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Exhibit
10.7
FOURTH
AMENDMENT
TO CONSTRUCTION LOAN
AGREEMENT
This FOURTH AMENDMENT TO
CONSTRUCTION LOAN AGREEMENT (this “ Agreement
”), dated as of July 26, 2007, is entered into by and
among the following parties:
(a) TIETEK LLC, a Delaware
limited liability company (the “ Borrower
”);
(b) NORTH AMERICAN
TECHNOLOGIES GROUP, INC., a Delaware corporation (the “
Company ”), and TIETEK TECHNOLOGIES, INC., a Texas
corporation (“ TTT ”) (the Company and TTT shall
be collectively referred to as the “ Borrower
Affiliates ” and the Borrower Affiliates and the Borrower
shall be collectively referred to as the “ Borrower
Group ”); and
(c) OPUS 5949 LLC (formerly
known as Tie Investors, LLC), a Texas limited liability company
(the “ Lender ” and, together with the Borrower
Group, the “ Parties ”).
RECITALS
A. The Borrower, the Borrower
Affiliates, and the Lender entered into that certain Construction
Loan Agreement, dated as of February 5, 2004, as amended by
(1) that certain Release, dated February 22, 2005, by and
among the Parties, (2) that certain Limited Waiver and First
Amendment to Construction Loan Agreement dated July 7, 2005,
(3) that certain Second Amendment to Construction Loan
Agreement dated December 29, 2005, and (4) that certain
Third Amendment to Construction Loan Agreement dated
September 18, 2006 (as so amended, the “ Loan
Agreement ”), pursuant to which the Lender agreed to make
available to the Borrower Group certain financial accommodations
and modifications to the Loan Documents.
B. The Borrower and the
Borrower Affiliates have requested that, subject to the terms,
conditions, covenants and limitations contained in this Agreement,
the Lender amend certain terms and conditions of the Loan Agreement
and the Note to permit the Borrower to obtain additional financing
that will be subordinate to the Loan (as defined in the Loan
Agreement, as amended hereby) on the terms set forth
below.
C. The Lender has agreed to
the actions described in Paragraph B preceding, in each
instance upon and subject to the terms, conditions, covenants and
limitations contained in this Agreement.
ACKNOWLEDGMENTS:
(a) The Borrower and the
Borrower Affiliates hereby acknowledge and agree to the accuracy of
all Recitals included in this Agreement.
(b) The Borrower and the
Borrower Affiliates acknowledge and agree that all amounts advanced
to, or for the benefit of, the Borrower, including, but not limited
to, the Loan prior to the date hereof are, and shall continue to
be, obligations under the Loan Documents (the “
Obligations ”) and subject to all the terms and
conditions in the Loan Agreement and the other Loan Documents, in
each instance as amended and modified by this Agreement.
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(c) The Borrower and the
Borrower Affiliates acknowledge and agree that (i) as of
July 25, 2007, the outstanding principal and accrued but
unpaid amount of the Obligations is $14,070,777.78, of which
$14,000,000.00 is the amount of outstanding principal of the Prior
Note, $70,777.78 is the amount of accrued but unpaid interest
thereon; and (ii) the Obligations are enforceable against the
Borrower without offset, reduction, or counterclaim.
AGREEMENTS
NOW, THEREFORE, in
consideration of the premises herein contained and other good and
valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties hereto, intending to be legally bound,
agree to the above Recitals, Acknowledgments and as
follows:
1. DEFINITIONS . All
capitalized terms used but not otherwise defined in this Agreement
shall have the meanings ascribed to them in the Loan
Agreement.
2. AMENDMENTS TO LOAN
DOCUMENTS .
2.1 The following definitions
in Section 1.1 of the Loan Agreement are hereby amended
and restated in their entirety to read as follows:
“Debentures” the 8% Convertible Debentures
of the Company in the original principal amount of up to
$3,000,000, issued pursuant that certain Securities Purchase
Agreement dated as of July 24, 2007 (the “July 2007
SPA”).
“Loan
Documents” This Agreement, the Limited Waiver and First
Amendment to Construction Loan Agreement dated as of July 7,
2005, the Second Amendment to Construction Loan Agreement dated as
of December 29, 2005, the Third Amendment to Construction Loan
Agreement dated as of September 18, 2006, this Fourth
Amendment to Construction Loan Agreement dated as of the date
hereof, the Note, the Deed of Trust, the Security Agreement, the
Patent Security Agreement, the Intercreditor Agreement, the Voting
Agreement, the Non-Compete Agreement, the NATK Royalty Agreement,
the TieTek Royalty Agreement, the Membership Pledge Interest
Agreements, the Solvency Certificates, and any other documents to
be executed by Borrower or any of their respective shareholders
pertaining to the Loan, and as the same may be amended from time to
time.
“Note”
collectively, (i) that certain Amended and Restated Promissory
Note, dated as of July 7, 2005, in the stated principal amount
of $14,000,000 made by TieTek LLC, payable to the order of the
Lender, as amended by the First Amendment dated December 29,
2005, Second Amendment dated September 18,
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2006 and Third Amendment
dated July 26, 2007, (ii) any other promissory notes
evidencing any portion of the Loan, including any instruments
amended and restated by the instrument referred to in clause
(i) immediately preceding, and (iii) any promissory notes
or other agreement evidencing any renewals, extensions, increases,
amendments, modifications, restatements or payment-in-kind in
respect of any of the foregoing.”
2.2 All references to the
“Loan Agreement” or the “Construction
Agreement” or other similar terms intended to refer to the
Loan Agreement in each of the Loan Documents and in any other
documents or agreements by, between or among any of the Borrower
Group and their respective affiliates, and or for the benefit of
the Lender will from and after the date hereof refer to the Loan
Agreement, as amended hereby, and all obligations of the Borrower
Group under the Loan Agreement, as amended hereby, shall be secured
by and be entitled to the benefits of said Loan Documents and such
other documents and agreements. All Loan Documents heretofore
executed by all or any of the Borrower Group shall remain in full
force and effect to secure the Loan (as defined in the Loan
Agreement), and such Loan Documents, as amended hereby, are hereby
ratified and affirmed.
3. CONDITIONS PRECEDENT TO
EFFECTIVENESS . The effectiveness of this Agreement is subject
to the fulfillment of each of the following terms and conditions to
the satisfaction of Lender in its sole discretion at or before 2:00
p.m. (Dallas time) July 26, 2007.
3.1 The Lender shall have
received fully executed copies of the July 2007 SPA among the
Company and certain purchasers of Debentures issued pursuant to the
July 2007 SPA, in form and substance satisfactory to
Lender.
3.2 The Lender shall have
received a legal opinion of the Borrower’s counsel in form
and substance satisfactory to the Lender as to much matters as
Lender may request with respect to each member of the Borrower
Group, this Agreement, the Loan Agreement, the other Loan Documents
and each agreement and instrument delivered in connection with, or
contemplated by, this Agreement.
3.3 The Lender shall have
received evidence satisfactory to the Lender that each Purchaser
(as defined in the July 2007 SPA) has funded the Applicable
Subscription Amount (as defined in the July 2007 SPA).
3.4 The Lender shall have
received the Third Amendment to Amended and Restated Promissory
Note in form of attached hereto as Exhibit A, appropriately
executed by TieTek LLC.
4. LENDER CONSENT AND
WAIVER . By execution hereof, Lender hereby consents to
(i) the payment of PIK Interest on the Note in NATK Shares for
the interest payments due April 1, 2007 and July 1, 2007
and for any interest that accrued from July 1, 2007 through
the date of this Agreement; (ii) the payment of PIK Interest
on the Note at the Applicable Rate of 700 base points per annum for
interest payments due April 1, 2007 and July 1, 2007 and
for any interest accrued from July 1, 2007 through the date of
this Agreement and waives any default under the Loan Documents or
Loan Agreement that may have resulted therefrom; (iii) the
transactions contemplated in the July 2007 SPA; and (iv) the
amendment of the Note to amend and restate the definition of
“Debenture Termination Date.”
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5. RATIFICATIONS,
REPRESENTATIONS AND WARRANTIES .
5.1 The terms and provisions
set forth in this Agreement shall supersede all inconsistent terms
and provisions set forth in the Loan Agreement and, except as
expressly set forth in this Agreement, the terms and provisions of
the Loan Agreement and each of the other Loan Documents are
ratified and confirmed and shall continue in full force and effect.
The Parties hereto agree that the Loan Agreement shall continue to
be legal, valid, binding and enforceable in accordance with its
terms.
5.2 The Borrower and the
Borrower Affiliates hereby represent and warrant to the Lender as
follows:
(a) the execution, delivery
and performance of this Agreement and any and all other agreements
executed and/or delivered in connection herewith or therewith have
been authorized by all requisite action on the part of the Borrower
and the Borrower Affiliates and will not violate (i) the
Regulations of the Borrower; or (ii) the articles of
incorporation or bylaws of either of the Borrower
Affiliates;
(b) the representations and
warran
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