EXHIBIT 4.3
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Nematron Corporation
April 25, 2003
VIA OVERNIGHT MAIL
Nematron Corporation
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President and CEO
Re: Loans by LaSalle Business Credit, LLC
Dear Xx. Xxxxxx:
Reference is made to that certain Amended and Restated Loan and Security
Agreement dated as of June 30, 2000, as heretofore and hereafter amended,
amended and restated or otherwise modified from time to time (the "Agreement"),
by and between Nematron Corporation ("Borrower") and LaSalle Business Credit,
Inc., predecessor by merger to LaSalle Business Credit, LLC, a Delaware limited
liability company ("Lender"). Each term set out herein and not otherwise defined
shall have the meaning ascribed to such term in the Agreement.
By our letters to you dated October 3, 2001 and February 18, 2002, we notified
you that Borrower is and remains in default (collectively, the Defaults) under
the Agreement. The Defaults have not been cured or waived. The terms of the
Agreement provide that Lender may, as a result of any Event of Default,
including any Default, accelerate the payment of all Liabilities. Borrower
acknowledges the existence of each Default.
Lender has requested that Borrower obtain alternative financing, and Borrower
has agreed to use its best efforts to obtain such alternate financing. However,
Borrower has not yet obtained such alternative financing. Borrower has therefore
requested that Lender not immediately accelerate the payment of the Liabilities,
and that Lender, for the moment, allow both parties to the Agreement to proceed
under the terms of the Agreement. In the event Borrower and each guarantor set
forth herein executes this letter and returns same to Lender, together with the
fee described in paragraph (g) below, on or before May 2, 2003, Lender hereby
agrees to allow both parties to proceed under the terms of the Agreement (as
such terms are amended herein) until further notice to Borrower, provided as
follows:
(a) That there occurs no additional Event of Default; and
(b) That there occurs no material adverse change (as determined
by Lender in its sole discretion) in Borrower or in its business;
and
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(c) That Borrower shall use its continuing best efforts to
refinance all of the liabilities with another lender as soon
as practicable; and
(d) That Borrower agrees that clause (a) of Section 2 of the
Agreement is hereby amended and restated to read in its entirety
as follows:
(a) during the Original Term and any Renewal Term, absent
the existence and continuation of an Event of Default,
LaSalle may, in its sole discretion, make such
revolving loans and advances (the "Revolving Loans")
to Borrower as Borrower shall from time to time request,
in accordance with the terms of this paragraph 2; and
(e) That Borrower agrees that the definition of "Revolving Loan
Commitment" set forth in Section 1 of the Agreement is hereby
amended and restated, effective as of the date of this letter, to
read in its entirety as follows:
"Loan Commitment" shall mean:
(A) at all times prior to and including May 15, 2003,
Seven Hundred Twenty Five Thousand and No/100 Dollars
($725,000.00); and
(B) for the period from May 16, 2003 through and including
June 15, 2003:
(i) Seven Hundred Twenty Five Thousand and No/100
Dollars ($725,000.00) in the event that (x)
Borrower and A-OK shall have delivered to LaSalle,
on or before May 15, 2003, at least three (3)
written proposals (or groups of proposals) from
other lenders to refinance all Liabilities at or
before the last day of the Original Term (it being
understood, for the avoidance of doubt, that any
group of proposals which would collectively
refinance all Liabilities shall constitute, for
these purposes, one (1) proposal; and (y) LaSalle
shall have deemed at least three (3) of such
proposals (or groups of proposals) viable in
LaSalle's sole discretion (the occurrence of the
conditions in clauses (x) and (y) is referenced
to herein as a "Timely Proposal Event"); or
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(ii)Six Hundred Twenty Five Thousand and No/100 Dollars
($625,000.00) in the event a Timely Proposal Event
has not occurred; and
(C) for the period from June 16, 2003, through the end of
the Original Term:
(i) Seven Hundred Twenty Five Thousand and No/100
Dollars ($725,000.00) in the event that (x) a Timely
Proposal Event shall have occurred and (y) both (1)
Borrower and A-OK shall have delivered to LaSalle,
on or before June 15, 2003, at least one (1)
written commitment (or group of commitments) from
another lender (or lenders) to refinance all
Liabilities at or before the last day of the
Original Term, and (2) LaSalle shall have deemed at
least one (1) such commitment (or group of
commitments) viable in LaSalles sole discretion
(the occurrence of the conditions in clauses (y)(1)
and (2) is referred to herein as a "Timely
Commitment Event"); or
(ii)Six Hundred Twenty Five Thousand and No/100 Dollars
($625,000.00) in the event (x) a Timely Proposal
Event has occurred but a Timely Commitment Event has
not occurred, or (y) a Timely Commitment Event has
occurred but a Timely Proposal Event has not
occurred; or
(iii) Five Hundred Twenty Five Thousand and No/100
Dollars ($525,000.00) in the event that neither a
Timely Commitment Event nor a Timely Proposal Event
has occurred.
(f) That Borrower agrees that Section 12(a) of the Agreement is hereby
amended by deleting the date "November 12, 2003" and by inserting the
date "July 15, 2003" in lieu thereof; and
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(g) That Borrower pays Lender a fee in the amount of One Thousand and
No/100 Dollars ($1,000.00) in consideration of Lender's willingness to
enter into this letter agreement, which fees shall be payable, fully
earned and nonrefundable upon Borrower's acceptance of this letter; and
(h) That Borrower and each Guarantor agree that all references to LaSalle
Business Credit, Inc. contained in the Agreement and the Other
Agreements are hereby deemed to read "LaSalle Business Credit, LLC".
Borrower hereby (a) ratifies and affirms its obligations under the Agreement;
(b) denies and waives the existence of any defenses relating to its obligations
under the Agreement; and (c) waives and releases any claims or causes or action
against Lender which may now or hereafter be available to it arising out of (i)
the administration of the Agreement or the Other Agreements, (ii) the
negotiation and execution of this letter, or (iii) any other matter pertaining
to the Agreement or the Other Agreements.
Each of the undersigned guarantors hereby (a) ratifies and affirms its
individual and several obligations under its respective Continuing Unconditional
Guaranty executed by each guarantor in favor of Lender; (b) acknowledges and
confirms that each Continuing Unconditional Guaranty continues in full force and
effect notwithstanding this letter; (c) denies and waives the existence of any
defenses relating to any of such Continuing Unconditional Guaranties; and (d)
waives and releases any claims or causes or action against Lender which may now
or hereafter be available to any guarantor arising out of (i) the administration
of the Agreement or the Other Agreements, (ii) negotiation and execution of this
letter, or (iii) any other matter pertaining to the Agreement or the Other
Agreements; provided, however, that the failure of any guarantor to execute this
letter shall not release such guarantor or any other guarantor of its respective
obligations under any of the Continuing Unconditional Guaranties.
By this letter Lender does not waive any Default, nor any previous Events of
Default about which you have been notified. This letter is being written with
Lender reserving all of its rights to exercise any and all of Lender's remedies,
as provided in the Agreement and in all the Other Agreements, at such time and
in such manner as provided therein. Nothing herein shall be construed or
interpreted as being a waiver of any of Lender's rights or remedies (as provided
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to Lender under the terms of the Other Agreements, the Uniform Commercial Code
or otherwise), by virtue of its forbearance to date (it being understood that
Lender has no obligation to continue to forbear) or extension with respect
thereto.
Very truly yours,
LASALLE BUSINESS CREDIT, LLC
By /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, First Vice President
Accepted and agreed to this
30th day of April, 2003.
NEMATRON CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
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Its President
Consented and agreed to by
the following guarantors of
the obligations of Nematron Corporation
to LaSalle Business Credit, LLC
A-OK CONTROLS ENGINEERING, INC. OPTIMATION, INC.
By /s/ Xxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxx
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Its Secretary Its Secretary
Date: April 30, 2003 Date: April 30, 2003
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