SECOND NOTE MODIFICATION AGREEMENT
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Exhibit 10.36
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THIS SECOND NOTE MODIFICATION AGREEMENT ("AGREEMENT") has been executed April 29, 2011, by and between Xxxx Security International, Inc., a Delaware corporation (the "Borrower"), whose address is 000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000, and Merlin Partners, LP, a Delaware limited partnership, whose address is One Chagrin Highlands, 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxx 00000 (the "Lender")
BACKGROUND
Borrower has borrowed from Lender the principal sum of One Million Three Hundred Fifty Thousand Dollars ($1,350,000.00) evidenced by a Promissory Note dated December 28, 2010 ("Note"). On March 9, 2011, a partial payment of Six Hundred Seventy Five Thousand ($675,000) was paid on the Note. The outstanding balance owed by Borrower under the Note is Six Hundred Seventy Five Thousand ($675,000) plus all accrued interest. On March 19, 2011, Borrower and Lender executed a Note Modification Agreement ("Note Modification Agreement") which extended the date that the Note is due and payable to April 28, 2011.
As collateral security for the obligations of the Borrower to Lender under the Note, the following documents all dated December 28, 2010 were executed and delivered to Lender: (a) a Deed of Trust executed by Borrower's subsidiary Colonial Full Service Car Wash, Inc., creating a junior lien on the real property known as Colonial 1 Car Wash, having the street address of 0000 X. Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx and 0000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx; (b) a Deed of Trust executed by Borrower's subsidiary Crystal Falls Car Wash, Inc. creating a junior lien on the real property known as Crystal Falls Car Wash, having the street address of 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx; (c) a Security Agreement executed by Borrower and Xxxx Trademark, II, Inc. creating a first priority security interest on the "Xxxx" trademark; and (d) a Warrant Agreement executed by Borrower. The Deed of Trust executed by Crystal Falls Car Wash, Inc. has been released in exchange for the partial payment of Six Hundred Seventy Five Thousand ($675,000) that Borrower made to Lender on March 9, 2011. For purposes of this Agreement, the Note, and the documents in (a), (c) and (d) above, are hereinafter collectively referred to as (the "Loan Documents").
Under the existing terms of the Note as amended by the Note Modification Agreement, all principal and interest under the Note is due and payable in full on or before April 28, 2011. Borrower has requested that Lender extend the date that the principal and interest under the Note is due and payable to June 6, 2011. All defined terms herein (unless otherwise noted) shall have the meaning as defined in the Loan Documents.
NOW, THEREFORE, in consideration of the mutual promises herein and in the Loan Documents contained and intending to be legally bound hereby, the parties agree as follows:
1. Incorporation of Recitals
The recitals set forth above in the Background section of this Agreement are hereby incorporated by reference into this Agreement as if same had been fully set forth at length herein.
2. Reaffirmation of Amount Due and Payment of Accrued Interest.
Borrower hereby acknowledges and agrees that as of the date of this Agreement, there was due and owing to Lender on the Note the sum of Six Hundred Seventy Five Thousand Dollars ($675,000.00), plus accrued interest calculated as set forth in the Note. The Borrower in consideration of Lender's execution of this Agreement, shall pay to Lender on or before April 28, 2011, the accrued interest on the Note to date and prepay the accrued interest through June 6, 2011. The accrued and prepaid interest on the Note through June 6, 2011 is in the amount of $51,263.
3. Due Date of Note
The Lender agrees to and hereby modifies the date by which all principal and interest under the Note is due and payable from April 28, 2011 to June 6, 2011.
4. Reaffirmation of Loan Documents and Collateral
The Loan Documents are in full force and effect and are not modified by this Agreement, except as specifically set forth in this Agreement. The Borrower, Colonial Full Service Car Wash, Inc., and Xxxx Trademark II, Inc., hereby represents, warrants and reaffirms to the Lender that it is the intention of the parties to this Agreement that all existing collateral security held by the Lender shall continue to serve as collateral for the Note, until the Note is paid in full. The security interests and liens held by the Lender are in full force and legal effect.
5. Governing Law and Venue.
This Agreement is delivered in the State of Ohio and governed by Ohio law (without giving effect to its laws of conflicts). The parties to this Agreement agree that any legal action or proceeding with respect to any of its obligations under this Agreement and the Loan Documents may be brought by the Lender in any state or federal court located in Ohio. By the execution and delivery of this Agreement, the parties to this Agreement submits to and accepts, for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of those courts. The parties to this Agreement waive any claim that the state of Ohio is not a convenient forum or the proper venue for any such suit, action or proceeding.
6. Miscellaneous.
Section headings are for convenience of reference only and do not affect the interpretation of this Agreement. This Agreement and the Loan Documents embody the entire agreement between the Borrower and the Lender regarding the terms of the loan evidenced by the Note and supersedes all oral statements and prior writings relating to that loan.
[signature page follows]
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IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be duly executed and sealed as of the day and year first above written.
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XXXX SECURITY INTERNATIONAL, INC.
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By:
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/s/Xxxxxx X. Xxxxxxxx
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Name:
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Xxxxxx X. Xxxxxxxx
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Title:
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CEO
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XXXX TRADEMARK, II, INC.
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By:
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/s/ Xxxxxx X. Xxxxxxxx
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Name:
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Xxxxxx X. Xxxxxxxx
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Title:
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President
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COLONIAL FULL SERVICE CAR WASH, INC..
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By:
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/s/ Xxxxxx X. Xxxxxxxx
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Name:
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Xxxxxx X. Xxxxxxxx
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Title:
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President
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MERLIN PARTNERS, L.P.
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By:
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/s/ Xxxxxxx Xxxxxx
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Name:
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Xxxxxxx Xxxxxx
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Title:
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CFO
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