EXHIBIT 99.6
SECOND AMENDMENT
of the
Note, Loan and Modification Agreement
This Second Amendment of the Note, Loan and Modification Agreement
(this "AMENDMENT") is effective as of March 9, 2007 by and among BIOMERICA,
INC., a Delaware corporation ("BORROWER") and Xxxxx Xxxxx as Trustee of the
XXXXX XXXXX TRUST DATED AUGUST 21, 1998 ("LENDER") and XXXXX XXXXX, as an
individual ("XXXXX").
Recitals
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A. Under the Loan Agreement, dated September 12, 2000 between Borrower
and Lender, as modified by the Loan Modification, Forbearance and Security
Agreement dated March 12, 2004 among Borrower, Lender and Xxxxx and by the
Amendment of the Note, Loan and Modification Agreement dated as of September 1,
2004 (collectively, as amended, restated, otherwise modified or extended from
time to time, the "LOAN AGREEMENT"), Lender agreed to make a loan (the "LOAN")
to Borrower. The Loan is evidenced by the Amended and Restated Promissory Note,
dated March 19, 2004, in principal amount of $313,318.00, as the same may have
been further amended or extended from time to time (the "NOTE" and, together
with the Loan Agreement and any and all other agreements, instruments or
documents executed in connection with the Loan, the "LOAN DOCUMENTS"). This
Amendment is a Loan Document.
B. As of the date of this Agreement, the outstanding principal balance
of the Loan is $234,426, plus accrued interest accrued from February 28, 2007.
C. As of the date of this Agreement, Borrower has failed to pay to
Lender in the amount of $53,250 (the "OVERDUE PRINCIPAL"), which is due and
payable under the Loan Agreement. Accordingly, Borrower is currently in default
under the Loan Agreement and the other Loan Documents.
D. Borrower has requested Lender and Xxxxx to enter into the
Subordination Agreement dated March 9, 2007 (the "COMMERCIAL SUBORDINATION
AGREEMENT") among Borrower, Lender, Xxxxx and Commercial Bank of California
("COMMERCIAL"), in connection with one or more loans or extensions of credit
(the "COMMERCIAL LOAN") between Borrower and Commercial. Commercial's agreement
to provide the Commercial Loan to Borrower is conditioned upon, among other
things, the execution and delivery of the Commercial Subordination Agreement.
E. In order to induce Lender and Xxxxx to enter into the Commercial
Subordination Agreement and to waive certain defaults under the Loan Documents,
the parties have agreed to enter into this Agreement, as set forth below.
NOW THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree to modify the Loan
Documents as follows:
Agreement
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1. RECITALS. Borrower, Lender and Xxxxx agree that the Recitals above
are true and correct and are a part of this Agreement.
2. REAFFIRMATION OF LOAN. Borrower reaffirms all of its obligations
arising under or with respect to the Loan, and Borrower acknowledges that it has
no claims, offsets or defenses with respect to the payment of sums due under the
Note, the Loan Agreement or any other Loan Documents.
3. DEFAULTS. Lender agrees that any and all defaults or events of
default which may have occurred solely as a result of Borrower's failure to
repay the Overdue Principal when due are hereby waived, but Lender expressly
reserves any and all rights and remedies of Lender with respect to any other
defaults or events of default which may have occurred and may now be continuing
or which may occur after the date hereof.
4. EXISTING COLLATERAL. Borrower hereby ratifies, affirms and restates
the security interests previously granted to Borrower to Lender as collateral
for the Loan, in all of Borrower's right, title and interest in and to the
assets of the Borrower, as provided in the Loan Agreement (the "EXISTING
COLLATERAL").
5. PLEDGE OF LANCER STOCK. In addition to the Existing Collateral,
Borrower is hereby granting to Lender, and Lender shall have security interest
in and to, any capital stock owned or held by Borrower as of the date of this
Agreement in Lancer Orthodontics, Inc., a California corporation ("LANCER"), or
any rights of any kind or nature arising from or incidental to ownership of said
capital stock, including, without limitation, any rights to cash, stock and
other property, dividends and any rights issued or paid on account of or with
respect to such capital stock or proceeds thereof (the "LANCER COLLATERAL" and
together with the Original Collateral, the "COLLATERAL"). In the event Borrower
defaults under this Agreement or any other Loan Documents, Lender shall have all
rights and remedies under the Loan Documents and applicable law. Borrower hereby
irrevocably authorizes Lender at any time and from time to time to file any
financing statements, amendments thereto and continuation statements as
authorized by applicable law, to establish and maintain the validity, perfection
and priority of the security interests in the Collateral granted in this
Amendment and other Loan Documents.
6. PAYMENTS BY BORROWER TO LENDER. This Amendment establishes the
following payments from the Borrower to the Lender for the Overdue Principal:
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Borrower shall pay Lender the total back payments due of $53,250 no
later than August 31, 2007.
In addition, Borrower shall pay to Lender all other accrued interest,
principal and other amounts in strict accordance with the Loan Documents.
7. ADDITIONAL INDEBTEDNESS. Borrower agrees not to have or incur, any
indebtedness or obligations in favor of Commercial or its successors or assigns
which is senior in priority of payment of security under the terms of the
Commercial Subordination Agreement to the indebtedness of Borrower to Lender,
except for, directly or indirectly, the indebtedness incurred under the
Commercial Loan in the aggregate principal amount of Two Hundred Thousand
Dollars ($200,000) and interest and expenses payable with respect to such loan.
Borrower agrees not to amend, extend or modify the Commercial Loan without the
prior consent of Lender.
9. On August 15, 2006, Lender agreed to an extension of the due date
for the Note until September 1, 2007. Lender further agreed that, effective with
the quarter ended November 30, 2006, the payments of $3,500 per month which are
due upon the achievement of certain financial results as described in such Note,
shall be reduced to $2,000 per month upon the achievement of the same results.
10. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender and Xxxxx as follows:
a. All representations and warranties made and given by
Borrower in the Loan Documents are true, accurate and correct.
b. The execution of and performance under the Loan Documents
(including this Amendment) and the terms of the Commercial Loan, and
the consummation of the transactions contemplated thereby and hereby
will not conflict with, result in any breach of, adversely affect, or
prevent Borrower from entering into, any agreement in connection with
Borrower's payments of rent currently due.
11. FEES. Borrower shall pay to Xxxxx, in immediately available funds,
up to $750 in legal costs incurred by Xxxxx in connection with the preparation,
review and negotiation of this Amendment and the Commercial Subordination
Agreement and related agreements, assignments and documents. Furthermore,
Borrower shall indemnify and reimburse Lender and Xxxxx for any liabilities,
losses, claims, actions, costs and expenses (including reasonable legal costs
and expenses) in connection with the Commercial Subordination Agreement, the
enforcement thereof and any other costs and expenses of Lender or Xxxxx required
under the Commercial Subordination Agreement.
12. OTHER TERMS. All other terms of the Note, the Loan Agreement and
the other Loan Documents not specifically modified by this Amendment remain in
full force and effect.
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[Signatures on the Following Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives, effective as of the day and
year first above written.
Borrower Lender
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BIOMERICA, INC. XXXXX XXXXX, as Trustee of the
XXXXX XXXXX TRUST DATED
AUGUST 21, 1998
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxx
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Name: Xxxx X. Xxxxx Xxxxx Xxxxx, as Trustee and not
Title: Chief Executive Officer individually
Xxxxx
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/s/ Xxxxx Xxxxx
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XXXXX XXXXX, as an individual
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