Exhibit 4.1
July 9, 2004
Xxxxxxx Communications, Inc.
00000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
RE: SIXTH AMENDMENT - REVISED
Gentlemen:
XXXXXXX COMMUNICATIONS, INC., a Georgia corporation ("Borrower") and
LaSalle Bank National Association, a national banking association ("Bank") have
entered into that certain Loan and Security Agreement dated June 5, 1996 (the
"Security Agreement"). From time to time thereafter, Xxxxxxxx and Bank may have
executed various amendments (each an "Amendment" and collectively the
"Amendments") to the Security Agreement (the Security Agreement and the
Amendments hereinafter are referred to, collectively, as the "Agreement").
Borrower and Bank now desire to further amend the Agreement as provided herein,
subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(A) The first grammatical sentence of Paragraph 9 of the Agreement is
deleted in its entirety and the following is substituted in its place:
9. TERMINATION: This Agreement shall be in effect from the
date hereof until June 30, 2006 (the "Original Term")
and shall automatically renew itself from year to year
thereafter (each such one-year renewal being referred to
herein as a "Renewal Term") unless (a) Bank makes demand
for repayment prior to the end of the Original Term or
the then current Renewal Term; provided, however, absent
an Event of Default, Bank shall give Borrower at least
one hundred twenty (120) days notice of its intention to
demand the Loans or terminate this Agreement prior to
the end of the Original Term or the then current Renewal
Term; (b) the due date of the Liabilities is accelerated
pursuant to paragraph 13 hereof; or (c) Borrower prepays
all of the Liabilities prior to the end of the Original
Term or the then current Renewal Term and by paying all
of the Liabilities in full on the last day of such term.
Xxxxxxx Communications, Inc.
July 9, 2004
Page 2
(B) Paragraph (1) of Exhibit A of the Agreement is deleted in its entirety
and the following is substituted in its place:
(1) LOAN LIMITS: Bank may, in its sole discretion, advance an amount
up to the sum of the following sublimits (the "Loan Limit"):
(A) Subject to subparagraph (4)(a) of this Exhibit A, up to
eighty percent (80%) of the face amount (less maximum
discounts, credits and allowances which may be taken by
or granted to Account Debtors in connection therewith)
of Xxxxxxxx's Eligible Accounts; plus
(B) Subject to subparagraph (4)(b) of this Exhibit A, up to
eighty percent (80%) of the face amount (less maximum
discounts, credits and allowances which may be taken by
or granted to Account Debtors in connection therewith)
of Borrower's Eligible Accounts or Five Hundred Thousand
and No/100 Dollars ($500,000.00), whichever is less;
plus
(C) Subject to subparagraph (5)(a) of this Exhibit A, up to
twenty percent (20%) of the lower of the cost or market
value of Borrower's Eligible Inventory; plus ----
(D) Subject to subparagraph (5)(b) of this Exhibit A, up to
twenty percent (20%) of the lower of the cost or market
value of Borrower's Eligible Inventory; plus ----
(E) Subject to subparagraph (5)(c) of this Exhibit A, up to
forty percent (40%) of the lower of the cost or market
value of Borrower's Eligible Inventory; plus
(F) Subject to subparagraph (5)(d) of this Exhibit A, up to
fifty percent (50%) of the lower of the cost or market
value of Borrower's Eligible Inventory; plus
Xxxxxxx Communications, Inc.
July 9, 2004
Page 3
(G) Subject to subparagraph (2)(a) of this Exhibit A, up to
eighty percent (80%) of the purchase price of the
Equipment purchased with such advances (exclusive of
sales taxes, delivery charges and other "soft" costs
related to such purchases), to be used by Borrower from
time to time to purchase new Equipment, or One Million
and No/100 Dollars ($1,000,000.00), whichever is less;
provided, that prior to any advance under this
subparagraph, Borrower shall furnish to Bank an invoice
and acceptance letter for the Equipment being purchased
and shall have executed such documents and taken such
other actions as Bank shall require to assure that Bank
has a first perfected security interest in such
Equipment; and further provided, that each advance under
this subparagraph shall equal or exceed One Hundred
Thousand and No/100 Dollars ($100,000.00) and may be
made not more frequently than quarterly; plus ----
(H) Up to fifty percent (50%) against the face amount of
commercial Letters of Credit issued by Bank for the
purpose of purchasing Eligible Inventory; provided, that
such commercial Letters of Credit are in form and
substance satisfactory to Bank; minus
(I) Such reserve as Bank elects, in its sole discretion, to
establish from time to time;
provided, that the aggregate amount of Loans made
pursuant to subparagraphs (1)(c), (1)(d), (1)(e), (1)(f)
and 1(h) of this Exhibit A shall in no event exceed Five
Million and No/100 Dollars ($5,000,000.00);
further provided, that the aggregate Loan Limit shall in
no event exceed FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00), except as such amount may be increased
or decreased by Bank, in its sole discretion, from time
to time.
Xxxxxxx Communications, Inc.
July 9, 2004
Page 4
(C) Paragraph (1) of Exhibit A of the Agreement is amended to add the
following provision:
(1).(1) LETTERS OF CREDIT: Subject to the terms and conditions of
the Agreement, including Exhibit A, and the Other
Agreements, during the Original Term or any Renewal Term,
Bank may, in its sole discretion from time to time issue,
upon Xxxxxxxx's request, commercial and/or standby Letters
of Credit; provided, that the aggregate undrawn face amount
of all such Letters of Credit shall at no time exceed FIVE
MILLION AND NO/100 DOLLARS ($5,000,000.00). Bank's
contingent liability under the Letters of Credit shall
automatically reduce, dollar for dollar, the amount which
Borrower may borrow pursuant to paragraph (1) hereof.
Payments made by Bank to any Person on account of any Letter
of Credit shall constitute Loans hereunder. At no time shall
the aggregate of direct Loans by Bank to Borrower plus the
contingent liability of Bank under the outstanding Letters
of Credit be in excess of the Loan Limit. Borrower shall
remit to Bank a Letter of Credit fee equal to ONE-FOURTH OF
ONE PERCENT (1/4TH OF 1%) per month on the aggregate undrawn
face amount of all Letters of Credit outstanding, which fee
shall be payable monthly in arrears on each day that
interest is payable hereunder. Borrower shall also pay on
demand Bank's normal and customary administrative charges
for issuance of any Letter of Credit.
(D) Subparagraphs (7)(a) and (7)(b) of Exhibit A of the Agreement are
deleted in their entirety and the following is substituted in their place:
(A) FACILITIES FEES: Borrower shall pay to Bank an annual
facilities fees equal to three-fourths of one percent (3/4ths
of 1%) of the aggregate Loan Limit, which fee shall be fully
earned by Bank and payable on June 3, 2005, and on the same
day of each year thereafter during the Original Term and any
Renewal Term.
(B) TRANSACTION FEE: Borrower shall pay to Bank a one-time
transaction fee in the amount of Five Hundred and No/100
Dollars ($500.00), which fee shall be fully earned by Bank on
the date of this Amendment and payable on July 31, 2004.
Xxxxxxx Communications, Inc.
July 9, 2004
Page 5
(E) Paragraph (9) of Exhibit A of the Agreement is deleted in its entirety
and the following is substituted in its place:
(9) Notwithstanding the provision of subparagraph 11(o) of the
Agreement. Xxxxxxx Corporation shall at all times maintain a
Tangible Net Worth equal to the Minimum Tangible Net Worth as
hereafter defined. At all times from August 30, 2003 through
August 31, 2004 "Minimum Tangible Net Worth" shall equal
$7,500,000.00. Thereafter, from August 31st of each year
through August 30th of the following year, Minimum Tangible
Net Worth shall be equal to the greater of (1) Xxxxxxx
Corporation's Tangible Net Worth as shown on Xxxxxxx
Corporation's reviewed year-end financial statement for the
immediately preceding fiscal year (which shall be delivered to
Bank in form and substance satisfactory to Bank no later than
November 30th of each year), or (2) the Minimum Tangible Net
Worth as of the last day of the immediately preceding fiscal
year, plus Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00). "TANGIBLE NET WORTH" being defined for purposes
of this paragraph as Xxxxxxx'x shareholders' equity (including
retained earnings) less the book value of all intangible
assets (as determined solely by Bank on a consistent basis)
plus the amount of any LIFO reserve plus the amount of any
debt subordinated to Bank, all as determined under generally
accepted accounting principles applied on a basis consistent
with the financial statement dated February 28, 2004 except as
set forth herein. The measurement for Minimum Tangible Net
Worth shall be determined solely by Bank at the end of each of
Xxxxxxx Corporation's fiscal years.
(F) Paragraph (13),(1) of Exhibit A of the Agreement entitled "REAL
PROPERTY LOAN" is deleted in its entirety and the phrase "INTENTIONALLY OMITTED"
is substituted in its place.
2. This Amendment shall not become effective until fully executed
by all parties hereto.
Xxxxxxx Communications, Inc.
July 9, 2004
Page 6
3. Except as expressly amended hereby and by any other
supplemental documents or instruments executed by either party
hereto in order to effectuate the transactions contemplated
hereby, the Agreement and Exhibit A thereto hereby are
ratified and confirmed by the parties hereto and remain in
full force and effect in accordance with the terms thereof.
LASALLE BANK NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION
By:____________________________
Title:_________________________
Accepted and agreed to this
____ day of July, 2004.
XXXXXXX COMMUNICATIONS, INC.
By:_________________________
XXXXXX X. XXXXXX
Title: President
By:_________________________
X. XXXX XXXXXXXX, XX.
Title: Treasurer
Consented and agreed to by the following guarantor of the obligations
of XXXXXXX COMMUNICATIONS, INC. to LaSalle Bank National Association.
XXXXXXX CORPORATION
By:_____________________________
XXXXXX X. XXXXXX
Title: President and CEO
Date: July ___, 2004
