SIXTH MODIFICATION TO
REVOLVING CREDIT LOAN & SECURITY AGREEMENT
(ACCOUNTS AND INVENTORY)
This SIXTH MODIFICATION TO LOAN & SECURITY AGREEMENT AND INVENTORY
RIDER (this "Modification") is entered into as of May 23, 2000 by and
between XXXXXX BEVERAGE COMPANY a Delaware corporation ("Borrower") and
COMERICA BANK-CALIFORNIA, a California corporation ("Bank").
RECITALS
A. Borrower and Bank have previously entered into that certain
Revolving Credit Loan & Security Agreement (Accounts and Inventory) dated
as of May 15, 1997 (as modified, the "Loan Agreement"), together with those
certain documents entitled Inventory Rider (Revolving Advance), Equipment
Rider and Environmental Rider, all dated as of May 15, 1997 and those
certain UCC-1 Financing Statements filed with various states.
B. In addition to the Collateral as defined in the Loan Agreement, the
obligations of Borrower under the Loan Agreement are and were also secured
by that certain Security Agreement in License Agreement and Other
Agreements dated May 15, 1997 (the "License Security Agreement").
X. Xxxxxx Natural Corporation (sometimes referred to as "Xxxxxx
Natural"), a Delaware corporation, and CVI Ventures, Inc. (sometimes
referred to as "CVI"), a Delaware corporation (sometimes, collectively,
"Guarantors") have each executed those certain Guaranties, each dated as of
May 15, 1997 (respectively, the "Xxxxxx Guaranty" and the "CVI Guaranty",
which are sometimes hereinafter collectively referred to as the
"Guaranties"). Pursuant to the Guaranties, Guarantors guaranteed the
obligations that are or may be owing to Bank by Borrower, as set forth more
completely in the Guaranties.
D. The Loan Agreement has been modified pursuant to that certain First
Modification to Revolving Credit Loan and Security Agreement (Accounts and
Inventory) dated May 11, 1998 the "First Modification").
E. The Loan Agreement has been further modified pursuant to that
certain Second Modification to Revolving Credit Loan and Security Agreement
dated July 27, 1998 (the "Second Modification").
F. The Loan Agreement has been further modified pursuant to that
certain Third Modification to Revolving Credit Loan and Security Agreement
dated December 1, 1998 (the "Third Modification").
G. In conjunction with the execution of the Third Modification,
Borrower and Bank also entered into those certain documents, respectively
entitled Inventory Rider (the "Inventory Rider") and addendum to Revolving
Credit Loan and Security Agreement, both also dated as of December 1, 1998.
H. The Loan Agreement has been further modified pursuant to that
certain Fourth Modification to Revolving Credit Loan and Security Agreement
dated March 28, 2000 (the "Fourth Modification").
I. The Loan Agreement has been further modified pursuant to that
certain Fifth Modification to Revolving Credit Loan and Security Agreement
dated April 27, 2000 (the "Fifth Modification").
J. Pursuant to the Loan Agreement, Bank has made available to Borrower
a line of credit based on a formula (the "Formula Based Line of Credit ').
The amount available under the Formula Based Line of Credit was calculated
by the sum of (1) ninety percent of the Eligible Accounts; plus (2) the
Inventory Sublimit (as defined in Recital K below), in an aggregate
principal amount not to exceed Three Million Dollars ($3,000,000) at any
one time, as further provided in the terms and conditions set forth more
completely in the Loan Agreement
K. Pursuant to the terms of the Inventory Rider, and as part of the
Formula Based Line of Credit, Bank has provided Borrower with a loan
facility based on advances against Borrower's Inventory (the "Inventory
Sublimit"), which was calculated based on fifty-five percent (55%) of the
lower of the cost or the value of Borrower's Inventory, but in any event
not to exceed the aggregate sum of One Million Five Hundred Thousand
Dollars ($1,500,000) at any time, as further provided in the terms and
conditions set forth more completely in the Inventory Rider and the Loan
Agreement.
L. As of May 15, 2000, the principal balance of the Formula Based Line
of Credit was Five Hundred Ninety Five Thousand Dollars ($595,000).
M. All of the documents referred to above, and those executed
therewith or thereafter, are sometimes hereinafter collectively referred to
as the "Loan Documents".
N. Borrower is a distributor of natural soda and other non-alcoholic
beverages.
0. Borrower and Bank have agreed to modify the Loan Documents in
certain respects, by, among other things, converting the Formula Based Line
of Credit provided for in the Loan Agreement and the Inventory Rider to a
non-formula based line of credit (the "Non-Formula Based Line of Credit")
on the terms and conditions set forth below.
AGREEMENT
For good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as set forth below.
I. Incorporation by Reference; Definitions. The foregoing Loan
Documents and the Recitals are incorporated herein by this reference as
though set forth in full herein. Any term not defined herein shall have the
meaning given in the Loan Documents.
2. Modifications to the Loan Agreement. The Loan Agreement is hereby
modified as set forth below.
2.1 Modification of Section 2.1 of the Loan Agreement to Provide for
Conversion of the Formula Based Line of Credit to a Non-Formula Based Line
of Credit. Section 2.1 of the Loan Agreement is hereby modified by deleting
it in its entirety and substituting the following provision:
"Notwithstanding any prior agreement to the contrary, upon the request
of Borrower, made at any time and from time to time during the term hereof,
and so long as no Event of Default has occurred, and irrespective of any
Borrowing Base defined herein, Bank shall lend to Borrower an amount not to
exceed the principal sum of Three Million Dollars ($3,000,000) at any one
time, with any amount in 'excess thereof being referred to hereinafter as
an 'Overadvance')."
2.2 Modification of the First Sentence of Section 3.1 of the Loan
Agreement. The first sentence of Section 3.1 of the Loan Agreement is
hereby modified by deleting it in its entirety and substituting the
following provision:
"This Agreement shall remain in full force and effect until May 1,
2002, unless earlier terminated by Borrower."
2.3 Modification of Section 6.15 (c) of the Loan Agreement to
Eliminate Certain Reporting Requirements. Section 6.15 (c) of the Loan
Agreement is hereby modified by deleting it in its entirety and replacing
it with the following provision:
"Notwithstanding any prior agreement to the contrary, Borrower shall
not be under any obligation to provide Bank with the following reports:
(1) Accounts receivable or payable aging reports;
(2) Inventory reports; and
(3) Borrowing Base reports."
2.4 Modification of the Loan Agreement to Add New Section 6.25 to
Eliminate Required Audits Absent An Event of Default or Default. The Loan
Agreement is hereby modified to add the following provision as Section 6.25
of the Loan Agreement:
"Notwithstanding any prior agreement to the contrary, the Loan
Agreement and in particular Section 6.1 are hereby modified to provide that
absent the occurrence of an event of default or default under the Loan
Documents which is continuing, Bank shall not require that Bank be
permitted to conduct audits of the Accounts or Inventory of Borrower. In
the event of the occurrence of an Event of Default or Default by Borrower
under the Loan Documents, Bank shall be entitled to conduct such audits of
Borrower's Accounts and Inventory as Bank reasonably may require, at
Borrower's expense."
3. Deletion of the Inventory Rider. In light of the conversion of the
Formula Based Line of Credit to a Non-Formula Based Line of Credit pursuant
to this Modification, the Inventory Rider is hereby deleted and is no
longer an operative document between Bank and Borrower.
4. No Modification of Other Obligations; No Effect on Collateral.
Except as is otherwise specifically set forth herein or in any document
executed in connection herewith, the Loan Agreement and the Loan Documents
are and shall remain unmodified and in full force and effect, and are
hereby ratified and confirmed. Nothing herein shall be deemed to affect in
anyway the Collateral that secures the obligations under the Loan Agreement
(as modified by this Modification) or under any other agreement now or in
the future.
5. Conflicts. If any conflict exists between the provisions of the
Loan Documents and the provisions of this Modification, the provisions of
this Modification shall control.
6. Ratification of the Guaranties and Security Therefor. By executing
this Modification below where indicated, Guarantors acknowledge and agree
that they have read and are familiar with, and consent to, all of the terms
and conditions of this Modification. In light of the foregoing, by
executing this Modification, Guarantors further confirm and agree that all
of the terms and provisions of the Guaranties are ratified and reaffirmed,
and that the Guaranties shall and do continue in full force and effect.
Although Bank has informed Guarantors of the terms of this Modification,
Guarantors understand and agree that Bank has no duty whatsoever to do so,
nor to seek this or any future acknowledgment, consent, or reaffirmation,
and that nothing contained herein is intended to, or shall create, such a
duty on the part of Bank as to any transactions hereafter.
7: Further Assurances Borrower agrees to make and execute such other
Documents and/or take such other action and/or provide such further
assurances as may be requested by Bank in connection with the Obligations
or as may be necessary or required to effectuate the terms and conditions
of this Modification and any documents executed in connection herewith.
8. Future Modifications. Neither Us Modification nor any document
executed herein entitles, or implies any consent or agreement to, any
further or future modification of, amendment to, waiver of, or consent with
respect to any provision of the Modification or the Loan Documents. Any
modifications hereto or to the Loan Documents shall be in writing and
signed by the parties.
9. Integration. This Modification and any documents executed in
connection herewith are integrated agreements, and supersede all
negotiations and agreements regarding the subject matter hereof and
thereof, and taken together with the Loan Documents and any documents
executed in connection herewith, constitute the final agreement of the
parties with respect to the subject matter hereof and thereof.
IN WITNESS WHEREOF, the parties have caused this Modification to be
executed as of the day and year first written above.
XXXXXX BEVERAGE COMPANY
By: /s/ Xxxxxx Xxxxx
Title: Chairman
COMERICA BANK-CALIFORNIA
By: /s/ Xxxxx Xxxxxxx
By: Xxxxx Xxxxxxx
Its: Vice President
CONSENT OF GUARANTORS:
XXXXXX NATURAL CORPORATION
By: /S/ Xxxxxx Xxxxx
Title: Chairman
Hard E Beverage Co. formerly
CVI Ventures, Inc.
By: /s/ Xxxxxx Xxxxx
Its: Chairman
