EXHIBIT 10.46
WAIVER AND FIRST AMENDMENT TO LOAN AGREEMENT
THIS WAIVER AND FIRST AMENDMENT TO LOAN AGREEMENT (the "Amendment"), dated as of
July 12, 1999, is between KARTS INTERNATIONAL INCORPORATED, a Nevada corporation
("Borrower") and THE XXXXXXXXX FOUNDATION ("Xxxxxxxxx").
RECITALS:
WHEREAS, Borrower and Xxxxxxxxx have entered into that certain Loan
Agreement dated as of June 3, 1999 (as the same may hereafter be amended or
otherwise modified, the "Agreement");
WHEREAS, Borrower has requested that Xxxxxxxxx waive Borrower's
non-compliance with the covenant contained in Section 8 (l) of the Agreement;
and
WHEREAS, Borrower and Xxxxxxxxx now desire to amend the Agreement as herein
set forth;
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows effective as of the date
hereof unless otherwise indicated:
ARTICLE 1
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE 2
Amendments
Section 2.1 Amendment to Section 12; Events of Default. Section 12 of the
Agreement is hereby amended by adding a new Subsection 12 (q) which shall read
in its entirety to read as follows:
"(q) Shareholder Approval. Borrower shall fail to obtain approval
from its shareholders of all terms, conditions, covenants and
agreements contained in this Agreement, the Note and the other
Loan Documents on or before September 30, 1999."
ARTICLE 3
Waiver
Section 3.1 Limited Waiver of Section 8 (l) of the Agreement.
(a) Xxxxxxxxx hereby waives any Event of Default resulting from the
Borrower's failure to, on or before thirty (30) days from date of the
Agreement, (i) enter into an employment agreement with Xxxxxxx Xxxxxxx that
is for a term of at least three (3) years and is otherwise in form and
substance satisfactory to Xxxxxxxxx and (ii) in connection with such
employment agreement, execute an agreement to and in favor of Xxxxxxxxx
whereby Borrower agrees to provide adequate anti-dilution protection that
Xxxxxxxxx deems necessary for the shares of Common Stock that may be issued
to Xxxxxxxxx pursuant to the conversion of the Note as a result of any
Common Stock that may be issued to Xxxxxxx Xxxxxxx in connection with such
employment agreement.
(b) Xxxxxxxxx hereby grants Borrower an additional thirty (30) days
from the date hereof to comply with the covenants set forth in Section 8
(l) of the Agreement.
(c) The waiver contained in this Section 3.1 shall be limited strictly
as written and shall not be deemed to constitute a waiver of, or any
consent to noncompliance with, any term or provision of the Agreement
except as expressly set forth herein. Further, the waiver contained in this
Section 3.1 shall not constitute a waiver of any future Event of Default
that may occur, including, without limitation, the Borrower's failure to
keep, perform or observe the covenants set forth in Section 8 (l) of the
Agreement (as amended by this Amendment) after thirty (30) days from the
date hereof.
ARTICLE 4
Ratifications, Representations and Warranties
Section 4.1 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. Borrower and Xxxxxxxxx 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 4.2 Representations and Warranties. Borrower hereby represents and
warrants to Xxxxxxxxx as follows: (a) after giving effect to this Amendment, no
Event of Default has occurred and is continuing; (b) after giving effect to this
Amendment, the representations and warranties set forth in the Loan Documents
are true and correct in all material respects on and as of the date hereof with
the same effect as though made on and as of such date except with respect to any
representations and warranties limited by their terms to a specific date; (c)
the execution, delivery and performance of this Amendment has been duly
authorized by all necessary action on the part of Borrower and each Obligor and
does not and will not: (1) violate any provision of law applicable to Borrower
or any Obligor, the articles of incorporation, bylaws, partnership agreement,
membership agreement, or other applicable governing document of Borrower or any
Obligor or any order, judgment, or decree of any court or agency of government
binding upon Borrower or any Obligor; (2) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of Borrower or any Obligor; (3) result in or
require the creation or imposition of any material lien upon any of the assets
of Borrower or any Obligor; or (4) require any approval or consent of any Person
under any material contractual obligation of Borrower or any Obligor; and (d)
the articles of incorporation, bylaws, partnership agreement, certificate of
limited partnership, membership agreement, articles of organization or other
applicable governing document of the Borrower and each Obligor have not been
modified or rescinded and remain in full force and effect.
IN ADDITION, TO INDUCE XXXXXXXXX TO AGREE TO THE TERMS OF THIS AMENDMENT,
BORROWER AND EACH OBLIGOR (BY IT EXECUTION BELOW) REPRESENTS AND WARRANTS THAT
AS OF THE DATE OF ITS EXECUTION OF THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS
AGAINST OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS
AND IN ACCORDANCE THEREWITH IT:
(a) WAIVER. WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE OF
ITS EXECUTION OF THIS AMENDMENT AND
(b) RELEASE. RELEASES AND DISCHARGES XXXXXXXXX, AND ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS, AFFILIATES AND ATTORNEYS
(COLLECTIVELY THE "RELEASED PARTIES") FROM ANY AND ALL OBLIGATIONS,
INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS
WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW
OR EQUITY, WHICH THE BORROWER OR ANY OBLIGOR EVER HAD, NOW HAS, CLAIMS
TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE
DATE HEREOF AND FROM OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
ARTICLE 5
Miscellaneous
Section 5.1 Survival of Representations and Warranties. All representations
and warranties made in this Amendment or any other Loan Document including 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 Xxxxxxxxx or any closing shall affect the representations and
warranties or the right of Xxxxxxxxx to rely upon them.
Section 5.2 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 5.3 Expenses of Xxxxxxxxx. As provided in the Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Xxxxxxxxx in
connection with the preparation, negotiation, and execution of this Amendment
and the other Loan Documents executed pursuant hereto, including without
limitation, the costs and fees of Xxxxxxxxx'x legal counsel.
Section 5.4 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 5.5 Applicable Law. This Amendment and all other Loan Documents
executed pursuant hereto shall be governed by and construed in accordance with
the laws of the State of Texas and the applicable laws of the United States of
America.
Section 5.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Xxxxxxxxx and Borrower and their respective
successors and assigns, except Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Xxxxxxxxx.
Section 5.7 Counterparts. This Amendment may be executed in one or more
counterparts and on telecopy counterparts, 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 agreement.
Section 5.8 Effect of Waiver. No consent or waiver, express or implied, by
Xxxxxxxxx to or for any breach of or deviation from any covenant, condition or
duty by Borrower or any Obligor shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
Section 5.9 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
Section 5.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
Executed as of the date first written above.
BORROWER:
KARTS INTERNATIONAL INCORPORATED
By: /s/ Xxxxxxx Xxxxxxx
-----------------------
Name:
Title:
XXXXXXXXX:
THE XXXXXXXXX FOUNDATION
By:
Name:
Title:
Obligor Consent
Each of the undersigned Obligors: (i) consents and agrees to this
Amendment; (ii) agrees that the Loan Documents to which it is a party shall
remain in full force and effect and shall continue to be the legal, valid and
binding obligation of such Obligor enforceable against it in accordance with
their respective terms; and (iii) agree that the obligations, indebtedness and
liabilities of the Borrower arising under this Amendment are "Guaranteed
Indebtedness" as defined in the guaranty agreement to which it is a party in
connection with the Agreement.
OBLIGORS:
XXXXXXX'X THUNDER KARTS, INC.
By:
Name:
Title:
XXXX, L.L.C.
By:
Name:
Title:
STRAIGHT LINE MANUFACTURING, INC.
By:
Name:
Title:
USA INDUSTRIES INCORPORATED
By:
Name:
Title:
