EXHIBIT 10.27
FIRST AMENDMENT TO EXIM GUARANTEED LOAN AGREEMENT
THIS FIRST AMENDMENT TO EXIM GUARANTEED LOAN AGREEMENT (this
"Amendment"), dated as of August 1, 1996, is between SCIENTIFIC MEASUREMENT
SYSTEMS, INC., a Texas corporation ("Borrower"), and XXXXX FARGO HSBC TRADE
BANK, N.A. ("Lender").
RECITALS:
A. Borrower and Lender entered into that certain EXIM Guaranteed Loan
Agreement dated as of June 15, 1996 (the "Agreement").
B. Borrower and Lender now desire to amend the Agreement as herein set
forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Capitalized terms used in this Amendment,
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to the extent not otherwise defined herein, shall have the meanings given to
such terms in the Agreement, as amended hereby.
ARTICLE II
Amendments
Section 2.01. Amendment to Certain Definitions. (a) Effective as of
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date hereof, the definition of each of the following terms contained in Section
1.01 of the Agreement is amended to read in its respective entirety as follows:
"Prime Rate" shall mean that variable rate of interest per annum
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established by Xxxxx Fargo Bank from time to time as its prime rate
which shall vary from time to time. Such rate is set by Xxxxx Fargo Bank
as a general reference rate of interest, taking into account such
factors as Xxxxx Fargo Bank may deem appropriate, it being understood
that many of Xxxxx Fargo Bank's commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or best
rate charged to any customer and that Xxxxx Fargo Bank may make various
commercial or other loans at rates of interest having no relationship to
such rate.
Section 2.02. Amendments to Exhibits. Effective as of the date hereof,
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(a) Exhibit "A" to the Agreement (Note) is amended to conform in its entirety to
Annex "A" to this Amendment.
ARTICLE III
Conditions Precedent
Section 3.01. Conditions. The effectiveness of this Amendment is
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subject to the receipt by Lender of the following in form and substance
satisfactory to Lender:
(a) Resolutions. Resolutions of the Board of Directors of
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Borrower certified by its Secretary or an Assistant Secretary which
authorize the execution, delivery and performance by Borrower of this
Amendment and the other Loan Documents to which Borrower is or is to be
a party hereunder.
(b) Note. The Note executed by Borrower.
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(c) Additional Information. Such additional documents,
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instruments and information as Lender may request.
Section 3.02. Additional Conditions. The effectiveness of this
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Amendment is also subject to the satisfaction of the additional conditions
precedent that (a) the representations and warranties contained herein and in
all other Loan Documents, as amended hereby, shall be true and correct as of the
date hereof as if made on the date hereof, (b) all proceedings, corporate or
otherwise, taken in connection with the transactions contemplated by this
Amendment and all documents, instruments and other legal matters incident
thereto shall be satisfactory to Lender, and (c) no Event of Default shall have
occurred and be continuing and no event or condition shall have occurred that
with the giving of notice or lapse of time or both would be an Event of Default.
ARTICLE IV
Ratifications, Representations, and Warranties
Section 4.01. Ratifications. The terms and provisions set forth in
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this Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the Agreement and except as expressly modified and superseded by
this Amendment, the terms and provisions of the Agreement are ratified and
confirmed and shall continue in full force and effect. Borrower and Lender agree
that the Agreement as amended hereby shall continue to be the legal, valid and
binding obligation of such Persons enforceable against such Persons in
accordance with its terms.
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Section 4.02. Representations, Warranties and Agreements. Borrower
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hereby represents and warrants to Lender that (a) the execution, delivery, and
performance of this Amendment and any and all other Loan Documents executed or
delivered in connection herewith have been authorized by all requisite corporate
action on the part of Borrower and will not violate the articles of
incorporation or bylaws of Borrower, (b) the representations and warranties
contained in the Agreement as amended hereby, and all other Loan Documents are
true and correct on and as of the date hereof as though made on and as of the
date hereof, (c) no Event of Default has occurred and is continuing and no event
or condition has occurred that with the giving of notice or lapse of time or
both would be an Event of Default, (d) Borrower is in full compliance with all
covenants and agreements contained in the Agreement as amended hereby, (e)
Borrower is indebted to Lender pursuant to the terms of the Note, as the same
may have been renewed, modified, extended and rearranged, including, without
limitation, renewals, modifications, increases and extensions made pursuant to
this Amendment, (f) the liens, security interests, encumbrances and assignments
created and evidenced by the Loan Documents are, respectively, valid and
subsisting liens, security interests, encumbrances and assignments and secure
the Note as the same may have been renewed, modified or rearranged, including,
without limitation, renewals, modifications, increases and extensions made
pursuant to this Amendment, and (g) Borrower has no claims, credits, offsets,
defenses or counterclaims arising from the Loan Documents or Lender's
performance under the Loan Documents.
ARTICLE V
Miscellaneous
Section 5.01. Survival of Representations and Warranties.
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All representations and warranties made in this Amendment or any other Loan
Documents including any Loan Document furnished in connection with this
Amendment shall fully survive the execution and delivery of this Amendment and
the other Loan Documents, and no investigation by Lender or any closing shall
affect the representations and warranties or the right of Lender to rely on
them.
Section 5.02. Reference to Agreement. Each of the Loan Documents,
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including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement, as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement, as amended hereby.
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Section 5.03. Expenses of Lender. As provided in the Agreement,
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Borrower agrees to pay on demand all costs and expenses incurred by Lender in
connection with the preparation, negotiation and execution of this Amendment and
the other documents and instruments executed pursuant hereto and any and all
amendments, modifications, and supplements thereto, including, without
limitation, the costs and fees of Lender's legal counsel, and all costs and
expenses incurred by Lender in connection with the enforcement or preservation
of any rights under the Agreement, as amended hereby, or any other Loan
Document, including, without limitation, the costs and fees of Lender's legal
counsel.
Section 5.04. Severability. Any provision of this Amendment held by a
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court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5.05. Applicable Law. This Amendment and all other Loan
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Documents executed pursuant hereto shall be deemed to have been made and to be
performable in Houston, Xxxxxx County, Texas and shall be governed by and
construed in accordance with the laws of the State of Texas.
Section 5.06. Successors and Assigns. This Amendment is binding upon
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and shall inure to the benefit of Lender and Borrower and their respective
successors and assigns, except Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.
Section 5.07. Counterparts. This Amendment may be executed in one or
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more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.
Section 5.08. Effect of Waiver. No consent or waiver, express or
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implied, by Lender to or for any breach of or deviation from any covenant,
condition or duty by Borrower shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
Section 5.09. Headings. The headings, captions, and arrangements used
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in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 5.10. ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
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INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THIS AMENDMENT AND THE OTHER INSTRUMENTS,
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DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Executed as of the date first written above.
BORROWER:
SCIENTIFIC MEASUREMENT SYSTEMS, INC.
By: /s/ XXXXX XXXXXXX
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Xxxxx Xxxxxxx
Chairman
LENDER:
XXXXX FARGO HSBC TRADE BANK, N.A.
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. XxXxxxxx
Senior Vice President
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LIST OF ANNEXES
Annex Document
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A Note
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PROMISSORY NOTE
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$1,250,000.00 Houston, Texas August 1, 1996
FOR VALUE RECEIVED, the undersigned, SCIENTIFIC MEASUREMENT SYSTEMS,
INC., a Texas corporation ("Maker"), hereby promises to pay to the order of
XXXXX FARGO HSBC TRADE BANK, N.A., a national banking association ("Payee"), at
its offices at 1000 Louisiana, Houston, Xxxxxx County, Texas, in lawful money of
the United States of America, the principal sum of ONE MILLION TWO HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($1,250,000.00), or so much thereof as may be
advanced and outstanding hereunder, together with interest on the outstanding
principal balance from day to day remaining, at a varying rate per annum which
shall from day to day be equal to the lesser of (a) the Maximum Rate
(hereinafter defined) or (b) the sum of the Prime Rate (hereinafter defined) of
Payee in effect from day to day plus two percent (2.0%), and each change in the
rate of interest charged hereunder shall become effective, without notice to
Maker, on the effective date of each change in the Prime Rate or the Maximum
Rate, as the case may be; provided, however, if at any time the rate of interest
specified in clause (b) preceding shall exceed the Maximum Rate, thereby causing
the interest rate hereon to be limited to the Maximum Rate, then any subsequent
reduction in the Prime Rate shall not reduce the rate of interest hereon below
the Maximum Rate until the total amount of interest accrued hereon equals the
amount of interest which would have accrued hereon if the rate specified in
clause (b) preceding had at all times been in effect. All past due principal and
interest on this Note shall bear interest at the Default Rate (hereinafter
defined).
Principal of and interest on this Note shall be due and payable as
follows:
(a) Accrued and unpaid interest on this Note shall be due and
payable monthly, on the first (1st) day of each month commencing on
September 1, 1996, and upon the maturity of this Note, however such
maturity may be brought about; and
(b) All outstanding principal of this Note and all accrued
interest thereon shall be due and payable on June 15, 1997.
Principal of this Note shall be subject to mandatory prepayment at the
times described in Sections 2.03 and 2.06 of the Agreement (hereinafter
defined).
Interest on the indebtedness evidenced by this Note shall be computed
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day) unless such calculation
would result in a usurious rate in
which case interest shall be calculated on the basis of a year of 365 or 366
days, as the case may be.
As used in this Note, the following terms shall have the respective
meanings indicated below:
"Agreement" means that certain Exim Guaranteed Loan Agreement
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dated as of June 15, 1996 between Maker and Payee, as amended by First
Amendment to Exim Guaranteed Loan Agreement dated as of August 1, 1996,
and as the same may be further amended or modified from time to time.
"Default Rate" shall mean the lesser of (a) the sum of the
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Prime Rate plus five percent (5%) or (b) the Maximum Rate.
"Maximum Rate" means the maximum rate of nonusurious interest
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permitted from day to day by applicable law, including as to Article
5069-1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise
without limitation, that rate based upon the "indicated rate ceiling"
and calculated after taking into account any and all relevant fees,
payments, and other charges in respect of this Note which are deemed to
be interest under applicable law.
"Prime Rate" shall mean that variable rate of interest per annum
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established by Xxxxx Fargo Bank from time to time as its prime rate
which shall vary from time to time. Such rate is set by Xxxxx Fargo Bank
as a general reference rate of interest, taking into account such
factors as Xxxxx Fargo Bank may deem appropriate, it being understood
that many of Xxxxx Fargo Bank's commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or best
rate charged to any customer and that Xxxxx Fargo Bank may make various
commercial or other loans at rates of interest having no relationship to
such rate.
This Note (a) is the Note provided for in the Agreement and (b) is
secured as provided in the Agreement. Payment of this Note is guaranteed by,
among other things, the Export-Import Bank of the United States pursuant to the
EXIM Guaranty (as defined in the Agreement).
Notwithstanding anything to the contrary contained herein, no provisions
of this Note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is herein
provided for, or shall be adjudicated to be so provided, in this Note or
otherwise in connection with this loan transaction, the provision of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other
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excess sum paid for the use, forbearance or detention of sums loaned pursuant
hereto. If for any reason interest in excess of the Maximum Rate shall be deemed
charged, required or permitted by any court of competent jurisdiction, any such
excess shall be applied as a payment and reduction of the principal of
indebtedness evidenced by this Note; and, if the principal amount hereof has
been paid in full, any remaining excess shall forthwith be paid to Maker. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, Maker and Payee shall, to the extent permitted by applicable law, (a)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the entire contemplated term of the indebtedness
evidenced by this Note so that the interest for the entire term does not exceed
the Maximum Rate.
Upon the occurrence of any Event of Default, as such term is defined in
the Agreement, the holder hereof may, at its option, (a) declare the entire
unpaid principal of and accrued interest on this Note immediately due and
payable without notice, demand or presentment, all of which are hereby waived,
and upon such declaration, the same shall become and shall be immediately due
and payable, (b) foreclose or otherwise enforce all liens or security interests
securing payment hereof, or any part hereof, (c) offset against this Note any
sum or sums owed by the holder hereof to Maker, (d) exercise its rights under
the EXIM Guaranty and (e) take any and all other actions available to Payee
under this Note, the Agreement, the Loan Documents (as such term is defined in
the Agreement) at law, in equity or otherwise. Failure of the holder hereof to
exercise any of the foregoing options shall not constitute a waiver of the right
to exercise the same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part of installment of any sum due the holder hereunder,
or if this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all costs,
expenses, and fees incurred by the holder, including all reasonable attorneys'
fees.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
THIS NOTE IS PERFORMABLE IN XXXXXX COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever liable
for payment of any sums of money payable on this Note jointly and severally
waive notice, presentment, demand for payment, protest, notice of protest and
not-payment or dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, grace, and all other
formalities of any kind, and consent to all extensions without notice for any
period or periods of time and partial payments,
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before or after maturity, and any impairment of any collateral securing this
Note, all without prejudice to the holder. The holder shall similarly have the
right to deal in any way, at any time, with one or more of the foregoing parties
without notice to any other party, and to grant any such party any extensions of
time for payment of any of said indebtedness, or to release or substitute part
or all of the collateral securing this Note, or to grant any other indulgences
or forbearances whatsoever, without notice to any other party and without in any
way affecting the personal liability of any party hereunder.
This Note is executed in renewal, extension and modification of, but not
in discharge or novation of, that certain promissory note in the original
principal amount of $1,250,000.00, dated June 15, 1996, executed by Maker and
payable to the order of Payee.
SCIENTIFIC MEASUREMENT SYSTEMS, INC.
By:
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Xxxxx Xxxxxxx
Chairman
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