Exhibit 10.1
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT ("AGREEMENT") is made as of the 11th day of
August, 2000, by and among ACCOM, INC., a Delaware corporation ("BORROWER"); THE
PROVIDENT BANK, an Ohio banking institution ("LENDER"); and ACCOM INTERNATIONAL,
INC., ACCOM EUROPE, LTD., ACCOM ASIA- PACIFIC, and ACCOM VIRTUAL STUDIO, INC.
(collectively, "GUARANTORS"). Hereafter, the BORROWER and the GUARANTORS are
collectively referred to as the "OBLIGORS."
RECITALS
The LENDER has extended a revolving line of credit to the BORROWER. The
GUARANTORS have guaranteed to the LENDER the repayment and performance by the
BORROWER of such credit accommodation.
The OBLIGORS have requested that the LENDER agree to modify certain of the
terms and conditions governing the credit accommodations. The LENDER has agreed
to the requested modifications in accordance with the terms of this AGREEMENT.
The parties have entered into this AGREEMENT to accomplish such modifications.
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
AGREEMENT
Section 1. Definitions. As used in this AGREEMENT, the terms set forth below
shall have the meanings set forth below. Terms defined in this Section or
elsewhere in this AGREEMENT are in all capital letters. The singular use of any
defined term includes the plural, and the plural use includes the singular. All
terms defined in the "LOAN AGREEMENT" (as such term is defined below) which are
not defined herein shall have the same meaning in this AGREEMENT as given to
them in the LOAN AGREEMENT.
Section 1.1. Guaranty. The term "GUARANTY" means collectively: (a) the
Guaranty Agreement dated February 10, 2000 executed by Accom International,
Inc.; (b) the Guaranty Agreement dated February 10, 2000 executed by Accom
Europe, Ltd.; (c) the Guaranty Agreement dated February 10, 2000 executed by
Accom Asia- Pacific; and (d) the Guaranty Agreement dated February 10, 2000
executed by Accom Virtual Studio, Inc.
Section 1.2. Laws. The term "LAWS" means all ordinances, statutes,
rules, regulations, orders, injunctions, writs or decrees of any governmental
authority.
Section 1.3. Loan Agreement. The term "LOAN AGREEMENT" means the Loan
And Security Agreement by and between the BORROWER and the LENDER dated February
10, 2000.
Section 1.4. Loan Documents. The term "LOAN DOCUMENTS" means
collectively the LOAN AGREEMENT, NOTE, GUARANTY, and all agreements, instruments
and documents, security agreements, subordination agreements, intercreditor
agreements, pledges, affidavits, powers of attorney, consents, assignments,
landlord and mortgage waivers, opinions, collateral assignments, reimbursement
agreements, contracts, notices, leases, financing statements, pledges and all
other written matter, whether heretofore, now or hereafter executed, which
evidence or secure the LOAN.
Section 1.5. Loan. The term "LOAN" means the revolving line of credit
facility being provided by the LENDER to the BORROWER pursuant to the LOAN
AGREEMENT.
Section 1.6. Note. The term "NOTE" means the Revolving Loan Promissory
Note dated February 10, 2000 from the BORROWER, as maker thereof, and payable to
the order of the LENDER in the stated principal amount of Two Million Dollars
($2,000,000.00).
Section 2. Acknowledgment Of Obligations. The OBLIGORS acknowledge that: (a)
each of the LOAN DOCUMENTS is the valid and binding obligation of each of the
OBLIGORS that is a signatory thereto; (b) the LOAN DOCUMENTS are enforceable in
accordance with all stated terms; and (c) the OBLIGORS have no defenses, claims
of offset, or counterclaims against the enforcement of the LOAN DOCUMENTS in
accordance with all stated terms.
Section 3. Amendment and Modification of Loan Agreement. The LOAN AGREEMENT
is hereby amended and modified as follows:
a. Section 1.17. Section 1.17 of the LOAN AGREEMENT is hereby amended
by deleting its present language in its entirety and substituting in lieu
thereof the following:
Section 1.17. Dollar Cap. The term "DOLLAR CAP" shall mean
the sum of One Million Five Hundred Thousand Dollars
($1,500,000.00).
b. Section 2.1.6. Section 2.1.6 of the LOAN AGREEMENT is hereby amended
by deleting its present language in its entirety and substituting in lieu
thereof the following:
Section 2.1.6. Term. All sums outstanding under the
REVOLVING LOAN shall be paid in full on June 30, 2001.
c. Section 5.18. Section 5.18 of the LOAN AGREEMENT is hereby amended
by deleting its present language in its entirety and substituting in lieu
thereof the following:
Section 5.18. Tangible Net Worth. The BORROWER shall
maintain a TANGIBLE NET WORTH of not less than: (a) Two
Million Seventy-Six Thousand Dollars ($2,076,000.00) as of
September 30, 2000; (b) One Million Seven Hundred Eighty-Six
Thousand Dollars ($1,786,000.00) as of December 31, 2000; and
(c) One Million Eight Hundred Thousand Dollars as of the last
day of each calendar quarter ending after December 31, 2000.
d. Section 5.19. Section 5.19 of the LOAN AGREEMENT is hereby amended
by deleting its present language in its entirety and substituting in lieu
thereof the following:
Section 5.19. EBITDA. The BORROWER shall have an EBITDA of
not less than: (a) Four Hundred Sixty-One Thousand Dollars
($461,000.00) for the six (6) month period ending June 30,
2000; (b) negative One Hundred Forty-One Thousand Dollars
(-$141,000.00) for the seven (7) month period ending July 31,
2000; (c) negative Two Hundred Sixty-Three Thousand Dollars
(-$263,000.00) for the eight (8) month period ending August
31, 2000; (d) One Hundred Sixty-Eight Thousand Dollars
($168,000.00) for the nine (9) month period ending September
30, 2000; (e) negative One Hundred Ninety-Five Thousand
Dollars (-$195,000.00) for the ten (10) month period ending
October 31, 2000; (f) negative Two Hundred Forty-Eight
Thousand Dollars (-$248,000.00) for the eleven (11) month
period ending November 30, 2000; (g) Two Hundred Twenty-Nine
Thousand Dollars ($229,000.00) for the twelve (12) month
period ending December 31, 2000; (i) One Hundred Thousand
Dollars ($100,000.00) for the one (1) month period ending
January 31, 2001; (j) Two Hundred Thousand Dollars
($200,000.00) for the two (2) month period ending February
28, 2001; (k) Three Hundred Thousand Dollars ($300,000.00)
for the three (3) month period ending March 31, 2001; (l)
Four Hundred Thousand Dollars ($400,000.00) for the four (4)
month period ending April 30, 2001; (m) Five Hundred Thousand
Dollars ($500,000.00) for the five (5) month period ending
May 31, 2001; and (n) Six Hundred Thousand Dollars
($600,000.00) for the six (6) month period ending June 30,
2001.
e. Section 5.20. Section 5.20 of the LOAN AGREEMENT is hereby amended
by deleting its present language in its entirety and substituting in lieu
thereof the following:
Section 5.20. Interest Coverage Ratio. The BORROWER shall
maintain an INTEREST COVERAGE RATIO of not less than: (a)
0.60 to 1.0 for the nine (9) month period ending September
30, 2000; (b) 0.60 to 1.0 for the twelve (12) month period
ending December 31, 2000; (c) 1.0 to 1.0 for the fiscal
quarter ending December 31, 2000; and (d) 1.0 to 1.0 for each
fiscal quarter ending after December 31, 2000.
f. Section 6.15. Section 6.15 of the LOAN AGREEMENT is hereby amended
by deleting its present language in its entirety and substituting in lieu
thereof the following:
Section 6.15. Capital Expenditures. The BORROWER shall not
make any CAPITAL EXPENDITURES in excess of: (a) Two Hundred
Fifty Thousand Dollars ($250,000.00) in the aggregate during
the nine (9) month period ending September 30, 2000; (b) Four
Hundred Fifty Thousand Dollars ($450,000.00) in the aggregate
during the twelve (12) month period ending December 31, 2000;
(c) One Hundred Thousand Dollars ($100,000.00) in the
aggregate during the three (3) month period ending March 31,
2001; and (d) Two Hundred Thousand Dollars ($200,000.00) in
the aggregate during the six (6) month period ending June 30,
2001.
Section 4. Amendment And Modification Of Note. The NOTE is hereby amended
and modified as follows:
a. Interest Rate. Paragraph number 1 of the NOTE, which paragraph is
entitled "Interest Rate" is hereby amended by deleting the words and percentage
"One and One-Quarter percent (1.25%)" and substituting in lieu thereof the words
and percentage "two and one-quarter percent (2.25%)".
b. Maturity Date. Paragraph number 3 of the NOTE, which paragraph is
entitled "Repayment" is hereby amended by deleting the date "March 1, 2003" and
substituting in lieu thereof the date "June 30, 2001."
Section 5. Amendment Fee. In consideration of the LENDER'S agreements
contained herein, the BORROWER shall pay to the LENDER on the date of this
AGREEMENT a fee in the amount of Ten Thousand Dollars ($10,000.00). The BORROWER
hereby irrevocably authorizes the LENDER to make an advance under the LOAN to
make payment of such fee.
Section 6. Obligors' Representations And Warranties. As an inducement to the
LENDER to enter into this AGREEMENT, each of the OBLIGORS makes the
following representations and warranties to the LENDER and acknowledges the
LENDER'S justifiable reliance thereon:
Section 6.1 Authority And Good Standing. Each OBLIGOR: (a) has the
power to enter into this AGREEMENT and any related documents and to perform all
of its obligations hereunder and thereunder; (b) has duly authorized the entry
into and performance of this AGREEMENT and all related documents; and (c) is in
good standing in the jurisdiction of its organization.
Section 6.2 Violations. The execution, delivery, and performance of
this AGREEMENT by each OBLIGOR will not immediately, or with the passage of
time, the giving of notice, or both: (a) violate any LAWS or result in a default
under any contract, agreement, or instrument to which any OBLIGOR is a party or
by which any OBLIGOR or any properties of any OBLIGOR are bound; or (b) result
in the creation or imposition of any security interest in, or lien or
encumbrance upon, any of the assets of any OBLIGOR, except in favor of the
LENDER.
Section 6.3 Litigation. There are no outstanding judgments or tax liens
against any OBLIGOR, and there are no actions, suits, investigations or
proceedings pending against any OBLIGOR or against any of the collateral
securing the LOAN.
Section 6.4 Liens. The LENDER holds first lien priority perfected liens
and security interests in and to the assets of the BORROWER as required by the
terms and conditions of the LOAN DOCUMENTS, which liens shall survive intact the
transactions contemplated by this AGREEMENT in the same lien priority existing
prior to this AGREEMENT.
Section 6.5 Enforceability. This AGREEMENT and all of the LOAN
DOCUMENTS, as modified and amended in accordance herewith, are the valid and
binding obligations of the OBLIGORS, as indicated, and are fully enforceable in
accordance with all stated terms.
Section 7. Guaranty. The GUARANTORS hereby ratify and reaffirm the terms and
conditions of each GUARANTY and acknowledge that each GUARANTY will continue to
be fully enforceable against the GUARANTOR executing such GUARANTY in accordance
with all stated terms after the execution and delivery of this AGREEMENT and the
consummation of the transactions contemplated herein.
Section 8. No Other Modifications Of Loan Documents. The parties acknowledge
that except as specifically stated in this AGREEMENT, the LOAN DOCUMENTS shall
not be deemed to have been amended, modified or changed in any respect, and
shall continue to be enforceable against the parties thereto in accordance with
all stated terms. Nothing contained herein is intended to limit, vary, or
terminate any liens, pledges, security interests or mortgage liens presently
existing for the benefit of the LENDER or to alter the lien priority thereof.
Each OBLIGOR reaffirms
and ratifies all of such liens, pledges, security interests or mortgage liens
previously granted for the benefit of the LENDER.
Section 9. Further Assurances. The OBLIGORS each agree to execute and
deliver to the LENDER such other and further documents as may, from time to
time, be reasonably requested by the LENDER in order to execute or enforce the
terms and conditions of this AGREEMENT or any of the LOAN DOCUMENTS.
Section 10. No Novation; No Refinance. It is the intent of each of the
OBLIGORS and of the LENDER that nothing contained in this AGREEMENT shall be
deemed to effect or accomplish or otherwise constitute a novation of any of the
obligations owed by any of the OBLIGORS to the LENDER or to be a refinance of
the LOAN. Nothing contained herein shall be deemed to extinguish, terminate or
impair any of the duties or obligations owed by the OBLIGORS to the LENDER with
respect to the LOAN, the LOAN DOCUMENTS or the GUARANTY.
Section 11. Enforceability. This AGREEMENT shall inure to the benefit of and
be enforceable against the OBLIGORS and the LENDER and their respective
successors and assigns.
Section 12. Choice Of Law; Consent To Jurisdiction; Agreement As To Venue.
This AGREEMENT shall be construed, performed and enforced and its validity and
enforceability determined in accordance with the LAWS of the State of Maryland
(excluding, however, conflict of LAWS principles). Each of the OBLIGORS consents
to the jurisdiction of the courts of the State of Maryland and the jurisdiction
of the United States District Court for the District of Maryland, if a basis for
federal jurisdiction exists. Each of the OBLIGORS waives any right to object to
the maintenance of a suit in any of the state or federal courts of the State of
Maryland on the basis of improper venue or inconvenience of forum.
Section 13. Amendment. This AGREEMENT may be amended only by a writing duly
executed by each of the OBLIGORS and by the LENDER.
Section 14. Waiver. No failure or delay by the LENDER in the exercise or
enforcement of any of its rights under any LOAN DOCUMENT shall be a waiver of
such right or remedy nor shall a single or partial exercise or enforcement
thereof preclude any other or further exercise or enforcement thereof or the
exercise or enforcement of an other right or remedy. The LENDER may at any time
or from time to time waive all or any rights under this AGREEMENT or under any
LOAN DOCUMENT, but any such waiver must be specific and in writing and no such
waiver shall constitute, unless specifically so expressed by the LENDER in
writing, a future waiver of performance or exact performance by any of the
OBLIGORS. No notice to or demand upon the OBLIGORS in any instance shall entitle
any OBLIGOR to any other or further notice or demand in the same, similar or
other circumstance.
Section 15. Obligations Unconditional. The OBLIGORS' respective obligations
hereunder and as set forth in the LOAN DOCUMENTS are absolute and unconditional,
and are independent of any defense or rights of set-off, recoupment or
counterclaim which any of the OBLIGORS might have against the LENDER. Each of
the OBLIGORS agrees that all payments required to be made by it shall be made
free of any deductions and without abatement, diminution or set-off. Until the
LOAN has been fully repaid and all other obligations of the OBLIGORS owed to the
LENDER have been fully performed: (a) no payment provided for herein or by the
terms of any of the LOAN DOCUMENTS shall be suspended or discontinued; and (b)
the OBLIGORS shall fully perform and observe all of their respective covenants
and agreements contained herein and in the LOAN DOCUMENTS, including without
limitation, the covenants and agreements to make all payments required under the
LOAN DOCUMENTS, as amended pursuant to this AGREEMENT.
Section 16. Expenses. The BORROWER agrees to reimburse the LENDER upon
demand for the costs and expenses incurred by the LENDER in connection with the
preparation of this AGREEMENT, including all attorneys' fees. In the event the
BORROWER fails to pay such costs and expenses upon the demand of the LENDER, the
BORROWER hereby irrevocably authorizes the LENDER to make an advance under the
LOAN in order to make payment of such costs and expenses.
Section 17. Counterparts And Delivery. This AGREEMENT may be executed and
delivered in counterparts, and shall be fully enforceable against each
signatory, even if all designated signatories do not actually execute this
AGREEMENT. No OBLIGOR is relying upon the signature of any other OBLIGOR in
making the decision to execute this AGREEMENT. This AGREEMENT, and the
signatures to this AGREEMENT, may be delivered via facsimile.
SECTION 18. RELEASE. IN ORDER TO INDUCE THE LENDER TO ENTER INTO THIS
AGREEMENT, EACH OF THE OBLIGORS FOREVER RELEASES AND DISCHARGES THE LENDER AND
THE LENDER'S OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS, SUCCESSORS, AND
ASSIGNS (COLLECTIVELY, THE "RELEASED PARTIES") FROM ANY AND ALL CLAIMS, CAUSES
OF ACTION, SUITS AND DAMAGES (INCLUDING CLAIMS FOR ATTORNEYS' FEES AND COSTS)
WHICH THE OBLIGORS, JOINTLY OR SEVERALLY, EVER HAD OR MAY NOW HAVE AGAINST ANY
OF THE RELEASED PARTIES, WHETHER KNOWN OR UNKNOWN, INCLUDING BUT NOT LIMITED TO
ANY AND ALL CLAIMS BASED UPON OR RELYING ON ANY ALLEGATIONS OR ASSERTIONS OF
DURESS, ILLEGALITY, UNCONSCIONABILITY, BAD FAITH, BREACH OF CONTRACT, REGULATORY
VIOLATIONS, NEGLIGENCE, MISCONDUCT, OR ANY OTHER TORT, CONTRACT OR REGULATORY
CLAIM OF ANY KIND OR NATURE. THIS RELEASE IS INTENDED TO BE FINAL AND
IRREVOCABLE AND IS NOT SUBJECT TO THE SATISFACTION OF ANY CONDITIONS OF ANY
KIND.
Section 19. Waiver Of Jury Trial. Each of the OBLIGORS and the LENDER agree
that any suit, action, or proceeding, whether claim or counterclaim, brought or
instituted by any of the OBLIGORS, the LENDER, or any successor or assign of any
of the OBLIGORS or the LENDER, on or with respect to this AGREEMENT or any of
the
LOAN DOCUMENTS or which in any way relates, directly or indirectly, to the
obligations of any of the OBLIGORS to the LENDER under this AGREEMENT or any of
the LOAN DOCUMENTS or the dealings of the parties with respect thereto, shall be
tried by a court and not by a jury. EACH OF THE OBLIGORS AND THE LENDER HEREBY
EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR
PROCEEDING.
IN WITNESS WHEREOF, the parties have executed this AGREEMENT with the
specific intention of creating a document under seal to be effective as of the
date first above written.
WITNESS/ATTEST: BORROWER:
ACCOM, INC., A Delaware Corporation
________________________ By: (SEAL)
Name: /s/ Xxxxxx X. XxXxxxxx
Title: Senior Vice President and
Chief Financial Officer
GUARANTORS:
ACCOM INTERNATIONAL, INC.
________________________ By: (SEAL)
Name: /s/ Xxxxxx Xxxxxx
Title: Director
ACCOM EUROPE, LTD.
________________________ By: (SEAL)
Name: /s/ Xxxxx Xxxxxxxx
Title: Director
WITNESS/ATTEST: GUARANTORS (cont.):
ACCOM ASIA-PACIFIC
________________________ By: (SEAL)
Name: /s/ Xxxxxx X. XxXxxxxx
Title: Director
ACCOM VIRTUAL STUDIO, INC.
________________________ By: (SEAL)
Name: /s/ Xxxxxx Xxxxxx
Title: Director
LENDER:
THE PROVIDENT BANK,
An Ohio Banking Institution
________________________ By: (SEAL)
Name: /s/ Xxxx Xxxxx
Title: Vice President
