AMENDMENT TO LOAN AND SECURITY AGREEMENT
AMENDMENT
TO LOAN AND SECURITY AGREEMENT
THIS
AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
“Amendment”)
dated
as of MARCH
31, 2008,
will
serve to set forth the terms of the financing transactions by and among
PLAINSCAPITAL
BANK,
a Texas
state bank (together with its successors and assigns, “Lender”)
and
AVATAR
SYSTEMS, INC.,
a Texas
corporation (“Debtor”).
RECITALS
WHEREAS,
Debtor
and Lender entered into a LOAN
AND SECURITY AGREEMENT
dated as
of AUGUST
16, 2006
(as
amended, renewed and restated from time to time, the “Agreement”),
pursuant to which Lender agreed to make certain credit facilities available
to
Debtor on the terms and conditions set forth therein;
NOW
THEREFORE,
for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
Capitalized terms used in this Amendment, to the extent not otherwise defined
herein, shall have the same meanings as in the Agreement, as amended hereby.
2. Amendments.
(a) Amendment
to Section 9(b).
Section
9(b) is hereby amended in its entirety to read as follows:
(b) Adjusted
Debt/Tangible Net Worth.
Debtor
will maintain, as of MARCH
31, 2008,
a ratio
of (1) Adjusted Debt, to (2) Tangible Net Worth of not greater than 2.50 to
1.00.
(b) Amendment
to Section 9(c).
Section
9(c)
of the
Agreement is hereby amended in its entirety to read as follows:
(c) Minimum
Free Cash Flow to Certain Fixed Cost.
Debtor
will maintain, as of MARCH
31, 2008,
a ratio
of (i) Free Cash Flow, to (ii) Current Maturities of Long-Term Indebtedness
plus
interest
expense and rent payments for such period (“Fixed
Costs”)
equal
to or greater than 1.25 to 1.00.
(c) Amendment
to Section 9(d).
Section
9(d)
of the
Agreement is hereby amended in its entirety to read as follows:
(d) Current
Ratio.
Debtor
will maintain, as of MARCH
31, 2008,
a ratio
of (i) current assets, to (ii) current liabilities of not less than 1.15 to
1.00.
3. Conditions
Precedent.
The
obligations of Lender under this Amendment shall be subject to the condition
precedent that Debtor shall have executed and delivered to Lender this Amendment
and such other documents and instruments incidental and appropriate to the
transaction provided for herein as Lender or its counsel may reasonably
request.
4. Waiver.
Debtor
hereby acknowledges, confirms and agrees that Debtor is currently in default
under Section
13(b)
of the
Agreement by reason of Debtor’s failure to comply with the provisions of
Sections
9 (b-d)
of the
Agreement (the “Existing
Defaults”).
Debtor acknowledges and agrees that certain other Events of Default or events
which with notice and/or the passage of time would be an Event of Default may
exist and are continuing and that this Agreement relates only to the Existing
Defaults.
In
consideration of and expressly conditioned upon Debtor’s timely and strict
compliance with the Loan Documents to which Debtor is a party and the terms
and
conditions set forth herein, Lender agrees to waive the Existing Defaults.
Exhibit
10.1
5. Ratifications.
Except
as expressly modified and superseded by this Amendment, the Loan Documents
are
ratified and confirmed and continue in full force and effect. The Loan
Documents, as modified by this Amendment, continue to be legal, valid, binding
and enforceable in accordance with their respective terms. Without limiting
the
generality of the foregoing, Debtor hereby ratifies and confirms that all liens
heretofore granted to Lender were intended to, do and continue to secure the
full payment and performance of the advances under the Note and
all
obligations under the Loan Documents. Debtor agrees to perform such acts and
duly authorize, execute, acknowledge, deliver, file and record such additional
assignments, security agreements, modifications or agreements to any of the
foregoing, and such other agreements, documents and instruments as Lender may
reasonably request in order to perfect and protect those liens and preserve
and
protect the rights of Lender in respect of all present and future Collateral.
6. Representations,
Warranties and Confirmations.
Debtor
hereby represents and warrants to Lender that (a) this Amendment and any other
Loan Documents to be delivered under this Amendment have been duly executed
and
delivered by Debtor, are valid and binding upon Debtor and are enforceable
against Debtor in accordance with their terms, except as limited by any
applicable bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors’ rights and except to the extent
specific remedies may generally be limited by equitable principles, (b) no
action of, or filing with, any governmental authority is required to authorize,
or is otherwise required in connection with, the execution, delivery and
performance by Debtor of this Amendment or any other Loan Document to be
delivered under this Amendment, and (c) the execution, delivery and performance
by Debtor of this Amendment and any other Loan Documents to be delivered under
this Amendment do not require the consent of any other person and do not and
will not constitute a violation of any laws, agreements or understandings to
which Debtor is a party or by which Debtor is bound.
7. Release.
Each
Obligor hereby acknowledges and agrees that there are no defenses,
counterclaims, offsets, cross-complaints, claims or demands of any kind or
nature whatsoever to or against Lender or the terms and provisions of or the
obligations of such Obligor under the Loan Documents and the other agreements,
instruments and documents evidencing, securing, governing, guaranteeing or
pertaining thereto, and that no Obligor has no right to seek affirmative relief
or damages of any kind or nature from Lender. To the extent any such defenses,
counterclaims, offsets, cross-complaints, claims, demands or rights exist,
each
Obligor hereby waives, and hereby knowingly and voluntarily releases and forever
discharges Lender and its predecessors, officers, directors, agents, attorneys,
employees, successors and assigns, from all possible claims, demands, actions,
causes of action, defenses, counterclaims, offsets, cross-complaints, damages,
costs, expenses and liabilities whatsoever, whether known or unknown, such
waiver and release being with full knowledge and understanding of the
circumstances and effects of such waiver and release and after having consulted
legal counsel with respect thereto.
8. Multiple
Counterparts.
This
Amendment may be executed in a number of identical separate counterparts, each
of which for all purposes is to be deemed an original, but all of which shall
constitute, collectively, one agreement. No party to this Amendment shall be
bound hereby until all parties have executed a counterpart of this Amendment
hereto.
9. FINAL
AGREEMENT.
THE
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED BY THIS AMENDMENT REPRESENT
THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES AND MAY NOT BE CONTRADICTED
BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN AND AMONG THE
PARTIES.
Exhibit
10.1
10. Reference
to Agreement.
Each of
the Loan Documents, including the Agreement and any and all other agreements,
documents, or instruments now or hereafter executed and delivered pursuant to
the terms hereof containing a reference to the Agreement shall mean and refer
to
the Agreement as amended hereby.
11. 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.
12. Headings.
The
headings, captions, and arrangements used in this Amendment are for convenience
only and shall not affect the interpretation of this Amendment.
REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK
Exhibit
10.1
AGREED
as of
the date first written above.
| LENDER: | ADDRESS: | |||
| PLAINSCAPITAL BANK | 0000 Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxx
0000 Xxxxxx (Xxxxxx Xxxxxx), Xxxxx 00000 |
|||
| By: |
/s/
Xxxxx Xxxxxxx
|
|||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | Vice President | |||
| DEBTOR: | ADDRESS: | |||
| AVATAR SYSTEMS, INC. | 0000 Xxxxxxx Xxxxx,
Xxxxx
000 Xxxxxx, XX 00000 |
|||
| By: |
/s/
Xxxxxx X. Xxxxxx
|
|||
| Name: | Xxxxxx X. Xxxxxx. | |||
| Title: | President | |||
CONFIRMATION
OF GUARANTY ATTACHED
Exhibit
10.1
CONFIRMATION
OF GUARANTY
To
induce
Lender to enter into the foregoing Amendment, the undersigned (whether one
or
more, “Guarantor”):
(a)
consents and agrees to the execution, delivery and effectiveness of the
Amendment, (b) ratifies and confirms that all guaranties and assurances granted,
conveyed or otherwise provided to Lender under the Loan Documents, are not
released, diminished, impaired, reduced, or otherwise adversely affected by
the
Amendment and continue to guarantee and assure the full payment and performance
of the indebtedness and obligations as renewed, increased, extended, restated
or
replaced pursuant to the Amendment in accordance with the terms and conditions
of such guarantees, (c) agrees to perform such acts and duly authorize, execute,
acknowledge and deliver such additional guarantees, assurances and other
documents, instruments and agreements as Lender may reasonably deem necessary
or
appropriate in order to create, perfect, preserve and protect those guaranties
and assurances, and (d) waives notice of acceptance of this confirmation, which
consent and agreement binds Guarantor and Guarantor’s successors and assigns and
inures to Lender and its successors and assigns.
Guarantor
acknowledges and agrees that (a) Guarantor is not required by the terms of
the
Note or any other Loan Document to consent to the Amendment, and (b) nothing
in
the Note or any other Loan Document shall be deemed to require the consent
of
Guarantor to any future waivers, amendments or modifications to the Loan
Documents.
EXECUTED
as of
the Effective Date.
| GUARANTOR: | ADDRESS: | |||
| 0000 Xxxxxxxx Xxxxx Xxxxxx, XX 00000 |
||||
| By: |
/s/
Xxxxxx X. Xxxxxx
|
|||
| XXXXXX X. XXXXXX | ||||
