obligations under the Loan Documents;
(vi) There are no actions, suits or proceedings (including, without
limitation, proceedings before any court, arbitrator or
governmental authority or agency) pending or threatened against
Borrowers or Guarantors (or to the knowledge of Borrowers or
Guarantors, any basis for any such action, suit or proceeding),
which if adversely determined, might individually, or in the
aggregate, materially adversely:
(1) impair the ability of Borrowers or Guarantors to pay or perform
their respective obligations under the Loan Documents and the
Guaranties; or
(2) affect the Collateral or the use, manner of use, or operation
thereof;
(vii) There is no presently known fact which affects, or may affect in the
future (so far as Borrowers or Guarantors can foresee), materially and
adversely the condition (financial or other) of Borrowers or Guarantors,
the operation, use or manner of use of the Collateral or the ability of
Borrowers or Guarantors to pay or perform their respective obligations
under the Loan Documents and the Guaranties; and
(viii) Neither the Low Documents, the Guaranties nor any other document or
written materials delivered or made, and no other communication made, to
Lender or any employee or agent of Lender contains any untrue statement of
a material fact or fails to state a material fact necessary in order to
make any statement contained
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therein not misleading in light of the circumstances in which such
statement was made.
(b) The representations, warranties and covenants of Borrowers and
Guarantors made in subparagraph 5(a) hereof are, as of the date hereof and shall
be, at all times, true and correct in all material respects, and are and shall
be of continuing force and effect until all indebtedness and obligations of
Borrowers under the Loan Documents have been fully and finally paid and
performed.
6. (a) All of the terms, covenants, agreements, conditions,
representations, warranties and provisions contained in each of the Loan
Documents are adopted and incorporated into all of the other Loan Documents to
the same full extent and with the same binding force and effect as if all of the
terms, covenants, agreements, conditions, representations, warranties and
provisions of each of the Loan Documents were stated in full in all of the other
Loan Documents, it being the intent that each of the Loan Documents complements
and supplements the others to the fullest extent necessary or required to
protect, preserve and confirm all the rights. benefits, privileges, powers and
remedies of Lender and under the Loan Documents.
(b) Any breach or violation by Borrowers or Guarantors of any of the
covenants, agreements, conditions, representations and warranties of Borrowers
or Guarantors, respectively, under this Amendment shall constitute and be a
default under the Agreement and the Loan Documents and shall entitle Lender, at
the election of Lender, to exercise any and all rights, powers and remedies
available to Lender under the Loan Documents and the Guaranties.
(c) Except as herein expressly modified, all of the Loan Documents and the
terms and provisions thereof are hereby reaffirmed and ratified and remain in
full force and effect, and unchanged, in all respects.
7. Guarantors, as guarantors under the Guaranties, hereby acknowledge and
consent to the modifications of the Loan Documents as herein provided and, in
consideration of such modifications, hereby agree that:
(a) The modifications to the Loan Documents as herein provided do not and
shall not in any way limit, prejudice or impair the obligations of Guarantors,
as guarantors, under the Guaranties, or the rights, powers, privileges, benefits
and remedies of Lender under the Guaranties;
(b) The Guaranties and all of the provisions thereof are hereby reaffirmed
and ratified and remain in full force and effect;
(c) The Guaranties, when made, constituted and, at the date hereof,
continue to constitute a valid and binding obligation of Guarantors, as
guarantors, to pay unconditionally and absolutely the entire amount of the Loans
evidenced by the Agreement and the Notes, which obligation is enforceable in
accordance with the terms and conditions of the Agreement and the Notes; and
(d) Guarantors hereby waive all errors and imperfections, if any, in the
Guaranties and all defenses, if any, on account thereof in case of any
subsequent action to enforce the Guaranties.
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8. Lender hereby represents to Borrowers and Guarantors; that Lender is,
at the date hereof, the absolute and exclusive owner of the Agreement and the
Notes and, as such, has full power and authority to enter into, and is bound by,
this Amendment.
9. Notwithstanding any prior act of Lender or any procedure established by
Lender with regard to the loans evidenced by the Agreement and the Notes and
secured by the Loan Documents, Borrowers and Guarantors each acknowledge and
agree that Lender has not heretofore waived any of its rights or remedies under
the Notes and the Loan Documents nor has Lender waived any of the duties or
obligations of Borrowers and Guarantors thereunder. No waiver by Lender of any
covenant or condition under the Notes or the Loan Documents shall be deemed a
waiver of any subsequent breach of the same or any other covenant or condition.
No covenant, term or condition of the Notes or the Loan Documents shall be
deemed waived by Lender unless waived in writing.
10. (a) Time is of the essence with respect to the payment, performance
and observance of each and every covenant, agreement, condition, representation,
warranty and obligation of Borrowers under the Loan Documents and of Guarantors
under the Guaranties.
(b) None of the covenants, terms or conditions of this Amendment shall in
any manner be altered, waived, modified, changed or abandoned, except by written
instrument, duly signed and delivered by all the parties hereto.
(c) This Amendment contains the whole agreement between the patties hereto
as to the subject matter hereof and there am no other terms, obligations,
covenants, representations, warranties, statements or conditions, oral or
otherwise, of any kind.
(d) This Amendment shall extend to, be obligatory upon and inure to the
benefit of the respective successors and assigns of Borrowers, Lender and
Guarantors.
(e) The recitals to this Agreement are hereby incorporated into and made a
part of this Amendment, and shall constitute covenants, representations and
warranties of Borrowers and Guarantors which shall be binding upon and
enforceable against Borrowers and Guarantors respectively.
(f) This Agreement has been executed by Borrowers and Guarantors in the
State of Illinois and, together with all of the Loan Documents, shall be
construed and enforced in accordance with the laws of the State of Illinois.
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(g) This Agreement may be executed in counterparts and any set of
counterparts containing the original signatures of all parties shall constitute
an original for all purposes.
IN WITNESS WHEREOF, the Lender, Borrowers and Guarantors have caused this
First Amendment to Loan and Security Agreement to be executed and delivered the
day and year first above written.
XXXXXXXX TECHNOLOGIES OF MINNESOTA,
INC., a Minnesota corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Its: Executive Vice President
--------------------------
XXXXXXXX TECHNOLOGIES OF GEORGIA,
INC., a Georgia corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Its: Executive Vice President
--------------------------
XXXXXXXX TECHNOLOGIES, INC., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Its: President/CEO
--------------------------
XXXXXXXX ACQUISITION CORP., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Its:
--------------------------
/s/ Xxxxxx X. Xxxxx
------------------------------
XXXXXX XXXXX
/s/ Xxxxxxx Xxxxxxx
------------------------------
XXXXXXX XXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
------------------------------
XXXXXX XXXXXXXX
XXXXXX FINANCIAL, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. XxXxxx
-------------------------------
Its: Vice President
--------------------------
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EXHIBIT A
RECEIVABLES CERTIFICATE FORM
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MONTHLY CERTIFICATION
XXXXXXXX TECHNOLOGIES OF MINNESOTA, INC.
XXXXXXXX TECHNOLOGIES OF GEORGIA, INC.
Appraisal Date GA: Lawrenceville (6/29/98), Jackson (___________)
Appraisal Date MN: Savage (_____________)
Appraiser Name: MB Valuation Service
Forced Liquidation Value GA (net of Lawrenceville): $
Forced Liquidation Value GA - Lawrenceville $1,148,613.00
Forced Liquidation Value MN: $
-------------
(1) Total Forced Liquidation Value: $
Less:
Office Equipment Furniture, Fixtures,
Computers, Telephones, etc.
Lawrenceville, GA $6,293.00
Jackson, GA $
Savage, MN $
(2)
< >
-------------
(3) Net M&E (1-2) $
(4) Item #3 multiplied by advance rate of 80% $
Less:
Loan Balances
GTI 02 Sept 1, 1998 $1,151,996.96
GTI 04 Sept 1, 1998 $ 39,599.96
GTI 12 Sept 1, 1998 $ 558,003.02
GTI 14 Sept 1, 1998 $ 61,200.08
GTI 15 Sept 4, 1999 $ 850,000.00
------------------- -------------
(5) Total Loans $<2,660,800.02>
(6) Net Suppressed. Item #4 less Item #5. $
===============
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