Exhibit 10.16
[Integra Bank Logo]
Integra Bank
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
January 3, 1996
VIA CERTIFIED MAIL
Maarten X. Xxxxxxx, Chairman
OAKHURST COMPANY, INC.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
RE: Credit Agreement dated August 1, 1994, as amended (the "Credit Agreement")
by and between Oakhurst Company, Inc. (the "Borrower") and Integra Bank
(the "Bank")
Dear Maarten:
This letter shall constitute notice that the borrower is in violation of
Section 6.14(a)(ii) of the Credit Agreement which reqires the borrower to
maintain "Consolidated Tangible Net Worth not less than $1,000,000 at the end of
each of its fiscal quarters." The Borrower's failure to cure the foregoing
violation to the Bank's reasonable satisfaction within fifteen (15) days after
the date of this letter will constitute an Event of Default under Section 8.03
of the Credit Agreement. The Borrower has advised the Bank that it will not be
able to cure the aforesaid covenant violation and has therefore requested the
Bank to modify the covenant requirements. Capitalized terms used in this letter
and not otherwise defined shall have the meanings ascribed thereto in the Credit
Agreement.
The Bank has considered the borrower's request and, subject to the further
provisions of this letter, the Bank has agreed to modify Section 6.14(a)(ii) of
the Credit Agreement so that the Borrower will now be required to maintain a
consolidated net worth not less than $6,500,000; for purposes of the foregoing,
"consolidated net worth" shall mean (i) the total shareholder's equity
(including capital stock, additional paid-in capital and retained earnings after
deducting treasury stock) which would appear on a consolidated balance sheet of
the Borrower prepared in accordance with GAAP, minus (ii) any tax deferrals.
The foregoing modification is being granted by the Bank with the express
understanding and agreement of the Borrower that:
(i) the Bank does not intend to extend the Revolving Credit Expiration Date
beyond July 31, 1996,
(ii) the Revolving Credit Loans and all indebtedness and obligations of Steel
City to the Bank will be immediately due and payable in full on the
Revolving Credit Expiration Date,
Maarten X. Xxxxxxx, Chairman
January 3, 1996
Page 2
(iii) the Borrower will immediately begin to solicit loan commitments from
alternate financing sources for the Borrower and Steel City, so that
all indebtedness and obligations of the Borrower and Steel City to the
Bank will be refinanced as soon as possible, but in any event no later
than July 31, 1996, and
(iv) if the Borrower has not refinanced the outstanding principal balance of
the Revolving Credit Loans by February 28, 1996, then commencing on
March 1, 1996, the outstanding principal balance of the Revolving Credit
Loans will bear interest at a rate per annum equal to the Prime Rate
plus two and one-half percent (2.5%).
Except to the extent specifically provided for above, this letter does not
constitute a modification, alteration, release,limitation or waiver of any
default, breach, right, power, remedy or privilege under the Loan Documents. The
Bank expressly reserves all rights and remedies previously available to it under
the Loan Documents against the Borrower and the Subsidiaries and, except to the
extent provided for herein, the Bank may at any time exercise its rights and
remedies.
Please signify your consent to the foregoing by signing below where indicated
and returning a signed copy to me.
Sincerely,
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President - Corporate Banking
cc: Xxxxxxx X. X'Xxxxxx, III
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxx
X. Xxxxxxx
Xxxxx Xxxxxx, Esquire
Xxxxx X. Xxxxxxx, Esquire
The foregoing is agreed to this 9th day of January, 1996.
OAKHURST COMPANY, INC.
/s/ Xxxx Xxxxxxxx
By: Xxxx Xxxxxxxx
Title: President
