June 1, 2001
Celtic Capital Corporation
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, XX 00000
Attention: Mr. Xxxx Xxxxxx
President
Ladies and Gentlemen:
This letter agreement sets forth the agreement of National Manufacturing
Technologies, Inc., a California corporation ("NMTI"), I-PAC Manufacturing,
Inc., a California corporation ("Electronics"), I-PAC Precision Machining, Inc.
("Sheet Metal"), National Metal Technologies ("NMT"), Comtel Holdings, Inc., a
Delaware corporation ("Comtel Holdings"), and Xxxxx Diversified Technologies,
Inc., a California corporation ("Xxxxx"), to assist Celtic Capital Corporation,
a California corporation ("Celtic"), in the collection of certain accounts
receivable of Electronics, Sheet Metal and NMT (the "Receivables").
The undersigned are executing this letter agreement in order to induce Celtic to
approve the sale of Electronics' and Sheet Metal's equipment and inventory to
Xxxxx pursuant to the Asset Purchase Agreement dated as of June 1, 2001 among
Electronics, Sheet Metal, Xxxxx and NMTI. Celtic has a security interest in
said equipment and inventory pursuant to each of the Loan and Security
Agreements with Electronics and Sheet Metal dated as of June 18, 1999, as
amended (the "Loan and Security Agreements"). Each of Electronics and Sheet
Metal is in default of its obligations to repay its debt under its respective
Loan and Security Agreement. Pursuant to the Loan and Security Agreements,
Celtic may, among other things, exercise all of the rights and remedies of
Electronics and Sheet Metal with respect to collection of the Receivables.
Each of NMTI, Electronics, Sheet Metal, Comtel Holdings and Xxxxx covenants
and agrees to provide promptly to Celtic such agreements, instruments,
certificates and other documents, and to do and perform promptly such other acts
and things, as Celtic may reasonably request from time to time to facilitate
Celtic's collection of the Receivables. Each of NMTI, Electronics, Sheet Metal,
Comtel Holdings and Xxxxx further covenants and agrees to act in good faith and
use commercially reasonable efforts (but without incurring material cost or
expense) to provide the documentation and assistance described in the preceding
sentence, which shall include, without limitation, the following:
(1) NMTI, Electronics, Sheet Metal and NMT providing to Celtic any
information reasonably requested thereby concerning the Receivables, including,
without limitation, the amount and aging of each account, the name and address
of each account debtor and a copy of all correspondence with each account debtor
regarding each account; and
(2) each of Comtel Holdings and Xxxxx using commercially reasonable efforts
(but without incurring material cost or expense) to influence each account
debtor to make full payment of the Receivables payable thereby, without discount
or offset.
This letter agreement is subject to the terms of the Workout Agreement
dated as of May 31, 2001 between Celtic and each of NMTI, Electronics, Sheet
Metal and NMT and shall terminate on the date on which Celtic has been paid all
amounts owed thereto by NMTI, Electronics, Sheet Metal and NMT.
This letter agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of California.
Very truly yours,
NATIONAL MANUFACTURING TECHNOLOGIES INC.
By: /S/ Xxxxxxx X. Xxxxx
--------------------
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
COMTEL HOLDINGS, INC.
By: /S/ Xxxx Xxxxxx
---------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
XXXXX DIVERSIFIED TECHNOLOGIES, INC.
By: /S/ Xxxx Xxxxxx
---------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
