Exhibit 10.1
[COMERICA LOGO]
FIRST MODIFICATION TO THE AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This First Modification to the Amended and Restated Loan and Security
Agreement (this "Modification") is entered into by and between LIBERTY PREMIUM
FINANCE, INC. ("Borrower") and COMERICA BANK ("Bank") as of this 26th day of
April, 2005, at San Jose, California.
RECITALS
This Modification is entered into upon the basis of the following facts
and understandings of the parties, which facts and understandings are
acknowledged by the parties to be true and accurate:
Bank and Borrower previously entered into an Amended and Restated Loan and
Security Agreement (Accounts) dated May 7, 2004. The Amended and Restated Loan
and Security Agreement and each subsequent modification shall collectively be
referred to herein as the "Agreement."
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as set forth
below.
AGREEMENT
1. Incorporation by Reference. The Recitals and the documents referred
to therein are incorporated herein by this reference. Except as otherwise noted,
the terms not defined herein shall have the meaning set forth in the Agreement.
2. Modification to the Agreement. Subject to the satisfaction of the
conditions precedent as set forth in Section 3 hereof, the Agreement is hereby
modified as set forth below.
A. Section 1.10 of the Agreement is hereby amended by deleting it
in its entirety and replacing it with the following:
"1.10 Credit Limit" shall mean Six Million Dollars
($6,000,000.00).
B. Section 3.1(a) of the Agreement is hereby amended by deleting
the date "May 14, 2005" it in its entirety and replacing it
the date "May 14, 2006:
C. Section 6.4 a. of the Agreement is hereby emended by deleting
it in its entirety and replacing it with the following:
"a. Borrower shall permit representatives of Bank to conduct
audits of Borrower's Books relating to the Accounts and other
Collateral and make extracts therefrom, with results satisfactory to
Bank, provided that Bank shall use its best efforts to not interfere
with the conduct of Borrower's business, and to the extent possible
to arrange for verification of the Accounts directly with the
account debtors obligated thereon or otherwise, all under reasonable
procedures acceptable to Bank and at Borrower's sole expense;
provided, however, that, prior to an Event of Default and as long as
any two of the following individuals: Xxxxxxx Xxxxxx, Xxxx Xxxxxx
and Xxxxxxxx Xxxxxx are employed in positions similar to the ones
that they hold today, then Borrower shall not be responsible for
more than one (1) such audits in each calendar year. Notwithstanding
any of the provisions contained in Section 2 of this Agreement or
otherwise, Borrower hereby acknowledges and agrees that upon
completion of any such audit Bank shall have the right to adjust the
Borrowing Base percentage or the definition of Eligible Accounts
under any amendment or modification to this Agreement, that may now
or hereafter be entered into by Bank and Borrower, in its sole and
reasonable discretion, based on its review of the results of such
audit."
D. Section 6.15b(1) of the Agreement is hereby amended by
deleting it in its entirety and replacing it with the
following:
"(1) Borrower shall deliver to Bank: (1) within thirty
(30) days after the end of each quarter, a company
prepared balance sheet and profit and loss statement
covering Borrower's operations;"
E. Section 6.15d(3) of the Agreement is hereby amended by
deleting it in its entirety and replacing it with the
following:
"(3) Compliance Certification within 30 days of each
quarter-end;"
F. Section 6.16 of the Agreement is hereby amended by deleting it
in its entirety and replacing it with the following:
"6.16 Borrower shall maintain the following financial ratios
and covenants, which shall be monitored on a quarterly basis except
as noted below:
a. Working Capital in an amount not less than $3,500,000.00.
b. Tangible Effective Net Worth in an amount not less than
$3,400,000.00.
c. a ratio of Current Assets to Current Liabilities of not less
than 1.75:1.00.
d. a Debt-to-Worth Ratio of not greater than 2.00:1.00.
e. Borrower shall not without Bank's prior written consent
acquire or expend for or commit itself to acquire or expend
for fixed assets by lease, purchase or otherwise in an
aggregate amount that exceeds Fifty Thousand Dollars
($50,000.00) in any fiscal year; and
All financial covenants shall be computed in accordance with GAAP
consistently applied except as otherwise specifically set forth in this
Agreement. All monies due from affiliates (including officers, directors
and shareholders) shall be excluded from Borrower's assets for all
purposes hereunder."
3. Legal Effect. The effectiveness of this Modification is conditioned
upon receipt by Bank of this Modification, and any other documents
which Bank may require to carry out the terms hereof. Except as
specifically set forth in this Modification, all of the terms and
conditions of the Agreement remain in full force and effect.
4. Integration. This is an integrated Modification and supersedes all
prior negotiations and agreements regarding the subject matter
hereof. All amendments hereto must be in writing and signed by the
parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set forth
above.
LIBERTY PREMIUM FINANCE, INC.
By: /s/ Xxxxx X. Xxxxxx
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Its: Vice President
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By: /s/ Xxxxxxx X. X'Xxxx
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Its: Assistant Secretary
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COMERICA BANK
By: /s/ Xxxxxxx Xxxxxx
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Its: Vice-President -- Western Division
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Address for Notices:
00000 Xxxx 000xx Xxxxxx
Xxxxxxxx, XX 00000
