EXHIBIT 10.10
SECOND AMENDMENT TO LETTER LOAN AGREEMENT
THIS SECOND AMENDMENT TO LETTER LOAN AGREEMENT ("Amendment") is made and
entered into effective as of March 18, 1997, by and between D. A. CONSULTING
GROUP, INC., a Texas corporation, formerly known as Documentation Associates,
Inc., a Texas corporation (herein called "Borrower"), and SOUTHWEST BANK OF
TEXAS, N.A., a national banking association with offices in Houston, Texas
(herein called "Lender").
R E C I T A L S:
WHEREAS, Documentation Associates, Inc. and Lender entered into a Letter
Loan Agreement dated March 18, 1996, as amended by First Amendment to Letter
Loan Agreement dated November, 1996 executed by and between Borrower and Lender
(which, as amended, is herein called the "Loan Agreement"; the terms defined
therein being used herein as therein defined unless otherwise defined herein);
and
WHEREAS, Borrower and Lender desire to further amend the Loan Agreement
to (i) extend the maturity date of the Note, (ii) increase the principal amount
of the Note, and (iii) amend certain terms and provisions of the Loan Agreement.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, Borrower and Lender hereby agree to amend the Loan Agreement as
hereinafter set forth.
1. AMENDMENTS TO LOAN AGREEMENT.
(a) The references to "1,000,000.00" in the opening paragraph,
paragraph 1 and paragraph 2 of the Loan Agreement are deleted and replaced with
"1,500,000.00".
(b) Section 5 of the Loan Agreement is effective the date hereof and
subject to the satisfaction of the conditions precedent set forth in Section 2
hereof, hereby amended as follows:
(i) Subsection (d) is hereby deleted and replaced with the
following:
"(d) Borrower shall furnish to Lender within thirty (30)
days after the end of June 30, 1997, and each June 30 after June 30,
1997, field audit reports prepared by a company mutually acceptable to
Lender and Borrower, in a form acceptable to Lender;"
(ii) Subsection (q) is deleted and replaced with the following
provision:
"(q) Borrower shall pay a letter of credit commission to
Lender in respect of each Letter of Credit issued by Lender equal to the
greater of $250 or an amount determined by multiplying (i) one percent
(1%) of the face amount of such Letter of Credit by (ii) a fraction, the
numerator of which shall be the number of days between the date of such
Letter of Credit and the stated expiration date thereof and the
denominator of which shall be 360; such commission shall be payable at
the time a Letter of Credit is issued and upon any renewal or extension
thereof; additionally, Borrower agrees to reimburse Lender for all
actual out-of-pocket expenses incurred by Lender, such as advising or
confirming bank fees, telex charges and the like and to pay those fees
customarily charged by Lender for any amendments to a Letter of Credit."
(c) Section 6 of the Loan Agreement is effective as of the date hereof
and subject to the satisfaction of the conditions precedent set forth in
Section 2 hereof, hereby amended as follows:
(i) Subsection 6(a) is deleted and replaced with the following:
"(a) Permit at any time Borrower's Tangible Net Worth to be
less than $1,750,000.00, as used herein, the term "Tangible Net Worth"
shall mean the total assets of Borrower, minus its total liabilities
(including contingent liabilities), minus all intangibles, expenses and
other items deducted in arriving at tangible net worth as determined by
Borrower's regularly employed certified public accountant in a manner
consistent with prior practice;"
(ii) Subsection 6(b) is deleted and replaced with the following:
"(b) Permit, at any time during the periods set forth below,
its ratio of total liabilities to Tangible Net Worth to be more than
2.00 to 1.00."
(iii) Subsection 6(l) is deleted and replaced with the
following:
"(l) Expend or enter into any commitment to expend any
amount for the acquisition or lease of tangible, fixed or capital
assets, including repairs, replacements and improvements, which are
capitalized under proper accounting practice, in which exceeds, in the
aggregate, $1,000,000.00" --See attached page.
(d) Section 9(b) of the Loan Agreement is deleted.
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2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective
when, and only when, Lender shall have received the following:
(a) counterparts of this Amendment executed by Borrower;
(b) $1,500,000.00 Renewal Promissory Note (Revolving Credit) executed
by Borrower;
(c) Corporate Certificate and Resolutions from Borrower; and
(d) any additional documentation or materials reasonably required by
Lender.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants as follows:
(a) Borrower is duly authorized and empowered to execute, deliver and
perform this Amendment and all other instruments referred to or
mentioned herein to which it is a party, and all action on its part
requisite for the due execution, delivery and the performance of this
Amendment has been duly and effectively taken. This Amendment, when
executed and delivered, will constitute valid and binding obligations of
Borrower enforceable in accordance with its terms. This Amendment does
not violate any provisions of Borrower's Articles of Incorporation,
By-Laws, or any contract, agreement, law or regulation to which
Borrower is subject, and does not require the consent or approval of any
regulatory authority or governmental body of the United States or any
state.
(b) The representations and warranties made by Borrower in the Loan
Agreement are true and correct as of the date of this Amendment.
(c) No event has occurred and is continuing which constitutes an Event
of Default or would constitute an Event of Default but for the
requirement that notice be give or time elapse or both.
4. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
(a) Upon the effectiveness of Section 1 hereof, on and after the
date hereof each reference in the Loan Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import, and each
reference in the other Loan Documents, shall mean and be a reference to
the Loan Agreement as amended hereby.
(b) Except as specifically amended above, the Loan Agreement and the
Note and all other instruments securing or guaranteeing Borrower's
obligations to Lender (the "Loan Documents") shall remain in full force
and effect and hereby ratified and confirmed. Without limiting the
generality of the foregoing, the Loan Documents and all collateral
described therein do and shall continue to secure the
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payment of all obligations of Borrower under the Loan Agreement and the
Note, as amended hereby, and under the other Loan Documents.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver
of any right, power or remedy of Lender under any of the Loan
Documents, nor constitute a waiver of any provision of any of the
Loan Documents.
5. WAIVER. As additional consideration for the execution, delivery and
performance of this Amendment by the parties hereto and to induce Lender to
enter into this Amendment, Borrower warrants and represents to Lender that no
facts, events, statuses or conditions exist or have existed which, either now or
with the passage of time or giving of notice, or both, constitute or will
constitute a basis for any claim or cause of action against Lender or any
defense to (i) the payment of any obligations and indebtedness under the Note
and/or the Loan Documents or (ii) the performance of any of their obligations
with respect to the Note and/or the Loan Documents, and in the event any such
facts, events, statuses or conditions exist or have existed, Borrower
unconditionally and irrevocably waives any and all claims and causes of action
against Lender and any defense to their payment and performance obligations in
respect to the Note and the Loan Documents.
6. COSTS AND EXPENSES. Borrower agrees to pay on demand all costs and
expenses of Lender in connection with the preparation, reproduction, execution
and delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including the reasonable fees of out-of-pocket expenses of
counsel for Lender. In addition, Borrower shall pay any and all fees payable or
determined to be payable in connection with the execution and delivery, filing
or recording of this Amendment and the other instruments and documents to be
delivered hereunder, and agrees to save Lender harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such fees, except such liabilities arising from the gross
negligence of Lender.
7. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Texas.
8. FINAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed in multiple counterparts, each of which is an original instrument
for all purposes, all as of the day and year first above written.
"BORROWER"
D.A. CONSULTING GROUP, INC.,
formerly known as Documentation
Associates, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
Title: CFO
____________________________________
"LENDER"
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President
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