Exhibit 10.1
AMENDMENT TO
LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT (the "Amendment") is made and entered
into this 11th day of January, 2000, by and between XXXXXX INDUSTRIES, INC., a
Delaware corporation, having offices at 00 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000 (the "Borrower") and ALLFIRST BANK, a Maryland
state-chartered commercial bank, successor to The First National Bank of
Maryland, a division of FMB Bank, having offices at 0000 Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000 (the "Lender").
B A C K G R O U N D :
A. Borrower has borrowed from Lender and desires to continue to borrow from
Lender in connection with the operation of its business(es). On February 16,
1999, the parties entered into a Loan Agreement relative to a Revolving Loan and
a Mortgage Loan (the "Agreement"). The Agreement is incorporated herein by
reference and made a part hereof. All capitalized terms used herein without
definition which are defined in the Agreement shall have the meanings set forth
therein.
B. The parties desire to amend the Agreement.
C. Borrower has no defense, charge, defalcation, claim, plea, demand or
set-off against the Agreement or any of the Loan Documents.
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
covenant and agree as follows:
1. That the above Background is incorporated herein by reference.
2. That Section 1.1 of the Agreement is amended to extend the current
Revolving Loan Maturity Date from January 31, 2001, to January 31, 2002 and to
increase the stated principal amount of the Revolving Loan Note from Twenty
Million Dollars ($20,000,000) to Thirty Million Dollars ($30,000,000).
3. That Section 2.2 of the Agreement is amended to increase the maximum
Outstanding Revolving Loan Amount from Twenty Million Dollars ($20,000,000) to
Thirty Million Dollars ($30,000,000).
4. That Section 2.2.3 of the Agreement is amended to provide that
Borrower shall now have the option, exercisable at any time prior to the
Revolving Loan Maturity Date, to convert all or any part of the Revolving Loan
to a term loan(s) payable in not more than sixty (60) consecutive equal monthly
principal payments plus accrued interest. Any such term loan(s) shall be
evidenced by a promissory note of the Borrower in form and content satisfactory
to Lender, which will supplement but not supersede or replace the Revolving Loan
Note.
5. That Section 2.5 of the Agreement is amended to provide that
interest will accrue on the outstanding principal balance of the Revolving Loan
at a rate per annum equal to the Federal Funds Target Rate as established by the
Federal Open Market Committee of the Federal Reserve Board, as in effect from
time to time plus the following increments based on the Borrower's Tangible Net
Worth as reported (GAAP defined) quarterly on its 10Q or 10K financial
statements. The interest rate shall change effective with the Bank's
implementation or changes in the Federal Funds Target Rate as publicly
announced.
Tangible Net Worth Increment
Greater than $25,000,000 1.65%
Less than or equal to $25,000,000 1.80%
The interest rate will revert (prospectively) automatically to the appropriate
rate should Borrower's Tangible Net Worth subsequently change from the level
which prompted the adjustment.
6. That Section 2.7 of the Agreement is amended to add a subsection (d)
to read in its entirety as follows:
(d) The Borrower agrees to pay to the Lender
quarterly in arrears, on the last day of each quarter, an
availability fee calculated at 15 basis points per annum on
the average daily unused portion of the Revolving Loan between
$20,000,000 and $30,000,000 during that quarter.
7. That Section 5.9 of the Credit Agreement is amended to provide that
the Revolving Loan will be subject to review and, at Bank's option, modification
by Bank in the event of any change(s) in executive management or a sale(s) of
Borrower.
8. That Section 6.11 of the Agreement is amended to provide that
Borrower will not permit the Tangible Net Worth of Borrower, on a consolidated
basis, to be less than $18,000,000 at any time until FYE 2000 or less than
$22,000,000 at any time from FYE 2000 until FYE 2001 or less than $25,000,000 at
any time from FYE 2001 and thereafter while any Loan remains outstanding and
unpaid or any other amount is owing under any Loan Document to Lender.
9. That Section 6.12 of the Agreement is amended to provide that
Borrower shall maintain a maximum Debt-to-Tangible Net Worth Ratio of 2.50-to-1
until FYE 2000 and 2.25-to-1 from FYE 2000 until FYE 2001 and 1.70-to-1 from FYE
2001 and thereafter while any Loan remains outstanding and unpaid or any other
amount is owing under any Loan Document to Lender.
10. That the Agreement is amended to add a Section 6.14 to read in
its entirety as follows:
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6.14 Treasury Stock Repurchases.
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Execute treasury stock repurchases, except that
Borrower may execute treasury stock repurchases in annual
amounts not in excess of 50% of net income provided that such
repurchase(s) does not trigger any financial covenant
default(s).
11. That the Borrower reaffirms and restates the representations and
warranties set forth in Article VII of the Agreement, as amended by this
Amendment, and all such representations and warranties shall be true and correct
on the date hereof with the same force and effect as if made on such date,
except as they may specifically refer to an earlier date(s). The Borrower
represents and warrants (which representations and warranties shall survive the
execution and delivery hereof) to the Lender that (i) this Amendment has been
duly authorized, executed and delivered and constitute a legal, valid and
binding obligation of the Borrower, and is enforceable in accordance with its
terms; (ii) the Borrower is not in default under the Agreement or any of the
other Loan Documents, and the Borrower is in full compliance with all of the
terms and conditions thereof; (iii) no event exists, or is likely to exist in
the future, which with the passage of time, notice, or both, will constitute a
default under the Agreement or any of the other Loan Documents; and (iv) there
have been no material adverse changes in the Borrower's finances or operations
which would cause the Borrower to be in default under any of the financial
covenants contained in the Loan Documents.
12. That the terms and conditions, paragraph sections, collateral and
guaranty requirements, representations and warranties of the Agreement and Loan
Documents, together with all understandings by and between the parties to this
Amendment evidenced by writings of the same or subsequent date not in conflict
with the above modifications under this Amendment shall remain in full force and
effect as the agreement of the parties relative to the Loans, and are hereby
ratified, reaffirmed and confirmed.
13. That all references to the Agreement, the Loan Documents, and the
other documents and instruments delivered pursuant to or in connection
therewith, as well as in writings of the same or subsequent date, shall mean the
Agreement as amended hereby and as each may in the future be amended, restated,
supplemented or modified from time to time. Similarly, all references to The
First National Bank of Maryland, a division of FMB Bank, shall be deemed to have
been made and to refer to Allfirst Bank, successor to The First National Bank of
Maryland, a division of FMB Bank.
14. That the parties hereto shall, at any time, and from time to time
following the execution of this Amendment, execute and deliver all such further
instruments and take all such further action as may be reasonably necessary or
appropriate in order to carry out the provisions of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers all as of the day and year
first above written.
ATTEST: XXXXXX INDUSTRIES, INC., a Delaware
corporation
______________________________ By:________________________________
Title:________________________ Title:_____________________________
______________________________ By:________________________________
Title:________________________ Title:_____________________________
ALLFIRST BANK, successor to The First
National Bank of Maryland, a Division
of FMB Bank
By:________________________________
Title:_____________________________
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