1
EXHIBIT 10.20
SECOND AMENDMENT TO
REVOLVING CREDIT AND LOAN AGREEMENT
This SECOND AMENDMENT TO REVOLVING CREDIT AND LOAN AGREEMENT ("Second
Amendment") is dated as of October 31, 1995 and is among MEDAR, INC., a
Michigan corporation (the "Company"), AUTOMATIC INSPECTION DEVICES, INC., an
Ohio corporation ("AID") and INTEGRAL VISION LTD., a corporation established
under the laws of the United Kingdom ("Integral"), as Borrowers, and NBD Bank,
a Michigan banking corporation ("NBD"). This Second Amendment amends 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 "First Amendment") among the
Company, AID, Integral and NBD. The Company, AID and Integral are collectively
referred to as the "Borrowers" and individually as a "Borrower". Capitalized
terms not otherwise defined in this Second Amendment shall have the meanings
given to them in the Loan Agreement.
WHEREAS, the Company has negotiated to purchase certain real property
commonly known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the
"Farmington Hills Property"), pursuant to an Offer to Purchase Real Estate
dated as of August 29, 1995, between the Company and Graco, Inc.
WHEREAS, the Company has requested that NBD provide the Company with a
secured term loan in the principal amount of $2,540,000, the proceeds of which
will be used to purchase the Farmington Hills Property and to make certain
improvements thereon.
WHEREAS, AID, Integral and Guarantor have determined that it is in
their best interest to reaffirm their guaranties, including guarantying this
new loan because it will enable the Company to reduce costs and increase
production capacity.
WHEREAS, NBD is willing to make such a loan on the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. New Loan Facility. The Loan Agreement is hereby amended such
that a new Section 2.6 is added to read as follows:
2.6 Term Loan to the Company.
(a) Establishment of Loan. Subject to the terms and conditions of
this agreement, NBD will extend a term loan to the Company in the
original principal amount of $2,540,000 ("1995 Mortgage Loan"), to be
evidenced by a Installment Business Loan Note in substantially the
form of Exhibit 2.6 attached to the Second Amendment (together with
any amendments, restatements, replacements or
2
renewals, the "1995 Term Note"). The 1995 Mortgage Loan will be
repaid in 59 consecutive monthly installments of $14,111 plus interest
and with a final balloon payment of $1,707,444 (assuming timely
payment of prior installments) plus accrued but unpaid interest. NBD
will be granted a mortgage on the Farmington Hills Property to secure
the 1995 Term Note and any other amounts owed by the Company to NBD.
(b) Interest Options. The outstanding principal balance of the
1995 Mortgage Loan will bear interest at the Floating Rate unless NBD
and the Company shall have agreed in writing to a fixed per annum rate
of interest on the 1995 Mortgage Loan for a time period ("Fixed Rate
Period") of not less than one year nor longer than the maturity date
of the 1995 Term Note ("Negotiated Term Rate"), in which case the
outstanding principal shall bear interest at such Negotiated Term Rate
during the Fixed Rate Period. The Company may request that the 1995
Mortgage Loan bear interest at a Negotiated Term Rate at any time, and
from time to time, upon one business Days prior written notice to NBD
specifying the requested Fixed Rate Period. NBD shall quote a
Negotiated Term Rate to the Company and shall have sole and absolute
discretion to determine such Negotiated Term Rate or to refuse to
establish a Negotiated Term Rate (in which case the Floating Rate
shall apply). The Company shall confirm its agreement to the quoted
rate in writing confirming such Negotiated Term Rate and the
applicable Fixed Rate Period.
2. Revise Definitions. The following definitions contained in
Section 1.1 of the Loan Agreement are hereby amended to read as follows:
"Applicable Rate" means, (i) with respect to the Revolving Loans, the
Floating Rate, the Adjusted Base Rate, the Adjusted Eurodollar Rate or
the Negotiated Rate, as applicable, (ii) with respect to any Equipment
Loan the rate specified as the non-default interest rate in the
applicable Equipment Loan Documents for such Equipment Loan, and (iii)
with respect to the 1995 Mortgage Loan, the Floating Rate or
Negotiated Term Rate (defined in Section 2.6), as then applicable.
"Loan Documents" means this Agreement, the Notes, the Guaranty
Agreement, the L/C Documents, the Bank Guaranty Documents, the
Equipment Loan Documents, the Mortgage, the First Amendment, the
Second Amendment and all other agreements, documents or instruments
now or hereafter executed by or on behalf of any of the Borrowers or
the Guarantor and delivered to NBD in connection with this Agreement
or any amendment thereof.
"Loans" means (i) the Revolving Loans made by NBD to the Borrowers
pursuant to Section 2.1, including those made by NBD through the
London Branch, in each case evidenced by the Revolving Note, (ii) the
Equipment Loans made by NBD
3
to any one or more of the Borrowers pursuant to Section 2.4, and (iii)
the 1995 Mortgage Loan made by NBD to the Company pursuant to Section
2.6.
"Notes" means the Revolving Note and the 1995 Term Note, together with
any amendments, restatements, replacements or renewals thereof, and
the promissory notes, leases and conditional sales contracts given by
any Borrower pursuant to the credit granted under Section 2.4,
together with any amendments, restatements, replacements or renewals
thereof.
3. Prepayments of 1995 Term Note. The Loan Agreement is hereby
amended such that a new Section 4.1(e) is added to read as follows:
(e) Prepayment of 1995 Term Note. The Company may at any time and
from time to time prepay all or a portion of the 1995 Mortgage Loan
without premium or penalty; provided, however, that any prepayment of
principal during a Fixed Rate Period and prior to the last day of such
Fixed Rate Period must be accompanied by the indemnity payment set
forth in Section 4.8 below. All prepayments will be applied first to
accrued but unpaid interest and then to principal installments due in
the inverse order of maturity.
4. Interest on 1995 Mortgage Loan. Section 4.2(a) of the Loan
Agreement is hereby amended by adding the following sentence at the end of that
section: "The Company will pay interest on the 1995 Mortgage Loan, provided in
Section 2.6(b), payable monthly in arrears on the 30th day of each month (or
28th day of each February) beginning November 30, 1995, and at maturity.
5. Term Loan Indemnity. Section 4.8 of the Loan Amendment is
hereby amended by adding the following sentence at the beginning of that
section: "If the Company prepays any principal of the 1995 Term Note during a
Fixed Rate Period, the Company will reimburse NBD for any loss or expense
incurred by NBD as calculated pursuant to the prepayment provisions specified
in the 1995 Term Note and assuming that the maturity dates referenced in such
section are no later than the final day of the Fixed Rate Period."
6. Purchase Money Indebtedness. The parties agree that the 1995
Mortgage Loan will not be considered a Purchase Money Lien for purposes of
Section 6.2(d)(v) of the Loan Agreement.
7. Conditions Precedent. Notwithstanding any other term of this
Second Amendment or the Loan Agreement, NBD will not be required to make the
1995 Mortgage Loan unless the following conditions have been met:
(a) NBD shall have received a closing fee of $25,400 from
the Company prior to or simultaneously with the funding of the 1995 Mortgage
Loan (which the Company hereby authorizes NBD to withhold from the proceeds of
the 1995 Term Note).
4
(b) NBD shall have received a fully executed copy of this
Second Amendment and the 1995 Term Note.
(c) NBD shall have received a mortgage, in form and
substance satisfactory to NBD (as amended and restated from time to time, the
"Mortgage"), from the Company on the Farmington Hills Property, together with a
mortgage survey and a commitment for a mortgagee title insurance policy (to be
issued without standard exceptions).
(d) NBD shall have received an environmental certificate
from the Company together with a Phase I Environmental Audit of the Farmington
Hills Property prior to the funding of the 1995 Mortgage Loan.
(e) NBD shall have received a copy of the resolutions (i)
authorizing the Company to purchase the Farmington Hills Property, to obtain
the requested loan from NBD and to secure its obligations by a mortgage on such
Farmington Hills Property, certified by the secretary of the Company, and (ii)
authorizing the Borrowers to complete the transactions contemplated in the
First Amendment and Second Amendment, certified by the secretary of each
Borrower.
(f) NBD shall have received the opinion of counsel to the
Borrowers, in form and substance satisfactory to NBD and its counsel, covering
matters related to the First Amendment and this Second Amendment.
(g) All of the terms and conditions in Section 3.7 of the
Loan Agreement continue to be met.
8. Reaffirmation of Loan Agreement; Conflicts. The parties
hereto acknowledge and agree that the terms and provisions of this Second
Amendment, amend, add to and constitute a part of the Loan Agreement. Except
as expressly modified and amended by the terms of this Second Amendment, all of
the other terms and conditions of the Loan Agreement and all of the documents
executed in connection therewith or referred or incorporated therein, remain in
full force and effect and are hereby ratified, confirmed and approved. If
there is an express conflict between the terms of this Second Amendment and the
terms of the Loan Agreement, or any of the other agreements or documents
executed in connection therewith or referred to or incorporated therein, the
terms of this Second Amendment shall govern and control. Any reference in any
other document or agreement to the Loan Agreement shall hereafter refer to the
Loan Agreement as amended by this Second Amendment.
9. Representations True. The representations and warranties of
the Borrowers contained in the Loan Agreement are true on the date hereof and
there does not exist any Default or Event of Default under the Loan Agreement.
5
10. Expenses. Borrowers acknowledge and agree that the Borrowers
will pay all attorneys' fees and out-of-pocket costs of NBD in connection with
or with respect to this Second Amendment and the 1995 Mortgage Loan.
IN WITNESS WHEREOF, the Borrowers and NBD have executed the foregoing
document by their duly authorized officers as of the day and year first written
above.
NBD BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Vice President
and
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Its: Loan Officer
MEDAR, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: President
AUTOMATIC INSPECTION DEVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: President
INTEGRAL VISION LTD.
By: /s/ ▇▇▇▇▇▇▇ Current
---------------------------
▇▇▇▇▇▇▇ Current
Its: Company Secretary
6
REAFFIRMATION OF GUARANTY
The undersigned, Medar Canada Ltd., hereby acknowledges the terms of
this Second Amendment to Revolving Credit and Loan Agreement and hereby
reaffirms each and every term of its Guarantee and Postponement of Claim dated
August 10, 1995, given in favor of NBD Bank with respect to the obligations of
Medar, Inc., Automatic Inspection Devices, Inc. and Integral Vision Ltd.
MEDAR CANADA LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: President
