SECOND AMENDMENT TO
LOAN AGREEMENT
THIS SECOND AMENDMENT TO THE LOAN AGREEMENT (the "Amendment") is made this
____ day of February, 1997, by and among BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("Original Lender") and XXXXX FARGO BANK, N.A. ("Xxxxx
Fargo") (each individually also a "Lender" and collectively the "Lenders"), BANK
OF AMERICA NT&SA, doing business as Seafirst Bank, the successor by merger to
Bank of America, NW, N.A., as agent for the Lenders ("Agent"), BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION as letter of credit agent for Lenders
("Letter of Credit Agent"), and MERIX CORPORATION, an Oregon corporation (the
"Borrower").
RECITALS
A. The Borrower, the Original Lender, the Agent and the Letter of Credit
Agent are parties to that certain Loan Agreement dated as of October 31, 1996,
(as the same may be amended, modified or extended from time to time the "Loan
Agreement") and the related Loan Documents described therein. The Original
Lender assigned a portion of its interest under the Loan Agreement to Xxxxx
Fargo, pursuant to an Assignment Agreement dated as of December 13, 1996.
B. Borrower has requested that the Lenders temporarily modify a covenant
contained in the Loan Agreement. The parties now wish to amend the Loan
Agreement, subject to the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used herein and not otherwise defined
shall have the meaning given in the Loan Agreement. All references in the Loan
Documents to Bank of America NW, N.A., shall mean its successor by merger, Bank
of America NT&SA.
2. Amendments to Loan Agreement. The Loan Agreement is amended as follows:
Section 6.15 Profitability. Borrower and its Subsidiaries on a
consolidated basis shall, as of the end of the two fiscal quarters ending
February 28, 1997, report a Pre-tax Loss for the combined previous two
quarters (ending November 30, 1996 and February 28, 1997, respectively) of
not more than $2,000,000. As used herein, "Pre-Tax Loss" (or "Pre-Tax
Earnings") means, for any period or periods, net loss (or net income),
excluding any extraordinary gains or losses and taxes associated therewith,
plus income tax expense, if any, in each case determined in accordance with
GAAP for such period or periods. Beginning with the fiscal quarter ending
May 31, 1997, Borrower and its Subsidiaries on a consolidated basis shall,
as of the end of each fiscal quarter, report Pre-tax Earnings of not less
than zero ($0.00) for at least one of the preceding two consecutive fiscal
quarters.
PAGE 1 - SECOND AMENDMENT TO LOAN AGREEMENT
3. Conditions to Effectiveness. Notwithstanding anything contained herein
to the contrary, this Amendment shall not become effective until each of the
following conditions is fully and simultaneously satisfied:
(a) Delivery of Amendment. The Borrower, the Agent, the Letter of
Credit Agent, and each Lender shall have executed and delivered the original or
appropriate counterparts of this Amendment to the Agent;
(b) Payment of Fee and Reimbursement for Expenses. The Borrower shall
have paid Agent a fee of $1,500 for this Amendment and reimbursed the Agent for
all out-of-pocket expenses incurred by the Lenders in connection with the
preparation of this Amendment, including legal fees;
(c) Default. Borrower hereby represents and warrants that it, and all
of its Subsidiaries, are not in default under any of the terms or conditions of
the Loan Agreement, or any documents related to the Loan Agreement; and
(d) Other Documents. The Agent and the Lenders shall have received
such other documents, instruments, and undertakings as the Agent and such Lender
may reasonably request.
4. Representations and Warranties. The Borrower hereby represents and
warrants to the Lenders and the Agent that each of the representations and
warranties set forth in Article 5 of the Loan Agreement is true and correct in
each case as if made on and as of the date of this Amendment and the Borrower
expressly agrees that it shall be an additional Event of Default under the Loan
Agreement if any representation or warranty made hereunder shall prove to have
been incorrect in any material respect when made.
5. Corporate Authority. Borrower represents and warrants to the Agent and
the Lenders that the execution, delivery and performance of this Amendment are
within Borrower's corporate powers, and have been duly authorized and are not in
contravention of law or the terms of Borrower's charter, bylaws, or other
incorporation papers, or of any undertaking of Borrower of which either Borrower
is a party or by which it is bound.
6. No Further Amendment. Except as expressly modified by this Amendment,
the Loan Agreement and the other Loan Documents shall remain unmodified and in
full force and effect and the parties hereby ratify their respective obligations
thereunder. Without limiting the foregoing, the Borrower expressly reaffirms and
ratifies its obligation to pay or reimburse the Agent and the Lenders on request
for all reasonable expenses, including legal fees, actually incurred by the
Agent or such Lender in connection with the preparation of this Amendment and
the closing of the transactions contemplated hereby and thereby.
7. Miscellaneous.
(a) Entire Agreement. This Amendment and the other Loan Documents
comprise the entire agreement of the parties with respect to the subject matter
hereof and supersede all prior oral or written agreements, representations or
commitments.
PAGE 2 - SECOND AMENDMENT TO LOAN AGREEMENT
(b) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same Amendment.
(c) Governing Law. This Amendment and the other agreements provided
for herein and the rights and obligations of the parties hereto and thereto
shall be construed and interpreted in accordance with the laws of the State of
Oregon.
EXECUTED AND DELIVERED by the duly authorized officers of the parties
as of the date first above written.
BORROWER: MERIX CORPORATION
By: XXXXXXX XXXXXXXXX
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Name: XXXXXXX XXXXXXXXX
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Title: Treasurer
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AGENT: BANK OF AMERICA, NT&SA, doing business as
Seafirst Bank
By: XXXX X. XXXXX
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Name: XXXX X. XXXXX
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Title: Assistant Vice President
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By: XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President
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LENDER AND
LETTER OF CREDIT AGENT: BANK OF AMERICAN NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: XXXXXX X. XXXXXXXXXX
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Name: XXXXXX X. XXXXXXXXXX
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Title: Vice President
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LENDER: XXXXX FARGO BANK, N.A.
By: XXXXX XXXXX
-------------------------------------
Name: XXXXX XXXXX
-----------------------------------
Title: VP
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PAGE 3 - SECOND AMENDMENT TO LOAN AGREEMENT
