FIFTH AMENDMENT TO FORBEARANCE AGREEMENT
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THIS FIFTH AMENDMENT TO FORBEARANCE AGREEMENT (hereafter, this
"AGREEMENT") is made as of October 6, 1995 by and between
AMALGAMATED AUTOMOTIVE INDUSTRIES, INC., a Pennsylvania corporation,
ACME AUTO PARTS, INC., a Pennsylvania corporation, XXX CORPORATION, a
Pennsylvania corporation and TALMENS PROPERTIES, INC., a
Pennsylvania corporation (collectively, "BORROWER") and
PROVIDENT BANK OF MARYLAND, a Maryland banking corporation
("LENDER").
RECITALS
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Pursuant to the terms and provisions of a Loan and
Security Agreement between the LENDER and the BORROWER dated
May 7, 1992 ("LOAN AGREEMENT"), the LENDER provided to the
BORROWER a revolving line of credit ("REVOLVER") as evidenced
by a promissory note dated May 7, 1992 from the BORROWER to
the order of the LENDER in the stated principal amount of Two
Million Dollars ($2,000,000.00) ("DEMAND NOTE"). As used herein, the
term "LOAN DOCUMENTS" means collectively the LOAN AGREEMENT, the
DEMAND NOTE, and all other documents evidencing, securing or otherwise
documenting the REVOLVER.
Pursuant to the terms and provisions of the LOAN
AGREEMENT and the DEMAND NOTE all sums outstanding under the
REVOLVER are due and payable in full on the demand of the
LENDER. The BORROWER defaulted under the terms of the LOAN
AGREEMENT and pursuant to the terms of a letter dated June 1,
1995, the LENDER demanded the immediate and full repayment of
all sums outstanding under the REVOLVER.
The BORROWER was unable to repay the sums due under the
REVOLVER and requested that the LENDER: (a) forbear from
immediately exercising its enforcement and collection rights
against the BORROWER and the collateral securing the
obligations of the BORROWER to the LENDER and (b) continue to
advance proceeds of the REVOLVER to the BORROWER.
In accordance with the terms and provisisons of a
Forbearance Agreement dated June 5, 1995 by and between the
BORROWER and the LENDER, as amended by and Amendment To Forbearance
Agreement dated June 30, 1995 and a Second Amendment To Forbearance
Agreement dated July 27, 1995, a Third Amendment To Forbearance
Agreement dated August 29, 1995, and a Fourth Amendment To Forbearance
Agreement dated September 29, 1995 (collectively, "FORBEARANCE
AGREEMENT"), the LENDER agreed: (i) to forbear from the exercise of
its enforcement and collection rights against the BORROWER until 5:00
p.m. on October 10, 1995; and (ii) continue to advance proceeds of
the REVOLVER to the BORROWEER, subject to the limitations
contained in the LOAN AGREEMENT and the FORBEARANCE
AGREEMENT, until 5:00 p.m. on October 10, 1995.
The BORROWER has requested an extension to the
FORBEARANCE AGREEMENT. The LENDER is willing to extend the FORBEARANCE
AGREEMENT to October 31, 1995 subject to the terms and provisions of
this AMENDMENT.
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
Section 1. RECITALS. The parties hereby acknowledge the
accuracy of the Recitals to this AGREEMENT, and agree that the
Recitals are hereby incorporated into this AGREEMENT and made
a part hereof.
Section 2. ACKNOWEDGMENT OF DEFAULT. The BORROWER acknowledges and
agrees that all sums outstanding under the LOAN DOCUMENTS are due and
payable in full (subject to the terms of this AGREEMENT) and the
BORROWER has defaulted in its obligation to the LENDER: (a) by failing
to repay all sums outstanding under the REVOLVER upon the demand of the
LENDER; and (b) by failing to comply with the convenants contained in
Sections 6.28 and 6.30 of the LOAN AGREEMENT (collectively, "EXISTING
DEFAULT"). In addition, the BORROWER hereby acknowledges and agrees
that in the absence of the specific agreement to forbear as set forth
in this AGREEMENT, the LENDER has the immediate and unconditional right
to pursue enforcement and collection proceedings against the BORROWER
and the collateral securing the BORROWER'S obligations to the LENDER.
Section 3. AMENDMENT TO FORBEARANCE AGREEMENT. Section 3.1 of the
FORBEARANCE AGREEMENT, as previously amended, is hereby amended by
deleting its present language in its entirety and by substituting in
lieu thereof the following:
3.1 Time Limitations. The agreement of the LENDER to
forbear from exercising its rights and remedies as set forth herein
shall expire at 5:00 p.m. October 31, 1995. As used herein, the term
'DATE OF TERMINATION' means the date on which the LENDER'S agreement to
forbear from exercising its rights and remedies as set forth herein
expires pursuant to this Section 3.1, Section 3.2 or any other section
of this AGREEMENT.
Section 4. COOPERATION OF BORROWER. In the event all of the
BORROWER"S obligations to the LENDER are not repaid in full by the DATE OF
TERMINATION, the BORROWER shall fully and completely aid and assist the LENDER
in the disposition of the BORROWER'S assets securing the REVOLVER, including,
but not limited to, the collection of all of the BORROWER'S accounts receivable.
Section 5. EVENTS OF DEFAULT. In the event of a violation of any
of the terms or provisions of this AGREEMENT by the BORROWER, or the occurrence
of any event of default (other than the EXISTING DEFAULT) under any of the LOAN
DOCUMENTS, or the occurrence of any event or condition which with the giving of
notice, the passage of time, or both, would constitute an event of default under
any of the LOAN DOCUMENTS, the LENDER'S agreements to: (i) forbear from
exercising any or all of its rights or remedies under the LOAN DOCUMENTS as set
in the FORBEARANCE AGREEMENT, as modified xxxxx, and (ii) continue to advance
proceeds of the REVOLVER, as modified, shall automatically terminate, without
notice to the BORROWER.
Section 6. NO DEFENSES OR OFFSETS; RELEASE OF ANY CLAIMS.
In consideration for the agreements of the LENDER contained herein, the
BORROWER hereby acknowledges and agrees that it hereby forever waives and
releases any and all defenses (other than the specific agreement to forbear as
set forth in the FORBEARANCE AGREEMENT, as modified herein) or offsets, known or
unknown to the BORROWER, existing as of this date, which might restrict
the immediate right of the LENDER to require the payment in full of the
REVOLVER or the initiation of enforcement and collection proceedings against
the BORROWER or against any or all of the collateral securing the obligations
of the BORROWER due to the LENDER. The BORROWER hereby releases, waives,
discharges and agrees to hold the LENDER and its officers, directors, agents
and employees harmless from any and al claims, known or unknown, existing
as of this date, which the BORROWER might have against the LENDER or its
officers, directors, agents, or employees which in anyway relate, pertain or
arise, directly or indirectly, from the REVOLVER, the LOAN DOCUMENTS, the
FORBEARANCE AGREEMENT, this AGREEMENT, or which otherwise relate or pertain to
the collateral securing the obligations of the BORROWER due to the LENDER or the
transactions described in the LOAN DOCUMENTS or the conduct of the parties with
respect thereto.
Section 7. RATIFICATION. Except as modified by the express
provisions of this AGREEMENT all terms and provisions of the FORBEARANCE
AGREEMENT and the LOAN DOCUMENTS are hereby ratified and confirmed and shall
remain in full force and effect.
Section 8. NO WAIVER. The BORROWER acknowledges and agrees that,
although, the LENDER has agreed to forbear, upon the conditions contained in
the FORBEARANCE AGREEMENT, as modified herein, the LENDER does not waive the
the existence of the EXISTING DEFAULT,
and the execution and performance of this AGREEMENT shall not impair, diminish
or adversely affect the EXISTING DEFAULT as a basis for the exercise by the
LENDER of its rights and remedies, and the EXISTING DEFAULT shall continue to be
an Event of Default (as that term is defined in the LOAN DOCUMENTS) despite the
forbearance of the LENDER and the execution of this AGREEMENT.
Section 9. FEES AND EXPENSES. The BORROWER shall pay all of the
reasonable fees, costs, and expenses, including the LENDER'S reasonable counsel
fees and expenses, in connection with the negotiation and preparation of this
AGREEMENT. The BORROWER hereby authorizes the LENDER to debit the BORROWER'S
account with the LENDER to make payment of all such fees, costs and expenses.
Section 10. FINAL AGREEMENT. This AGREEMENT, together with
the FORBEARANCE AGREEMENT and the LOAN DOCUMENTS, contain the final and
entire agreement of the parties and shall be binding upon and benefit
the parties and their successors and assigns.
Section 11. GOVERNING LAW. The performance and
construction of this AGREEMENT shall be governed by the laws
of the State of Maryland.
Section 12. AMENDMENT. This AGREEMENT mat only be altered,
modified or amended by a writing executed by all of the parties
hereto.
Section 13. TIME. Time is of the essence with respect to all
aspects of this AGREEMENT. The BORROWER hereby acknowledges and agrees
that the LENDER'S prior extensions of the forbearance period provided
to the BORROWER under the FORBEARANCE AGREEMENT shall in no way be
deemed to infer that the LENDER shall continue to advance proceeds of
the REVOLVER or continue to forbear from exercising its rights after
the DATE OF TERMINATION. No further extensions of the forbearance
period shall be provided.
Section 14. JURISDICTION. The BORROWER consents to the
jurisdiction of any of the courts of the state of Maryland as
to any issues related to this AGREEMENT, including the validity,
enforceability and interpretation hereof, which require judicial
resolution.
Section 16. NO NOVATION. This AGREEMENT shall not cause a
novation of the BORROWER'S obligations under any of the LOAN DOCUMENTS.
In addition, this AGREEMENT shall not release, affect or impair the
priority of any security interests and xxxxx held by the LENDER in any
assets of the BORROWER.
Section 17. DELIVERY BY TELEFACSIMILE. This AGREEMENT
may be delivered by telefacsimile and a telefacsimile of any
party's signature hereto shall constitute an original
signature for all purposes.
Section 12. WAIVER OF JURY TRIAL. The BORROWER agrees
that any suit, action or proceeding, whether claim or
counterclaim, brought or instituted by any party to this
AGREEMENT or by any of thier successors or assigns, on or respect to
this AGREEMENT, the FORBEARANCE AGREEMENT, or any of the LOAN
DOCUMENTS or which in anyway related directly or indirectly to the
obligations of the BORROWER to the LENDER under the REVOLVER
or the dealings of the parties with respect thereto, shall be
tried only by a court and not by a jury. The BORROWER
expressly waives any right to a trial by jury in any such
actions or proceedings.
IN WITNESS WHEREOF, the parties have executed this
AGREEMENT as of the date first above written.
WITNESS/ATTEST: LENDER:
PROVIDENT BANK OF MARYLAND,
A Maryland Banking Corporation
/s/ Xxxxxxx X. Xxxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxx (SEAL)
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Name: Xxxxxx X. Xxxxxx
Title: Vice President
BORROWER:
AMALGAMATED AUTOMOTIVE INDUSTRIES INC.,
A Pennsylvania Corporation
/s/ Xxxx X.Xxxxxxx By: /s/ Xxxx X. Xxxxx (SEAL)
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Vice President Name: Xxxx X. Xxxxx
Title: President/CEO
ACME AUTO PARTS, INC.,
A Pennsylvania Corporation
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx (SEAL)
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Vice President Name: Xxxx X. Xxxxx
Title: President/CEO
XXX CORPORATION,
A Pennsylvania Corporation
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx (SEAL)
------------------------ ----------------------
Vice President Name: Xxxx X. Xxxxx
Title: President/CEO
TALMENS PROPERTIES, INC.,
A Pennsylvania Corporation
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx (SEAL)
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Vice President Name: Xxxx X. Xxxxx
Title: President/CEO
