SECOND AMENDMENT TO EXHIBIT 10.1 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") dated effective as of September 2, 1999, is made by and between MOTO PHOTO, INC., a Delaware...
SECOND AMENDMENT TO
EXHIBIT 10.1
SECOND AMENDMENT TO
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") dated effective as of September 2, 1999, is made by and between MOTO PHOTO, INC., a Delaware corporation, (hereinafter called "Borrower"), and THE PROVIDENT BANK, an Ohio banking corporation, (hereinafter called "Bank").
WITNESSETH:
WHEREAS, Borrower and the Bank entered into a Loan and Security Agreement dated February 19, 1997 (the "Loan Agreement"), providing for several loans from Bank to Borrower from Bank to Borrower;
WHEREAS, the Loan Agreement was subsequently amended by First Amendment to Loan and Security Agreement dated May 30, 1998; and
WHEREAS, Borrower and Bank wish to further amend the terms of the Loan Agreement to: (1) provide for a second capital expenditure loan to Borrower; (2) decrease the amount of the line of credit loan and extend the term thereof; and (3) to modify certain other terms and conditions of the loans provided for therein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the Bank and Borrower hereby agree, as follows:
1. Section 2.1(i) of the Loan Agreement, is hereby revised and replaced in part, to read as follows:
2.1 Loans. The Bank shall make a total of five (5) loans to the Borrower, on the terms and conditions contained herein, consisting of an Automated Line of Credit Loan ("Line of Credit Loan"), a Fixed Rate Term Loan and a Variable Rate Term Loan (collectively "Term Loans"), two (2) Capital Expenditure Facilities (collectively, the "Capital Expenditure Loans"). All loans shall be herein collectively called the "Loans".
(i) Line of Credit. Subject to the terms and conditions of this Agreement, the Bank agrees to lend and re-lend to the Borrower at any time and from time to time on and after the date hereof and prior to April 30, 2001, an aggregate principal amount not to exceed at any one time outstanding, the lesser of (i) $1,500,000 or (ii) the then-current Borrowing Base, as defined herein (the lesser of (i) or (ii) being referred to hereinafter as the "Maximum Line of Credit Lo
From time to time, during the term of the Line of Credit Loan, Bank may request, and Borrower shall provide Bank within ten (10) days of such request, with a true and correct Borrowing Base Certificate, in the form attached hereto as Exhibit A, stating the Borrowing Base for the preceding month. Borrower shall on demand immediately repay any amounts outstanding that are in excess of the aggregate of the Maximum Line of Credit Loan Amount. All such loans will be made from xxx
2. Section 2.1(v), Capital Expenditure Loan 2, is hereby added to the Loan Agreement.
(v) Capital Expenditure Loan 2. Subject to the terms and conditions of this Agreement, the Bank agrees to lend and re-lend to the Borrower at any time and from time to time on and after the date hereof and prior to January 30, 2000 (the "Draw Period"), an aggregate principal amount not to exceed at any one time outstanding, the lesser of: (i) $2,800,000, or (ii) the aggregate of 80% of Borrower's Capital Expenditures (as hereinafter defined) for the Draw Period (the l
From time to time, during the Draw Period for Capital Expenditure Loan 2, when Borrower seeks an advance hereunder, Borrower shall submit invoices or other evidence of expenditure to Bank detailing Borrower's capital expenditures. Bank shall advance funds to Borrower equivalent to 80% of Borrower's new capital expenditures for that period within ten (10) days of such request. No such advance shall exceed the Maximum Capital Expenditure Loan 2 Amount.
Funds advanced under the Capital Expenditure Loan 2 shall be used to finance Borrower's capital expenditures. All such loans hereunder will be made from time to time in the reasonable discretion of the Bank, and neither this Agreement nor any loans or other action by the Bank shall obligate the Bank to make further loans to the Borrower. Notwithstanding the foregoing, Bank shall be required to make loans hereunder to Borrower provided that no Event of Default, as hereinafter continuing. Bank shall have no obligation to make any advances if Borrower is in default under any of the Loans, including, but not limited to failure to comply with any covenants hereunder.
3. Subparagraph (c) of Section 5.15, Financial Covenants, is hereby revised and replaced in its entirety to read as follows:
(c) A capital expenditure limit of $4,000,000 per calendar year during the term of this Agreement.
4. The following new subparagraph is added to Section 5.15, Financial Covenants:
(d) A ratio of funded debt to earnings before interest, taxes on income, depreciation and amortization for any twelve (12) month rolling period, in each case determined in accordance with GAAP on a consolidated basis, of less than 3:00 to 1:00. Funded debt shall mean all of Borrower's outstanding interest bearing debt and all capitalized leases. Earnings before interest, taxes on income, depreciation and amortization for any twelve (12) month rolling period shall include the
5. Section 6.3, Contingent Liabilities, is hereby revised and replaced in its entirety to read as follows:
Contingent Liabilities. Endorse, guarantee or become surety for the obligations of any person, firm or corporation, except that the Borrower may: (i) endorse checks and negotiable instruments for collection or deposit in the ordinary course of business, (ii) guarantee or become a surety for the leases or other obligations of any franchisees in connection with the operation by such franchisees of a franchise ("Franchisee Obligations"), provided, however, that the total agg
6. Section 6.10, Indebtedness, is hereby revised and replaced in its entirety to read as follows:
Indebtedness. Directly or indirectly create, incur, assume, guaranty or be or remain liable with respect to any indebtedness, except for (a) the Obligations, (b) any existing indebtedness disclosed in the financial statements referenced in Section 4.4 hereof as the same may be updated from time to time, (c) any purchase money indebtedness not to exceed $750,000 per year, (d) any purchase money indebtedness incurred under the Quick Start Program, (e) any Franchisee Obligati
7. Conditions Precedent. The obligations of the Bank to enter into this Amendment and to continue to make advances under the Note(s) to Borrower are conditioned upon Borrower delivering to Bank the following documents, in form and substance satisfactory to the Bank and satisfaction of the following conditions:
A. Properly executed: (i) Amended and Restated Line of Credit Promissory Note; (ii) Second Amendment to Loan and Security Agreement; and (iii) Capital Expenditure Loan 2 Promissory Note;
B. Certified copy of a resolution of the board of directors of Borrower authorizing the execution and delivery of this Amendment, the Second Amended and Restated Line of Credit Promissory Note and the Capital Expenditure Loan 2 Promissory Note, the borrowings contemplated herein, the pledging of assets, and the assumption of all other undertakings provided for herein;
C. Borrower shall have paid all reasonable fees and expenses incurred by the Bank with respect to this Amendment, including, but not limited to, legal fees; and
D. Such other documents as Bank or its counsel may reasonably request.
8. Representations and Warranties. In order to induce the Bank to enter into this Amendment, Borrower hereby makes and restates in their entirety all of the representations and warranties set forth in Section 4 of the Loan Agreement, except that those representations and warranties regarding financial statements shall refer to the financial statements as of and for the last period submitted by Borrower to Bank, which representations and warranties are true in all material r
9. Effect of this Amendment; Continuation of Loan Agreement. Borrower and the Bank agree that:
(a) the execution and delivery of this Amendment is not intended to discharge any obligation of Borrower due the Bank under the Loan Agreement or this Amendment;
(b) there is no novation by the execution and delivery of this Amendment;
(c) all the terms and conditions contained in the Loan Agreement, as amended, and all documents executed in accordance therewith, except as specifically modified herein, shall continue unchanged and remain in full force and effect; and
(d) Capitalized terms used in this Amendment and not defined herein shall have the meanings attributed to them in the Loan Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment duly to be executed as of the day and year first above written.
MOTO PHOTO, INC.
(a Delaware corporation)
By:________________________________
XXXXX X. XXXXX
Its: Executive Vice President
THE PROVIDENT BANK
By___________________________________
Xxxxxx X. Brunswick Its: Senior Vice President
CAPITAL EXPENDITURE 2
LINE OF CREDIT PROMISSORY NOTE
DATE OF NOTE: ______________, 1999
MAXIMUM CREDIT: TWO MILLION EIGHT HUNDRED THOUSAND DOLLARS ($2,800,000)
MATURITY DATE: JANUARY 30, 2005
FOR VALUE RECEIVED, the undersigned ("Borrower"), does hereby promise to pay to the order of THE PROVIDENT BANK, an Ohio banking corporation, or its successors or assigns, at its principal office located at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxx 00000 ("Lender"), or at such other place as the Lender may designate to Borrower in writing from time to time, in legal tender of the United States, the Maximum Credit, as set forth above, or such portion thereof whi
The loan evidenced by this Note is subject to the terms of this Note and the Loan and Security Agreement dated February 19, 1997, between the Lender and the Borrower as amended by First Amendment to Loan and Security Agreement dated May 1, 1998, and Second Amendment to Loan and Security Agreement dated of even date herewith (together, the "Loan Agreement") and until the expiration of the Draw Period (hereinafter defined) or occurrence of an Event of Default as defined in the Loan Agreemen
3. PRINCIPAL AND INTEREST PAYMENTS
This Note shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of Ohio.
MOTO PHOTO, INC., a Delaware corporation
By:_______________________________
STATE OF OHIO, COUNTY OF XXXXXXXXXX, XX:
______________________________
LINE OF CREDIT PROMISSORY NOTE
DATE OF NOTE: _____________, 1999
MAXIMUM CREDIT: ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000)
FOR VALUE RECEIVED, the undersigned ("Borrower"), does hereby promise to pay to the order of THE PROVIDENT BANK, an Ohio banking corporation, or its successors or assigns, at its principal office located at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxx 00000 ("Lender"), or at such other place as the Lender may designate to Borrower in writing from time to time, in legal tender of the United States, the Maximum Credit, as set forth above, or such portion thereof whi
The loan evidenced by this Note is an automated revolving line of credit subject to the terms of this Note and the Loan and Security Agreement dated February 19, 1997, between the Lender and the Borrower as amended by First Amendment to Loan and Security Agreement dated May 30, 1998, as amended by Second Amendment to Loan and Security Agreement dated of even date herewith (collectively, the "Loan Agreement") and until maturity or occurrence of an Event of Default as defined in the Loan Ag
3. PRINCIPAL AND INTEREST PAYMENTS
This Note shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of Ohio.
MOTO PHOTO, INC., a Delaware corporation
By:_______________________________
STATE OF OHIO, COUNTY OF XXXXXXXXXX, XX: