AMENDMENT AND EXTENSION AGREEMENT
NBD Bank ("NBD" or "Lender"), Secom General Corporation ("Secom"),
Form Flow, Inc. ("Form Flow"), L & H Die, Inc. ("L&H"), Micanol, Inc.
("Micanol"), Uniflow Corporation ("Uniflow"), and MMC Manufacturing Corp.
f/k/a Milford Manufacturing, Corporation ("Milford") enter into this
Amendment and Extension Agreement (this "Agreement") on November 25, 1998.
For convenience (i) Secom, Form Flow, L&H, Micanol, Uniflow, and Milford are
referred to herein, collectively, as "Borrowers" and, individually, as a
"Borrower," (ii) Secom, Form Flow, L&H, Micanol, Uniflow, and Milford in
their capacity as guarantor of another Borrower's debt to NBD, and any other
person or entity who guaranteed the obligations of one or more of Borrowers
to NBD are referred to herein, collectively, as "Guarantors", and,
individually, as a "Guarantor," and (iii) Borrowers and Guarantors are
referred to herein, collectively, as the "Parties" and, individually, as a
"Party."
RECITALS
A. NBD, as lender and secured party, and Borrowers, as borrowers and
debtors, are parties to a certain Amended and Restated Revolving Credit and
Loan Agreement dated as of June 30, 1996, as amended by Acknowledgement to
Amended and Restated Revolving Credit and Loan Agreement, dated April 4,
1997, First Amendment to Amended and Restated Revolving Credit and Loan
Agreement dated August 22, 1997 and Second Amendment to Amended and Restated
Revolving Credit and Loan Agreement, dated as of January 1, 1998
(collectively, as so amended and as may be further amended and with all
supplements thereto, the "Credit Agreement"). Capitalized terms used herein
but not defined shall have the meanings given to them in the Credit
Agreement.
B. In furtherance of, and in accordance with, the Credit Agreement,
NBD agreed, among other things, to make available to Borrowers (i) a secured
committed revolving credit facility in an aggregate principal amount not to
exceed $4,000,000 (the "Revolving Credit Facility"), (ii) secured
discretionary line of credit advances (the "Line of Credit"), in an aggregate
principal amount not to exceed $2,000,000, against the security of accounts
receivable and inventory described in the Credit Agreement, subject to
certain limitations, and (iii) a term loan in the original principal amount
of $800,000 (the "Term Loan").
C. In furtherance of, and in accordance with the Credit Agreement, NBD
also agreed, among other things, to make discretionary advances to Borrowers
in an aggregate principal amount not to exceed $1,500,000 ("Equipment Line")
to be used for the acquisition of equipment by any Borrower, and NBD agreed
to extend discretionary advances to Secom in an aggregate principal amount
not to exceed $300,000 ("Improvement Line") to be used for the improvement of
Secom's facility at 00000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxx.
D. The Revolving Credit Facility is evidenced by an Amended and
Restated
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Revolving Credit Note dated as of June 30, 1996 in the original principal
amount of $4,000,000 (the "Revolving Note"). The Line of Credit is evidenced
by a Line of Credit Note, dated as of June 30, 1996, in the original
principal amount of $2,000,000 (the "Line of Credit Note"). The Term Loan is
evidenced by an Amended and Restated Term Note dated June 30, 1996 (the "Term
Note") in the original principal amount of $800,000. The Equipment Line is
evidenced by an Amended and Restated Equipment Line Note (the "Equipment Line
Note") dated as of January 1, 1998, in the original principal amount of
$1,500,000, and the Improvement Line was evidenced by a Promissory Note (the
"Improvement Line Note") dated as of August 22, 1997, in the original
principal amount of $300,000. The Improvement Line Note has been paid in full
and no further advances will be made under the Improvement Line. For
convenience, the Revolving Note, the Line of Credit Note, the Term Note, and
the Equipment Line Note are referred to herein, collectively, as the "Notes."
E. Among other mortgages and security agreements (i) Secom executed
and delivered to NBD (A) an Amended and Restated Security Agreement dated
June 30, 1996, as amended by an Amendment to Amended and Restated Security
Agreement dated March 31, 1997 (as may be further amended and with all
supplements thereto, the "Secom Security Agreement"), (ii) Micanol executed
and delivered to NBD an Amended and Restated Security Agreement dated as of
June 30, 1996, as amended by Amendment to Amended and Restated Security
Agreement dated March 31, 1997 (as amended and as may be further amended and
with all supplements thereto, the "Micanol Security Agreement"), (iii) Form
Flow executed and delivered to NBD an Amended and Restated Security Agreement
dated June 30, 1996, as amended by Amendment to Amended and Restated Security
Agreement dated March 31, 1997, a Continuing Security Agreement dated August
22, 1997 and a Continuing Security Agreement dated November 5, 1997,
(collectively, as amended and as may be further amended and with all
supplements thereto, the "Form Flow Security Agreements"), (iv) L&H executed
and delivered to NBD an Amended and Restated Security Agreement dated as of
June 30, 1996, as amended by Amendment to Amended and Restated Security
Agreement dated March 31, 1997, a Continuing Security Agreement dated August
22, 1997, and a Continuing Security Agreement dated November 5, 1997 (as so
amended and as may be further amended and with all supplements thereto, the
"L&H Security Agreements"), (v) Uniflow executed and delivered to NBD an
Amended and Restated Security Agreement dated June 30, 1996, as amended by
Amendment to Amended and Restated Security Agreement dated March 31, 1997,
and a Continuing Security Agreement dated August 22, 1997 (as so amended and
as may be further amended from time to time and with all supplements thereto,
the "Uniflow Security Agreements"), and (vi) Milford executed and delivered
to NBD a Security Agreement dated April 4, 1997 (as so amended and as may be
further amended from time to time and with all supplements thereto the
"Milford Security Agreement"). For convenience, the Secom Security Agreement,
the Form Flow Security Agreements, the L&H Security Agreements, the Micanol
Security Agreement, the Uniflow Security Agreements, and the Milford Security
Agreement are referred to herein, collectively, as the "Security Agreements."
F. In addition to the Secom Security Agreement, Secom also executed
and delivered to NBD an Amended and Restated Future Advance Mortgage, dated
December 6, 1995, and
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recorded on March 6, 1996 in Liber 28654, Pages 367-381 of the Xxxxx County
Records (as may be amended and with all supplements thereto, the "Secom
Mortgage"), which Secom Mortgage relates to property located at 0000 Xxxxxxxx
Xxxxxx,. 0000 Xxxxxxxx Xxxxxx and 00000 Xxxxxx Xxxx (collectively, "the
Mortgaged Premises").
G. All of the obligations of Secom to NBD, whether then existing or
thereafter created or arising, are guaranteed by L&H, Uniflow, Form Flow and
Micanol, jointly and severally, pursuant to that certain Amended and Restated
Continuing Guaranty, dated as of June 30, 1996 (as may be amended and with
all supplements thereto, the "Secom Guaranty").
H. All of the obligations of L&H to NBD, whether then existing or
thereafter created or arising, are guaranteed, jointly and severally, by
Secom, Uniflow, Form Flow and Micanol, pursuant to that certain Amended and
Restated Continuing Guaranty, dated as of June 30, 1996, (as may be amended
and with all supplements thereto, the "L&H Guaranty").
I. All of the obligations of Uniflow to NBD, whether then existing or
thereafter created or arising, are guaranteed, jointly and severally, by
Secom, L&H, Form Flow and Micanol, pursuant to that certain Amended and
Restated Continuing Guaranty, dated as of June 30, 1996, (as may be amended
and with all supplements thereto, the "Uniflow Guaranty").
J. All of the obligations of Form Flow to NBD, whether then existing
or thereafter created or arising, are guaranteed, jointly and severally, by
Secom, L&H, Uniflow and Micanol, pursuant to that certain Amended and
Restated Continuing Guaranty, dated as of June 30, 1996, (as may be amended
and with all supplements thereto, the "Form Flow Guaranty").
K. All of the obligations of Micanol to NBD, whether then existing or
thereafter created or arising, are guaranteed, jointly and severally, by
Secom, L&H, Uniflow, and Form Flow, pursuant to that certain Amended and
Restated Continuing Guaranty, dated as of June 30, 1996, (as may be amended
and with all supplements thereto, the "Micanol Guaranty").
L. All of the obligations of L&H, Uniflow, Form Flow, Secom and
Micanol to NBD, whether then existing or thereafter created or arising, are
guaranteed by Milford pursuant to separate guaranties, each dated April 4,
1997, executed by Milford in favor of NBD (as may be amended, and with all
supplements thereto, the "Milford Loan Party Guaranties").
M. For convenience, the Secom Guaranty, the L&H Guaranty, the Uniflow
Guaranty, the Form Flow Guaranty, the Micanol Guaranty, and the Milford Loan
Party Guaranties are referred to herein, collectively, as the "Guaranties,"
and such Guaranties and all other documents and instruments executed by any
Guarantor in connection therewith are referred to herein, collectively, as
the "Guarantor Loan Documents."
N. For convenience, all of the foregoing documents, mortgages,
agreements, assignments and promissory notes set forth in Recitals A through
M above, together with any other documents, instruments, agreements or
promissory notes executed in connection with, or
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in furtherance of, any of the foregoing, as amended from time to time,
including as amended by this Agreement, but exclusive of all present or
future oral agreements between NBD and any one or more of the Parties, are
referred to herein, collectively, as the "Loan Documents."
O. On November 6, 1998 (i) there was $2,207,793.17 in principal owing
by Borrowers to NBD under the Revolving Credit Facility, (ii) there was $0 in
principal owing by Borrowers to NBD under the Line of Credit, (iii) there was
$625,592.35 in principal owing by Borrowers to NBD under the Term Loan, and
(iv) there was $644,680.00 in principal owing by Borrowers to NBD under the
Equipment Line, in each case, plus accrued but unpaid interest, costs and
expenses (including attorneys' fees) called for by the Credit Agreement. In
early 1998, substantially all of Milford's tangible assets were sold to a
third party unaffiliated with any Borrower and a portion of the proceeds of
such sale were applied to repay certain of Milford's obligations to NBD.
Milford remains a loan party Borrower and Guarantor under the Loan Documents,
however, and in that regard, Milford still has obligations to NBD. For
convenience, all of the obligations referred to in the immediately preceding
sentence, together with all other principal and interest due or becoming due
to NBD, together with the payment of all other sums, indebtedness and
liabilities of any and every kind now or hereafter owing and to become due
from Borrowers to NBD however created, incurred, evidenced, acquired or
arising, and whether direct or indirect, primary, secondary, fixed or
contingent, matured or unmatured, joint, several, or joint and several, and
whether for principal, interest, reimbursement obligations, indemnity
obligations, obligations under guaranty agreements, fees, costs, expenses, or
otherwise, all of Borrowers' obligations under this Agreement, together with
all other present and future obligations of Borrowers to NBD, are referred to
herein, collectively, as the "Obligations."
P. Each Party, jointly and severally, acknowledges and agrees that (i)
the Obligations, Guarantors' obligations under the Guarantor Loan Documents,
and all other obligations of any one or more of the Parties to NBD are owing
to NBD without setoff, recoupment, defense or counterclaim, in law or in
equity, of any nature or kind; (ii) the Obligations are secured by valid,
perfected, indefeasible, enforceable, first priority liens and security
interests in favor of NBD in, among other things (A) all of each Borrower's
present and future accounts, chattel paper, instruments, documents and
inventory, contracts and business records (but excluding computer hardware
and software), and all proceeds and products of all of the foregoing, as more
fully described in the Security Agreements; (B) specific equipment of Form
Flow located at 0000 Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, as more fully
described on Exhibit A to the Continuing Security Agreement dated August 22,
1997, executed by Form Flow in favor of NBD; (C) a Mazak ZTC-16B vertical
machining center, SN130013 and accessories owned by Form Flow as more fully
described in the Continuing Security Agreement dated November 5, 1997
executed by Form Flow in favor of NBD; (D) specific equipment of L&H located
at 00000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000, as more fully described on
Exhibit A to the Continuing Security Agreement dated August 22, 1997,
executed by L&H in favor of NBD; (E) specific equipment of L&H located at
00000 Xxxxxx Xxxx, Xxxxxxx, XX 00000-0000, as more fully described in the
Continuing Security Agreement dated November 5, 1997 executed by L&H in favor
of NBD; and (F) specific equipment of Uniflow located at
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00000 Xxxx Xxxxx, Xxxx, Xxxxxxxx 00000, as more fully described on Exhibit A
to the Continuing Security Agreement dated August 22, 1997, executed by
Uniflow in favor of NBD. The Obligations are also secured by a first priority
lien, security interest and mortgage in favor of NBD with respect to the
Mortgaged Premises, as more fully described in the Secom Mortgage. For
convenience all collateral referred to above, together with all other
collateral described in the Loan Documents and all collateral heretofore,
simultaneously herewith or hereafter granted to NBD by any one or more of the
Parties to secure any of the Obligations or any one or more of the Parties'
other obligations to NBD, including, without limitation, the obligations of
any one or more of the Guarantors under the Guarantor Loan Documents, is
referred to, collectively, as the "Collateral."
Q. Each Party reaffirms, ratifies, confirms and approves its
obligations and duties under the Loan Documents, as modified by this
Agreement. Without limiting the generality of the immediately preceding
sentence, Guarantors hereby reaffirm, ratify, confirm and approve their
obligations and duties under the Guarantor Loan Documents, and the provisions
herein, and acknowledge and agree that the Guarantor Loan Documents extend
to, and cover, all of the Obligations, including the sums described in
Paragraph N above. Each Party, jointly and severally, reaffirms, ratifies and
confirms the liens, mortgages, assignments and security interests granted to
NBD in the Collateral under the Loan Documents or otherwise.
R. Borrowers are in default under Loan Documents for the following
reasons:
(i) Based on Borrowers' financial statements dated August 30, 1998
(the "August 1998 Financials"), Borrowers' Cash Flow Coverage Ratio is
less than 1.20 to 1.00;
(ii) Borrowers' Tangible Capital Funds are less than $10,000,000
(On August 31, 1998, Borrowers' Tangible Capital Funds were
$8,090,364.00);
(iii) Borrowers' Current Ratio is less than 1.25 to 1.00 (on
August 31, 1998, Borrowers' Current Ratio was 1.22 to 1.00);
(iv) Based on the Borrowers' financial statements for the quarter
ended June 30, 1998, Borrowers' total Funded Debt to EBITDA is greater
than 4.75 to 1.00, in violation of Borrowers' loan documents with G.E.
Capital Public Finance, Inc and Key Corp. (Under Section 7.1(f) of the
Loan Documents, a default by Borrowers with respect to a debt to other
lenders is a default under the Loan Documents); and
(v) Borrowers have failed to pay real and personal property taxes
on Borrowers' assets in an amount totaling approximately $250,000 in
the aggregate (the "Unpaid Taxes").
For convenience, the above-described defaults are referred to
collectively as the "Existing Defaults." Each Party represents and warrants,
after due inquiry and investigation,
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that none of them is aware of any other Events of Default or defaults, or of
any event which, with the passage of time, notice, or both, would become an
Event of Default or a default under the Loan Documents or this Agreement.
S. Each Party also acknowledges that based on the Existing Defaults,
NBD has the right, without further notice, to enforce its rights under the
Loan Documents (including the Guarantor Loan Documents) and applicable law.
Further, if NBD took such action, each Party acknowledges that NBD's actions
would be within NBD's rights under the Loan Documents (including the
Guarantor Loan Documents) and applicable law, and would be reasonable and
appropriate under the circumstances.
T. Each Party acknowledges and agrees that (i)NBD has fully performed
all of its obligations under the Loan Documents; (ii)NBD has no obligation to
continue to lend to Borrowers, or to forbear from enforcing its rights and
remedies beyond the Forbearance Period (as hereinafter defined); (iii) any
loans made after the date of this Agreement will be made in NBD's sole
discretion; and (iv) NBD has made no representations of any nature or kind
that funding in any amount will continue, or that the Forbearance Period (as
hereinafter defined) will be extended beyond the expiration thereof.
U. Each Party further acknowledges and agrees that the actions taken
by NBD to date in furtherance of the Loan Documents are reasonable and
appropriate under the circumstances and are within NBD's fights under the
Loan Documents and applicable law.
V. Each Party represents and warrants to NBD that it has received
direct and substantial economic benefit from all of the Obligations and that
it will continue to receive direct and substantial economic benefit from such
Obligations, and from any other loans made or which may be made in the future
to Borrowers.
W. NBD informed Borrowers on several occasions that NBD is concerned
about the Existing Defaults and that Borrowers must take steps to address
such Existing Defaults. The Parties have informed NBD that they have engaged
the services of an investment banking firm (the "Investment Banker") to
explore, among other things, potential acquisition candidates for the
business as a whole or for the various business segments of Borrowers. The
Parties have requested that NBD agree to waive the Existing Defaults to allow
the Parties, with the assistance of the Investment Banker, time to develop
and begin to implement a plan with respect to sale of the business as a whole
or Borrowers' various business segments.
X. Subject to the terms and conditions of this Agreement, and in
reliance on the Parties' agreements, acknowledgments, representations, and
warranties in this Agreement, NBD has agreed to amend the Loan Documents and
waive the Existing Defaults under the Loan Documents (including the Guarantor
Loan Documents), as set forth below.
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AGREEMENT
Based on the foregoing Recitals (which are incorporated herein as
agreements, representations, warranties, and covenants of the respective
Parties, as the case may be), and for other good and valuable consideration,
the adequacy and receipt of which are acknowledged by each Party hereto, NBD
and each Party agree as follows:
1. Waiver.
(a) Subject to the following conditions and those set forth below, NBD
agrees to waive the Existing Defaults through February 1, 1999 (the
"Extension Period"), at which time, unless earlier demand is made, all
Obligations shall be due and payable in full without further notice or demand
by NBD.
(b) NBD's agreement to waive the Existing Defaults through the
Extension Period is conditioned upon NBD receiving, on or before November 18,
1998 (the "Effective Date"), a fully-executed copy of this Agreement,
together with fully-executed copies of all of the exhibits that require
signature.
(c) Anything here to the contrary notwithstanding, NBD's waiver shall
be deemed null and void and of no further force and effect if during the
Extension Period there are further Events of Default or defaults under the
Loan Documents, including this Agreement, or if any Party fails to fully
comply with all the terms and conditions of this Agreement or any of the
other Loan Documents.
2. Financial Covenants During Extension Period. Attached hereto as
Exhibit A is a copy of projections prepared by Borrowers (the "Projections")
of operating results and cash flows through March 31, 1999. In accordance
with the Projections, and as an accommodation to Borrowers, anything to the
contrary in the Loan Documents notwithstanding, through the Extension Period,
the following financial covenants shall be applicable, rather than the Cash
Flow Coverage Ratio, Tangible Capital Funds and Current Ratio covenants set
forth in the Credit Agreement:
(a) Borrowers' Total Equity shall not be less than $7,000,000. For
the purposes of this covenant, "Total Equity" means book net worth
determined in accordance with generally acceptable accounting
principles;
(b) Borrowers' Total Liabilities to Total Equity shall not exceed
2.5 to 1.0. Notwithstanding anything in the Loan Documents to the
contrary, for the purposes of this covenant, "Total Liabilities" means
all liabilities of Borrowers of any nature whatsoever;
(c) Borrowers' Current Ratio shall not be less than 0.6 to 1.0;
and
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(d) Borrowers' EBITD shall not be less than $125,000 for the month
of October, 1998, not less than $65,000 for the month of November,
1998 and not less than negative $45,000 for the month of December,
1998.
3. Interest. Notwithstanding anything to the contrary in the Loan
Documents, prior to the occurrence of a default or Event of Default under
this Agreement or any of the other Loan Documents (excluding the Existing
Defaults during the Forbearance Period, but including a worsening of such
Existing Defaults) (a) all Obligations shall bear interest computed on the
basis of the actual number of days elapsed in a year of 360 days at the rate
of 1% per annum ab.ove the rate announced from time to time by NBD as its
prime rate, which may not be the lowest rate charged by NBD to any of its
customers (the "Applicable Rate"). After the occurrence of an Event of
Default or default under this Agreement or the Loan Documents (excluding the
Existing Defaults during the Forbearance Period, but including a worsening of
such Existing Defaults), all of such Obligations at NBD's sole discretion
shall bear interest at the rate of 3% per annum above the Applicable Rate
(the "Default Rate"). Notwithstanding the foregoing, in no event whatsoever
shall the rate of interest charged under this Agreement or any agreement or
note executed in connection herewith or referred to or incorporated herein
exceed the highest rate permitted by applicable law. The fact that NBD is
entitled to receive a higher rate of interest upon default is to compensate
NBD for increased administrative and monitoring costs and shall not in any
manner be deemed to have waived or modified any of NBD's rights in connection
with the occurrence of a default or any Event of Default under this Agreement
or any other Loan Document.
4. Increase in Line of Credit and Termination of Improvement Line,
Equipment Line Credit, and Revolving Credit Facility.
(a) The $4,000,000 Revolving Credit Facility described in Recital
B(i), the Improvement Line described in Recital C, and the Equipment Line of
Credit described in Recital C are hereby terminated. No further advances
under the Revolving Credit Facility, the Improvement Line, or the Equipment
Line of Credit will be made.
(b) Anything to the contrary in the Loan Documents notwithstanding,
and as reflected by the amendments to the Credit Agreement described in
paragraphs 4, 5 and 6 below, NBD's commitment and obligation to make Loans is
terminated. NBD's uncommitted credit authorization to Borrowers referred to
in Section 2.1(b) of the Credit Agreement shall remain in place but in the
principal sum not to exceed $3,000,000 in the aggregate at any one time
outstanding, which uncommitted credit authorization shall be evidenced by a
Second Amended and Restated Master Demand Business Loan Note as more fully
described in Section 12 below. Under this uncommitted credit authorization,
NBD, in its sole and absolute discretion, may decide whether or not to make
any future Loans to Borrowers. NBD may refuse to advance for any reason or
for no reason at any time, even if Borrowers have collateral availability to
borrow under the Loan Documents and no Event of Default or default has
occurred under such Loan Documents. The fact that NBD in its sole and
absolute discretion makes one or more Loans after the date of this Agreement
does not in any way obligate NBD to make any other Loans
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under the Revolving Loan Authorization or otherwise.
5. Revised Definitions.
(a) The following definitions in Section 1.1 of the Credit Agreement
are hereby amended in their entirety to read as follows:
"Authorization Amount" means an uncommitted credit authorization
to Borrowers under Section 2.1(b) in the principal sum not to exceed
$3,000,000, in the aggregate at any time outstanding.
"Current Ratio" means the relationship, expressed as a numerical
ratio, which (i) the amount of current assets of the Loan Parties,
determined on a Combined basis, which would be properly classified as
a current asset under GAAP, bears to (ii) the amount of current
liabilities of the Loan Parties determined on a Combined basis, which
would be properly classified as current liabilities under GAAP. For
the purposes of this definition, current assets shall not include
assets that represent capital equipment being held for sale over the
next six month, and current liabilities shall not include debt
associated with such assets.
"Tangible Capital Funds" means Tangible Net Worth plus
Subordinated Debt.
"Termination Date" means the earlier to occur of (a) the date on
which a demand for payment of the obligations is made by NBD, (b)
February 1, 1999, and (c) the date on which NBD's obligations shall be
terminated pursuant to Section 7.2.
(b) The definition of "Borrowing Base" contained in Section 1.1 of the
Credit Agreement is hereby amended by changing the last sentence at the end
of that definition to read as follows: "In no event will the amount included
in the Borrowing Base under clause (b) above (for Eligible Inventory) exceed
$500,000."
(c) The definition of "Commitment" contained in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety.
6. Changes With Respect to Revolving Loans. Section 2.1 of the Credit
Agreement is hereby amended as follows:
(a) Section 2.1(a) of the Credit Agreement is deleted in its entirety;
(b) Section 2. l(b) of the Credit Agreement is hereby amended to read
in its entirety as follows:
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(b) Revolving Loan Authorization. Subject to the terms and
conditions of this Agreement, NBD may, in its sole and absolute
discretion, make Revolving Loans to the Borrowers, jointly and
severally, from the Effective Date and before the Termination Date
as Borrowers may from time to time request from NBD; provided,
however, that the aggregate principal amount of all Revolving
Loans which are outstanding hereunder shall not at any time exceed
the Authorization Amount; provided, further, that the aggregate
principal amount of all Revolving Loans which NBD shall make
pursuant to this Section 2. l(b) at any time shall not, when added
to the principal balance of the Revolving Loans outstanding at
such time plus the aggregate face amount of all outstanding L/Cs,
exceed (i) the borrowing base at such time; or (ii) the
Authorization Amount at such time. The Revolving Loans advanced
under this Section 2.1(b) shall be evidenced by a Second Amended
and Restated Master Demand Business Loan Note of Borrower in
substantially the form of Exhibit B to the Amendment and
Forbearance Agreement by and among Borrowers and NBD. Such Note
shall be dated the Effective Date and stated to mature on demand.
Interest shall accrue on the unpaid principal balance of the
Revolving Loans from time to time outstanding under this Section
2.1(b) at the applicable rate(s) and shall be payable in
accordance with Section 4.2. Subject to the other terms and
conditions of this Agreement, and subject to NBD's sole and
absolute discretion, the Revolving Loans may be borrowed, repaid
and re-borrowed prior to the Termination Date. Although such Note
shall be expressed to be payable in the maximum amount of
$3,000,000, the Borrowers shall be obligated to pay only the
unpaid principal balance of the Revolving Loans, together with
interest thereon and other amounts due in connection therewith as
provided herein and in the Note. The proceeds of the Revolving
Loans shall be used by the Borrowers for working capital or other
general corporate purposes of the Loan Parties.
7. Issuance of Letters of Credit. The introductory paragraph of
Section 2.3(a) of the Credit Agreement is hereby amended to read in its
entirety as follows:
(a) Issuance of L/Cs. Upon the request by the Borrowers (with no
less than three Business Days prior written application in such form
as requested by NBD), and provided there is sufficient availability
under the Borrowing Base and Authorization, NBD may, in its sole and
absolute discretion, issue for the account of any Borrower standby or
commercial letters of credit, upon the following conditions:
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8. Sale of the Press. The Parties have informed NBD that they are
attempting to sell a 900 ton press (the "Press"), which has been partially
paid for but has never been delivered to Borrowers. The Parties have informed
NBD that they have been told that the Press is expected to sell for between
$600,000-$700,000. The Parties acknowledge that NBD advanced to Borrowers
$246,403, which funds were utilized as a down payment on the Press. The
Parties have informed NBD that the sale proceeds on the Press will be
delivered to NBD immediately upon receipt to be applied by NBD to the
Obligations in any order NBD determines in its sole discretion. It is NBD's
current intention to apply the proceeds it receives from the sale of the
Press to the balance outstanding on the Amended Equipment Term Note (as
defined in Section 11), but NBD reserves the right to apply such sale
proceeds in its sole discretion to the Obligations in any manner it deems
appropriate.
9. Reporting Requirements.
(a) Sections 6.1(d)(iv) and (v) of the Credit Agreement are hereby
amended in their entirety to read as follows:
(iv) daily, a Borrowing Base Certificate in a form and detail
reasonably acceptable to Bank, executed by the chief financial
officers of the Loan Parties and completed as of the end of the
preceding day sent by facsimile with the originals to follow by U.S.
Mail;
(v) as soon as available and in any event within 15 days after the
end of each calendar month, a report listing the accounts receivable
aging, accounts payable aging and inventory of all of the Loan
Parties, in a form and detail reasonably acceptable to Bank, executed
by the chief financial officers if, the Loan Parties and completed as
of the end of the most recently ended month;
(b) Sections 6.1(d)(ix) and(x) are added to the Credit Agreement as
follows:
(ix) Within 15 days after the end of each month, a balance sheet
as of the end of such month and statements of income, retained
earnings and cash flows from the beginning of the fiscal year to the
end of such month, certified as correct by one of Borrowers'
authorized agents; and
(x) Such other documents, certificates, financial reports or
statements as Bank may reasonably request.
(c) Simultaneously with the execution of this Agreement, the Parties
shall provide to NBD all documents in their possession or control with
respect to the Investment Banker, including, without limitation, engagement
letters, preliminary analyses, time tables, correspondence, expressions of
interest from any third parties, and cost analyses, and other documents and
materials. Thereafter, immediately upon receipt, the Parties shall provide to
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NBD copies of all Investment Banker information. In addition, the Parties
hereby authorize NBD to speak directly to such Investment Banker regarding
the Investment Banker's progress with respect to marketing the business, so
long as a representative of Borrowers is present during such discussions.
10. Year 2000 Issues. Borrowers will take all actions reasonably
necessary to assure that Year 2000 Issues will not have a material adverse
effect on the business, operations or financial condition of Borrowers. Upon
NBD's request, Borrowers will provide NBD with a description of their plan to
address Year 2000 Issues, including updates and progress reports. Borrowers
will advise NBD of any reasonably anticipated material adverse effect on the
business, operations or financial condition of Borrowers as a result of Year
2000 Issues.
11. Amended and Restated Notes. The Revolving Note and the Line of
Credit Note are consolidated, amended, restated and replaced in their
entirety by a Second Amended and Restated Master Demand Business Loan Note,
in the form of Exhibit B attached hereto (the "Amended Revolving Note"). The
Term Note is amended and restated and replaced in its entirety by a Second
Amended and Restated Term Note in the form of Exhibit C attached hereto (the
"Amended Term Note"). The Equipment Line Note is amended, restated and
replaced in its entirety by a Second Amended and Restated Equipment Term Note
in the form of Exhibit D attached hereto (the "Amended Equipment Term Note").
The Improvement Loan Note was paid in full in early 1998 and, therefore, is
hereby canceled. For convenience, the Amended Revolving Note, the Amended
Term Note, and the Amended Equipment Line Note are referred to herein,
collectively, as the "Amended Notes." Any reference in any other document or
instrument (including, but not limited to, the Credit Agreement) to the
Revolving Note, the Line of Credit Note or the Equipment Term Note shall
constitute a reference to the Amended Notes. The Amended Notes are in
substitution and exchange for the Notes and shall not in any circumstances be
deemed a novation or to have paid, terminated, extinguished or discharged
Borrowers' indebtedness evidenced by such Notes, all of which indebtedness
shall continue under, and be evidenced and governed by, the Amended Notes.
12. Dominion of Funds and Lockbox Arrangements. Borrowers have
recently executed and delivered to NBD a Dominion of Funds Agreement,
attached hereto as Exhibit E. Borrowers agree to continue to operate within
the terms and conditions of the Dominion of Funds Agreement and also within
the terms and conditions of the Lockbox Agreement which they have previously
executed.
13. Amended and Restated Security Agreements, Second Amended and
Restated Mortgage. Simultaneously with the execution and of this Agreement,
Borrowers will execute and deliver to NBD (a) Amended and Restated Security
Agreements in the form of Exhibit G attached hereto (the "Amended Security
Agreements"), and (b) UCC-I Financing Statements in the form of Exhibit H
attached hereto (the "New UCC's"), pursuant to which Borrowers will grant to
NBD a blanket lien on all of Borrowers' assets, including machinery,
equipment, and general intangibles, other than the Other Lenders' M&E, as
defined below. Simultaneously with the execution of this Agreement, Secom
will execute and deliver to NBD a
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Second Amended and Restated Future Advance Mortgage on the Mortgaged Premises
in the form of Exhibit I attached hereto (the "Amended Mortgage"). Key Corp.
Leasing, Ltd., GE Capital Public Finance, Inc., and Amplicon (collectively,
the "Other Lenders") have liens and security interests in certain of
Borrowers' machinery, equipment (and with respect to Amplicon only, software)
and products and proceeds of the foregoing (the "Other Lenders' M&E").
Borrowers have informed NBD that it is an Event of Default under Borrowers'
loan documents with the Other Lenders for Borrowers to xxxxx x xxxx to NBD on
the Other Lenders' M&E without such Other Lenders' consent and that they do
not believe such Other Lenders will consent. Thus, as noted above, the Other
Lenders' M&E will be excluded from the all asset lien provided for in the
Amended Security Agreements and the New UCC's.
14. Compensation. So long as any of the Obligations remain
outstanding, no loans, distributions, advances or other payments of any kind
or nature shall be made by any Borrower to any shareholder or any member of
their immediate families, other than the following:
(i) Reasonable cash compensation in an amount no greater than the
amount currently being paid to each such individual as of the date
hereof, provided that such cash compensation is paid for services
actually rendered by the applicable individual to Borrower;
(ii) Reasonable reimbursement for business expenses incurred in
the ordinary course of business; and
(iii) Employee benefits provided in the ordinary course of
business to other employees of Borrower consistent with past
practices.
15. Transactions with Affiliates. Without NBD's prior written consent,
which consent may be withheld at NBD's sole discretion, until all of the
Obligations are paid in full, no advances will be made by any Borrower to any
entity or individual affiliated with any Borrower, whether now existing or
formed in the future, except with respect to inter-company transactions
consistent with practice, and except for amounts to shareholders and members
of their immediate families specifically permitted by Paragraph 14 above.
16. NBD's Consultant. The Parties acknowledge that counsel to NBD may
hire a financial consultant (the "Consultant") to assist such counsel in its
evaluation of Borrowers' financial condition and Borrowers' relationship with
NBD. The Parties shall provide the Consultant access to Borrowers'
facilities, books and records and shall cooperate in good faith with the
Consultant and shall cause Borrowers' outside accountant (the "CPA") to
cooperate in good faith in connection with the provision of all information
requested by the Consultant (including copies of all information in the CPA's
possession relating to the Parties). All information provided to the
Consultant shall be held in confidence and used only by NBD and its agents in
connection with transactions with the Parties.
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17. Additional Covenants. In addition to the covenants already
contained in the Loan Documents or elsewhere in this Agreement, Borrowers
agree that the Loan Documents are hereby amended to include the following
covenants:
(a) Except as specifically provided herein, Borrowers shall not
make any loan or advance to any of their respective shareholders or
affiliates without the prior written consent of NBD, except in connection
with Borrowers' 401K Plan;
(b) Borrowers shall not incur any obligations for loans or leases
without the prior written consent of NBD;
(c) Borrowers shall permit NBD or its agents to perform audits of
the Collateral whenever deemed necessary by NBD. Borrowers shall compensate
NBD for those audits in accordance with NBD's schedule of fees, as may be
amended from time to time;
(d) Borrowers shall not permit any tax or other liens to be placed
on any of their property; provided, however, that it shall not be an Event of
Default hereunder if the manufacturer of the Press asserts a mechanic's lien
against such Press for nonpayment of the Purchase Price; and
(e) The Parties shall immediately notify NBD in writing of any
legal proceeding brought by or against any Borrower or any Guarantor.
18. Additional Reporting. In addition to any reports or information
required by the Loan Documents or this Agreement (which must be provided
timely), or that NBD may hereafter request, each
Party must provide NBD with:
(a) Within one day of receipt, copies of written notices of
default received from other creditors, and
(b) Within one day of gaining knowledge thereof, any adverse
information regarding any Party.
19. Defaults. In addition to any other Events of Default or defaults
provided for in the Loan Documents, and without waiver of the demand and
discretionary provisions of the Loan Documents, the occurrence of any of the
following constitutes an Event of Default and a. default under this Agreement
(and each Loan Document):
(a) If any Party fails to comply with any term or condition in
this Agreement (or any agreement referred to or incorporated herein) or the
Loan Documents (other than the Existing Defaults);
(b) If any material adverse change occurs in any Borrower's
financial condition or business prospects;
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(c) If any lender, supplier, creditor, lessor, bond holder or
representative thereof (collectively, "Creditor") of any Party shall
(i)obtain a judgment against any Party or (ii) receives from -------- any
Borrower any prepayments of obligations;
(d) If any representation or warranty made by any Party in this
Agreement or in connection with the negotiation hereof is untrue as of the
date made;
(e) If attachment by way of seizure, xxxx, xxxx or otherwise of
any assets of any one or more of the Parties;
(f) If the filing of any notice of lien, levy or assessment by any
government, department or agency or the fact that any taxes or debts owing
(including the Unpaid Taxes) become a lien or encumbrance upon any assets of
any of the Parties; and
(g) If any Borrower fails to pay or cause to be paid when due any
and all taxes with respect to such Borrower's business, including, without
limitation, payroll taxes and real property taxes, other than the Unpaid
Taxes.
(h) If any Borrower defaults under any agreement, document or
instrument by and among such Borrower and NBD or any of its affiliates, or by
and among such Borrower and any other bank, financial institution, lending
agency, or leasing agency who has provided financing of any nature to such
Borrower, including without limitation, the Other Lenders, except for those
defaults under the Borrowers' loan documents with the Other Lenders listed on
Exhibit J attached hereto (the "Other Lenders' Existing Defaults").
(i) If any of the Other Lenders accelerate the obligations owing
to them by any of the Borrowers, or otherwise attempt to enforce their rights
under any of their loan documents with any of the Borrowers, on account of
the Other Lenders Existing Defaults.
20. Written Documents Control. The Parties acknowledge and agree that
in the past, certain terms and provisions of the Loan Documents may not have
been complied with and may have been temporarily waived or modified through
certain temporary oral agreements or waivers among the Parties and NBD. Each
Party acknowledges and agrees that any and all of such oral agreements or
waivers are hereby terminated and each Party's duties, obligations, fights
and responsibilities with respect to the Loan Documents and this Agreement
shall be governed solely in accordance with the terms and conditions of the
written Loan Documents between the Parties and NBD, and this Agreement,
together with all written supplements or amendments, thereto or hereto, but
exclusive of all present or future oral agreements between NBD and any one or
more of the Parties.
21. Bank Accounts. The Parties represent and warrant to NBD that all
of the financial and bank accounts of Borrowers of any nature, including,
without limitation, checking and savings accounts, time deposit accounts and
operating and other deposit accounts and money market and other investment
accounts (collectively, the "Bank Accounts"), are
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maintained with NBD, and Borrowers maintain no such accounts with any other
bank, financial institution or other third party. The Parties acknowledge and
agree that Borrowers shall continue to maintain all of such Bank Accounts
with NBD, and all revenues of Borrowers will be deposited in an NBD Bank
Account immediately upon receipt.
22. No Overdrafts. The Parties acknowledge that, notwithstanding that
NBD may have honored overdrafts in the past, hereafter, neither NBD nor any
oF its affiliates will, under any circumstances, honor any checks or other
items presented to NBD or such affiliates for payment for which there are
insufficient available funds in any Borrower's accounts and NBD or. such
affiliates, as the case may be, may return any such items so presented.
23. Authority 10 Debit Accounts. If any payment called for by the Loan
Documents, this Agreement Or any other agreement referred to or incorporated
herein, or any other present or future agreements between NBD or any of its
affiliates on the one hand, or any party on the other hand, is not paid when
and as called for under the terms of such agreement, then NBD or any of its
affiliates may debit any one or more of any Party's accounts at NBD or any of
its affiliates for such amount. The fact that NBD or any of its affiliates
has debited any such account will in no way waive or diminish any default for
the failure to make such payment when and as due.
24. No Further Forbearance Implied. Each Party acknowledges that NBD
has no obligation to continue making Loans or extend the term of the
Forbearance Period or forbear from enforcing its fights and remedies after
the Forbearance Period, and nothing contained herein or otherwise is intended
to be or is a promise or agreement to continue making Loans, or to extend the
term of the Forbearance Period beyond the expiration thereof. Furthermore, no
future agreement by NBD to continue making Loans, or to extend the term of
the Forbearance Period beyond the expiration thereof, or any other agreement,
is valid or enforceable unless it is contained in a written agreement signed
by NBD.
25. Forbearance Fee. In consideration for NBD agreeing to forbear from
exercising its rights and remedies under the Loan Documents with respect to
the Existing Defaults as provided herein, Borrowers shall pay to NBD a
forbearance fee in the amount of $35,000 (the "Forbearance Fee")
simultaneously with the execution of this Agreement.
26. Expenses, Fees and Costs; Indemnification
(a) Each Party, jointly and severally, shall be responsible for the
payment of all fees and out-of-pocket disbursements incurred by NBD,
including fees of counsel and court costs, in any way arising from or in
connection with this Agreement, any Collateral, any Loan Document, any
Obligations, or the business relationship between NBD on the one hand and any
one or more of the Parties on the other hand, including, without limitation:
(1) Audit Fees (as defined in Paragraph 27 below); (2) all fees and expenses
(including recording fees and insurance policy fees) of NBD and counsel for
NBD for the preparation, examination, approval, negotiation, execution and
delivery of, or the closing of any of the transactions contemplated by,
E-16
this Agreement or any of the Loan Documents; (3) all fees and out-of-pocket
disbursements incurred by NBD, including attorneys' fees, in any way arising
from or in connection with any action taken by NBD to monitor, advise,
administer, enforce or collect any of the Obligations (including under this
Agreement, the Guarantor Loan Documents, and any other Loan Document, or
otherwise), or any other obligations of any one or more of the Parties,
whether joint, joint and several, or several, under this Agreement, any Loan
Document, any other existing or future document or agreement, or arising from
or relating to the business relationship between NBD, on the one hand, and
any one or more of the Parties, on the other hand, or otherwise securing any
of the Obligations, including any actions to lift the automatic stay or to
otherwise in any way monitor or participate in any bankruptcy, reorganization
or insolvency proceeding of any one or more of the Parties; (4) all expenses
and fees (including attorneys' fees) incurred in relation to, in connection
with, in defense of or in prosecution of any litigation instituted by any one
or more of the Parties, NBD, or any third party, against or involving NBD
arising from, relating to, or in connection with any of the Obligations, or
any one or more of the Parties' other obligations, this Agreement, any
Collateral, any Loan Document, or the business relationship between NBD, on
the one hand, and any one or more of the Parties, on the other hand,
including any so-called "lender liability" action, any claim and delivery or
other action for possession of, or foreclosure on, any of the Collateral,
post-judgment enforcement of any rights or remedies including enforcement of
any judgments, and prosecution of any appeals (whether discretionary or as of
right and whether in connection with pre-judgment or post-judgment matters);
(5) all costs, expenses, and fees incurred by NBD or its agents in connection
with appraisals and reappraisals of all or any of the Collateral (and each
Party must fully cooperate with such appraisers and make its property
available for appraisal in connection with as many appraisals as NBD may
request); (6) all costs, expenses, and fees incurred by NBD or its counsel in
connection with consultants, including, without limitation, the Consultant,
expert witnesses, or other professionals retained by NBD or its counsel, to
assist, advise, or give testimony with respect to any matter relating to the
Collateral, the Obligations, the Loan Documents, the Guaranty, or the
business relationship between NBD, on the one hand, and any one or more of
the Parties, on the other hand (and each Party must fully cooperate with such
Consultant, expert witness or other professional and shall make its premises,
books and records, accounting systems, computer systems and other media for
the recordation of information available to such persons); and (7) all costs,
expenses and fees incurred by NBD in connection with any environmental
investigations including, but not limited to, Phase I, Phase II and Phase III
environmental audits (and each Party agrees that NBD or its agents may enter
on its premises at any time to conduct such environmental investigations).
Each Party's agreement, jointly and severally, to be responsible for NBD's
attorneys' fees and costs applies regardless of whether or not NBD prevails
in whole or in part in any action, proceeding, litigation, or otherwise, and
regardless of the nature of any action or litigation or the theories or bases
of recovery or defense. Each Party, jointly and severally, agrees to
indemnify NBD for all Claims (as hereinafter defined) which may be imposed
on, incurred by, or asserted against NBD in connection with this Agreement,
any Loan Document, or the transactions contemplated hereby or thereby, or the
business relationship between NBD, on the one hand, and any one or more of
the Parties, on the other hand.
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(b) All of the foregoing costs, expenses, reimbursement
obligations, and indemnification obligations are part of the Obligations and
are secured by all of the Collateral.
(c) "Claims" means any demand, claim, action or cause of action,
damage, liability, loss, cost, debt, expense, obligation, tax, assessment,
charge, lawsuit, contract, agreement, undertaking or deficiency, of any kind
or nature, whether known or unknown, fixed, actual, accrued or contingent,
liquidated or unliquidated (including interest, penalties, attorneys' fees
and other costs and expenses incident to proceedings or investigations
relating to any of the foregoing or the defense of any of the foregoing),
whether or not litigation has commenced.
27. Verification of Accounts/Audits. Attached hereto as Exhibit F is a
true and complete list, including accurate addresses and contact persons of
all of each Borrower's customers and account debtors. The Parties agree that,
NBD, through its employees or authorized agents, is permitted to send a
letter to and otherwise contact each Borrower's customers and account debtors
to Verify account receivable balances. In addition, NBD shall be permitted
full and complete access to each Borrower's facilities, and books and records
to conduct audits as often as NBD reasonably desires. The cost of such audits
is part of the Obligations, is secured by all Collateral, and must be paid by
Borrowers within ten (10) days of receipt of an invoice therefor (the "Audit
Fees"). The Audit Fees are in addition to all other interest, fees, costs,
and expenses provided for in the Loan Documents or this Agreement.
28. Other Documents. Each Party must execute, or cause to be executed,
any documents requested by NBD to carry out the intent of or to implement
this Agreement, the Guarantor Loan Documents, or any other Loan Document.
29. Cross Default/Cross Collateralization/Remedies. An Event of
Default or a default under this Agreement (or any agreement referred to or
incorporated herein)as an Event of Default or a default under each document
and agreement comprising the Loan Documents (including the Guarantor Loan
Documents), and an Event of Default or a default under any document or
agreement comprising the Loan Documents (including the Guarantor Loan
Documents) is an Event of Default or a default under the terms of this
Agreement (and all agreements referred to or incorporated herein).
Immediately upon the occurrence of an Event of Default or a default under
this Agreement, any Loan Document or any document executed in connection
herewith or referenced herein, and without notice or an opportunity to cure
such Event of Default or default, NBD has the right to exercise any remedies
provided in this Agreement, the Loan Documents, and under applicable law, and
the Forbearance Period will automatically expire at NBD's election, without
further notice and, at NBD's election but without notice, all of each Party's
obligations to NBD (including the Obligations and the Guarantors' obligations
under the Guarantor Loan Documents) will be immediately due and payable. In
any event, from and after the earlier of expiration of the Forbearance Period
or the occurrence of an Event of Default or a default under this Agreement or
any Loan Document, NBD may immediately take action to enforce its rights and
remedies under the Loan Documents (including enforcement action on account of
the Existing Defaults), this Agreement, and applicable law, including
collecting the Obligations and foreclosing on the Collateral. Each of
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the Parties acknowledges and agrees that it was and remains each Party's
intent that a default by any Party under any of its Obligations to NBD shall
be deemed to be a default under each document or agreement evidencing all of
the other Parties' Obligations to NBD, and all Collateral pledged by a Party
to secure that Party's Obligations to NBD also secures all of the other
Parties' Obligations to NBD. Each Party agrees to execute and deliver to NBD
any security agreements, financing statements or other documents NBD may deem
necessary or desirable to effectuate the above-referenced provisions. ABSENT
THE PRIOR OCCURRENCE OF AN EVENT OF DEFAULT, DEFAULT OR PRIOR DEMAND FOR
PAYMENT, ALL OBLIGATIONS, AND GUARANTORS' OBLIGATIONS UNDER THE GUARANTOR
LOAN DOCUMENTS ARE DUE AND PAYABLE IN FULL AT THE EXPIRATION OF THE
FORBEARANCE PERIOD.
30. Loan Documents, Guaranties and Secom Mortgage Continue. Except as
expressly modified and amended by the terms of this Agreement, all other
terms and conditions of the Loan Documents (including the Guarantor Loan
Documents and the Secom Mortgage) remain in full force and effect and are
hereby ratified, confirmed, and approved. If there is an express conflict
between the terms of this Agreement and the terms of the Loan Documents, the
terms of this Agreement govern and control. Without limiting the generality
of the foregoing, (a) each Guarantor acknowledges and agrees that the
Guaranties extend to cover all of the Obligations of Borrowers to NBD,
including without limitation, all of such Obligations under this Agreement
and under the Loan Documents, and (b) each Party acknowledges and agrees that
the Secom Mortgage extends to cover all of Borrowers' Obligations to NBD,
including without limitation, all of such Obligations under this Agreement
and under the Loan Documents.
31. Reservation of Rights/No Waivers. This Agreement grants a limited
forbearance until the expiration of the Forbearance Period on the terms and
conditions set forth in this Agreement. Except for such forbearance through
the expiration of the Forbearance Period, all of NBD's rights and remedies
against each Party and the Collateral are expressly reserved, including all
fights and remedies resulting from, or arising in connection with, the
Existing Defaults. Likewise, nothing herein is a waiver of any Existing
Defaults, or other defaults existing as of the date hereof, or an agreement
to consent to further worsening of such Existing Defaults, or new Events of
Default or defaults, or in any way prejudices NBD's rights and remedies under
the Loan Documents (including the Guarantor Loan Documents), or applicable
law. Further, NBD has the right to waive any terms, provisions, or conditions
in this Agreement or the Loan Documents in its sole discretion, and any such
waiver does not prejudice, waive, or reduce any other fight or remedy which
NBD may have against any one or more of the Parties. No waiver of fights or
any condition of this Agreement, the Loan Documents, or any other agreement
by NBD is effective unless the same is contained in a writing signed by an
authorized agent of NBD.
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32. Credit Inquiries. In the event customers, buyers, investors,
potential alternative financing sources, or other parties ask NBD about the
current lending relationship among NBD and any one or more of the Parties,
each Party agrees that NBD may refer such inquiries to the appropriate Party.
33. Entire Agreement, Etc.
(a) This Agreement and the Exhibits hereto constitute the Parties'
and NBD's entire understanding with respect to the subject matter hereof.
Modifications or amendments to this Agreement must be in writing and signed
by the party to be charged in order to be effective. This Agreement is
governed by the internal laws of the State of Michigan (without regard to
conflicts of law principles). This Agreement is binding on each Party and its
respective successors, assigns, heirs, and personal representatives and shall
inure to NBD's benefit and its successors and assigns. If any provision of
this Agreement conflicts with any applicable statute or law, or is otherwise
unenforceable, such offending provision is null and void only to the extent
of such conflict or unenforceability, and is deemed separate from and does
not invalidate any other provision of this Agreement.
(b) This Agreement is being entered into among competent persons
who are experienced in business and represented by counsel (or who have had
the opportunity to be represented by counsel), and has been reviewed by the
Parties and their counsel, if any. Therefore, any ambiguous language in this
Agreement will not necessariiy be construed against any particular party as
the drafter of such language.
(c) This Agreement may be executed in any number of counterparts
with the same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one instrument.
Facsimile copies of signatures are to be treated as original signatures for
all purposes.
(d) References in the Loan Documents and all other documents
executed in connection with the Loan Documents (as each of the foregoing is
amended hereby) to the Loan Documents mean the Loan Documents as amended by
this Agreement.
(e) The term "including" means including, without limitation, and
the term "includes" means includes, without limitation.
(f) All headings are inserted for convenience only and do not
affect the construction or interpretation of this Agreement.
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34. Additional Representations. Each Party represents and warrants to
NBD that:
(a) Each Borrower's execution, delivery, and performance of this
Agreement and all agreements and documents delivered in connection herewith
by such Borrower, have been duly authorized by all necessary corporate action
and do not and will not require any consent or approval of such Borrower's
stockholders, violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in
effect having applicability to such Borrower or it articles of incorporation
or bylaws, or result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which such Borrower is a party or by which it or its properties
may be bound or affected.
(b) 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 any Borrower of
this Agreement and all agreements and documents delivered in connection with
this Agreement.
(c) This Agreement and all agreements and documents delivered
pursuant hereto by any one or more of the Parties are the legal, valid and
binding obligations of each such Party enforceable against each such Party in
accordance with the terms thereof.
(d) After giving effect to the amendments contained herein and
effected pursuant hereto, all representations and warranties contained in the
Loan Documents are true and correct on and as of the date hereof with the
same force and effect as if made on and as of the date hereof.
(e) Except for the Existing Defaults, each Party has duly and
properly performed, complied with and observed each of its covenants,
agreements, and obligations contained in the Loan Documents.
(f) Borrowers' audited financial statement for the fiscal year
ended September 30, 1997, and Borrowers' interim financial statements for the
nine-month period ended June 30, 1998, copies of which have been furnished to
NBD, fairly present Borrowers' financial condition at such dates and the
results of Borrowers' operations for the periods indicated, all substantially
in accordance with generally accepted accounting principles applied on a
consistent basis.
(g) No Party has assigned any claim, set off or defense to any
individual or entity.
(h) This Agreement and all of the Exhibits and other written
material delivered by any one or more of the Parties to NBD in connection
with the transactions contemplated hereby do not contain any statement that
is false or misleading with respect to any
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material fact and do not omit to state a material fact necessary in order to
make the statements therein not false or misleading. There is no additional
fact of which any Party is aware that has not been disclosed in writing to
NBD that materially affects adversely or, so far as each Party can reasonably
foresee, will materially affect adversely, any Party's financial condition or
business prospects.
(i) All Parties executing this Agreement in a representative
capacity warrant that they have authority to execute this Agreement and
legally bind the entity they represent.
35. Survival; Reliance. All agreements, representations and warranties
made in this Agreement (and all agreements referred to or incorporated
herein) survive the execution of this Agreement (and all documents and
agreements referred to or incorporated herein). Notwithstanding anything in
this Agreement (or any documents or agreements referred to or incorporated
herein) to the Contrary, no investigation or inquiry by NBD (including by its
agents) with respect to any matter which is the subject of any
representation, warranty, covenant or other agreement set forth herein or
therein is intended, nor shall it be interpreted, to limit, diminish or
otherwise affect the full scope and effect of any such representation,
warranty, covenant or other agreement. All terms, covenants, agreements,
representations and warranties of each Party made herein (or in any documents
or agreements referred to or incorporated herein), or in any certificate or
other document delivered or to be delivered pursuant hereto, are deemed to be
material and to have been relied upon by NBD, notwithstanding any
investigation heretofore or hereafter made by NBD or its agents.
36. Notices. Any notice or other communication required or permitted
to be given under this Agreement or any of the Loan Documents must be in
writing and delivered personally, telegraphed, telecopied or telexed, or
mailed (by certified or registered mail or by recognized overnight courier),
postage prepaid, and is deemed given when so delivered personally,
telegraphed or telexed, or if mailed, one day after the date of mailing,
addressed as follows (or to any another address as to which any party so
advises the other parties in writing):
(a) If to Borrowers
or Guarantors: Secom General Corporation
00000 Xxxxx Xxxxx Xxxxxx
Xxxx, Xxxxxxxx 00000
Telecopy (000) 000-0000
Attn: Xxxx Xxxxxxxx
(b) If to NBD: NBD Bank
000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, III
E-22
With a copy to: Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attn: Xxxxx X. Xxxxx
37. Discretionary Loans; Demand Obligations. Notwithstanding any
provisions of this Agreement, it is understood and agreed that NBD is at no
time obligated to make any Loan, despite compliance with any express
conditions precedent thereto, and NBD may at any time make demand for payment
of the Obligations, notwithstanding that there may then exist no Event of
Default or default. ABSENT PRIOR DEMAND BY NBD, OR A WRITTEN AGREEMENT SIGNED
BY NBD TO THE CONTRARY, ALL OF THE OBLIGATIONS SHALL BE DUE AND PAYABLE IN
FULL ON THE EARLIER OF (A) A DEFAULT UNDER THE LOAN DOCUMENTS, INCLUDING THIS
AGREEMENT, OR (B) THE EXPIRATION OF THE FORBEARANCE PERIOD.
38. Impairment of Collateral. The execution and delivery of this
Agreement (and all agreements and documents referred to herein) does not
impair or affect any other security (by endorsement or otherwise) for the
Obligations, or any one or more of the Parties' other obligations to NBD. No
security taken before or after as security for the Obligations impairs or
affects this Agreement (or any agreement or document referred to herein). All
present and future additional security is to be considered as cumulative
security.
39. Time Is of the Essence. Each Party acknowledges and agrees that
time is of the essence as to each and every term and provision of this
Agreement and each Loan Document.
40. Adverse Events. Promptly upon gaining knowledge thereof or at such
time as any Party should have known thereof, each Party must inform NBD of
the occurrence of any Event of Default, or default, or any event which with
the lapse of time or service of notice or both would constitute an Event of
Default or default under this Agreement or any of the Loan Documents, or of
any other occurrence which has or could reasonably be expected to have a
materially adverse effect on any Party's business, properties, or financial
condition or upon any Party's ability to comply with its obligations under
this Agreement or the Loan Documents (including the Guarantor Loan
Documents).
41. Non-Waiver. No failure or delay on the part of NBD in the exercise
of any power or fight, and no course of dealing between any one or more of
the Parties or any Personal Guarantor and NBD, operates as a waiver of such
power or right, nor shall any single or partial exercise of any power or
right preclude other or further exercise thereof or the exercise of any other
power or right. The remedies provided for herein are cumulative and not
exclusive of any remedies which may be available to NBD at law or in equity.
No notice to or demand on any Party not required hereunder or under the Loan
Documents entitles any such Party to any other or further notice or demand in
similar or other circumstances, or waives NBD's right to any other or further
action in any circumstances without notice or demand. Any waiver of an
E-23
provision of this Agreement or the Loan Documents and any consent to any
departure by any one or more of the Parties from the terms of any provision
of this Agreement or the Loan Documents, is effective only if in writing
signed by an authorized officer of NBD, and only in the specific instance and
for the specific purpose for which given.
42. No Other Promises or Inducements. There are no promises or
inducements which have been made to any signatory hereto to cause such
signatory to enter into this Agreement other than those which are set forth
in this Agreement.
43. Additional Agreements. Prior to or simultaneously with the
execution and delivery of this Agreement (or such other date as is indicated
below), the Parties shall cause to be executed and delivered to NBD the
following documents:
(a) The Amended Notes executed by Borrowers;
(b) The Amended and Restated Security Agreements and the New UCC's
executed by Borrowers;
(c) The list of customers and account debtors;
(d) The Second Amended and Restated Future Advance Mortgage
executed by Secom;
(e) Certificate of Resolutions in the form attached as Exhibit K
hereto, executed by Borrower;
(f) A Security Agreement and UCC-I Financing Statement in the form
of Exhibit L attached hereto, executed by Milford;
(g) A UCC-I Financing Statement covering equipment owned by
Uniflow and financed by NBD as described on such UCC-1 Financing Statement in
the form of Exhibit M attached hereto;
(h) Executed demand deposit account signature cards and
resolutions for all of Borrowers' operating accounts in the form of Exhibit N
attached hereto; and
(i) Such other financing statements, resolutions, searches and
other documents and agreements reasonably required by NBD, to effectuate the
transactions contemplated by this Agreement.
E-24
44. Subordination Agreements. ANYTHING CONTAINED IN THIS AGREEMENT OR
IN ANY OTHER AGREEMENT TO THE CONTRARY NOTWITHSTANDING, NOTHING CONTAINED IN
THIS AGREEMENT OR IN ANY OTHER AGREEMENT RESTRICTS OR PROHIBITS NBD'S RIGHT
TO BLOCK, STOP OR PROHIBIT PAYMENTS TO ANY SUBORDINATED CREDITOR(S) ON
ACCOUNT OF THE EXISTING DEFAULTS OR OTHERWISE. Without limiting the
generality of the previous sentence and notwithstanding any provision of any
Subordination Agreement to the contrary, Guarantors agree jointly and
severally that all amounts owing by any Borrower to any of them, however
evidenced, present or future (the "Subordinated Indebtedness") are
subordinated to all of the Obligations, AND HEREBY WAIVE ALL RIGHTS TO
RECEIVE PAYMENTS ON OR RELATED TO THE SUBORDINATED INDEBTEDNESS UNTIL SUCH
TIME AS NBD HAS RECEIVED PAYMENT IN FULL WITH RESPECT TO THE OBLIGATIONS.
45. Payments to Shareholders. Effective immediately, all dividends,
distributions and other payments to shareholders, present or future, whether
by way of stock redemption, payments on preferred stock, or deferred
compensation, principal or interest, shall cease in their entirety, except
for those payments specifically permitted by this Agreement, or those in
connection with a 401K Plan.
46. STATUTE OF FRAUDS. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. ALL
PRIOR AND CONTEMPORANEOUS ORAL AGREEMENTS, IF ANY, BETWEEN NBD, ON THE ONE
HAND, AND ANY ONE OR MORE OF THE PARTIES, ON THE OTHER HAND, ARE MERGED INTO
THIS AGREEMENT AND DO NOT SURVIVE THE EXECUTION OF THIS AGREEMENT.
47. RELEASE. AS OF THE DATE HEREOF EACH PARTY REPRESENTS AND WARRANTS
THAT HE, SHE OR IT IS AWARE OF, AND POSSESSES, NO CLAIMS OR CAUSES OF ACTION
AGAINST NBD. NOTWITHSTANDING THIS REPRESENTATION AND AS FURTHER CONSIDERATION
FOR THE AGREEMENTS AND UNDERSTANDINGS HEREIN, EACH PARTY INDIVIDUALLY,
JOINTLY, SEVERALLY, AND JOINTLY AND SEVERALLY, IN EVERY CAPACITY, INCLUDING
BUT NOT LIMITED TO, AS SHAREHOLDERS, OFFICERS, PARTNERS, DIRECTORS,
INVESTORS, OR CREDITORS OF ANY ONE OR MORE OF THE PARTIES, EACH OF THEIR
EMPLOYEES, AGENTS, EXECUTORS, SUCCESSORS AND ASSIGNS, HEREBY RELEASES NBD,
ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AFFILIATES,
SUBSIDIARIES, SUCCESSORS AND ASSIGNS FROM ANY LIABILITY, CLAIM, RIGHT OR
CAUSE OF ACTION WHICH NOW EXISTS, OR HEREAFTER ARISES, WHETHER KNOWN OR
UNKNOWN, ARISING FROM OR IN ANY WAY RELATED TO FACTS IN EXISTENCE AS OF THE
DATE HEREOF. BY WAY OF EXAMPLE AND NOT
E-25
LIMITATION, THE FOREGOING INCLUDES ANY CLAIMS IN ANY WAY RELATED TO ACTIONS
TAKEN OR OMITTED TO BE TAKEN BY NBD UNDER THE LOAN DOCUMENTS, THE BUSINESS
RELATIONSHIP WITH NBD AND ALL OTHER OBLIGATIONS OF ANY NATURE OR KIND OF ANY
ONE OR MORE OF THE PARTIES, ANY ORAL AGREEMENTS OR UNDERSTANDINGS (ACTUAL OR
ALLEGED), ANY BANKING RELATIONSHIPS THAT ANY ONE OR MORE OF THE PARTIES HAS
OR MAY HAVE HAD WITH NBD AT ANY TIME AND FOR ANY REASON INCLUDING, BUT NOT
LIMITED TO, DEMAND DEPOSIT ACCOUNTS, OR OTHERWISE.
48. WAIVER OF JURY TRIAL AND BOND; SUBMISSION TO JURISDICTION;
AND ACKNOWLEDGMENT.
(a) ANY JUDICIAL PROCEEDING AGAINST ANY ONE OR MORE OF THE PARTIES
BROUGHT BY NBD WITH RESPECT TO ANY TERM OR CONDITION OF THIS AGREEMENT, THE
LOAN DOCUMENTS OR ANY OTHER PRESENT OR FUTURE AGREEMENT BETWEEN ANY ONE OR
MORE OF THE PARTIES AND NBD MAY BE BROUGHT BY NBD IN A COURT OF COMPETENT
JURISDICTION IN THE STATE OF MICHIGAN, UNITED STATES OF AMERICA, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY AND NBD ACCEPT FOR
THEMSELVES AND IN CONNECTION WITH THEIR RESPECTIVE PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREE TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER PRESENT AND
FUTURE AGREEMENT BETWEEN ANY ONE OR MORE OF THE PARTIES AND NBD. EACH PARTY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON THEM, AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS MAY BE MADE BY MAIL OR MESSENGER DIRECTED TO THEM
AT THEIR ADDRESSES SET FORTH IN THIS AGREEMENT. EACH OF THE PARTIES WAIVES
ANY BOND OR SURETY OR SECURITY UPON SUCH BOND OR SURETY WHICH MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF NBD. NOTHING CONTAINED IN THIS SECTION AFFECTS
NBD'S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECTS NBD'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY ONE OR MORE
OF THE PARTIES OR ANY ONE OR MORE OF THEIR PROPERTIES IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY PARTY AGAINST NBD
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER OR CLAIM IN ANY WAY ARISING OUT
OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
PRESENT OR FUTURE AGREEMENT BETWEEN ANY ONE OR MORE OF THE PARTIES AND NBD,
MUST BE BROUGHT ONLY IN A COURT LOCATED IN THE STATE OF MICHIGAN. EACH PARTY
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED
E-26
HEREUNDER OR IN CONNECTION HEREWITH AND MAY NOT ASSERT ANY DEFENSE BASED ON
LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NONCONVENIENS.
(b) EACH PARTY ACKNOWLEDGES THAT (1) HE, SHE OR IT HAS FULLY READ
ALL OF THIS AGREEMENT AND HAS BEEN GIVEN THE OPPORTUNITY TO CONSULT WITH
COUNSEL AND OTHER ADVISORS OF HIS, HER OR ITS CHOICE, AND AFTER CONSULTING
WITH SUCH COUNSEL OR ADVISORS, KNOWLINGLY, VOLUNTARILY AND WITHOUT DURESS,
COERCION, UNLAWFUL RESTRAINT, INTIMIDATION OR COMPULSION, ENTERS INTO THIS
AGREEMENT, BASED UPON SUCH ADVICE AND COUNSEL AND IN THE EXERCISE OF HIS, HER
OR ITS BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS BEEN ENTERED INTO IN
EXCHANGE FOR GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH THE PARTIES
HERETO ACKNOWLEDGE, (3) HE, SHE OR IT HAS CAREFULLY AND COMPLETELY READ ALL
OF THE TERMS AND PROVISIONS OF THIS AGREEMENT AND IS NOT RELYING ON THE
OPINIONS OR ADVICE OF NBD OR HIS, HER OR ITS AGENTS OR REPRESENTATIVES IN
ENTERING INTO THIS AGREEMENT.
(c) THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL RIGHT, BUT THAT THIS RIGHT MAY BE WAIVED. NBD AND EACH
PARTY EACH HEREBY KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL
RIGHTS TO A TRIAL BY JURY OF ALL DISPUTES ARISING OUT OF OR IN RELATION TO
THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENTS BETWEEN ANY OF THE
PARTIES. NO PARTY WILL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED. EACH PARTY
AND NBD AGREE THAT ANY OF THEM MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THEIR CONSENT TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY AND THE OTHER AGREEMENTS SET FORTH IN
THIS AGREEMENT.
WITNESS NBD BANK
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx, III
Name: Xxxxxx X. Xxxxx, III
Title: Vice President
[Signatures continued on Page 28]
E-27
[Signatures continued from Page 27]
WITNESS SECOM GENERAL CORPORATION
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Name: Vice President
Title:
Subscribed and sworn to before me this 25th day of Nov., 1998.
/s/ Xxxxxxx Xxxxxx
Notary Public, Oakland County, MI
My Commission Expires: 5-28-2002
WITNESS FORM FLOW, INC.
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Name:
Title: Director
Subscribed and sworn to before me this 25th day of Nov., 1998.
/s/ Xxxxxxx Xxxxxx
Notary Public, Oakland County, MI
My Commission Expires: 5-28-2002
WITNESS L & H DIE, INC.
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Name:
Title: Director
Subscribed and sworn to before me this 25th day of Nov., 1998.
/s/ Xxxxxxx Xxxxxx
Notary Public, Oakland County, MI
My Commission Expires: 5-28-2002
[Signatures continued on Page 29]
XXXXXXX XXXXXX
Notary Public, Oakland County, MI
My Commission Expires 5-28-2002
E-28
WITNESS MICANOL, INC.
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Name:
Title: Director
Subscribed and sworn to before me this 25th day of Nov., 1998.
/s/ Xxxxxxx Xxxxxx
Notary Public, Oakland County, MI
My Commission Expires: 5-28-2002
WITNESS UNIFLOW CORPORATION
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Name:
Title: Director
Subscribed and sworn to before me this 25th day of Nov., 1998.
/s/ Xxxxxxx Xxxxxx
Notary Public, Oakland County, MI
My Commission Expires: 5-28-2002
MMC MANUFACTURING CORP. F/K/A
WITNESS MILFORD MANUFACTURING,
CORPORATION
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
Name: Vice President
Title:
Subscribed and sworn to before me this 25th day of Nov., 1998.
/s/ Xxxxxxx Xxxxxx
Notary Public, Oakland County, MI
My Commission Expires: 5-28-2002
XXXXXXX XXXXXX
Notary Public, Oakland County, MI
My Commission Expires 5-28-2002
E-29
EXHIBITS
Exhibit A: Projections
Exhibit B: Second Amended and Restated Master Demand Business Loan Note
(attached)
Exhibit C: Second Amended and Restated Term Note (attached)
Exhibit D: Second Amended and Restated Equipment Term Note (attached)
Exhibit E: Dominion of Funds Agreement
Exhibit F: List of Borrowers' Customers
Exhibit G: Amended Security Agreements
Exhibit H: New UCC's
Exhibit I: Second Amended and Restated Mortgage
Exhibit J: Other Lenders' Existing Defaults
Exhibit K: Certificate of Resolutions
Exhibit L: Milford Security Agreement and UCC-1 Financing Statement
Exhibit M: Uniflow UCC-1 Financing Statement
Exhibit N: Demand Deposit Account Signature Cards and Resolutions
E-30
Exhibit "B"
SECOND AMENDED AND RESTATED
MASTER DEMAND BUSINESS LOAN NOTE
Amount: (DELTA) $3,000,000 Dated: as of November 25, 1998
Made at Detroit, Michigan.
FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to
pay to the order of NBD BANK ("Bank"), at its offices in Detroit, Michigan or
at such other place as the holder of this note may from time to time
designate in writing on demand, the principal sum of (DELTA) Three Million
(DELTA) and 00/100 Dollars (DELTA)($3,000,000.00), together with interest on
the outstanding balance thereof as provided below. THIS NOTE IS PAYABLE ON
DEMAND. Until demand, the undersigned shall make monthly payments of accrued
interest commencing on December 1, 1998, and continuing on the 1st day of
each consecutive month thereafter. Unpaid interest under the Prior Notes
(defined below) is due on December 1, 1998.
The indebtedness under this Note outstanding from time to time prior
to maturity (whether by demand, acceleration or otherwise) or the occurrence
of an Event of Default shall bear interest on the basis of a year of 360 days
for the actual number of days elapsed in each month, at the rate of 1% per
annum above the Bank's Prime Rate (the "Applicable Rate"), as more fully
provided in the Amended and Restated Revolving Credit and Loan Agreement
dated as of June 30, 1996, as amended by First Amendment to Revolving Credit
and Loan Agreement dated as of August 22, 1997, Second Amendment to Revolving
Credit and Loan Agreement dated as of January 1, 1998, and an Amendment and
Forbearance Agreement (the "Forbearance Agreement") dated the date hereof (as
so amended and as may be further amended from time to time, the "Credit
Agreement"). Capitalized terms not otherwise defined herein shall have the
meanings given them in the Credit Agreement. As used herein, the "Prime Rate"
shall be the per annum rate of interest from time to time announced by the
Bank (or any successor thereto) as its prime rate, which prime rate may not
be the lowest `rate of interest charged by the Bank to any of its customers.
Any change in the Prime Rate shall immediately effect a change in the rate of
interest payable hereunder.
After maturity, or from and after an Event of Default, the outstanding
principal balance under this Note shall bear additional interest from and
after such maturity date or the occurrence of the Event of Default, at a rate
of three (3%) percentage points per annum above the Applicable Rate until the
Note is fully paid or the Event of Default is fully cured (the "Default
Rate").
If any payment is not received by Bank within fifteen days after its
due date, the Bank may assess and the undersigned agree to pay a late fee
equal to the lesser of 5% of the past due amount or the Late Fee Cap. The
Late Fee Cap is $350 and is based on the original principal amount of this
Note.
Principal of and interest on this Note shall be payable in lawful
money of the United States of America. The undersigned agrees to pay all
costs of collection and enforcement of this Note, including reasonable
attorneys' fees and court costs
E-31
The indebtedness under this Note may be prepaid in whole or in part at
any time. In addition to the payments described above, additional payments on
this Note may be due and payable pursuant to the terms of the Credit
Agreement.
Bank is hereby authorized by Borrowers to record on its books and
records, the date and amount of each Revolving Loan, the Loan Period, the
applicable interest rate (including any changes therein), the amount of each
payment of principal thereon and such other information as appropriate, which
books and records shall constitute rebuttable presumptive evidence of the
information so recorded, provided, however, that any failure by Bank to
record any such information shall not relieve Borrowers of their obligation
to repay the outstanding principal amount of all Revolving Loans made by
Bank, all accrued interest thereon and any amount payable with respect
thereto in accordance with the terms of this Note and the Credit Agreement.
This Note is given pursuant to the terms and conditions of the Credit
Agreement, including the Forbearance Agreement. This Note is secured by,
among other collateral, the collateral granted to Lender under the terms of
the Credit Agreement, including the Forbearance Agreement, and the Loan
Documents. The occurrence of any default under the Credit Agreement,
including the Forbearance Agreement, or any of the Loan Documents (as such
documents may have been amended by the Credit Agreement), or any document or
instrument referred to or incorporated into any of the foregoing shall be
deemed a default under this Note and shall entitle the holder of this Note to
accelerate the maturity of the debt evidenced by this Note and to have all
rights and remedies afforded by law or available under the Credit Agreement,
including the Forbearance Agreement, the Loan Documents and under all other
agreements referred to or executed in connection with any of the foregoing.
This Note consolidates, amends and restates (but does not discharge)
certain existing obligations evidenced by a Line of Credit Note, dated as of
June 30, 1996 in the original principal amount of $2,000,000, and an Amended
and Restated Revolving Credit Note, dated June 30, 1996, in the original
principal amount of $4,000,000, all from the undersigned,to Bank ("Prior
Notes"). Any references in the Credit Agreement or any other agreement to the
Prior Notes shall hereafter constitute a reference to this Note.
The undersigned, and all endorsers and guarantors, hereby severally
waive valuation and appraisement, presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note, and expressly agree
that the maturity of this Note, or any payment due under this Note, may be
extended from time to time without in any way affecting the liability of the
undersigned or such endorsers or guarantors.
E-32
This Note, made and executed in the State of Michigan, shall be
governed and construed according to the internal laws of the State of
Michigan.
SECOM GENERAL CORPORATION,
a Delaware corporation
By: ______________________
Name: Xxxx Xxxxxxxx
Its: Vice President
00000 Xxxxx Xxxxx Xxx.
Xxxx, Xxxxxxxx 00000
UNIFLOW CORPORATION
By: ______________________
Xxxx Xxxxxxxx
Its: Vice President
00000 Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
MICANOL, INC.
By: ______________________
Xxxx Xxxxxxxx
Its: Vice President
X.X. Xxx 000
00000 Xxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
L&H DIE, INC.
By: ______________________
Xxxx Xxxxxxxx
Its: Vice President
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
FORM FLOW, INC.
By: ______________________
Xxxx Xxxxxxxx
Its: Vice President
0000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
[Signature of Milford Manufacturing continued on Page 4]
E-33
[Signature of Milford Manufacturing continued from Page 3]
MMC MANUFACTURING CORP., f/k/a
MILFORD MANUFACTURING, CORPORATION
By: _____________________________
Name:________________________
Its:_________________________
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
E-34
Exhibit "C"
SECOND AMENDED AND RESTATED
TERM NOTE
Amount: $625,592.35 Dated: as of November 25, 1998
Due Date: (DELTA) Demand or February 1, 0000 Xxxx xx Xxxxxxx, Xxxxxxxx
FOR VALUE RECEIVED, the undersigned promise to pay to the order of NBD
BANK ("Bank"), at its offices in Detroit, Michigan or at such other place as
the holder of this Note may from time to time designate in writing, the
principal sum of SIX HUNDRED TWENTY-FIVE THOUSAND, FIVE HUNDRED NINETY-TWO
AND 35/100 Dollars ($625,592.35), together with interest on the outstanding
balance thereof at 1% above the Bank's Prime Rate (the "Note Rate"), as more
fully provided in the Credit Agreement referred to below, payable as follows:
Unless earlier demand for payment is made, principal is payable in 2 monthly
installments (DELTA) in the amount of $5,000 plus accrued interest on
December 6, 1998 and January 6, 1999, followed by a balloon payment of all
remaining principal and interest on (DELTA) February 1, 1999. As used herein,
the "Prime Rate" shall be the per annum rate of interest from time to time
announced by the Bank (or any successor thereto) as its prime rate, which
prime rate may not be the lowest rate of interest charged by the Bank to any
of its customers. Any change in the Prime Rate shall immediately effect a
change in the rate of interest payable hereunder.
After maturity, or from and after an Event of Default, described
below, the outstanding principal balance under this Note shall bear
additional interest from and after such maturity date or the occurrence of
the Event of Default, at a rate of three (3%) percentage points per annum
above the Note Rate until the Note is fully paid or the Event of Default is
fully cured (the "Default Rate").
The indebtedness under this Note outstanding from time to time shall
bear interest on the basis of a year of 360 days for the actual number of
days elapsed in each month. Principal of and interest on this Note shall be
payable in lawful money of the United States of America. The undersigned
agrees to pay all costs of collection and enforcement of this Note, including
reasonable attorneys' fees and court costs.
If any payment is not received by Bank within fifteen days after its
due date, the Bank may assess and the undersigned agree to pay a late fee
equal to the lesser of 5% of the past due amount or the Late Fee Cap. The
Late Fee Cap is $200 and is based on the original principal amount of this
Note.
The indebtedness under this Note may be prepaid in whole or in part at
any time.
This Note is given pursuant to the terms and conditions of the Amended
and Restated Revolving Credit and Loan Agreement dated as of June 30, 1996,
as amended by First Amendment to Amended and Restated Revolving Credit and
Loan Agreement dated as of August 22, 1997, Second Amendment to Revolving
Credit and Loan Agreement dated as of January 1, 1998, and an Amendment and
Forbearance Agreement (the "Forbearance Agreement") dated the date hereof (as
so amended and as may be further amended from time to
E-35
time, the "Credit Agreement"). Capitalized terms not otherwise defined herein
shall have the meanings given them in the Credit Agreement. This Note is
secured by, among other collateral, the collateral granted to Lender under
the terms of the Credit Agreement, including the Forbearance Agreement, and
the Loan Documents. The occurrence of any Event of Default under the Credit
Agreement, including the Forbearance Agreement, or any default under any of
the Loan Documents or any document or instrument referred to or incorporated
into any of the foregoing shall be deemed an Event of Default under this Note
and shall entitle the holder of this Note to accelerate the maturity of the
debt evidenced by this Note and to have all rights and remedies afforded by
law or available under the Credit Agreement, including the Forbearance
Agreement, the Loan Documents and under all other agreements referred to or
executed in connection with any of the foregoing.
This Second Amended and Restated Term Note, among other things, amends
and restates (but does not discharge) the indebtedness outstanding under that
certain Amended and Restated Term Note dated as of June 30, 1996, in the
original principal amount of $775,000. Any reference in any other document or
instrument to the foregoing notes shall constitute a reference to this Second
Amended and Restated Term Note.
The undersigned, and all endorsers and guarantors, hereby severally
waive valuation and appraisement, presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note, and expressly agree
that the maturity of this Note, or any payment due under this Note, may be
extended from time to time without in any way affecting the liability of the
undersigned or such endorsers or guarantors.
This Note, made and executed in the State of Michigan, shall be
governed and construed according to the internal laws of the State of
Michigan.
SECOM GENERAL CORPORATION,
a Delaware corporation
By: ______________________
Name: Xxxx Xxxxxxxx
Title: Vice President
00000 Xxxxx Xxxxx Xxx.
Xxxx, Xxxxxxxx 00000
E-36
Exhibit "D"
SECOND AMENDED AND RESTATED EQUIPMENT TERM NOTE
Amount: $644,680 Dated: as of November 25, 1998
Due Date: (DELTA) Demand or February 1, 1999 Made at Detroit, Michigan.
FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to
pay to the order of NBD BANK ("Bank"), at its offices in Detroit, Michigan or
at such other place as the holder of this note may from time to time
designate in writing, the principal sum of SIX HUNDRED FORTY-FOUR THOUSAND,
SIX HUNDRED EIGHTY AND 00/100 Dollars ($644,680), together with interest on
the outstanding balance thereof as provided below, payable as follows:
(DELTA) Unless earlier demand for payment is made, principal is payable in 2
equal monthly installments equal to $10,750 of the principal, beginning on
December 1, 1998 and January 1, 1999, followed by a balloon payment of all
remaining principal and interest on (DELTA) February 1, 1999. Interest is
payable in monthly payments of accrued interest commencing on December 1,
1998, and continuing on the first day of each consecutive month thereafter
until maturity. Accrued interest since the last payment on the Prior Note
(defined below) shall be due on December 1, 1998.
The indebtedness under this Note outstanding from time to time prior
to maturity (whether by acceleration or otherwise) or the occurrence of an
Event of Default shall bear interest on the basis of a year of 360 days for
the actual number of days elapsed in each month, at the rate of 1% per annum
over the rate announced from time to time as Bank's Prime Rate (the
"Applicable Rate"), as more fully described in the Amended and Restated
Revolving Credit and Loan Agreement dated as of June 30, 1996, as amended by
First Amendment to Amended and Restated Revolving Credit and Loan Agreement,
dated as of August 22, 1997, Second Amendment to Amended and Restated
Revolving Credit and Loan Agreement dated as of January 1, 1998, and an
Amendment and Forbearance Agreement (the "Forbearance Agreement") dated as of
the date hereof (as so amended and as may be further amended from time to
time, the "Credit Agreement"). Capitalized terms not otherwise defined herein
shall have the meanings given them in the Credit Agreement.
After maturity, or from and after an Event of Default, the outstanding
principal balance under this Note shall bear additional interest from and
after such maturity date or the occurrence of the Event of Default, at a rate
of three (3%) percentage points per annum above the Applicable Rate until the
Note is fully paid or the Event of Default is fully cured (the "Default
Rate").
If any payment is not received by Bank within fifteen days after its
due date, the Bank may assess and the undersigned agree to pay a late fee
equal to the lesser of 5% of the past due amount or the Late Fee Cap. The
Late Fee Cap is $200 and is based on the original principal amount of this
Note.
Principal of and interest on this Note shall be payable in lawful
money of the United States of America. The undersigned agrees to pay all
costs of collection and enforcement of this Note, including reasonable
attorneys' fees and court costs.
The indebtedness under this Note may be prepaid in whole or in part at
any time subject to any applicable indemnity payment under the Credit
Agreement.
E-37
This Note is given pursuant to the terms and conditions of the Credit
Agreement, including the Forbearance Agreement. This Note is secured by,
among other collateral, the collateral granted to Bank under the terms of the
Credit Agreement, including the Forbearance Agreement, and the Loan
Documents. The occurrence of any default under the Credit Agreement,
including the Forbearance Agreement, or any of the Loan Documents (as such
documents may have been amended by the Credit Agreement), or any document or
instrument referred to or incorporated into any of the foregoing shall be
deemed a default under this Note and shall entitle the holder of this Note to
accelerate the maturity of the debt evidenced by this Note and to have all
rights and remedies afforded by law or available under the Credit Agreement,
including the Forbearance Agreement, the Loan Documents and under all other
agreements referred to or executed in connection with any of the foregoing.
Bank is hereby authorized by Borrowers to record on its books and
records, the Loan Period, the applicable interest rate (including any changes
therein), the amount of each payment of principal thereon and such other
information as appropriate, which books and records shall constitute
rebuttable presumptive evidence of the information so recorded, provided,
however, that any failure by Bank to record any such information shall not
relieve Borrowers of their obligation to repay the outstanding principal
amount of all Equipment Advances made by Bank, all accrued interest thereon
and any amount payable with respect thereto in accordance with the terms of
this Note and the Credit Agreement.
This Note amends and restates (but does not discharge) the Amended and
Restated Equipment Line Note dated as of January 1, 1998, in the original
principal amount of $1,500,000, from the undersigned to Bank (the "Prior
Note"). Any reference in the Credit Agreement or any other agreement to the
Prior Note shall hereafter constitute a reference to this Note.
The undersigned, and all endorsers and guarantors, hereby severally
waive valuation and appraisement, presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note, and expressly agree
that the maturity of this Note, or any payment due under this Note, may be
extended from time to time without in any way affecting the liability of the
undersigned or such endorsers or guarantors.
E-38
This Note, made and executed in the State of Michigan, shall be
governed and construed according to the internal laws of the State of
Michigan.
SECOM GENERAL CORPORATION,
a Delaware corporation
By: _____________________________
Name:________________________
Its:_________________________
00000 Xxxxx Xxxxx Xxx.
Xxxx, Xxxxxxxx 00000
UNIFLOW CORPORATION
By: _____________________________
Name:________________________
Its:_________________________
00000 Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
MICANOL, INC.
By: _____________________________
Name:________________________
Its:_________________________
X.X. Xxx 000
00000 Xxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
L & H DIE, INC.
By: _____________________________
Name:________________________
Its:_________________________
00000 Xxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
[Signatures continued on Page 4]
E-39
[Signatures continued from Page 3]
FORM FLOW, INC.
By: _____________________________
Name:________________________
Its:_________________________
6901 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
MMC MANUFACTURING CORP., f/k/a
MILFORD MANUFACTURING, CORPORATION
By: _____________________________
Name:________________________
Its:_________________________
000 Xxx Xxxxxx
Xxxxxxx, XX 00000
E-40
