EXHIBIT 10.20
SECOND AMENDED LOAN AGREEMENT
WHEREAS, on the 25th day of October, 2000, STILLWATER NATIONAL BANK AND
TRUST COMPANY OF STILLWATER, OKLAHOMA (hereinafter referred to as the "Bank")
and WESTWOOD CORPORATION, a Nevada Corporation (hereinafter referred to as
"Westwood"), TANO CORP., a Louisiana Corporation (hereinafter referred to as
"TANO"), NMP CORP., an Oklahoma Corporation (hereinafter referred to as "NMP"),
and MC II ELECTRIC COMPANY, a Texas Corporation (hereinafter referred to as
"MCII"), (collectively Westwood, Tano, NMP and MCII are hereinafter referred to
as "Debtor") entered into a Loan Agreement (hereinafter referred to as the "Loan
Agreement"), wherein the Bank agreed to enter into a revolving loan agreement
whereby the Bank would loan to the Company up to TWO MILLION EIGHT HUNDRED
THOUSAND and NO/100 DOLLARS ($2,800,000.00) for the purpose of financing the
Company's ongoing operations, which agreement was evidenced by a Renewal and
Amended Revolving Promissory Note of even date therewith ("Note"); and
WHEREAS, on June 25, 2001, Bank and Debtor entered into an Amended Loan
Agreement whereby the parties amended the Loan Agreement by, among other things,
extending the Maturity Date and increasing the rate of interest contained in the
Note.
WHEREAS, the parties wish to make further adjustments to the lending
arrangements between the parties, including increasing the line of credit
available to the Debtor to THREE MILLION EIGHT HUNDRED THOUSAND and NO/100
DOLLARS ($3,800,000.00), extending the Maturity Date in the Note and adjusting
the interest rate charged in the Note.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereby agree to amend the Loan Agreement in the following respects:
1. Paragraphs 1.1, 1.1 (a) and 1.1 (b) of the Loan Agreement are amended
to read as follows:
1.1 Subject to the terms and conditions of this Agreement, Debtor
shall have the right from time to time, prior to the "Termination
Date" (defined below), to borrow and, upon repayment, reborrow from
the Bank amounts not at any one time in the aggregate principal
balance exceeding the lesser of: (i) the Borrowing Base determined as
of the date of borrowing; or (ii) Three Million Eight Hundred Thousand
and No/100 Dollars ($3,800,000.00) (hereinafter referred to as
"Revolving Loan"). For these purposes:
(a) "Termination Date" means July 15, 2002.
(b) "Borrowing Base" means, as of any given date, the sum of the
following factors: (1) seventy-five percent (75%), or at the
Bank's sole discretion any lesser percentage designated upon
forty-five (45) days notice, of Eligible Trade Accounts
Receivable of TANO, MC II and NMP; plus (2) fifty percent (50%)
of the value of the inventory of TANO, MCII, and NMP, not to
exceed Two Million and No/100 Dollars ($2,000,000.00).
2. Paragraph 1.1(c)(7) of the Loan Agreement is amended to read as
follows:
(7) Eligible Trade Accounts Receivable shall not include any account
receivable of the same account debtor to any of the Debtors in excess
of fifteen percent (15%) of the then Eligible Trade Accounts
Receivable calculated after excluding this debtor's Eligible Trade
Accounts Receivable, provided, however Eligible Trade Accounts
Receivable may include the following: accounts receivable of CECOM and
Xxxxxxx up to a maximum of forty percent (40%) of the then Eligible
Trade Account after excluding CECOM and Xxxxxxx Eligible Trade
Accounts Receivable; accounts receivable of DFAS up to a maximum of
twenty-five percent (25%) of the then Eligible Trade Account after
excluding DFAS Eligible Trade Accounts Receivable; the accounts
receivable of Avondale up to a maximum of twenty-five percent (25%) of
the then Eligible Trade Account after excluding Avondale Eligible
Trade Accounts Receivable, and accounts receivable of Bath Ironworks
up to a maximum of twenty-five percent (25%) of the then Eligible
Trade Account after excluding Bath Ironworks Eligible Trade Accounts
Receivable; and
3. Paragraph 1.2 of the Loan Agreement shall be amended to reflect that
the "Renewal Note" which is defined in that paragraph refers to the Second
Amended and Restated Promissory Note between the parties dated of even date
hereof in the original principal amount of Three Million Eight Hundred Thousand
and NO/100 Dollars ($3,800,000.00).
4. Paragraph 2 of the Loan Agreement is amended to read as follows:
2.1 The interest rate on the Renewal Note shall be the greater of the
"Minimum Interest Rate" (defined below) and the "Adjusted Interest
Rate" (defined below) which is subject to change from time to time
based on changes in the "Index" (defined below). The Adjusted Interest
Rate shall be a rate per annum equal to the sum of the "Base Rate"
(defined below) and the "Margin" (defined below). The Contract Rate
shall fluctuate during the term of this Note based upon the sum of the
Base Rate and the Margin.
2.2 The Base Rate may be adjusted up or down DAILY, and shall equal
the lowest base rate on corporate loans posted by at least
seventy-five percent (75%) of the nation's 30 largest banks as
published in the money rates section of the Southwest Edition of the
Wall Street Journal. Bank will inform Debtor what the current Base
Rate is at any time during the term of the Renewal Note upon request
of Debtor. The Base Rate will not change more often than once each
DAY.
2.3 The Margin shall be one and one-half (11/2) percentage points.
2.4 The Minimum Interest Rate shall equal six and one half percent (6
1/2%).
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5. This Loan Agreement shall be further amended to provide that upon the
execution of this Second Amended Loan Agreement, and as a condition precedent
thereto, the Debtor shall pay to the Bank a Loan Fee of Two Thousand Five
Hundred and No/100 Dollars ($2,500.00).
6. Except as may be amended herein, the terms and conditions of the Loan
Agreement remain in full force and effect.
IN WITNESS WHEREOF, this Agreement is executed this 18th day of December,
2001.
"BANK"
STILLWATER NATIONAL BANK AND TRUST
COMPANY, STILLWATER, OKLAHOMA
By: /s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx, Senior Vice President
"COMPANY"
Westwood Corporation, a Nevada corporation
By: /s/ Xxxxxx X. XxXxx
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Xxxxxx X. XxXxx, President
TANO Corp., a Louisiana corporation
By: /s/ Xxx Xxxxxxxx
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Xxx Xxxxxxxx, President
NMP Corp., an Oklahoma corporation
By: /s/ Xxxxxx X. XxXxx
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Xxxxxx X. XxXxx, President
MC II Electric Company, a Texas corporation
By: /s/ Xxxxxx X. XxXxx
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Xxxxxx X. XxXxx, President
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