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10.27 Amended Loan Agreement dated July 7, 1997 between Registrant and
First Union National Bank of Tennessee
MODIFICATION NUMBER 1
TO THE PROMISSORY NOTE AND THE LOAN AGREEMENT
Kyzen Corporation
000 Xxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(Individually and Collectively, "Borrower")
First Union National Bank of Tennessee
First Union Tower
000 0xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(Hereinafter referred to as the "Bank")
THIS AGREEMENT is entered into as of July 7, 1997 by and between Bank and
Borrower.
WHEREAS, Bank is the holder of a Promissory Note executed and delivered by
Borrower, dated March 11, 1996, in the original principal amount of $ 500,000.00
(the "Note"); and
WHEREAS, in connection the execution of the Note, Borrower also executed and
delivered to Bank certain other Loan Documents, including a Loan Agreement,
dated March 11.'1996 (the 'Loan Agreement"); and
WHEREAS, Borrower and Bank have agreed to modify the terms of the Promissory
Note and the Loan Agreement.
NOW, THEREFORE, in consideration of the premises contained herein and other good
and valuable consideration receipt and sufficiency of which is acknowledged, the
parties agree an follows:
OUTSTANDING BALANCE. The total outstanding unpaid principal balance under the
Note as of June 30, 1997 is $0.00. The parties acknowledge that interest on the
obligations under the Note is paid through May 27, 1997.
MODIFICATIONS.
1. The Note is hereby modified by deleting the provisions in the Note
establishing the repayment terms and by substituting the following in
their place and stead:
REPAYMENT TERMS. The Note shall be due and payable in consecutive
monthly payments of accrued interest only commencing on July, 27, 1997,
and on the same day of each month thereafter until fully paid. In any
event all principal and accrued interest shall be due and payable on
April 30, 1998.
LINE OF CREDIT ADVANCE. Borrower may borrow, repay and reborrow, and
Bank may advance and readvance under the Note rest actively from time
to time until the maturity hereof (each an "Advance" and together the
"Advances"), so long as the total indebtedness outstanding at any one
time does not exceed the principal amount stated on the face of the
Note. Bank's obligation to make Advances under the Note shall terminate
if Borrower is in Default or a representation in any of the Loan
Documents is false or has become false. As of the date of each proposed
Advance, Borrower shall be deemed to represent that each representation
made in the Loan Documents is true as of' such date.
2. The section and FINANCIAL COVENANTS of the Loan Agreement is hereby
amended by adding the following:
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FINANCIAL COVENANTS. Borrower agrees to the following provisions from
the date hereof until final payment in full of the Obligations, unless
Bank shall otherwise consent in writing:
Working Capital. Borrower shall, at all times, maintain Working Capital
of at least $1,200,000.00.
"Working Capital" shall mean the excess of the current assets over the
current liabilities.
Net Income. Borrower shall maintain a minimum net income (as defined
pursuant to generally accepted accounting principals presently in
effect and currently employed by Borrower in its financial accounting)
during fiscal year 1997 and the first quarter of fiscal year 1998 based
or the following schedule:
CUMULATIVE FISCAL YEAR TO DATE INCOME
-------------------------------------
July, 1997 ($340.000.00)
August, 1997 ($310,000.00)
September, 1997 ($260,000.00)
October, 1997 ($160,000.00)
November, 1997 ($110,000.00)
December, 1997 $0
January, 1998 $ 50,000.00
February, 1998 $100,000.00
Xxxxx, 0000 $150,000.00
ACKNOWLEDGMENTS. Borrower acknowledges and represents that the Note and other
Loan Documents. as amended hereby, and in full force and effect and are binding
upon it, its successors, assigns, administrators and heirs without any defense,
counterclaim, right or claim of set-off or of other sum due; that, after giving
effect to this Agreement, no default or event that with the passage of time or
giving of notice would constitute a default under the Loan Documents has
occurred; that all representations and warranties contained in the Loan
Documents are true and correct as of this date; that there have been no changes
in the ownership of any collateral pledged to secure the Obligations since the
dates of the instruments originally pledging such collateral; and that Borrower
has taken all necessary action (corporate or otherwise) to authorize the
execution and delivery of this Agreement. This Agreement constitutes: only a
modification of an existing obligation owing by Borrower to Bank and is not a
novation.
LIENS. Borrower acknowledges and confirms the extent, validity end priority of
the Bank's security interests and liens in the collateral pledged, if any,
pursuant to the Loan Documents, and agrees that such security interests and
liens shall secure the Borrower's Obligations to Bank, including any
modification of the Note or Loan Agreement, and all future modifications,
extensions, renewals and/or replacements of the Loan Documents.
MISCELLANEOUS. This Agreement shall be construed in accordance with and governed
by the laws of the applicable state as originally provided in the Loan
Documents, without reference to that state's conflicts of laws principles. This
Agreement and the other Loan Documents constitute the sole agreement of the
parties with respect to the subject matter thereof and supersede all oral
negotiations and prior writings with respect to the subject matter thereof. No
amendment of this Agreement, and no waiver of any one or more of the provisions
hereof shall be effective unless set forth in writing and signed by the parties
hereto. The illegality, unenforceability or inconsistency of any provision of
this Agreement shall not in any way affect or- impair the legality,
enforceability or consistency of the remaining provisions of this Agreement or
the other Loan Documents. This Agreement and the other Loan Documents are
intended to be consistent. However, in the event of any inconsistencies among
this Agreement and any of the Loan Documents, the terms of this Agreement, and
then the Note, shall control. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts. Each such
counterpart shall be deemed an original, but all such counterparts shall
together constitute one and the same agreement.
DEFINITIONS. The term "Loan Documents" used in this Agreement and other Loan
Documents refers to all documents, agreements and instruments executed in
connection with any of the Obligations (as defined herein),
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and may include, without limitation, modification agreements, a commitment
letter that survives closing a loan agreement, any note, guaranty agreements,
security agreements, security instruments, financing statements, mortgage
instruments, letters of credit and any renewals or modifications, whenever any
of the foregoing are executed, but does not include swap agreements (as defined
in 11 U.S.C. - 101). The term "Obligations" used in this Agreement refers to any
and an indebtedness and other obligations of every kind and description of the
Borrower to any Bank affiliate, whether or not under the Loan Documents, and
whether such debts or obligations are primary or secondary, direct or indirect,
absolute or contingent, sole, joint or several, secured or unsecured, due or to
became due, contractual, including, without limitation swap agreements (as
defined in 11 U.S.C. - 101), arising by tort, arising by operation of law, by
overdraft or otherwise, or now or hereafter existing, including, without
limitation, principal, interest, fees, late fees, expenses, attorneys' fees and
costs that have been or may hereafter be contracted or incurred. Terms used in
this Agreement which are capitalized and not otherwise defined herein shall have
the meanings ascribed to such terms in the Note and/or other Loan Documents.
ARBITRATION. Upon demand of any party hereto, whether made before or after
institution or any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement and other Loan
Documents ("Dispute") between or among parties to this Agreement shall be
resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to arbitration, claims
brought as class actions, claims arising from Loan Documents executed in the
future, or claims arising a out of or connected with the transaction reflected
by this Agreement.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in the city in which the office of Bank first stated above is
located. The expedited procedures set forth in Rule 51 et seq.. of the
Arbitration Rules shall be applicable to claims of less than $1,000,000.00. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. The panel from which
all arbitrators are selected shall be comprised of licensed attorneys. The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction state or federal, of the state where
the hearing will be conducted or if such person is not available to serve, the
single arbitrator may be a licensed attorney. Notwithstanding the foregoing, the
arbitration provision does not apply to disputes under or related to swap
agreements.
PRESERVATION AND LIMITATION OF REMEDIES. Notwithstanding the preceding binding
arbitration provisions, Bank and Borrower agree to preserve, without limitation,
certain remedies that any party hereto may employ or exercise freely,
independently or in connection with an arbitration proceeding or after an
arbitration action is brought. Bank and Borrower shall have the right to proceed
in any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose, against any real
or personal property or other security by exercising a power of sale Under Loan
Documents or under applicable law or by judicial foreclosure and sale, including
proceeding to confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment, of receiver and filing an involuntary bankruptcy proceeding; and
(iv) when applicable a judgment by confession of judgment. Preservation of these
remedies does not limit the power of an arbitrator to grant similar remedies
that may be requested by a party in Dispute.
Borrower and Bank agree that they shall not have a remedy of punitive or
exemplary damages against the other in any Dispute and hereby waive any right
or claim to punitive or exemplary damages they have now or which may arise in
the future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
IN WITNESS WHEREOF, the undersigned have signed and sealed this Agreement the
day and year first above written.
Kyzen Corporation
Taxpayer Identification Number 00-0000000
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CORPORATE By: /s/ Xxxxxxxx X. Xxxxxxx
SEAL -------------------------------------
Xxxxxxxx X. Xxxxxxx, Treasurer
First Union National Bank of Tennessee
CORPORATE By: /s/ Xxxxxxxx Xxxxxx
SEAL -------------------------------------
Xxxxxxxx Xxxxxx, Vice President
