EXHIBIT 10.1
SECOND LOAN MODIFICATION AGREEMENT
THIS SECOND LOAN MODIFICATION AGREEMENT (this "Agreement") is entered
into as of June 30, 2004, by and between XXXXXX TECHNOLOGIES, INC. whose address
is 000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 (the "Company")
and each of the Subsidiaries who now or hereafter are parties to this Agreement
(individually and collectively "Borrower") and Silicon Valley Bank ("Lender")
whose address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, an Export-Import Bank Loan and Security Agreement, dated
February 24, 2004 (as may be amended from time to time, the "Loan Agreement").
The Loan Agreement provides for, among other things, an Exim Committed Line in
an amount not to exceed the Maximum Amount Available at any time (the "Exim
Facility"). Hereinafter, all indebtedness owing by Borrower to Lender shall be
referred to as the "Obligations." All capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Loan
Agreement.
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Obligations is
secured by the Collateral as described in the Loan Agreement and the
Intellectual Property Security Agreement of even date therewith from Borrower in
favor of Lender. Additionally, repayment of the Obligations is guaranteed by
pursuant to the Exim Guarantee from the Export-Import Bank of the United States
("Exim") in favor of Lender. Hereinafter, the above-described security documents
and guaranties, together with all other documents securing repayment of the
Obligations shall be referred to as the "Security Documents". Hereinafter, the
Security Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the "Existing Loan Documents". The Existing
Loan Documents, as modified by this Agreement are hereinafter collectively
called the "Loan Documents").
3. DESCRIPTION WAIVERS AND OTHER AGREEMENTS.
(a) Borrower is in violation of Section 6.7(a) (the "Tangible Net Worth
Covenant") for the months ending April 30 and May 31, 2004 (collectively, the
"Defaults") and expects to be in violation of the Tangible Net Covenant for the
month ending June 30, 2004 (the "Anticipated Default") and Borrower has
requested that the Lender waive the Defaults and forbear from acting on the
Anticipated Default until July 31, 2004.
(b) Borrower agrees that on or before July 15, 2004, it will schedule
an audit of Borrower's books and records and the Collateral.
(c) Lender hereby agrees to waive the Defaults.
4. FORBEARANCE.
(a) Lender agrees to forebear until July 31, 2004 (the "Forbearance
Period") from exercising its rights and remedies under the Existing Loan
Documents and under applicable law ("Default Rights"), notwithstanding the
Anticipated Default.
(b) By signing below, Borrower acknowledges that it is currently in
default and as a result of the Defaults will be in default as result of the
Anticipated Defaults and accordingly Lender is entitled to exercise the Default
Remedies. Nothing in this Agreement in any way shall constitute Lender's waiver
of the Anticipated Default. Borrower further agrees that the exercise of any
Default Rights by Lender upon termination of the Forbearance Period shall not be
affected by reason of this Agreement, and the Borrower shall not assert as a
defense thereto the passage of time, estoppel, laches or any statute of
limitations to the extent that the exercise of any Default Rights was precluded
by this Agreement.
(c) The Forbearance Period shall be immediately terminated, without
notice, if (a) Borrower breaches any of the terms set forth in this Agreement,
(b) the occurrence of any default (other than the Defaults and the Anticipated
Default) under the Existing Loan Documents, or (c) if any recital,
representation or warranty made herein, in any document executed and delivered
in connection herewith, or in any report, certificate, financial statement or
other instrument or document previously, now or hereafter furnished by or on
behalf of the Borrower in connection with this Agreement or any other document
executed and delivered in connection with this Agreement, shall prove to have
been false, incomplete or misleading in any material respect on the date as of
which it was made (collectively, a "Default"), whereupon Lender, at its option,
without any notice to Borrower, may immediately exercise any Default Remedies.
(d) Upon termination of the Forbearance Period described above, without
any notice to Borrower, Lender may exercise the Default Remedies. In addition,
Lender's agreement to continue to forbear from enforcing its remedies under the
Existing Loan Documents until the end of the Forbearance Period, notwithstanding
Borrower's Anticipated Default under the Existing Loan Documents, (a) in no way
shall be deemed an agreement by Lender to waive Borrower's compliance with all
other terms of the Existing Loan Documents, as modified by this Agreement and
(b) shall not limit or impair Lender's right to demand strict performance of all
other terms and covenants as of any date.
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
6. PAYMENT OF LOAN FEE. In consideration of Lender's agreement to enter into
this Agreement, Borrower shall pay to Lender upon the execution of this
Agreement, a fee in the amount of One Thousand Five Hundred Dollars ($1,500)
(the "Loan Fee"), plus all of Lender's out-of-pocket expenses, including
reasonable legal fees, in connection with this Agreement.
7. NO DEFENSES OF BORROWER. Borrower agrees that it has no defenses against the
obligations to pay any amounts under the Obligations.
8. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Lender is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Lender's agreement to
modifications to the existing Obligations pursuant to this Agreement in no way
shall obligate Lender to make any future modifications to the Obligations.
Nothing in this Agreement shall constitute a satisfaction of the Obligations. It
is the intention of Lender and Borrower to retain as liable parties all makers
and endorsers of Existing Loan Documents, unless the party is expressly released
by Lender in writing. No maker, endorser, or guarantor will be released by
virtue of this Agreement. The terms of this paragraph apply not only to this
Agreement, but also to all subsequent loan modification agreements.
9. CONDITIONS. The effectiveness of Agreement is conditioned upon the Lender's
receipt of such written consents and waivers from Exim as Lender deems necessary
and advisable in connection with the transactions described in this Agreement.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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This is executed as of the date first written above.
BORROWER:
Xxxxxx Technologies, Inc.
By: /s/ XXXX X. XXXXXX
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Name: XXXX X. XXXXXX
Title: VP & GENERAL COUNSEL
Xxxxxx IAC , LLP
By: /s/ XXXXXX QUICK
------------------------------
Name: XXXXXX QUICK
Title: MANAGER
DSI, Inc.
By: /s/ XXXX X. XXXXXX
------------------------------
Name: XXXX X. XXXXXX
Title: VP & GENERAL COUNSEL
Xxxxxx Solutions, Inc.
By: /s/ XXXX X. XXXXXX
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Name: XXXX X. XXXXXX
Title: VP & GENERAL COUNSEL
LENDER:
SILICON VALLEY BANK
By: /s/ XXXXXX X. XXXXXXXXXX
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Name: XXXXXX X. XXXXXXXXXX
Title: VICE PRESIDENT
The undersigned hereby consent to the modifications to the Indebtedness pursuant
to this Second Loan Modification Agreement, hereby ratifies all the provisions
of the Keep Well Agreement previously delivered to Lender and confirms that all
provisions of that document are in full force and effect.
Xxxxxx Holdings, Inc., a Delaware corporation
By: /s/ XXXXXX QUICK
------------------------------
Name: XXXXXX QUICK
Title: CEO & PRESIDENT
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