EXHIBIT 10.1
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT (the "Agreement") dated November 30, 1999, is
between MEMRY CORPORATION, a Delaware corporation with its chief executive
office and principal place of business at 00 Xxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx 00000 ("BORROWER") and XXXXXXX BANK, a banking institution with an
office at 000 Xxxxxx Xxxxxx, Xxxx Place II, 5th Floor, HFD 605, Hartford,
Connecticut 06103-3494 ("LENDER") amending a certain Commercial Revolving Loan,
Term Loan, Line of Credit and Security Agreement by and between the Borrower and
the Lender dated June 30, 1998 as amended by a Letter Agreement dated June 3,
1999, and as further amended by a Letter Agreement dated September 22, 1999 (as
amended, the "LOAN AGREEMENT").
W I T N E S S E T H:
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WHEREAS, pursuant to the Loan Agreement the Lender made a Revolving Loan to
the Borrower in an amount up to $3,000,000 of which the principal amount of
$2,087,473.43 remains outstanding on November 17, 1999; and
WHEREAS, pursuant to the Loan Agreement the Lender made a Term Loan to the
Borrower in the original principal amount of $500,000 of which the principal
amount of $366,666.72 remains outstanding as of November 17, 1999; and
WHEREAS, pursuant to the Loan Agreement the Lender made an Equipment Loan
to the Borrower in an amount up to $750,000, $667,993.00 of which was converted
to term indebtedness on July 1, 1999 in accordance with the terms of the Loan
Agreement of which the principal amount of $593,771.56 remains outstanding as of
November 17, 1999; and
WHEREAS, pursuant to the Loan Agreement, the Borrower reborrowed amounts
under the Equipment Loan, of which the principal amount of $235,498.37 remains
unconverted and outstanding as of November 17, 1999; and
WHEREAS, the Borrower has requested that the Bank: (i) increase the amount
of the Revolving Loan to $5,000,000; (ii) make an additional term loan in the
original principal amount of $1,000,000; and (iii) increase the amount of the
Equipment Loan to $1,250,000; and
WHEREAS, the Borrower has further requested that the Lender amend certain
terms and conditions of the Loan Agreement; and
WHEREAS, the Lender is willing to increase the amounts of the Loans as
aforesaid and to amend certain other terms and conditions of the Loan Agreement
on the terms and conditions set forth herein.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
(S) 1. Definitions. Capitalized terms used herein without definition that
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are defined in the Loan Agreement shall have the same meanings herein as
therein.
(S) 1.1. Ratification of Existing Agreements. All of the Borrower's
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obligations and liabilities to the Lender as evidenced by or otherwise arising
under the Loan Agreement, the Revolving Loan Note, the Term Loan Note, the
Equipment Loan Note, the Converted Equipment Loan Note and each and every other
document, instrument or agreement executed in connection therewith (the "Loan
Documents"), are, by Borrower's execution of this Agreement, ratified and
confirmed in all respects. In addition, by Borrower's execution of this
Agreement, Borrower represents and warrants that no counterclaim, right of set-
off, recoupment or defense of any kind exists or is outstanding with respect to
such obligations and liabilities.
(S) 1.2. Representations and Warranties. Except as set forth on Schedule
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I attached hereto and made a part hereof, all of the representations and
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warranties made by the Borrower in the Loan Agreement, the Notes and the other
Loan Documents are true and correct on the date hereof as if made on and as of
the date hereof, except to the extent that any of such representations and
warranties expressly relate by their terms to a prior date.
(S) 1.3. Conditions Precedent. The effectiveness of the amendments
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contemplated hereby shall be subject to the satisfaction on or before the date
hereof of each of the following conditions precedent:
A. Representations and Warranties. All of the representations and
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warranties made by the Borrower herein, whether directly or incorporated by
reference, shall be true and correct on the date hereof, except as provided in
(S)3 hereof.
B. Performance; No Event of Default. The Borrower shall have performed
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and complied in all material respects with all terms and conditions herein
required to be performed or complied with by it prior to or at the time hereof,
and there shall exist no material adverse change in the financial condition of
the Borrower, and there shall exist no default, Defaulting Event or Event of
Default.
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C. Corporate Action. All requisite corporate action necessary for the
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valid execution, delivery and performance by the Borrower of this Agreement and
all other instruments and documents delivered by the Borrower in connection
herewith shall have been duly and effectively taken.
D. Delivery. The parties hereto shall have executed and delivered this
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Agreement. In addition, the Borrower shall have executed and delivered such
further instruments, and take such further action as the Lender may have
requested, in each case further to effect the purposes of this Agreement, the
Loan Agreement and the other Loan Documents.
E. Fees and Expenses. The Borrower shall have paid to the Lender all
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fees and expenses incurred by the Lender in connection with this Agreement, the
Loan Agreement or the other Loan Documents.
F. Commitment Fee. The Borrower shall have paid to the Lender at
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closing a non-refundable commitment fee of $17,500.
1. (S) Amendments to the Loan Agreement.
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A. Amendment to the Preamble of the Loan Agreement. The first Whereas
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clause of the Loan Agreement is hereby amended in its entirety to read as
follows:
"WHEREAS, Borrower has requested Lender to extend to
Borrower the following financial accommodations
(collectively, the "Loans"): a revolving loan in the maximum
aggregate principal amount of up to $5,000,000, a term loan
in the original principal amount of $500,000, an additional
term loan in the original principal amount of $1,000,000,
and a line of credit in the original principal amount of up
to $1,250,000 which provides for, among other things,
amounts outstanding thereunder to be converted to term
indebtedness; and"
B. Amendment to the Definitions of the Loan Agreement. The following
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definitions set forth in Article I of the Loan Agreement are hereby amended in
their entirety to read as follows:
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"(dd) "Equipment Loan Borrowing Base" shall mean: (I) prior to June
30, 2000, an amount equal to the lesser of: (i) One Million Two Hundred
Fifty Thousand Dollars ($1,250,000); or (ii) seventy-five percent (75%) of
the face amount of net invoices and/or purchase orders for Eligible
Equipment, or (II) commencing June 30, 2000, an amount equal to the lesser
of: (i) One Million Two Hundred Fifty Thousand Dollars ($1,250,000); or
(ii) seventy-five percent (75%) of the face amount of net invoices for
Eligible Equipment."
"(cccc) "Revolving Loan Borrowing Base" shall mean: (I) if the
Increased Revolving Loan Borrowing Base Test is satisfied, an amount equal
to the lesser of:
I. Five Million Dollars ($5,000,000) or
II. an amount equal to the aggregate of (1) eighty percent (80%) of
Eligible Accounts and (2) the lesser of (A) forty-five percent (45%) of
Eligible Inventory, or (B) One Million Seven Hundred Fifty Thousand Dollars
($1,750,000), or (II) if the Increased Revolving Loan Borrowing Base Test
is not satisfied, an amount equal to the lesser of (i) Five Million Dollars
($5,000,000) or (ii) an amount equal to the aggregate of (1) eighty percent
(80%) of Eligible Accounts and (2) the lesser of (A) thirty-five percent
(35%) of Eligible Inventory, or (B) One Million Dollars ($1,000,000). As
used herein, the term "Increased Revolving Loan Borrowing Base Test" means:
the consolidated net sales of the Borrower for the three month period
ending December 31, 1999 equal at least $6,297,375 and the consolidated net
profit before taxes of the Borrower for the three month period ending
December 31, 1999 equals at least $790,933."
"(mmm) "Loan" means a Revolving Loan, the Term Loan, the Additional
Term Loan, an Equipment Loan, or a Converted Equipment Loan, and "Loans"
means the Revolving Loans, the Term Loan, the Additional Term Loan, the
Equipment Loans, and the Converted Equipment Loans."
"(ooo) "Note" means the Revolving Loan Note, the Term Loan Note, the
Additional Term Loan Note, the Equipment Loan Note, the Initial Converted
Equipment Loan Note, the Subsequent Converted Equipment Loan Note or the
Final Converted Equipment Loan Note, and "Notes" means the Revolving Loan
Note, the Term Loan Note, the Additional Term Loan Note, the Equipment Loan
Note, the Initial Converted Equipment Loan Note, the
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Subsequent Converted Equipment Loan Note and the Final Converted Equipment
Loan Note."
A. Amendment to the Definitions of the Loan Agreement. The following
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definitions are added to Article I of the Loan Agreement, inserted in
alphabetical order and each definition shall be re-lettered accordingly:
"Additional Term Loan" shall have the meaning assigned in Section 3.1
hereof."
"Additional Term Loan Maturity Date" shall mean January 1, 2004."
"Additional Term Loan Note" shall have the meaning assigned in Section
3.1 hereof."
B. Amendment to Article III of the Loan Agreement. Article III of the
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Loan Agreement is hereby amended in its entirety to read as follows:
"Section 3.1. Amount. Subject to the terms and conditions contained in this
Agreement, Lender has made a loan to Borrower in the original principal amount
of $500,000 (the "Term Loan"). In addition to this Agreement, the Term Loan
shall be evidenced by a Term Loan Note payable to Lender in the form of Exhibit
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B attached hereto (the "Term Loan Note").
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Subject to the terms and conditions contained in this Agreement, Lender agrees
to make an additional term loan to Borrower in the original principal amount of
$1,000,000, not less than $500,000 of which shall be used to finance the
purchase of Eligible Equipment (the "Additional Term Loan"). While Lender has
agreed to disburse the full amount of the Additional Term Loan on the date
hereof, prior to June 30, 2000 Borrower shall have submitted to Lender
documentation to evidence the purchase of Eligible Equipment including: (a)
copies of invoices and/or purchase orders and proof of payment, which reflect
the actual cost of the Eligible Equipment being purchased with the proceeds of
not less than $500,000 of such Additional Term Loan, including, if any,
installation and other services and costs associated therewith; (b) evidence
satisfactory to Lender that upon payment of the purchase price therefor, the
Eligible Equipment shall be in the Borrower's physical possession and that (1)
the Borrower has acquired good title to such Eligible Equipment, and (2) such
Eligible Equipment is not subject to any pledge, lien, lease, encumbrance or
charge of any kind whatsoever, other than in favor of Lender. In addition to
this Agreement, the Additional Term Loan shall be evidenced by an Additional
Term Loan Note payable to Lender in the form of Exhibit B-1 attached hereto
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(the "Additional Term Loan Note")."
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"Section 3.2. Notice and Manner of Establishing Interest Rate. Whenever the
Borrower desires to have the Term Loan or Additional Term Loan accrue interest
as a Fixed Rate Loan, the Borrower shall give the Lender written notice at least
three (3) Business Days prior to the day on which the requested Fixed Rate Loan
is to take effect. Such notice (an "Election Notice") shall specify the
effective date of the Fixed Rate Loan and the duration of the initial Interest
Period. The Borrower shall elect the duration of each succeeding Interest Period
by giving irrevocable written notice to Lender of such duration not less than
three (3) Business Days prior to the last day of the then current Interest
Period applicable to such Fixed Rate Loan. If the Lender does not receive timely
notice of the Interest Period elected by the Borrower, the Borrower shall be
deemed to have elected to convert to a Prime Rate Loan subject to Section 7.2
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below."
"Section 3.3. Monthly Statements. On a monthly basis, Lender shall render a
statement for the Term Loan and the Additional Term Loan, which statements shall
be considered correct and accepted by Borrower and conclusively binding upon
Borrower unless Borrower notifies Lender to the contrary within ten (10) days of
the receipt of any such statement by Borrower. Lender shall have the right to
debit any account of Borrower for all principal, interest and other charges on
the Term Loan and the Additional Term Loan as and when the same shall be due and
payable, if not otherwise paid by Borrower."
C. Amendment to Section 5.1 of the Loan Agreement. Section 5.1 of the
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Loan Agreement is hereby amended by inserting the words "(which shall not be
reduced by the amount of the Initial Converted Equipment Loan)" after the words
Borrowing Base so to read as follows:
"Section 5.1 Amount. Subject to the terms and conditions contained in this
Agreement and so long as no Defaulting Event has occurred, Lender agrees to make
loans (collectively, the "Subsequent Equipment Loans" and, individually, a
"Subsequent Equipment Loan") to Borrower from time to time until terminated as
provided below in principal amounts not exceeding in the aggregate at any one
time outstanding the Equipment Loan Borrowing Base (which shall not be reduced
by the amount of the Initial Converted Equipment Loan), it being agreed and
understood that at no time shall the maximum aggregate principal amount of the
Equipment Loans made by Lender exceed the Equipment Loan Borrowing Base."
D. Amendment to Section 5.2 of the Loan Agreement. Section 5.2 of the
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Loan Agreement is hereby amended by deleting (a) and substituting the following:
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"(a) copies of invoices and/or purchase orders (and proof of payment within
90 days after the date of the borrowing made with respect thereto), which
reflect the actual cost of the Eligible Equipment being purchased with the
proceeds of such Subsequent Equipment Loan, including, if any, installation and
other services and costs associated therewith;"
E. Amendment to Section 6.1 of the Loan Agreement. Section 6.1 of the
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Loan Agreement is hereby amended by inserting the words "(which shall not be
reduced by the amount of the Initial Converted Equipment Loan)" after the words
Borrowing Base so to read as follows:
"Section 6.1 Amount. Subject to the terms and conditions
contained in this Agreement and so long as no Defaulting Event has
occurred, Lender agrees to make loans (collectively, the "Final
Equipment Loans" and, individually, an "Final Equipment Loan") to
Borrower from time to time until terminated as provided below in
principal amounts not exceeding in the aggregate at any one time
outstanding the Equipment Loan Borrowing Base (which shall not be
reduced by the amount of the Initial Converted Equipment Loan or the
Subsequent Converted Equipment Loan), it being agreed and understood
that at no time shall the maximum aggregate principal amount of the
Equipment Loans made by Lender exceed the Equipment Loan Borrowing
Base."
F. Amendment to Section 7.1(a)(ii) of the Loan Agreement. Section
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7.1(a)(ii) of the Loan Agreement is hereby amended in its entirety to read as
follows:
"(ii) Term Loan and Additional Term Loan. The Term Loan and the
Additional Term Loan shall bear such type of interest as the Borrower may
elect subject to the provisions of this Agreement. The Term Loan and the
Additional Term Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a per annum
rate equal to, at the election of the Borrower: (A) if a Prime Rate Loan,
at a floating rate per annum equal to the Prime Rate plus three-quarters of
one percentage point (.75%), or (B) in the case of a Fixed Rate Loan, at a
per annum rate equal to the Fixed Rate plus three hundred twenty-five (325)
basis points."
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G. Amendment to Section 7.2(h) of the Loan Agreement. Section 7.2(h) of
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the Loan Agreement is hereby amended in its entirety to read as follows:
"(h) Term Loan and Additional Term Loan. Provided that no Event of
Default shall have occurred, the Borrower may, on any Business Day, convert
the outstanding Term Loan or Additional Term Loan bearing interest as a
Prime Rate Loan or a Fixed Rate Loan into a Fixed Rate Loan or a Prime Rate
Loan, respectively, in the same aggregate principal amount, provided,
however, that any conversion of a Fixed Rate Loan shall be made only on the
last Business Day of the then current Interest Period applicable to such
Fixed Rate Loan."
H. Amendment to Section 7.3(a) of the Loan Agreement. Section 7.3(a)
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of the Loan Agreement is hereby amended by inserting the phrase " , Additional
Term Loan" after the words "Term Loan".
I. Amendment to Section 7.7 of the Loan Agreement. Section 7.7 of the
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Loan Agreement is hereby amended in its entirety to read as follows:
"Section 7.7. Early Termination Fee. In the event that prior to June
30, 2001 (a) the Revolving Loan is terminated by the Borrower, or (b) the
Revolving Loan is terminated as a result of the occurrence of an Event of
Default, Borrower shall pay to Lender on the effective date of termination,
in addition to any other payments Borrower is required to make hereunder, a
termination fee equal to one percent (1%) of the maximum principal amount
of the Loans (the "Termination Fee"). It is understood that the
determination of the maximum principal amount of the Loans shall be made
without regard to the components of the Revolving Loan Borrowing Base based
upon Eligible Accounts and Eligible Inventory and the component of the
Equipment Loan Borrowing Base based upon Eligible Equipment. For example,
for purposes of this provision, on the date hereof the maximum principal
amount of the Revolving Loan is $5,000,000, the maximum principal amount of
the Equipment Loan is $1,250,000, the maximum principal amount of the Term
Loan is $500,000 and the maximum principal amount of the Additional Term
Loan is $1,000,000 and the Termination Fee would be $77,500."
J. Amendment to Section 11.30 of the Loan Agreement. Section 11.30 of
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the Loan Agreement is hereby amended in its entirety to read as follows:
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"Section 11.30. Debt to Worth Ratio. Permit its Debt to Worth Ratio to
be greater than (a) 4.0 to 1.0 on December 31, 1999, (b) 3.5 to 1.0 on
March 31, 2000, and (c) 3.0 to 1.0 on June 30, 2000, and at the end of each
and every fiscal quarter thereafter."
K. Amendment to Section 11.31 of the Loan Agreement. Section 11.31 of
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the Loan Agreement is hereby amended in its entirety to read as follows:
"Section 11.31. Debt Service Coverage Ratio. Permit its Debt Service
Coverage Ratio for each period of four (4) consecutive fiscal quarters to
be less than (a) 1.50 to 1.0 on December 31, 1999, (b) 1.75 to 1.0 on March
31, 2000, and (c) 2.0 to 1.0 on June 30, 2000 and at the end of each and
every fiscal quarter thereafter."
L. Amendment to Section 11.32 of the Loan Agreement. Section 11.32 of
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the Loan Agreement is hereby amended in its entirety to read as follows:
"Section 11.32. Leverage Ratio. Permit its Leverage Ratio for each
period of four (4) consecutive fiscal quarters to be greater than (a) 7.0
to 1.0 on December 31, 1999, and (b) 3.0 to 1.0 on March 31, 2000 and at
the end of each and every fiscal quarter thereafter."
M. Amendment to Section 17.1(a) of the Loan Agreement. Section 17.1(a)
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of the Loan Agreement is hereby amended by adding the words "Additional Term
Loan" to the last sentence so as to read:
"At the end of the Revolving Loan Term, Borrower shall pay the entire
balance of the Revolving Loans, the Equipment Loans, the Converted
Equipment Loans, the Term Loan, the Additional Term Loan and all other
outstanding Obligations. Further, upon termination of the Revolving Loan
facility all of the rights, interests and remedies of Lender and
Obligations of Borrower shall survive and Borrower shall have no right to
receive, and Lender shall have no obligation to make, any further Loans."
N. Amendment to Section 17.1(b) of the Loan Agreement. Section 17.1(b)
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of the Loan Agreement is hereby amended in its entirety to read as follows:
"(b) Term Loan and Additional Term Loan.
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Unless sooner terminated by Lender as a result of the occurrence of an
Event of Default (including without limitation the failure to pay the
Revolving Note upon demand or on its due date), the Term Loan shall be due
and payable in fifty-nine (59) consecutive monthly installments of
principal in the amount of $8,333.33 (plus interest in arrears) commencing
on August 1, 1998 and continuing on the first day of each and every month
thereafter through and including June 1, 2003, and (b) one final
installment of $8,332.53, plus all accrued and unpaid interest, principal
and any other sums due hereunder or under the Term Loan Note on June 30,
2003.
Unless sooner terminated by Lender as a result of the occurrence of an
Event of Default (including without limitation the failure to pay the
Revolving Note upon demand or on its due date), the Additional Term Loan
shall be due and payable in fifty-nine (59) consecutive monthly
installments of principal in the amount of $16,666.67 (plus interest in
arrears) commencing on January 1, 2000 and continuing on the first day of
each and every month thereafter through and including December 1, 2004, and
(b) one final installment of $16,666.67, plus all accrued and unpaid
interest, principal and any other sums due hereunder or under the Term Loan
Note on January 1, 2005."
(S) 1. Expenses. The Borrower agrees to pay to the Bank upon demand an amount
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equal to any and all out-of-pocket costs or expenses (including reasonable legal
fees and disbursements) incurred or sustained by the Bank in connection with the
preparation of this Agreement and related matters.
(S) 1.1. Delivery of Notes. Contemporaneously herewith, the Borrower
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shall execute and deliver to Lender: (a) an Amended and Restated Revolving Loan
Note in form and content satisfactory to Lender which shall be substantially in
the form of Exhibit A attached hereto; (b) an Additional Term Loan Note in form
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and content satisfactory to Lender which shall be substantially in the form of
Exhibit B attached hereto; and (c) an Amended and Restated Equipment Loan Note
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in form and content satisfactory to Lender which shall be substantially in the
form of Exhibit C attached hereto.
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The copy of the Revolving Loan Note attached hereto as Exhibit A shall be
deemed to be attached to the Loan Agreement as Exhibit A thereto and the note
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attached thereto as Exhibit A is hereby deleted. The copy of the Additional Term
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Loan Note attached hereto as Exhibit B shall be deemed to be attached to the
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Loan Agreement as Exhibit B-1 thereto. The copy of the Equipment Loan Note
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attached hereto as Exhibit C shall be deemed to be attached to the Loan
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Agreement as Exhibit C thereto and the note attached thereto as Exhibit C is
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hereby deleted.
(S) 1.2 Miscellaneous Provisions.
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A. Except as otherwise expressly provided by this Agreement, all of the
respective terms, conditions and provisions of the Loan Agreement, the Notes and
the other Loan Documents shall remain the same. It is declared and agreed by
each of the parties hereto that the Loan Agreement, as amended hereby, shall
continue in full force and effect, and that this Agreement and the Loan
Agreement shall be read and construed as one instrument.
B. This Agreement is intended to take effect under, and shall be
construed according to and governed by, the laws of the State of Connecticut.
C. This Agreement may be executed in any number of counterparts, but
all such counterparts shall together constitute but one instrument. In making
proof of this Agreement it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
(d) All references in the Notes and Loan Documents to "Loan Agreement"
shall mean and refer to the Loan Agreement as amended by this Agreement.
[Signatures on the following page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date first above written.
Witnesses:MEMRY CORPORATION
By: /s/
Its
Witnessed:XXXXXXX BANK
By /s/
Its
STATE OF CONNECTICUT)
)ss. _________________
COUNTY OF_____________)
Before me, the undersigned, this ____ day of November, 1999, personally
appeared ___________________, known to me to be the ____________ of MEMRY
CORPORATION and that he as such officer, signer and sealer of the foregoing
instrument, acknowledged the execution of the same to be his free act and deed
individually and as such officer, and the free act and deed of said corporation.
In Witness Whereof; I hereunto set my hand.
Notary Public
My Commission Expires:
Commissioner of the Superior Court
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STATE OF CONNECTICUT )
) ss. Hartford
COUNTY OF HARTFORD )
Before me, the undersigned, this ____ day of November, 1999 personally
appeared ________________________, known to me to be the ___________________ of
XXXXXXX BANK, and that he as such officer, signer and sealer of the foregoing
instrument, acknowledged the execution of the same to be his free act and deed
individually and as such officer, and the free act and deed of said corporation.
In Witness Whereof; I hereunto set my hand.
Notary Public
My Commission Expires:
Commissioner of the Superior Court
