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EXHIBIT 10
FIRST AMENDMENT TO LOAN AGREEMENT
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THIS FIRST AMENDMENT TO LOAN AGREEMENT (the "First Amendment") is made this
18th day of February, 1998, at Cleveland, Ohio, by and among THE HUNTINGTON
NATIONAL BANK ("Bank"), whose principal office is located at 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000, XXXXXX INCORPORATED, whose address is 00000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000 ("Borrower"), and SUPREME ELECTRONICS CORP., whose
address is 00000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 ("Guarantor").
RECITALS
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A. The Borrower and Bank, entered into a Restated Loan Agreement dated as
of February 28, 1997 (the "Loan Agreement"), pursuant to which Bank
agreed to make available to the Borrower a loan of up to
$5,000,000.00. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Loan Agreement.
B. The Borrower has requested certain amendments to the Loan Agreement.
C. As a material inducement to Bank to make the amendments to the loan
herein contemplated, Guarantor for good and valuable consideration, is
willing to deliver to Bank an acknowledgment of the Continuing
Guaranty Unlimited.
D. Bank is willing to make the amendments and modifications to the loan
herein described, upon the terms, covenants and conditions herein set
forth, and in reliance upon the representations and warranties of
Borrower herein contained.
NOW, THEREFORE, in consideration of the foregoing Recitals, the terms,
covenants and conditions hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1 Amendments
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1.1 The third sentence of Section 2.1 is hereby modified and amended to
extend the maturity date of the Loan and the Revolving Note from February 28,
1998 to February 28, 1999.
1.2 Section 5.11 of the Loan Agreement is hereby amended to read in its
entirety as follows:
5.11 MAINTENANCE OF KEY FINANCIAL REQUIREMENTS. Borrower shall,
at all times, maintain the following financial requirements:
1.1.1 WORKING CAPITAL. Borrower will at all times maintain
consolidated Current Assets of Borrower and its Subsidiaries in excess
of their consolidated Current Liabilities (including the Revolving
Credit Note) of at least Seven Million Dollars ($7,000,000.00).
1.1.2 TANGIBLE NET WORTH. Borrower shall at all times maintain its
consolidated Tangible Net Worth in an amount not less than Nine
Million Dollars ($9,000,000.00). For purposes of this section the
Revolving Credit Notes shall be included in total liabilities and
deferred expenses of Borrower and its Subsidiaries shall be treated as
intangibles.
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2 Borrower's Representations, Warranties and Events of Default.
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2.1 Representations and Warranties.
2.1.1 Except as amended hereby, the terms, provisions, conditions and
agreements of the Loan Agreement are hereby ratified and confirmed and
shall remain in full force and effect. Borrower expressly acknowledges that
this First Amendment shall not constitute a novation or waiver. Each and
every representation and warranty of the Borrower set forth in the Loan
Agreement is hereby confirmed and ratified in all material respects and
such representations and warranties shall be deemed to have been made and
undertaken as of the date of this First Amendment as well as at the time
they were made and undertaken.
2.1.2 The Borrower further represents and warrants that:
2.1.2.1 No Event of Default now exists or will exist
immediately following the execution hereof or after giving effect
to the transactions contemplated hereby.
2.1.2.2 All necessary corporate or shareholder actions on
the part of the Borrower to authorize the execution, delivery and
performance of this First Amendment, the First Modification and
Amendment to the Revolving Credit Note and all other documents or
instruments required pursuant hereto or thereto have been taken;
this First Amendment the First Modification and Amendment to the
Revolving Credit Note and each such other document or instrument
have been duly and validly executed and delivered and are legally
binding and binding upon the parties thereto and enforceable in
accordance with their respective terms, except to the extent that
the enforceability thereof may be limited by bankruptcy,
insolvency or like laws or by general equitable principals.
2.1.2.3 The execution, delivery and performance of this
First Amendment, the First Modification and Amendment to the
Revolving Credit Note and all other documents or instruments
required pursuant hereto or thereto, and all actions and
transactions contemplated hereby and thereby will not (A)
violate, be in conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under (1)
any provision of the Articles of Incorporation, Code of
Regulations or Bylaws of the Borrower, (2) any arbitration award
or any order of any court or of any other Governmental agency or
authority, (3) any license, permit or authorization granted to
the Borrower or under which the Borrower operates, or (5) any
applicable law, rule, order or regulation, indenture, agreement
or other instrument to which the Borrower is a party or by which
the Borrower or any of its properties is bound and which has not
been waived or consented to, or (B) result in the creation or
imposition of any lien, charge or encumbrance of any nature
whatsoever, except as expressly permitted in the Loan Agreement,
upon any of the properties of the Borrower.
2.1.2.4 No consent, approval or authorization of, or
filing, registration or qualification with, any governmental
authority or any other person or entity is required to be
obtained by the Borrower in connection with the execution,
delivery or performance of this First Amendment, the First
Modification and Amendment to the Revolving Credit Note or
any document or instrument required in connection herewith or
therewith which has not already been obtained or completed.
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3 AFFIRMATION AND AGREEMENT OF THE BORROWERS AND THE GUARANTOR. The Borrower and
the Guarantor have executed this First Amendment to consent to the amendments to
the Loan Agreement made pursuant hereto.
4 FEES AND EXPENSES. As required under the Loan Agreement, the Borrower shall
pay a facility fee of $5,000.00 upon execution hereof, and shall reimburse the
Bank upon demand for all out-of-pocket costs, charges and expenses of the Bank
(including reasonable fees and disbursements of legal counsel to Bank in
connection with the preparation, negotiation, execution and delivery of this
First Amendment and the other agreements or documents relating hereto or
required hereby).
5 REFERENCE TO LOAN AGREEMENT. Except as amended hereby, the Loan Agreement
shall remain in full force and effect and is hereby ratified and confirmed in
all respects. On and after the effectiveness of the amendment to the Loan
Agreement accomplished hereby, each reference in the Loan Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of like import and each
reference to the Loan Agreement in any Note or other Loan Document, or other
agreement, document or instrument executed and delivered pursuant to the Loan
Agreement, shall be deemed a reference to the Loan Agreement as amended hereby.
6 COUNTERPARTS. This First Amendment may be executed in as many counterparts as
may be convenient, each of which when so executed shall be deemed to be an
original for all purposes, and shall become binding when the Borrower, the
Guarantor, and Bank have executed at least one counterpart.
7 FURTHER ACTS. The parties agree to perform any further acts and to execute and
deliver any additional documents which may be reasonably necessary to carry out
the intent and provisions of this First Amendment.
8 BINDING EFFECT. This First Amendment shall be binding upon and shall inure to
the benefit of the Borrower, the Guarantor, Bank, and their respective heirs,
personal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties have signed this First Amendment to Loan
Agreement, intending to be legally bound thereby as of the Effective Date.
BORROWER
XXXXXX INCORPORATED
/s/ Xxxxxx Xxxxxxxxxx BY: Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
/s/ Xxxxx Xxxx
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Signed in the presence of: THE HUNTINGTON NATIONAL BANK
(as to all signatures)
/s/ Xxxxx Xxxxxxx
--------------------------------- By: /s/ Xxxxxxx Xxxxxx
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