FIFTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
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This Fifth Amendment to Loan and Security Agreement ("Fifth Amendment")
is made effective the day of April, 2004, by and among SOVEREIGN BANK (the
"Bank"), a federally-chartered, SAIF-insured savings institution with offices at
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000; X. X. XXXX CO., INC.,
a Delaware corporation ("X.X. Xxxx Co."); XXXXX X. and XXXXXXXXXX X. XXXXXX
("Menards," together with X.X. Xxxx Co. sometimes hereinafter referred to as
"Borrowers"), with offices at 000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000; and MORO CORPORATION, a Delaware corporation
("Guarantor").
BACKGROUND
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A. Borrowers and the Bank entered into a Loan and Security Agreement
dated March 31, 2000, as amended (the "Agreement").
B. Borrowers have requested the Bank to loan X. X. Xxxx Co. an
additional $120,000 pursuant to an equipment term loan (the "Equipment Term
Loan") to permit X. X. Xxxx Co. to finance the purchase of certain equipment and
vehicles more specifically described in Exhibit "A" attached hereto and made a
part hereof and the Bank has agreed to make the Equipment Term Loan, all as more
particularly set forth in this Fifth Amendment.
C. The Bank and Borrowers desire to enter into this Fifth Amendment to
make the Equipment Term Loan to X. X. Xxxx Co. pursuant to the terms hereof.
D. The Agreement shall remain in full force and effect, without
modification or amendment, except as specifically set forth below. All terms not
otherwise defined herein shall have the meanings set forth in the Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, and in consideration of the aforementioned Background which is
incorporated herein by reference, and in consideration of the terms and
conditions set forth herein, agree as follows:
1. CONFIRMATION OF EXISTING LOANS. Borrowers hereby ratify, confirm and
acknowledge that the statements contained in the foregoing Background are true,
accurate and correct and that the Loan Documents, as that term is defined in the
Agreement, are valid, binding and in full force and effect as of the date
hereof. Borrowers further acknowledge, confirm, represent and warrant that they
have no defenses, set-offs, counterclaims, or challenges to or against the
payment of any sums owing under the Loan Documents, or to the enforceability or
validity of the terms thereof. Borrowers further acknowledge, confirm, represent
and warrant that they have no claims, suits or causes of action against the Bank
and hereby remise, release and forever discharge the Bank, its officers,
directors, shareholders, representatives and their successors and assigns, and
any of them, from any claims, causes of action, suits, or demands whatsoever in
law and equity, which they have or may have from the beginning of the world to
the date of this Fifth Amendment. Neither this Fifth Amendment nor any of the
documents executed in connection herewith is in any way intended to constitute a
novation of or to the Loan Documents.
2. CONFIRMATION OF INDEBTEDNESS. Borrowers confirm and acknowledge that
the outstanding principal balance of the indebtedness as evidenced by the Loan
Documents was One Million Three Hundred Forty-One Thousand Eight Hundred Six and
58/100 Dollars ($1,341,806.58) as of April 6, 2004.
3. All references in the Agreement and/or any of the Loan Documents to
"the Agreement" or "this Agreement" shall be understood to refer to the Loan and
Security Agreement, as amended by this Fifth Amendment, and as the same may
hereafter be amended from time to time. All terms not defined herein shall have
the meanings given to them in the Agreement.
4. The following definitions are hereby added to Section 1.1 of the
Agreement:
EQUIPMENT TERM LOAN. The meaning provided at Section 2.11 hereof.
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EQUIPMENT TERM LOAN NOTE. The equipment term loan note executed by
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X. X. Xxxx Co. in the principal amount specified in Section 2.12 hereof and in
the form of Exhibit "B" attached hereto and made a part hereof.
5. A new Section 2.11 is added to the Agreement to read in its entirety
as follows:
2.11 EQUIPMENT TERM LOAN. Subject to, and in accordance with, the
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terms and conditions of this Agreement, the Bank agrees to loan X. X. Xxxx Co.
the principal amount of One Hundred Twenty Thousand Dollars ($120,000.00) (the
"Equipment Term Loan").
6. A new Section 2.12 is added to the Agreement to read in its entirety
as follows:
2.12 EQUIPMENT TERM LOAN NOTE. The obligation of X.X. Xxxx Co. to
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pay the principal of, and accrued interest on, the Equipment Term Loan shall be
evidenced by its promissory note dated this date (the "Equipment Term Loan
Note"):
(a) payable to order of the Bank in the face amount of One
Hundred Twenty Thousand Dollars ($120,000.00);
(b) bearing interest on the unpaid principal amount
at an annual rate equal to the
Prime Rate plus one-quarter (.25%);
(c) with interest payable on a monthly basis in arrears on the
first day of each calendar month commencing May 1, 2004;
(d) with principal payable in seventy-one (71) equal,
consecutive monthly installments in the amount of $1,690.14 each, plus interest
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thereon, commencing on May 1, 2004 and continuing on the first day of each month
thereafter until April __, 2010, at which time the remaining unpaid principal
balance, plus all accrued interest thereon, shall be paid in full, or due in
full upon the occurrence of an Event of Default;
(e) prepayable by X.X. Xxxx Co. without penalty or premium but
with accrued interest to the date of such prepayment on the amount prepaid, at
any time and from time to time, in whole or in part, upon notification to the
Bank of such prepayment not later than 10:00 a.m. on the date of such
prepayment;
(f) secured by the Collateral and the Surety Agreement; and
(g) in the form of Exhibit "B" attached hereto and made a part
hereof.
7. Sections 2.11, 2.12, 2.13 and 2.14 of the Agreement are hereby
renumbered as Sections 2.13, 2.14, 2.15 and 2.16, respectively.
8. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and
warrant that, as of the date hereof:
(a) Borrowers have the authority and have taken all action necessary
to enter into this Fifth Amendment;
(b) The representations and warranties of Borrowers set forth in
Article 4 of the Agreement are true and correct as of the date of this Fifth
Amendment as if made on the date hereof; and
(c) As of the date of this Fifth Amendment there does not exist any
Event of Default under the Agreement nor does there exist any event which with
the passage of time, the giving of notice, or both, would constitute an Event of
Default under the Agreement.
9. CERTIFICATE(S) OF INSURANCE. Certificate(s) of insurance evidencing
that Borrowers are in compliance with Section 6.10 of the Agreement as of the
date hereof shall be presented to the Bank prior to or concurrently with the
signing of this Fifth Amendment.
10. EXPENSES. Borrowers agree to reimburse the Bank for its
out-of-pocket expenses, including, but not limited to, reasonable attorney's
fees and other costs of preparation and filing concerning this Fifth Amendment
and other documents as required by law or deemed necessary by Bank, including,
but not limited to, the cost of all lien searches deemed necessary by the Bank.
Such costs and expenses shall be paid simultaneously with the execution of this
Fifth Amendment and all such expenses hereafter incurred shall be paid within
fifteen (15) days after notice by the Bank.
11. ADDITIONAL EVENTS OF DEFAULT. Without limiting the generality of
the terms and conditions of the Agreement or this Fifth Amendment, the
occurrence of any one or more of the following events shall constitute
additional Events of Default under the Agreement:
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(a) The failure of either Borrower to duly perform or observe any
obligation, covenant or agreement set forth in this Fifth Amendment;
(b) Any representation or warranty of either Borrower set forth
herein is discovered to be materially untrue as of the date of this Fifth
Amendment, or any statement, certificate or data furnished by Borrowers to the
Bank heretofore is discovered to be materially untrue as of the date as of which
the facts therein set forth were stated or certified to be true.
12. INCONSISTENCIES AND INTEGRATION. All of the terms, conditions and
covenants, to the extent not expressly inconsistent with those set forth herein,
of the Agreement or other Loan Documents are incorporated herein by reference
and shall remain in full force and effect unaffected or unaltered by the terms
of this Fifth Amendment. To the extent there is any inconsistency with the terms
of this Fifth Amendment and any of the other Loan Documents, the terms of this
Fifth Amendment shall control.
13. MISCELLANEOUS.
(a) FURTHER ASSURANCES. From time to time Borrowers shall execute
and deliver to the Bank such additional documents and will provide such
additional information as the Bank may reasonably request to carry out the
intent of this Fifth Amendment.
(b) GOVERNING LAW. This Fifth Amendment, and the rights and
obligations of the parties under this Fifth Amendment, shall be governed by, and
construed and interpreted in accordance with, the domestic, internal laws, but
not the law of conflicts of law, of the Commonwealth of Pennsylvania.
(c) BINDING EFFECT AND ASSIGNMENT. This Fifth Amendment shall inure
to the benefit of, and shall be binding upon, the respective successors, heirs
and assigns of the parties hereto. Neither Borrower shall assign any of its
rights or delegate any of its obligations hereunder without the prior written
consent of the Bank.
(d) SEVERABILITY. If any provision of this Fifth Amendment shall be
invalid under applicable laws, such invalidity shall not affect any other
provision of this Fifth Amendment that can be given effect without the invalid
provision, and to this end, the provisions hereof are severable.
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(e) COUNTERPARTS AND HEADINGS. This Fifth Amendment may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute but one and the same instrument. Section
headings contained herein are for convenience of reference only and shall in no
way affect or be used to construe or interpret this Fifth Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Fifth
Amendment to Loan and Security Agreement as of the day and year first above
written.
BORROWERS:
X. X. XXXX CO. INC.
By: /S/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, President
/S/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, individually,on a joint
and several basis with Xxxxxxxxxx X. Xxxxxx
/S/ XXXXXXXXXX X. XXXXXX
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Xxxxxxxxxx X. Xxxxxx, individually, on a
joint and several basis with Xxxxx X. Xxxxxx
SOVEREIGN BANK
By:_________________________________
Xxxxxxx X. Xxxxxxx, Vice President
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The undersigned, Moro Corporation, surety to the Bank with respect to
all obligations of Borrowers to the Bank, has read the above Fifth Amendment to
Loan and Security Agreement, understands the terms and conditions thereof and
the effect of said Fifth Amendment on Borrowers and on itself as surety to the
Bank. The undersigned hereby consents to the execution and delivery of the
foregoing Fifth Amendment to Loan and Security Agreement by Borrowers to the
Bank and further agrees that its guaranty and suretyship of all obligations of
Borrowers to the Bank shall remain in full force and effect undiminished by the
foregoing Fifth Amendment to Loan and Security Agreement.
The undersigned further acknowledges, agrees, confirms and certifies
that the Surety Agreement to which it is a party remains in full force and
effect, enforceable in accordance with its terms and that it has no defenses,
set-offs or counterclaims to the Bank's full enforcement of the terms of said
agreement.
MORO CORPORATION
By:
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Xxxxx X. Xxxxxx, President
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EXHIBIT "A"
EQUIPMENT AND VEHICLES TO BE PURCHASED
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EXHIBIT "B"
EQUIPMENT TERM LOAN NOTE
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