Exhibit 99.6
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (this "Agreement") is made to be
effective as of the ______ day of October 2002, by and between BANKNORTH
LEASING CORP. ("Banknorth"), and PLYMOUTH RUBBER COMPANY, INC. (the
"Borrower").
Banknorth is the holder by acquisition of Andover Capital Group,
Inc. of secured collections (the "Loans") evidenced, respectively, by
the following instruments:
1) Promissory Note dated November 25, 1998 in the original principal
amount of $1,339,031.88, as modified, evidencing Loan No. M1026-01
2) Promissory Note dated June 30, 1999 in the original principal amount
of $867,743.00, as modified, evidencing Loan No. M1026-02;
3) Promissory Note dated March 3, 2000 in the original principal amount
of $810,249.90, as modified, evidencing Loan No. M1026-03; and
4) Promissory Note dated May , 2000 in the original principal
amount of $161,313.39, as modified, evidencing Loan No. M1026-04.
The Borrower has failed to make certain payments upon the Loans when the
same have come due and, therefore, an event of default has occurred
under each of the Notes and the related documents, (collectively, "Loan
Documents"). Banknorth now has the right to exercise any one or more of
the remedies available upon default, whether arising under the Notes or
other Loan Documents or otherwise. The Borrower has requested that
Banknorth waive such event of defaults and modify the schedules for the
payments under the Notes and otherwise modify certain agreements of the
Borrower as set forth herein. Subject to the terms and conditions set
forth herein, Banknorth is willing to grant a limited waiver of the
existing defaults under the Loan Documents and to modify certain
agreements of the Borrower under the Loan Documents. This Agreement is
made to set forth the terms applicable to such limited waivers and
modifications.
NOW, THEREFORE, in consideration of the premises, and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Borrower and Banknorth hereby agree as follows:
1. Waiver of Existing Defaults; Representation and Warranty of No Other
Event of Default. Subject to the satisfaction of all of the
conditions precedent set forth below, Banknorth agrees to waive the
existing defaults; provided, however, that such waiver shall be a
waiver only of the specific instances of existing defaults. Nothing
contained herein shall be construed as a continuing waiver by
Banknorth of any provisions of the Loan Documents as modified by
this Agreement and nothing contained herein shall be construed as
any agreement by Banknorth to grant any future waiver, indulgence,
forbearance or other accommodation in the event of any future breach
or default under any Loan Document. The Borrower represents and
warrants to Banknorth that, except for the existing defaults, no
other Events of Default have occurred and are continuing under any
of the Loan Documents as of the date hereof, such that, after giving
effect to the limited waivers and modifications provided herein, the
Borrower shall be in full compliance with all of the provisions of
the Loan Documents.
2. Acknowledgement of Obligations and Default. The Borrower
acknowledges, represents and warrants that (a) each of the Notes
and the other Loan Documents is the valid and binding obligation of
the Borrower and is fully enforceable against the Borrower in
accordance with all stated terms; (b) the duties of the Borrower to
pay and perform its obligations under the Notes and the other Loan
Documents are the absolute, unconditional obligations of the
Borrower and are not subject to any set-off, defense or
counterclaim; (c) (i) the Borrower's failure to pay the installments
due under and on the payment dates; (ii) the Borrower's default
under certain obligations owed to lenders other than Banknorth
constitute events of default under the Notes on the Loan Documents
and, as a result thereof, Banknorth is entitled, absent the waiver
granted in this Agreement, to exercise any one or more of the
default remedies available to Banknorth, whether arising under
theNotes or the other Loan Documents or otherwise. THE BORROWER
HEREBY UNCONDITIONALLY REAFFRIMS AND RATIFIES ALL OBLIGATIONS OWED
BY THE BORROWER PURSUANT TO THE TERMS OF THE NOTES AND THE LOAN
DOCUMENTS, AS HEREBY MODIFIED.
3. Acknowledgement of Outstanding Balance of Loans. The Borrower
acknowledges the aggregate unpaid principal balance of the Loan as
of October 1, 2002 is $2,227,783.33 and is allocated among the Loans
as set forth below:
Loan Balance
M1026-01 $794,623.78
M1026-02 $617,739.69
M1026-03 $676,205.34
M1026-04 $139,214.52
4. Security. The obligations of the Borrower to repay the Loans and
perform all of the other duties of the Borrower under the Notes and
the other Loan Documents shall continue to be secured by the liens,
assignments, and security interests described and provided for in
the Loan Documents, none of which shall be impaired by anything
contained in this Agreement and all of which are hereby ratified and
confirmed by the Borrower. The Borrower represents and warrants
that the security interests in the collateral ("Collateral") secures
the Loans shall continue to constitute perfected, first priority
security interests in the Collateral in accordance with the terms
stated in the Loan Documents.
5. Modification of Payment Schedules. The terms of the Notes are
hereby modified so that remaining balances shall be payable monthly
beginning November 1, 2002 and continuing on the first day of each
month thereafter until maturity. For the period of November 1, 2002
through and including June 1, 2003, the aggregated amount of the
monthly payments shall be Twenty Five Thousand Dollars ($25,000.00).
For the period July 1, 2003 through and including June 1, 2004 the
aggregated amount of the monthly payments shall be Forty Thousand
Dollars ($40,000.00). For the period July 1, 2004 through and
including June 1, 2006 the aggregated amount of the monthly payments
shall be Forty Five Thousand Dollars ($45,000.00). For the period
July 1, 2006 through and including June 1, 2007 the aggregated
amount of the monthly payments shall be Fifty Thousand Dollars
($50,000.00). For the period July 1, 2007 through and including
April 1, 2008 the aggregated amount of the monthly payments shall be
Sixty Thousand Dollars ($60,000.00). On May 1, 2008, the entire
remaining outstanding principal balance, together with all interest
accrued thereon, shall be due and payable in full.
6. Modification of Maturity Date. The remaining balance due under the
Loans shall be due and payable on August 1, 2008.
7. Modification of Interest Rate. The Notes are hereby modified so
that the remaining balances of the Loans shall accrue at an interest
rate of Nine and One Half Percent (9.50%) per annum beginning
November 1, 2002.
8. Restructuring Fee. Upon the execution and delivery of this
Agreement, Banknorth shall be paid a restructuring fee of One
Percent of the outstanding balance from the Borrower in the amount
of $22,275.00.
9. Deletion of Financial Covenants. The Parties hereby agree to delete
all of the Financial Covenants.
10. No Other Modifications of Loan Documents. Except as specifically
stated in this Agreement, the Notes and other Loan Documents have
not been amended, modified or changed in any respect. Without
limiting the foregoing, nothing herein shall be construed as a
waiver or modification of any provision providing for default
remedies in favor of Banknorth if any further default occurs under
any of the Notes or other Loan Documents, including the right to
accelerate the maturity of the Loans.
11. Further Assurances. The Borrower agrees to execute and deliver to
Banknorth such other and further documents as may from time to time,
be reasonably requested by Banknorth in order to execute or enforce
the terms and conditions of this Agreement or any of the Loan
Documents.
12. No Novation; No Refinance. It is the intention of the parties
that nothing contained in this Agreement shall be deemed to effect
or accomplish or otherwise constitute a novation of any of the
obligations or duties owed by the Borrower to Banknorth or of any of
the Notes or other Loan Documents or to be a refinance of the Loans.
Except as specifically provided herein, nothing contained herein is
intended to extinguish, terminate or impair any of the duties or
obligations owed by the Borrower to Banknorth.
13. Successors and Assigns. This Agreement shall inure to the benefit
of and be enforceable against each of the parties and their
respective successors and assigns.
14. Choice of Law; Consent to Jurisdiction; Agreement to Venue. This
Agreement shall be construed, performed and enforced and its
validity and enforceability determined in accordance with the laws
of the State of Massachusetts. The Borrower consents to the
jurisdiction of any state or federal court located in the State of
Massachusetts. The Borrower waives any right to object to the
maintenance of a suit in any of the state or federal courts of the
State of Massachusetts on the basis of improper venue or
inconvenience of forum.
15. Amendments. This Agreement may be amended only by a writing
executed by all of the Parties.
16. Time. Time is of the essence of this Agreement.
17. No Oral or Implied Waiver. No failure or delay by Banknorth in
the exercise or enforcement of any of its rights under any Loan
Document shall be a waiver of such right or remedy nor shall a
single or partial exercise or enforcement thereof preclude any other
or further exercise or enforcement thereof or the exercise or
enforcement of any other right or remedy. Banknorth may at any time
or from time to time waive all or any rights under this Agreement
any of the Note or any of the other Loan Documents, but any such
waiver must be specific and in writing and no such waiver shall
constitute, unless specifically so expressed by Banknorth in
writing, a future waiver of performance or exact performance by the
Borrower. No notice to or demand upon the Borrower in any instance
shall entitle the Borrower to any other or further notice or demand
in the same, similar or other circumstance.
18. Obligations Unconditional. The obligations of the Borrower set
forth in this Agreement and as required by the terms of the Notes or
the other Loan Documents are absolute and unconditional, and are
independent of any defense or rights of set-off, recoupment or
counterclaim which the Borrower might have against Banknorth. The
Borrower agrees that all payments required hereunder or by the Notes
or other Loan Documents shall be made free of any deductions and
without abatement, diminution or set-off.
19. Release. In order to induce Banknorth to enter into this
Agreement, the Borrower forever releases and discharges Banknorth
and Banknorth's officers, directors, employees, attorneys and agents
(collectively the "Released Parties") from any and all claims,
causes of action, suits and damages (including claims for attorneys
fees and costs) which the Borrower ever had or may now have against
any of the Released Parties arising out of or related in any way to
the loans, the Notes or the other Loan Documents, or the collateral
for the loans or the administration thereof, whether known or
unknown, including but not limited to any and all claims based upon
or relying on any allegations or assertions of duress, illegality,
unconscionability, bad faith, breach of contract, regulatory
violations, negligence, misconduct, or any other tort, contract or
regulatory claim of any kind or nature. This release is intended to
be final and irrevocable and is not subject to the satisfaction of
any conditions of any kind.
20. Waiver of Jury Trial. Each of the Parties agrees that any suit,
action or proceeding, whether claim or counterclaim, brought or
instituted by any party, or any successor or assign of any party, on
or with respect to this Agreement, the Loans (or the administration
thereof), or any of the Notes or the other Loan Documents, or which
in any way relates, directly or indirectly to the obligations of any
party to any other party, or the dealings of the parties with
respect thereto, shall be tried by a court and not by a jury. Each
of the parties hereby expressly waives any right to a trial by jury
in any such suit, action or proceeding.
IN WITNESS WHEREOF, the Parties have executed this Agreement with the
specific intention of creating a document under seal as of the date
first above written.
WITNESS BORROWER:
Plymouth Rubber Company, Inc.,
A Massachusetts Corporation
____________________________ ________________________________
By: Xxxxxx X Xxxxx, Vice President
BANKNORTH LEASING CORPORATION
____________________________ ________________________________
Xxxx X. Wedge, Senior Vice President
