LOAN MODIFICATION AGREEMENT
EXHIBIT 10.24
Loan #9531605184-00006
THIS LOAN MODIFICATION AGREEMENT (“Agreement”) is made and effective as of September 16, 2011, by and between SUTRON CORPORATION, a Virginia corporation (“Borrower”) and BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation and successor by merger to Branch Banking and Trust Company of Virginia (“Lender”).
RECITALS
WHEREAS, on July 29, 2004, Lender made a commercial line of credit loan in the amount of One Million Six Hundred Twenty-Five Thousand and 00/100 Dollars ($1,625,000.00) (as subsequently modified, the “Loan”) to the Borrower, evidenced by, inter alia, (i) the Borrower’s Commercial Promissory Note of same date in the amount of the Loan (as subsequently modified, the “Note”), (ii) that certain first lien Security Agreement of same date executed by the Borrower for the benefit of the Lender (as subsequently
modified, the “Security Agreement”), and (iii) that Loan Agreement and Schedule DD thereto, each of same date executed by the Borrower and the Lender (as subsequently modified, collectively, the “Loan Agreement”) (the Note, Security Agreement, Loan Agreement, Schedule GC (as defined below), and all other documents evidencing or securing the Loan, as subsequently modified, are sometimes collectively referred to herein as “Loan Documents”); and
WHEREAS, by Loan Modification Agreement and Release of Guarantors dated as of August 5, 2005, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Two Million and 00/100 Dollars ($2,000,000.00), (ii) extend the maturity date of the Loan, and (iii) release the Guarantors, as defined therein, from their obligations under the Guaranty, as defined therein; and
WHEREAS, by Loan Modification Agreement dated as of August 5, 2006, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00), and (ii) extend the maturity date of the Loan; and
WHEREAS, by Loan Modification Agreement dated as of June 26, 2007, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Three Million and 00/100 Dollars ($3,000,000.00), (ii) extend the maturity date of the Loan, and (iii) amend Schedule DD to the Loan Agreement; and
WHEREAS, by Loan Modification Agreement dated as of August 4, 2008, the Lender and the Borrower agreed, inter alia, to extend the maturity date of the Loan; and
WHEREAS, by Loan Modification Agreement dated as of September 2, 2009, the Lender and the Borrower agreed, inter alia, to (i) extend the maturity date of the Loan, and (ii) replace Schedule DD to the Loan Agreement with that certain Amended and Restated Schedule “GC” to BB&T Loan Agreement dated September 2, 2009 (“Schedule GC”); and
WHEREAS, by Note and Loan Modification Agreement dated as of August 20, 2010, the Lender and the Borrower agreed, inter alia, to extend the maturity date of the Loan; and
WHEREAS, the Borrower has requested that Lender (i) further extend the maturity date of the Loan; and (ii) make certain other modifications to the Loan terms; and
WHEREAS, the Lender has agreed to grant Borrower’s request, subject to Borrower’s execution and delivery of, and performance of the terms and conditions set forth in, this Agreement.
NOW THEREFORE, for and in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Recitals. The above recitals are incorporated herein and made a part hereof.
2. Loan Statement. Borrower and Lender hereby confirm that as of the date hereof, (i) there is no accrued and unpaid interest under the Loan, and (ii) there is no outstanding principal balance under the Loan. The maximum principal amount of the Note is $3,000,000.00.
3. Note Payments/Maturity Date. Commencing October 5, 2011 and continuing on the fifth (5th) day of each and every calendar month during the term of the Loan, payments of interest only shall continue to be due and payable. The Loan maturity date is hereby extended to September 5, 2013.
4. Loan Agreement. Section 5 Financial Covenants of the Loan Agreement is hereby modified to provide as follows:
The Borrower covenants and agrees that until such time as all of the Borrower’s obligations under the Loan and the Loan Documents have been fully paid and satisfied, the Borrower shall at all times maintain the following financial covenants and ratios in accordance with GAAP; otherwise the Borrower shall be in default under the Loan Documents:
Tangible Net Worth: A minimum Tangible Net Worth of not less than Sixteen Million and 00/100 Dollars ($16,000,000.00) at all times. Tangible Net Worth is defined as net worth minus loans or advances to stockholders and affiliates minus intangible assets
Minimum Working Capital: This covenant has been deleted.
5. Modification of Loan Documents.
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A.
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The Note, Security Agreement, Loan Agreement and remaining Loan Documents are hereby modified to reflect and incorporate the terms and provisions of the Loan modifications as described in paragraphs 1 through 4 above.
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B.
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The terms “Note”, “Security Agreement”, “Loan Agreement”, and all other defined documents as referenced in the Loan Documents, shall be deemed to mean such documents, as modified by this Agreement. In addition, this Agreement shall be deemed to be a Loan Document.
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6. Modification Costs. Borrower further agrees to pay to Lender at the time of the execution of this Agreement, a Loan extension fee in the amount of $1,500.00.
7. Ratification and Renewal. The Borrower hereby ratifies and renews its covenants and agreements to pay the Loan in accordance with the terms and provisions of the Note, as modified by this Agreement; and the Borrower otherwise hereby ratifies and renews its covenants and agreements to perform, comply with and be bound by all other terms and provisions of the Note and the Loan Documents, all as modified by this Agreement. The Borrower also hereby confirms that the Security Agreement continues to secure repayment of
the Note, as modified by this Agreement. Further, the Borrower covenants and warrants that each and every provision of the Note and Loan Documents, as modified by this Agreement, are in full force and effect and are the lawful and binding obligations of Borrower, enforceable in accordance with their respective terms.
8. Waiver. The Borrower acknowledges Lender as the owner and holder of the Note, and the secured party under the Security Agreement, and covenants and agrees that there are no defenses, set-offs, or counter-claims against Lender, with respect to the Note and the Loan Documents, as modified by the terms of this Agreement, or otherwise, or with respect to the Loan or with respect to the collection or enforcement of any of the same. The parties to this Agreement do not intend this Agreement to be construed as a novation
of the Note.
9. Further Assurances. The parties agree to execute and deliver any and all instruments and documents reasonably necessary or required from time to time to effect the terms and intent of this Agreement.
10. Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the modification of the Loan, and no other agreement, statement or promise made by any party hereto, or any employee, officer, agent, or attorney of any party hereto, shall be valid or binding.
11. Binding Effect. Each and every of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors, personal representatives and assigns.
12. Governing Law. This Agreement shall be governed by, construed under, and interpreted and enforced in accordance with the laws of the Commonwealth of Virginia, but without regard for Virginia’s laws or rules regarding conflict or choice of laws.
13. Severability. If any term, covenant or condition of this Agreement, or the application thereof to any person or circumstance, shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to other persons or circumstances, shall not be affected hereby, and each term, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
14. Headings. The captions and headings herein are for convenience of reference only and in no way define or limit the scope or content of this Agreement or in any way affect its provisions.
15. Modification. The terms of this Agreement may not be changed, waived, discharged or terminated orally, but only by an instrument in writing, signed by the party against which enforcement of the change, waiver, discharge or termination is asserted.
16. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together will constitute one instrument.
SIGNATURES ON FOLLOWING PAGES
IN WITNESS WHEREOF, the parties have executed this Loan Modification Agreement as of the date and year first written above.
BORROWER:
SUTRON CORPORATION, a Virginia corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Treasurer
COMMONWEALTH OF VIRGINIA )
)
COUNTY OF LOUDON ) to-wit:
The foregoing was subscribed and sworn to before me on this 16 day of September 2011, by Xxxxxx X. Xxxxxx, as Treasurer of SUTRON CORPORATION, a Virginia corporation, on behalf of the corporation.
Xxxxxxx X.
Xxxxx
Notary Public
My Commission Expires: January 31, 2014
Notary Registration No.: 127916
[signature of Lender of following page]
LENDER:
BRANCH BANKING AND TRUST COMPANY, a
North Carolina banking corporation
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Senior Vice President
COMMONWEALTH OF VIRGINIA )
)
COUNTY OF FAIRFAX ) to-wit:
The foregoing instrument was acknowledged before this 16th day of September, 2011, by Xxxxxxx X. Xxxxx, as Senior Vice President of BRANCH BANKING AND TRUST COMPANY, a North Carolina corporation, on behalf of the corporation.
Xxxxx Xxxxxxxx
Notary Public
My Commission Expires: 9/30/2014
Notary Registration No.: 268459
