EXHIBIT 10.25
THIRD AMENDMENT TO BUSINESS LOAN AGREEMENT, FIRST AMENDMENT TO SECURITY
AGREEMENT AND FIRST AMENDMENT TO EACH OF TWO CERTAIN PROMISSORY NOTES
THIS THIRD AMENDMENT TO BUSINESS LOAN AGREEMENT, FIRST AMENDMENT TO
SECURITY AGREEMENT AND FIRST AMENDMENT TO EACH OF TWO CERTAIN PROMISSORY NOTES
("Third Amendment"), made and entered into as of the 8th day of May, 1998, by
and among XXXX SYSTEMS, INC., a California corporation ("TSI"), XXXX GROUP
NEWCO, INC., a Delaware corporation ("Newco"), and UNION BANK OF CALIFORNIA,
N.A., a national banking association ("Bank"),
W I T N E S S E T H:
WHEREAS, Bank and TSI are parties to that certain Business Loan Agreement,
dated as of June 19, 1997 (as amended by those certain First and Second
Amendments to Loan Agreement, dated as of February 12, 1998 and April 27, 1998,
respectively, the "Loan Agreement"), which Loan Agreement governs (a) that
certain Promissory Note (Base Rate) in a principal amount not to exceed
$4,500,000.00, dated February 6, 1998, executed by TSI in favor of Bank, and (b)
that certain Promissory Note (Base Rate) in the original principal amount of
$1,000,000.00, dated June 20, 1997, executed by TSI in favor of Bank
(individually a "Promissory Note" and collectively the "Promissory Notes"); and
WHEREAS, TSI wishes to change its state of incorporation to the State of
Delaware and, in connection therewith, has caused Newco to be incorporated as a
corporation under Delaware law and, pursuant to the terms and conditions of that
certain Agreement and Plan of Merger, dated as of May 1, 1998, by and between
Newco and TSI, will merge with Newco, with Newco being the surviving corporation
(the "Merger"); and
WHEREAS, upon the consummation of the Merger, Newco shall change its name
to "Xxxx Group, Inc." and the existing Xxxx Group, Inc., a guarantor of the
obligations of TSI to Bank, shall change its name to "Xxxx Systems
International, Inc."; and
WHEREAS, under Section 4.14 of the Loan Agreement and under Section 3(d) of
that certain Security Agreement, dated April 5, 1996, executed by TSI in favor
of Bank's predecessor in interest, Union Bank (the "Security Agreement"), TSI
has agreed not to enter into any consolidation or merger, or to change its
composition as a business entity, without the prior written consent of Bank and,
accordingly, has requested that Bank provide its written consent to the Merger;
and
WHEREAS, Bank is willing to consent to the Merger, subject, however, to the
terms and conditions of this Third Amendment; and
WHEREAS, TSI, Newco and Bank desire to amend the Loan Agreement, the
Security Agreement and each of the Promissory Notes to reflect certain changes
effected by the Merger;
NOW, THEREFORE, for and in consideration of the premises hereof, and other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. All capitalized terms used in this Third Amendment shall, unless
otherwise defined herein or unless the context otherwise requires, have the
meanings given thereto in the Loan Agreement, the Security Agreement or the
Promissory Notes, as the context may require.
2. Bank hereby consents to the Merger upon the terms and subject to the
conditions of this Third Amendment.
3. From and after the date on which this Third Amendment becomes
effective as provided in Xxxxxxxxx 0, xxxxx, each reference to "Xxxx Systems,
Inc.", "Borrower" or "Debtor" which is contained in the Loan Agreement, the
Security Agreement, either of the Promissory Notes or any other document,
instrument or agreement entered into in connection with the Loan Agreement, the
Security Agreement, either of the Promissory Notes or any transaction
contemplated by any of the same (including without limitation any application
and agreement relating to the issuance of a standby letter of credit under the
Loan Agreement) shall be and be deemed to be a reference to "Xxxx Group, Inc.
(formerly known as Xxxx Group Newco, Inc. and successor in interest to Xxxx
Systems, Inc.)". In connection therewith, (a) the Loan Agreement is amended by
deleting the name "Xxxx Systems, Inc." where it appears in the second line of
the introductory paragraph thereof and in the signature line thereof and by
substituting in lieu thereof in each such instance the name "Xxxx Group, Inc.
(formerly known as Xxxx Group Newco, Inc. and successor in interest to Xxxx
Systems, Inc.)", (b) the Security Agreement is amended by deleting the name
"Xxxx Systems, Inc." where it appears in the second line of the introductory
paragraph thereof and in the signature line thereof and by substituting in lieu
thereof in each such instance the name "Xxxx Group, Inc. (formerly known as Xxxx
Group Newco, Inc. and successor in interest to Xxxx Systems, Inc.)", and (c)
each of the Promissory Notes is amended by deleting the name "Xxxx Systems,
Inc." where it appears at the top of the first page thereof and in the signature
line thereof and by substituting in lieu thereof in each such instance the name
"Xxxx Group, Inc. (formerly known as Xxxx Group Newco, Inc. and successor in
interest to Xxxx Systems, Inc.)".
4. Upon the consummation of the Merger, Newco, under the name Xxxx Group,
Inc., agrees to, and shall, (a) assume all liabilities, duties and obligations
of TSI under the Loan Agreement, the Security Agreement, the Promissory Notes
and the other Loan Documents (including without limitation all liabilities,
duties and obligations arising under any application and agreement relating to
the issuance of a standby letter of credit under the Loan Agreement), and (b)
succeed to all rights of TSI under the Loan Agreement, the Security Agreement,
the Promissory Notes and the other Loan Documents.
5. The consent granted by Bank in Paragraph 2 of this Third Amendment and
the other provisions of this Third Amendment shall become effective upon the
satisfaction of the following conditions precedent:
(a) The Merger shall have been consummated in accordance with all
applicable laws, rules and regulations;
(b) Newco shall have changed its name to "Xxxx Group, Inc.";
(c) The existing Xxxx Group, Inc. shall have changed its name to
"Xxxx Systems International, Inc."; and
(d) The Bank shall have received the following, each in form and
substance satisfactory to Bank and its counsel:
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(i) This Third Amendment, duly executed by TSI and Newco;
(ii) A Security Agreement on Bank's standard form, dated the
date the Merger is consummated (the "Closing Date"), duly executed by
"Xxxx Group, Inc. (formerly known as Xxxx Group Newco, Inc.)";
(iii) Such UCC-1 Financing Statements and UCC-2 Financing
Statement Change Forms (together with evidence that the same have been
filed and, in the case of UCC-1 Financing Statements, are subject to
no prior filings) as Bank may require to assure itself of the
continued perfection of the security interests heretofore granted to
Bank by TSI;
(iv) A Continuing Guaranty of the obligations of "Xxxx
Group, Inc. (formerly known as Xxxx Group Newco, Inc. and successor in
interest to Xxxx Systems, Inc.)" to Bank, on Bank's standard form,
dated the Closing Date, duly executed by "Xxxx Systems International,
Inc. (formerly known as Xxxx Group, Inc.)";
(v) Such UCC-2 Financing Statement Change Forms (together
with evidence that the same have been filed) as Bank may require to
assure itself of the continued perfection of the security interests
heretofore granted to Bank by Xxxx Group, Inc.;
(vi) A written opinion of Xxxxxxxxxxx, Xxxxx & Xxxxxxxx LLP,
counsel to TSI, Newco and Xxxx Group, Inc., in the form appended
hereto as Exhibit I, dated the Closing Date and addressed to Bank; and
(vii) Such other documents, instruments and agreements as
Bank may reasonably require to effectuate the purposes of this Third
Amendment.
6. Except as expressly provided herein, the Loan Agreement, the Security
Agreement and the Promissory Notes are unchanged and shall remain in full force
and effect, and such Loan Agreement, such Security Agreement and such Promissory
Notes are hereby ratified and confirmed by TSI and Newco.
7. This Third Amendment shall be governed by and construed in accordance
with the laws of the State of California.
8. This Third Amendment may be executed in any number of identical
counterparts, any set of which signed by all parties hereto shall be deemed to
constitute a complete, executed original for all purposes.
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IN WITNESS WHEREOF, the parties have executed this Third Amendment as of
the day and year first above written.
XXXX SYSTEMS, INC. UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxxx X. Dirk By: /s/ Xxxxxxxx Xxxxxxx
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Title: Chief Executive Officer Title: Vice President
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By: /s/ Xxxxxxx Xxxxxxx
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XXXX GROUP NEWCO, INC. Title: Vice President
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By: /s/ Xxxxxxx X. Dirk
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Title: Chief Executive Officer
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