[TYPE] EX-10.1
[DESCRIPTION] Mortgage Deed and Security Agreement
Exhibit 10.1(j)
[Letterhead of Fleet Bank]
COMMITMENT LETTER
March 30, 1998
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
▇▇▇▇▇▇▇ & Yale, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇:
Fleet National Bank ("Fleet") agrees to extend its existing revolving credit
facility and modify the existing term loan (the "Credit Accomodations") to
▇▇▇▇▇▇▇ & Yale, Inc. ("S&Y") under the following terms and conditions:
Amount: Reduced to $2,500,000.
Maturity Date: January 2, 1999
Advance Rates: The advance rate for eligible inventory will be reduced
to 32 percent.
Inventory Cap: Availability derived from eligible inventory will be
capped at $1,300,000.
Pricing: The revolving credit facility and the existing term loan
facility will bear interest at Fleet's Prime rate plus
one (1) percent through June 30, 1998 and at Fleet's
Prime rate plus two (2) percent from July 1, 1998
through the maturity date.
Personal Guarantor: ▇▇▇▇ ▇▇▇▇▇▇▇▇ limited to $1.0 million. This guarantee
will be secured by a pledge of 228,000 shares of S&Y
common stock. Further, a personal financial statement
acceptable to Fleet on Fleet's standard form of personal
financial statement must be received by close of business
March 31, 1998.
Covenants: The Minimum Debt Service Coverage Ratio will deleted. A
minimum pretax profit covenant will be established. This
covenant will require a monthly pretax profit for March
and quarterly pretax profits for each quarter ending June
30, September 30, and December 31. Additionally, S&Y must
not incur a pretax loss greater there $50,000 for any
month beginning with April. Capital expenditures in fiscal
year 1998 will not exceed $500,000.
Appraisals: S&Y agrees to pay for real estate as well as machinery and
equipment appraisals at Fleet's request.
Fees: In addition to all other amounts due respecting the Credit
Accomodations, S&Y agrees to pay Fleet the following:
$10,000 due and payable March 31, 1998
$20,000 due and payable June 30, 1998
$7,000 due and payable July 31, 1998
$7,000 due and payable August 31, 1998
$7,000 due and payable September 30, 1998
$10,000 due and payable October 31, 1998
$10,000 due and payable November 30, 1998
$10,000 due and payable December 31, 1998
Documentation: All closing documents for the Credit Accomodations shall
be consistent with this letter and shall contain such
other terms and conditions as are customarily required by
Fleet in transactions of this nature, and may be required
by counsel to Fleet.
Legal Opinions: Prior to closing, there shall be delivered to Fleet the
opinion of S&Y's counsel that, without limitation: (1) all
loan documents, as affected by all modification documents
executed pursuant to the terms of this letter, have been
validly authorized and executed by and on behalf of S&Y
and the guarantors, if any; (2) all loan documents, as
affected by all modification documents executed pursuant
to the terms of this letter, are enforceable in accordance
with their terms and do not violate any legal require-
ments; and (3) Fleet has a perfected security interest in
all collateral granted to Fleet by S&Y and any guarantor
of the Credit Accomodations.
Representations: All representations made by S&Y to Fleet in connection
with the Credit Accomodations shall be deemed to be
material and relied upon by the Fleet in issuing this
letter and shall survive the closing.
Expenses: Whether or not the Credit Accomodations are closed, all
costs and expenses incurred by the Fleet, including but
not limited to attorneys' fees and any and all other
expenses in connection with the Credit Accomodations shall
be paid by S&Y. Such expenses shall be in addition to, and
shall not be offset against, any other fee due and owing
to the Fleet.
Naturally, this letter does not include all the terms and conditions that will
be covered in Fleet's legal documentation for the Credit Accomodations, but they
do state the essential business terms of Fleet's commitment. These terms have
been proposed in reliance on the financial statements, projections, and other
information provided by S&Y and any guarantor to Fleet, and are therefore con-
ditional upon there being no material adverse change in the S&Y's (or any
guarantor's) financial condition or any adverse change, governmental or judicial
action concerning S&Y's business or assets, and is also subject to the execution
of documentation that is satisfactory to the Fleet and its counsel, which shall
include additional terms and conditions, including without limitation
additional reporting requirements.
If you have any questions or comments on the terms of this proposal, please do
not hesitate to call me. If the foregoing terms and conditions are acceptable to
you, please acknowledge below and return a signed counterpart to this letter on
or before March 31, 1998.
FLEET NATIONAL BANK
By: /s/H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Assistant Vice President
Agreed and Accepted:
▇▇▇▇▇▇▇ & YALE, INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman & CEO
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as
Personal Guarantor
