EXHIBIT 10.2
FIRST AMENDMENT TO LOAN AGREEMENT
THIS Amendment to Loan Agreement made this 31st day of May, 2005, by
and between M-TRON INDUSTRIES, INC., a Delaware corporation ("M-TRON"), and
PIEZO TECHNOLOGY, INC., a Florida corporation (collectively, the "Borrowers"),
and FIRST NATIONAL BANK OF OMAHA (the "Bank"), a national banking association
established at Omaha, Nebraska.
WHEREAS, M-TRON has existing term loans with the Bank evidenced by
term note number 2000001751-6 with a due date of April 30, 2007, term note
number 2000001751-8 with a due date of October 14, 2007, and term note number
20000001751-9 with a due date of October 14, 2005 pursuant to an existing
additional loan agreement with the Bank, which shall remain in full force in
accordance with its terms; and
WHEREAS, M-TRON has an existing revolving line of credit with the
Bank evidenced by revolving note number 2000001751-5 with a due date of May 31,
2005 pursuant to an existing additional loan agreement with the Bank, which
shall be paid in full from the proceeds of the Revolving Note; and
WHEREAS, the Bank is willing to provide such credit facilities to
the Borrowers upon the terms and conditions herein set forth.
WHEREAS, the parties hereto desire to amend the AGREEMENT.
Now, therefore, in consideration of the AGREEMENT, and their mutual
promises made herein, BANK and BORROWERS agree as follows:
1. Terms which are typed herein as all capitalized words and are not
defined herein shall have the same meanings as when described in the
AGREEMENT.
2. Article I Section 1.01. Defined Terms "Fixed Charge Coverage
Ratio" of the AGREEMENT is hereby amended to read, effective
immediately:
"Fixed Charge Coverage Ratio" means as of any day the ratio
derived when comparing EBITDA, less unfunded capital
expenditures, dividends and taxes to the Borrowers' payments on
the principal and interest of the Obligations and Subordinated
Debt made during the applicable reporting period.
3. Article I Section 1.01. Defined Terms "Tangible Net Worth" of the
AGREEMENT is hereby amended to read, effective immediately:
"Tangible Net Worth" means total assets less total liabilities
(but excluding Subordinated Debt existing on the Closing Date, in
an amount not exceeding $2,500,000) and less the following types
of assets: (a) receivables and other investments in or amounts
due from any shareholder, employee, or other person or entity
related to or affiliated with the Borrowers except the $500,000
short-term note receivable from Xxxxx Corporation as long as
Borrowers receive timely quarterly payments of no less than
$125,000, starting 9/30/05. (b) goodwill, patents, copyrights,
mailing lists, trade names, trademarks, servicing rights,
organizational and franchise cost, bond underwriting costs and
other like assets properly classified as intangible; and (c)
treasury stock. Tangible Net Worth shall not include any debt due
to the Borrowers not acceptable to the Bank in the exercise of
its reasonable discretion including the $917,000 long-term note
receivable due from Xxxxx Corporation.
4. Article I. Section 1.01. Defined Terms "Revolving Loan
Termination Date" (a) of the AGREEMENT is hereby amended to read, effective
immediately:
(a) May 31, 2006,
5. Article II Section 2.12, Repayment of Revolving Note is hereby
amended to read, effective immediately:
2.12 The Revolving Note shall be due and payable on May 31, 2006.
Interest only shall be payable monthly on the Revolving Note. All
outstanding principal and interest shall be due and payable on
May 31, 2006.
6. Article VII Section 7.06. Dividends are hereby amended to read,
effective immediately:
7.06 As to Borrower M-TRON, declare or pay any dividends in
excess of fifty percent (50%) of M-TRON's prior year earnings,
but only so long as M-TRON is in compliance with all other terms
of this Agreement; or purchase, redeem, retire or otherwise
acquire for value any of its capital stock now or hereafter
outstanding; or make any distribution of assets to its
stockholders as such whether in cash, assets or obligations of
the Borrowers; or allocate or otherwise set apart any sum for the
payment of any dividend or distribution on, or for the purchase,
redemption or retirement of any shares of, its capital stock; or
make any other distribution by reduction of capital or otherwise
in respect of any shares of its capital stock; or permit any of
its Subsidiaries to purchase or otherwise acquire for value any
stock of the Borrowers or another Subsidiary, except that the
Borrowers (a) may declare and deliver dividends and make
distributions payable solely in common stock of the Borrowers;
and (b) may purchase or otherwise acquire shares of its capital
stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital
stock, without the prior written consent of Bank.
7. Article VII Section 7.13 Management Fees is hereby added:
7.13 Annual management fees paid to Xxxxx Corporation shall be
limited to the lesser of (a) $250,000 or (b) 50% of the sum of
net income plus management fees previously expensed during the
reported fiscal year period.
8. BORROWER certifies by its execution hereof that all of the
representations and warranties set forth in the AGREEMENT are true as of this
date, and that no EVENT OF DEFAULT under the AGREEMENT, and no event which, with
the giving of notice or passage of time or both, would become such an EVENT OF
DEFAULT, has occurred as of execution hereof, except as disclosed to BANK. All
other terms and conditions of the AGREEMENT not affected or amended by this
AGREEMENT, are hereby ratified and confirmed.
9. GUARANTOR acknowledges and consents to the foregoing amendment,
and agrees and confirms that his separate guarantee of BORROWER's obligations to
BANK are, and continue to be, valid and binding obligations of GUARANTOR.
10. Except as herein amended, the AGREEMENT continues to be the
valid, binding obligation of BORROWER.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
M-TRON INDUSTRIES, INC. FIRST NATIONAL BANK OF OMAHA
By: /s/ By: /s/
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Its: Its:
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PIEZO TECHNOLOGY, INC.
By: /s/
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Its:
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ACKNOWLEDGED BY GUARANTOR:
XXXXX CORPORATION
By: /s/
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Its:
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