FOURTH AMENDMENT
TO REVOLVING LOAN AGREEMENT
THIS FOURTH AMENDMENT TO REVOLVING LOAN AGREEMENT (the "Fourth
Amendment"), dated effective as of the 26th day of June, 1998, is made by and
between KMG-BERNUTH, INC., a Delaware corporation (the "Borrower"), and
SOUTHTRUST BANK, NATIONAL ASSOCIATION, formerly known as SouthTrust Bank of
Alabama, National Association (the "Bank").
W I T N E S S E T H:
WHEREAS, the Borrower and the Bank entered into a Revolving Loan
Agreement dated August 1, 1996 (the "Loan Agreement"); and
WHEREAS, pursuant to that certain First Amendment to Revolving Loan
Agreement dated effective as of December 31, 1996 (the "First Amendment"),
the Bank and Borrower amended the Loan Agreement to extend the Revolving Loan
Termination Date until November 30, 1998; and
WHEREAS, pursuant to that certain Second Amendment to Revolving Loan
Agreement dated effective as of September 1, 1997 (the "Second Amendment"),
the Bank and Borrower further amended the Loan Agreement to extend the
Revolving Loan Termination Date until January 15, 1999; and
WHEREAS, pursuant to that certain Third Amendment to Revolving Loan
Agreement dated effective as of December 31, 1997 (the "Third Amendment")
(the Loan Agreement as amended by the First Amendment, the Second Amendment
and the Third Amendment being hereinafter referred to as the "Loan Agreement
As Amended"), the Bank and Borrower further amended the Loan Agreement to,
among other things, extend the Revolving Loan Termination Date until January
15, 2000, and to acknowledge the Bank's release of the Guaranty (except as
otherwise herein specifically provided, all capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed to them
in the Loan Agreement As Amended), all as more specifically hereinafter set
forth.
WHEREAS, the Borrower desires, and the Bank has agreed, to further
modify the Loan Agreement As Amended in order to amend certain financial
covenants contained in the Loan Agreement As Amended, all as more
specifically hereinafter set forth.
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NOW, THEREFORE, the Borrower and the Bank hereby modify the Loan
Agreement As Amended as follows:
1. Section 6.1(F) of the Loan Agreement As Amended is hereby deleted
in its entirety and the following new Section 6.1(F) substituted in lieu
thereof:
(F) The Borrower will maintain during the term of this Agreement:
(1) Tangible Net Worth of, at minimum, Two Million
Five Hundred Thousand and No/100 Dollars
($2,500,000.00) as of July 31, 1999, and until July 30,
2000, and Five Million and No/100 Dollars
($5,000,000.00) as of July 31, 2000, and at all times
thereafter.
(2) A Fixed Charge Coverage of not less than 1.25 to
1.0 at the end of each fiscal year commencing July 31,
1999.
(3) A ratio of Liabilities to Tangible Net Worth of
not more than 3.50 to 1.0 as of July 31, 1999, and
until July 30, 2000, and 2.0 to 1.0 as of July 31,
2000, and at all times thereafter.
(4) A Borrowing Base such that the balance of the
Borrower's outstanding Revolving Loan will not, at any
time, exceed its Borrowing Base.
2. Borrower represents and warrants to the Bank that all
representations and warranties given by Borrower in Article V of the Loan
Agreement As Amended are true and correct as of the date hereof, except to
the extent affected by this Fourth Amendment. Borrower represents and
warrants to the Bank that Borrower is in full compliance with all of the
covenants of Borrower contained in Article VI of the Loan Agreement As
Amended, except to the extent affected by this Fourth Amendment. Borrower
agrees to pay directly, or reimburse the Bank for, all reasonable expenses,
including the reasonable fees and expenses of legal counsel, incurred in
connection with the preparation of the documentation to evidence this Fourth
Amendment and any other documents executed in furtherance hereof.
3. Except as heretofore or herein expressly modified, or as may
otherwise be inconsistent with the terms of this Fourth Amendment (in which
case the terms and conditions of this Fourth Amendment shall govern), all
terms of the Loan Agreement As Amended shall be and remain in full force and
effect, and the same are hereby ratified and confirmed in all respects.
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IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment effective as of the date first above written.
WITNESSES: SOUTHTRUST BANK, NATIONAL ASSOCIATION
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
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Its: Group Vice President
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KMG-BERNUTH, INC.
/s/ Xxxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
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Its: Vice President
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