MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding shall set forth the terms and conditions
whereby Xxxxx Xxxxxx Xxxxxxxxx, III ("Xxxxxxxxx") and Xxxxx X. Xxxxx ("Xxxxx")
agree to loan funds to DCT Components Systems, Inc. ("DCT").
The terms of said loan being acknowledged and consented to by Noble
International Ltd. ("Noble"). Xxxxxxxxx and Xxxxx agree to loan to DCT an amount
equal to fifty (50%) percent of the liability to Chrysler Corporation for the
overpayment by Chrysler Corporation to DCT said amount being approximately
$225,000. The loan to DCT shall be on the following terms and conditions:
1. The effective date of the Note shall be July 1, 1996;
2. The maturity date of the Note shall be the earlier of August 1, 1998
or the refinancing of the debt to CIT;
3. The Note shall bear interest at the rate of ten (10%) percent per
annum;
4. Interest shall accrue on the full amount to be loaned from July 1,
1996 to December 31, 1996; accrued interest being due and payable
January 2, 1997; thereafter, interest shall be paid quarterly on April
1, July 1, October 1, and January 2;
5. There shall be a five (5) day grace period for the payment of
interest. If the interest is not paid within said five (5) days, the
entire amount shall be accelerated and become due and payable;
6. The Note shall be in the form of the attached Exhibit A; and
The foregoing terms and conditions as well as those addition terms and
conditions as set forth in the Note attached hereto as Exhibit A and
incorporated herein by reference are acceptable to the corporation.
DCT COMPONENTS SYSTEMS, INC.
BY: /s/ Xxxxx XXXX
------------------------------
Its PRES.
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Date: 8/3, 1996
ACKNOWLEDGED AND CONSENTED TO:
Noble International Ltd. hereby consents to the
terms and conditions as set forth herein.
BY: /s/ Xxxx X. Xxxxx
------------------------
Its President
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Date: July 1, 1996
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Exhibit A
PROMISS0RY NOTE
AMOUNT: [_____] DETROIT, MICHIGAN
DUE DATE; August 1, 1998 DATED: July 1, 1996
FOR VALUE RECEIVED, on the Due Date the undersigned, DCT COMPONENT SYSTEMS,
INC., a Michigan corporation, (hereinafter "Borrower"), promises to pay to the
order of XXXXX XXXXXX XXXXXXXXX, III or XXXXX X. XXXXX] (hereinafter "Payee"),
at Xxxxx's address set forth below, or at such other place as Payee may
designate in writing, the principal sum of [___________________] and no/100
Dollars ($[___________]), plus accrued interest as hereinafter provided, all in
lawful money of the United States of America.
The principal outstanding under this Note from time to time shall bear
interest ("Effective Interest Rate") on a basis of a year of three hundred sixty
(360) days and thirty (30) days in a month, at a fixed rate equal to ten percent
(10%) per annum, except that interest shall be deemed to have accrued hereunder
from and after December 31, 1995.
Interest only on all amounts disbursed hereunder shall be due and payable
on the first (1st) day of each calendar quarter, except that the first
installment of interest shall not be due and payable hereunder until January 2,
1997, with interest payable thereafter on the entire principal amount
outstanding on each April 1, July 1, October 1, and January 2, until all
principal and accrued interest hereunder is paid in full. In any event, all
unpaid principal plus any accrued but unpaid interest outstanding hereunder
shall be due and payable no later than the Due Date.
Nothing herein contained, nor any transaction relating hereto, shall be
construed or so operate as to require the Borrower to pay, or be charged,
interest, at a greater rate than the maximum allowed by the applicable law
relating to this Note. Should any interest or other charges charged, paid or
payable by the Borrower in connection with this Note, or any other document
delivered in connection herewith, result in the charging, compensation, payment
or earning of interest in excess of the maximum allowed by the applicable law as
aforesaid, then any and all such excess shall be and the same is hereby waived
by the holder, and any and all such excess paid shall be automatically credited
against and in reduction of the principal due under this Note. If Payee shall
reasonably determine that the Effective Interest Rate (together with all other
charges or payments related hereto that may be deemed interest) stipulated under
this Note is, or may be usurious or otherwise limited by law, the unpaid balance
of this Note, with accrued interest at the highest rate permitted to be charged
by
stipulation in writing between Payee and Borrower, at the option of Payee, shall
immediately become due and payable.
Upon failure to pay any installment of interest and/or principal hereunder
within five (5) days of the date when due, or upon default under any other
promissory note, loan agreement, security or any other agreement executed in
connection herewith, or between the Borrower and Payee, or upon dissolution or
termination of the existence of Borrower, or upon the insolvency or business
failure of Borrower, or upon the appointment of a receiver for any of the
property of Borrower, or if Borrower is generally not paying its debts as such
debts become due, or if a custodian is appointed or takes possession of the
property of Borrower, or upon commencement of any proceedings under the
bankruptcy or insolvency laws by or against Borrower, or if any other
indebtedness of Borrower to Payee or a third party shall become due and remain
unpaid by acceleration of maturity or after maturity thereof, or if any writ of
attachment, garnishment, execution or similar process shall be issued against
any property of Borrower, or if the debt of the Borrower to CIT Financial is
refinanced, or if Payee deems itself insecure for any other reason whatsoever,
then and in any such event, Payee may, without notice, declare the entire unpaid
principal balance hereunder and all accrued interest, together with all other
indebtedness of Borrower to Payee, to be immediately due and payable. During any
period(s) this Note is in default, or after the Due Date, or after acceleration
of maturity, the Borrower shall be obligated to Payee and shall pay Payee,
default interest at the rate of the Effective Interest Rate plus five percent
(5%) per annum from the Due Date, the date of acceleration of maturity or the
date of default, as the case may be, until the entire principal balance together
with accrued interest has been paid in full. If this Note is not otherwise in
default, but any required installment is not paid within five (5) days from the
date same is due, then, at the option of the Payee, a late charge of not more
than Five Cents ($.05) for each dollar of the installment so overdue may be
charged. The right of Payee to collect a default interest rate and/or a late
charge is in addition to any other rights of Payee pursuant hereto. Payee may
hold and apply at any time its own indebtedness or liability to Borrower in
payment of any indebtedness hereunder. Notwithstanding anything contained in
this paragraph to the contrary, this Note shall be payable in all events
immediately upon demand by Xxxxx.
Acceptance by Payee of any payment in an amount less than the amount then
due shall be deemed an acceptance on account only, and the failure to pay the
entire amount then due shall be and continue to be an event of default. Borrower
and all endorsers, sureties and guarantors hereof, hereby jointly and severally
waive presentment for payment, demand, notice of nonpayment, notice of protest
of this Note, diligence in collection or bringing suit, and hereby consent to
any and all extensions of time, renewals, waivers, or modifications that may be
granted by Payee with respect
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to payment of any other provisions of this Note, and to the release of any
collateral or any part thereof, with or without substitution. The liability of
the Borrower shall be absolute and unconditional, without regard to the
liability of any other party hereto.
This Note is secured by the capital stock of Borrower owned by Xxxxx Xxxx,
pursuant to the terms of a certain Collateral Pledge and Escrow Agreement of
even date herewith.
WITNESSES: BORROWER:
DCT COMPONENT SYSTEMS, INC.,
a Michigan corporation
--------------------------------- ------------------------------------
By: Xxxxx Xxxx
_________________________________ Its: President
ADDRESSES:
BORROWER:
DCT COMPONENT SYSTEMS, INC.
34660 Centaur
Clinton Township, Michigan 48035
Attn: Xxxxx Xxxx
PAYEE:
[Xxxxx Xxxxxx Xxxxxxxxx, III,
c/o DCT Companies, Inc.
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000]
or
[Xxxxx X. Xxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxx 00000]
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