MODIFICATION AGREEMENT
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DATE: December 22, 2000
PARTIES: Borrower XXXXXXX COMMUNICATIONS CORPOATION, a Utah corporation
Bank: BANK ONE, UTAH, NA, a national banking association
RECITALS:
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A. Bank has extended to Borrower credit ("Loan") in the principal amount of
$5,000,000.00 pursuant to the Loan Agreement, dated January 5, 1999 ("Loan
Agreement"), and evidenced by the Promissory Note, dated January 5, 1999
("Note"). The unpaid principal of the Loan as of the date hereof is $-0-.
B. The Loan and/or guaranty of Loan is secured by, among other things, the
Commercial Security Agreement, dated January 5, 1999, by Borrower, for the
benefit of Bank (the agreements, documents, and instruments securing the Loan
and the Note are referred to individually and collectively as the ("Security
Documents").
C. Bank and Borrower have executed and delivered previously the following
agreements ("Modifications") modifying the terms of the Loan, the Note, the Loan
Agreement, and/or the Security Documents: Modification Agreement, dated June 9,
1999. (The Note, the Loan Agreement, the Security Documents, any arbitration
resolution, and all other agreements, documents, and instruments evidencing,
securing, or otherwise relating to the Loan, as modified in the Modifications,
are sometimes referred to individually and collectively as the "Loan Documents".
Hereinafter, "Note", "Loan Agreement", and "Security Documents" shall mean such
documents as modified in the Modifications.)
D. Borrower has requested that Bank modify the Loan and the Loan Documents
as provided herein. Bank is willing to so modify the Loan and the Loan
Documents, subject to the terms and conditions herein.
AGREEMENT:
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For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Bank agree as follows:
1. ACCURACY OF RECITALS.
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Borrower acknowledges the accuracy of the Recitals.
2. MODIFICATION OF LOAN DOCUMENTS.
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2.1 The Loan Documents are modified as follows:
2.1.1 Interest on the Loan and the Note shall be due and payable
commencing on February 1, 2001, and continuing on the same day of each
successive month thereafter until the maturity date. No payments of principal of
the Loan and the Note shall be due and payable until the maturity date.
2.1.2 The maturity date of the Loan and the Note is changed from
December 22, 2000, to December 21, 2001. On the maturity date Borrower shall pay
to Bank the unpaid principal, accrued and unpaid interest, and all other amounts
payable by Borrower under the Loan Documents as modified herein.
2.1.3 The Section entitled "Additional Affirmative Covenant - Debt
Service Coverage" of the Loan Agreement is modified to read in its entirety as
follows:
Additional Affirmative Covenant - Debt Service Coverage. Borrower
further covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will comply at all times with the following ratio. Maintain as
of the end of each fiscal quarter, a ratio (a) net income, after taxes, plus
interest, depreciation, amortization and depletion, less any Distributions, for
the twelve month period then ending, to (b) interest plus current maturities of
long-term debt plus current maturities of capital leases for the same such
twelve month period, of not less than the following ratios for the following
periods: for the period ending December 31, 2000, 1.4 to 1.0; for the period
January 1, 2001 to termination of this Loan Agreement, 2.0 to 1.0.
2.1.4 The Section entitled "Affirmative Covenants. Compliance Certificate"
of the Loan Agreement is modified to read in its entirety as follows:
Compliance Certificate. Unless waived in writing by Lender, provide
Lender 45 days after each quarter with a certificate executed by Borrower's
chief financial officer, or other officer or person acceptable to Lender, (a)
certifiying that the representations and warranties set forth in this Agreement
are true and correct as of the date of the certificate and that, as of the date
of the certificate, no Event of Default exists under this Agreement, and (b)
demonstrating compliance with all financial covenants set forth in this
Agreement.
2.1.5 The Section entitled "Additional Provisions - Financial Statements" on
the Addendum to Loan Agreement is modified to read in its entirety as follows:
Additional Provisions - Financial Statements. Furnish Lender
with, as soon as available, but in no event later than ninety (90) days after
the end of each fiscal year, Borrower's balance sheet, income statement,
statement of changes in financial position, and 10K for the year ended, audited
by certified public accountant(s) reasonably acceptable to Lender, and as soon
as available, but in no event later than forty-five (45) days after the end of
each fiscal quarter, Borrower's balance sheet, income statement, statement of
changes in financial position, and 10Q for the period ended, prepared and
certified, subject to year end review adjustments, as correct to the best
knowledge and belief by Borrower's chief financial officer of other officer or
person acceptable to Lender. All financial reports required to be provided under
this Agreement shall be prepared in accordance with generally accepted
accounting principals, applied on a consistent basis, and certified by Borrower
as being true and correct.
2.2 Each of the Loan Documents is modified to provide that it shall be a
default or an event of default thereunder if Borrower shall fail to comply with
any of the covenants of Borrower herein or if any representation or warranty by
Borrower herein is materially incomplete, incorrect, or misleading as of the
date hereof.
2.3 Each reference in the Loan Documents to any of the Loan Documents shall
be a reference to such document as modified herein.
3. RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.
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The Loan Documents are ratified and affirmed by Borrower and shall remain in
full force and effect as modified herein. Any property or rights to or interests
in property granted as security in the Loan Documents shall remain as security
for the Loan and the obligations of Borrower in the Loan Documents.
4. BORROWER REPRESENTATIONS AND WARRANTIES.
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Borrower represents and warrants to Bank:
4.1 No default or event of default under any of the Loan Documents as
modified herein, nor any event, that, with the giving of notice or the passage
of time or both, would be a default or an event of default under the Loan
Documents as modified herein has occurred and is continuing.
4.2 There has been no material adverse change in the financial condition of
Borrower or any other person whose financial statement has been delivered to
Bank in connection with the Loan from the most recent financial statement
received by Bank.
4.3 Each and all representations and warranties of Borrower in the Loan
Documents are accurate on the date hereof.
4.4 Borrower has no claims, counterclaims, defenses, or set-offs with
respect to the Loan or the Loan Documents as modified herein.
4.5 The Loan Documents as modified herein are the legal, valid, and binding
obligations of Borrower, enforceable against Borrower in accordance with their
terms.
4.6 Borrower is validly existing under the laws of the State of its
formation or organization and has the requisite power and authority to execute
and deliver this Agreement and to perform the Loan Documents as modified herein.
The execution and delivery of this Agreement and the performance of the Loan
Documents as modified herein have been duly authorized by all requisite action
by or on behalf of Borrower. This Agreement has been duly executed and delivered
on behalf of Borrower.
5. BORROWER COVENANTS.
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Borrower covenants with Bank:
5.1 Borrower shall execute, deliver, and provide to Bank such additional
agreements, documents, and instruments as reasonably required by Bank to
effectuate the intent of this Agreement.
5.2 Borrower fully, finally, and forever releases and discharges Bank and
its successors, assigns, directors, officers, employees, agents, and
representatives from any and all actions, causes of action, claims, debts,
demands, liabilities, obligations, and suits, of whatever kind or nature, in law
or equity of Borrower, whether now known or unknown to Borrower, (i) in respect
of the Loan, the Loan Documents, or the actions or omissions of Bank in respect
of the Loan or the Loan Documents and (ii) arising from events occurring prior
to the date of this Agreement.
5.3 Contemporaneously with the execution and delivery of this Agreement,
Borrower has paid to Bank:
5.3.1 All accrued and unpaid interest under the Note and all amounts,
other than interest and principal, due and payable by Borrower under the Loan
Documents as of the date hereof.
5.3.2 All the internal and external costs and expenses incurred by Bank
in connection with this Agreement (including, without limitation, inside and
outside attorneys, title, filing, and recording costs, expenses, and fees).
5.3.3 A renewal fee of $12,500.00.
6. EXECUTION AND DELIVERY OF AGREEMENT BY BANK.
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Bank shall not be bound by this Agreement until (i) Bank has executed and
delivered this Agreement, (ii) Borrower has performed all of the obligations of
Borrower under this Agreement to be performed contemporaneously with the
execution and delivery of this Agreement, (iii) if required by Bank, Borrower
and any guarantor(s) of the Loan have executed and delivered to Bank an
arbitration resolution, and (iv) each guarantor of the Loan has executed the
Consent of Guarantor(s) below.
7. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.
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The Loan Documents as modified herein contain the complete understanding and
agreement of Borrower and Bank in respect of the Loan and supersede all prior
representations, warranties, agreements, arrangements, understandings, and
negotiations. No provision of the Loan Documents as modified herein may be
changed, discharged, supplemented, terminated, or waived except in a writing
signed by the parties thereto.
8. BINDING EFFECT.
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The Loan Documents as modified herein shall be binding upon and shall inure to
the benefit of Borrower and Bank and their respective successors and assigns.
9. CHOICE OF LAW.
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This Agreement shall be governed by and construed in accordance with the laws of
the State of Utah, without giving effect to conflicts of law principles.
10. COUNTERPART EXECUTION.
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This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same document. Signature pages may be detached from the counterparts and
attached to a single copy of this Agreement to physically form one document.
DATED as of the date first above stated.
BANK: BORROWER:
BANK ONE, UTAH, NA, XXXXXXX COMMUNICATIONS CORPORATION,
a national banking association a Utah corporation
By: /s/Xxxx X. Xxxxxx BY: /s/Xxxxx Xxxxxx
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Xxxx X. Xxxxxx Xxxxx Xxxxxx
Its: Vice President Its: CFO
