EXHIBIT 2.3
AMENDMENT AGREEMENT
This Amendment Agreement is made this 5th day of July, 2001, by and
between MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking organization
having its chief executive office at One M&T Plaza, Buffalo, New York 14240 (the
Bank), and AMERICAN LOCKER GROUP INCORPORATED, a Delaware business corporation
having its chief executive office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the Borrower).
Whereas, the Bank and the Borrower previously entered into a corporate
term loan agreement dated August 30, 1991, which was amended by (1) an amendment
agreement dated May 1, 1994; (2) an amendment agreement dated March 12, 1996;
(3) an amendment agreement dated August 22, 1997; and (4) an amendment agreement
dated June 9, 1999 (as so amended the Loan Agreement), and
Whereas, the Bank and the Borrower now desire to amend certain
provisions of the Loan Agreement;
Now, Therefore, effective on the date of this Amendment Agreement,
the Bank and the Borrower agree as follows:
1. A new clause (jiv) to read "(jiv) Loan IV" is added to Section 1
of the Loan Agreement after clause (jiii) of such Section 1.
2. There is added to the Loan Agreement after Section 2C thereof a
new Section 2D to read as follows:
2D. Loan IV.
a. MAKING AND OBTAINING LOAN IV. Upon and subject to each term and
condition of this Agreement, the Bank shall make Loan IV to the
Borrower
and the Borrower shall obtain Loan IV from the Bank. The
principal amount of Loan IV as evidenced by two notes in the
principal amounts of $6,300,000 and $2,100,000 shall be
$8,400,000.
b. TERMINATION OF OBLIGATION. Any obligation of the Bank to make
Loan IV shall terminate no later than July 6, 2001.
c. REPAYMENT. The Borrower shall repay the outstanding principal
of the two notes to the Bank in 84 consecutive monthly
installments commencing on August 6, 2001, and continuing
thereafter on the same day of each succeeding calendar month
consisting of 83 equal installments each in the total amount of
$100,000, and one final installment on the maturity date in an
amount equal to the outstanding principal on both notes, together
with all other amounts outstanding hereunder, including, without
limitation, accrued interest, costs, and expenses. In addition,
until the outstanding principal is paid in full, payments of all
accrued and unpaid interest on both notes will become due and
payable on the 6th day of each month commencing on August 6,
2001.
d. OPTIONAL PREPAYMENT IN ADVANCE. The Borrower shall have the
option of paying the principal sum to the Bank in advance of the
maturity date, in whole or in part, at any time and from time to
time upon written notice received by the Bank prior to making
such prepayment. With respect to the term note in the amount of
$2,100,000 for which the Borrower has elected a fixed rate
option, the Borrower shall pay to the Bank, together with the
prepayment, as consideration of the privilege of making such
prepayment, a premium equal to the greater of (a) 1 percent of
the principal sum prepaid; or (b) an amount equal to the present
value of the difference between (i) the amount of interest that
would have accrued on the principal sum during the remaining term
of the note, at the interest rate set forth in the note in effect
on the date of prepayment; and (ii) the amount of interest that
would have accrued on the principal sum during the remaining term
of the note at the current market rate. With respect to the libor
term note, the Borrower shall be liable for and shall pay the
Bank, on demand, the higher of $250 or the actual amount of the
liabilities, expenses, costs or funding losses that are a direct
or indirect result of such prepayment (based on the entire
principal amount prepaid).
e. MATURITY DATE. The maturity date of both notes shall be July 6,
2008.
f. INTEREST. The unpaid principal balance of each note will bear
interest equal to (A) an interest rate based on the London
Interbank Offered Rate ("LIBOR") plus 2.00 percent (any
designation of an interest period for LIBOR shall be made on two
business days prior notice) or (B) Fixed rate, at the Bank's Cost
of Funds plus 2.00 percent. "Fixed Rate" shall mean the greater
of (i) 2.00 percentage points above the Cost of Funds, or (ii)
7.00 percent. "Cost of Funds" shall mean the most recent yield on
United States Treasury Obligations adjusted to a constant
maturity of seven years in effect two business days prior to
closing date as published by the Board of Governors of the
Federal Reserve System in the Federal Reserve Statistical Release
H.15 (519), or by such other quoting service, index or commonly
available source utilized by the Bank, plus the "ask" side of the
seven year swap spread in effect two business days prior to
closing date as set forth in Bloomberg, L.P., or by such other
quoting service, index or commonly available source utilized by
the Bank. Interest is payable monthly on the same date that
principal installments are payable.
g. GENERAL PROVISIONS AS TO REPAYMENT AND PAYMENT. Repayment of the
principal amount of Loan IV, payment of all interest owing
pursuant to this
Agreement in connection with Loan IV and payment of all other
amounts owing by the Borrower to the Bank pursuant to this
Agreement in connection with Loan IV shall be made in lawful
money of the United States and in immediately available funds at
the banking office of the Bank located at One Fountain Plaza,
Buffalo, New York, or at such other office of the Bank as may at
any time and from time to time be specified in any notice
delivered, given or sent to the Borrower by the Bank. No such
repayment or payment shall be deemed to have been received by the
Bank until received by the Bank at the office of the Bank
determined in accordance with the preceding sentence, and any
such repayment or payment received by the Bank at such office
after 2:00 p.m. on any day shall be deemed to have been received
by the Bank at the time such office opens for business on the
next business day of the Bank. If the time by which any of the
principal amount of Loan IV is to be repaid is extended by
operation of law or otherwise, the Borrower shall pay interest on
the outstanding portion thereof during such period of extension
as provided in Section 2C of this Agreement.
3. Section 3 of the Loan Agreement is amended in its entirety to
read as follows:
3. PREREQUISITES TO THIS LOAN. The obligation of the Bank to
make this loan shall be conditioned upon the following:
a. NO DEFAULT. (i) There not having occurred or existed at any
time during the period beginning on the date of this
Agreement and ending at the time such loan is made, any Event
of Default or Potential Event of Default, and (ii) the Bank
not believing in good faith that any Event of Default
or Potential Event of Default has so occurred or existed or
so exists;
b. REPRESENTATIONS AND WARRANTIES. (i) Each representation
and warranty made in this Agreement being true and correct
as of all times during the
period beginning on the date of this Agreement and ending at
the time such loan is made, except to the extent updated in
(A) a certificate executed by the Chief Executive Officer or
the President or a Vice President of the Borrower and by the
Chief Financial Officer of the Borrower, and received by the
Bank before the time such loan is to be made, or (B) Exhibit
A attached to and made a part of this Agreement; (ii) each
other representation and warranty made to the Bank by or on
behalf of the Borrower or by or on behalf of any subsidiary
or other obligor before the time such loan is to be made
being true and correct as of the date thereof, except to the
extent updated and (A) a certificate executed by the Chief
Executive Officer or the President or a Vice President of
the Borrower and by the Chief Financial Officer of the
Borrower, and received by the Bank before the time such loan
is to be made, or (B) Exhibit A attached to and made a part
of this Agreement; (iii) each financial statement provided
to the Bank by or on behalf of the Borrower or by or on
behalf of any subsidiary or other obligor before the time
such loan is to be made being true and correct as of the
date thereof; and (iv) the Bank not believing in good faith
that (A) any such representation or warranty, except as so
updated, was or is other than true and correct as of any
such time, or as of such date of determination of the truth
and correctness thereof, or (B) any such financial statement
was other than true and correct as of the date thereof;
c. PROCEEDINGS. The Bank being satisfied as to each corporate
or other proceeding in connection with any transaction
contemplated by this Agreement; and
d. RECEIPT BY BANK. The receipt by the Bank at or before the
time Loan IV is to be made of the following, in form and
substance satisfactory to the Bank:
i) Two Promissory Notes in the principal amounts of
$6,300,000 and
$2,100,000, appropriately completed and duly executed
by the Borrower;
ii) A Ratification of General Guaranty Agreement,
appropriately completed and duly executed by American
Locker Security Systems, Inc.;
iii) A Ratification of General Guaranty Agreement,
appropriately completed and duly executed by
American Locker Company, Inc.;
iv) A certificate executed by the Chief Executive Officer
or the President or a Vice President of the Borrower
and by the Chief Financial Officer of the Borrower
and stating that (A) there did not occur or exist
at any time during the period beginning on the date
of this Agreement and ending at the time such loan is
to be made, and there does not exist at the time
such loan is to be made, any Event of Default or
Potential Event of Default, and (B) each
representation and warranty made in this Agreement was
true and correct as of all times during the period
beginning on the date of this Agreement and ending
at the time of such loan and is true and correct as
of the date of the loan, except to the extent updated
in a certificate executed by the Chief Executive
Officer or the President or a Vice President of the
Borrower and by the Chief Financial Officer of
the Borrower and received by the Bank before the time
of such loan;
v) Evidence that each of the Borrower and all subsidiaries
is at the time such loan is to be made in good
standing under the laws of the jurisdiction in which it
is incorporated;
vi) A copy of the certificate or articles of incorporation
or other charter document of each of the Borrower
and all subsidiaries certified by its Secretary to
be complete and accurate at the time such loan is to be
made;
vii) A copy of the bylaws or other organizational document
of each of the Borrower and all subsidiaries certified
by its Secretary to be complete and accurate at the
time such loan is to be made;
viii) Evidence of the taking, and of the continuation in
full force and effect at the time such loan is to be
made, of each corporate or other action of the
Borrower or of any other Person necessary to authorize
the obtaining of such loan by the Borrower, the
execution, delivery to the Bank and performance of
each Loan Document and the imposition or creation of
any security interest, mortgage and other lien and
encumbrance imposed or created pursuant to any Loan
Document;
ix) Evidence that each requirement contained in any Loan
Document with respect to insurance is being met at
the time such loan is made;
x) Each additional writing required by any Loan Document
or deemed necessary or desirable by the Bank at the
sole option of the Bank; and
xi) Payment of all costs and expenses payable pursuant to
the first sentence of Section 8 of this Agreement at
or before the time such loan is made.
4. Section 4a of the Loan Agreement is amended to add the following:
"The proceeds of Loan IV will be used only to purchase stock
of B.L.L. Corporation, d/b/a Security Manufacturing Corp.,
and to refinance the existing $333,000 term loan."
5. Section 5 of the Loan Agreement shall be amended, in part, as
follows:
5. AFFIRMATIVE COVENANTS. During the term of this Agreement,
the Borrower shall do the following unless the prior
written consent of the Bank to not doing so shall have been
obtained by the Borrower:
d. NET WORTH; LIABILITIES. At any time, the Borrower shall not
permit (i) Borrower's consolidated tangible net worth to be
less than $5 million, or (ii) its
consolidated liabilities to exceed 250 percent of its
consolidated tangible net worth.
6. Section 6 of the Loan Agreement shall be amended as follows:
6. NEGATIVE COVENANTS. During the term of this Agreement,
neither the Borrower nor any subsidiary shall, without the
prior written consent of the Bank do, attempt to do, or
agree or otherwise incur, assume, or have any obligation
to do any of the following:
j. CAPITAL EXPENDITURES. With the exception of this loan
and the purchase of the stock of B.L.L. Corporation,
d/b/a Security Manufacturing Corp., make (whether by
purchase or other acquisition of any Asset or Security, by
means of any Capital Lease or otherwise) capital
expenditures exceeding $3 million in the aggregate for the
Borrower and all subsidiaries during any fiscal year of the
Borrower.
7. Section 10j of the Loan Agreement is amended in its entirety to
read as follows:
j. LOAN. "Loan" means Loan I, Loan II, Loan III, or Loan IV.
8. There is added to the Loan Agreement after Section 10j(iii)
thereof a new section 10j(iv) to read as follows:
j(iv). LOAN IV. "Loan IV" means a loan by the Bank to the
Borrower in the principal amount of $8,400,000.
9. The Loan Agreement is changed by this Amendment Agreement only to
the extent that is specifically amended by this Amendment
Agreement and, as so amended, the Loan Agreement shall
remain in full force and effect. Effective on the date of
this Amendment Agreement, references in the Loan Agreement
to "this Agreement" shall be deemed to be references to the Loan
Agreement as amended by this Amendment Agreement.
In Witness Whereof, the Bank and the Borrower have caused this
Amendment Agreement
to be duly executed on the date shown at the beginning of this
Amendment Agreement.
MANUFACTURERS AND TRADERS TRUST COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Vice President
AMERICAN LOCKER GROUP INCORPORATED
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Chairman