Exhibit 10.19
SAN HOLDINGS, INC.
FOURTH AMENDMENT TO
▇▇▇▇▇▇ LOAN AUTHORIZATION AGREEMENT
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
Ladies and Gentlemen:
Reference is hereby made to that certain ▇▇▇▇▇▇ Loan Authorization
Agreement dated as of May 16, 2003 (the ▇▇▇▇▇▇ Loan Authorization Agreement, as
the same may be amended from time to time, being referred to herein as the "Loan
Agreement"), between the undersigned, SAN Holdings, Inc., a Colorado corporation
(the "Borrower"), and ▇▇▇▇▇▇ Trust and Savings Bank (the "Bank"). All
capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Loan Agreement.
The Borrower has requested that the Bank increase the available amount of
credit available to the Borrower under the Loan Agreement and make certain
amendments to the Loan Agreement, and the Bank is willing to do so under the
terms and conditions set forth in this agreement (herein, the "Amendment").
SECTION 1. AMENDMENTS.
Subject to the satisfaction of all of the conditions precedent set forth
in Section 3 below, the Loan Agreement shall be and hereby is amended as
follows:
1.1 The Loan Agreement shall be and hereby is amended by deleting the
amount of "$3,300,000" appearing throughout the document and substituting
therefor the amount "$4,800,000."
1.2 The paragraph entitled "Variable Interest Rate" of the Loan Agreement
shall be deleted and replaced with the following:
"Variable Interest Rate: The interest rate applicable prior to the
Maturity Date equals the rate per annum announced by the Bank from time to
time as its prime commercial rate (the "Prime Rate") plus:
FROM THROUGH RATE
The date hereof to August 16, 2004 .25%
August 17, 2004 to November 16, 2004 .50%
November 17, 2004 to February 16, 2005 .75%
February 17, 2005 to May 16, 2005 1%
(the "Applicable Margin")."
1.3 The paragraph entitled "Maturity Date" of the Loan Agreement shall be
deleted and replaced with the following:
"Maturity Date: The Loan Account terminates, and Loans are payable
ON DEMAND (but if no demand, no later than May 16, 2005)."
1.4 Section 2 (Interest) of the Loan Agreement shall be amended by
deleting the third sentence thereof and replacing it with the following:
"Interest for each billing period is computed by applying a daily
periodic rate based on the Bank's Prime Rate plus the Applicable Margin to
each day's ending Loan balance."
1.5 The parenthetical immediately following the term "ON DEMAND" set forth
in each of Section 5 (Maturity Date; Payments) and Section 10 (Termination;
Renewal) shall be deleted and replaced with the following:
"(but if no demand, no later than May 16, 2005)"
1.6 Exhibit A of the Loan Agreement shall be amended and restated in its
entirety in the form of Exhibit A attached hereto.
SECTION 2. NEW NOTE.
In replacement for that certain Note payable to the order of ▇▇▇▇▇▇ Trust
and Savings Bank dated as of August 14, 2003 in the principal amount of
$3,300,000 (the "Previous Note"), the Borrower shall execute and deliver to the
Bank a new demand note in the amount of $4,800,000, dated as of the date of its
issuance and otherwise in the form of Exhibit A attached hereto (the "New Note")
which shall substitute for the Bank's Previous Note and shall evidence the loans
outstanding to the Bank. All references in the Loan Agreement shall be deemed
references to the New Note.
SECTION 3. CONDITIONS PRECEDENT.
3.1 The Borrower and the Bank shall have executed and delivered this
Amendment.
3.2 The Borrower shall have executed and delivered the New Note to the
Bank.
3.3 The Bank shall have received copies (executed or certified, as may be
appropriate) of all legal documents or proceedings taken in connection with the
execution and delivery of this Amendment to the extent the Bank or its counsel
may reasonably request.
3.4 The Borrower shall have paid to the Bank a non-refundable closing fee
in the amount of $12,000.
3.5 Legal matters incident to the execution and delivery of this Amendment
shall be satisfactory to the Bank and its counsel.
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3.6 Sun Capital Partners II, LP shall have executed and delivered to the
Bank their consent to this Amendment in the form set forth below and an
amendment to the Guaranty.
SECTION 4. REPRESENTATIONS.
In order to induce the Bank to execute and deliver this Amendment, the
Borrower hereby represents to the Bank that as of the date hereof the
representations and warranties set forth in the Loan Agreement are and shall be
and remain true and correct and the Borrower is in compliance with the terms and
conditions of the Loan Agreement.
SECTION 5. MISCELLANEOUS.
5.1 Except as specifically amended herein, the Loan Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Loan Agreement, the
Note, or any other instrument or document executed in connection therewith, or
in any certificate, letter or communication issued or made pursuant to or with
respect to the Loan Agreement, any reference in any of such items to the Loan
Agreement being sufficient to refer to the Loan Agreement as amended hereby.
5.2 This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages. all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[SIGNATURE PAGE TO FOLLOW]
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This Fourth Amendment to ▇▇▇▇▇▇ Loan Authorization Agreement is entered
into as of this 26th day of November, 2003.
SAN HOLDINGS, INC.
By /s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
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Name ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
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Title Sr. VP & CFO
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Accepted and agreed to.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title Vice President
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GUARANTOR'S ACKNOWLEDGEMENT AND CONSENT
The undersigned, Sun Capital Partners II, LP, heretofore executed and
delivered to the Bank a Guaranty dated May 16, 2003 (as amended, the
"Guaranty"). The undersigned hereby consents to the Amendment to the Loan
Agreement as set forth above and confirms that the Guaranty and all of the
undersigned's obligations thereunder remain in full force and effect. The
undersigned further agrees that the consent of the undersigned to any further
amendments to the Loan Agreement shall not be required as a result of this
consent having been obtained, except to the extent, if any, required by the
Guaranty.
SUN CAPITAL PARTNERS II, LP
By: Sun Capital Advisors II, LP
Its: General Partner
By: Sun Capital Partners, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: VP
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EXHIBIT A
DEMAND NOTE
$4,800.000 November 26, 2003
ON DEMAND, for value received, the undersigned, SAN HOLDINGS, INC., a
Colorado corporation, promises to pay to the order of ▇▇▇▇▇▇ TRUST AND SAVINGS
BANK (the "Bank") at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
the principal sum of Four Million Eight Hundred Thousand Dollars ($4,800,000)
or, if less, the amount outstanding under the ▇▇▇▇▇▇ Loan Authorization
Agreement referred to below together with interest payable at the times and at
the rates and in the manner set forth in the ▇▇▇▇▇▇ Loan Authorization Agreement
referred to below.
This Note evidences borrowings by the undersigned under that certain
▇▇▇▇▇▇ Loan Authorization Agreement dated as of May 16, 2003, between the
undersigned and the Bank, as the same may be amended from time to time; and this
Note and the holder hereof arc entitled to all the benefits provided for under
the ▇▇▇▇▇▇ Loan Authorization Agreement, to which reference is hereby made for a
statement thereof. The undersigned hereby waives presentment and notice of
dishonor. The undersigned agrees to pay to the holder hereof all court costs and
other reasonable expenses, legal or otherwise, incurred or paid by such holder
in connection with the collection of this Note. It is agreed that this Note and
the rights and remedies of the holder hereof shall be construed in accordance
with and governed by the laws of the State of Illinois.
This Note is issued in substitution and replacement for, and evidences
indebtedness previously evidenced by, that certain Note of SAN Holdings, Inc.
dated August 14, 2003, payable to the Bank in the face principal amount of
$3,300,000.
SAN HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: CEO
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