EXHIBIT 99.1
AMENDMENT
of the
Note, Loan and Modification Agreement
This writing, effective as of September 1, 2004, (the "Amendment"),
modifies the terms of the Loan Agreement, dated September 12, 2000 (the "Loan
Agreement") between Biomerica, Inc., a Delaware corporation (the "Borrower"),
Xxxxx Xxxxx as Trustee of the XXXXX XXXXX TRUST DATED AUGUST 21, 1998 (the
"Lender"), the Loan Modification, Forbearance and Security Agreement (the
"Modification Agreement") dated March 12, 2004, among Borrower, Lender and Xxxxx
Xxxxx, as an individual ("Xxxxx"), and the Amended and Restated Promissory Note,
dated March 19, 2004, in principal amount of $313,318.00 (the "Note"), executed
in connection with the loan by Lender to Borrower (the "Loan").
In consideration of the extension of the maturity date granted herein
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. EXTENSION OF MATURITY DATE. Under the terms of the Note, the Loan
matures on September 1, 2004. The Maturity Date, as defined in the Note, is
hereby extended until August 31, 2005. Lender agrees that any and all defaults
or events of default which may have occurred solely as a result of Borrower's
failure to repay the Loan at maturity are hereby waived, but Lender expressly
reserves any and all rights and remedies of Lender with respect to any other
defaults or events of default which may have occurred and may now be continuing
or which may occur after the date hereof.
2. REAFFIRMATION OF LOAN. Borrower reaffirms all of its obligations
arising under or with respect to the Loan, and Borrower acknowledges that it has
no claims, offsets or defenses with respect to the payment of sums due under the
Note, the Modification Agreement or any other document or agreement executed in
connection therewith. The security interest previously granted by Borrower to
Lender in connection with the Loan secures payment and performance of the Loan
as amended to date.
3. PAYMENTS BY BORROWER TO LENDER. This Amendment establishes the
following payment schedule from the Borrower to the Lender for the principal and
interest due on the Note:
a) Borrower shall pay $4,000.00 per month payable in two
installments of $2,000 each on the first (1st) and fifteenth
(15th) day of each month or on such other dates as agreed
upon, in writing, between Lender and Borrower.
b) Not later than 50 days after the end of each of the Borrower's
fiscal quarters and its fiscal year end, Borrower shall pay a
sum equal to one-half (1/2) of the Borrower's revenues after
deducting cash expenses (non-cash items such as depreciation,
amortization, stock option expense, subsidiary and/or
affiliate losses, salary accruals, etc. shall not be deducted
from income) as calculated for the fiscal quarter then ending
between the date hereof and August 31, 2005. This payment by
Borrower to Lender shall not exceed $3,500 per month in the
relevant quarter. The Borrower shall make its payment to the
Lender within two (2) business days after the Borrower has
filed its financial statements on Forms 10-QSB or 10-KSB, as
applicable, with the Securities and Exchange Commission, and
such payments shall be determined based on such financial
statements, as adjusted to reflect any adjustments required by
the Borrower's accountants in connection with their review or
audit of those statements, as applicable.
4. DEFERRAL OF SALARY. Borrower acknowledges and agrees that the
agreements between Borrower and Xxxxx set forth in Section 7 of the Modification
Agreement with respect to the deferral of salary payable by Borrower to Xxxxx
during the Forbearance Period (as defined in the Modification Agreement) have
terminated, effective as of August 31, 2004.
5. OTHER TERMS. All other terms of the Note, the Loan Agreement and
the Modification Agreement not specifically modified by this
Amendment remain in full force and effect.
[Signatures on the Following Page]
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives, effective as of the day and
year first above written.
Borrower Lender
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BIOMERICA, INC. XXXXX XXXXX, as Trustee of the XXXXX
XXXXX TRUST DATED AUGUST 21, 1998
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxx
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Xxxxxxx X. Xxxxx Xxxxx Xxxxx as Trustee and not
individually
Title: Chief Executive Officer
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Xxxxx Xxxxx, individually
/s/ Xxxxx Xxxxx
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