WORKOUT AGREEMENT
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This Agreement, dated as of June 1, 2001, is entered into by (1) each of
NATIONAL MANUFACTURING TECHNOLOGIES, INC., a California corporation ("NMTI"),
I-PAC MANUFACTURING, INC., a California corporation ("Electronics"), I-PAC
PRECISION MACHINING, INC., a California corporation ("Sheet Metal"), and
NATIONAL METAL TECHNOLOGIES, a California corporation ("NMT" and, together with
Electronics and Sheet Metal, the "Borrowers"), and (2) CELTIC CAPITAL
CORPORATION, a California corporation ("Celtic").
Recitals
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A. NMTI and Celtic have entered into a Loan and Security Agreement
dated as of June 18, 1999, as amended by a First Amendment to Loan and Security
Agreement dated December 15, 1999, a Second Amendment to Loan and Security
Agreement dated August 14, 2000, a Third Amendment to Loan and Security
Agreement dated effective October 16, 2000 and a Fourth Amendment to Loan and
Security Agreement dated effective March 5, 2001.
B. Electronics and Celtic have entered into a Loan and Security Agreement
dated as of June 18, 1999, as amended by a First Amendment to Loan and Security
Agreement dated December 15, 1999, a Second Amendment to Loan and Security
Agreement dated effective June 9, 2000, a Third Amendment to Loan and Security
Agreement dated August 14, 2000, a Fourth Amendment to Loan and Security
Agreement dated effective October 16, 2000 and a Fifth Amendment to Loan and
Security Agreement dated effective March 5, 2001 (said Agreement, as so amended
and as it may hereafter be amended, restated or otherwise modified from time to
time, herein called the "Electronics Loan Agreement").
C. Sheet Metal and Celtic have entered into a Loan and Security Agreement
dated as of June 18, 1999, as amended by a First Amendment to Loan and Security
Agreement dated December 15, 1999, a Second Amendment to Loan and Security
Agreement dated effective June 9, 2000, a Third Amendment to Loan and Security
Agreement dated August 14, 2000, a Fourth Amendment to Loan and Security
Agreement dated effective October 16, 2000 and a Fifth Amendment to Loan and
Security Agreement dated effective March 5, 2001 (said Agreement, as so amended
and as it may hereafter be amended, restated or otherwise modified from time to
time, herein called the "Sheet Metal Loan Agreement").
D. NMT and Celtic have entered into a Loan and Security Agreement dated as
of June 18, 1999, as amended by a First Amendment to Loan and Security Agreement
dated December 15, 1999, a Second Amendment to Loan and Security Agreement dated
effective June 9, 2000, a Third Amendment to Loan and Security Agreement dated
August 14, 2000, a Fourth Amendment to Loan and Security Agreement dated
effective October 16, 2000 and a Fifth Amendment to Loan and Security Agreement
dated effective March 5, 2001 (said Agreement, as so amended and as it may
hereafter be amended, restated or otherwise modified from time to time, herein
called the "NMT Loan Agreement").
E. The Electronics Loan Agreement, the Sheet Metal Loan Agreement and the
NMT Loan Agreement are sometimes referred to herein as the "Loan Agreements."
F. Each of NMTI, Electronics, Sheet Metal and NMT (the "Credit Parties") has
executed a separate Guaranty dated as of June 18, 1999 in favor of Celtic
(together the "Guaranties"), whereby such Credit Party guaranteed all of the
obligations of the other Credit Parties to Celtic.
G. It is the intention of the parties hereto that the Borrowers repay their
indebtedness to Celtic under the Loan Agreements pursuant to the terms of this
Agreement and the other rights and remedies of Celtic, in order to obviate the
need for a liquidation or reorganization of the Borrowers under the United
States Bankruptcy Code. Accordingly, the Credit Parties and Celtic hereby agree
as set forth below.
Section 1. Acknowledgments.
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Each of the Credit Parties hereby acknowledges and agrees as follows:
(a) the facts set forth above in the recitals to this Agreement are correct and
complete with respect to the subject matter thereof; (b) each Borrower is in
default under its Loan Agreement, pursuant to Sections 10.1.1, 10.1.2, 10.1.3,
10.1.4, 10.1.5, 10.1.7 and 10.1.9 thereof; (c) as of the date of this Agreement,
there is a principal balance due, owing and unpaid from each Borrower to Celtic
as set forth in Schedule 1 attached hereto, in addition to accrued interest
thereon and other fees and charges in respect thereof; (d) Celtic has no further
obligation to advance funds or otherwise extend credit to any Credit Party; (e)
Celtic has not waived or agreed to waive any Credit Party's defaults under its
Loan Agreement or Guaranty or any of the rights and remedies of Celtic in
respect thereof; (f) none of the Loan Agreements has been amended or otherwise
modified, except as described in the recitals to this Agreement; (g) the Loan
Agreements, the Guaranties and the other documentation entered into in
connection therewith were duly authorized and constitute legal, valid, binding
and continuing obligations of the Credit Parties to Celtic, enforceable in
accordance with the respective terms of such documentation, except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally; and
(h) as of the date of this Agreement, no Credit Party has any claim,
counterclaim, cross-claim, right of setoff or defense of any kind that would in
any way reduce or offset any of such Credit Party's obligations to Celtic under
the Loan Agreements, the Guaranties or any other documentation entered into in
connection therewith.
Section 2. Component Transactions.
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The Credit Parties will enter into, and will use commercially reasonable
efforts to procure that Comtel Holdings, Inc., a Delaware corporation ("Comtel
Holdings"), and Xxxxx Diversified Technologies, Inc., a California corporation
("Xxxxx"), enter into, as applicable, each of the transactions described below
(the "Component Transactions") as soon as practicable but in any event not later
than __________, 2001 (the date on which all of the Component Transactions have
been entered into and, in the case of the Component Transactions described in
Sections 2(a) and (e), consummated herein called the "Closing Date").
(a) Asset Purchase Agreement.
Electronics, Sheet Metal, Xxxxx and NMTI will enter into an Asset
Purchase Agreement (the "Asset Purchase Agreement") whereby Xxxxx will purchase
from Electronics and Sheet Metal all of their equipment and inventory for an
aggregate purchase price of $__________, allocated as follows: (i) $454,730.00
for the equipment of Electronics; (ii) $__________ for the inventory of
Electronics; (iii) $1,546,900.00 for the equipment of Sheet Metal; and (iv)
$__________ for the inventory of Sheet Metal.
(b) Equipment Notes.
Xxxxx will execute (i) a promissory note in favor of Electronics in the
principal amount of $454,730.00 (the "Electronics Equipment Note") and (ii) a
promissory note in favor of Sheet Metal in the principal amount of $1,546,900.00
(the "Sheet Metal Equipment Note"). Each of the Electronics Equipment Note and
the Sheet Metal Equipment Note shall bear interest at the rate of interest per
annum announced by Xxxxx Fargo Bank, N.A. at its head office in San Francisco,
California from time to time as its "prime rate" or "reference rate" plus one
and one-quarter percent (1.25%) per annum, shall provide for repayment of
principal in 36 substantially equal monthly installments, commencing on
September 3, 2001, and shall otherwise be in form and substance satisfactory to
Celtic.
(c) Inventory Notes.
Xxxxx will execute (i) a promissory note in favor of Electronics in the
principal amount of $__________ (the "Electronics Inventory Note") and (ii) a
promissory note in favor of Sheet Metal in the principal amount of $__________
(the "Sheet Metal Inventory Note"). Each of the Electronics Inventory Note and
the Sheet Metal Inventory Note shall bear interest at the rate of interest per
annum announced by Xxxxx Fargo Bank, N.A. at its head office in San Francisco,
California from time to time as its "prime rate" or "reference rate" plus one
and one-quarter percent (1.25%) per annum, shall provide for repayment of
principal in monthly installments, commencing on ________ and ending on _______,
and shall otherwise be in form and substance satisfactory to Celtic.
(d) Equipment Security Agreement.
Xxxxx will execute a security agreement in favor of Electronics and Sheet
Metal, in form and substance satisfactory to Celtic (the "Equipment Security
Agreement"), encumbering the equipment purchased by Xxxxx from Electronics and
Sheet Metal and securing the Electronics Equipment Note and the Sheet Metal
Equipment Note.
(e) Landlord Agreements.
Cabot Industrial Properties, L.P., a Delaware limited partnership
("Cabot"), Xxxxx and Electronics will execute an agreement (the "Electronics
Landlord Agreement") substantially in the form of the Landlord's Consent and
Waiver dated as of August 23, 1999 among Cabot, Electronics and Celtic; and
Square One Development Corporation, a California corporation ("Square One"),
Xxxxx and Sheet Metal will execute an agreement (the "Sheet Metal Landlord
Agreement") substantially in the form of the Agreement with Landlord dated as of
August 16, 2000 among Square One, Sheet Metal and Celtic.
(f) Assignments to Celtic.
Electronics will irrevocably assign to Celtic, on terms and conditions
satisfactory to Celtic and with the consent of Xxxxx and Cabot, all of
Electronics' right, title and interest in and to the Electronics Equipment Note,
the Electronics Inventory Note, the Equipment Security Agreement and the
Electronics Landlord Agreement, and Sheet Metal will irrevocably assign to
Celtic, on terms and conditions satisfactory to Celtic and with the consent of
Xxxxx and Square One, all of Sheet Metal's right, title and interest in and to
the Sheet Metal Equipment Note, the Sheet Metal Inventory Note, the Equipment
Security Agreement and the Sheet Metal Landlord Agreement (such assignments
herein called the "Celtic Assignments").
(g) Agreement to Pursue Receivables.
Each of NMTI, Electronics, Sheet Metal, NMT, Comtel Holdings and Xxxxx
will enter into a letter agreement in favor of Celtic, in form and substance
satisfactory to Celtic, whereby NMTI, Electronics, Sheet Metal, NMT, Comtel
Holdings and Xxxxx will agree to act in good faith and use commercially
reasonable efforts (but without incurring material cost or expense) to assist
Celtic in pursuing the payment of the accounts receivable of Electronics, Sheet
Metal and NMT (the "Receivables Letter Agreement").
(h) NMT Auction.
Pursuant to documentation in form and substance satisfactory to Celtic,
NMT will enter into an agreement with an auctioneer acceptable to Celtic (the
"Auction Agreement") to sell all of the equipment of NMT at an auction to be
held not later than October 31, 2001; provided, however, that NMT shall not be
required to proceed with such auction if, on or before September 30, 2001, the
Credit Parties have paid Celtic at least $4,000,000 in principal amount of the
indebtedness to Celtic under the Loan Agreements, together with all accrued and
unpaid interest thereon; further provided, however, that NMT will proceed
immediately with such auction, regardless of the date, if NMT fails at any time
to make a payment of rent when due under its lease dated as of December 18, 1998
with Touchstone Calle Platino LLC, a California limited liability company, with
respect to the real property commonly known as 0000 Xxxxx Xxxxxxx xx xxx Xxxx xx
Xxxxxxxxx, Xxxxxx of San Diego, State of California.
Section 3. Debt Repayment.
In consideration of the Credit Parties' entering into and consummating,
and procuring Alton's and Comtel Holdings' entering into and consummating, the
Component Transactions as described in Section 2, Celtic will (a) consent to the
sale of the equipment and inventory of Electronics and Sheet Metal to Xxxxx
pursuant to the Asset Purchase Agreement, such consent to be evidenced by
Celtic's execution of UCC releases with respect to its existing security
interest in such equipment and inventory, and (b) credit against the
indebtedness of Electronics and Sheet Metal to Celtic, on a dollar-for-dollar
basis, all amounts received by Celtic under the Electronics Equipment Note, the
Sheet Metal Equipment Note, the Electronics Inventory Note, the Sheet Metal
Inventory Note and the Equipment Security Agreement and provide Electronics and
Sheet Metal a monthly accounting of such payments. Notwithstanding the
foregoing, nothing in this Agreement shall diminish or alter the rights and
remedies of Celtic to proceed independently against any or all of the Credit
Parties for amounts unpaid under the Loan Agreements, the Guaranties or
otherwise. Celtic shall at all times retain the right to exercise all available
remedies under the Loan Agreements, the Guaranties or otherwise both before and
after the Closing Date.
Section 4. Conditions Precedent.
It shall be a condition precedent to the effectiveness of this Agreement
that the following documents, in form and substance satisfactory to Celtic, be
delivered to Celtic:
(a) a copy of the executed Asset Purchase Agreement, including all
documents delivered by the parties pursuant thereto, certified by Electronics
and Sheet Metal to be correct and complete and in full force and effect;
(b) the originals of the Electronics Equipment Note, the Sheet Metal
Equipment Note, the Electronics Inventory Note and the Sheet Metal Inventory
Note, each duly executed by Xxxxx and duly endorsed to Celtic by Electronics or
Sheet Metal, as appropriate;
(c) originals of the executed Equipment Security Agreement, the
executed Electronics Landlord Agreement and the executed Sheet Metal Landlord
Agreement, certified by Electronics and Sheet Metal to be correct and complete
and in full force and effect, together with (i) UCC-1 financing statements for
filing in the State of California, duly executed by Xxxxx in favor of
Electronics and Sheet Metal and duly assigned to Celtic by Electronics and Sheet
Metal, and (ii) to the extent required by Celtic, UCC termination statements
with respect to any UCC-1 financing statements previously executed by
Electronics or Sheet Metal in favor of any Person (other than Celtic) and filed
in the State of California, duly executed by such Person;
(d) the Celtic Assignments, duly executed by Electronics and Sheet
Metal and consented to by Xxxxx, Cabot and Square One;
(e) the Receivables Letter Agreement, duly executed by NMTI,
Electronics, Sheet Metal, NMT and Comtel Holdings;
(f) a copy of the Auction Agreement, certified by NMT to be correct and
complete and in full force and effect; and
(g) such other approvals, opinions, evidence and documents as Celtic
may reasonably require.
Section 5. Release of Claims Against Celtic.
(a) Terms of Release.
As additional consideration for Celtic's performance under this
Agreement, the Credit Parties do, for themselves and their heirs, executors,
administrators, employees, representatives, shareholders, predecessors,
subsidiaries, affiliates, parents, successors-in-interest, transferees, assigns,
officers, directors, managers, servants, employees, insurers, underwriters,
attorneys and agents, now and in the future, and for all persons acting by,
through, under or in concert with them, and each of them, hereby release,
discharge and hold harmless Celtic and its respective past, present and future
administrators, affiliates, agents, assigns, attorneys, directors, employees,
executors, heirs, officers, parents, partners, predecessors, representatives,
parents, shareholders, subsidiaries and successors, and each of them, and all
persons acting by, through, under or in concert with one or more of them (the
"Released Parties"), from and against any and all liabilities, claims,
obligations, counterclaims, security arrangements, controversies, damages,
judgments, awards, actions and causes of action whatsoever, whether known or
unknown, liquidated or unliquidated, fixed or contingent, direct or indirect,
that the Credit Parties ever had, now have or claim or could claim to have
arising out of, related to or in any way connected with any of the Loan
Agreements, any of the Guaranties, any of the documents, instruments and/or
agreements executed in connection therewith, the existing indebtedness and/or
any of the Credit Parties' credit relationships with Celtic, from the beginning
of time through and including the Closing Date (the "Released Matters").
(b) Waiver of Civil Code Section 1542.
The Credit Parties understand, and have been advised by legal counsel
concerning, the provisions of Section 1542 of the California Civil Code, which
provides as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
The Credit Parties understand and hereby waive the provisions of California
Civil Code Section 1542 and any statutory or common-law concepts similar
thereto, and they declare that they realize they may have damages they presently
know nothing about and that such damages have been released pursuant to this
release. The Credit Parties also declare that they understand that Celtic would
not have agreed to enter into this Agreement if the release provisions contained
in this Section 5 did not cover damages and their results, which may not yet
have manifested themselves or may be unknown or not anticipated at the present
time.
(c) Sole Ownership.
The Credit Parties represent and warrant that they alone are the owners
of the claims released in Section 6(a) above and that they have not heretofore
assigned or transferred, or purported to assign or transfer, to any person or
entity (each a "Person") any of the Released Matters. The Credit Parties
further agree to defend, indemnify and hold harmless Celtic and all other
Released Parties from and against all liability, claims, demands, damages,
costs, expenses and attorneys' fees incurred by them as a result of any Person's
asserting any such assignment or transfer of any rights or claims. The Credit
Parties also represent and warrant that none of the Released Matters is subject
to any purported or actual lien, security interest, encumbrance or contractual
or other right of any third party, and the Credit Parties agree to defend,
indemnify and hold harmless Celtic and all other Released Parties from and
against all liability, claims, demands, damages, costs, expenses and attorneys'
fees incurred by them as a result of any Person's asserting the existence of any
of the foregoing. This agreement to defend, indemnify and hold harmless shall
survive termination, amendment or expiration of the Loan Agreements, the
Guaranties, this Agreement, each other document, contract and instrument
heretofore or hereafter delivered hereunder or thereunder and any relationship
between any of the Credit Parties and Celtic.
Section 6. Representations and Warranties.
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Each Credit Party hereby represents and warrants as set forth below for
the benefit of Celtic.
(a) Legal Authority.
Such Credit Party has taken all legal action necessary to authorize and
approve the execution, delivery and performance of this Agreement and the other
documentation contemplated hereby. Such Credit Party has the legal power and
authority to execute this Agreement and perform the Component Transactions. The
execution, delivery and performance of this Agreement and the other
documentation contemplated hereby do not require the consent or approval of any
governmental authority or other Person[, other than the consent of UPS Capital
Corp. with respect to the Equipment Security Agreement]. This Agreement and the
other documentation executed by such Credit Party as contemplated hereby are
legal, valid and binding obligations of such Credit Party and are enforceable
against such Credit Party in accordance with their respective terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally.
(b) No Conflict.
The execution, delivery and performance of this Agreement and the other
documentation contemplated hereby do not contravene or conflict with any other
agreement, indenture, document, instrument or undertaking to which such Credit
Party is a party or by which such Credit Party or any of the property thereof
may be bound or affected.
(c) Litigation.
There is no litigation or other proceeding currently pending against such
Credit Party.
(d) Orders.
Such Credit Party is not in default with respect to any order, writ,
injunction, decree or demand of any court or other governmental authority.
(e) Contractual Obligations.
Such Credit Party is not in default of or bound by any contractual
obligation that could reasonably be expected to adversely affect the ability of
such Credit Party to perform its obligations under this Agreement or any
documentation contemplated hereby.
(f) Information.
No representation, warranty, information or report furnished by such
Credit Party to Celtic in connection with this Agreement or any documentation
entered into in connection herewith contains any material misstatement of fact
or omits to state a material fact or any fact necessary to make the statements
contained therein, in light of the circumstances in which made, not misleading.
(g) Organization.
Such Credit Party is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and is in good
standing in each jurisdiction in which it is required to qualify to do business.
(h) Insolvency.
The execution, delivery and performance of this Agreement and the other
documentation to be entered into by such Credit Party in connection herewith
will not (i) render such Credit Party insolvent as that term is defined pursuant
to generally accepted accounting principles or render such Credit Party
Insolvent, as defined below, (ii) leave such Credit Party with remaining assets
that constitute unreasonably small capital given the nature of its business or
(iii) result in the incurrence of Debts (as defined below) by such Credit Party
beyond such Credit Party's ability to pay them when and as they mature and
become due and payable. For purposes of this Section 6(h), "Insolvent" means
that the present fair salable value of assets is less than the amount that will
be required to pay the probable liability on existing Debts as they become
absolute and matured, and "Debts" means any legal liability for indebtedness,
whether matured or unmatured, liquidated or unliquidated, fixed or contingent,
direct or indirect. Such Credit Party has derived or expects to derive a
financial or other benefit or advantage from this Agreement and the Component
Transactions.
Section 7. Covenant to Pursue Claim.
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From and after the Closing Date, so long as any obligation of any Credit
Party to Celtic under any Loan Agreement, any Guaranty or otherwise remains
outstanding and unpaid, NMT will, and NMTI will cause NMT to, diligently
prosecute its claim against Alliant Techsystems Inc., a Delaware corporation,
for payment for goods sold thereto, together with punitive damages as
appropriate in connection therewith, and will promptly pay to Celtic all
proceeds received from such prosecution; provided, however, that if, on or
before June 30, 2001, the Credit Parties have not paid Celtic at least
$4,000,000 in principal amount of the indebtedness to Celtic under the Loan
Agreements, together with all accrued and unpaid interest thereon, NMT will, and
NMTI will cause NMT to, execute such documentation and take such other action as
Celtic may require in order to assign to Celtic all of NMT's rights with respect
to such claim.
Section 8. Miscellaneous Provisions.
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(a) No Commitment for Future Extensions.
Each Credit Party acknowledges that Celtic has made no promise, agreement
or commitment to extend the maturity date of any Borrower's repayment
obligations under its Loan Agreement or to consider any further workout or
restructure proposal made by any Credit Party.
(b) Payment of Expenses.
. On the Closing Date, the Credit Parties will pay to Celtic all
reasonable fees and expenses incurred by Celtic in connection with the
negotiation and documentation of this Agreement, the Component Transactions, and
all agreements and documents contemplated hereby and thereby, including, without
limitation, reasonable attorneys' fees and any other applicable fees and
charges.
(c) Financial Reporting.
The Credit Parties will continue to provide financial information to
Celtic as required by the Loan Agreements.
(d) Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW).
(e) Successors and Assigns.
This Agreement shall be binding on and inure to the benefit of all of the
parties hereto and upon the heirs, executors, administrators, legal
representatives, successors and assigns of the parties hereto, and each of them.
The terms and provisions of this Agreement are for the exclusive benefit of the
Credit Parties and Celtic and may not be transferred, assigned, pledged, set
over or negotiated to any Person without the prior express written consent of
Celtic. Notwithstanding any other provisions contained herein, Celtic may sell,
transfer, negotiate, assign or grant participations in all or a portion of its
rights under this Agreement, the Component Transactions, the Loan Agreements and
the Guaranties to any Person without prior notice to any of the Credit Parties.
(f) Integration.
This Agreement, together with the other documentation contemplated
hereby, represents the entire agreement of the Credit Parties and Celtic with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by Celtic relative to the subject matter hereof
that are not expressly set forth or referred to in the above-referenced
documents.
(g) Execution in Counterparts.
This Agreement and the other documentation contemplated hereby may be
executed in counterparts, each of which shall be deemed to be an original for
all purposes hereunder. Any facsimile signatures shall be treated as original
for all purposes hereof. All of such counterparts shall together constitute one
and the same instrument. In making proof of this Agreement and the other
documentation contemplated hereby, it shall not be necessary to produce or
account for more than one such counterpart signed by each of the parties hereto
or a facsimile copy thereof.
(h) Headings.
All headings contained herein are for convenience purposes only and shall
not be considered when interpreting this Agreement.
(i) Continuing Cooperation.
The Credit Parties and Celtic shall cooperate with each other in carrying
out the terms and intent of this Agreement and the other documentation
contemplated hereby and in executing all documents, pleadings and agreements as
are reasonably required to effectuate the terms and intent of this Agreement and
such other documentation.
(j) Consultation with Counsel.
Each of the Credit Parties acknowledges that (i) it has been represented
by counsel of its own choice at each stage in the negotiation of this Agreement
and the other documentation contemplated hereby, (ii) it has relied on such
counsel's advice throughout the negotiations that preceded the execution of this
Agreement and such other documentation and in connection with the preparation
and execution of this Agreement and such other documentation, (iii) such counsel
has read and approved this Agreement and such other documentation, (iv) such
counsel has advised such Credit Party concerning the validity and effectiveness
of this Agreement and such other documentation, and the transactions to be
consummated in accordance herewith and therewith, and (v) such Credit Party is
freely and voluntarily entering into this Agreement and such other
documentation.
IN WITNESS WHEREOF, this Agreement has been duly executed on behalf of each of
the parties hereto, as of the day and in the year first written above.
NATIONAL MANUFACTURING TECHNOLOGIES INC.
By: /S/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
I-PAC MANUFACTURING, INC.
By: /S/ Xxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
IPAC PRECISION MACHINING, INC.
By: /S/ Xxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
NATIONAL METAL TECHNOLOGIES
By: /S/ Xxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
CELTIC CAPITAL CORPORATION
By: /S/ Xxxx Xxxxxx
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Xxxx Xxxxxx
President
SCHEDULE 1
to Workout Agreement
OUTSTANDING PRINCIPAL AMOUNTS
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Borrower Loan Type Balance
-------- ---------- -------
I-PAC Manufacturing, Inc. A/R $2,365,424.19
INV 348,307.85
I-PAC Precision Machining, Inc. A/R 43,352.61
INV 58,122.29
EQ 766,800.00
National Metal Technologies A/R 611,427.01
INV 60,980.16
EQ 670,800.00
Total $4,925,214.11
