AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT ("Amendment") is made this ___ day of
September, 2000, by and between Bank of America, N.A., a national banking
association (the "Bank") and Xxxxxx Technologies, Inc., a Delaware corporation
("Borrower").
W I T N E S S E T H:
--------------------
WHEREAS, Bank and Borrower are parties to that certain Loan Agreement dated
as of February 29, 2000 (the "Loan Agreement"), pursuant to which Bank extended
a revolving line of credit to the Borrower (the "Loan"), in the principal amount
of $2,000,000 (all capitalized terms appearing herein and not otherwise defined
shall have the meanings ascribed to such terms in the Loan Agreement); and
WHEREAS, the Loan was scheduled to mature on July 31, 2000, but the
maturity date thereof was extended to September 30, 2000 pursuant to the terms
of that certain renewal Promissory Note dated May 12, 2000; and
WHEREAS, the Borrower has now requested Bank to extend the maturity date of
the Loan further, to December 31, 2000; and
WHEREAS, the Bank has agreed to such extension of the maturity date,
subject to certain terms and conditions; and
WHEREAS, the parties wish to set forth their agreement with respect to the
foregoing matters herein;
NOW, THEREFORE, in consideration of the premises, the Bank's agreement to
extend the maturity date of the Loan, the mutual promises set forth below, and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree hereby as follows:
1. Extension of Maturity Date. The Maturity Date of the Loan is hereby
extended from September 30, 2000 to December 31, 2000, which date shall
hereafter be the "Maturity Date" for purposes of the Loan Agreement. The
Borrower shall execute and deliver a note modification agreement (the "Note
Modification"), in form satisfactory to the Bank, evidencing such extension of
the Maturity Date.
2. Amendments to Loan Agreement. The parties hereto agree to amend the Loan
Agreement as follows:
(a) Section 2(A) is amended by restating the following subsections as
follows:
Revolving Line of Credit. (i) Subject to the terms hereof, Bank agrees
to extend a revolving line of credit (the "Revolver") to Borrower, in the
original principal amount of Two Million Dollars ($2,000,000), for the
purpose of providing temporary financing of the Borrower's short-term
working capital needs (including specifically, but not limited to, issuance
of letters of credit having an aggregate face amount of not more than the
lesser of $1,000,000 or fifty percent (50%) of the borrowing base, as
described in the Borrowing Base Agreement attached hereto as Exhibit A and
by reference made a part hereof), prior to the closing of private
placements of capital stock of the Borrower and receipt of the proceeds
thereof (each, a "Private Placement". For purposes hereof, however, a
Private Placement shall not be deemed to include the creation or incurrence
of additional indebtedness by the Borrower; provided, however, that the
creation or incurrence of any such indebtedness shall be subject to the
prior written consent of the Bank, in accordance with Section 7 (E)
hereof). Provided that no default has occurred hereunder, and subject to
the mandatory prepayment provisions hereof, the Borrower may obtain
advances from time to time under the Revolver, and may repay and re-borrow
under the Revolver, subject to the Borrowing Base Agreement. To evidence
the Revolver, the Borrower shall execute and deliver to Bank a promissory
note (the "Note") in the principal amount of $2,000,000, which Note shall
bear interest and be payable in accordance with the terms set forth
hereinbelow. The Revolver shall mature and become payable in full on
December 31, 2000, which date shall be the "Maturity Date."
* * * * *
(iii) Interest and Principal. Interest on the principal amount
outstanding under the Revolver from time to time shall accrue at a variable
rate of the Prime Rate, plus two hundred basis points (2.00%) per annum,
which accrued interest shall be payable monthly in arrears. The principal
of the Note shall be repaid in full on the Maturity Date, together with all
accrued but unpaid interest.
* * * * *
(v) Guaranties. Repayment in full of all Obligations of the Borrower
shall be personally, and jointly and severally, guaranteed by Xxxxxxx X.
Xxxxxx and Xxxxxx X. Xxxxxx (the "Guarantors"), pursuant to guaranty
agreements in form satisfactory to the Bank (the "Guaranties"). Each of the
Guarantors shall agree to maintain minimum liquidity, as determined by the
Bank, in an amount of not less than $500,000 at all times, the calculation
of which minimum liquidity shall exclude all of the Guarantors' ownership
interests in the Borrower and all home equity lines of credit.
(b) Section 2(A) of the Loan Agreement is further amended by adding a new
subsection, as follows:
(vi) Mandatory Prepayment. In the event Borrower closes any Private
Placement prior to the Maturity Date, the net proceeds thereof (up to the
outstanding principal balance of the Loan, exclusive of any amount of the
Loan reserved for payment of letters of credit issued by the Bank for the
account of the Borrower) shall be paid to the Bank as a prepayment of the
Loan. Such net proceeds shall be applied to any outstanding principal
amount of the Loan until the same has been repaid in full. The amount (if
any) available to be borrowed under the Loan shall be reduced by the amount
of each such prepayment. Any remaining proceeds of a Private Placement
after payment in full of the Loan (up to the face amount of such letters of
credit) shall also be paid to and deposited by the Bank in a cash
collateral account maintained by the Bank in the name of the Borrower, and
held as additional collateral for payment and performance by the Borrower
under any letters of credit issued by the Bank for the account of the
Borrower, including all reimbursement obligations of the Borrower pursuant
to such letters of credit. Any proceeds remaining after the Loan has been
repaid and such letters of credit have been fully secured may be retained
by the Borrower.
(c) Section 6(A) of the Loan Agreement is amended by restating the same as
follows:
(i) Maintain a Tangible Net Worth of not less than $2,000,000 through
and including December 31, 2000, and thereafter.
(d) The Borrowing Base Certificate (Exhibit A-1 to the Borrowing Base
Agreement) is amended by restating the same in full, in the form attached hereto
as Exhibit A.
3. Guaranties. Each of the Guarantors shall execute an amendment and
acknowledgment agreement (the "Guaranty Amendment"), in form satisfactory to the
Bank. Such Guaranty Amendment shall provide that the obligations of each of the
Guarantors pursuant to their Guaranty, and any Collateral therefor, shall extend
to the Loan, as amended hereby. Such Guaranty Amendment shall also provide that
the Guaranties shall be amended to make the same unlimited and unconditional.
4. Conditions Precedent to Amendment. The Bank's obligation to enter into
this Amendment shall be subject to the satisfaction of the following conditions,
in form and substance reasonably acceptable to the Bank and the Bank's counsel:
A. Note Modification. Borrower has executed and delivered the Note
Modification.
B. Guaranty Amendments. Each Guarantor has executed and delivered a
Guaranty Amendment.
C. No Defaults. No condition or event of default under the Loan Documents
shall exist.
D. Miscellaneous. All other Loan Documents or items that are customarily
provided in loan transactions of this type and all other loan documents or items
reasonably required by Bank.
E. No Material Adverse Effect. No event has occurred or failed to occur
that would have a Material Adverse Effect on the financial condition of the
Borrower or any Guarantor as set forth in their most recent annual financial
statements and internally-prepared monthly financial statements submitted to
Bank.
5. Costs, Expenses and Attorneys' Fees. Borrower shall pay to Bank all
costs and expenses, including reasonable attorneys' fees incurred by Bank in
connection with (a) negotiation and preparation of this Amendment and each of
the Loan Documents, and (b) Bank's continued administration thereof.
6. Representations and Warranties. Borrower represents and warrants to the
Bank as follows:
(a) Power and Authority; Enforceability. Borrower has the power and
authority to execute and deliver this Amendment and to perform the terms
and conditions of the Loan Agreement and the other Loan Documents, as
amended and modified by this Amendment. The execution and delivery of this
Amendment by the Borrower and the performance of the Loan Agreement and the
other Loan Documents, as amended and modified by this Amendment, do not and
will not violate any law, rule or regulation, or constitute a breach of the
articles of incorporation, bylaws or resolutions of Borrower or any
agreement to which Borrower is a party or by which its assets are bound.
The Loan Agreement and the other Loan Documents, as amended and modified by
this Amendment, constitute legal, valid and binding obligations of
Borrower, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, and similar laws and other law
generally affecting the enforceability of creditors' rights and to general
principles of equity.
(b) No Default. Upon the execution and delivery of this Amendment by
the Borrower, the Borrower will not be in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in the Loan Agreement or the other Loan Documents, as
amended and modified by this Amendment, or any other agreement or
instrument to which any of them is a party.
(c) Representations. The representations and the information furnished
by the Borrower to the Bank with regard to this Amendment are and shall
continue to be true and not misleading in all material respects. In
addition, the representations and warranties of the Borrower to the Bank
contained herein, in the Loan Agreement, in the other Loan Documents and in
any other document or instrument executed or delivered by the Borrower in
connection therewith, are and shall continue to be true and not misleading
in all material respects, except as otherwise disclosed in writing to the
Bank and approved by the Bank prior to the date hereof.
7. Covenants. The Borrower covenants and agrees that, unless the Bank shall
otherwise consent in writing, the Borrower shall:
(a) Compliance with Covenants. Continue to comply with all of the
terms, covenants and agreements contained in the Loan Agreement and the
other Loan Documents, as amended and modified by this Amendment.
(b) Further Assurances. Execute and deliver such further instruments,
and take such further action as the Bank may reasonably request, in each
case to further effect the purposes of the Loan Agreement and the other
Loan Documents, as modified by this Amendment.
8. Ratification. Except as expressly amended hereby, the Loan Agreement
shall be and remain in full force and effect in accordance with its terms. The
Borrower stipulates and agrees that there exists no defense, claim of setoff, or
claim in avoidance of any of its liabilities or obligations under or pursuant to
the Loan Agreement, as so amended.
9. Miscellaneous.
(a) All references to the "Loan Agreement" in the Loan Agreement shall
hereafter mean and refer to the Loan Agreement as previously amended and as
amended hereby.
(b) All references to the "Loan Agreement" in the other Loan Documents
shall hereafter mean and refer to the Loan Agreement as previously amended
and as amended hereby.
(c) In the event of any conflict between the terms of this Amendment
and the Loan Documents, the terms of this Amendment shall control and
govern.
(d) All capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed to such terms in the Loan Agreement.
10. Counterparts. This Amendment may be executed in separate counterparts,
and said counterparts taken together shall be deemed to constitute one and the
same instrument. An executed copy of this Amendment delivered by telecopier
shall have the same effect as an originally executed copy of this Amendment.
11. NO ORAL AGREEMENT. THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing
Amendment to Loan Agreement as of the date first above written.
BORROWER:
---------
XXXXXX TECHNOLOGIES, INC.
ATTEST:
By: ____________________
Title: _________________
----------------------
SECRETARY
[Corporate Seal]
BANK:
BANK OF AMERICA, N.A.
By: ____________________
Title: _________________
EXHIBIT A
[Attached]
EXHIBIT A-1
BORROWING BASE CERTIFICATE
Status as of _______________, 20___.
In accordance with the terms of the Borrowing Base Agreement attached as Exhibit
A to that Loan Agreement dated February 29, 2000, by and between Xxxxxx
Technologies, Inc. and Bank of America, N.A., as amended, we hereby represent
and warrant as follows:
1. Total Accounts Receivable $____________
2. Less ineligible accounts receivable
(as set forth in the Borrowing Base
Agreement) $____________
3. Eligible Accounts Receivable $____________
4. 80% of Eligible Accounts Receivable $____________
5. Eligible Inventory: $____________
6. 50% of Eligible Inventory $____________
7. Net Book Value ("NBV")
of Equipment $____________
8. 50% of NBV of Equipment $____________
9. Line 4 + Line 6 + Line 8 $____________
10. Maximum loan amount $2,000,000.00
11. Outstanding balance as of report date $____________
12. Borrowing Base (lesser of line 9 or line 10
minus line 11) $____________
13. Less aggregate outstanding letters of credit $____________
14. Net available for further advances $____________
15. If line 14 is negative, amount to be
repaid immediately to Bank $____________
The undersigned does hereby certify that the foregoing is true and correct.
The undersigned does further acknowledge that the Bank is relying upon this
certificate and any supporting documents to grant or continue to grant credit to
it, and further warrants and represents that no event of default has occurred,
or would, with the passage of time or the giving of notice, or both, occur under
the above-referenced Loan Agreement.
Borrower:
--------
XXXXXX TECHNOLOGIES, INC.
By:________________________________
Title: ____________________________
Bank of America, N.A.
NOTE MODIFICATION AGREEMENT
BY AND BETWEEN BANK OF AMERICA, N.A.
("BANK"/"LENDER")
AND
XXXXXX TECHNOLOGIES, INC.
(the "BORROWER")
EFFECTIVE AS OF: SEPTEMBER __, 2000
On May 12, 2000, Borrower executed a renewal Promissory Note (the "Note") in
favor of Bank/Lender. The Note was in the original principal face amount of
$2,000,000.00, with a stated final maturity date of September 30, 2000. The
principal balance of the Note as of the effective date of this Agreement is
$__________________. Bank/Lender remains the owner and holder of the Note and
has agreed with Borrower to modify certain provisions of the Note. Now,
therefore, in consideration of these premises and the exchange of other good and
valuable consideration, the receipt of which is hereby acknowledged, Bank/Lender
and Borrower agree to modify the Note as follows:
[X] The maturity date is changed to: December 31, 2000
[ ] The interest rate is changed to:_________________________
[X] The payment terms are changed to: All principal, together with
accrued but unpaid interest on the Note, shall be payable in full on December
31, 2000. Principal of the Note shall also be prepaid in accordance with the
terms of that certain Amendment to Loan Agreement of even date herewith between
the Borrower and the Bank (the "Amendment).
The term "Borrower" as used in this Agreement shall be construed as singular or
plural to correspond with the number of persons executing this Agreement as
Borrower.
All other terms, conditions and covenants in the Note shall be and remain in
full force and effect. When executed by Bank/Lender and Borrower, this Agreement
shall be attached to and become a part of the Note.
NOTICE OF FINAL AGREEMENT.
THIS WRITTEN AGREEMENT, TOGETHER WITH THE AMENDMENT, REPRESENTS THE FINAL
AGREEMENT BETWEEN BORROWER AND BANK/LENDER AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN
BORROWER AND BANK/LENDER. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
BORROWER AND BANK/LENDER.
IN WITNESS WHEREOF, the undersigned has caused this Note Modification Agreement
to be executed under seal by Borrower on this ______ day of September, 2000.
Bank of America, N.A. Borrower:
By: _________________________________
Title: _______________________________
XXXXXX TECHNOLOGIES, INC.
ATTEST: By:
Title:
_______________________
SECRETARY
[Corporate Seal]
ACKNOWLEDGMENT AND AMENDMENT AGREEMENT
THIS ACKNOWLEDGMENT AND AMENDMENT AGREEMENT (this "Acknowledgment"), is
made this ___ day of September, 2000, by XXXXXX X. XXXXXX, an individual
resident of Forsyth County, North Carolina ("Guarantor"), and BANK OF AMERICA,
N.A., a national banking association ("Bank"), as follows:
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to that certain Continuing and Unconditional Guaranty
dated February 29, 2000 (the "Guaranty"), Guarantor guaranteed payment of all of
the indebtedness and obligations of Xxxxxx Technologies, Inc., a Delaware
corporation (the "Borrower") to Bank; and
WHEREAS, Borrower has requested the Bank to extend the maturity date of its
revolving line of credit to Borrower (the "Loan"); and
WHEREAS, the Bank has agreed to so extend the maturity date of the Loan,
pursuant to the terms of an Amendment to Loan Agreement dated as of even date
herewith between the Bank and the Borrower (the "Amendment"), provided, among
other things, that the Guarantor acknowledge that payment of the Loan, as so
extended, is guaranteed by the Guarantor pursuant to the Guaranty, and that the
Guarantor agree to amend the Guaranty; and
WHEREAS, the Guarantor wishes to acknowledge that the Guaranty covers and
applies to the Loan, as extended pursuant to the terms of the Amendment; and
WHEREAS, the Guarantor further wishes to amend the Guaranty as set forth
below;
NOW, THEREFORE, in consideration of the premises and to induce the Bank to
extend the maturity date of the Loan, the parties hereto agree hereby as
follows:
1. Acknowledgment of Guaranty. Guarantor does hereby acknowledge and agree
that the Guaranty, as amended hereby, is in full force and effect in accordance
with the terms thereof, and that the same covers and applies to the Loan, as the
same has been amended in accordance with the terms of the Amendment.
2. Amendment to Guaranty. The Guaranty is hereby amended in the first
numbered section thereof, by deleting the fourth paragraph of such section,
which paragraph contained a limitation on the liability of the Guarantor to the
Bank. It is expressly provided that the liability of the Guarantor to the Bank
for and on account of the Loan and the Guaranty shall hereafter be unlimited and
unconditional.
3. Ratification of Guaranty. The Guarantor hereby stipulates and agrees
that there exists no defense, claim of setoff, or claim in avoidance of any of
its liabilities or obligations under or pursuant to the Guaranty, as amended
hereby.
4. Counterparts. This Acknowledgment may be executed in separate
counterparts, and said counterparts taken together shall be deemed to constitute
one and the same instrument. An executed copy of this Acknowledgment delivered
by telecopier shall have the same effect as an originally executed copy of this
Acknowledgment.
5. NO ORAL AGREEMENT. THIS WRITTEN ACKNOWLEDGMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed the foregoing
Acknowledgment and Amendment Agreement as of the date first above written.
_____________________________ (SEAL)
XXXXXX X. XXXXXX
BANK OF AMERICA, N.A.
By: __________________________
Title: ________________________
