SECOND AMENDMENT TO CREDIT AUTHORIZATION
AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AUTHORIZATION AGREEMENT, dated as of
August 11, 1997 (this "Amendment") by and between Interface Systems, Inc., a
Delaware Corporation, the ("Borrower") and NBD Bank, a Michigan banking
corporation (the "Bank").
RECITALS
A. The Borrower and the Bank are parties to a Credit
Authorization Agreement dated as of February 19, 1997, as
amended by a First Amendment To Credit Authorization
Agreement dated as of April 21, 1997 (as amended the
"Agreement").
B. The Borrower has defaulted under the Agreement due to a
breach of the Net Worth covenant in section 9.3(i), for the
month ended June 30, 1997.
C. The Borrower has requested that the Bank waive such covenant
default, and the Bank is willing to do so strictly in
accordance with the terms hereof, and provided the Agreement
is amended as set forth herein, and the Borrower has agreed
to such amendment.
AGREEMENT
Based upon these recitals, the parties agree as follows:
1. Upon satisfaction of the conditions set forth in paragraph 4
hereof, the Agreement shall hereby be amended as of the
effective date hereof as follows:
A. The definition of "Net Worth" in section 9.3(i)
shall be deleted in its entirety and the following
shall be inserted in place thereof:
Net Worth. Permit its Net Worth to be less
than $11,500,000 at June 30, 1997 and increasing thereafter by 75% of
monthly net income, without reduction for any loss periods.
2. From and after the effective date of this Amendment,
references to the "Agreement" in the Credit Authorization Agreement, the
Note, the Security Documents, and all other documents executed pursuant to
the Credit Authorization Agreement shall be deemed references to the Credit
Authorization Agreement as amended hereby.
3. The Borrower represents to the Bank that:
(a) (i) The execution, delivery and performance
of this amendment by the Borrower and all
agreements and documents delivered pursuant
hereto by the Borrower have been duly
authorized by all necessary action and do
not and will not require any consent or
approval of its shareholders, violate any
provision of any law, rule, regulation,
order, writ, judgment, injunction, decree,
determination or award presently in effect
having applicability to it or of its
articles of incorporation or by-laws; (ii)
no authorization, consent, approval,
license, exemption of or filing a
registration with any court or governmental
department, commission, board, bureau,
agency or instrumentality, domestic or
foreign, is or will be necessary to the
valid execution, delivery, or performance
by the Borrower of this amendment and all
agreements and documents delivered pursuant
hereto and (iii) this Amendment and all
agreements and documents delivered pursuant
hereto by the Borrower are the legal, valid
binding obligations of the Borrower
enforceable against it in accordance with
the terms thereof.
(b) After giving effect to the amendment
contained herein and effected pursuant
hereto, the representations and warranties
contained in Section 10.0 of the Agreement
are true and correct on and as of the
effective date hereof with the same force
and effect as if made on and as of such
effective date.
(c) Other than the Existing Default, as defined
in and to be waived pursuant to paragraph
5, no Events of Acceleration (as defined in
Section 11.0 of the Agreement) and no
default shall have occurred and be
continuing or will exist under the
Agreement as of the effective date hereof.
4. This Amendment shall not become effective until it
shall be duly executed by the Borrower and the
Bank.
5. The Borrower acknowledges that an Event of
Acceleration has occurred because the Borrower has
breached a covenant contained in Section 9.3(i) of
the Agreement for the month of the Borrower ended
June 30, 1997 (the "Existing Default"). The
Borrower acknowledges that the Bank has the ability
to accelerate all indebtedness and exercise all of
its rights and remedies under the Agreement. In
consideration of the execution of this Amendment
and subject to the satisfaction of the condition
required by Paragraph 4 hereof, the Bank agrees to
waive the Existing Default, provided that such
waiver shall waive only the Existing Default and
does not waive any other Events of Acceleration,
including without limitation any future Events of
Acceleration caused by any violation of Section
9.3(i). This waiver shall not be deemed to be a
waiver, or a consent to any modification or
amendment, of any other term or condition of the
Agreement or any term or condition of any
agreement, instrument, or document referred to
therein or executed pursuant thereto, or to
prejudice any present or future right which the
Bank now has or may have hereunder.
6. The terms used but not defined herein shall have
the respective meanings ascribed thereto in the
Agreement. Except as expressly contemplated
hereby, the Agreement, and all related notes,
guaranties, certificates, instruments and other
documents, are hereby ratified and confirmed and
shall remain in full force and effect, and the
Borrower acknowledges that it has no defense,
offset, or counterclaim thereunder.
7. This Amendment shall be governed by and in
accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first written above.
INTERFACE SYSTEMS, INC.
/S/
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By: Xxxxx X. Xxxxx
Its: Treasurer
NBD BANK
/S/
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By: Xxxxxxx Xxxxx
Its: First Vice President