1
EXHIBIT 10.18
SECOND AMENDMENT TO LOAN AGREEMENT
Dated as of March 10, 1997
This SECOND AMENDMENT is made by and between WELLINGTON HALL CARIBBEAN
CORPORATION, a corporation organized and existing under the laws of the state of
North Carolina (the "Company"), and the OVERSEAS PRIVATE INVESTMENT CORPORATION,
an agency of the United States of America ("OPIC").
WITNESSETH:
WHEREAS, the Company and OPIC entered into a loan agreement dated
December 22, 1989 which was amended pursuant to a First amendment to Loan
Agreement dated as of September 1, 1994 (as amended, the "Loan Agreement";
capitalized terms used but not defined herein having the meanings ascribed to
such terms in the Loan Agreement);
WHEREAS, pursuant to the Loan Agreement, OPIC lent the Company the sum
of U.S. $1,300,000 (the "Loan"), of which $990,999 principal amount remains
outstanding;
WHEREAS, the Company has proposed certain modifications to the
repayment terms of the Loan;
WHEREAS, OPIC is agreeable to such modifications, subject to the terms
and conditions set forth herein; and
WHEREAS, since November 1, 1996, in contemplation of the parties'
entering into this Second Amendment, the Company has been paying interest on the
Loan at the rate of 10% per annum, and the Company has made no payments of
principal since April 30, 1996; OPIC and the Company have agreed that, upon the
effectiveness of this Second Amendment in accordance with Section 4 hereof, the
amendments to Sections 2.04 (Interest) of the Loan Agreement will be effective
as of November 1, 1996 and the amendments to Section 2.05 (Repayment of the
Loan) of the Loan Agreement will be effective as of July 31, 1996.
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
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SECTION 1. AMENDMENTS TO THE LOAN AGREEMENT.
Subject to the provisions of Sections 3 and 4 hereof, and effective as
of the date hereof except as otherwise specified below, the Loan Agreement is
hereby amended as follows:
(a) Section 2.04(a) is amended, effective as of November 1, 1996, to
read in its entirety as follows:
"SECTION 2.04. Interest. (a) The Company shall pay interest to the
order of OPIC on the unpaid principal of each Note (i) for the period
from the Closing Date through July 31, 1993, at the rate of 12% per
annum; (ii) for the period commencing on August 1, 1993 and ending on
July 31, 1995, at the rate of 9% per annum; (iii) for the period
commencing on August 1, 1995 and ending on October 31, 1996, at the
rate of 12% per annum; and (iv) thereafter at the rate of 10% per
annum, accruing from the Closing Date and due on each Quarterly Payment
Date in each year."
(b) Section 2.05 is amended, effective as of July 31, 1996, to read in
its entirety as follows:
"SECTION 2.05. Repayment of the Loan. (a) The Loan shall mature on
October 31, 1999, and on such date the entire unpaid principal of the
Loan, together with all accrued and unpaid interest thereon, shall be
due and payable.
(b) The Company shall make mandatory payments of principal of the
Loan, to amortize the Loan in full by October 31, 1999, as follows:
(i) On October 31, 1994, the Company shall make a principal
payment of $61,937;
(ii) On each Quarterly Payment Date commencing on January 31,
1995 and ending on April 30, 1996, the Company shall make a principal
payment at $30,969;
(iii) the Company shall not be required to make principal
payment for the period commencing on July 31, 1996 and ending on April
30, 1997;
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(iv) On each Quarterly Payment Date commencing on July 31,
1997 and ending on April 30, 1998, the Company shall make a principal
payment of $30,969;
(v) On each Quarterly Payment Date commencing on July 31, 1998
and ending on July 31, 1999, the Company shall make a principal payment
of $61,937; and
(vi) On October 31, 1999, the Company shall make a principal
payment of $557,438."
(c) Subsection (a) of Section 2.10 is hereby amended by deleting the
last sentence thereof.
(d) Clause (i) of Subsection (o) of Section 8.01 is amended and
restated in its entirety as follows:
"(i) cease to own beneficially and of record at least
226,958 shares of common stock of Sponsor,"
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Company represents, covenants, and warrants to OPIC that:
(a) The Execution, delivery and performance of this Second Amendment by
the Company (i) have been duly authorized by all necessary corporate action,
(ii) will not violate any applicable law or applicable regulation or ruling of
any governmental agency, and (iii) will not breach, or result in the creation of
any encumbrance under, any agreement or other requirement by which it or its
assets are bound. This Second Amendment has been duly executed and delivered by
the Company and constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject,
as to enforceability, to applicable bankruptcy, insolvency, moratorium and
similar laws of general applicability affecting creditor's rights.
(b) The representations and warranties of the Company set forth in
Article III of the Loan Agreement, as amended hereby, are true and correct in
all material respects on the date hereof.
(c) There are no Events of Default under the Loan Agreement, as amended
hereby, existing on the date hereof.
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SECTION 3. REFERENCE TO AND EFFECT ON THE FINANCING DOCUMENTS.
(a) On and after the date hereof each reference in the Loan Agreement
to "this Agreement", "hereunder", "hereof", "herein", "hereby" or words of like
import, and each reference in the other Financing Documents to "the Loan
Agreement", "thereunder", "thereof" or words of like import referring to the
Loan Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.
(b) Except as specifically amended above, the Loan Agreement shall
remain in full force and effect and is hereby ratified and confirmed. WITHOUT
LIMITATION OF THE AGREEMENTS CONTAINED IN THIS SECOND AMENDMENT, THE COMPANY
ACKNOWLEDGES THAT IS HAS BEEN ADVISED BY COUNSEL WITH RESPECT TO THIS AMENDMENT
AND FURTHER ACKNOWLEDGES AND AGREES THAT (i) EACH OF THE AGREEMENTS SET FORTH
HEREIN WERE KNOWINGLY AND VOLUNTARILY MADE; (ii) THE OBLIGATIONS OF THE COMPANY
OWING TO OPIC HEREUNDER SHALL BE STRICTLY CONSTRUED AND SHALL BE EXPRESSLY
SUBJECT TO COMPLIANCE BY THE COMPANY WITH THE TERMS AND CONDITIONS SET FORTH
HEREIN, INCLUDING, WITHOUT LIMITATION, THE REPAYMENT TERMS HEREOF; (iii) THE
RIGHTS OF OPIC HEREIN SHALL BE GIVEN FULL EFFECT; AND (iv) NO REPRESENTATIVE OF
OPIC HAS WAIVED OR MODIFIED ANY OF THE PROVISIONS OF THE LOAN AGREEMENT AS
AMENDED HEREBY AS OF THE DATE HEREOF, AND NO SUCH WAIVER OR MODIFICATION
FOLLOWING THE DATE HEREOF SHALL BE EFFECTIVE UNLESS MADE IN ACCORDANCE WITH
SECTION 9.05 OF THE LOAN AGREEMENT. OPIC SHALL BE UNDER NO OBLIGATION TO MAKE
FURTHER AMENDMENTS TO THE LOAN AGREEMENT.
(c) The execution, delivery and effectiveness of this Second
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any party to the Loan Agreement, not constitute a
waiver of any provision of the Loan Agreement.
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SECTION 4. CONDITIONS PRECEDENT.
The provisions of this Second Amendment shall not become effective
until OPIC shall have received the following:
(a) an original counterpart of this Second Amendment duly executed by
the Company;
(b) a duly executed consent of the Guarantor to this Second Amendment,
in the form of Exhibit A hereto, which consent shall be in full force and
effect; and
(c) A duly executed second amendment to the Project Completion
Agreement, in the form of Exhibit B hereto, which second amendment shall be in
full force and effect;
(d) payment in full of a rescheduling fee in the amount of $9,909.00;
and
(e) payment in full for all expenses incurred by OPIC, including
without limitation, fees and expenses for outside legal counsel, if any, in
connection with the preparation, negotiation, and execution of this second
Amendment, the second amendment to the Project Completion Agreement, and the
consent of the Guarantor, and all other documentation contemplated hereby or by
any financing Document.
SECTION 5. EXECUTION IN COUNTERPARTS.
This Second Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
SECTION 6. GOVERNING LAW.
THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE DISTRICT OF COLUMBIA OF THE UNITED STATES OF AMERICA.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Second
Amendment to be executed and delivered on its behalf by its duly authorized
representative on the date first above written.
WELLINGTON HALL CARIBBEAN CORPORATION
By: /s/ Hoyt Hackney
-------------------------------
Its President
-------------------------------
OVERSEAS PRIVATE INVESTMENT CORPORATION
By: /s/ Ralph Mathrews
-------------------------------
Its Director, PMG & SA
-------------------------------
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EXHIBIT A
GUARANTOR ACKNOWLEDGMENT AND CONSENT
GUARANTOR ACKNOWLEDGMENT AND CONSENT, dated as of March 10, 1997 (the
"Consent"), made by MUEBLES WELLINGTON HALL, S.A. (the "Guarantor"), a
corporation organized and existing under the laws of Honduras.
WITNESSETH:
WHEREAS, pursuant to a loan agreement dated December 22, 1989 between
OPIC and Wellington Hall Caribbean Corporation (the "Company"), as amended by a
First Amendment to Loan Agreement dated as of September 1, 1994 (as so amended,
as amended as of the date hereof, and as further amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"), OPIC lent the
Company the sum of U.S. $1,300,000 (the "Loan") for investment in the Guarantor
and its business upon the condition, among others, that the Guarantor guarantee
repayment of the Loan;
WHEREAS, the Guarantor entered into a Guaranty dated December 22, 1989,
as amended by a First Amendment to Guaranty dated as of September 1, 1994 (as so
amended, and as from time to time amended, modified or supplemented, the
"Guaranty") in favor of OPIC pursuant to which the Guarantor guaranteed the
payment to OPIC of all amounts due under the Loan Agreement and the Notes (as
defined in the Loan Agreement) as therein provided;
WHEREAS, the Company has requested that OPIC modify the payment terms
of the Loan, and OPIC has agreed to make such modifications pursuant to a Second
Amendment to the Loan Agreement dated the date hereof, upon the condition, among
others, that the Guarantor execute and deliver this Consent.
NOW THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
The Guarantor hereby:
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(i) acknowledges and consents to the execution, delivery and
performance of the Second amendment to Loan Agreement, attached hereto as
Exhibit A;
(ii) reaffirms and agrees that the Guaranty is in full force
and effect, without defense, offset or counterclaim, and that the provisions
of the Guaranty are valid, binding and enforceable in accordance with its terms;
(iii) acknowledges that for purposes of Section 14 of the
Guaranty that OPIC's address is:
Overseas Private Investment Corporation
Attention: Vice President/Finance
1100 New York Avenue, N.W.
Washington, D.C. 20527
United States of America
Facsimile: (202) 408-9866
(iv) represents and warrants to OPIC that:
(x) all of the representations and warranties made by
it in the Guaranty are true and correct as of the date hereof;
(y) it has all requisite power and authority,
corporate or otherwise, to execute, deliver, and perform all
of its obligations under this Consent, and its execution,
delivery and performance of this Consent have been duly
authorized by all necessary action, corporate or otherwise;
and
(z) it is in compliance with all of the covenants
made by it in the Guaranty as of the date hereof.
This Consent does not constitute, and shall not be deemed to
constitute, a novation of the obligations of the Guarantor under the
Guaranty. Unless otherwise specified herein, terms capitalized for
other than grammatical purposes have the meanings specified in the Loan
Agreement.
* * * * *
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IN WITNESS WHEREOF, the undersigned has caused this Consent to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MUEBLES WELLINGTON HALL, S.A.
By
-------------------------------
Its
-------------------------------
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EXHIBIT B
================================================================================
SECOND AMENDMENT TO PROJECT COMPLETION AGREEMENT
among
WELLINGTON HALL, LIMITED
WELLINGTON HALL CARIBBEAN CORPORATION,
MUEBLES WELLINGTON HALL, S.A.
and
the OVERSEAS PRIVATE INVESTMENT CORPORATION
dated as of March 10, 1997
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SECOND AMENDMENT TO PROJECT COMPLETION AGREEMENT
SECOND AMENDMENT TO PROJECT COMPLETION AGREEMENT dated as of March 10,
1997 (this "Second Agreement"), made by and among WELLINGTON HALL, LIMITED (the
"Sponsor"), a corporation organized and existing under the laws of North
Carolina, WELLINGTON HALL CARIBBEAN CORPORATION (the "Company"), a corporation
organized and existing under the laws of North Carolina, MUEBLE WELLINGTON HALL,
S.A. ("MWH"), a corporation organized and existing under the laws of Honduras,
and the OVERSEAS PRIVATE INVESTMENT CORPORATION ( "OPIC"), an agency of the
United States of America.
WITNESSETH:
WHEREAS, the Sponsor owns beneficially and of record 100% of the
outstanding capital stock of the Company, and the Company owns beneficially and
of record 99% of the outstanding capital stock of MWH; and
WHEREAS, pursuant to a loan agreement dated December 22, 1989 between
OPIC and the Company, as amended by a First Amendment to Loan Agreement dated as
of September 1, 1994 (as so amended, as amended as of the date hereof, and as
further amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"), OPIC lent the Company the sum of U.S. $1,300,000 (the "Loan"); and
WHEREAS, pursuant to a Project Completion Agreement dated as of
December 22, 1989 among the parties hereto, as amended pursuant to a First
Amendment to Project Completion Agreement dated as of September 1, 1994 (as
amended, the "Project Completion Agreement"), the Sponsor made certain
undertakings to OPIC respecting the Loan and the Project to be funded with the
proceeds thereof; and
WHEREAS, the Company has requested that OPIC modify the payment terms
of the Loan, and OPIC has agreed to make such modifications pursuant to a Second
Amendment to the Loan Agreement dated the date hereof, upon the condition, among
others, that the Sponsor and the other parties hereto enter into this Second
Amendment;
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NOW THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Second Amendment shall have the
definitions given such terms in the Loan Agreement, unless otherwise defined
herein.
SECTION 2. AMENDMENTS TO THE PROJECT COMPLETION AGREEMENT.
Subject to the provision of Section 4 hereof and effective as of the
date hereof, the Project Completion Agreement is hereby amended as follows:
(a) Section 2.2. is amended in subsection (a) by deleting
the phrase "Section 3" in the parenthetical clause and inserting in its place
the phrase "Section 2.3".
(b) Section 2.3 is amended by adding the following new
sentence at the end thereof:
"The foregoing notwithstanding, the "Completion Date" shall not occur,
and shall not be deemed to have occurred, prior to October 3,1 1999."
(c) Section 2.4 is amended in the first sentence thereof by
deleting the phrase "to the account of the Company or MWH as necessary " and
inserting in its place the phrase:
"to such persons as OPIC may direct in its demand, whether to OPIC, or
to the Company, or to MWH, or for application to any other obligations
of the Company or MWH as OPIC may specify in its sole discretion"
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The Sponsor represents and warrants to OPIC that:
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(a) it has all requisite power and authority, corporate or
otherwise, to execute, deliver, and perform all of its obligations under this
Second Amendment;
(b) its execution, delivery and performance of this Second
Amendment have been duly authorized by all necessary action, corporate or
otherwise;
(c) The authorized capital of the Sponsor consists of
6,000,000 shares of common stock, no par value, 2,289,887 of which are issued
and outstanding (the "Sponsor Shares"); and 5,000,000 shares of preferred
stock, none of which are issued and outstanding. The Sponsor Shares have been
duly authorized and validly issued and are fully paid and nonassessable.
Approximately nine and nine-tenths of a percent (9.9%) of the Sponsor Shares
are owned beneficially and of record by Hoyt Hackney, free and clear of all
liens, encumbrances and security interests. The Sponsor proposes to issue
additional Sponsor Shares in the amount of $,1689,887 shares, for a total of
3,979,774 shares issued and outstanding.
(d) The Sponsor does not own or otherwise control any voting
stock of, or have any ownership interest in, any corporation, partnership or
other entity, other than the Company; the authorized capital of the Company
consists of 10,000 shares of common stock, all of which are issued and
outstanding, have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned beneficially and of record by the Sponsor, free
and clear of all liens, encumbrances and security interests.
(e) This Second Amendment has been duly executed and
delivered by it and constitutes the legal, valid, and binding obligation of the
Sponsor enforceable against it in accordance with its terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, moratorium and similar
laws of general applicability affecting creditors' rights.
(f) No governmental authorization or action of any kind is
or will be necessary for the valid execution, delivery or performance by the
Sponsor of this Second Amendment.
(g) The execution, delivery and performance by it of this
Second Amendment do not require the consent or approval of any creditor of the
Sponsor and will not conflict with or constitute a breach or default under or
violate any provision of the charter or by-laws of the
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Sponsor or any agreement, law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award applicable to the Sponsor.
(h) The audited Financial Statements of the Sponsor dated
April 30, 1996 and the unaudited Financial Statements of the Sponsor dated
October 31, 1996, which have been furnished to OPIC fairly present the
financial condition of the Sponsor as of such date.
(i) Since April 30, 1996, there has been no material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial condition or results of
operations of the Sponsor or in the Sponsor's ability to perform its
obligations under the Project Completion Agreement, as amended by this Second
Amendment.
(j) No event has occurred and is continuing that constitutes,
or with the lapse of time or the giving of notice of both would constitute, an
Event of Default under the Loan Agreement or under any agreement or instrument
evidencing any Indebtedness of the Sponsor which give the holder thereof the
right to accelerate payment of such Indebtedness prior to its scheduled
maturity, and no such event will occur upon the execution and delivery or
performance of this Second Amendment.
(k) There are no actions, proceedings or claims pending or,
to the best knowledge of this Sponsor, threatened, the adverse determination of
which might have a material adverse effect on its ability to perform its
obligations hereunder, or affect the validity or enforceability hereof.
(l) As of the date hereof, the Sponsor is not insolvent, as
such term is used under the United States Bankruptcy Code; neither will it be
rendered insolvent, as such term is so used, by its execution of this Second
Amendment.
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SECTION 4. REFERENCE TO AND EFFECT ON THE PROJECT COMPLETION AGREEMENT.
(a) On and after the date hereof each reference in the Project
Completion Agreement to "This Agreement", "hereunder", reference in the other
Financing Documents to "the Project Completion Agreement", "thereunder",
"thereof" or words of like import referring to the Project Completion Agreement,
shall mean and be a reference to the Project Completion Agreement as amended
hereby.
(b) Except as specifically amended above, the Project Completion
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
(c) The execution, delivery and effectiveness of this Second Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any party to the Project Completion Agreement, nor
constitute a waiver of any provision of the Project Completion Agreement.
SECTION 5. EXECUTION IN COUNTERPARTS.
This Second Amendment may be executed in any number of counterparts and
by different parties hereto in separated counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
SECTION 6. GOVERNING LAW.
THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE DISTRICT OF COLUMBIA. THE HEADINGS HEREIN ARE FOR PURPOSES
OF REFERENCE ONLY AND DO NOT LIMIT OR AFFECT ITS MEANING.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Second
Amendment to be executed by its duly authorized representative as of the day and
year first above written.
WELLINGTON HALL, LIMITED
By:
--------------------------------
Its
---------------------------------
WELLINGTON HALL CARIBBEAN CORPORATION
By:
--------------------------------
Its
---------------------------------
MUEBLES WELLINGTON HALL, S.A.
By:
--------------------------------
Its
---------------------------------
OVERSEAS PRIVATE INVESTMENT CORPORATION
By:
--------------------------------
Its
---------------------------------
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SECOND AMENDMENT TO PROJECT COMPLETION AGREEMENT
among
WELLINGTON HALL, LIMITED,
WELLINGTON HALL CARIBBEAN CORPORATION,
MUEBLES WELLINGTON HALL, S.A.
and
the OVERSEAS PRIVATE INVESTMENT CORPORATION
dated as of March 10, 1997
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SECOND AMENDMENT TO PROJECT COMPLETION AGREEMENT
SECOND AMENDMENT TO PROJECT COMPLETION AGREEMENT dated of March 10,
1997 (this "Second Amendment"), made by and among WELLINGTON HALL, LIMITED (the
"Sponsor"), a corporation organized and existing under the laws of North
Carolina, WELLINGTON HALL CARIBBEAN CORPORATION (the "Company"), a corporation
organized and existing under the laws of North Carolina, MUEBLES WELLINGTON
HALL, S.A. ("MWH"), a corporation organized and existing under the laws of
Honduras, and the OVERSEAS PRIVATE INVESTMENT CORPORATION ("OPIC"), an agency of
the United States of America.
WITNESSETH:
WHEREAS, the Sponsor owns beneficially and of record 100% of the
outstanding capital stock of the Company, and the Company owns beneficially and
of record 99% of the outstanding capital stock of MWH; and
WHEREAS, pursuant to a loan agreement dated December 22, 1989 between
OPIC and the Company, as amended by a First Amendment to Loan Agreement dated as
of September 1, 1994 (as so amended, as amended as of the date hereof, and as
further amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"), OPIC lent the Company the sum of U.S. $1,300,000 (the "Loan"); and
WHEREAS, pursuant to a Project Completion Agreement dated as of
December 22, 1989 among the parties hereto, as amended pursuant to a First
Amendment to Project Completion Agreement dated as of September 1, 1994 (as
amended, the "Project Completion Agreement"), the Sponsor made certain
undertakings to OPIC respecting the Loan and the Project to be funded with the
proceeds thereof; and
WHEREAS, the Company has requested that OPIC modify the payment terms
of the Loan, and OPIC has agreed to make such modifications pursuant to a Second
Amendment to the Loan Agreement dated the date hereof, upon the condition, among
others, that the Sponsor and the other parties hereto enter into this Second
Amendment;
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NOW THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Second Amendment shall have the
definitions given such terms in the Loan Agreement, unless otherwise defined
herein.
SECTION 2. AMENDMENTS TO THE PROJECT COMPLETION AGREEMENT.
Subject to the provisions of Section 4 hereof and effective as of the
date hereof, the Project Completion Agreement is hereby amended as follows:
(a) Section 2.2 is amended in subsection (a) by deleting the
phrase "Section 3" in the parenthetical clause and inserting in its place the
phrase "Section 2.3".
(b) Section 2.3 is amended by adding the following new
sentence at the end there of:
"The foregoing notwithstanding, the "Completion Date" shall not occur,
and shall not be deemed to have occurred, prior to October 31, 1999."
(c) Section 2.4 is amended in the first sentence thereof by
deleting the phrase "to the account of the Company or MWH as necessary" and
inserting in its place the phrase:
"to such persons as OPIC may direct in its demand, whether to OPIC, or
to the Company, or to MWH, or for application to any other obligations
of the Company or MWH as OPIC may specify in its sole discretion"
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The Sponsor represents and warrants to OPIC that:
(a) it has all requisite power and authority, corporate or
otherwise, to execute, deliver, and perform all of its obligations under this
Second Amendment;
(b) its execution, delivery and performance of this Second
Amendment have been duly authorized by all necessary action, corporate or
otherwise;
(c) The authorized capital of the Sponsor consists of
6,000,000 shares of common stock, no par value, 2,289,887 of which are issued
and outstanding (the "Sponsor Shares"); and
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5,000,000 shares of preferred stock, none of which are issued and outstanding.
The Sponsor Shares have been duly authorized and validly issued and are fully
paid and nonassessable. Approximately nine and nine-tenths of a percent (9.9%)
of the Sponsor Shares are owned beneficially and of record by Hoyt Hackney,
free and clear of all liens, encumbrances and security interests. The Sponsor
proposes to issue additional Sponsor Shares in the amount of 1,689,887 shares,
for a total of 3,979,774 shares issued and outstanding.
(d) The Sponsor does not own or otherwise control any voting
stock of, or have any ownership interest in, any corporation, partnership or
other entity, other than the Company; the authorized capital of the Company
consists of 10,000 shares of common stock, all of which are issued and
outstanding, have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned beneficially and of record by the Sponsor, free
and clear of all liens, encumbrances and security interests.
(e) This Second Amendment has been duly executed and delivered
by it and constitutes the legal, valid, and binding obligation of the Sponsor
enforceable against it in accordance with its terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, moratorium and similar
laws of general applicability affecting creditors' rights.
(f) No governmental authorization or action of any kind is or
will be necessary for the valid execution, delivery or performance by the
Sponsor of this Second Amendment.
(g) The execution, delivery and performance by it of this
Second Amendment do not require the consent or approval of any creditor of the
Sponsor and will not conflict with or constitute a breach or default under or
violate any provision of the charter or by-laws of the sponsor or any
agreement, law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to the Sponsor.
(h) The audited Financial Statements of the Sponsor dated
April 30, 1996 and the unaudited Financial Statements of the Sponsor dated
October 31, 1996, which have been furnished to OPIC, fairly present the
financial condition of the Sponsor as at such date.
(i) Since April 30, 1996, there has been no material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial condition or results of
operations of the Sponsor or in the Sponsor's ability to perform its
obligations under the Project Completion Agreement, as amended by this Second
Amendment.
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(j) No event has occurred and is continuing that constitutes,
or with the lapse or time or the giving of notice of both would constitute, an
event of Default under the Loan Agreement or under any agreement or instrument
evidencing any Indebtedness of the Sponsor which gives the holder thereof the
right to accelerate payment of such Indebtedness prior to its scheduled
maturity, and no such event will occur upon the execution and delivery or
performance of this Second Amendment.
(k) There are no actions, proceedings or claims pending or, to
the best knowledge of the Sponsor, threatened, the adverse determination of
which might have a material adverse effect on its ability to perform its
obligations hereunder, or affect the validity or enforceability hereof.
(l) As of the date hereof, the Sponsor is not insolvent, as
such term is used under the United States Bankruptcy Code; neither will it be
rendered insolvent, as such term is so used, by its execution of this Second
Amendment.
SECTION 4. REFERENCE TO AND EFFECT ON THE PROJECT COMPLETION AGREEMENT.
(a) On and after the date hereof each reference in the Project
Completion Agreement to "this Agreement", "hereunder", "hereof", "herein",
"hereby" or words of like import, and each reference in the other Financing
Documents to "the Project Completion Agreement", "thereunder", "thereof" or
words of like import referring to the Project Completion Agreement, shall mean
and be a reference to the Project Completion Agreement as amended hereby.
(b) Except as specifically amended above, the Project Completion
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
(c) The execution, delivery and effectiveness of this Second Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any party to the Project Completion Agreement, nor
constitute a waiver of any provision of the Project Completion Agreement.
SECTION 5. EXECUTION IN COUNTERPARTS.
This Second Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
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SECTION 6. GOVERNING LAW.
THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE DISTRICT OF COLUMBIA. THE HEADINGS HEREIN ARE FOR PURPOSES
OF REFERENCE ONLY AND DO NOT LIMIT OR AFFECT ITS MEANING.
IN WITNESS WHEREOF, each of the parties hereto has caused this Second
Amendment to be executed by its duly authorized representative as of the day and
year first above written.
WELLINGTON HALL, LIMITED
By: /s/ Hoyt Hackney
-------------------------------------
Its President
-------------------------------------
WELLINGTON HALL CARIBBEAN CORPORATION
By:/s/ Hoyt Hackney
-------------------------------------
Its President
-------------------------------------
MUEBLES WELLINGTON HALL, S.A.
By: /s/ Hoyt Hackney
-------------------------------------
Its President
-------------------------------------
OVERSEAS PRIVATE INVESTMENT CORPORATION
By:/s/ Ralph Mathrews
-------------------------------------
Its Director, PMG & SA
-------------------------------------
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SECOND OMNIBUS AMENDMENT
Dated as of March 10, 1997
This SECOND OMNIBUS AMENDMENT is made by and between WELLINGTON HALL
CARIBBEAN CORPORATION, a corporation organized and existing under the laws of
the state of North Carolina (the "Company"), WELLINGTON HALL LIMITED, a
corporation organized and existing under the laws of North Carolina (the
"Sponsor"), MUEBLES WELLINGTON HALL, S.A., a corporation organized and existing
under the laws of Honduras ("MWH"), and OVERSEAS PRIVATE INVESTMENT CORPORATION,
an agency of the United States of America ("OPIC").
WITNESSETH:
WHEREAS, the Company and OPIC entered into a loan agreement dated
December 22, 1989, as amended by a First Amendment to Loan Agreement dated as of
September 1, 1994 (as so amended, as amended as of the date hereof, and as
further amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"; capitalized terms used but not defined herein having the meanings
ascribed to such terms in the Loan Agreement);
WHEREAS, as of the date hereof, the respective parties to the Loan
Agreement and the Project Completion Agreement have entered into certain
amendments to such agreements; and
WHEREAS, the parties hereto wish to confirm that all references to any
such agreement in any Financing Document is a reference to such agreement as
amended.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. FINANCING DOCUMENTS,
All references to, and the definition of, any document or agreement
herein or in any Financing Document shall be a reference to such document or
agreement as it may have been or may hereafter be amended or modified from time
to time.
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SECTION 2. REPRESENTATIONS AND WARRANTIES.
Each of the Company, the Sponsor and MWH represents, covenants, and
warrants to OPIC that this Second Omnibus Amendment has been duly executed and
delivered by such party and constitutes the legal, valid and binding agreement
of such party, enforceable against such party in accordance with its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency, moratorium
and similar laws of general applicability affecting creditor's rights.
SECTION 3. EFFECT ON FINANCING DOCUMENTS.
Except as specifically amended above, each Financing Document shall
remain in full force and effect and is hereby ratified and confirmed.
SECTION 4. EXECUTION IN COUNTERPARTS.
This Second Omnibus Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constiture but one and the same instrument.
SECTION 5. GOVERNING LAW.
THIS SECOND OMNIBUS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE DISTRICT OF COLUMBIA OF THE UNITED STATES OF
AMERICA.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Second
Omnibus Amendment to be executed and delivered on its behalf by its duly
authorized representative on the date first above written.
WELLINGTON HALL CARIBBEAN CORPORATION
By: /s/ Hoyt Hackney
-------------------------------------
Its President
-------------------------------------
WELLINGTON HALL LIMITED
By: /s/ Hoyt Hackney
-------------------------------------
Its President
-------------------------------------
MUEBLES WELLINGTON HALL, S.A.
By: /s/ Hoyt Hackney
-------------------------------------
Its President
-------------------------------------
OVERSEAS PRIVATE INVESTMENT CORPORATION
By: /s/ Ralph Mathrews
-------------------------------------
Its Director, PMG & SA
-------------------------------------
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GUARANTOR ACKNOWLEDGMENT AND CONSENT
GUARANTOR ACKNOWLEDGMENT AND CONSENT, dated as of March 10, 1997 (the
"Consent"), made by MUEBLES WELLINGTON HALL, S.A. (the "Guarantor"), a
corporation organized and existing under the laws of Honduras.
WITNESSETH:
WHEREAS, pursuant to a loan agreement dated December 22, 1989 between
OPIC and Wellington Hall Caribbean Corporation (the "Company"), as amended by a
First Amendment to Loan Agreement dated as of September 1, 1994 (as so amended,
as amended as of the date hereof, and as further amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"), OPIC lent the
Company the sum of U.S. $1,300,000 (the "Loan") for investment in the Guarantor
and its business upon the condition, among others, that the Guarantor guarantee
repayment of the Loan;
WHEREAS, the Guarantor entered into a Guaranty dated December 22, 1989,
as amended by a First Amendment to Guaranty dated as of September 1, 1994 (as so
amended, and as from time to time amended, modified or supplemented, the
"Guaranty") in favor of OPIC pursuant to which the Guarantor guaranteed the
payment to OPIC of all amounts due under the Loan Agreement and the Notes (as
defined in the Loan Agreement) as therein provided;
WHEREAS, the Company has requested that OPIC modify the payment terms
of the Loan, and OPIC has agreed to make such modifications pursuant to a Second
Amendment to the Loan Agreement dated the date hereof, upon the condition, among
others, that the Guarantor execute and deliver this Consent.
NOW THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
The Guarantor hereby:
(i) acknowledges and consents to the execution, delivery and
performance of the Second Amendment to Loan Agreement, attached hereto as
Exhibit A;
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(ii) reaffirms and agrees that the Guaranty is in full force and
effect, without defense, offset or counterclaim, and that the provisions of the
Guaranty are valid, binding and enforceable in accordance with its terms;
(iii) acknowledges that for purposes of Section 14 of the Guaranty that
OPIC's address is:
Overseas Private Investment Corporation
Attention: Vice President/Finance
1100 New York Avenue, N.W.
Washington, D.C. 20527
United States of America
Facsimile: (202) 408-9866
(iv) represents and warrants to OPIC that;
(x) all of the representations and warranties made by it in
the Guaranty are true and correct as of the date hereof;
(y) it has all requisite power and authority, corporate or
otherwise, to execute, deliver, and perform all of its obligations
under this Consent, and its execution, delivery and performance of this
Consent have been duly authorized by all necessary action, corporate or
otherwise; and
(z) it is in compliance with all of the covenants made by it
in the Guaranty as of the date hereof.
This Consent does not constitute, and shall not be deemed to
constitute, a novation of the obligations of the Guarantor under the Guaranty.
Unless otherwise specified herein, terms capitalized for other than grammatical
purposed have the meanings specified in the Loan Agreement.
* * * *
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IN WITNESS WHEREOF, the undersigned has caused this Consent to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MUEBLES WELLINGTON HALL, S.A.
By: /s/ Hoyt Hackney
------------------------------------
Its President
------------------------------------
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EXHIBIT A
SECOND AMENDMENT TO LOAN AGREEMENT
Dated as of March 10, 1997
This SECOND AMENDMENT is made by and between WELLINGTON HALL CARIBBEAN
CORPORATION, a corporation organized and existing under the laws of the state of
North Carolina (the "Company"), and the OVERSEAS PRIVATE INVESTMENT CORPORATION,
an agency of the United States of America ("OPIC")
WITNESSETH:
WHEREAS, the Company and OPIC entered into a loan agreement dated
December 22, 1989, which was amended pursuant to a First Amendment to Loan
Agreement dated as of September 1, 1994 (as amended, the "Loan Agreement";
capitalized terms used but not defined herein having the meanings ascribed to
such terms in the Loan Agreement);
WHEREAS, pursuant to the Loan Agreement, OPIC lent the Company the sum
of U.S. $1,300,000 (the "Loan"), of which $990,999 principal amount remains
outstanding;
WHEREAS, the Company has proposed certain modifications to the
repayment terms of the Loan;
WHEREAS, OPIC is agreeable to such modifications, subject to the terms
and conditions set forth herein; and
WHEREAS, since November 1, 1996, in contemplation of the parties'
entering into this Second Amendment, the Company has been paying interest on the
Loan at the rate of 10% per annum, and the Company has made no payments of
principal since April 30, 1996; OPIC and the Company have agreed that, upon the
effectiveness of this Second Amendment in accordance with Section 4 hereof, the
amendments to Sections 2.04 (Interest) of the Loan Agreement will be effective
as of November 1, 1996 and the amendments to Section 2.05 (Repayment of the
Loan) of the Loan Agreement will be effective as of July 31, 1996.
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NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE LOAN AGREEMENT.
Subject to the provisions of Sections 3 and 4 hereof, and effective as
of the date hereof except as otherwise specified below, the Loan Agreement is
hereby amended as follows:
(a) Section 2.04 is amended, effective as of November 1, 1996, to read
in its entirety as follows:
"Section 2.04. Interest. (a) The Company shall pay interest to the
order of OPIC on the unpaid principal of each Note (i) for the period
from the Closing Date through July 31. 1993, at the rate of 12% annum;
(ii) for the period commencing on August 1, 1993 and ending on July 31,
1995, at the rate of 9% per annum; (iii) for the period commencing on
August 1, 1995 and ending on October 31, 1996, at the rate of 12% per
annum; and (iv) thereafter at the rate of 10% per annum, accruing from
the Closing Date and due on each Quarterly Payment Date in each year."
(b) Section 2.05 is amended, effective as of July 31, 1996, to read in
its entirety as follows:
"Section 2.05. Repayment of the Loan. (a) The Loan shall mature on
October 31, 1999, and on such date the entire unpaid principal of the
Loan, together with all accrued and unpaid interest thereon, shall be
due and payable.
(b) The Company shall make mandatory payments of principal
of the Loan, to amortize the Loan in full by October 31, 1999, as
follows:
(i) On October 31, 1994, the Company shall make a principal
payment of $61,937;
(ii) On each Quarterly Payment Date commencing on January 31,
1995 and ending on April 30, 1996, the Company shall make a principal
payment of $30,969;
(iii) the Company shall not be required to make principal
payments for the period commencing on July 31, 1996 and ending on April
30, 1997;
(iv) On each Quarterly Payment Date commencing on July 31,
1997 and ending on April 30, 1998, the Company shall make a principal
payment of $30,969;
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(v) On each Quarterly Payment Date commencing on July 31, 1998
and ending on July 31, 1999, the Company shall make a principal payment
of $61,937; and
(vi) On October 31, 1999, the Company shall make a principal
payment of $557,438."
(c) Subsection (a) of Section 2.10 is hereby amended by deleting the
last sentence thereof.
(d) Clause (i) of Subsection (o) of Section 8.01 is amended and
restated in its entirely as follows:
"(i) cease to own beneficially and of record at least 2226,958 shares
of common stock of Sponsor,"
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Company represents, covenants, and warrants to OPIC that:
(a) The execution, delivery and performance of this Second
Amendment by the Company (i) have been duly authorized by all necessary
corporate action, (ii) will not violate any applicable law of applicable
regulation or ruling of any governmental agency, and (iii) will not breach, or
result in the creation of any encumbrance under, any agreement or other
requirement by which it or its assets are bound. This Second Amendment has been
duly executed and delivered by the Company and constitutes the legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, moratorium and similar laws of general applicability affecting
creditor's rights.
(b) The representations and warranties of the Company set
forth in Article III of the Loan Agreement, as amended hereby, are true and
correct in all material respects on the date hereof.
(c) There are no Events of Default under the Loan Agreement,
as amended hereby, existing on the date hereof.
SECTION 3. REFERENCE TO AND EFFECT ON THE FINANCING DOCUMENTS.
(a) On and after the date hereof each reference in the Loan
Agreement to "this Agreement", "hereunder", "hereof", "herein", "hereby" or
words of like import, and each reference in the other Financing Documents to
"the Loan Agreement"' 'thereunder", "thereof" or words of like import referring
to the Loan Agreement, shall mean and be a reference to the Loan Agreement as
amended hereby.
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(b) Except as specifically amended above, the Loan Agreement shall
remain in full force and effect and is hereby ratified and confirmed. WITHOUT
LIMITATION OF THE AGREEMENTS CONTAINED IN THIS SECOND AMENDMENT, THE COMPANY
ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL WITH RESPECT TO THIS AMENDMENT
AND FURTHER ACKNOWLEDGES AND AGREES THAT (i) EACH OF THE AGREEMENTS SET FORTH
HEREIN WERE KNOWINGLY AND VOLUNTARILY MADE; (ii) THE OBLIGATIONS OF THE COMPANY
OWING TO OPIC HEREUNDER SHALL BE STRICTLY CONSTRUED AND SHALL BE EXPRESSLY
SUBJECT TO COMPLIANCE BY THE COMPANY WITH THE TERMS AND CONDITIONS SET FORTH
HEREIN, INCLUDING, WITHOUT LIMITATION, THE REPAYMENT TERMS HEREOF; (iii) THE
RIGHTS OF OPIC HEREIN SHALL BE GIVEN FULL EFFECT; AND (iv) NO REPRESENTATIVE OF
OPIC HAS WAIVED OR MODIFIED ANY OF THE PROVISION OF THE LOAN AGREEMENT AS
AMENDED HEREBY AS OF THE DATE HEREOF, AND NO SUCH WAIVER OR MODIFICATION
FOLLOWING THE DATE HEREOF SHALL BE EFFECTIVE UNLESS MADE IN ACCORDANCE WITH
SECTION 9.05 OF THE LOAN AGREEMENT, OPIC SHALL BE UNDER NO OBLIGATION TO MAKE
FURTHER AMENDMENTS TO THE LOAN AGREEMENT.
(c) The execution, delivery, and effectiveness of this Second Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any party to the Loan Agreement, nor constitue a
waiver of any provisionof the Loan Agreement.
SECTION 4. CONDITIONS PRECEDENT.
The provisions of this Second Amendment shall not become effective
until OPIC shall have received the following:
(a) an original counterpart of this Second Amendment duly
executed by the Company;
(b) a duly executed consent of the Guarantor to this Second
Amendment, in the form of Exhibit A hereto, which consent shall be in full
force and effect; and
(c) a duly executed second amendment to the Project Completion
Agreement, in the form of Exhibit B hereto, which second amendment shall be in
full force and effect;
(d) payment in full of a rescheduling fee in the amount of
$9,909.99; and
(e) payment in full for all expensed incurred by OPIC,
including without limitation, fees and expenses for outside legal counsel, if
any, in connection with the preparation, negotiation, and
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execution of this Second Amendment, the second amendment to the Project
Completion Agreement, and the consent of the Guarantor, and all other
documentation contemplated hereby or by any Financing Document,.
SECTION 5. EXECUTION IN COUNTERPARTS.
This Second Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
SECTION 6. GOVERNING LAW.
THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE DISTRICT OF COLUMBIA OF THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, each of the parties hereto has caused this Second
Amendment to be executed and delivered on its behalf by its duly authorized
representative on the date first above written.
WELLINGTON HALL CARIBBEAN CORPORATION
By
----------------------------------
Its
----------------------------------
OVERSEAS PRIVATE INVESTMENT CORPORATION
By
----------------------------------
Its
----------------------------------
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