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EXHIBIT 10.36
ASSUMPTION AND AMENDMENT TO LOAN AGREEMENT
THIS AGREEMENT, made this 5th day of June, 1998, by, between and among
Bank of Oklahoma, N.A. (hereinafter called "Lender"), Fibercast Company, a
Delaware corporation (hereinafter called "Borrower"), and Denali Incorporated, a
Delaware corporation (hereinafter called "Assignee"), with respect to the
following:
WHEREAS:
A. Borrower is indebted to Lender for a loan in the amount of
$3,500,000 (the "Loan") as reflected by that certain Promissory Note
dated February 2, 1996, in the stated original principal face amount of
$5,000,000 (hereinafter called "Note") a copy of which is attached
hereto as Exhibit "A", as well as that certain Loan Agreement by and
between Lender and Borrower dated February 7, 1996, as subsequently
amended by that certain First Amendment to Loan Agreement, dated
February 7, 1997, and Second Amendment to Loan Agreement, dated
February 7, 1998 (the "Loan Agreement") which Note and Loan Agreement
are secured by that certain Real Estate Mortgage and Security Agreement
dated March 31, 1986 recorded in Book 4933 at Page 460 of the records
of the County Clerk of Tulsa County, Oklahoma, as amended on March 30,
1992 and on February 7, 1996, and by that certain Security Agreement
dated March 31, 1986, as amended (hereinafter collectively the
"Security Agreement"; and,
B. Assignee has purchased the capital stock of Borrower; and,
C. Assignee is willing to assume the payment of the indebtedness due
and owing from Borrower to Lender and assume all obligations past,
present or future, arising out of or by reason of the Note and the Loan
Agreement, as subsequently amended, and any other documents related to
the Note or the Loan including other than the Security Agreement
(collectively referred to as the "Loan Documents"); and,
D. The parties hereto wish to amend and modify certain provisions of
the Loan Agreement and Promissory Note as more particularly set forth
herein.
W I T N E S S E T H
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and upon the express condition that the security
interests held by Lender pursuant to the Security Agreement are valid, first
security interests now existing, or hereafter created or acquired, and that the
execution of this Agreement will not impair such security interest, it is hereby
agreed as follows:
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1. The "WHEREAS" clauses of this Agreement which are, by reference,
incorporated into and made a part of the body of this Agreement as if
set out in full, shall be deemed and held to be contractual in nature
and not mere recitals.
2. Assignee hereby covenants, promises and agrees (a) to pay the Note
at the times, and in the manner in all respects as therein provided, as
same may be modified or amended from time to time, (b) to perform each
and all of the covenants, agreements and obligations of the Note, at
the time, and in the manner in all respects as therein provided, as
same may be modified or amended from time to time, and (c) to execute
and deliver to Lender a replacement note in the form of Exhibit "B"
attached hereto in the original principal amount of $3,500,000, being
the principal balance of the Note at the time this Assumption Agreement
is executed, and accruing interest as set forth therein, maturing on
February 7, 2001 (hereinafter called the "Replacement Note", together
with all renewals, extensions, and changes in form thereof), which
shall constitute a renewal of, and substitution for, the Note.
3. All the property described in the Security Agreement shall remain in
all respects subject to the security interest created by the Security
Agreement and Loan Documents, except the Lender hereby releases its
security interest in all now owned or hereafter acquired inventory and
accounts of the Borrower and any proceeds therefrom. Except as provided
in the preceding sentence, nothing herein contained and nothing done
pursuant hereto, shall affect or be construed to affect the priority of
the security interest, charge or encumbrance of the Security Agreement
over other liens, charges, encumbrances or conveyances, nor shall
anything herein contained or done in pursuance hereof affect or be
construed to affect any security or instrument held by Lender as
security for or evidence of the other indebtedness owed Lender by
Borrower except as herein stated.
4. Assignee waives any and all rights, claims or setoffs, if any,
against Lender, its successors and assigns, arising out of or by reason
of the Note, the Security Agreements and the Loan Documents.
5. Denali Incorporated and Fibercast Company are collectively referred
to as the "Borrower" in the Loan Agreement.
6. Paragraph 1.1 of the Loan Agreement is stricken in its entirety and
in its place the following paragraph shall be inserted:
1.1 Subject to the terms of this Agreement the Bank agrees to
loan Borrower the sum of $3,500,000 in the form of a term loan
(the "Term Loan") which shall be repaid pursuant to the terms
of the Note attached hereto as Exhibit "A".
7. Paragraph 1.2 of the Loan Agreement is stricken in its entirety.
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8. Paragraph 1.3 is stricken in its entirety and in its place the
following paragraph shall be added :
1.3 Borrower shall execute to Bank a promissory note
evidencing the Term Loan, payable to the order of the Bank in
the principal amount of $3,500,000 in the form of Exhibit "A"
hereto (the "Term Note" or "Note"), with appropriate
insertions. The Note shall bear interest and be payable as
described therein.
9. Exhibit "B" hereto is substituted for Exhibit "A" to the Loan
Agreement.
10. Section 1.4 of the Loan Agreement is deleted in its entirety.
11. Section 2.1 of the Loan Agreement is amended such that the words
"accounts receivable" and "inventory" are deleted therefrom.
12. Paragraph 3.1 is deleted and in its place the following shall be
substituted:
3.1 Conditions Precedent. The making of the Term Loan
hereunder shall be conditioned upon the following:
13. Paragraphs 3.1.2 and 3.1.4 are deleted in their entirety.
14. Paragraphs 3.2, 3.2.1, 3.2.2, and 3.3 are deleted in their
entirety.
15. Paragraph 4.4, beginning with the words "no material adverse
change" to the end of the paragraph is deleted.
16. The words "Except for security interest granted to NationsBank,
N.A. in inventory and accounts receivable and a second lien interest in
equipment" are added at the beginning of paragraphs 4.6, 4.8, 6.3, and
6.6.
17. Paragraph 5.1 is deleted in its entirety. The Assignee shall
deliver the Lender the same information required under Section 5.2 of
the Credit Agreement referred to below.
18. Paragraphs 5.6, 5.11, 5.12, and 5.13 are deleted in their entirety
and in their place, Paragraphs 5.5 and all subparagraphs thereto and
all paragraphs referenced therein as are stated in that certain Amended
and Restated Credit Agreement among Denali Incorporated, Ershigs
Biloxi, Inc., Ershigs, Inc., Fluid Containment, Inc., and Sefco, Inc.,
The Financial Institutions named in such Credit Agreement, and
NationsBank of Texas, N.A. as Agent for the Banks dated March 23, 1998,
as such paragraphs are amended by that certain Amendment No. 1 and
Consent dated June 5, 1998, (the "Credit Agreement") are inserted are
inserted as if restated in their entirety hereby.
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19. Paragraphs 6.1, 6.1.1, 6.1.2, 6.1.3, 6.2, 6.5, 6.7, 6.9, and 6.10
are deleted in their entirety.
20. Paragraph 8.2 is deleted; Paragraph 8.3 is replaced with Section
6.1(g) of the Credit Agreement; Paragraphs 8.4 and 8.5 are replaced
with Section 6.1(f) of the Credit Agreement; Paragraph 8.7 is deleted;
Paragraph 8.8 is replaced with Section 6.1(e) of the Credit Agreement,
except that the words "(other than the Credit Obligations)" where found
in such paragraph are stricken therefrom and are not adopted hereby;
and Paragraph 8.10 is amended in its entirety to ready as follows:
8.10 General Default. (i) Any breach by the Borrower of
any of the covenants in paragraph 5.3, 5.5 of the Credit
Agreement as hereby adopted, and Section 6;
(ii) any breach by the Borrower of any other
covenants in this Agreement, the Note, the Security Agreement,
or the Mortgage and such breach is not cured within 30 days
following the receipt of written notice thereof from the Bank;
or,
(iii) any written representation or warranty made by
the Borrower or any officer thereof in this Agreement, the
Note, the Security Agreement, or the Mortgage proves to have
been false or erroneous in any material respect at the time it
was made or deemed made.
21. Paragraph 9.2 is amended to provide that notices to the Borrower
shall be given as follows:
To the Borrower:
Denali Incorporated
0000 Xxxx Xxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
To the Lender (Bank):
Bank of Oklahoma, N.A.
Attn: Xxxxx Xxxxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxx, Xxxxxxxx 00000
22. The following Paragraph shall be added to the Loan Agreement:
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9.11 This document may be executed and returned by facsimile
transmission and shall be deemed to have the same effect and
be accorded the same dignity as if executed by all parties on
the original document and shall be binding upon the parties
hereto as if fully executed upon such original document.
23. That certain Revolving Line of Credit facility, as evidenced by
that certain Letter Agreement between Borrower and Lender, dated
February 6, 1996, as subsequently amended is terminated.
24. All of the grants, covenants, terms, conditions and agreements
hereof shall be binding upon and inure to the benefit of all of the
assigns and successors of the parties hereto.
25. Neither this Agreement nor any provision hereof maybe changed,
altered, waived, amended, discharged or terminated orally, but only by
an instrument reduced to writing, signed by all parties hereto.
EXECUTED the date and year first written hereinabove.
"Assignee" "Borrower"
DENALI INCORPORATED FIBERCAST COMPANY
By: /s/ R. XXXXX XXXXXXX By: /s/ R. XXXXX XXXXXXX
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Its: TREASURER Its: VICE PRESIDENT
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"Lender"
BANK OF OKLAHOMA, N.A.
/s/ XXXXX XXXXXX
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Xxxxx Xxxxxx, Vice President
