Document:

exh10-25_17301.htm

EXHIBIT 10.25

 

Loan #9531605184-00006

LOAN MODIFICATION AGREEMENT

THIS LOAN MODIFICATION AGREEMENT (“Agreement”) is made and effective as of September 16, 2011, by and between SUTRON CORPORATION, a Virginia corporation (“Borrower”) and BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation and successor by merger to Branch Banking and Trust Company of Virginia (“Lender”).

RECITALS

WHEREAS, on July 29, 2004, Lender made a commercial line of credit loan in the amount of One Million Six Hundred Twenty-Five Thousand and 00/100 Dollars ($1,625,000.00) (as subsequently modified, the “Loan”) to the Borrower, evidenced by, inter alia, (i) the Borrower’s Commercial Promissory Note of same date in the amount of the Loan (as subsequently modified, the “Note”), (ii) that certain first lien Security Agreement of same date executed by the Borrower for the benefit of the Lender (as subsequently
modified, the “Security Agreement”), and (iii) that Loan Agreement and Schedule DD thereto, each of same date executed by the Borrower and the Lender (as subsequently modified, collectively, the “Loan Agreement”) (the Note, Security Agreement, Loan Agreement, Schedule GC (as defined below), and all other documents evidencing or securing the Loan, as subsequently modified, are sometimes collectively referred to herein as “Loan Documents”); and

WHEREAS, by Loan Modification Agreement and Release of Guarantors dated as of August 5, 2005, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Two Million and 00/100 Dollars ($2,000,000.00), (ii) extend the maturity date of the Loan, and (iii) release the Guarantors, as defined therein, from their obligations under the Guaranty, as defined therein; and

WHEREAS, by Loan Modification Agreement dated as of August 5, 2006, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00), and (ii) extend the maturity date of the Loan; and

WHEREAS, by Loan Modification Agreement dated as of June 26, 2007, the Lender and the Borrower agreed, inter alia, to (i) increase the principal amount of the Loan to Three Million and 00/100 Dollars ($3,000,000.00), (ii) extend the maturity date of the Loan, and (iii) amend Schedule DD to the Loan Agreement; and

WHEREAS, by Loan Modification Agreement dated as of August 4, 2008, the Lender and the Borrower agreed, inter alia, to extend the maturity date of the Loan; and

WHEREAS, by Note and Loan Modification Agreement dated as of September 2, 2009, the Lender and the Borrower agreed, inter alia, to (i) extend the maturity date of the Loan, and (ii) replace Schedule DD to the Loan Agreement with that certain Amended and Restated Schedule “GC” to BB&T Loan Agreement dated September 2, 2009 (“Schedule GC”); and

  

  

  

WHEREAS, by Note and Loan Modification Agreement dated as of August 20, 2011, the Lender and the Borrower agreed, inter alia, to extend the maturity date of the Loan; and

WHEREAS, the Borrower has requested that Lender (i) further extend the maturity date of the Loan; and (ii) make certain other modifications to the Loan terms; and

WHEREAS, the Lender has agreed to grant Borrower’s request, subject to Borrower’s execution and delivery of, and performance of the terms and conditions set forth in, this Agreement.

NOW THEREFORE, for and in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.           Recitals.  The above recitals are incorporated herein and made a part hereof.

2.           Loan Statement.  Borrower and Lender hereby confirm that as of the date hereof, (i) there is no accrued and unpaid interest under the Loan, and (ii) there is no outstanding principal balance under the Loan.  The maximum principal amount of the Note is $3,000,000.00.

3.           Note Payments/Maturity Date.  Commencing September 5, 2011 and continuing on the fifth (5th) day of each and every calendar month during the term of the Loan, payments of interest only shall continue to be due and payable.  The Loan maturity date is hereby extended to September 5, 2013.

4.           Loan Agreement.  Section 5 Financial Covenants of the Loan Agreement is hereby modified to provide as follows:

The Borrower covenants and agrees that until such time as all of the Borrower’s obligations under the Loan and the Loan Document have been fully paid and satisfied, the Borrower shall at all times maintain the following financial covenants and ratios in accordance with GAAP; otherwise the Borrower shall be in default under the Loan Documents:

Tangible Net Worth: A minimum Tangible Net Worth of not less than Sixteen Million and 00/100 Dollars ($16,000,000.00) at all times. Tangible Net Worth is defined as net worth minus loans or advances to stockholders and affiliates minus intangible assets.

Minimum Working Capital: This covenant has been deleted.

 

5.           Modification of Loan Documents.

	 	
A.

	
The Note, Security Agreement, Loan Agreement and remaining Loan Documents are hereby modified to reflect and incorporate the terms and provisions of the Loan modifications as described in paragraphs 1 through 4 above.

	 	
B.

	
The terms “Note”, “Security Agreement”, “Loan Agreement”, and all other defined documents as referenced in the Loan Documents, shall be deemed to mean such documents, as modified by this Agreement.  In addition, this Agreement shall be deemed to be a Loan Document.

  

  

  

6.           Modification Costs.   Borrower further agrees to pay to Lender at the time of the execution of this Agreement, a Loan extension fee in the amount of $1,500.00.

7.           Ratification and Renewal.  The Borrower hereby ratifies and renews its covenants and agreements to pay the Loan in accordance with the terms and provisions of the Note, as modified by this Agreement; and the Borrower otherwise hereby ratifies and renews its covenants and agreements to perform, comply with and be bound by all other terms and provisions of the Note and the Loan Documents, all as modified by this Agreement.  The Borrower also hereby confirms that the Security Agreement continues to secure repayment of
the Note, as modified by this Agreement.  Further, the Borrower covenants and warrants that each and every provision of the Note and Loan Documents, as modified by this Agreement, are in full force and effect and are the lawful and binding obligations of Borrower, enforceable in accordance with their respective terms.

8.           Waiver.  The Borrower acknowledges Lender as the owner and holder of the Note, and the secured party under the Security Agreement, and covenants and agrees that there are no defenses, set-offs, or counter-claims against Lender, with respect to the Note and the Loan Documents, as modified by the terms of this Agreement, or otherwise, or with respect to the Loan or with respect to the collection or enforcement of any of the same.  The parties to this Agreement do not intend this Agreement to be construed as a novation
of the Note.

9.           Further Assurances.  The parties agree to execute and deliver any and all instruments and documents reasonably necessary or required from time to time to effect the terms and intent of this Agreement.

10.           Entire Agreement.  This Agreement contains the entire agreement of the parties hereto with respect to the modification of the Loan, and no other agreement, statement or promise made by any party hereto, or any employee, officer, agent, or attorney of any party hereto, shall be valid or binding.

11.           Binding Effect.  Each and every of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors, personal representatives and assigns.

  

  

  

12.           Governing Law.  This Agreement shall be governed by, construed under, and interpreted and enforced in accordance with the laws of the Commonwealth of Virginia, but without regard for Virginia’s laws or rules regarding conflict or choice of laws.

13.           Severability.  If any term, covenant or condition of this Agreement, or the application thereof to any person or circumstance, shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to other persons or circumstances, shall not be affected hereby, and each term, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

14.           Headings.  The captions and headings herein are for convenience of reference only and in no way define or limit the scope or content of this Agreement or in any way affect its provisions.

15.           Modification.   The terms of this Agreement may not be changed, waived, discharged or terminated orally, but only by an instrument in writing, signed by the party against which enforcement of the change, waiver, discharge or termination is asserted.

16.           Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together will constitute one instrument.

 

 

 

 

SIGNATURES ON FOLLOWING PAGES

  

  

  

IN WITNESS WHEREOF, the parties have executed this Note and Loan Modification Agreement as of the date and year first written above.

                                                             BORROWER:

 

 

                                                             SUTRON CORPORATION, a Virginia corporation

                                                              By: _________________________

                                                                         Sidney C. Hooper

                                                                         Treasurer

COMMONWEALTH OF VIRGINIA      )

                                                                     )

COUNTY OF LOUDON                           ) to-wit:

The foregoing was subscribed and sworn to before me on this 16 day of September, 2011, by Sidney C. Hooper, as Treasurer of SUTRON CORPORATION, a Virginia corporation, on behalf of the corporation.

 

                                                                                     _______________________________

                                                                                                           Notary Public

My commission Expires: January 31, 2014           

Notary Registration No: 127916                            

 

 

[signature of Lender of following page]

  

  

  

 

                                                          LENDER:

                                                          BRANCH BANKING AND TRUST COMPANY, a

                                                          North Carolina banking corporation

                                                           By: _________________________________

                                                                     Leonard C. Lewan

                                                                     Senior Vice President

COMMONWEALTH OF VIRGINIA       )

                                                                      )

COUNTY OF FAIRFAX                            ) to wit:

The foregoing instrument was acknowledged before this ___ day of September, 2011, by Leonard C. Lewan, as Senior Vice President of BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, on behalf of the corporation.

                                                                   ____________________________________

                                                                   Notary Public

My Commission Expires: ___________________

Notary Registration No.: ___________________Exhibit 10.1 Promissory Note

Exhibit 10.1

UNSECURED PROMISSORY NOTE

PRINCIPAL AMOUNT:  

$80,000

LOAN DATE:  

MARCH 15, 2012

EXECUTION DATE:

MARCH 22, 2012

INTEREST RATE: 

10.00% SIMPLE INTEREST

BORROWER:

WILLOW CREEK ENTERPRISES, INC.

LENDER:

DUKE HOLDINGS LTD.

DUE DATE:

$80,000 ON DEMAND

1.

Principal Repayment.  For value received, Willow Creek Enterprises, Inc., a Delaware corporation (the “Borrower”) hereby unconditionally promises to pay to the order of Duke Holdings Ltd., a corporation established under the laws of the country of Belize (the “Lender”), the principal amount of eighty thousand US dollars ($80,000), with simple interest accruing at an annual rate of ten percent (10.00%) thereon. The principal amount is due and payable upon ten (10) days written notice by Lender (the “Due Date”).

2.

Payment Terms. Borrower shall pay the principal and any accrued interest in full on or before Due Date.

3.

Default. Borrower will be in default if any of the following occur: 

(a)

Borrower fails to make the Principal Repayment when due; 

(b)

Borrower breaks any promise Borrower has made to Lender in this Note or Borrower fails to perform promptly at the time and strictly in the manner provided in this Note; 

(c)

Any representation or statement made or furnished to Lender by Borrower or on Borrower's behalf in connection with this Note is false or misleading in any material respect; or, 

(d)

A receiver is appointed for any part of Borrower's property, Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any Bankruptcy or insolvency laws seeking the liquidation or reorganization of Borrower and such proceeding is not dismissed within sixty (60) days after such filing.

4.

Borrower’s Right to Prepay.  Borrower may pay without penalty, all or a portion of the amount owed earlier than it is due. Any prepayment shall be first applied against any accrued and unpaid interest and then to reduce the amount of principal due under this Note.

5.

Waiver of Demand, Presentment, etc. The Borrower hereby expressly waives demand and presentment for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, bringing of suit and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereunder, regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder.

6.

Payment.  Except as otherwise provided for herein, all payments with respect to this Note shall be made in lawful currency of the United States of America by check or wire transfer of immediately available funds, at the option of the Lender, at the principal office of the Lender or such other place or places or designated accounts as may be reasonably specified by the Lender of this Note in a written notice to the Borrower at least one (1) business day prior to payment. 

7.

Assignment.  The rights and obligations of the Borrower and the Lender of this Note shall be binding upon, and inure to the benefit of, the permitted successors, assigns, heirs, administrators and transferees of the parties hereto.

8.

Waiver and Amendment.  Any provision of this Note, including, without limitation, the due date hereof, and the observance of any term hereof, may be amended, waived or modified (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Borrower and the Lender.

9.

Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by registered or certified mail, postage prepaid, or delivered by facsimile transmission, to the Borrower at the address or facsimile number set forth herein or to the Lender at its address or facsimile number set forth in the records of the Borrower.  Any party hereto may by notice so given change its address for future notice hereunder.  Notice shall conclusively be deemed to have been given when personally delivered or when deposited in the mail in the manner set forth above and shall be deemed to have been received when delivered or, if notice is given by facsimile transmission, when delivered with confirmation of receipt.

10.

Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions shall be excluded from this Note, and the balance of this Note shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

11.

Headings.  Section headings in this Note are for convenience only, and shall not be used in the construction of this Note.

IN WITNESS WHEREOF, the Borrower has caused this Note to be issued as of the date first above written.

WILLOW CREEK ENTERPRISES, INC.

By:  /s/ Terry Fields                                   

        Name:  Terry Fields

        

        Title:    President and Chief Executive Officer

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