EXHIBIT 10.11
THIRD AMENDMENT TO LETTER LOAN AGREEMENT
THIS THIRD AMENDMENT TO LETTER LOAN AGREEMENT ("Amendment") is made and
entered into effective as of May 27, 1997, by and between D.A. CONSULTING GROUP,
INC., a Texas corporation, formerly known as Documentation Associated, Inc. a
Texas corporation (herein called "Borrower"), and SOUTHWEST BANK OF TEXAS, N.A.,
a national association with offices in Houston, Texas (herein called "Lender").
R E C I T A L S:
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WHEREAS, Documentation Associates, Inc. and Lender entered into a Letter
Loan Agreement dated March 18, 1996, as amended by First Amendment to Letter
Loan Agreement dated November, 1996 executed by and between Borrower and Lender,
and as amended by Second Amendment to Letter Loan Agreement dated effective May
18, 1997 (which, as amended, is herein called the "Loan Agreement"; the terms
defined therein being used herein as therein defined unless otherwise defined
herein); and
WHEREAS, Borrower and Lender desire to further amend the Loan Agreement
to (i) increase the principal amount of the Note, and (ii) amend certain terms
and provisions of the Loan Agreement.
A G R E E M E N T:
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NOW, THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, Borrower and Lender hereby agree to amend the Loan Agreement as
hereinafter set forth.
1. AMENDMENTS TO LOAN AGREEMENT.
(a) The references to "1,500,000.00" in the opening paragraph,
paragraph 1 and paragraph 2 of the Loan Agreement are deleted and replaced with
"3,500,000.00". The reference to the Maturity Date in paragraph 1 of the Loan
Agreement is hereby amended to be June 18, 1998.
(b) Section 5 of the Loan Agreement is effective as of the date
hereof and subject to the satisfaction of the conditions precedent set forth in
Section 2 hereof, hereby amended by adding the following subsection thereto:
"(r) Pay to Lender a commitment fee calculated at the rate of
one-fourth of one percent (1/4%) per annum (determined on a daily basis and for
the actual number of days elapsed based on a 365-day year) after the date hereof
on the average daily unborrowed amount of the Note, payable, in arrears,
quarter-annually commencing on August 31, 1997, (for the period and from the
date of this Agreement until such date) and continuing on the same day of each
November, February, May and August thereafter, with a final payment on the
Maturity Date. Borrower acknowledges and agrees that such commitment fee is in
consideration of Lender's holding monies in readiness for Borrower prior to the
funding of Borrower's requests for advances and is not intended as additional
compensation for Lender."
(c) Section 6 of the Loan Agreement is effective as of the date
hereof and subject to the satisfaction of the conditions precedent set forth in
Section 2 hereof, hereby amended as follows:
(i) Subsection 6(a) is deleted and replaced with the
following:
"(a) Permit at any time Borrower's Tangible Net Worth to
be less than the following amounts during the following periods:
Period Amount
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Date hereof through
September 30, 1997 $1,750,000
October 1, 1997 through
December 31, 1997 $2,000,000
January 1, 1998 through
March 31, 1998 $2,250,000
April 1, 1998 through
the Maturity Date $2,500,000
As used herein, the term "Tangible Net Worth" shall mean the
total assets of Borrower, minus its total liabilities (including
contingent liabilities), minus all intangibles, expenses and
other items deducted in arriving at tangible net worth as
determined by Borrower's regularly employed certified public
accountant in a manner consistent with prior practice;"
(ii) Subsection 6(b) is deleted and replaced with the
following:
"(b) Permit, at any time, its ratio of total liabilities
to Tangible Net Worth to be more than 2.75 to 1.00;"
(d) Section 9(b) of the Loan Agreement is hereby added:
"(b) the guaranty of D.A. International, Inc. (the
"Guarantor")."
2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective when, and only when, Lender shall have received the following:
(a) counterparts of this Amendment executed by Borrower;
(b) $3,500,000.00 Modification Promissory Note (Revolving Credit)
executed by Borrower;
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(c) Corporate Certificate and Resolutions from Borrower;
(d) Continuing Guaranty from Guarantor;
(e) Corporate Certificate and Resolutions from Guarantor; and
(f) any additional documentation or materials reasonably required by
Lender.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants as follows:
(a) Borrower is duly authorized and empowered to execute, deliver and
perform this Amendment and all other instruments referred to or
mentioned herein to which it is a party, and all action on its part
requisite for the due execution, delivery and the performance of this
Amendment has been duly and effectively taken. This Amendment, when
executed and delivered, will constitute valid and binding obligations of
Borrower enforceable in accordance with its terms. This Amendment does
not violate any provisions of Borrower's Articles of Incorporation,
By-Laws, or any contract, agreement, law or regulation to which Borrower
is subject, and does not require the consent or approval of any
regulatory authority or governmental body of the United States or any
state.
(b) The representations and warranties made by Borrower in the Loan
Agreement are true and correct as of the date of this Amendment.
(c) No event has occurred and is continuing which constitutes an Event
of Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
4. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
(a) Upon the effectiveness of Section 1 hereof, on and after the
date hereof each reference in the Loan Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import, and each
reference in the other Loan Documents, shall mean and be a reference to
the Loan Agreement as amended hereby.
(b) Except as specifically amended above, the Loan Agreement and
the Note and all other instruments securing or guaranteeing Borrower's
obligations to Lender (the "Loan Documents") shall remain in full force
and effect and are hereby ratified and confirmed. Without limiting the
generality of the foregoing, the Loan Documents and all collateral
described therein do and shall continue to secure the payment of all
obligations of Borrower under the Loan Agreement and the Note, as
amended hereby, and under the other Loan Documents.
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(c) The execution, delivery and effectiveness of ????????????????????
expressly provided herein, operate as a waiver of any right, power or
remedy of Lender under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents.
5. WAIVER. As additional consideration for the execution, delivery and
performance of this Amendment by the parties hereto and to induce Lender to
enter into this Amendment, Borrower warrants and represents to Lender that no
facts, events, statuses or conditions exist or have existed which, either now
or with the passage of time or giving of notice, or both, constitute or will
constitute a basis for any claim or cause of action against Lender or any
defense to (i) the payment of any obligations and indebtedness under the Note
and/or the Loan Documents or (ii) the performance of any of their obligations
with respect to the Note and/or the Loan Documents, and in the event any such
facts, events, statuses or conditions exist or have existed, Borrower
unconditionally and irrevocably waives any and all claims and causes of action
against Lender and any defense to their payment and performance obligations in
respect to the Note and the Loan Documents.
6. COSTS AND EXPENSES. Borrower agrees to pay on demand all costs and
expenses of Lender in connection with the preparation, reproduction, execution
and delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including the reasonable fees of out-of-pocket expenses of
counsel for Lender. In addition, Borrower shall pay any and all fees payable or
determined to be payable in connection with the execution and delivery, filing
or recording of this Amendment and the other instruments and documents to be
delivered hereunder, and agrees to save Lender harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such fees, except such liabilities arising from the gross
negligence of Lender.
7. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Texas.
8. FINAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed in multiple counterparts, each of which is an original instrument
for all purposes, all as of the day and year first above written.
"BORROWER"
D.A. CONSULTING GROUP, INC.
a Texas corporation, formerly known as
Documentation Associates, Inc.
By:/s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: CFO
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"LENDER"
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ Xxxxxx X. XxXxx
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Xxxxxx X. XxXxx, Senior Vice President
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