EXHIBIT 4.1
PAY-OFF AGREEMENT
August 23, 2002
VIA FACSIMILE AND
OVERNIGHT MAIL
Ballantyne of Omaha, Inc., as Leading Borrower
0000 XxXxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxx, Treasurer
Re: Loan and Security Agreement, dated as of August 30, 2001, by an among
Ballantyne of Omaha, Inc. ("LEADING BORROWER"), Design &
Manufacturing, Inc., XenoTech Rental Corp. and Xenotech Strong, Inc.
(collectively, the "OTHER BORROWERS"; Leading Borrower and Other
Borrowers being collectively referred to as the "BORROWERS" and each
as a "BORROWER"), and General Electric Capital Corporation
("LENDER"), as amended by that certain First Amendment to Loan and
Security Agreement, dated as of March 26, 2002 (collectively, the
"LOAN AGREEMENT").
Gentlemen:
All capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the above-described Loan Agreement.
The total amount necessary to pay in full as of this date all outstanding
Loans and other Obligations (other than any and all indemnity obligations under
any of the Loan Documents not yet due and payable and which by their terms
survive the termination of such Loan Documents (collectively, the "INDEMNITY
OBLIGATIONS")) of the Borrowers to the Lender under the Loan Agreement and the
other Loan Documents is as follows:
(i) Aggregate outstanding principal balance of the
Obligations as of this date ........................ $ 1,000,000.00
(ii) Accrued but unpaid interest on the Obligations
as of this date .................................... $ 5,034.58
(iii) Other:
Prepayment and settlement fee ...................... $ 100,000.00
Unused Credit Line fee ............................. $ 1,749.93
Wire Charge fees ................................... $ 50.00
Collateral Monitoring fee .......................... $ 677.42
Legal fees ......................................... $ 5,936.54
Audit expenses 7/22-7/26/02 (field review) ......... $ 4,541.26
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(iv) Total pay-off amount
on the Loan(s) and the other
Obligations (sum of (i)-(iii))(other
than the Indemnity Obligations)..................... $ 1,117,989.73
LESS:
Deposits on hand not applied to the loan balance ......... $ (1,300,000.00)
---------------
Remaining pay-off due .................................... $ (182,010.27)
The Borrowers and the Lender agree that the Lender shall retain all
deposits in the Collection Account on hand as of the date of this letter and
shall retain such deposits made in the Collection Account subsequent thereto
until the amount so retained by the Lender is equal to the total pay-off amount
set forth in (iv) above (the "PAY-OFF AMOUNT"). The Pay-Off Amount is subject to
adjustment with respect to any Obligations accruing subsequent to the date
hereof until the date upon which the Pay-Off Amount has been paid in full. All
deposits to the Collection Account received by the Lender in excess of the
Pay-Off Amount, if any, shall be promptly returned to the Leading Borrower.
Subject to the Lender's receipt of the Pay-Off Amount in full in accordance
with the preceding paragraph, the Lender agrees: (a) Borrower will not be
indebted to the Lender for any reason under the Loan Agreement or the other Loan
Documents (other than with respect to the Indemnity Obligations), (b) all of the
Lender's security interests in, security titles to and other liens on all real
and personal property of the Borrower pursuant to the Loan Agreement will be
automatically terminated and released, (c) all Guarantors of the Obligations
will be automatically released from their obligations to the Lender (other than
with respect to the Indemnity Obligations), (d) the Lender shall execute and
deliver to the Borrowers letters in the form of EXHIBIT A attached hereto
terminating each of the Account Agreements entered into in connection with the
Loan Agreement, and (e) the Borrowers shall be authorized to file any and all
Uniform Commercial Code ("UCC") financing statement terminations with respect to
the Lender's UCC financing statement filings on the Borrowers and the Lender
will execute any and all mortgage releases (including such releases with respect
to Borrower's real property located in Xxxxxxx County, Nebraska and Champaign
County, Illinois) and other such lien release documents filed in connection with
the Loan Documents in order to evidence or otherwise give public notice of such
collateral terminations and releases (provided, however, that any and all such
termination statements, mortgage releases and other such documents shall be
prepared and recorded at the Borrowers' expense).
By signing below, the Borrowers, the Guarantors and the Lender each
acknowledge and agree that (a) the Domestic Revolving Credit Loan, the Foreign
Revolving Credit Loan and the Term Loan have been terminated by the Borrowers as
of this date, (b) each of the Loan Documents is terminated as of this date
(other than the provisions contained in such Loan Documents with respect to
Indemnity Obligations), and (c) the Lender shall have no further obligation to
make any Loans or other financial accommodations to or on behalf of the
Borrowers under the Loan Documents.
For and in consideration of the Lender's agreements contained herein, the
Borrowers and the Guarantors hereby forever release and discharge the Lender,
its officers, directors, employees, agents, representatives, successors and
assigns (collectively, the "RELEASED PARTIES") from any and all claims, causes
of action, damages and liabilities of any nature whatsoever,
known or unknown, which such Person ever had, now has or might hereafter have
against the Released Parties which relate, directly or indirectly, to the Loan
Agreement or any of the Loan Documents or the transactions relating thereto
(other than the Lender's agreement and obligations under this letter).
For and in consideration of the Lender's agreements contained herein, the
Borrowers agree to reimburse and pay, within three days of demand therefor, in
immediately available funds, all losses, liabilities, charges, expenses and fees
which the Lender may incur as a result of any non-payment, claim, refund or
charge back of any checks or other items which have been credited by the Lender
to the Borrowers' loan account with the Lender, together will all expenses and
other charges incident thereto. Additionally, the Borrowers agrees to reimburse
and pay, within three days of demand therefor, in immediately available funds,
all losses, liabilities, charges, expenses and fees (i) which the Lender may
have incurred or may now or hereafter incur in connection with the transactions
contemplated hereby which have not as yet been reflected in the Borrower's loan
account which Borrowers are, or may be, required to bear pursuant to the Loan
Documents and (ii) which the Lender may incur as a result of errors in
calculation of any amounts due the Lender by the Borrowers. Notwithstanding
anything to the contrary contained herein, the Lender hereby reserves all of its
rights in and to any checks or similar instruments for payment of money
heretofore received by the Lender in connection with its loan arrangements with
the Borrowers under the Loan Agreement and all of its rights to any monies due
or to become due under paid checks or similar instruments for which the Lender
gave credit to any of the Borrowers in calculating the foregoing Pay-Off Amount.
The Lender hereby requests that each of the Borrowers and the Guarantors
acknowledge its receipt and acceptance of and agreement to the terms and
conditions set forth in this letter by signing a copy of it in the appropriate
space indicated below and returning it to the Lender no later than 5.00 PM on
August 26, 2002. This letter must be signed by each of the Borrowers and the
Guarantors and shall not become effective unless and until it is so accepted and
agreed to by each of the Borrowers and the Guarantors and returned to the
Lender. Delivery of a photocopy or telecopy of an executed counterpart of this
letter shall be effective as delivery of a manually executed original
counterpart of this letter.
Very truly yours,
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Account Manager
-----------------------------
Its: Duly Authorized Signatory
Each of the undersigned hereby acknowledges
its receipt and acceptance of and agreement
to the terms and conditions of this letter:
BORROWERS:
BALLANTYNE OF OMAHA, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: President
----------------------------
DESIGN & MANUFACTURING, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: President
----------------------------
XENOTECH RENTAL, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: President
----------------------------
XENOTECH STRONG, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: President
----------------------------
GUARANTORS:
STRONG WESTREX, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: President
----------------------------
BALLANTYNE OVERSEAS CORP.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: President
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