EXHIBIT 10.19
AMENDMENT NO. 1
TO
SUBORDINATED PROMISSORY NOTE
DATED JULY 13, 2001
THIS AMENDMENT NO. 1 TO SUBORDINATED PROMISSORY NOTE (this "Amendment") is
entered into as of the 19th day of July, 2001 by and between Oakhurst Company,
Inc., a Delaware corporation (together with its successors and assigns, the
"Issuer") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Noteholder.")
The parties wish to amend that certain Subordinated Promissory Note dated July
13, 2001 in the original principal amount of $250,623 (the "Note") in order to
take into account the fact that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ has sold portions of the
▇▇▇▇▇▇▇ Note (as that term is defined in the Note) to third parties.
Accordingly, the Note is hereby amended as follows:
1. Paragraph 2 of the Note is amended and restated in its entirety to read as
follows:
"2. PAYMENT OF PRINCIPAL AND INTEREST.
(a) Additional Definitions. The following additional terms shall have
the following meanings:
(i) The "Davies First Note" shall mean the Issuer's Secured
Promissory Note issued to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and in which
Maarten ▇. ▇▇▇▇▇▇▇ has a participatory interest, dated
October 18, 1999, as the same is amended by that certain
Amendment to Secured Promissory Note dated as of July 13,
2001, as well as any promissory notes that result from the
sale, assignment or transfer of all or any portion of the
Davies First Note.
(ii) The "Davies Second Note" shall mean this Note, as well as
any promissory notes that result from the sale, assignment
or transfer of all or any portion of this Note.
(iii) The "▇▇▇▇▇▇▇ Note" shall mean that certain promissory note
dated July 13, 2001 issued to Maarten ▇. ▇▇▇▇▇▇▇ in the
principal amount of $136,421 and having substantially the
same terms and conditions as this Note, as well as any
promissory notes that result from the sale, assignment or
transfer of all or a portion of the ▇▇▇▇▇▇▇ Note.
(iv) The "▇▇▇▇▇▇▇ Note" shall mean the secured promissory note
of the Issuer issued to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and dated October
19, 2000 in the original principal amount of $800,000, as
the same is amended by that certain Amendment to Secured
Promissory Note dated July 18, 2001, as well as any
promissory notes that result from the sale, assignment or
transfer of all or any portion of the ▇▇▇▇▇▇▇ Note.
(v) "Net Cash Flow" shall mean (i) the operating cash flow of
Steel City Products, Inc. ("SCPI") and Sterling
Construction Company, both subsidiaries of the Issuer, to
the extent they are permitted by their bank or
institutional lenders to dividend or otherwise transfer
cash to the Issuer; plus (ii) the proceeds from the sale by
the Issuer of any shares of its common stock after the date
hereof; plus (iii) any proceeds received by the Issuer
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from the exercise of any stock options; less any or all of
the foregoing amounts that the Issuer's Board of Directors
in its sole and absolute discretion determines should be
reserved for the payment of the Issuer's past, current and
future overhead expenses.
(vi) "Net Cash Proceeds" shall mean the net proceeds received by
the Issuer from the sale of assets of SCPI (other than
sales of SCPI's inventory and other sales made in the
ordinary course of business;) less any or all of such
proceeds that the Issuer's Board of Directors in its sole
and absolute discretion determines should be reserved for
the payment of the Issuer's past, present and future
overhead expenses.
(vii) References in this Section 2 to payments being made "pro
rata" shall mean in proportion to the total amount of
accrued interest or principal (as the case may be) owed
under the notes in question at the time the computation is
made.
(b) Sources of Payment. The principal of, and accrued interest on,
this Note shall be payable prior to the Maturity Date to the
extent of any Net Cash Flow and Net Cash Proceeds of the Issuer.
(i) Application of Net Cash Flow. To the extent that Net Cash
Flow becomes available from time to time it shall be
applied in the following manner and sequence:
(A) first, to pay pro rata accrued interest on the ▇▇▇▇▇▇▇
Note and the Davies First Note;
(B) second, to pay pro rata the remaining principal
outstanding on the ▇▇▇▇▇▇▇ Note and the Davies First
Note;
(C) third, upon payment in full of all accrued interest
and outstanding principal on the ▇▇▇▇▇▇▇ Note and the
Davies First Note, to pay pro rata accrued interest on
the ▇▇▇▇▇▇▇ Note and the Davies Second Note; and
(D) fourth, to pay pro rata the then outstanding principal
of the ▇▇▇▇▇▇▇ Note and the Davies Second Note.
(ii) Application of Net Cash Proceeds. Any Net Cash Proceeds
that become available shall be applied in the following
manner:
(A) first, to pay pro rata any accrued interest on the
▇▇▇▇▇▇▇ Note and the Davies First Note;
(B) second, equal amounts of remaining Net Cash Proceeds
shall be applied to the repayment of the ▇▇▇▇▇▇▇ Note
and the Davies First Note until all accrued interest
and outstanding principal on the ▇▇▇▇▇▇▇ Note and the
Davies First Note have been paid in full;
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(C) third, to repay any remaining outstanding principal
balance of the ▇▇▇▇▇▇▇ Note;
(D) fourth, upon payment in full of all accrued interest
and outstanding principal on the ▇▇▇▇▇▇▇ Note and the
Davies First Note, to pay pro rata accrued interest on
the ▇▇▇▇▇▇▇ Note and the Davies Second Note; and
(E) fifth, to repay pro rata the principal outstanding on
the ▇▇▇▇▇▇▇ Note and the Davies Second Note.
(c) Extension of Maturity Date. To the extent that all accrued
interest and the outstanding principal of this Note have not been
paid on or before the Maturity date, the Issuer may request an
extension of the Maturity Date until sufficient Net Cash Flow
and/or Net Cash Proceeds are available to do so, but Noteholder
shall have no obligation to grant such an extension.
(d) Compounding of Interest. Accrued but unpaid interest will be
added to the principal balance hereof annually.
(e) No Impairment of Payment Obligation. No provision of this Note
shall alter or impair the obligations of the Issuer to pay the
principal of, or interest on, this Note at the place and time,
and in the currency, herein prescribed.
(f) Prepayment. The principal hereunder shall be subject to
prepayment by the Issuer at any time without the consent of the
Noteholder and without premium or penalty, subject to any
restriction on prepayment required by Comerica.
(g) Certain Note Transfers. If any of this Note, the ▇▇▇▇▇▇▇ Note,
the Davies First Note or the ▇▇▇▇▇▇▇ Note (individually, a
"Transferred Note") are sold, assigned or transferred (which
sale, assignment or transfer shall be in full compliance with
applicable securities laws) and new notes are issued to reflect
such sale, assignment or transfer (individually, a "New Note" and
collectively, "New Notes"), the amount of Net Cash Flow and Net
Cash Proceeds that would have been applied to the Transferred
Note under the terms of this Note shall be applied to the New
Notes in proportion to the total amount of accrued interest or
principal, as the case may be, owed under the New Notes at the
time the computation is made."
2. Subparagraph (a) of Paragraph 7 of the Note is amended and restated in its
entirety to read as follows:
"No payment on account of principal of, or interest on, (i) that
certain promissory note dated July 3, 2001 in the original principal
amount of $1,000,000 issued to KTI, Inc.; (ii) the Davies First Note;
(iv) the ▇▇▇▇▇▇▇ Note; (iii) the ▇▇▇▇▇▇▇ Note; (iv) the Davies Second
Note; or (v) any other promissory note issued contemporaneously
herewith pursuant to the Transaction Agreement (each a "Subordinated
Note and collectively, the "Subordinated Notes") shall be made, and no
Subordinated Notes shall be redeemed or purchased directly or
indirectly by the Issuer (or any of its subsidiaries), if at the time
of such payment or purchase or immediately after giving effect
thereto, (i) there shall exist a default in any payment with respect
to the Senior Indebtedness or (ii) there shall have occurred an event
of default as those terms may be defined in the instrument under which
the same is outstanding (other than a default in the payment of
amounts due thereon) with respect to the Senior Indebtedness,
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permitting the holders thereof to accelerate the maturity thereof, and
such event of default shall not have been cured or waived or shall not
have ceased to exist."
3. In all other respects, the Note shall remain as originally written.
IN WITNESS WHEREOF, the Issuer and the Noteholder have caused this Amendment to
be duly executed as of the date first set forth above.
OAKHURST COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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