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EXHIBIT 10.12
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of June 23, 1999, by and among Coyote Sports, Inc., a Nevada
corporation (the "Borrower"), Xxx X. Xxxxxxxxxxx, the Chairman of the Borrower's
board of directors ("Xxxxxxxxxxx"), Xxxxx X. Xxxxxx, the Chief Executive Officer
and President and a director of the Borrower (jointly with Xxxxxxxxxxx, the
"Shareholders"), and Paragon Coyote Texas Ltd., a Texas limited partnership
whose principal executive offices are located at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxx Xxxxx, Xxxxx 00000 (the "Lender").
RECITALS
WHEREAS, the parties entered into that certain Loan Agreement dated as
of March 19, 1998, as amended by that certain First Amendment to Loan Agreement
dated as of December 30, 1998 (as so amended, the "Loan Agreement");
WHEREAS, Borrower has failed to pay interest due and payable under the
Note totaling $368,000 through the date hereof; and
WHEREAS, the parties wish to amend and extend the Loan, the Loan
Agreement and the Note as set forth below.
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which the parties hereby
acknowledge, the parties hereby agree as follows:
1. The principal amount of the Note is hereby restated to be Six
Million Three Hundred Sixty-Eight Thousand Dollars ($6,368,000).
2. The maturity date of the Note (the "Maturity Date") hereby is
changed from September 19, 1999
to March 31, 2000.
3. Lender hereby waives Borrower's default in the payment of interest
due and payable to date under the Note.
4. Contemporaneously with the execution and delivery hereof, Borrower
agrees duly to execute and deliver to Lender an amended and restated promissory
note in the form attached hereto as Exhibit A (the "Amended and Restated Note").
From and after the execution and delivery hereof and of the Amended and Restated
Note, the term "Note" in the Loan Agreement shall refer to the Amended and
Restated Note, together with any and all renewals, extensions, restatements,
modifications, amendments, increases or rearrangements thereof.
Second Amendment to Loan Agreement
(Paragon Coyote Texas Ltd./Coyote Sports, Inc.)
As of June 23, 1999 - Page 1 of 4
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5. Each of Borrower and each Shareholder hereby irrevocably
acknowledges and agrees (i) that the provisions of Sections 1, 2 and 3 above
satisfy, and shall for all purposes be deemed to satisfy, all commitments (if
any) that are set forth in that certain letter from Lender to Borrower regarding
financing dated March 24, 1999 (the "Commitment Letter") and (ii) that neither
Lender nor any of its affiliates, as such term is defined in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended ("Affiliates"), shall have any
further obligations in such regard.
6. At soon as reasonably practicable, but in any event within thirty
(30) days from the date hereof, Borrower shall effect (or shall cause to be
effected), in form and substance satisfactory to Lender in Lender's sole
discretion, the grant to Lender of a security interest in each of the following:
(i) all of the issued and outstanding capital stock of Apollo Sports Holdings
Limited, a United Kingdom company, (ii) all of the assets of Apollo Sports
Technologies Limited, a United Kingdom company (including without limitation the
real property, plant and equipment located at Rounds Green Road, Oldbury,
Warley, Xxxx Xxxxxxxx X00 0XX, Xxxxxxx) and (iii) all of the assets of Xxxxxxxx
Cycle Technology Limited, a United Kingdom company. Each Shareholder shall use
his best efforts to cause Borrower to comply with Borrower's covenant set forth
in the immediately-preceding sentence.
7. The following shall constitute Events of Default:
(a) The untruth of any representation and warranty of Borrower
or of either Shareholder set forth herein; and
(b) The failure of Borrower or of either Shareholder timely to
comply in full with its covenants set forth herein.
8. Each of Borrower and each Shareholder, on its own behalf and on
behalf of its Affiliates, directors, officers, employees and agents and of their
respective successors, assigns, heirs, devisees and personal representatives
(each a "Releasing Party"), hereby unconditionally, finally and forever
releases, compromises and discharges, to the fullest extent allowed by law,
Lender and each of its partners, Affiliates, officers, employees and agents
(each a "Released Party"), from and against any and all liabilities,
obligations, claims, causes of action, debts, damages (including, without
limitation, special, incidental, indirect or consequential damages and damages
for loss of business profits), losses, penalties, fines, disputes, agreements,
understandings, costs and expenses (including, without limitation, attorneys'
fees, court costs and costs of investigation) of each and every kind whatsoever,
whether absolute or contingent, known or unknown, at any time on or prior to the
date hereof, directly or indirectly arising from, based upon, relating to or in
connection with (a) the Loan, the Loan Agreement and the Other Transaction
Documents and the transactions respectively contemplated thereby and (b) the
Commitment Letter (each a "Claim"). Each of Borrower and each Shareholder (i)
represents and warrants to each Released Party that neither it nor any other
Releasing Party has assigned or transferred, in whole or in part, to any person
or entity any Claim and (ii) agrees unconditionally to indemnify, defend and
hold harmless in full each Released Party from and against any and all Claims.
Second Amendment to Loan Agreement
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As of June 23, 1999 - Page 2 of 4
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9. As amended hereby, the Loan Agreement shall remain in full force and
effect. Each Shareholder acknowledges and agrees that Lender's rights under the
Xxxxxxxxxxx Security Agreement and the Xxxxxx Security Agreement shall remain in
full force and effect notwithstanding this Amendment or the transactions
contemplated hereby.
10. If any provision of this Amendment or the application thereof to
any Person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Amendment and the application of such provisions to any other
Person or circumstance shall not be affected thereby and shall be enforced to
the greatest extent permitted by law, provided that the essential economic
benefits of this Amendment to all parties shall not be materially and adversely
affected thereby.
11. All undefined capitalized terms used herein shall have the meanings
respectively given to them in the Loan Agreement.
12. This Amendment may be executed in one or more counterparts, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument. Signatures exchanged by facsimile shall be deemed to
constitute original, manually-executed signatures and shall be fully binding.
The signature of a party hereto shall render this Amendment enforceable in full
against such party notwithstanding that one or more other parties shall not have
signed this Amendment.
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Second Amendment to Loan Agreement
(Paragon Coyote Texas Ltd./Coyote Sports, Inc.)
As of June 23, 1999 - Page 3 of 4
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IN WITNESS WHEREOF, the parties have entered into this Second Amendment
to Loan Agreement as of the date set forth above.
BORROWER: COYOTE SPORTS, INC.,
a Nevada corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, Chief Executive Officer
LENDER: PARAGON COYOTE TEXAS LTD.,
a Texas limited partnership
By: Paragon Management Group, Inc.,
a Texas corporation, General Partner
By: /s/ Xxxx X. Xxxxxx, President
Xxxx X. Xxxxxx, President
SHAREHOLDERS: /s/ Xxx X. Xxxxxxxxxxx
XXX X. XXXXXXXXXXX
/s/ Xxxxx X. Xxxxxx
XXXXX X. XXXXXX
Second Amendment to Loan Agreement
(Paragon Coyote Texas Ltd./Coyote Sports, Inc.)
As of June 23, 1999 - Page 4 of 4
