EXHIBIT 10.1
COMERICA First Amendment to Credit Agreement
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This First Amendment to Credit Agreement ("Agreement") is made, delivered,
and effective as of July 3, 2003, by and between XXXXXXXXXX LABORATORIES,
INC., a Texas corporation ("Borrower"), CARALOE, INC., a Texas corporation,
XXXXXXX BIOTECHNOLOGIES, INC., a Delaware (collectively, "Guarantors" and
each a "Guarantor') and COMERICA BANK-TEXAS ("Bank").
WHEREAS, on September 1, 2002, Borrower and Bank entered into that certain
Credit Agreement (the "Credit Agreement") whereby, upon the terms and
conditions stated therein, Bank agreed to make various loans to borrower to
be used by the Borrower for the purposes set forth in the Agreement; and
WHEREAS, the loans are guaranteed by that certain Guaranty Agreement dated
October 1, 2000 executed by Caraloe, Inc. and that certain Guaranty
Agreement dated September 1, 2002 executed by Xxxxxxx Biotechnologies, Inc.
(collectively the "Guaranties" and each a "Guaranty"); and
WHEREAS, the Borrower, Guarantors and Bank mutually desire to amend certain
aspects of the Credit Agreement:
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained In this Agreement, Borrower Guarantors and Bank agree as follows:
1. As of the Effective Date, section 4.4 of the Credit Agreement shall be
amended and the following shall apply:
"Financial Covenants. Maintain all financial covenants set, forth below
(for purposes of the financial covenants definitions for capitalized
terms not otherwise defined in this Agreement follow the covenants):
a. Tangible Net Worth. Maintain a Tangible Net Worth, at all times,
of not less than $12,500,000.00.
b. Current Ratio. Maintain in a Current Ratio, at all times, of not
less than the ratio set forth below during the corresponding
period set forth below:
Period Amount
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From the date of this Agreement through
June 29,2003 1.75:1.0
From June 30, 2003 through
March 30,2004 1.90:1.0
From March 31, 2004 through
the Revolving Credit Maturity Date 2.0:1.0
c. Liquidity Ratio. Maintain a minimum Liquidity Ratio, at all
times, of at least the ratio set forth below during the
corresponding period set forth below:
Period Amount
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From the date of this Agreement through
June 29, 2004 1.75:1.0
From June 30, 2004 through
the Revolving Credit Maturity Date 2.5:1.0
Each of the aforementioned financial covenants be calculated as of the
end of each calendar quarter.
"Account Receivables" shall mean, as of any time of determination, any
amounts in respect of loans or advances owing to Borrower or another
Loan Party from any Account Debtor (as defined in the UCC) at such
time.
"Affiliate Receivables" shall mean, as of any time of determination,
any amounts in respect of loans or advances owing to Borrower or
another Loan Party from any of its Subsidiaries or Affiliates (other
than Affiliates which are Guarantors of all Indebtedness) at such time.
"Current Assets" shall mean, in respect of a Person and as of any
applicable date of determination, all current assets of such Person
determined in accordance with GAAP.
"Current Liabilities" shall mean, in respect of a Person and as of any
applicable date of determination, all liabilities of such Person that
should be classified as current in accordance with GAAP, plus the
amount of all outstanding Revolving Loans.
"Current Ratio" shall mean, in respect of a Person and as of any
applicable date of determination thereof, the ratio of Current Assets
to Current Liabilities.
"Liquidity Ratio" shall mean, in respect of a Person and as of any
applicable date of determination thereof the ratio of Cash plus
Accounts Receivable to the amount of the Indebtedness.
"Tangible Net Worth" shall mean, with respect to any Person and as of
applicable date of determination, (a) the net book value of all assets
of such Person (excluding Affiliate Receivables, patent rights,
trademarks, trade names, franchises, copyrights, licenses, goodwill,
and all other intangible assets of such Person), after all appropriate
deductions in accordance with GAAP (Including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and
amortization), less (b) all Debt of such Person at such time."
2. Bank waives Borrower's compliance with the minimum Tangible Net Worth
described in section 4.4 for the period ending December 30, 2002. This
waiver only applies to the foregoing and is not an agreement of any
future waivers of Borrower's compliance with any covenant or any Events
of Default.
3. Borrower is responsible for all costs incurred by Bank, including without
limit reasonable attorneys' fees (whether inside or outside counsel is
used), with regard to the preparation and execution of this Agreement.
4. Each Guarantor hereby consents to and joins in this Agreement and
ratifies and confirms to Bank that all terms and provisions of its
Guaranty and every other Loan Document to which it is a party are and
shall remain in full force and effect, and acknowledges that there are no
claims or offsets against, or defenses or counterclaims to, the terms and
provisions of and the obligations created and evidenced by its Guaranty
or the other Loan Documents, and reaffirms all agreements and obligations
under its Guaranty and the other Loan Documents to which it is a party,
and agrees that such obligations are not released, diminished or impaired
by this Agreement. Each Guarantor acknowledges that without this consent
and affirmation, Bank would not execute this Agreement or otherwise
consent to its terms.
5. Other than as expressly provided for herein, the execution of this
Agreement shall not be deemed to be a waiver of any Default or Event of
Default. Borrower expressly acknowledges and agrees that except as
expressly amended in this Agreement, the Credit Agreement, as amended,
remains in full force and effect and is ratified, confirmed and restated.
This Agreement is not an agreement to any further or other Agreement of
the Note.
6. All the terms used in this Agreement which are defined in the Credit
Agreement shall have the same meaning as used in the Credit Agreement,
unless otherwise defined in this Agreement.
7. Borrower waives, discharges, and forever releases Bank, Banks employees,
officers, directors, attorneys, stockholders, and their successors and
assigns, from and of any and all claims causes of action, allegations
or assertions that Borrower has or may have had at any time up through
and including the date of this Agreement, against any or all of the
foregoing, regardless of whether any such claims, causes of action,
allegations or assertions are known to Borrower or whether any such
claims, causes of action allegations or assertions arose as result
of Bank's actions or omissions in connection with the Note or any
Agreements, extensions or modifications thereof or Bank's administration
of the debt evidenced by the Note or otherwise INCLUDING ANY CLAIMS,
CAUSES OF ACTION, ALLEGATIONS OR ASSERTIONS RESULTING FROM BANK'S OWN
NEGLIGENCE, except and to the extent (but only to the extent) caused by
Bank's gross negligence or willful misconduct.
8. BANK AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS
A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EITHER
OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR
ARISING OUT OF ANY LOAN DOCUMENT OR ANY Of THE TRANSACTIONS CONTEMPLATED
BY THE LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, DEALINGS, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTION OF EITHER OF THEM. THESE PROVISIONS,
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED
BY BANK OR BORROWER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF
THEM.
9. THIS AGREEMENT AND THE OTHER "LOAN AGREEMENTS" (AS DEFINED IN SECTION
26.O2(A)(2) OF THE TEXAS BUSINESS & COMMERCE CODE, AS AMENDED) REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES, AND THIS AGREEMENT AND THE OTHER
WRITTEN LOAN AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the date set forth above.
BORROWER: BANK:
XXXXXXXXXX LABORATORIES, INC., COMERICA BANK-TEXAS
a Texas Corporation
By: /s/ By: /s/
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Carton X. Xxxxxx, President & CEO Xxxxxxxxx Xxxxxx AVP Texas Division
GUARANTORS:
CARALOE, INC.,
a Texas corporation
By: /s/
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Carton X. Xxxxxx, President
XXXXXXX BIOTECHNOLOGIES, INC.
a Delaware corporation
By: /s/
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Xxxxxxx X. Xxxxxx, CEO
