EXHIBIT 10.1
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SECOND AMENDMENT TO SECURITY AGREEMENT
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THIS SECOND AMENDMENT is made as of this 31st day of August, 1999 by
and among ENVIRONMENTAL ELEMENTS CORPORATION, a Delaware corporation
("Borrower") and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, a Maryland banking
corporation ("Bank").
RECITALS
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A. The Bank previously agreed to extend credit to the Borrower pursuant
to a certain Revolving Credit and Letter of Credit Agreement dated November 24,
1993, as amended by a letter agreement dated May 26, 1994 from Xxxxxxxx X.
Xxxxxxxxxx to Xxxxxx X. XxXxxx, a Second Amendment to Revolving Credit and
Letter of Credit Agreement dated October 25, 1995, a Third Amendment to
Revolving Credit and Letter of Credit Agreement dated June 12, 1998, and a
Fourth Amendment to Revolving Credit and Letter of Credit Agreement of even date
herewith (collectively, the "Agreement"), in the form of a line of credit
facility in an original principal amount not to exceed Ten Million Dollars
($10,000,000.00), which was reduced to Seven Million Dollars ($7,000,000.00),
then increased to Twelve Million Dollars ($12,000,000.00), and is currently
being increased to Fifteen Million Dollars ($15,000,000.00).
B. The indebtedness under the Agreement is evidenced by a Line of
Credit Promissory Note dated November 24, 1993 from Borrower to Bank, as amended
by a certain First Amendment to Line of Credit Promissory Note dated October 25,
1995, certain letter agreements between the Bank and the Borrower, a certain
Second Amendment to Line of Credit Promissory Note dated June 12, 1998, and a
certain Third Amendment to Line of Credit Promissory Note of even date herewith
(collectively, the "Note").
C. The repayment of the indebtedness evidenced by the Note is secured
by a Security Agreement dated October 25, 1995 between Borrower and Bank, as
amended by a First Amendment to Security Agreement dated July 12, 1998.
D. The Buyer has requested that the Bank extend the term and increase
the amount of such line of credit facility, and the Bank has agreed, and the
parties now wish to amend the Security Agreement.
WITNESSETH
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree that the Security Agreement is hereby modified and amended as follows (the
Security Agreement, as amended, is hereinafter referred to as the "Security
Agreement"):
1. Recitals. The parties acknowledge and agree that the foregoing
Recitals are true and correct, and are incorporated herein by reference.
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2. Amendments to Security Agreement.
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A. The aggregate amount of the credit facility described in
the Recitals of the Security Agreement, the repayment of which is secured by the
Security Agreement, is hereby increased from Twelve Million Dollars
($12,000,000.00) to Fifteen Million Dollars ($15,000,000.00).
B. All references in the Security Agreement to the "Note"
shall mean the Line of Credit Promissory Note, as heretofore amended and as
amended on even date, and all references to the Loan Agreement shall mean the
Revolving Credit and Letter of Credit Agreement, as heretofore amended and as
amended on even date, as well as any future amendments or modifications thereof.
3. Effect of Amendment. Except as modified and amended herein, the
Security Agreement shall be and remain in full force and effect. In the event of
any conflict between the terms and provisions of the Security Agreement and this
Second Amendment, the terms and provisions of this Second Amendment shall
prevail. Nothing contained herein shall constitute a novation under the Note.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed and sealed, intending this to be a sealed instrument, as of the date
first above written.
WITNESS/ATTEST: ENVIRONMENTAL ELEMENTS CORPORATION
____________________________ By:________________________________(SEAL)
Name: Xxxxx X. Xxxxxxxx
Title: Vice-President and
Chief Financial Officer
MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY
____________________________ By:________________________________(SEAL)
Xxxxxx X. Xxxxxxx,
Senior Vice-President
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