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EXHIBIT 10.4(d)
THIRD MODIFICATION AGREEMENT
DATE: March 28, 1997
PARTIES: Borrower: XXXXXX INSTRUMENT CORPORATION,
an Indiana corporation
Lender: BANK ONE, ARIZONA, NA,
a national banking association
RECITALS:
A. Pursuant to that Loan Agreement dated August 28, 1995 (the "Loan
Agreement"), Lender has extended to Borrower the following credit facilities
(the "Loans"):
1. A revolving line of credit (the "RLC") in the principal amount of
$4,000,000.00, evidenced by the Revolving Promissory Note, dated August
28, 1995 ("RLC Note"). The unpaid principal of the RLC as of August 2,
1996 was $1,603,150.75.
2. A term loan (the "Term Loan") in the principal amount of
$4,200,000.00, evidenced by the Promissory Note (Term Note), dated
August 28, 1995 ("Term Note"). The unpaid principal of the Term Note as
of August 2, 1996 was $3,895,000.00.
B. The Loans are secured by, among other things, the following:
1. Mortgage, Security Agreement, Assignment of Rents and Fixture
Filing, dated August 28, 1995 (the "Indiana Mortgage"), by Borrower, as
debtor, in favor of Lender, as secured party, covering real property
located in Xxxxx County, Indiana.
2. Mortgage, Security Agreement, Assignment of Rents and Fixture
Filing, dated August 28, 1995 ("Massachusetts Mortgage"), by
Xxxxxx/ALI, Inc., a Massachusetts corporation ("Xxxxxx/ALI"), as
debtor, in favor of Lender, as secured party, covering real property
located in Middlesex County, Massachusetts.
3. Security Agreement dated August 28, 1995 (the "Security
Agreement"), by Borrower, as debtor, in favor of Lender, as secured
party, covering the personal property described therein.
The agreements, documents, and instruments securing the Loans are referred to
individually and collectively as the "Security Documents."
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C. Lender and Borrower have previously executed a Modification
Agreement dated April 26, 1996 and a Second Modification dated August 9, 1996
(collectively, the "Modifications"), modifying the terms of the Loans, the RLC
Note, the Term Note, the Loan Agreement and/or the Security Documents. The RLC
Note and the Term Note are sometimes referred to individually and collectively
as the "Note." The Note, the Loan Agreement, the Security Documents, any
arbitration resolution, any environmental certification and indemnity agreement,
and all other agreements, documents, and instruments evidencing, securing, or
otherwise relating to the Loans, as modified by the Modifications, are sometimes
referred to individually and collectively as the "Loan Documents." Hereinafter,
"Note," "Loan Agreement," and each "Security Document," shall mean such document
as modified in the Modifications.
D. Borrower has requested that Lender provide Borrower with an
additional revolving line of credit/term loan in the amount of $1,200,000.00
(the "RLT") and modify certain provisions in the Loan Documents as provided
herein. Lender is willing to extend to Borrower such additional loan and so
modify the Loan Documents, subject to the terms and conditions herein.
AGREEMENT:
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and Lender agree as follows:
SECTION 1. ACCURACY OF RECITALS.
Borrower acknowledges the accuracy of the Recitals.
SECTION 2. MODIFICATION OF LOAN DOCUMENTS; OTHER AGREEMENTS.
2.1 Effective as of February 28, 1997, the definition of "Floating
Rate" on the first page of the RLC Note is hereby amended in its entirety to
read as follows:
"Floating Rate" means the rate per annum equal to the sum of (i)
one-half of one percent (O.5%) per annum, and (ii) the Prime Rate per
annum as in effect from time to time. The Floating Rate will change on
each day that the "Prime Rate" changes.
2.2 The maturity date of the RLC and the RLC Note is changed from
February 28, 1998, to February 28, 1999. The definition of "Maturity Date" on
the first page of the RLC Note is hereby amended in its entirety to read as
follows:
"Maturity Date" means February 28, 1999.
2.3 Recital C on page 1 of the Loan Agreement is hereby amended in its
entirety to read as follows:
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C. Borrower has also applied to Lender for a revolving line of
credit/term loan facility (the "RLT" and with the RLC and the Term
Loan, the "Loans") in, the principal amount of ONE MILLION TWO HUNDRED
THOUSAND AND NO/100 DOLLARS ($1,200,000.00) (the "RLT Amount") for the
purpose of financing leasehold improvements on Borrower's new
manufacturing facility.
2.4 The following definitions are either added to Section 1.1 of the
Loan Agreement or are set forth in Section 1.1 of the Loan Agreement and are
hereby amended in their entirety to read as follows:
"Advance" means RLC Advances, the Term Advance and RLT Advances.
"Borrowing Base" means an amount equal to:
(a) Eighty percent (80%) of the outstanding amount of all
Eligible Accounts Receivable of Borrower, as determined in
accordance with GAAP; plus
(b) The lesser of (i) forty percent (40%) of the lower of cost
or market value on an inventory line item basis the Net Eligible
Inventory of Borrower, as determined in accordance with GAAP, and
(ii) $1,500,000.00.
"Floating Rate Factor" means:
(a) For the RLC, one-half of one percent (0.5%).
(b) For the Term Loan, one and one quarter percent (1.25%).
(c) For the RLT, prior to the RLT Termination Date, one half
of one percent (0.5%).
(d) For the RLT, commencing on the RLT Termination Date and
continuing thereafter, one percent (1.0%).
"Loans" means the RLC, the Term Loan and the RLT, each being a Loan.
"Notes" means the RLC Note, the Term Note and the RLT Note, each
being a Note.
"RLC Maturity Date" means February 28, 1999.
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"RLT": See Recital C hereto.
"RLT Advance" means a disbursement of the proceeds of the RLT.
"RLT Amount" means the sum of ONE MILLION TWO HUNDRED THOUSAND AND
NO/100 DOLLARS ($1,200,000.00).
"RLT Fee": See Section 5.4 hereof.
"RLT Maturity Date" means March 31, 2002.
"RLT Note" means the Promissory Note dated March 28, 1997 in the
amount of the RLT executed by Borrower and delivered pursuant to the
terms of this Loan Agreement, together with any renewals, extensions,
modifications or replacements thereof.
"RLT Termination Date" means the date that is twelve (12) months
after the date of the RLT Note.
"Unused RLT Fee": See Section 5.5 hereof.
2.5 Section 2.2 of the Loan Agreement is hereby amended in its entirety
to read as follows:
2.2 Revolving Line. Subject to the terms and conditions set forth in
this Loan Agreement, the RLC shall be a revolving line of credit,
against which RLC Advances may be made to Borrower, repaid by Borrower,
and new RLC Advances made to Borrower, as Borrower may request,
provided that (i) no RLC Advance shall be made if an Event of Default
shall be continuing, or if any event has occurred which, with the
giving of notice or passage of time, or both, would constitute an Event
of Default, (ii) no RLC Advance shall be made that would cause the
outstanding principal balance of the RLC to exceed the lesser of (A)
the RLC Commitment, or (B) an amount equal to the Borrowing Base less
the principal balance of the RLT outstanding from time to time, and
(iii) no RLC Advance shall be made on or after the RLC Maturity Date.
2.6 Section 2.5 of the Loan Agreement is hereby amended in its entirety
to read as follows:
2.5 Excess Balance Repayment. There shall be due and payable from
Borrower to Lender, and Borrower shall immediately repay to Lender,
without notice or demand, from time to time, any amount by which the
outstanding principal balance of the RLC exceeds the lesser of (i) the
RLC Commitment, or (ii)
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an amount equal to the Borrowing Base less the principal balance of the
RLT outstanding from time to time.
2.7 Article 4 of the Loan Agreement is hereby amended in its entirety
to read as follows:
ARTICLE 4
THE RLT
4.1 RLT Commitment. Lender agrees to loan to or for the benefit of
Borrower, and Borrower agrees to draw upon and borrow, in the manner
and upon the terms and conditions contained in this Loan Agreement,
amounts that in the aggregate at any time outstanding shall not exceed
the RLT Amount.
4.2 Revolving Line. Subject to the terms and conditions set forth in
this Loan Agreement, prior to the RLT Termination Date, the RLT shall
be a revolving line of credit, against which RLT Advances may be made
to Borrower, repaid by Borrower, and new RLT Advances made to Borrower,
as Borrower may request, provided that (i) no RLT Advance shall be made
if an Event of Default shall be continuing, or if any event has
occurred which, with the giving of notice or passage of time, or both,
would constitute an Event of Default, (ii) no RLT Advance shall be made
that would cause the outstanding principal balance of the RLT to exceed
the RLT Amount, (iii) no RLT Advance shall be made on or after the RLT
Termination Date, and (iv) no RLT Advance shall be made if, after the
making of such Advance, the outstanding principal balance of the RLT
plus the outstanding principal balance of the RLC would exceed the
Borrowing Base. On and after the RLT Termination Date, the RLT shall no
longer constitute a revolving line of credit and no further RLT
Advances shall be made to Borrower under the RLT.
4.3 RLT Note. The RLT shall be evidenced by the RLT Note, and shall
bear interest and be payable to Lender upon the terms and conditions
contained therein.
4.4 Principal Prepayments. Borrower may prepay the outstanding
principal balance of the RLT Note in accordance with the terms and
provisions of the RLT Note, including without limitation, any
prepayment premium required therein.
4.5 Notice of RLT Advance. RLT Advances shall be made by Lender to
Borrower upon written notice or telephonic notice followed by facsimile
notice from Borrower to Lender specifying the date and amount of the
requested RLT Advance.
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4.6 Excess Balance Repayment. There shall be due and payable from
Borrower to Lender, and Borrower shall immediately repay to Lender,
without notice or demand, from time to time, (i) any amount by which
the outstanding principal balance of the RLT exceeds the RLT Amount,
and (ii) any amount by which the outstanding principal balance of the
RLT plus the outstanding principal balance of the RLC exceeds the
Borrowing Base.
4.7 Method of Payment. All payments of principal of, and interest
on, the RLT Note shall be made to Lender before 2:00 p.m. (Phoenix,
Arizona time), in immediately available funds. All payments made on the
RLT Note shall be applied, to the extent of the amount thereof, in the
order of priority to be determined by Lender in its sole discretion:
(i) to the payment of costs, fees or other charges incurred in
connection with the RLT; (ii) to the payment of accrued interest on the
RLT; and/or (iii) to the reduction of the principal balance.
4.8 Conditions. Lender shall have no obligation to make any RLT
Advance unless and until all of the conditions and requirements of this
Loan Agreement are fully satisfied. However, Lender in its sole and
absolute discretion may elect to make one or more RLT Advances prior to
full satisfaction of one or more such conditions and/or requirements.
Notwithstanding that such an RLT Advance or RLT Advances are made, such
unsatisfied conditions and/or requirements shall not be waived or
released thereby. Borrower shall be and continue to be obligated to
fully satisfy such conditions and requirements, and Lender, at any
time, in Lender's sole and absolute discretion, may stop making RLT
Advances until all conditions and requirements are fully satisfied.
4.9 Other RLT Advances by Lender. Lender, after giving ten (10) days
written notice to Borrower, from time to time, may make RLT Advances in
any amount in payment of (i) insurance premiums, taxes, assessments,
liens or encumbrances existing against property encumbered by the
Security Documents, (ii) interest accrued and unpaid upon the RLT,
(iii) any charges and expenses that are the obligation of Borrower
under this Loan Agreement or any Security Document, and (iv) any
charges or matters necessary to preserve the property encumbered by the
Security Documents or to cure any Event of Default.
4.10 Assignment. Borrower shall have no right to any RLT Advance
other than to have the same disbursed by Lender in accordance with the
disbursement provisions contained in this Loan Agreement. Any
assignment or transfer, voluntary or involuntary, of this Loan
Agreement or any right hereunder shall not be binding upon or in any
way affect Lender without its written consent; Lender may make RLT
Advances under the disbursement provisions herein, notwithstanding any
such assignment or transfer.
2.8 The following new Sections 5.4 and 5.5 are hereby added to the Loan
Agreement:
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5.4 RLT Fee. In connection with the RLT, Lender has earned and
Borrower shall pay to Lender on or before the closing of the RLT a
non-refundable RLT Fee (the "RLT Fee") in the amount of $1,000.00.
5.5 Unused RLT Fee. Prior to the RLT Termination Date, an unused RLT
fee (the "Unused RLT Fee") computed at the rate of one-quarter of one
percent (.25%) per annum on the unused portion of the RLT Amount,
calculated from the date of the RLT Note shall be payable monthly in
arrears. For each month (or portion thereof), the unused commitment fee
shall be equal to (A) the RLT Amount minus (B) the "average monthly
outstandings" for the month (or portion thereof) with respect to which
the Unused RLT Fee is being computed, with the resulting number
multiplied by (C) one-twelfth (1/12th) of the rate per annum set forth
above. As used herein, "average monthly outstandings" means the sum of
the outstanding amount of the RLT Advances on each day during the month
(or portion thereof for which the unused RLT Fee is being computed)
with respect to which the Unused RLT Fee is being computed, divided by
the number of days in that month (or portion thereof). If the unused
RLT Fee is being computed for less than a full month, the percentage
used in clause (C) above shall be computed on a daily basis for the
number of days for which the fee is being computed.
2.9 The Security Agreement is hereby amended to secure, in addition to
the obligations and indebtedness described therein, the RLT. Section 2(c) of the
Security Agreement is hereby amended in its entirety to read as follows:
(c) Payment of the sum of $1,200,000.00 according to the terms of
that Revolving Promissory Note dated March 28, 1997, made by Debtor,
payable to the order of Secured Party, evidencing a revolving line of
credit, all or any part of which may be advanced to Debtor, repaid by
Debtor and readvanced to Debtor, from time to time, subject to the
terms and conditions thereof, with interest thereon, extension and
other fees, late charges, prepayment premiums and attorneys' fees,
according to the terms thereof, and all extensions, modifications,
renewals or replacements thereof (hereinafter called the "RLT Note")
(the RLC Note, the Term Note and the RLT Note are hereinafter severally
and collectively called the "Note");
2.10 Borrower agrees that pursuant to that Modification of Mortgage
(Massachusetts) and that Modification of Mortgage (Indiana) the Massachusetts
Mortgage and the Indiana Mortgage shall be modified to secure repayment of the
RLT.
2.11 Each of the Loan Documents is modified to provide that it shall be
a default or an event of default thereunder if Borrower shall fail to comply
with any of the covenants of Borrower herein or if any representation or
warranty by Borrower herein is materially incomplete, incorrect, or misleading
as of the date hereof.
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2.12 Each reference in the Loan Documents to any of the Loan Documents
is hereby amended to be a reference to such document as modified herein and in
any modification of mortgage executed in connection herewith.
SECTION 3. RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.
The Loan Documents are ratified and affirmed by Borrower and shall
remain in full force and effect as modified herein. Any property or rights to or
interests in property granted as security in the Loan Documents shall remain as
security for the Loans and the obligations of Borrower in the Loan Documents.
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender:
4.1 No default or event of default under any of the Loan Documents as
modified herein, nor any event, that, with the giving of notice or the passage
of time or both, would be a default or an event of default under the Loan
Documents as modified herein has occurred and is continuing.
4.2 There has been no material adverse change in the financial
condition of Borrower or any other person whose financial statement has been
delivered to Lender in connection with the Loans from the most recent financial
statement received by Lender.
4.3 Each and all representations and warranties of Borrower in the Loan
Documents are accurate on the date hereof.
4.4 Borrower has no claims, counterclaims, defenses, or set-offs with
respect to the Loans or the Loan Documents as modified herein.
4.5 The Loan Documents as modified herein are the legal, valid, and
binding obligation of Borrower, enforceable against Borrower in accordance with
their terms.
4.6 Borrower is validly existing under the laws of the State of its
formation or organization and has the requisite power and authority to execute
and deliver this Agreement and to perform the Loan Documents as modified herein.
The execution and delivery of this Agreement and the performance of the Loan
Documents as modified herein have been duly authorized by all requisite action
by or on behalf of Borrower. This Agreement has been duly executed and delivered
on behalf of Borrower.
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SECTION 5. BORROWER COVENANTS.
Borrower covenants with Lender:
5.1 Borrower shall execute, deliver, and provide to Lender such
additional agreements, documents, and instruments as reasonably required by
Lender to effectuate the intent of this Agreement.
5.2 Borrower fully, finally, and absolutely and forever releases and
discharges Lender and its present and former directors, shareholders, officers,
employees, agents, representatives, successors and assigns, and their separate
and respective heirs, personal representatives, successors and assigns, from any
and all actions, causes of action, claims, debts, damages, demands, liabilities,
obligations, and suits, of whatever kind or nature, in law or equity of
Borrower, whether now known or unknown to Borrower, and whether contingent or
matured, (i) in respect of the Loans, the Loan Documents, or the actions or
omissions of Lender in respect of the Loans or the Loan Documents and (ii)
arising from events occurring prior to the date of this Agreement.
SECTION 6. CONDITIONS PRECEDENT.
The agreements of Lender and the modifications contained herein shall
not be binding upon Lender until Lender has executed and delivered this
Agreement and Lender has received, at Borrower's expense, all of the following,
all of which shall be in form and content satisfactory to Lender and shall be
subject to approval by Lender:
6.1 An original of this Agreement fully executed by the Borrower and
Xxxxxx/ALI;
6.2 An original Modification of Mortgage (Indiana) fully executed by
the Borrower;
6.3 An original Modification of Mortgage (Massachusetts) fully executed
by Xxxxxx/ALI;
6.4 An RLT fee in the amount of $1,000.00;
6.5 Commitments from the title insurance companies that issued the
lender's ALTA extended coverage title insurance policies in connection with the
Loans (the "Title Policies") to issue endorsements, in form satisfactory to
Lender, to the Title Policies, insuring that the Massachusetts Mortgage and the
Indiana Mortgage, as modified by the applicable Modification of Mortgage,
continue to be first liens upon the real property described therein, as security
for the RLC, the Term Loan and the RLT, as modified herein, subject only to
those exceptions contained in the Title Policies and to such additional
exceptions as Lender may specifically approve in writing
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6.6 If Borrower or Xxxxxx/ALI is a corporation, limited liability
company, partnership or trust, such resolutions or authorizations and such other
documents as Lender may require relating to the existence and good standing of
that corporation, partnership or trust, and the authority of any person
executing this Agreement or other documents on behalf of that corporation,
limited liability company, partnership or trust; and
6.7 Payment of all the internal and external costs and expenses
incurred by Lender in connection with this Agreement (including, without
limitation, outside attorneys, appraisal, appraisal review, processing, title,
filing and recording costs, expenses, and fees).
SECTION 7. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE TERMINATION,
OR WAIVER.
The Loan Documents as modified herein contain the complete
understanding and agreement of Borrower and Lender in respect of the Loans and
supersede all prior representations, warranties, agreements, arrangements,
understandings, and negotiations. No provision of the Loan Documents as modified
herein may be changed, discharged, supplemented, terminated, or waived except in
a writing signed by the parties thereto.
SECTION 8. BINDING EFFECT.
The Loan Documents as modified herein shall be binding upon and shall
inure to the benefit of Borrower and Lender and their successors and assigns and
the executors, legal administrators, personal representatives, heirs, devisees,
and beneficiaries of Borrower, provided, however, Borrower may not assign any of
its right or delegate any of its obligation under the Loan Documents and any
purported assignment or delegation shall be void.
SECTION 9. CHOICE OF LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Arizona, without giving effect to conflicts of law
principles.
SECTION 10. COUNTERPART EXECUTION.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same document.
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Signature pages may be detached from the counterparts and attached to a single
copy of this Agreement to physically form one document.
DATED as of the date first above stated.
XXXXXX INSTRUMENT CORPORATION, an
Indiana corporation
By: /s/ Xxxxxx X. Xxxxxx Xx.
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Name: Xxxxxx X. Xxxxxx Xx.
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Title: Vice President
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BORROWER
BANK ONE, ARIZONA, NA, a national banking
association
By: /s/ Xxxxxxx XxXxxx
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Name: Xxxxxxx XxXxxx
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Title: Vice President
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LENDER
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CONSENT AND AGREEMENT
The undersigned, as the debtor under the Massachusetts Mortgage
described in the foregoing Third Modification Agreement, hereby consents and
agrees to the modification of the Loan Documents, the extension of the RLT to
Borrower and all other matters contained in the foregoing Third Modification
Agreement and agrees that the Massachusetts Mortgage shall hereinafter secure
payment of the RLT.
XXXXXX/ALI, INC., a Massachusetts corporation
By: /s/ Xxxxxx X. Xxxxxx Xx.
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Name: Xxxxxx X. Xxxxxx Xx.
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Title: Vice President
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