Exhibit 10.23
FORBEARANCE AGREEMENT AND RELEASE
This FORBEARANCE AGREEMENT AND RELEASE (this "Agreement") is
hereby entered into as of August 30, 2001 (the "Effective Date") by and among
COMERICA BANK-CALIFORNIA ("Bank"), a California banking corporation, with its
office at 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 and WOOD
ALLIANCE, INC. d/b/a WOOD ASSOCIATES, INC., f/k/a Wood Alliance S.P. Inc.
("Borrower"), a California corporation, with its principal place of business at
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Borrower and Bank are parties to that certain Amended and
Restated Revolving Loan and Security Agreement dated January 31, 2000, as
amended by that certain First Amendment to Amended and Restated Revolving Loan
and Security Agreement dated July 6, 2001 (the foregoing is collectively
referred to as the "Loan Agreement") pursuant to which Bank made available to
Borrower a revolving line of credit (the "Line of Credit") in an aggregate
principal amount of up to Twelve Million and 00/100 Dollars ($12,000,000.00).
The Loan Agreement and all agreements, documents and instruments executed by
Borrower in connection with the Loan Agreement are collectively referred to as
the "Loan Documents". Capitalized terms not otherwise defined herein shall have
the meanings given such terms in the Loan Documents.
B. In order to induce Bank to extend the Line of Credit to
Borrower, Xxxxx X. Xxxx, an individual, and Xxxxx X. Xxxxxxxx an individual
(each a "Guarantor" and collectively the "Guarantors") have each executed a
guaranty in favor of Bank and each dated as of September 5, 1995 (each a
"Guaranty" and collectively the "Guaranties"), pursuant to which Guarantors
guaranteed the obligations owing to Bank by Borrower, as set forth more
completely in each of their respective Guaranties.
C. There is presently due and owing to Bank, as of August __,
2001, the principal amount of Seven Million One Hundred Forty-Seven Thousand
Nine Hundred Eight Dollars and 00/100 Dollars ($7,147,908.00), plus accrued but
unpaid interest, as of August __, 2001, together with certain costs and expenses
of Bank, including attorneys' fees. Interest and such costs and expenses
continue to accrue.
D. Borrower has acknowledged and hereby further acknowledges
that the following Events of Default (the "Existing Defaults") exist under the
Loan Agreement: (i) failure to comply with the required Quick Ratio set forth in
Section 8.1 of the Loan Agreement; (ii) failure to comply with the Tangible Net
Worth Ratio set forth in Section 8.2 of the Loan Agreement; (iii) failure to
comply with the Tangible Effective Net Worth covenant set forth in Section 8.3
of the Loan Agreement; (iv) failure to comply with the Profitability covenant
set forth in Section 8.4 of the Loan Agreement.
E. Because of the Existing Defaults, Bank has no obligation to
make additional advances under the Line of Credit, all sums outstanding under
the Line of Credit are due and payable, and Bank has full legal right to
exercise its default rights and remedies under the Loan Documents. Such remedies
include, but are not limited to, the right to repossession and sale of the
Collateral.
F. Borrower has requested that Bank continue to make advances
and forbear for a period of time from exercising its rights and remedies under
the Loan Documents.
G. Bank may, in its sole absolute discretion, continue to make
advances to Borrower under the Line of Credit, and Bank will forbear from
exercising its rights and remedies under the Loan Documents, on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, receipt
of which is hereby acknowledged, the parties hereby agree as set forth below.
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1. Incorporation of Recitals. Each of the above Recitals is hereby
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incorporated herein by this reference.
2. Incorporation of the Loan Documents. The Loan Documents, together
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with the other documents and instruments executed pursuant to this Agreement,
are incorporated herein by this reference.
3. Ratification of Obligations. Borrower ratifies and reaffirms the
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Obligations, which are currently outstanding in the amounts set forth in Recital
C, without setoff, defense, or counterclaim.
4. Conditions Precedent to Bank's Obligations. This Agreement shall
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not be effective as against Bank unless and until each of the following
conditions (each a "Condition Precedent" and collectively the "Conditions
Precedent") shall have been satisfied in Bank's sole discretion or waived by
Bank, for whose sole benefit such Conditions Precedent exist:
4.1 Authorization. Bank shall have received a certified copy of
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all corporate action taken by Borrower to authorize the execution, delivery, and
performance of this Agreement.
4.2 Execution and Delivery of this Agreement. Borrower shall have
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duly executed and delivered this Agreement and any other documents required
hereby, all in form and content satisfactory to Bank, by no later than August
30, 2001.
4.3 iPrint Loan. iPrint Technologies, Inc. shall have lent to
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Borrower at least One Million Two Hundred Thousand and 00/100 Dollars
($1,200,000.00) as of the date of this Agreement, which debt shall be
subordinated to the Obligations pursuant to a subordination agreement in form
and substance acceptable to Bank.
4.4 Guarantor's Consent. Each Guarantor shall have executed the
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consent at the end of this Agreement.
4.5 Payment of Bank's Attorneys' Fees and Costs. Borrower shall
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have paid the Bank all of Bank's costs and expenses (including appraisal fees
and attorneys' fees) incurred in connection with the negotiation, preparation
and execution of this Agreement and satisfaction of the Conditions Precedent.
4.6 Payment of Accrued Interest. Borrower shall have paid to Bank
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all accrued and unpaid interest through August 30, 2001.
4.7 Further Assurances. Bank shall have received such other
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documents and instruments as Bank may reasonably require in order to put into
effect the terms of this Agreement.
5. Terms and Conditions of Forbearance. Subject to the satisfaction
-----------------------------------
of the Conditions Precedent, and subject to the additional terms and conditions
herein, during the period (the "Forbearance Period") commencing on the date
hereof and ending on the earlier to occur of (a) January 1, 2002; or (b) the
date that any Forbearance Default (defined below) occurs, Bank will forbear in
the exercise of its rights and remedies under the Loan Documents and applicable
law with respect to the Existing Defaults.
5.1 Forbearance. Without limiting the generality of the foregoing,
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during the Forbearance Period, Bank will not (a) accelerate the maturity of the
Obligations or initiate proceedings to collect the Obligations; (b) file or join
filing any involuntary petition in bankruptcy with respect to Borrower, or
otherwise initiate or participate in similar insolvency reorganization, or
moratorium proceeding for the benefit of creditors of Borrower; (c) repossess or
sell, through judicial proceedings or otherwise, any of the Collateral, provided
that Bank shall continue to collect the Accounts and apply proceeds thereof to
the Line of Credit as provided in the Loan Agreement; or (d) initiate
proceedings to enforce the Guaranty.
5.2 Advances under Line of Credit. Bank may, in its sole and
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absolute discretion, during the Forbearance Period, make advances under the Line
of Credit, subject, however, to the amendments to the
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Loan Documents set forth in Section 6 hereof. Each advance under the Line of
Credit, if any, shall be based on the submission by Borrower of daily Borrowing
Base Certificates and bi-weekly accounts receivable agings and inventory balance
reports.
5.3 Reservation of Rights. Bank reserves its rights to
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declare a default and/or an Event of Default and/or to enforce its rights and
remedies with respect to defaults other than the Existing Defaults during the
Forbearance Period.
6. Amendments to the Loan Agreement. In order to induce Bank to
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enter into this Agreement, and as separate bargained-for consideration, Borrower
agrees to the following amendments to the Loan Agreement:
6.1 Amendment to Definition of "Committed Line". The
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definition "Committed Line" is hereby amended by deleting the term "Twelve
Million and 00/100 Dollars ($12,000,000.00)" and replacing it with the term "Ten
Million and 00/100 Dollars ($10,000,000.00)".
6.2 Amendment to Definition of "Termination Date". The
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definition "Termination Date" is hereby amended by deleting it in its entirety
and replacing it with the following:
"Termination Date" means the earlier of (a) acceleration of
the Obligations for any reason under the terms of this Agreement; (b)
the date on which Bank elects to terminate this Agreement pursuant to
the terms herein; or (c) January 1, 2002."
6.3 Amendment to Definition of "UCC". The definition "UCC" is
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hereby amended by deleting it in its entirety and replacing it with the
following:
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of California as amended from time to time,
and any successor statute".
6.4 Amendment to Section 2.1(a) of the Loan Agreement.
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Section 2.1(a) of the Loan Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:
"(a) Borrowing Base. Borrowing Base shall mean an amount
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equal to the sum of (i) eighty percent (80%) of Eligible Accounts;
plus (ii) until September 30, 2001, seventy percent (70%) of Eligible
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Accounts due and payable within one hundred twenty (120) days or less
from the invoice date in which the account debtor is either,
Bloomberg, L.P., BP Corp North America, Inc., an Indiana corporation,
The Xxxxxxx Xxxxxx Corporation, a Delaware corporation, Chevron
Corporation, a Delaware corporation, Coca Cola Co., a Delaware
corporation, Compaq Computer Corp., a Delaware corporation, SBC
Communications, Inc., a Delaware corporation, or Sun Microsystems,
Inc., a Delaware corporation, which amount shall not exceed One
Hundred Fifty Thousand and 00/100 Dollars ($150,000.00); plus (iii)
----
the lesser of (1) Two Million and 00/100 ($2,000,000.00); and (2)
fifty percent (50%) of Eligible Inventory."
6.5 Amendment to Section 2.2(b) of the Loan Agreement.
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Section 2.2(b) of the Loan Agreement is amended by deleting the term "Three
Million and 00/100 Dollars ($3,000,000.00)" and replacing it with the term "One
Million and 00/100 Dollars ($1,000,000.00)".
6.6 Amendment to Section 2.2(e) of the Loan Agreement.
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Section 2.2(e) of the Loan Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:
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"(e) Borrower shall pay to Bank fees upon the issuance or
amendment of each Letter of Credit and upon the payment by Bank of
each draft under any Letter of Credit determined in accordance with
Bank's standard fees and charges in effect at the time any Letter of
Credit is issued or amended or any draft is paid. In addition,
Borrower shall pay to Bank a fee equal to two percent (2.0%) per annum
of the face amount of all Letters of Credit, which fee shall be
payable in advance of issuance."
6.7 Amendment to Section 2.5 of the Loan Agreement. Section
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2.5 of the Loan Agreement is hereby deleted in its entirety and replaced with
the following:
"2.5 Interest. Borrower shall pay interest to Bank on the
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outstanding and unpaid principal balance of the Advances made under
the Revolving Facility at a rate per annum equal to the Base Rate plus
one and three quarters percent (1.75%)."
6.8 Amendment to Section 7.3(b) of the Loan Agreement. Section
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7.3(b) of the Loan Agreement is hereby amended by deleting the term "one hundred
twenty (120)" and replacing it with the term "ninety (90)".
6.9 Amendment to Section 7.3 of the Loan Agreement. Section
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7.3 of the Loan Agreement is hereby amended by adding new subsection (d) and (e)
as follows:
"(d) Projections. As soon as available and in any event no later
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than thirty (30) days prior to the end of each fiscal quarter of
Borrower, Borrower will deliver Projections of Borrower for the
forthcoming six (6) months, provided, however, upon an Event of
Default Borrower shall deliver updated Projections to Bank as of the
end of each quarter or within three (3) Business Days of Bank's
request for such Projections. As used herein, "Projections" means
Borrower's forecasted (a) balance sheets; (b) profit and loss
statements; (c) cash flow statements; and (d) capitalization
statements, and consistent with Borrower's historical financial
statements, together with appropriate supporting details and a
statement of underlying assumptions."
"(e) Daily Borrowing Base Certificate. On each Business Day,
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Borrower shall deliver to Bank: (i) a Borrowing Base Certificate
updated to reflect the most recent sales and collections of Borrower
and an assignment schedule of all Accounts created by Borrower on that
day; (ii) an invoice register or sales journal describing all sales of
Borrower for that day, in form and substance satisfactory to Bank,
and, if Bank so requests, copies of invoices evidencing such sales and
proofs of delivery relating thereto; and (iii) a cash receipts
journal."
6.10 Amendment to Section 7.5 of the Loan Agreement. Section 7.5
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of the Loan Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:
"7.5 Monthly A/R and A/P Agings; Inventory Reports. Within
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fifteen (15) days after the last day of each month, Borrower shall
deliver to Bank a monthly aged listings of accounts receivable and
accounts payable. In addition, on the first (1/st/) and fifteenth
(15/th/) day of each month, Borrower shall deliver to Bank an
inventory report in form and substance acceptable to Bank."
6.11 Amendment to Section 7.8 of the Loan Agreement. Section 7.8
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of the Loan Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:
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"7.8 Audit of Accounts and Inventory. Bank shall have
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the right to conduct audits, at Borrower's expense, of Borrower's
Accounts, Inventory and Borrower's Books on a periodic basis during
the term of this Agreement, and upon an Event of Default as frequent
as Bank may determine in its reasonable discretion."
6.12 Amendment to Sections 8.4 of the Loan Agreement. Sections
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8.4 of the Loan Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:
"8.4 Profitability. Commencing September 30, 2001, Borrower
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shall not incur monthly negative EBITDA greater than Two Hundred
Thousand and 00/100 Dollars ($200,000.00), exclusive of restructuring
charges, for each month.
6.13 Amendment to Section 8 of the Loan Agreement. Section 8 of
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the Loan Agreement is hereby amended by adding the following:
"8.5 Restructuring Charges. Borrower shall not incurr
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restructuring charges in excees of Three Hundred Thousand and 00/100
Dollars ($300,000.00)."
"8.6 Borrowing Base Availability. Borrower shall maintain
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Availiability under the Revolving Facility as of the dates set forth
below in amounts greater than:
$1,500,000.00 September 30, 2001
$300,000.00 October 30, 2001
$50,000.00 November 30, 2001
$0.00 December 31, 2001
As used herein, "Availability" means an amount equal to the Borrowing
Base, less the unpaid principal balance of the Revolving Facility.
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7. Financial Covenants. During the Forbearance Period, Borrower
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will not be required to comply with the financial covenants set forth in
Sections 8.1, 8.2 and 8.3 of the Loan Agreement.
8. Representations and Warranties. Borrower hereby represents and
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warrants to Bank as follows:
8.1 Recitals. The Recitals in this Agreement are true and
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correct.
8.2 Incorporation of Representations and Warranties. All
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representations and warranties of Borrower in the Loan Agreement are
incorporated herein in full by this reference and are true and correct as of the
date hereof.
8.3 Incorporation, Good Standing, and Due Qualification.
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Borrower is a corporation duly incorporated, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation; has the
corporate power and authority to own its assets and to transact the business in
which it is now engaged or proposed to be engaged in; and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required.
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8.4 Corporate Power and Authority. The execution, delivery, and
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performance by Borrower of this Agreement has been duly authorized by all
necessary corporate action and does not and will not (a) require any consent or
approval of the stockholders of such corporation; (b) contravene such
corporation's charter or bylaws; (c) violate any provision of law, rule,
regulation, order, writ, judgment, injunction, decree, determination, or award
presently in effect having applicability to Borrower; (d) 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 Borrower is a party or by which
it or its properties may be bound or affected; (e) result in, or require, the
creation or imposition of any lien, upon or with respect to any of the
properties now owned or hereafter acquired by Borrower; and (f) cause Borrower
to be in default under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award or any such indenture, agreement,
lease, or instrument.
8.5 Legally Enforceable Agreement. This Agreement is the legal,
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valid, and binding obligations of Borrower, enforceable against Borrower in
accordance with its respective terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency, and other similar laws
affecting creditors' rights generally.
8.6 Obligations Absolute. The obligation of Borrower to repay
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the Obligations is absolute and unconditional, and there exists no right of
setoff or recoupment, counterclaim or defense of any nature whatsoever to
payment of the Obligations.
9. Borrower's Covenants. Unless Bank otherwise consents in writing,
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Borrower agrees that during the Forbearance Period:
9.1 Compliance with Loan Documents. Borrower shall continue to
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comply with all covenants and other obligations of Borrower under the Loan
Documents, provided that Borrower shall not be required to cure the Existing
Defaults during the Forbearance Period.
9.2 Payment of Interest on Line of Credit. Interest required to
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be paid under the Loan Documents shall be paid by Borrower to Bank on a monthly
basis as provided in the Loan Documents.
9.3 Dividends. Borrower shall not declare or pay any dividends;
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or purchase, redeem, retire, or otherwise acquire for value any of its capital
stock now or hereafter outstanding, or make any distribution of assets to its
stockholders as such whether in cash, assets, or in obligations of Borrower; or
allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption, or retirement of any shares of
its capital stock; or make any other distribution by reduction of capital or
otherwise in respect of any shares of its capital stock; or permit any of its
Subsidiaries to purchase or otherwise acquire for value any stock of Borrower or
another Subsidiary.
10. Releases. The parties have agreed to the terms set forth below
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with respect to releases.
10.1 Release. Except for the obligations created or acknowledged
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by this Agreement, the Loan Documents (as modified hereby and by any documents
executed in connection herewith) and/or any of the documents executed in
connection with this Agreement, Borrower, Guarantors, and their respective
former and present employees, partners, stockholders, directors, officers,
successors, assignees, agents, and attorneys, hereby absolutely discharge and
release Bank and Bank's former and present employees, partners, stockholders,
directors, officers, successors, assignees, agents and attorneys from any and
all liabilities, causes of action, claims, which do or may exist, whether known
or unknown, suspected, or unsuspected arising out of or in any way relating to
either the Line of Credit, this Agreement and/or the Loan Documents (as modified
hereby and by any documents executed in connection herewith) between Bank on the
one hand and Borrower, and Guarantors on the other hand as of the date hereof
(the "Released Matters"). Nothing in this Section 10.1 shall be construed as
affecting or limiting in any way the parties' express contractual obligations to
each other hereunder or under the Loan Documents(as modified hereby and by any
documents executed in connection herewith).
10.2 No Actions. Borrower and Guarantors covenant and agree
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that neither they nor their respective present or former agents, employees or
assignees; will hereafter commence, maintain or prosecute
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any action at law or otherwise, or assert any claim against Bank or Bank's
present or former officers, directors, agents, employees, and attorneys for
damages or loss of any kind or amount arising out of or related in any way to
the Released Matters.
10.3 Acknowledgment. Borrower and Guarantors hereby acknowledge
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that either of such parties may hereafter discover facts different from or in
addition to those now known or believed to be true, and agree that this
Agreement shall remain in full force and effect, notwithstanding the existence
of any such different or additional facts. Borrower and Guarantors hereby waive
any and all rights which any such party has or may have under the provisions of
Section 1542 of the California Civil Code as now worded and as hereafter
amended, which section presently reads as follows
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
11. Defaults. Each of the following shall constitute a "Forbearance
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Default" hereunder:
11.1 Event of Default. The existence of any Event of Default
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(other than the Existing Defaults) under the Loan Agreement or any other Loan
Document.
11.2 Covenants. Borrower or Guarantor fails to keep or perform
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any of the covenants or agreements contained in this Agreement.
11.3 Representation and Warranties. Any representation or
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warranty of Borrower or Guarantor herein is false, misleading or incorrect in
any material respect.
12. Remedies. If a Forbearance Default occurs or exists, Bank may
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declare this Agreement to be terminated. Upon such termination, Bank shall be
relieved of its obligations set forth herein and, accordingly, Bank shall be
free to declare any and all of the Obligations to be immediately due and
payable, and Bank may proceed to enforce its rights under each of the Loan
Documents and applicable law.
13. Legal Effect. Except as specifically provided by this Agreement
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and any documents executed in connection herewith, all of the terms and
conditions of the Loan Documents are and shall remain in full force and effect
in accordance with their respective terms, and this Agreement shall not be
construed to: (a) impair the validity, perfection or priority of any lien or
security interest securing the Obligations; (b) waive or impair any rights,
power or remedies of Bank under the Loan Agreement and any other Loan Document
upon termination of the Forbearance Period, with respect to the Existing
Defaults or otherwise; (c) constitute an agreement by Bank or require Bank to
extend the Forbearance Period, or grant additional forbearance periods, or
extend the term of the Loan Agreement or the time for payment of any
Obligations; (d) make any advance under the Line of Credit or other extensions
of credit to Borrower after the termination of the Forbearance Period.
14. Documentation Fee. Borrower shall pay to Bank as a forbearance
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fee the amount of fifty Thousand and 00/100 Dollars ($50,000.00), which fee
shall be fully earned as of and payable on the date hereof, provided, however
that if the Obligations are indefeasibly paid in full by November 1, 2001 as a
result of a merger or sale of the company, then Bank shall refund to Borrower a
portion of the forbearance fee in the amount of Fifteen Thousand and 00/100
Dollars ($15,000.00).
15. Inconsistency. In the event of any inconsistency between the
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terms of this Agreement and any other Loan Document, this Agreement shall
govern.
16. Consultation with Counsel. Borrower acknowledges that it has
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consulted with counsel and with such other experts and advisors as it has deemed
necessary in connection with the negotiation, execution, and delivery of this
Agreement.
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17. General Terms. The parties have agreed to the general provisions
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set forth below.
17.1 Disposition of Collateral. Borrower and Guarantor hereby
-------------------------
waive, to the extent permitted by applicable law, any and all of their rights
under Article 9 of the Uniform Commercial Code, including but not limited to,
(a) notification of the time and place of any public sale of the Collateral; (b)
notification of the time after which any private sale or other intended
disposition of the Collateral is to be made; (c) any rights relating to the
compulsory disposition of the Collateral; and (d) any right to redeem the
Collateral.
17.2 Relief From Stay. Borrower hereby agrees that, in
----------------
consideration of Bank's forbearance of the exercise of its rights and remedies
as set forth herein, in the event Borrower shall (a) file with any bankruptcy
court of competent jurisdiction or be the subject of any petition under Title 11
of the U.S. Code, as amended; (b) be the subject of any order for relief issued
under such Title 11 of the U.S. Code, as amended; (c) file or be the subject of
any petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future federal
or state act or law relating to bankruptcy, insolvency, or other relief for
debtors; (d) have sought or consented to or acquiesced in the appointment of any
trustee, receiver, conservator, or liquidator; (e) be the subject of any order,
judgment, or decree entered by any court of competent jurisdiction approving a
petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insolvency, or relief for debtors, Bank shall thereupon be entitled to relief
from any automatic stay imposed by Section 362 of Title 11 of the U.S. Code, as
amended, or otherwise, on or against the exercise of the rights and remedies
otherwise available to Bank as provided in the Loan Documents and this
Agreement, and as otherwise provided by law.
17.3 Appointment of Receiver. Borrower agrees that upon
-----------------------
termination of the Forbearance Period, Bank shall be entitled to appointment of
a receiver for the Collateral.
17.4 Effectiveness. The Loan Documents, except as modified
-------------
herein, are hereby reaffirmed, ratified and republished (including, without
limitation, the grant of security interests contained therein) and Borrower
shall comply with all of the terms and conditions thereof.
17.5 Integration. This Agreement, any documents executed in
-----------
connection herewith and the Loan Documents (as modified hereby and by any
documents executed in connection herewith) contain the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, understandings, offers and negotiations, oral or written, with
respect thereto.
17.6 Successors and Assigns. This Agreement shall bind and inure
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to the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower. Bank shall have the right without the consent of or
notice to Borrower to sell, transfer, negotiate, or grant participation in all
or any part of, or any interest in, Bank's obligations, rights and benefits
hereunder.
17.7 Indemnification. Borrower and Guarantors shall each defend,
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indemnify and hold harmless Bank and its officers, employees, and agents
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by
this Agreement; and (b) all losses or Bank expenses in any way suffered,
incurred, or paid by Bank as a result of or in any way arising out of,
following, or consequential to transactions between Bank and Borrower whether
under this Agreement, or otherwise (including without limitation reasonable
attorneys' fees and expenses), except for losses caused by Bank's gross
negligence or willful misconduct.
17.8 Severability of Provisions. In the event any one or more of
--------------------------
the provisions contained in this Agreement is held to be invalid, illegal or
unenforceable in any respect, then such provision shall be ineffective only to
the extent of such prohibition or invalidity, and the validity, legality, and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
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17.9 Amendments. Neither this Agreement nor any provisions
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hereof may be changed, waived, discharged or terminated, nor may any consent to
the departure from the terms hereof be given, orally (even if supported by new
consideration), but only by an instrument in writing signed by all parties to
this Agreement. Any waiver or consent so given shall be effective only in the
specific instance and for the specific purpose for which given.
17.10 Waiver. No failure to exercise and no delay in exercising
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any right, power, or remedy hereunder shall impair any right, power, or remedy
which Bank may have, nor shall any such delay be construed to be a waiver of any
of such rights, powers, or remedies, or any acquiescence in any breach or
default hereunder; nor shall any waiver by Bank of any breach or default by
Borrower hereunder be deemed a waiver of any default or breach subsequently
occurring. All rights and remedies granted to Bank hereunder shall remain in
full force and effect notwithstanding any single or partial exercise of, or any
discontinuance of action begun to enforce, any such right or remedy. The rights
and remedies specified herein are cumulative and not exclusive of each other or
of any rights or remedies which Bank would otherwise have. Any waiver, permit,
consent or approval by Bank of any breach or default hereunder must be in
writing and shall be effective only to the extent set forth in such writing and
only as to that specific instance.
17.11 Interpretation. This Agreement and all agreements relating
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to the subject matter hereof are the product of negotiation and preparation by
and among each party and its respective attorneys, and shall be construed
accordingly. The parties waive the provisions of California Civil Code (S)1654.
17.12 Survival. All covenants, representations and warranties,
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waivers and releases of Borrower and Guarantor made in this Agreement shall
survive the termination of the Forbearance Period and continue in full force and
effect so long as any Obligations remain outstanding. The obligations of
Borrower to indemnify Bank with respect to the expenses, damages, losses, costs
and liabilities shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.
17.13 Counterparts. This Agreement may be signed in any number of
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counterparts, each of which shall be an original, with the same effect as if all
signatures were upon the same instrument. Delivery of an executed counterpart of
the signature page to this Agreement by telefacsimile shall be effective as
delivery of a manually executed counterpart of this Agreement, and any party
delivering such an executed counterpart of the signature page to this Agreement
by telefacsimile to any other party shall thereafter also promptly deliver a
manually executed counterpart of this Agreement to such other party; provided;
however, that the failure to deliver such manually executed counterpart shall
not affect the validity, enforceability, or binding effect of this Agreement.
17.14 Attorneys' Fees and Costs of Enforcement. In the event that
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any action is required to be taken by Bank to enforce or interpret its rights
under this Agreement and any documents executed in connection therewith or the
Loan Documents, whether or not suit is brought, or in the event of any dispute
arising from this Agreement and any document executed in connection therewith or
the Loan Documents Borrower shall pay to Bank the attorneys' fees and costs
incurred by Bank in connection therewith, including, without limitation, any
attorneys' fees and costs incurred in connection with any bankruptcy proceeding
of Borrower, including, without limitation, any motion for relief from stay or
dispute over or negotiation concerning cash collateral or nondischargeability,
and any expert witness fees.
17.15 Information to Third Parties. Borrower and Guarantors agree
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that Bank may provide information relating to this Agreement and/or the Loan
Documents and/or relating to such parties to Bank's parent, affiliates,
subsidiaries and service providers in the ordinary course of Bank's business.
17.16 Notices. Unless otherwise provided in this Agreement, all
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notices or demands relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered, sent by certified mail or
by facsimile to Bank or Borrower at their respective addresses set forth above.
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17.17 WAIVER OF JURY TRIAL. BANK, GUARANTORS AND BORROWER
--------------------
ACKNOWLEDGE AND AGREE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY
EXCEED THE TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY WAIVE, TO THE
EXTENT PERMITTED BY LAW, TRIAL BY JURY.
IN WITNESS WHEREOF, the parties hereto have agreed to the terms of
this Forbearance Agreement and Release as of the Effective Date.
WOOD ALLIANCE, INC. d/b/a WOOD ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
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Its: CEO
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COMERICA BANK-CALIFORNIA
/s/ Xxxxx X. Xxxxxxx
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By: Xxxxx X. Xxxxxxx
Its: Vice President
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REAFFIRMATION OF GUARANTY
The undersigned Guarantors hereby acknowledge and agree that each
Guarantor has read and is familiar with, and hereby consents to, all of the
terms and conditions of the Forbearance Agreement and Release dated the date
hereof ("Forbearance Agreement") by and between COMERICA BANK-CALIFORNIA, a
California banking corporation ("Bank") and WOOD ALLIANCE, INC. d/b/a WOOD
ASSOCIATES, INC., f/k/a Wood Alliance S.P. Inc. ("Borrower") and all of the
agreements and documents referred to therein, and specifically consent to the
forbearance as set forth therein, and in said agreements and documents. Each
Guarantor hereby confirms and agrees that all of the terms and provisions of
each Guarantor's Guaranty each dated September 5, 1995 are hereby ratified and
confirmed, and shall continue in full force and effect as the guaranty of all
Indebtedness (as the term "Indebtedness" is defined in the Guaranty), including
the obligations of Borrower to Bank under the Forbearance Agreement.
Bank has informed each Guarantor of the terms of said foregoing
Forbearance Agreement. Each Guarantor acknowledges having read the same and
consented to all of the terms and conditions thereof. Each Guarantor understands
and agrees that Bank has no duty under any agreement with Borrower, the
Guaranties or any other agreement with Guarantors to notify Guarantors or to
seek this or any future acknowledgment, consent or reaffirmation, and nothing
contained herein is intended to, or shall create such a duty as to any advances
or transactions hereafter.
Dated: August 30, 2001.
/s/ Xxxxx Xxxx
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Xxxxx X. Xxxx, an individual
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, an individual
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