SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT ("Second Amendment") is made as of
the 15th day of January, 2001, by and between Bank of America, N.A., a national
banking association (the "Bank") and Xxxxxx Technologies, Inc., a Delaware
corporation ("Borrower").
W I T N E S S E T H:
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WHEREAS, Bank and Borrower are parties to that certain Loan Agreement dated
as of February 29, 2000 (the "Loan Agreement"), pursuant to which Bank extended
a revolving line of credit to the Borrower (the "Loan"), in the principal amount
of $2,000,000 (all capitalized terms appearing herein and not otherwise defined
shall have the meanings ascribed to such terms in the Loan Agreement); and
WHEREAS, the Loan was scheduled to mature on July 31, 2000, but the
maturity date thereof was extended to September 30, 2000 pursuant to the terms
of that certain renewal Promissory Note dated May 12, 2000; and
WHEREAS, the maturity date of the Loan was further extended to December 31,
2000, pursuant to the terms of that certain Amendment to Loan Agreement dated
September 29, 2000 (the "First Amendment"); and
WHEREAS, the Borrower has repaid a portion of the principal balance of the
Loan and has requested that the Bank further extend the maturity date for
payment of the remaining principal balance of the Loan to June 30, 2001; and
WHEREAS, the Bank has agreed to such extension of the maturity date of the
Loan, subject to certain terms and conditions; and
WHEREAS, the parties hereto wish to set forth their agreement with respect
to the foregoing matters herein;
NOW, THEREFORE, in consideration of the premises, the Bank's agreement to
extend the maturity date of the Loan, the mutual promises set forth below, and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree hereby as follows:
1. Extension of Maturity Date. The Maturity Date of the Loan is hereby
extended from December 31, 2000 to June 30, 2001, which date shall hereafter be
the "Maturity Date" for purposes of the Loan Agreement.
2. Amendments to Loan Agreement. The parties hereto agree to amend the Loan
Agreement as follows:
(a) Section 2(A)(i), as amended by the First Amendment, is further amended
by deleting the words and figures "Two Million Dollars ($2,000,000)"
in the first sentence thereof, and substituting in lieu thereof the
words and figures "One Million, Five Hundred Thousand Dollars
($1,500,000)".
(b) Section 2(A)(i), as amended by the First Amendment, is further amended
by deleting the date "December 31, 2000" in the last sentence thereof,
and substituting in lieu thereof the date "June 30, 2001".
(c) Section 2(A)(iii), as amended by the First Amendment, is further
amended by deleting the words and figures "two hundred basis points
(2.00%)" and substituting in lieu thereof the words and figures
"twenty-five basis points (.25%)".
(d) The Borrowing Base Certificate (Exhibit A-1 to the Borrowing Base
Agreement), as amended by the First Amendment, is further amended by
deleting the figure "2,000,000" in line 10 thereof, and substituting
in lieu thereof the figure "$1,500,000". The form of the revised
Borrowing Base Certificate is attached hereto as Exhibit A.
3. Guaranties. Each of the Guarantors shall execute an acknowledgment of
this Second Amendment (the "Acknowledgment"), in form satisfactory to the Bank.
4. Conditions Precedent to Amendment. The Bank's obligation to enter into
this Second Amendment shall be subject to the satisfaction of all of the
following conditions, in form and substance reasonably acceptable to the Bank
and the Bank's counsel, not later than January 15, 2001:
A. Note Modification. Borrower has executed and delivered a note
modification agreement (the "Second Note Modification"), in form satisfactory to
the Bank, evidencing the extension of the Maturity Date, the reduction in
interest rate and the reduction in face amount, all as set forth in the
foregoing amendments.
B. Guaranty Amendments. Each Guarantor has executed and delivered an
Acknowledgment.
C. Letter of Credit. Borrower has delivered to Bank the original of a
standby letter of credit for the benefit of the Bank, in the face amount of One
Million Five Hundred Thousand Dollars ($1,500,000), which letter of credit has
been issued by, or confirmed through, a United States bank that is acceptable to
Bank. Such letter of credit shall be in such form and shall contain such terms
as may be reasonably acceptable to Bank, and shall be drawable unconditionally
by Bank immediately upon the failure by Borrower to repay the Loan in full by
June 30, 2001. The letter of credit shall be subject to no conditions to drawing
other than submission of a sight draft and a written certificate by Bank to the
effect that such payment in full of the Loan has not been received by June 30,
2001. The expiry date of the letter of credit must be on or after July 16, 2000.
D. Payment of Interest. Borrower has paid all accrued interest due as of
December 31, 2000 in the amount of $50,258.93.
E. Payment of Expenses. Borrower has paid all of the Bank's costs and
expenses, including the reasonable attorneys' fees incurred by Bank in
connection with the negotiation and preparation of this Second Amendment and any
prior loan documentation related to the Loan.
F. No Defaults. No condition or event of default under the Loan Documents
shall exist.
G. Miscellaneous. All other Loan Documents or items that are customarily
provided in loan transactions of this type and all other loan documents or items
reasonably required by Bank.
H. No Material Adverse Effect. No event has occurred or failed to occur
that would have a Material Adverse Effect on the financial condition of the
Borrower or any Guarantor as set forth in their most recent annual financial
statements and internally-prepared monthly financial statements submitted to
Bank.
5. Costs, Expenses and Attorneys' Fees. Borrower shall pay to Bank all
costs and expenses, including reasonable attorneys' fees, incurred by Bank in
connection with (a) Bank's continued administration of the Loan, and (b) any
further modification or amendment to or collection of the Loan.
6. Representations and Warranties. Borrower represents and warrants to the
Bank as follows:
(a) Power and Authority; Enforceability. Borrower has the power and
authority to execute and deliver this Second Amendment and to perform the
terms and conditions of the Loan Agreement and the other Loan Documents, as
previously amended and as amended and modified by this Second Amendment.
The execution and delivery of this Second Amendment by the Borrower and the
performance of the Loan Agreement and the other Loan Documents, as
previously amended and as amended and modified by this Second Amendment, do
not and will not violate any law, rule or regulation, or constitute a
breach of the articles of incorporation, bylaws or resolutions of Borrower
or any agreement to which Borrower is a party or by which its assets are
bound. The Loan Agreement and the other Loan Documents, as previously
amended and as amended and modified by this Second Amendment, constitute
legal, valid and binding obligations of Borrower, enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency,
reorganization, and similar laws and other law generally affecting the
enforceability of creditors' rights and to general principles of equity.
(b) No Default. Upon the execution and delivery of this Second
Amendment by the Borrower, the Borrower will not be in default in the
performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in the Loan Agreement or the other Loan Documents,
as amended and modified by this Second Amendment, or any other agreement or
instrument to which any of them is a party.
(c) Representations. The representations and the information furnished
by the Borrower to the Bank with regard to this Second Amendment are and
shall continue to be true and not misleading in all material respects. In
addition, the representations and warranties of the Borrower to the Bank
contained herein, in the Loan Agreement, in the other Loan Documents and in
any other document or instrument executed or delivered by the Borrower in
connection therewith, are and shall continue to be true and not misleading
in all material respects, except as otherwise disclosed in writing to the
Bank and approved by the Bank prior to the date hereof.
7. Covenants. The Borrower covenants and agrees that, unless the Bank shall
otherwise consent in writing, the Borrower shall:
(a) Compliance with Covenants. Continue to comply with all of the
terms, covenants and agreements contained in the Loan Agreement and the
other Loan Documents, as previously amended and as amended and modified by
this Second Amendment.
(b) Further Assurances. Execute and deliver such further instruments,
and take such further action as the Bank may reasonably request, in each
case to further effect the purposes of the Loan Agreement and the other
Loan Documents, as previously amended and as modified by this Second
Amendment.
8. Ratification; Release. Except as previously amended and as expressly
amended hereby, the Loan Agreement shall be and remain in full force and effect
in accordance with its terms. The Borrower stipulates and agrees that there
exists no defense, claim of setoff, or claim in avoidance of any of its
liabilities or obligations under or pursuant to the Loan Agreement, as so
amended. Borrower further irrevocably waives, releases and discharges any and
all claims or causes of action against Bank, its directors, officers, employees,
agents and representatives, that exist as of the date of this Second Amendment,
whether known or unknown, which arise out of or in connection with the Loan or
the Loan Documents, or any action or omission of Bank in connection therewith.
9. Miscellaneous.
(a) All references to the "Loan Agreement" in the Loan Agreement shall
hereafter mean and refer to the Loan Agreement as previously amended and as
amended hereby.
(b) All references to the "Loan Agreement" in the other Loan Documents
shall hereafter mean and refer to the Loan Agreement as previously amended and
as amended hereby.
(c) In the event of any conflict between the terms of this Second Amendment
and the Loan Documents, the terms of this Second Amendment shall control and
govern.
(d) All capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed to such terms in the Loan Agreement.
10. Counterparts. This Second Amendment may be executed in separate
counterparts, and said counterparts taken together shall be deemed to constitute
one and the same instrument. An executed copy of this Second Amendment delivered
by telecopier shall have the same effect as an originally executed copy of this
Second Amendment.
11. NO ORAL AGREEMENT. THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing Second
Amendment to Loan Agreement as of the date first above written.
BORROWER:
XXXXXX TECHNOLOGIES, INC.
ATTEST:
By:
---------------------
---------------------- Title:
SECRETARY ------------------
[Corporate Seal]
BANK:
BANK OF AMERICA, N.A.
By:
----------------------
Title:
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EXHIBIT A
[Attached]
EXHIBIT A-1
BORROWING BASE CERTIFICATE
Status as of _______________, 20___.
In accordance with the terms of the Borrowing Base Agreement attached as Exhibit
A to that Loan Agreement dated February 29, 2000, by and between Xxxxxx
Technologies, Inc. and Bank of America, N.A., as amended, we hereby represent
and warrant as follows:
1. Total Accounts Receivable $____________
2. Less ineligible accounts receivable
(as set forth in the Borrowing Base
Agreement) $____________
3. Eligible Accounts Receivable $____________
4. 80% of Eligible Accounts Receivable $____________
5. Eligible Inventory: $____________
6. 50% of Eligible Inventory $____________
7. Net Book Value ("NBV")
of Equipment $____________
8. 50% of NBV of Equipment $____________
9. Line 4 + Line 6 + Line 8 $____________
10. Maximum loan amount $1,500,000.00
11. Outstanding balance as of report date $____________
12. Borrowing Base (lesser of line 9 or line 10
minus line 11) $____________
13. Less aggregate outstanding letters of credit $____________
14. Net available for further advances $____________
15. If line 14 is negative, amount to be
repaid immediately to Bank $____________
The undersigned does hereby certify that the foregoing is true and correct.
The undersigned does further acknowledge that the Bank is relying upon this
certificate and any supporting documents to grant or continue to grant credit to
it, and further warrants and represents that no event of default has occurred,
or would, with the passage of time or the giving of notice, or both, occur under
the above-referenced Loan Agreement.
Borrower:
--------
XXXXXX TECHNOLOGIES, INC.
By:
----------------------------
Title:
-------------------------
Bank of America, N.A.
SECOND NOTE MODIFICATION AGREEMENT
BY AND BETWEEN BANK OF AMERICA, N.A.
("BANK"/"LENDER")
AND
XXXXXX TECHNOLOGIES, INC.
(the "BORROWER")
EFFECTIVE AS OF: DECEMBER 31, 2000
On May 12, 2000, Borrower executed a renewal Promissory Note (the "Note") in
favor of Bank/Lender. The Note was in the original principal face amount of
$2,000,000.00, with a stated final maturity date of September 30, 2000. By that
certain Note Modification Agreement dated as of September 30, 2000 (the "First
Modification"), the maturity date of the Note was extended to December 31, 2000.
The principal balance of the Note as of the effective date of this Agreement is
$1,453,468.75. Bank/Lender remains the owner and holder of the Note and,
pursuant to that certain Second Amendment to Loan Agreement dated as of January
15, 2001 (the "Second Amendment"), has agreed with Borrower to modify certain
provisions of the Note. Now, therefore, in consideration of these premises and
the exchange of other good and valuable consideration, the receipt of which is
hereby acknowledged, Bank/Lender and Borrower agree to modify the Note as
follows:
[X] The maturity date is changed to: June 30, 2001
----------------------
[X] The interest rate is changed to: Prime Rate plus .25%
----------------------
[X] The payment terms are changed to: Accrued interest payable
monthly in arrears. All principal, together with accrued but
unpaid interest on the Note, shall be payable in full on June
30, 2001. Principal of the Note shall also be prepaid in
accordance with the terms of that certain Amendment to Loan
Agreement dated September 29, 2000 between the Borrower and
the Bank (the "First Amendment).
[X] The principal face amount of the
Note is changed to: $1,500,000.00
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The term "Borrower" as used in this Agreement shall be construed as singular or
plural to correspond with the number of persons executing this Agreement as
Borrower.
All other terms, conditions and covenants in the Note shall be and remain in
full force and effect. When executed by Bank/Lender and Borrower, this Agreement
shall be attached to and become a part of the Note.
NOTICE OF FINAL AGREEMENT.
THIS WRITTEN AGREEMENT, TOGETHER WITH THE FIRST AND SECOND AMENDMENTS,
REPRESENTS THE FINAL AGREEMENT BETWEEN BORROWER AND BANK/LENDER AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
BETWEEN BORROWER AND BANK/LENDER. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
BORROWER AND BANK/LENDER.
IN WITNESS WHEREOF, the undersigned has caused this Second Note Modification
Agreement to be executed under seal by Borrower on this ______ day of January,
2001.
Bank of America, N.A. Borrower:
By:
--------------------
Title:
-----------------
XXXXXX TECHNOLOGIES, INC.
ATTEST: By:
---------------------
Title:
----------------------
SECRETARY
[Corporate Seal]
ACKNOWLEDGMENT BY GUARANTOR
THIS ACKNOWLEDGMENT BY GUARANTOR (this "Acknowledgment"), is made as of the
15th day of January, 2001, by XXXXXXX X. XXXXXX, an individual resident of
Forsyth County, North Carolina ("Guarantor"), and BANK OF AMERICA, N.A., a
national banking association ("Bank"), as follows:
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to that certain Continuing and Unconditional Guaranty
dated February 29, 2000 (the "Guaranty"), Guarantor personally guaranteed
payment of all of the indebtedness and obligations of Xxxxxx Technologies, Inc.,
a Delaware corporation (the "Borrower") to Bank; and
WHEREAS, by that certain Acknowledgment and Amendment Agreement dated
September 29, 2000, the Guarantor acknowledged an extension of the maturity date
of the Borrower's revolving line of credit from the Bank (the "Loan") and agreed
to remove any limitation as to the amount of the Guaranty; and
WHEREAS, Borrower has again requested the Bank to extend the maturity date
of the Loan; and
WHEREAS, the Bank has agreed to so extend the maturity date of the Loan,
pursuant to the terms of a Second Amendment to Loan Agreement dated as of even
date herewith between the Bank and the Borrower (the "Second Amendment"),
provided, among other things, that the Guarantor acknowledge that payment of the
Loan, as so extended, is guaranteed by the Guarantor pursuant to the Guaranty;
and
WHEREAS, the Guarantor wishes to acknowledge that the Guaranty covers and
applies to the Loan, as extended pursuant to the terms of the Second Amendment;
NOW, THEREFORE, in consideration of the premises and to induce the Bank to
extend the maturity date of the Loan, the parties hereto agree hereby as
follows:
1. Acknowledgment of Guaranty. Guarantor does hereby acknowledge and agree
that the Guaranty, as amended, is in full force and effect in accordance with
the terms thereof, and that the same covers and applies to the Loan, as the same
has been amended previously and in accordance with the terms of the Second
Amendment.
2. Ratification of Guaranty. The Guarantor hereby stipulates and agrees
that there exists no defense, claim of setoff, or claim in avoidance of any of
its liabilities or obligations under or pursuant to the Guaranty, as amended.
3. Counterparts. This Acknowledgment may be executed in separate
counterparts, and said counterparts taken together shall be deemed to constitute
one and the same instrument. An executed copy of this Acknowledgment delivered
by telecopier shall have the same effect as an originally executed copy of this
Acknowledgment.
4. NO ORAL AGREEMENT. THIS WRITTEN ACKNOWLEDGMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing
Acknowledgment by Guarantor as of the date first above written.
_____________________________ (SEAL)
XXXXXXX X. XXXXXX
BANK OF AMERICA, N.A.
By: __________________________
Title: ________________________
ACKNOWLEDGMENT BY GUARANTOR
THIS ACKNOWLEDGMENT BY GUARANTOR (this "Acknowledgment"), is made as of the
15th day of January, 2001, by XXXXXX X. XXXXXX, an individual resident of
Forsyth County, North Carolina ("Guarantor"), and BANK OF AMERICA, N.A., a
national banking association ("Bank"), as follows:
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to that certain Continuing and Unconditional Guaranty
dated February 29, 2000 (the "Guaranty"), Guarantor personally guaranteed
payment of all of the indebtedness and obligations of Xxxxxx Technologies, Inc.,
a Delaware corporation (the "Borrower") to Bank; and
WHEREAS, by that certain Acknowledgment and Amendment Agreement dated
September 29, 2000, the Guarantor acknowledged an extension of the maturity date
of the Borrower's revolving line of credit from the Bank (the "Loan") and agreed
to remove any limitation as to the amount of the Guaranty; and
WHEREAS, Borrower has again requested the Bank to extend the maturity date
of the Loan; and
WHEREAS, the Bank has agreed to so extend the maturity date of the Loan,
pursuant to the terms of a Second Amendment to Loan Agreement dated as of even
date herewith between the Bank and the Borrower (the "Second Amendment"),
provided, among other things, that the Guarantor acknowledge that payment of the
Loan, as so extended, is guaranteed by the Guarantor pursuant to the Guaranty;
and
WHEREAS, the Guarantor wishes to acknowledge that the Guaranty covers and
applies to the Loan, as extended pursuant to the terms of the Second Amendment;
NOW, THEREFORE, in consideration of the premises and to induce the Bank to
extend the maturity date of the Loan, the parties hereto agree hereby as
follows:
1. Acknowledgment of Guaranty. Guarantor does hereby acknowledge and agree
that the Guaranty, as amended, is in full force and effect in accordance with
the terms thereof, and that the same covers and applies to the Loan, as the same
has been amended previously and in accordance with the terms of the Second
Amendment.
2. Ratification of Guaranty. The Guarantor hereby stipulates and agrees
that there exists no defense, claim of setoff, or claim in avoidance of any of
its liabilities or obligations under or pursuant to the Guaranty, as amended.
3. Counterparts. This Acknowledgment may be executed in separate
counterparts, and said counterparts taken together shall be deemed to constitute
one and the same instrument. An executed copy of this Acknowledgment delivered
by telecopier shall have the same effect as an originally executed copy of this
Acknowledgment.
4. NO ORAL AGREEMENT. THIS WRITTEN ACKNOWLEDGMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing
Acknowledgment by Guarantor as of the date first above written.
_____________________________ (SEAL)
XXXXXX X. XXXXXX
BANK OF AMERICA, N.A.
By: __________________________
Title: ________________________
