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Exhibit 10.03
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Second Amendment to that certain Loan and Security Agreement
("Amendment") is made and entered into as of January 29, 1999 by and between
HMI Industries, Inc. ("Borrower") and Xxxxxx Financial, Inc. ("Lender").
WHEREAS, Lender and Borrower are parties to a certain Loan and Security
Agreement, dated April 23, 1998 and all amendments thereto (the "Agreement");
and
WHEREAS, Certain information has come to the attention of Lender, and
after discussions with the Borrower, the Lender has decided to phase out the
Inventory sub-line; and
WHEREAS, Events of Default are in existence under the Agreement as a
result of Borrower's breach of certain conditions contained in paragraph (J),
POST CLOSING CONDITIONS, clauses (3)-(6), of the Conditions Rider (the "Existing
Events of Default"), and Borrower has requested Lender waive the Existing Events
of Default; and
WHEREAS, the parties desire to amend the Agreement as hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Agreement and this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Agreement.
2. AMENDMENT. Subject to the conditions set forth below, the Agreement
is hereby amended as follows:
(a) Subsection 1.1 is amended by inserting the following definitions
after the existing definition of "AGREEMENT" and before the existing definition
of "AUSTRALIAN LINE OF CREDIT":
" 'APPLICABLE ADVANCE PERCENTAGE' means the following:
Date Percentage Rate
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January 29, 1999 through and
including March 1, 1999 50%
March 2, 1999 through and
including March 31 , 1999 45%
April 1, 1999 through and
including April 30, 1999 35%
May 1, 1999 through and
including May 31, 1999 20%
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June 1, 1999 through and
including the Termination Date 0%"
(b) Subsection 2.1, REVOLVING LOAN, is hereby amended by deleting
SUBSECTION 2.1, REVOLVING LOAN in its entirety and inserting the following in
lieu thereof:
"2.1, REVOLVING LOAN. Upon Borrower's request made at any time
during the term of this Agreement, Lender may, in its sole and
absolute discretion, make advances to Borrower ("Revolving
Advances") in an aggregate amount up to the lesser of (A)(i) after
the Acceptable Accounts Reporting Date (x) 80% of the aggregate
outstanding amount of Eligible Accounts, MINUS, (y) the HMAC
Reserve, plus (ii) the lessor of (x) Applicable Advance Percentage
of the aggregate value of Borrower's Eligible Inventory or (y)
$2,500,000.00 or (B) $4,250,000.00 (the "Maximum Revolving Loan
Amount")."
(c) Subsection 6.1, Book Net Worth is amended by deleting SUBSECTION
6.1. BOOK NET WORTH in its entirety and inserting the following in lieu thereof:
"6.1, BOOK NET WORTH. Permit Borrower's book net worth, at any time,
to be less than $9,750,000."
(d) Paragraph (J) POST-CLOSING CONDITIONS, of the Conditions Rider,
clauses (3)-(6) are hereby amended by deleting clauses (3)-(6), REAL ESTATE AND
MACHINERY AND EQUIPMENT APPRAISALS, EPA PHASE I REPORT, TITLE INSURANCE
COMMITMENT POLICY, and SURVEY in their entirety.
3. WAIVER. Lender hereby waives the Existing Events of Default. This is
a limited waiver and shall not be deemed to constitute a waiver of any other
Events of Default or any future breach of the Agreement or any of the other Loan
Documents. Notwithstanding, the foregoing waiver of the Existing Events of
Default, Borrower has failed to meet the conditions set forth in the side letter
to the Agreement dated April 23, 1998, from Lender and accepted by Borrower, and
due to the fact that the Borrower has sold the real property Collateral, Lender
is hereby notifying Borrower that Lender is revoking the proposed Term Loan
facility.
4. CONDITIONS. The effectiveness of this Amendment is subject to the
following conditions precedent (unless specifically waived in writing by
Lender):
(a) There shall have occurred no material adverse change in the
business, operations, financial condition. profits or prospects of Borrower, or
in the Collateral;
(b) Borrower shall have executed and delivered such other documents
and instruments as Lender may require;
(c) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments and
other legal matters incident thereto shall be satisfactory to Lender and its
legal counsel:
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(d) No Default or Event of Default other than the Existing Events of
Default shall have occurred and be continuing; and
(e) The Borrower shall have delivered to Lender evidence of the
consummation of the sale of Borrower's real property located at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000.
5. CORPORATE ACTION. The execution, delivery, and performance of this
Amendment has been duly authorized by all requisite corporate action on the part
of Borrower and this Amendment has been duly executed and delivered by Borrower.
6. REPRESENTATIONS AND WARRANTIES. To induce the Lender to enter into
this Amendment, the Borrower hereby warrants, represents and covenants to the
Lender that each representation or warranty of the Borrower set forth in Section
4 of the Agreement is hereby restated and reaffirmed as true and correct on and
as of the date hereof as if such representation or warranty were made on and as
of the date hereof (except to the extent that any such representation or
warranty expressly relates to a prior specific date or period).
7. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
8. SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
9. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
10. RATIFICATION. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions of the
Agreement and, except as expressly modified and superseded by this Amendment,
the terms and provisions of the Agreement are ratified and confirmed and shall
continue in full force and effect.
11. REFERENCES.
(a) Any reference to the Agreement contained in any Loan Document,
or any other notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Amendment shall be
deemed to include this Amendment, unless the context shall otherwise require.
(b) Except as specifically amended above, the Agreement, and all
other Loan Documents, are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed. The Borrower has no knowledge
of any challenge to the Lender's claims arising under the Loan Documents or the
effectiveness of the Loan Documents:
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the
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Lender under any of the Loan Documents, nor constitute a waiver of any provision
of any of the Loan Documents. This Amendment shall not constitute a modification
of the Agreement or a course of dealing with the Lender at variance with the
Agreement such as to require further notice by the Lender to require strict
compliance with the terms of the Agreement and the other Loan Documents in the
future, except as expressly set forth herein.
(d) The Borrower confirms and agrees that to the extent that any
such Loan Document purports to assign or pledge to the Lender, or to grant a
security interest or lien on, any Collateral as security for the Obligations of
the Borrower from time to time existing in respect of the Agreement and the Loan
Documents, such pledge, assignment and/or grant of the security interest is
hereby ratified and confirmed in all respects, except as expressly provided for
herein.
12. LOAN DOCUMENT. This Amendment shall be deemed to be a Loan Document
for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
XXXXXX FINANCIAL, INC.
By: /s/ Xxxxxxx X. XxXxxx
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Name: Xxxxxxx X. XxXxxx
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Title: Vice President
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HMI INDUSTRIES, INC.
ATTEST:
/s/ Xxxxx X. XxXxxx By: /s/ X. X. Xxxxxxxx, Xx.
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Secretary Name: X. X. Xxxxxxxx, Xx.
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Title: Exec. VP, CFO & Treasurer
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