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Exhibit: 10.19T
MODIFICATION NUMBER TWO
TO LOAN AGREEMENT
Xxxxx Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
(Individually and collectively, "Borrower")
First Union National Bank
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(Hereinafter referred to as the "Bank")
THIS AGREEMENT is entered into as of March 1, 1999, by and between Bank and
Borrower.
RECITALS
Bank is the holder of a Promissory Note executed and delivered by Borrower,
dated March 30, 1998, in the original principal amount of $1,200,000.00 (the
"Note"); and certain other Loan Documents, including a Loan Agreement, dated
March 30, 1998 (the "Loan Agreement"); and
Borrower and Bank have agreed to modify the terms of the Loan Agreement.
In consideration of Bank's continued extension of credit and the agreements
contained herein, the parties agree as follows:
AGREEMENT
ACKNOWLEDGMENT OF BALANCE. Borrower acknowledges that the most recent
Commercial Loan Invoice sent to Borrower with respect to the Obligations under
the Note is correct.
MODIFICATIONS.
1. The Section entitled "Borrowing Base" of the Loan Agreement is hereby
amended by deleting the subparagraph referring to "Eligible Accounts" and
"Eligible Inventory" and adding the following in its place and stead:
ELIGIBLE ACCOUNTS: The Maximum Principal Amount shall be an amount equal
to 75% of the new amount of Eligible Accounts, plus 45% of an amount equal to
its value of Eligible Inventory, less the amount of any Reserve required by
Bank.
ELIGIBLE INVENTORY: Eligible Inventory means inventory of raw material
and finished goods in Borrower's possession that is held for use or sale in
the ordinary course of Borrower's business and is not unmerchantable or obsolete
and is subject to a first priority perfected security interest in favor of
Bank. The value of the inventory will be determined by Bank and will be valued
at the lower of cost or market on a first-in, first-out basis. Eligible
Inventory may not exceed a maximum value of $700,000.00 for purposes of
borrowing base calculations.
ACKNOWLEDGMENTS. Borrower acknowledges and represents that the Note and other
Loan Documents, as amended hereby, are in full force and effect without any
defense, counterclaim, right or claim of set-off, 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
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Borrower has taken all necessary action to authorize the execution and delivery
of this Agreement; and that this Agreement is a modification of an existing
obligation and is not a novation.
COLLATERAL. Borrower acknowledges and confirms that there have been no changes
in the ownership of any collateral pledged to secure the Obligations (the
"Collateral") since the Collateral was originally pledged; that the Bank has
existing, valid first priority security interests and liens in the Collateral;
and 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 law 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. Terms used in this Agreement
which are capitalized and not otherwise defined herein shall have the meanings
ascribed to such terms in the Note.
CONNECTICUT PREJUDGMENT REMEDY WAIVER. EACH BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS REPRESENTED BY THIS AGREEMENT ARE COMMERCIAL TRANSACTIONS AND
HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ANY RIGHTS TO NOTICE OF AND HEARING ON
PREJUDGMENT REMEDIES UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES OR
OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES THE BANK'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.
ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements. SPECIAL RULES. All arbitration hearings shall be conducted in the
city named in the address of Bank first stated above. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall conclude within
120 days of demand for arbitration.
These time limitations may not be extended unless party shows cause for
extension and then for no more than a total of 60 days. 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. Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
the AAA. The parties do not waive applicable Federal or state substantive law
except as provided herein. RESERVATION AND LIMITATION OF REMEDIES.
Notwithstanding the preceding binding arbitration provisions, the parties agree
to preserve, without diminution, certain remedies that any party may exercise
before or after an arbitration proceeding is brought. The parties shall have
the right to proceed in any court of proper jurisdiction or by self-help to
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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 or under applicable law by judicial foreclosure including a
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. Any claim or
controversy with regard to any party's entitlement to such remedies is a
Dispute. WAIVER OF EXEMPLARY DAMAGES. The parties agree that they shall not
have a remedy of punitive or exemplary damages against other parties in any
Dispute and the future in connection with any Dispute whether the Dispute is
resolved by arbitration or judicially. WAIVER OF JURY TRIAL. THE PARTIES
ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY
WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE.
IN WITNESS WHEREOF, the undersigned have signed and sealed this Agreement the
day and year first above written.
First Union National Bank
CORPORATE By: Xxxxx [Illegible]
SEAL -------------------------------
Xxxxx [Illegible] , Vice President
Xxxxx Corporation
CORPORATE
SEAL By: Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President
