SERCURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) September 29, 1995
AMALGAMATED AUTOMOTIVE INDUSTRIES, INC.
PENNSYLVANIA 2-37589 & 1-6886 23-1716951
(State or other jurisdictional (Commission File (IRS Employee
of incorporation or organization) Number) Identification Number)
POST OFFICE BOX 2441
1731 SOUTH 19TH STREET, HARRISBURG, PENNSYLVANIA 17104
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including erea code 717/939-7893
NO CHANGE
(Former name or former address, if changed last reported)
Item 5. Other Events
(a) Further Amendments to Forebearance Agreement with Provident Bank
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of Maryland
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As reported most recently in the Issuer's Quarterly Report on the
Form 10-QSB, for the period ended July 31, 1995, the Issuer has maintained a
revolving line of credit with the Provident Bank of Maryland ("Provident") since
May 1992. Under the original loan agreement, the Issuer was allowed to borrow up
to $2,000,000 and at April 30, 1995, the Issuer had utilized the credit facility
to the extent of $1,877,000. The line of credit is collateralized by accounts
receivable, inventory, equipment, and working fund accounts maintained at the
bank. The agreement provides among other things, for maintenance of working
capital above $750,000 and tangible net worth above $500,000, the meeting of
certain performance ratios and cash flows (as defined in the agreement).
In the Management's Discussion and Analysis Section of its Annual
Report on Form 10-KSB for the 12 months ended October 31, 1994, the Issuer
reported that although it was in default of certain ratio and cash flow
requirements under its line of credit agreement, Provident had agreed to waive
its rights and remedies allowed per the loan agreement as of October 31, 1994
but as a condition for the waiver, the loan interest rate under the loan
agreement had been increased from 2% to 4% per annum above the bank's prime
rate effective January 9, 1995.
As reported in the Issuer's Current Report on Form 8-K, dated
April 28, 1995, Provident by letter received April 28, 1995, advised that it
was the bank's intent for the Issuer to repay or replace Provident's credit
facilities by no later than June 1, 1995. The Issuer also reported that it
had engaged a firm to provide consulting services to include such matters as
the structuring of financing alternatives, preparation of financial and
marketing presentations and making inquiries within the industry regarding
interest in the possible acquisition of the Company's stock or assets. The
Issuer further reported that management, with the assistance of the
consulting firm, was in the process of seeking alternative financing
arrangements to replace Provident's credit facilities at the earliest
opportunity, but was uncertain whether it could be accomplished by June 1,
1995. It was also reported that the Issuer had received some expressions of
interest in the possible purchase of its shares or a substantial portion of
its assets and had commenced discussions of a preliminary nature with firms
expressing an interest and that Shareholders had been advised that management
would consider legitimate proposals and, if they merit it, make a
recommendation regarding same to Shareholders.
By letter dated June 1, 1995, Provident demanded the immediate and
full repayment of all sums outstanding under the Issuer's revolving line of
credit loan agreement. On June 5, 1995, the Issuer and Provident entered into
a Forbearance Agreement ("Forbearance Agreement") which was attached to the
April 30, 1995 Form 10-QSB as Exhibit No (10.9), whereby Provident agreed to
forbear from the immediate execise of its enforcement and collection rights
until 5:00 p.m. on June 30, 1995 and to continue to advance funds under the
revolving credit line as modified by the Forbearance Agreement. Under the
terms of the Forbearance Agreement, all payments received on the Issuer's
accounts and receivables and all payments received as a result of the sale or
the disposition of the Issuer's inventory were paid to Provident and applied
to reduce the sums owed by the Issuer to Provident. In addition, the original
$2,000,000 revolving line of credit was modified and the aggregate allowable
principal amount outstanding reduced by $37,500 weekly to $1,824,500 for the
week ended June 30, 1995.
As reported in the Issuer's Current Reports on Form 8-K, dated
June 30 and July 27, 1995 and the Quarterly Report on Form 10-QSB for the
period ended July 31, 1995, the Issuer and Provident agreed to Amendments to the
Forbearance Agreement, whereby Provident agreed to continue to forbear until
until 5:00 p.m. on September 30, 1995, to continue to advance
funds under the revolving credit line and to increase the credit line
as reduced by the Forbearance Agreement to $1,862,000 for the
period July 1, 1995 to the amended Date of Termination. Except as specifically
modified, all other terms and provisions of the Forbearance Agreement remained
in effect.
As of September 29, 1995, the Issuer and Provident, Inter Alia,
agreed to a Fourth Amendment to the Forbearance Agreement, whereby Provident
agreed to continue to forbear until 5:00 P.M. on October 10, 1995. All other
terms and provisions of the Forbearance Agreement as previously amended would
remain in full force and effect. For a full complete description
and understanding of terms and conditions of the Fourth Amendment
to the Forbearance Agreement, referemce should be made
to the agreement which is attached hereto as Exibit NO.
(10.13). As of October 6, 1995, the Issuer and Provident agreed to a Fifth
Amendment to the Forbearance Agreement whereby Provident agreed to continue to
forbear until 5:00 P.M. on October 31, 1995 and the parties agreed that all
other terms and provisions of the Forbearance Agreement as previously amended
remain in full force and effect. For a full and complete description and
understanding of the terms and conditions of the Fifth Amendment to the
Forbearance Agreement, reference should be made to the agreement which is
attached hereto as Exibit NO. (10.14).
(b) Commitment Letter for New Credit Facility
------------------------------------------
On September 28, 1995, the Issuer received a Commitment Letter from CIT
Corporation ("CIT") for a $2,500,000 credit line, a portion of which would be
used to repay the Provident loan. CIT is in the process of completing its due
diligence audit and a closing date for the Cit loan has not yet been
established.
(c) Possible Merger with Seaboard Automotive Inc.
---------------------------------------------
As previously reported, the Issuer had received expressions of possible
interest in the purchase of the Issuer's shares and/or assets, which were being
reviewed by management. The Issuer and Seaboard Automotive Inc. of Blackwood,
New Jersey, have now entered into a preliminary agreement whereby Seaboard would
acquire all of the outstanding stock of Amalgamated on a 2 shares of Amalgamated
for 1 share of Seaboard basis. It is expected that a definitive agreement will
will be executed on or about October 31, 1995 and that the transaction will be
concluded as soon as possible thereafter upon shareholder approval.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMALGAMATED AUTOMOTIVE INDUSTRIES INC.
--------------------------------------
(Registrant)
Date: October 20, 1995 /s/ Kurt J. Myers
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Kurt J. Myers
President and Chief Executive Officer
Date: October 20, 1995 /s/ Nick J. Chacanias
--------------------------------------
Nick J. Chacanias
Treasurer
FOURTH AMENDMENT TO FORBEARANCE AGREEMENT
-----------------------------------------
THIS FOURTH AMENDMENT TO FORBEARANCE AGREEMENT (hereafter, this
"AGREEMENT") is made as of September 29, 1995 by and between
AMALGAMATED AUTOMOTIVE INDUSTRIES, INC., a Pennsylvania corporation,
ACME AUTO PARTS, INC., a Pennsylvania corporation, LAM CORPORATION, a
Pennsylvania corporation and TALMENS PROPERTIES, INC., a
Pennsylvania corporation (collectively, "BORROWER") and
PROVIDENT BANK OF MARYLAND, a Maryland banking corporation
("LENDER").
RECITALS
--------
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, and a Third Amendment To Forbearance
Agreement dated August 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 September 29, 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 September 29, 1995.
The BORROWER has requested an extension to the
FORBEARANCE AGREEMENT. The LENDER is willing to extend the FORBEARANCE
AGREEMENT to October 10, 1995 subject to the terms and provisions of
this AMENDMENT.
<PAGE>
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. The FORBEARANCE
AGREEMENT is hereby amended as follows:
a. Section 3. Section 3 of the FORBEARANCE
AGREEMENT is hereby amended and restated in its entirety as follows:
Section 3. FORBEARANCE. The LENDER agrees to forbear
from exercising any of its rights or remedies under the LOAN DOCUMENTS
as a result of the EXISTING DEFAULT, subject to the following terms
and conditions:
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 10, 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 3.2 or any other section of this
AGREEMENT.
3.2 Additional Defaults. The LENDER'S agreement to
forbear from exercising its rights and remedies as set forth herein
shall terminate immediately upon the occurrence of: (a) an event of
default (other than the EXISTING DEFAULT) under the LOAN AGREEMENT
or any other document evidencing, securing or otherwise documenting
the REVOLVER (collectively, the 'LOAN DOCUMENTS') or (b) any event or
condition (other than the EXISTING DEFAULT) which with the giving of
notice, the passage of time, or both, would constitute an event of
default under any of the LOAN DOCUMENTS.
b. Section 4. Section 4 of the FORBEARANCE AGREEMENT
is hereby amended and restated in its entirety as follows:
Section 4. ADDITIONAL ADVANCES UNDER THE REVOLVER.
The LENDER agrees to continue to advance proceeds of the REVOLVER to
the BORROWER pursuant to and subject to the following terms and
conditions:
4.1 Time Limitation The LENDER'S agreement to continue to advance
proceeds of the REVOLVER to the BORROWER shall expire on the DATE OF
TERMINATION.
4.2 Existing Terms And Conditions. The LENDER'S agreement to
continue to advance proceeds of the REVOLVER, as modified herein, is
subject to all of the terms and conditions set forth in the LOAN
DOCUMENTS, as modified herein.
4.3 Modification Of Loan Agreement. The LENDER shall have no
obligation to advance proceeds of the REVOLVER which would result in the
aggregate principal amount outstanding under the REVOLVER at any time
to exceed the lesser of (i) One Million Eight Hundred Sixty-Two
Thousand Dollars ($1,862,000.00), and (ii) the sum of (a) seventy-five
percent (75%) of the face amount of 'ELIGIBLE ACCOUNTS' ( as that term
is defined in the LOAN AGREEMENT), plus (b) the lesser of One Million
Five Hundred Thousand Dollars (1,500,000.00) and fifty percent (50%) of
the LENDER'S valuation of the 'ELIGIBLE INVENTORY' (as the term is
defined in the LOAN AGREEMENT);
Section 5. 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 6. 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
forth herein; and (ii) continue to advance proceeds of the REVOLVER, as modified
herein, shall automatically terminate, without notice to the BORROWER.
Section 7. 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 this AGREEMENT) 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, 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 this AGREEMENT or the conduct of the parties with
respect thereto.
Section 8. RATIFICATION. Except as modified by the express
provisions of this AGREEMENT all terms and provisions of the LOAN DOCUMENTS are
hereby ratified and confirmed and shall remain in full force and effect.
Section 9. NO WAIVER. The BORROWER acknowledges and agrees that,
although, the LENDER has agreed to forbear, upon the conditions contained in
this AGREEMENT, the LENDER does not waive 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 10. 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 11. FINAL AGREEMENT. This AGREEMENT, together with
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.
<PAGE>
Section 12. GOVERNING LAW. The performance and
construction of this AGREEMENT shall be governed by the laws
of the State of Maryland.
Section 13. AMENDMENT. This AGREEMENT mat only be altered,
modified or amended by a writing executed by all of the parties
hereto.
Section 14. TIME. Time is of the essence with respect to all
aspects of this AGREEMENT.
Section 15. 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 leins 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 18. 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, 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/ Patrick E. Killpatrick By: /s/ Thomas B. Freeze (SEAL)
-------------------------- ------------------------
Name: Thomas B. Freeze
Title: Vice President
<PAGE>
BORROWER:
AMALGAMATED AUTOMOTIVE INDUSTRIES INC.,
A Pennsylvania Corporation
/s/ Mark W.Jenkins By: /s/ Kurt J. Myers (SEAL)
----------------------- ------------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
ACME AUTO PARTS, INC.,
A Pennsylvania Corporation
/s/ Mark J. Jenkins By: /s/ Kurt J. Myers (SEAL)
------------------------ ----------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
LAM CORPORATION,
A Pennsylvania Corporation
/s/ Mark W. Jenkins By: /s/ Kurt J. Myers (SEAL)
------------------------ ----------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
TALMENS PROPERTIES, INC.,
A Pennsylvania Corporation
/s/ Mark J. Jenkins By: /s/ Kurt J. Myers (SEAL)
------------------------ ----------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
FIFTH AMENDMENT TO FORBEARANCE AGREEMENT
-----------------------------------------
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, LAM CORPORATION, a
Pennsylvania corporation and TALMENS PROPERTIES, INC., a
Pennsylvania corporation (collectively, "BORROWER") and
PROVIDENT BANK OF MARYLAND, a Maryland banking corporation
("LENDER").
RECITALS
--------
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 herin, 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.
<PAGE>
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 leins 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/ Patrick E. Killpatrick By: /s/ Thomas B. Freeze (SEAL)
-------------------------- ------------------------
Name: Thomas B. Freeze
Title: Vice President
<PAGE>
BORROWER:
AMALGAMATED AUTOMOTIVE INDUSTRIES INC.,
A Pennsylvania Corporation
/s/ Mark W.Jenkins By: /s/ Kurt J. Myers (SEAL)
----------------------- ------------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
ACME AUTO PARTS, INC.,
A Pennsylvania Corporation
/s/ Mark J. Jenkins By: /s/ Kurt J. Myers (SEAL)
------------------------ ----------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
LAM CORPORATION,
A Pennsylvania Corporation
/s/ Mark W. Jenkins By: /s/ Kurt J. Myers (SEAL)
------------------------ ----------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
TALMENS PROPERTIES, INC.,
A Pennsylvania Corporation
/s/ Mark J. Jenkins By: /s/ Kurt J. Myers (SEAL)
------------------------ ----------------------
Vice President Name: Kurt J. Myers
Title: President/CEO
