Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "Amendment") dated as of
May 1, 2002 is entered into by and among Circuit Research Labs, Inc., an Arizona
corporation ("Parent"), CRL Systems, Inc., a Nevada corporation ("Borrower") and
Xxxxxx Acquisition Corp. (f/k/a Xxxxx, Inc.), a Delaware corporation ("Lender").
RECITALS
A. The parties hereto entered into a Credit Agreement dated May 31, 2000
(the "Original Credit Agreement"), as amended by the First Extension Agreement,
dated September 29, 2000 (the "First Extension Agreement"), the Second Extension
Agreement, dated November 28, 2000, the Third Extension Agreement, dated January
18, 2001, the Fourth Extension Agreement, dated February 22, 2001, the Tranche
A Extension Agreement, dated March 30, 2001, the Tranche A Note and Tranche B
Note Extension Agreement, dated April 16, 2001 (the "Extension Agreements") and
the Amendment to the Credit Agreement, dated as of October 1, 2001 (the
"Amendment to Credit Agreement"). The Original Credit Agreement, as amended,
is herein referred to as the "Credit Agreement".
B. Pursuant to Section 2.1 of the Credit Agreement, Borrower agreed to
pay the principal amount of the Tranche A Note to Lender in quarterly payments
beginning April 30, 2002 (the "Quarterly Payments").
C. Pursuant to Section 2.2 of the Credit Agreement, Borrower agreed to
pay the full principal amount of the Tranche B Note to Lender on April 30, 2002.
D. The Credit Agreement and the Notes provide that the Notes are payable
on demand by Lender.
E. Lender and Borrower desire, subject to the conditions set forth in
this Amendment, to further amend the Credit Agreement and to amend and restate
the Tranche A Note and the Tranche B Note in order to among other things, remove
the requirement for the Quarterly Payments and to extend the Tranche A Note
Maturity Date and the Tranche B Note Maturity Date.
NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements
contained in this Amendment and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Amendment hereby agree as follows:
AGREEMENT
1. Section 1.1 of the Credit Agreement is hereby amended by deleting the
definitions of the following defined terms in their respective entireties and
substituting the following definitions for such defined terms:
"Agreement": this Credit Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Tranche A Maturity Date": December 31, 2003.
"Tranche B Maturity Date": December 31, 2003.
"Tranche A Note": the Second Amended and Restated Tranche A Note,
dated May 1, 2002, executed by Borrower and payable to the order of Lender
in the principal amount of $5,000,000.
"Tranche B Note": the Amended and Restated Tranche B Note, dated
May 1, 2002, executed by Borrower and payable to the order of Lender in the
amount of $3,500,000.
2. Section 2.1 of the Credit Agreement is hereby amended by deleting
Section 2.1 in its entirety and substituting the following language:
"2.1 Repayment of Tranche A Note. The Borrower hereby unconditionally
promises to pay to the Lender the principal amount of the Tranche A Note ON
DEMAND, or if no such demand is sooner made, on the Tranche A Maturity Date
(or such earlier date on which the Tranche A Note becomes due and payable
pursuant to Section 8.1). The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Tranche A Note from time to
time outstanding at the rate of 12 percent per annum and ON DEMAND, or if
no such demand is sooner made on the dates set forth in Sections 3.3 and
3.4."
3. Section 2.2 of the Credit Agreement is hereby amended by deleting
Section 2.2 in its entirety and substituting the following language:
"2.2 Repayment of Tranche B Note. The Borrower hereby unconditionally
promises to pay to the Lender the principal amount of the Tranche B Note ON
DEMAND, or if no such demand is sooner made, on the Tranche B Maturity Date
(or such earlier date on which the Tranche B Note becomes due and payable
pursuant to Section 8.1). The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Tranche B Note from time to
time outstanding at the rate of 12 percent per annum and ON DEMAND, or if
no such demand is sooner made, on the dates set forth in Sections 3.3 and
3.4."
4. Borrower acknowledges that failure of Borrower to fulfill any of its
obligations under this Amendment shall be deemed an Event of Default under the
Credit Agreement.
5. Borrower and Parent agree that the Obligations are valid and
enforceable obligations of Borrower and hereby confirms, acknowledges and
ratifies the existence of the Obligations and Borrower's and Parent's
obligations to Lender with respect thereto as set forth in the Credit Agreement,
and all other obligations of Borrower and Parent to Lender under the Loan
Documents.
6. Borrower and Parent jointly and severally represent and warrant to
Lender as follows:
a. The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Arizona.
b. The execution, delivery and performance by the Borrower and
Parent of this Amendment are within the respective corporate powers of Borrower
and Parent, have been duly authorized by all necessary corporate action and do
not violate, contravene or create a breach, violation or default under (i) the
Borrower's or Parent's charter or by-laws, (ii) any Requirement of Law or any
Contractual Obligation binding on or affecting Parent or the Borrower, or result
in, or require, the creation or imposition of any mortgage, deed of trust,
pledge, Lien, security interest or other charge, encumbrance or preferential
arrangement of any nature (other than as contemplated by the Loan Documents)
upon or with respect to any of the properties now owned or hereafter acquired by
the Borrower or Parent.
c. No authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority is required for the due execution,
delivery and performance by the Borrower or Parent of this Amendment.
d. There is no pending or threatened action or proceeding affecting
Parent, the Borrower or any of its Subsidiaries before any court, Governmental
Authority or arbitrator, which could materially and adversely affect the
financial condition or operations of Parent, the Borrower or any Subsidiary or
which purports to affect the legality, validity or enforceability of this
Amendment or any other Loan Document.
e. The representations and warranties made by Parent and the
Borrower in the Credit Agreement (as amended hereby) and the other Loan
Documents are true and correct on and as of the date of this Amendment with the
same force and effect as if made on and as of the date of this Amendment.
7. The Borrower agrees to pay or reimburse the Lender on demand for all
of its out-of-pocket costs and reasonable expenses incurred in connection with
this Amendment, and any other documents prepared in connection herewith and the
transactions contemplated hereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Lender.
8. In consideration of (i) the modification of certain provisions of the
Credit Agreement, as herein provided, and (ii) the other benefits received by
Borrower and Parent hereunder and in connection herewith, each of Borrower and
Parent hereby unconditionally and irrevocably RELEASES, RELINQUISHES and fully
and forever DISCHARGES Lender, all respective subsidiaries and affiliates of
Lender, and all of Lender's and any such subsidiary's or affiliate's respective
agents, officers, directors, employees, representatives, heirs, successors and
assigns (collectively, the "Released Lender Parties") from and against any and
all claims, demands, remedies, liabilities, suits, damages, actions and causes
of action of any and every kind or character, past or present, whether now
known, suspected or claimed, and whether arising under statute, common law or in
equity (collectively, the "Borrower Claims") which Borrower
ever had or may have against the Released Lender Parties or any of these, at any
time on or prior to the date of this Agreement arising out of or in connection
with this Agreement, the Credit Agreement as amended hereby and any other Loan
Documents or the actual or attempted enforcement by Lender of any rights or
remedies relating to any of the foregoing. Borrower covenants and agrees never
to commence, prosecute or cause to be prosecuted against any of the Released
Lender Parties any action or other proceeding based upon any Borrower Claims.
The agreements of Borrower set forth in this Section 8 shall survive the
expiration or other termination of this Agreement.
9. The Borrower and Parent hereby irrevocably and unconditionally waive
all protections that the Borrower or Parent could assert against the Lender or
any of its affiliates, successors or assigns, as a result of the running of any
present and future statute of limitations, laches or other limitations period,
and hereby agree that all present and future statute of limitations applicable
to the Loan Documents and the Notes shall be waived and suspended until 120 days
following the receipt by Lender of the indefeasible payment in full in cash of
the Obligations.
10. THIS AMENDMENT, THE AMENDMENT TO CREDIT AGREEMENT, THE EXTENSION
AGREEMENTS, THE NOTES AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
OF THE PARENT, THE BORROWER AND THE LENDER WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND THERE ARE NO PROMISES, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES
BY THE LENDER RELATIVE TO THE SUBJECT MATTER HEREOF NOT EXPRESSLY SET FORTH OR
REFERRED TO HEREIN, THE AMENDMENT TO CREDIT AGREEMENT, THE EXTENSION AGREEMENTS,
THE NOTES OR THE OTHER LOAN DOCUMENTS.
11. Except as expressly amended, modified and supplemented by this
Amendment, the terms, conditions and obligations contained in the Loan
Documents, the Amendment to Credit Agreement and the Extension Agreements remain
in full force and effect and are hereby ratified and confirmed. The execution,
delivery and effectiveness of this Amendment will not, operate as a waiver of
any right, power or remedy of Lender under any of the Loan Documents, the
Amendment to Credit Agreement or the Extension Agreements nor constitute a
waiver of any provision of any of the Loan Documents, the Amendment to Credit
Agreement or the Extension Agreements.
12. This Amendment will be deemed to be a contract made under the laws of
the State of New York and for all purposes will be governed by and interpreted
in accordance with the laws prevailing in the State of New York, without regard
to principles of conflict of laws.
13. This Amendment may be executed in several counterparts each of which
when so executed will be deemed to be an original and all of which will together
constitute one and the same agreement. This Amendment will become effective
when this Amendment is executed by each of the parties hereto.
14. Capitalized terms used but not defined in this Amendment have the
meanings ascribed to them in the Credit Agreement.
IN WITNESS WHEREOF, Parent, Borrower and Xxxxxx Acquisition Corp. have
executed this Agreement as of the first date written above.
CRL SYSTEMS, INC.
By: /s/ C. Xxxxxx Xxxxxxxxxxx
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Name: C. Xxxxxx Xxxxxxxxxxx
Title: President, Chief Executive Officer, Chairman
XXXXXX ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, Secretary
CIRCUIT RESEARCH LABS, INC.
By: /s/ C. Xxxxxx Xxxxxxxxxxx
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Name: C. Xxxxxx Xxxxxxxxxxx
Title: President, Chief Executive Officer, Chairman
