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EXHIBIT 10.43
EXHIBIT TO FORM 10-K
MEDAR, INC.
QUARTER ENDED MARCH 31, 1998
COMMISSION FILE NUMBER 0-12728
10.43 Waiver and Amendment to Revolving Credit and Loan Agreement
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May 12, 1998
Xxxxxxx X. Current, CFO
Medar, Inc.
00000 Xxxxx Xxxxx Xxx.
Farmington Hills, MI 48335
Re: Waiver and Amendment
Dear Xxxx:
We are sending you this letter in connection with the Revolving Credit
and Loan Agreement dated as of August 10, 1995 (as amended, the "Loan
Agreement"), as amended by the First Amendment to Revolving Credit and Loan
Agreement dated October 12, 1995, the Second Amendment to Revolving Credit and
Loan Agreement dated October 31, 1995, the Third Amendment to Revolving Credit
and Loan Agreement dated March 29, 1996, the Fourth Amendment to Revolving
Credit and Loan Agreement dated August 11, 1996, the Fifth Amendment to
Revolving Credit and Loan Agreement dated February 27, 1997, the Sixth Amendment
to Revolving Credit and Loan Agreement dated March 28, 1997, the Seventh
Amendment to Revolving Credit and Loan Agreement dated June 27, 1997, the Eighth
Amendment to Revolving Credit and Loan Agreement dated July 15, 1997, and the
Ninth Amendment to Revolving Credit and Loan Agreement dated March 15, 1998,
among Medar, Inc., Integral Vision Ltd. and NBD Bank. Capitalized terms not
otherwise defined in this letter are defined in the Loan Agreement.
Section 6.2(a) of the Loan Agreement provides that the Borrowers will
maintain a minimum amount of Tangible Net Worth and Section 6.2(b) provides that
the Borrowers will not have a Debt to Worth Ratio in excess of a certain maximum
amount. The Borrowers did not meet these covenants as of March 31, 1998. NBD and
the borrowers have agreed that they will amend and restate the current Loan
Agreement, which restated agreement will include the terms set forth in the
letter to you dated April 10, 1998, from Xxxxx Xxxxxx of NBD, and renegotiated
financial covenants.
NBD has agreed to give this conditional waiver of the existing defaults
in order to allow the parties time to negotiate and document the amended and
restated loan agreement. This waiver is conditioned on Borrowers' agreement to
the following revisions to the definitions of "Borrowing Base" and "Commitment"
in Section 1.1 of the Loan Agreement, to be effective as of the date of this
letter:
"Borrowing Base" means the sum of the following
(a) 80% of the book value of Eligible Accounts Receivables of the
Borrowers and Guarantor; plus
(b) 32.5% of the lower of costs or market value of Eligible Inventory
of the Borrowers and Guarantor. Notwithstanding the foregoing, in no
event will the amount advanced against Eligible Inventory exceed
$3,500,000.
"Commitment" means the commitment of NBD to make Revolving Loans
pursuant to the terms of Section 2.1 in the aggregate amount of
$10,000,000, as such amount may be further reduced from time to time
pursuant to section 2.2
Effective immediately for the month of April, 1998 and on the 19th day
of each month hereafter, and in addition to all other amounts documented and
owed, NBD Bank will earn a $20,000.00 fee as compensation for increased
servicing and for providing the revolving loans.
Subject to Borrowers' acceptance of the above amendments as evidenced
by their execution of the acknowledgment below, NBD agrees to waive until May
30, 1998, any default under the Loan Agreement that arises for failure to comply
with Sections 6.2(a) or 6.2(b) of the Loan Agreement for the period ending March
31, 1998.
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The violations of Sections 6.2(a) or 6.2(b) of the Loan Agreement are
the only violations of the Loan Agreement of which NBD is currently aware and
NBD is not waiving any other defaults which may exist under the Loan Agreement
and any related documents (including, without limitation, any Event of Default
caused by a default under the documents evidencing the Company's subordinate
loans). Furthermore, NBD reserves the right to declare a default with respect to
any violation of the Loan Agreement which may arise in the future, other than
the limited wavier specified above, including any future breach of Sections
6.2(a) or 6.2(b) of the Loan Agreement for any period after March 31, 1998.
A facsimile of this letter shall be as valid as the original. This
letter may be executed in counterparts, which when taken together shall
constitute one original.
Sincerely,
NBD Bank
By: /S/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Its: Loan Officer
Accepted and Agreed to by:
MEDAR, INC.
By: /S/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Its: Chief Executive Officer
INTEGRAL VISION, LTD.
By: /S/ Xxxxxxx X. Current
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Xxxxxxx X. Current
Its: Company Secretary
