EXHIBIT 10.2
FORBEARANCE AGREEMENT
This agreement ("Agreement") is entered into as of this 21st day of November,
2001, by and between Banc One Leasing Corporation ("Banc One"), Metatec
International, Inc., an Ohio company ("International"), and Metatec Worldwide,
Inc., an Ohio company ("Worldwide").
BACKGROUND INFORMATION
WHEREAS, on or around July 27, 1998, Metatec Corporation executed and delivered
to Banc One a Master Lease Agreement (together with all related addenda,
certificates, riders, evidence of perfection, the Schedules and Assumption, as
defined below, all as may have been or may be amended, the "Lease"); and
WHEREAS, pursuant to the Lease, on or around July 30, 1998, Metatec Corporation
executed and delivered to Banc One Lease Schedule No. 0000000000 (together with
related addenda, certificates, riders and other related documents, as amended,
"Schedule 1") pursuant to which Banc One leased to Metatec Corporation certain
personal property described therein ("Equipment 1"); and
WHEREAS, pursuant to the Lease, on or around August 20, 1998, Metatec
Corporation executed and delivered to Banc One Lease Schedule No. 1000063755
(together with related addenda, certificates, riders and other related
documents, as amended, "Schedule 2"; Schedules 1 and 2 are herein collectively
referred to as the "Schedules") pursuant to which Banc One leased to Metatec
Corporation certain personal property described therein ("Equipment 2";
Equipment 1 and 2 is herein collectively referred to as the "Equipment"); and
WHEREAS, on or around November 24, 1999, Metatec Corporation, International and
Banc One entered into an Assumption Agreement wherein International assumed all
of Metatec Corporation's obligations, agreements, tax indemnities and other
indemnities under the Lease (the "Assumption"); and
WHEREAS, as of March 31, 2001, International and Worldwide executed and
delivered to Banc One Security Agreements (together with all related evidence of
perfection, each, a "Security Agreement"; collectively, the "Security
Agreements") pursuant to which International and Worldwide granted to Banc One,
as collateral security for International's obligations under the Lease, a
security interest in their Equipment, Inventory, Accounts, chattel paper,
general intangibles, instruments, investment property, documents, deposit
accounts, letter of credit rights and foreign currency, exchange or options
contracts between International and any affiliate of Bank One Corporation (all
as more particularly described therein, the "Collateral"), which security
interests were perfected by the filing of UCC financing statements with various
governmental offices and/or other acts of perfection; and
WHEREAS, included in the Collateral is a Foreign Exchange & Options Agreement &
Schedule between International and Bank One, NA (Illinois) dated as of April __,
2001 (together with all rights and agreements thereunder, including all FX
Transactions [as defined therein], the "FEOMA"); and
WHEREAS, pursuant to Section 14(d) of the Lease, International is or will be, as
of November 30, 2001, in default on its obligations under the Lease (as
described in a Standstill Agreement and First Amendment to Amended and Restated
Loan Agreement dated as of November 21, 2001, the "Existing Default") due to a
default by International under its Amended and Restated Loan Agreement dated as
of March 31, 2001 (the "Loan Agreement") between International and Huntington
National Bank (the "Agent") as agent for
Huntington National Bank and Bank One, NA (Ohio), which Existing Default, along
with receipt of Banc One's prior notice thereof, is hereby acknowledged by
International and Worldwide; and
WHEREAS, as a consequence of the Existing Default, Banc One may exercise any or
all of its remedies as enumerated in Section 15 of the Lease and Section 12 of
the Security Agreements (collectively, the "Remedies"); and
WHEREAS, International and Worldwide have requested Banc One to forbear from
exercising its Remedies as result of the Existing Default and to otherwise
modify its rights and remedies; and
WHEREAS, Banc One is willing to modify its rights and to forbear from exercising
its Remedies, except as provided herein, during the term of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, Banc One, International and Worldwide do voluntarily and without
coercion of any kind hereby agree as follows:
I. Acknowledgment.
A. Banc One, International and Worldwide hereby acknowledge the
accuracy of the Background Information contained in this
Agreement.
B. Banc One, International and Worldwide hereby acknowledge and
stipulate that (a) Banc One's interest in the Equipment is an
ownership interest, and its security interest in the
Collateral is properly perfected; (b) Metatec Corporation or
International, as applicable, (i) executed and delivered the
Lease to Banc One on the dates reflected above, (ii) is
properly obligated under the Lease by the terms thereof, (iii)
is in possession of a copy of the Lease, and (iv) remains
bound, in all respects, under the terms of the Lease, as
specifically modified herein; and (c) International and
Worldwide (i) executed and delivered the Security Agreements
to Banc One on the dates reflected above, (ii) are properly
obligated under their respective Security Agreement by the
terms thereof, (iii) are in possession of copies of their
respective Security Agreement, and (iv) remain bound, in all
respects, under the terms of their respective Security
Agreement.
C. International hereby ratifies its obligations under the Lease
as specifically modified herein. Any rights to or interests in
property, including ownership and/or collateral interests in
the Equipment or Collateral, granted to Banc One pursuant to
the Lease or otherwise shall be continued and are hereby
ratified and acknowledged without further action by Banc One,
International or Worldwide.
D. International and Worldwide hereby ratify their respective
obligations under the Security Agreements.
E. International and Worldwide acknowledge that (i) prior to
giving effect to this Agreement, the obligations under the
Lease and Security Agreements were in default and were subject
to all Remedies available to Banc One thereunder, and (ii) the
Existing Default will continue to exist as a default under the
Lease notwithstanding any forbearance or waiver by the Agent
or any partial or complete cure by International of its prior,
current or subsequent defaults under the Loan Agreement.
II. Agreement.
1. FORBEARANCE.
1.01. Except as provided in this Agreement, Banc One shall not,
prior to the Termination Date (as defined herein), exercise
its Remedies against International, Worldwide, the Equipment
or the Collateral based upon the Existing Default.
1.02. "Termination Date" shall mean the earlier to occur of any of
the following:
(a) A default of any term of this Agreement, without
notice or cure period.
(b) Any event, non-event or occurrence described as a
default or event of default in the Lease or either
Security Agreement, or any document executed in
connection therewith (but not the Existing Default),
or a material adverse change to International,
Worldwide, the Equipment or the Collateral.
(c) December 14, 2001.
1.03. No delay or failure of Banc One to exercise any of its
Remedies, or any rights or remedies under this Agreement or
any document executed in connection with the Lease, the
Security Agreements or herewith shall operate as a waiver
thereof.
1.04. Prior to the Termination Date, except with respect to the
Existing Default, International will continue to comply with
all of its obligations under the Lease.
1.05. In consideration of the forbearance provided herein,
International agrees to take such actions as are requested by
Banc One or Bank One, NA (Illinois), including, but not
limited to executing and delivering to Bank One, NA
(Illinois), on even date herewith, the letter attached hereto
as Exhibit 1.05 (the "Instruction"), and causing the Agent to
execute the Instruction on even date herewith, for the purpose
of immediately (a) settling and netting all FX Transactions
and (b) causing the delivery by Bank One, NA (Illinois) of all
amounts otherwise to be paid to International under the FEOMA
upon such settlement or netting to be delivered to Banc One
for application to International's payment obligations under
the Lease, in allocations as Banc One, in its sole discretion,
determines to be appropriate.
2. REPRESENTATIONS AND WARRANTIES.
2.01. International and Worldwide represent and warrant to Banc One
that:
(a) No default or event of default under the Lease or
Security Agreements, nor any event that, with the
giving of notice or the passage of time or both,
would be a default or an event of default under such
documents has occurred and is continuing, except the
Existing Default.
(b) International and Worldwide have no claims,
counterclaims, defenses, or set-offs with respect to
their respective obligations under the Lease or the
Security Agreements.
(c) The Lease and the Security Agreements are the legal,
valid and binding obligations of International and
Worldwide, respectively, enforceable against
International and Worldwide, respectively, in
accordance with their terms.
3. REAFFIRMATION AND WAIVERS.
3.01. The Lease. International hereby reaffirms, acknowledges and
agrees that it is fully liable for the all obligations under
the Lease.
3.02. Security Agreements. International and Worldwide hereby
reaffirm, acknowledge and agree that they are fully obligated
under the Security Agreements pursuant to their terms.
4. RELEASE.
4.01. As a material inducement to Banc One to enter into this
Agreement, which the parties have determined to be to their
direct advantage and benefit, International and Worldwide do
hereby release and forever discharge Banc One, Bank One
Corporation, and all of their past and present employees,
agents, attorneys, officers, directors, subsidiaries and
affiliates, and each of their predecessors, successors and
assigns (hereinafter collectively referred to as "Banc One
Releasees"), from any and all claims, losses, liabilities,
demands, defenses, setoffs, counterclaims and causes of action
of any kind, if any, whether absolute or contingent, known or
unknown, matured or unmatured, that International or Worldwide
have or hereinafter can have, or have ever had, in whatever
capacity against any of the Banc One Releasees, arising out of
or relating to the Lease, the Equipment, either Security
Agreement, the Collateral, the FEOMA or any other event,
agreement, letter or transaction, oral or written, between
either of International or Worldwide and any of the Banc One
Releasees by reason of any matter from the beginning of time,
to and including the date of this Agreement.
4.02. This Release is non-contingent and absolute.
4.03 This Release shall survive and shall remain in full force and
effect after all of the obligations under the Lease have been
satisfied in full.
5. GENERAL PROVISIONS.
5.01. NO MODIFICATIONS. Except as otherwise provided herein, this
Agreement does not either implicitly or explicitly, modify any
provision of any documents, including the Lease or the
Security Agreements, and shall not constitute a waiver of any
rights or remedies thereunder.
5.02. GOVERNING LAW. This Agreement shall be governed by the laws of
Ohio without reference to any conflicts of law.
5.03. TIME IS OF THE ESSENCE. Time is of the essence under this
Agreement.
5.04. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be
deemed an original, and all such counterparts together shall
constitute one and the same instrument.
5.05. SEVERABILITY. If any portion of this Agreement is found by a
court to be unenforceable, the entire remainder of the
Agreement shall remain in full force and effect.
5.06. VENUE. Exclusive venue for any actions involving this
Agreement shall be in Franklin County, Ohio.
5.07. COUNSEL. In the negotiations leading up to this Agreement,
International and Worldwide have had sufficient time to
consider all terms of this Agreement and the alternatives to
this Agreement, during which time they have retained counsel
and are fully prepared and willing to sign this Agreement and
be legally bound hereby. International and Worldwide have
freely and thoroughly considered all their options and enter
into this Agreement knowingly and voluntarily. Each party has
had equal opportunity to negotiate the terms of this
Agreement, and Banc One's counsel is preparing the draft
merely for the convenience of the parties. The identity of the
party preparing this Agreement shall have no effect on the
interpretation hereof.
5.08. DEFINITIONS AND CAPTIONS. All capitalized terms used in this
Agreement that are not otherwise defined herein but are
defined in the Lease, Security Agreement or FEOMA shall have
the same meanings ascribed to them in the respective
instrument or document. Section captions used in this
Agreement are for convenience only and shall not affect the
construction of this Agreement.
5.09. INTEGRATION. This Agreement and the documents and instruments
executed contemporaneously herewith, and to which Banc One is
a party, contain the entire Agreement among the parties and
supersede any prior discussions, negotiations, representations
or agreements among them respecting the subject matter;
provided, however, that except as specifically provided
herein, this Agreement does not alter or amend any document or
instruments previously executed and delivered by either
International or Worldwide to Banc One.
5.10. NOT A NOVATION. This Agreement is a modification only and not
a novation. Except for the forbearance provided for herein,
the Lease and the Security Agreement, and all the terms and
conditions thereof, shall be and remain in full force and
effect with any changes herein deemed to be incorporated
therein. This Agreement is to be considered attached to the
Lease and made a part thereof. This Agreement shall not
release or affect the liability of any guarantor, surety or
endorser of the Lease or release any owner of Equipment or
Collateral securing the Lease. The validity, priority and
enforceability of the Lease shall not be impaired hereby.
5.11. REINSTATEMENT. International and Worldwide agree that to the
extent that all or any part of the payments contemplated
herein is subsequently invalidated, declared to be fraudulent
or preferential, set aside and required to be paid or repaid
over to the trustee, receiver or other entity, including
International or Worldwide acting as debtor-in-possession,
whether under any bankruptcy law or otherwise (any such
payment is hereinafter referred to as a "Preferential
Payment"), then the Lease and Security Agreements shall be
reinstated in an
amount equal to the amount of such Preferential Payment with
all liabilities intended to be satisfied by the payments to be
made hereunder being revived and continued in full force and
effect as if such Preferential Payment had not been made.
5.12. JURY WAIVER. International and Worldwide and Banc One (by its
acceptance hereof) hereby voluntarily, knowingly, irrevocably
and unconditionally waive any right to have a jury participate
in resolving any dispute (whether based upon contract, tort or
otherwise) between or among either or both of International or
Worldwide and Banc One arising out of or in any way related to
this Agreement, any other related document, or any
relationship between Banc One and International or Worldwide.
This provision is a material inducement to Banc One to provide
the forbearance described herein.
THE UNDERSIGNED HAVE HEREUNTO SET THEIR HAND IN COLUMBUS, OHIO ON THE 21st DAY
OF NOVEMBER, 2001.
Banc One Leasing Corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Its: Vice President
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Metatec International, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: Chairman and CEO
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Metatec Worldwide, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: Chairman and CEO
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