EXHIBIT 10(iv)
USTrust
USTrust Bank
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
October 3, 1997
Turbotec Products, Inc.
000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, President
Gentlemen:
Reference is made to our Amended and Restated Loan and Security Agreement
(Accounts Receivable and Inventory) dated October 31, 1994, together with all
amendments and additions thereto (hereinafter called the "Agreement").
Notwithstanding the provisions of the Agreement, it is agreed, effective
immediately, that the Agreement shall be amended as follows:
Section 5.A of the Agreement is hereby stricken in its entirety and the
following new Section 5.A substituted therefor:
"A. Subject to the terms and provisions of this Agreement, the Bank
hereby establishes a discretionary revolving line of credit in Borrower's
favor in the amount set forth below, as determined by Bank from time to
time hereafter. Bank may make such loans to Borrower, based upon such facts
and circumstances existing at the time of the request, as from time to time
Bank elects to make which are secured by Borrower's Inventory, Accounts and
all other Collateral and the proceeds thereof. Without limiting the
discretionary nature of Bank's obligation to make loans hereunder, or the
demand feature of any loans that Bank does make hereunder, Borrower agrees
that the aggregate unpaid principal of all loans outstanding at any one
time shall not exceed the Borrowing Base. The term "Borrowing Base" as used
herein shall mean the sum of the following:
(a) up to eighty (80%) percent of the unpaid face amount of
Qualified Accounts (as defined below) or such other percentage thereof
as may from time to time be fixed by the Bank upon notice to Borrower,
PLUS
(b) the lesser of (i) $650,000.00, or (ii) up to (A) fifty (50%)
percent of the cost or market value, whichever is lower, of all
Eligible Inventory (as defined below) consisting of raw materials and
twisted tubes, plus (B) the lesser of (1) $100,000.00, or (2) fifty
(50%) percent of the cost or market value, whichever is lower, of all
Eligible Inventory consisting of finished goods, MINUS
(c) one hundred (100%) percent of the aggregate amount then
undrawn on all letters of credit and acceptances issued by the Bank
for the
account of the Borrower; but in no event shall the sum of all direct
loans plus the sum of the aggregate amount undrawn on all letters of
credit and acceptances be in excess of $1,800,000.00 (the "Credit
Limit") or such other sum as may from time to time be fixed by the
Bank upon notice to Borrower. All such loans shall bear interest and
at the option of Bank shall be evidenced by demand notes in form
satisfactory to Bank, but in the absence of notes shall be
conclusively evidenced by the Bank's record of disbursements and
repayments and shall be payable ON DEMAND. Interest will be charged to
Borrower at a fluctuating rate which is the daily equivalent to the
Base Lending Rate in effect from time to time, plus one (1%) percent
per annum or at such other rate agreed on from time to time by the
parties, upon any balance owing to Bank at the close of each day and
shall be payable monthly in arrears, on the first day of each month,
until the Bank makes demand; PROVIDED THAT Bank at all times reserves
the right exercisable in Bank's sole discretion, based upon
circumstances then existing, to adjust the margin over the Base
Lending Rate payable by Borrower hereunder upon thirty (30) days
notice to Borrower. The rate of interest payable by Borrower shall be
changed effective as of that date in which a change in the Base
Lending Rate becomes effective. Interest shall be computed on the
basis of the actual number of days elapsed over a year of three
hundred sixty (360) days. The term "Base Lending Rate" as used herein
and in any supplement and amendment hereto shall mean the rate of
interest announced from time to time by Bank, at its head office, as
its Base Lending Rate, it being understood that such rate is a
reference rate and not necessarily the lowest rate of interest charged
by the Bank."
Kindly note that the alterations contained herein do not in any way alter,
release or change any other sections contained in the Agreement.
Please acknowledge your agreement to the foregoing by signing the enclosed
copy of this letter and returning the same to the undersigned.
Very truly yours,
USTRUST
By:/s/
---------------------------------
D. Xxxxxxx Xxxxxx, Vice President
UNDERSTOOD AND AGREED TO:
TURBOTEC PRODUCTS, INC.
By: /s/
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Xxxxxx X. Xxxxxxxxx, President
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