EXHIBIT 10.40
CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS OF THIS AGREEMENT
MARKED [*]. THE OMITTED PORTIONS OF THIS AGREEMENT HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment") is
entered into by and between ORYX TECHNOLOGY CORP., a Delaware corporation
("Borrower") SURGX CORPORATION, a Delaware corporation ("Guarantor") and [*]
("[*]").
WHEREAS, Borrower and [*] entered into that certain Loan Agreement
dated as of May 29, 1997, as amended from time to time (collectively, the
"Loan Agreement"); and
WHEREAS, the Loan Agreement currently governs a revolving line of
credit in the maximum amount of $1,500,000.00 (the "Line of Credit") provided
by [*] to Borrower, as currently evidenced by that certain Revolving Credit
Promissory Note dated May 29, 1997 payable by Borrower to the order of [*] in
the stated principal amount of $1,500,000.00 (the "Revolving Note"); and
WHEREAS, the Loan Agreement, the Revolving Note and all other
documents evidencing, securing, governing, guaranteeing and/or pertaining to
the Revolving Note are hereinafter referred to collectively as the "Loan
Documents"; and
WHEREAS, the parties hereto now desire to modify the Loan Agreement
as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, and agreements contained herein, and for other
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 The terms used in this Amendment to the extent not otherwise
defined herein shall have the same meanings as in the Loan Agreement.
ARTICLE II
AMENDMENTS
Section 2.01 Effective as of the date hereof, the definition of "Guarantors"
set forth in Section 1 of the Loan Agreement shall be amended to be SURGX
CORPORATION.
Section 2.02 Effective as of March 2, 1998, the definition of "Line of
Credit Amount" set forth in Section 1 of the Loan Agreement shall be
$500,000.00.
Section 2.03 Effective as of March 2, 1998, the definition of "Purchase
Agreement" set forth in Section 1 of the Loan Agreement shall be that certain
Revolving Account Transfer and Purchase Agreement ( Batch) dated March 2, 1998
between [*], Borrower and Guarantor, as may be amended from time to time.
Section 2.04 Effective as of the date hereof, a new Subsection 2b of the
Loan Agreement is hereby added to the Loan Agreement to read in its entirety
as follows:
"(b) TERM LOAN. Subject to the terms and conditions set forth
herein, [*] agrees to lend to Borrower, on a non-revolving basis
from time to time during the period commencing February 26, 1998
and continuing through the maturity date of the Note evidencing
this Credit Facility from time to time, an aggregate amount not
to
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exceed $1,000,000.00 (the "Term Loan"). The sums advanced
under the Term Loan shall be used for working capital purposes."
Section 2.05 Effective as of the date hereof, a new Subsection 6d is hereby
added to the Loan Agreement to read in its entirety as follows:
"(d) ORIGINATION FEE. Borrower agrees to pay [*] a facility fee equal
to $10,000.00 (the "Origination Fee") on the date of the initial
advance, if any, under the Term Loan. Borrower hereby authorizes
[*], in [*]'s sole discretion, to collect such Origination Fee
(i) by deducting such fee from the initial advance, if any,
under the Term Loan, (ii) by debiting the Debit Account, or
(iii) by using any combination of the foregoing. This
authorization does not affect Borrower's obligation to pay such
sums to [*] when due. Borrower and [*] acknowledge and agree
that the Origination Fee is reasonable compensation to [*] for
continuing to make the Term Loan available to Borrower and for
no other purpose."
Section 2.06 Effective as of the date hereof, Subsection 12b of the Loan
Agreement is hereby amended in its entirety to read as follows:
"(b) INVENTORY MAINTENANCE CERTIFICATE. An Inventory Maintenance
Certificate, in the form attached hereto as Schedule A, signed
by an officer of the Borrower, within 3 days after the end of
each month."
Section 2.07 Effective as of the date hereof, Subsection 12c of the Loan
Agreement is hereby amended in its entirety to read as follows:
"(c) INVENTORY LISTING. A list of Borrower's inventory by location
and type (to include the following: raw materials, work in
process and finished goods) within 3 days after the end of
each month, in form and detail satisfactory to [*]."
ARTICLE III
NOTE
Section 3.01 Contemporaneously with the execution hereof, Borrower agrees to
execute and deliver to [*] a promissory note (the "Term Note") in the stated
principal amount of $1,000,000.00, in form and substance satisfactory to [*],
to evidence the Term Loan. The Term Note shall be one of the "Notes", as
defined in the Loan Agreement, for all purposes.
Section 3.02 Contemporaneously with the execution hereof, Borrower agrees to
execute and deliver to [*] a promissory note (the "Modified Revolving Note")
in the stated principal amount of $500,000.00, in form and substance
satisfactory to [*], in amendment, extension and modification of the
Revolving Note.
ARTICLE IV
REPRESENTATIONS, WARRANTIES, RATIFICATION AND REAFFIRMATION
Section 4.01 Borrower hereby represents and warrants that: (i) the
representations and warranties contained in the Loan Agreement are true and
correct on and as of the date hereof as though made on and as of the date
hereof, (ii) no event has occurred and is continuing that constitutes an
Event of Default or would constitute an Event of Default but for the
requirement of notice or lapse of time or both, and (iii) there are no claims
or offsets against, or defenses or counterclaims to, the Loan Documents, the
indebtedness evidenced thereby or the liens securing same (including without
limitation, any defenses or offsets resulting from or arising out of breach
of contract or duty, the amount of interest charged, collected or received on
the Loan Documents heretofore, or breach of any commitments or promises of
any type).
Section 4.02 The terms and provisions set forth in this Amendment shall
modify and supersede all inconsistent terms and provisions set forth in the
Loan Agreement, but except as expressly modified and superseded by this
Amendment, the terms and provisions of the Loan Agreement are ratified and
confirmed and shall continue in full force and effect, Borrower hereby
agreeing that the Loan Agreement and the other Loan Documents (except as set
forth in Section 4.03 below) are and shall continue to be outstanding,
validly existing and enforceable in accordance with their respective terms.
Section 4.03 [*] consents to the sale by Borrower of all of the capital stock
of Oryx Instruments and Materials Corporation ("I&M") to Oryx Instruments
Corp. and the sale of substantially all of the assets of Oryx Power Products
Corporation ("Power Products") to Xxxx Products and agrees that any such sale
shall not be an Event of Default under the Loan Agreement and the
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other Loan Documents. Once [*] receives a copy of the executed documents
evidencing each such sale and such sale has been completed, [*] agrees to
promptly release its security interest and liens in the assets of I&M and
Power Products (other than the accounts purchased by [*] from I&M and Power
Products) and release I&M and Power Products from their respective guarantees
of the Line of Credit.
Section 4.04 Guarantor previously executed that certain guaranty agreement
(the "Guaranty Agreement") dated May 29, 1997, for the benefit of [*] to
unconditionally guarantee the payment and performance by Borrower of certain
indebtedness owing to [*] described therein, including without limitation,
the indebtedness evidenced by the Revolving Note. Guarantor, by executing
this Amendment hereby consents to this Amendment and agrees that,
notwithstanding the execution of this Amendment and the Modified Revolving
Note (a) the obligations of the Guarantor under the Guaranty Agreement remain
in full force and effect with respect to the Revolving Note, as amended,
extended and modified by the Modified Revolving Note, and (b) the term
"Guaranteed Indebtedness" under the Guaranty Agreement also includes the
indebtedness owing under the Term Note. Guarantor acknowledges and agrees
that there are no claims or offsets against, or defenses or counterclaims to,
the terms and provisions of the Guaranty Agreement or the obligations created
or evidenced thereby.
ARTICLE V
MISCELLANEOUS
Section 5.01 Each of the Loan Documents is hereby amended so that any
reference in the Loan Documents to the Loan Agreement shall mean a reference
to the Loan Agreement as amended hereby.
Section 5.02 This Amendment may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 5.03 The Agreement and this Amendment have been entered into in [*],
[*] and shall be performable for all purposes in [*], [*]. THE AGREEMENT,
AS AMENDED HEREBY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF [*]. Courts within the State of [*] shall have
jurisdiction over any and all disputes arising under or pertaining to the
Agreement, as amended hereby, and venue in any such dispute shall be the
courts located in [*], [*].
Section 5.04 This Amendment shall not become effective until executed by [*]
.
EXECUTED as of February 27, 1998.
BORROWER:
ORYX TECHNOLOGY CORP.
By: _________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
GUARANTOR:
SURGX CORPORATION
By: _________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
[*] :
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By: _________________________
Name: [*]
Title: [*]
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