EXHIBIT 10UU
------------
ADVANCED DEPOSITION TECHNOLOGIES, INC.
Myles Standish Industrial Park
Taunton, Massachusetts 02780
Dated as of: September 2, 1999
National Bank of Canada
One Federal Street, 27th Floor
Boston, Massachusetts 02110
Re: Modification No. 4 to Revolving Credit and Term Loan Agreement
--------------------------------------------------------------
Ladies and Gentlemen:
We refer to the Revolving Credit and Term Loan Agreement, dated as of
July 8, 1996 (as from time to time amended and in effect, the "Agreement"),
between Advanced Deposition Technologies, Inc. (the "Borrower") and National
Bank of Canada (the "Lender"). Terms used in this letter of agreement which are
not defined herein, but which are defined in the Agreement, shall have the same
respective meanings herein as therein.
We have requested you (i) to make available a temporary overadvance
facility in the amount of $500,000, (ii) to modify certain of our financial
covenants, and (iii) to make the amendments to the Agreement necessitated
thereby. You have advised us that you are prepared and would be pleased to
provide such overadvances and to make the amendments so requested by us on the
condition that we join with you in this letter of agreement.
Accordingly, in consideration of these premises, the promises, mutual
covenants and agreements contained in this letter of agreement, and fully
intending to be legally bound by this letter of agreement, we hereby agree with
you as follows:
ARTICLE I
---------
AMENDMENTS TO AGREEMENT
-----------------------
Effective as of September 2, 1999 (in this letter of agreement, the
"Modification Date"), the Agreement is amended as follows:
(a) The term "Loan Documents" shall, wherever used in the Agreement or
any of the other Loan Documents, be deemed to also mean and include Modification
No. 4 and all other documents executed and delivered in connection therewith.
(b) The term "Obligations" shall, wherever used in the Agreement or any
of the other Loan Documents, be deemed to also mean and include all obligations
of the Borrower to the Lender under or in respect of Modification No. 4 and any
and all Overadvances.
(c) The following four new definitions are added at the end of Section
1.1 of the Agreement:
"Modification No. 4" means that certain letter agreement dated as
of September 2, 1999 between the Borrower and the Lender, upon the
terms of which the Agreement was further modified and amended.
"Fourth Modification Date" means September 2, 1999.
"Overadvance Maximum Amount" shall have the meaning set forth in
Section 2.1.3.
"Overadvances" shall have the meaning set forth in Section 2.1.3.
(d) The following new Section 2.1.3 is inserted immediately following
Section 2.1.2 of the Agreement:
-1-
<PAGE>
"Overadvances. Notwithstanding the provisions of Section 2.1.1, at
the Borrower's request, the Lender will make Revolving Loans to the
Borrower at a time when the debit balance in the Loan Account in
respect of Revolving Loans exceeds the Borrowing Base or which cause
the debit balance in the Loan Account in respect of Revolving Loans to
exceed the Borrowing Base (any such Loan or Loans being herein referred
to individually as an "Overadvance" and collectively as
"Overadvances"), provided that: (i) the aggregate amount of
Overadvances at any one time outstanding shall not exceed $500,000 (the
"Overadvance Maximum Amount"); (ii) in no event shall the debit balance
in the Loan Account in respect of Revolving Loans at any one time
outstanding exceed the Revolving Credit Maximum Amount; and (iii) no
Default or Event of Default shall exist hereunder at the time any
Overadvance is requested or outstanding. Failure of the Borrower to
maintain any of the foregoing conditions shall constitute an immediate
Event of Default hereunder, and shall be deemed to be a failure to
perform an Obligation hereunder. The Lender shall enter such
Overadvances, along with all interest, expenses and charges relating
thereto, as debits in the Loan Account. On January 1, 2000 and on the
first Business Day of each calendar month thereafter, the Overadvance
Maximum Amount shall be automatically reduced by $28,000. Each
reduction of the Overadvance Maximum Amount shall be permanent. If at
any time the aggregate principal amount of all Overadvances outstanding
hereunder shall exceed the Overadvance Maximum Amount then in effect,
the Borrower shall immediately pay to the Lender the amount of such
excess. Notwithstanding anything contained in this Section 2.1.3 or
otherwise, unless sooner demanded as a result of the failure to meet
any of the conditions set forth in clauses (i) through (iii) above, the
Overadvance Maximum Amount shall be reduced to zero and the Borrower
shall pay all outstanding Overadvances on or before June 1, 2001.
Prior to the occurrence of an Event of Default, outstanding
Overadvances shall bear interest at a rate per annum equal to one
percent (1%) above the Base Rate in effect from time to time. After the
occurrence of an Event of Default, outstanding Overadvances shall bear
interest at the default rate otherwise applicable to the Loans pursuant
to Section 2.3.1."
(e) The definition of "M&E Loan Maturity Date" is amended to read
in its entirety as follows:
"`M&E Loan Maturity Date" means April 1, 2005.'"
(f) Section 2.2.2(B) of the Agreement is amended: (i) by deleting
the reference to "October 1, 1999" contained therein; and (ii) by
inserting in place thereof the following: "April 1, 2000."
(g) Section 5.14 of the Agreement is amended in its entirety to
read as follows:
"5.14 Minimum Tangible Net Worth. The Borrower will not permit
its Tangible Net Worth at any fiscal quarter-end specified below to be
less than the amount identified below as applicable to such fiscal
quarter:
Minimum
Fiscal Quarter-End Tangible Net Worth
------------------ ------------------
For any fiscal quarter
ending on or after
December 31, 1999
through and including
September 30, 2000 $3,500,000
For any fiscal quarter
ending on or after
December 31, 2000
through the Maturity Date $3,800,000."
(h) Section 5.15 of the Agreement is amended in its entirety to
read as follows:
-2-
<PAGE>
"5.15 Senior Indebtedness to Tangible Net Worth. The Borrower
will not permit the ratio of (i) Senior Indebtedness to (ii) Tangible
Net Worth at any fiscal quarter-end specified below to be more than the
ratio identified below as applicable to such fiscal quarter:
Fiscal Quarter-End Ratio
------------------ -----
For the fiscal quarter
ending on or after
December 31, 1999
through and including
September 30, 2000 5.5 to 1.0
For any fiscal quarter
ending on or after
December 31, 2000
through the Maturity Date 4.75 to 1.0."
(i) Section 5.17 of the Agreement is amended in its entirety to
read as follows:
"5.17 Minimum Net Income. The Borrower will not permit its Net
Income to be less than (i) $200 for the fiscal year ending December 31,
1999, and (ii) $300 for any fiscal year thereafter."
ARTICLE II
----------
AMENDMENTS TO M&E NOTE
----------------------
Effective as of the Modification Date, the M&E Note is amended: (i) by
deleting the references to "October 1, 1999" and "October 1, 2004" contained in
the first paragraph thereof; and (ii) by respectively inserting in place thereof
the following: "April 1, 2000" and "April 1, 2005."
-3-
<PAGE>
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to you as follows:
(a) Representations in Agreement: Each of the representations and
warranties made by or on behalf of the Borrower to you in the Agreement or any
other Loan Document, as amended through this letter of agreement, was true and
correct when made and is true and correct on and as of the Modification Date
with the same full force and effect as if each of such representations and
warranties had been made by the Borrower on the date hereof and in this letter
of agreement, except to the extent that such representations and warranties
relate solely to a prior date.
(b) No Events of Default: No Default or Event of Default exists on the
Modification Date (after giving effect to all of the arrangements and
transactions contemplated by this letter of agreement).
(c) Binding Effect of Documents. This letter of agreement has been duly
executed and delivered to you by the Borrower and is in full force and effect as
of the date hereof, and the agreements and obligations of the Borrower contained
herein and therein constitute legal, valid, and binding obligations of the
Borrower enforceable against the Borrower in accordance with their respective
terms.
ARTICLE IV
----------
PROVISIONS OF GENERAL APPLICATION
---------------------------------
(a) No Other Changes. Except as otherwise expressly provided by this
letter of agreement, all of the terms, conditions and provisions of the
Agreement and each of the other Loan Documents remain unaltered. The Agreement
and this letter of agreement shall be read and construed as one agreement.
Except to the extent specifically amended hereby, the provisions of the
Agreement shall remain unmodified, and the Agreement, as amended hereby, is
hereby confirmed as being in full force and effect, and the Borrower hereby
ratifies and confirms all of its agreements and obligations contained therein or
in the other Loan Documents.
(b) Governing Law. This letter of agreement is intended to take effect
as a sealed instrument and shall be deemed to be a contract under the laws of
the Commonwealth of Massachusetts. This letter of agreement and the rights and
obligations of each of the parties hereto shall be governed by and interpreted
and determined in accordance with the laws of the Commonwealth of Massachusetts.
(c) Binding Effect; Assignment. This letter of agreement shall be
binding upon and inure to the benefit of each of the parties hereto and their
respective successors in title and assigns.
(d) Counterparts. This letter of agreement may be executed in any
number of counterparts, but all such counterparts shall together constitute but
one and the same agreement. In making proof of this letter of agreement, it
shall not be necessary to produce or account for more than one counterpart
thereof signed by each of the parties hereto.
(e) Conflict with Other Agreements. If any of the terms of this letter
of agreement shall conflict in any respect with any of the terms of the
Agreement or any other Loan Document, the terms of this letter of agreement
shall be controlling.
(f) Conditions Precedent. This letter of agreement shall become
effective as of the Modification Date, but only if the form of acceptance at the
end of this letter of agreement shall be signed by the Lender.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter of agreement and return
such counterpart to the undersigned, whereupon this letter of agreement, as so
accepted by you, shall become a binding agreement between you and the
undersigned.
Very truly yours,
The Borrower:
-------------
ADVANCED DEPOSITION TECHNOLOGIES, INC.
By: /s/ Joseph Keller
----------------------------
Title: Controller
--------------------------
The foregoing agreement is hereby accepted by the undersigned as of
September 2, 1999.
The Lender:
-----------
NATIONAL BANK OF CANADA
By: /s/ A. Keith Broyles
----------------------------
Title: Vice President and Manager
--------------------------
By: /s/ Leonard J. Pellecchia
----------------------------
Title: Vice President
--------------------------
-4-
