EXHIBIT 10.8
MODIFICATION AND/OR EXTENSION AGREEMENT
DATE: August 1, 1997
BORROWER: R-B RUBBER PRODUCTS, INC.
LENDER: KEYBANK NATIONAL ASSOCIATION
NOTE: Dated September 1, 1995, original principal amount of
$500,000.00.
Loan #: 121729-9501
FOR VALUE RECEIVED. Borrower and Lender hereby agree to modify the
above-referenced Loan and Promissory Note and/or Loan Agreement as follows:
1. MODIFICATION AND/OR EXTENSION PROVISIONS.
a. The maturity date of the loan is hereby extended to August 1, 1998.
b. The maximum loan amount that Borrower may borrow under the Loan
shall be increased to $750,000.00.
c. Effective as of August 1, 1997, the interest rate shall change to
a variable rate equal to The Lender's Announced Prime Rate (the
"Index") plus one quarter percent (0.025%) per annum. The rate
shall adjust daily, based on changes in the Index. Borrower
shall make monthly payments of accrued interest only, beginning
with the payment due on September 1, 1997, and continuing until
maturity, when all outstanding principal and interest must be
paid in full.
2. CONDITIONS. The modifications and/or extension described above are
subject to and conditioned upon Borrower's full satisfaction of all of
the following conditions on or before, August 1, 1997, time being of
the essence.
a. There shall be no uncured event of default under the Loan, nor
any event or condition which with notice or the passage of time
would be an event of default thereunder.
b. Borrower shall deliver to Lender a fully executed original of
this Loan Modification and/or Extension Agreement.
c. All expenses incurred by Lender in connection with this Agreement
(including without limitation, attorney fees, recording charges
for title policy update(s), escrow charges, costs of obtaining
updated or additional appraisal(s) or collateral valuations, if
required by Lender) shall be paid by borrower.
d. Borrower shall pay Lender in cash an extension fee of $1,875.00.
e. Modification of Financial Covenants and Ratios in Business Loan
Agreement dated, October 29, 1996. Borrower covenants and agrees
that while this Agreement is in effect, Borrower will: Maintain a
ratio of Current Assets to Current Liabilities in excess of 1.10
to 1.00 measured quarterly: Maintain a minimum Tangible Net
Worth of not less than $4,000,000.00, measured quarterly.
Additional Financial Covenant. Maintain a minimum
EBITDA/Interest + CMLTD ratio of 1.75 to 1.00 measured fiscal
year end. EBITDA is defined as earnings before interest, taxes,
depreciation and amortization. CMLTD is defined as current
maturities-long term debt, as stated in the last fiscal year end
financial statement, payable in the current year.
3. GENERAL PROVISIONS. Except as modified above, all other provisions of
the Note and any other documents securing or relation to the Loan (the
"Loan Documents") remain in full force and effect. All security given
for the Loan and all guarantees of the Loan (as applicable) shall
continue in full force. Borrower warrants and represents to Lender
that it has full right, power and authority to enter into this
agreement and to perform all its obligations hereunder, and that all
information and material submitted to Lender in connection with this
modification are accurate and complete. Borrower warrants that no
default exists under the Loan Documents. Borrower reaffirms its
obligation to pay the Loan in full and reaffirms the validity and
enforceability of the Loan Documents, without set-off, counterclaim or
defense. Borrower acknowledges that:
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY A BANK
AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE
NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY THAT BANK TO BE ENFORCEABLE.
KEYBANK NATIONAL ASSOCIATION BORROWER:
R-B RUBBER PRODUCTS, INC.
________________________________________
XXX XXXXX Authorized Officer __________________________________
AUTHORIZED OFFICER
