Exhibit 10.1
FIRST AMENDMENT
TO
FORBEARANCE AGREEMENT
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THIS FIRST AMENDMENT TO FORBEARANCE AGREEMENT (this "First Amendment")
is made as of September 30, 2003, by and among IMAGEMAX, INC., a Pennsylvania
corporation, and IMAGEMAX OF DELAWARE, INC., a Delaware corporation (together,
the "Borrowers"); the Lenders, as defined in, and who are or may become a party
to the Credit Agreement (as defined below); and COMMERCE BANK, N.A., as Agent
for the Lenders.
Background
Borrowers, Lenders and Agent are parties to that certain Forbearance
Agreement dated as of August 18, 2003 (the "Initial Forbearance Agreement" and
as amended by this First Amendment, collectively, the "Forbearance Agreement"),
entered into in connection with that certain Amended and Restated Credit
Agreement, dated as of June 13, 2002, as amended by the First Amendment to
Credit Agreement dated as of December 23, 2002, and as further amended by the
Second Amendment to Credit Agreement dated as of April 11, 2003 (the "Credit
Agreement"), pursuant to which the Lenders agreed to extend certain credit
facilities to the Borrowers on the terms and conditions set forth therein and in
the other Loan Documents (as defined in the Credit Agreement). Unless otherwise
defined or redefined herein, each initially capitalized term used herein without
definition shall have the meaning ascribed thereto in the Credit Agreement and
the Initial Forbearance Agreement.
Lenders and Agent are willing to continue to forbear the exercise of
their rights under the Credit Agreement and the other Loan Documents and to
extend the Forbearance Period in consideration of the acknowledgements of
Borrowers and the terms, conditions and provision hereinafter set forth.
Except as expressly provided herein, each term, condition and provision
set forth in the Credit Agreement and in each other Loan Document, as the same
may have been modified or amended by the Initial Forbearance Agreement, are
intended to be ratified and confirmed herein in full.
NOW, THEREFORE, in consideration of the mutual covenants and premises
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby mutually acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Confirmation of Background. Each Borrower hereby ratifies, confirms
and acknowledges that the statements contained in the foregoing Background are
true and complete and that the Credit Agreement and each other Loan Document, as
the same may have been modified or amended by the Initial Forbearance Agreement,
are valid, binding and in full force and effect as of the date hereof and fully
enforceable against such Borrower in accordance with the respective terms
thereof. Each Borrower further acknowledges and agrees that nothing contained in
the Initial Forbearance Agreement, as amended by this First Amendment, shall be
deemed to impair, reduce or release in any manner whatsoever any of the
obligations of either Borrower under any Loan Document.
2. General Acknowledgements. Each Borrower hereby acknowledges and
agrees as follows:
2.1 The Forbearance Defaults described in the Background
Section of the Initial Forbearance Agreement have occurred, and, as a
consequence thereof, Events of Default have occurred under the Credit Agreement
and the Loan Documents. With respect thereto, each Borrower hereby waives any
requirements for any further notice or demand from Agent or Lenders in
connection therewith;
2.2 As a result of the Forbearance Defaults, Agent, on behalf
of Lenders, has the right to: (i) declare that the entire principal of and
interest on the Loans, the Notes, and all other amounts owed to the Lenders and
to the Agent under the Credit Agreement or any other Loan Document (other than
any Hedging Agreement) (such amounts, the "Indebtedness") and all Obligations
under the Credit Agreement and the Loan Documents are immediately due and
payable; and (ii) exercise all of rights and remedies available to Agent and
Lenders under the Credit Agreement and the other Loan Documents;
2.3 Neither the Initial Forbearance Agreement, as amended by
this First Amendment, nor any other agreement entered into in connection
herewith or therewith or pursuant to the terms hereof of thereof (collectively,
the "Forbearance Documents") shall be deemed or construed to be a compromise,
satisfaction, reinstatement, accord and satisfaction, novation or release of the
Credit Agreement or any other Loan Document, any rights or obligations
thereunder, or a waiver by Agent or any Lender of any of their respective rights
under the Credit Agreement or any other Loan Document, or at law or in equity;
2.4 Neither this Initial Forbearance Agreement, as amended by
this First Amendment, nor any other Forbearance Document, nor any action taken
pursuant to this Forbearance Agreement or under any Forbearance Document shall
be deemed to: (i) cure any Default or any other Event of Default which may exist
under the Credit Agreement or any Loan Document; or (ii) be a waiver by Agent or
Lenders of the Forbearance Defaults or any other Event of Default under the
Credit Agreement or any Loan Document or of any rights or remedies in connection
therewith or with respect thereto. Each party hereto intends that the
obligations of Borrowers with respect to the Credit Agreement and each Loan
Document are, and shall remain, in full force and effect; and
2.5 Except as expressly set forth herein, Borrowers hereby
ratify, confirm and reaffirm in all respects, without condition, all terms,
covenants and conditions set forth in the Loan Documents and the Forbearance
Agreement and hereby agree that the Borrowers remain jointly, severally and
unconditionally liable to the Agent and the Lenders in accordance with the terms
thereof, as amended by the Initial Forbearance Agreement, as further amended by
this First Amendment. Each of the Borrowers further hereby ratifies, confirms
and reaffirms that all of the Collateral, liens, security interests and pledges
created pursuant to the Loan Documents, and/or referenced therein, shall
continue unimpaired, in full force and effect, and secure and shall continue to
secure each of the Borrower's Obligations to the Agent and the Lenders. Without
limiting the foregoing, Borrowers each hereby ratify, confirm and reaffirm any
and all warrants of attorney contained in any of the Loan Documents or the
Initial Forbearance Agreement to confess judgment against any or all of the
Borrowers remain in full force and effect and that such warrants of attorney
were knowingly and voluntarily granted by each of the Borrowers.
3. Challenge to Enforcement. Each Borrower acknowledges and agrees that
such Borrower does not have any defense, set-off, counterclaim or challenge
against the payment of any sums owing under the Credit Agreement, any other Loan
Document, of the Initial Forbearance Agreement, or the enforcement of any of the
terms or conditions thereof, hereof or under any other Forbearance Document.
4. Confirmation of Existing Indebtedness. Each Borrower acknowledges
and agrees that as September 29, 2003, the principal outstanding Indebtedness
due under the Revolving Credit Facility is Five Million Four Hundred
Thirty-Eight Thousand Eight Hundred Eight Dollars and Sixty Cents
($5,438.808.60), together with accrued interest thereon in the amount of
Twenty-Eight Thousand Four Hundred Nineteen Dollars and Twenty-One Cents
($28,419.21). There is no Indebtedness outstanding under the Term Loan Facility.
5. Forbearance. The first sentence of Section 5 of the Initial
Forbearance Agreement is hereby amended and restated in its entirety as follows:
Agent and Lenders hereby agree to forbear from exercising the
rights and remedies available to them as a result of the
Forbearance Defaults, during the forbearance term which shall
expire on the earlier of: (i) the occurrence of an Event of
Default (other than the Forbearance Defaults) under any Loan
Document; (ii) the occurrence of a Default hereunder; or (iii)
October 31, 2003 (the "Forbearance Period").
6. Forbearance Agreements and Undertakings. In consideration of, and as
a condition precedent to, the agreement of Agent and Lenders to forbear the
exercise of their rights as set forth in Section 5 hereof and to extend the
Forbearance Period from September 30, 2003 to October 31, 2003, and in express
reliance thereon, Borrowers covenant and agree to that in addition to those
items set forth in Section 6 of the Initial Forbearance Agreement:
6.1 Consultant's Report. At Borrower sole cost and expense,
Borrowers shall cause Penn ▇▇▇▇▇▇ Financial Group, its independent consultant,
to prepare a written report addressed to each of the Borrowers and the Agent to
include (i) a full set of financial projections (including, but not limited to,
anticipated accounts receivable, cash receipts, accounts payable, and cash
payments) for the business on a monthly basis for the nine (9) month period
commencing October 1, 2003, (ii) a forecast on a monthly basis of Borrowers cash
flow applying the Maximum Available Credit as amended and restated herein, and
(iii) an analysis by location of Borrower's business of the profitability of the
operations in respect of each such location, each together with a full
descriptions of the underlying assumptions, and also together with such other
information as the Agent may request, and to deliver such written report to the
Agent on or before October 17, 2003;
6.2 Collateral Audit. Borrowers shall fully and timely
cooperate with Agent's representatives in the conduct of a financial and
collateral audit of the Borrowers so that the same may be concluded and
delivered to the Agent on or before October 25, 2003, and to pay upon Agent's
demand therefore all of Lenders' Costs incurred in connection therewith;
6.3 Letters of Intent. Upon the execution thereof, Borrowers
shall promptly deliver to Agent a true, correct and complete copy of any
executed Letters of Intent in respect of the sale of the Borrowers' business,
whether or not binding, and thereafter keep Agent advised in writing, no less
frequently than once every fifteen (15) days of the progress made towards
consummating the transactions contemplated thereby and to deliver to Agent
copies of any and all documents, instruments and agreements generated and
delivered by the parties thereto in order to effectuate the transactions
contemplated thereby;
6.4 Forbearance Fee. Borrowers shall pay to Agent for the
ratable benefit of the Lenders any accrued and unpaid portion of the Forbearance
Fee contemplated by Section 6.2 of the Initial Forbearance Agreement; and a
supplemental forbearance fee in the amount of Twenty-Five Thousand ($25,000)
Dollars (the "Supplemental Forbearance Fee"), payable on the earlier of: (i)
December 31, 2003; or (ii) the payment of the Indebtedness upon the closing of
the sale of the business of the Borrowers;
6.5 Lenders' Costs. Pay to Agent, on the date hereof and as a
condition precedent to the agreement of the Agent and the Lenders to extend the
Forbearance Period and to otherwise perform hereunder, all accrued an unpaid
Lenders' Costs incurred in connection with the Credit Agreement, and of the
other Loan Documents, the Initial Forbearance Agreement and this First
Amendment, including but not limited to: (i) reasonable counsel fees incurred by
Agent and Lenders in connection with the negotiation and documentation of each
of the foregoing and all agreements, documents, and instruments executed and
delivered in connection therewith or herewith.
7. Amendment to Credit Agreement.
7.1 Maximum Available Credit. Paragraph 2.1.4 of the Credit
Agreement, as amended and restated in the First Amendment to Amended and
Restated Credit Agreement and again amended and restated in the Second Amended
and Restated Credit Agreement is hereby again amended and restated in its
entirety as follows:
2.1.4 Maximum Available Credit. The outstanding principal
balance of the Revolving Credit Facility shall not exceed, at any time,
the lesser of: (i) Five Million Four Hundred Thirty-Eight Thousand
Eight Hundred Eight Dollars and Sixty Cents ($5,438,808.60); or (ii)
the sum of (a) Ninety (90%) Percent of Borrowers' Insured Eligible
Accounts Receivable; (b) Eighty (80%) Percent of Borrowers' Eligible
Accounts Receivable, exclusive of Insured Eligible Accounts Receivable
(or such lesser percentage as the Agent in its sole and absolute
discretion (exercised in good faith in its reasonable judgment), may
determine) less an amount equal to the aggregate amount of trade
payables of any of the Borrowers due to Minolta Corporation and Canon
USA, Inc., and any of their respective Affiliates, and (c) Fifty (50%)
Percent of Borrower's uninsured accounts receivable, but in the
aggregate not in excess of Five Hundred Thousand ($500,000) Dollars,
which are in excess of ninety (90) days from the date of the billing
thereof, but in all other respects comport to the definition of
Eligible Accounts Receivables of the Borrower, all determined in
accordance with the last prevailing Borrowing Base Certificate
delivered to Agent Bank in the form of Schedule 2.1.4 of the Amended
and Restated Credit Agreement (the "Maximum Available Revolving
Credit"). Borrowers jointly and severally agree to immediately repay,
without notice or demand, any principal balance of the Revolving Credit
Facility in excess of the Maximum Available Revolving Credit. Unless
Agent or the Lenders shall request more frequently, Borrowers shall
submit to the Agent no less frequently than once a month, a Borrowing
Base Certificate.
8. Cross Default. Notwithstanding anything to the contrary contained
herein or in any other Forbearance Document, the failure of Borrowers to fully
perform hereunder or under any other Forbearance Document, or a breach of a
representation and warranty hereunder or under any other Forbearance Document
shall constitute an Event of Default under the Credit Agreement and each other
Loan Document, and, following the occurrence of any such Event of Default, Agent
and Lenders may, at their option and without further notice to Borrowers,
exercise any and all rights available to Agent and Lenders hereunder, under any
other Forbearance Document, under the Credit Agreement, under any other Loan
Document, at law, in equity or otherwise.
9. Additional Documents and Future Actions. Borrowers will, at their
sole cost, take such actions and provide Agent from time to time with such
agreements, instruments, documents or information as Agent may, in Agent's
discretion, deem necessary or advisable to perfect, protect, maintain or enforce
the security interests in the Collateral or to carry out the terms of the Credit
Agreement, the other Loan Documents, the Initial Forbearance Agreement, this
First Amendment, and the other Forbearance Documents. Borrowers hereby authorize
and appoint Agents as Borrowers' attorney-in-fact, with full power of
substitution, to take such actions as Agent may deem advisable to maintain and
protect a continuously perfected security interest of Lenders in the Collateral,
and to execute on Borrowers' behalf such other documents and notices as Agent
may deem advisable to protect the Collateral and the interests therein and the
rights thereunder of Agent and Lenders. Such power being coupled with an
interest is irrevocable.
10. Representations and Warranties. In consideration of the forbearance
extended herein by Agent and Lenders, each Borrower hereby represents and
warrants, which representations and warranties shall survive until all
Obligations of the Borrowers to Agent and Lenders are paid, performed and
satisfied in full, as follows:
10.1 Except as disclosed on Schedule 10.1 hereof, all
representations and warranties of each Borrower set forth in the Credit
Agreement, each other Loan Document and the Initial Forbearance Agreement are
true and complete as of the date hereof, except as such representations and
warranties may have been affected by the Forbearance Defaults;
10.2 Except as disclosed on Schedule 10.1 hereof with respect
to the representations and warranties of the Borrowers, no condition or event
exists or has occurred which would constitute an Event of Default under the Loan
Documents (or would, upon the giving of notice or the passage of time, or both
constitute an event of default) other than the Forbearance Defaults;
10.3 The execution and delivery of this First Amendment and
each of the other Forbearance Documents by each Borrower and all documents and
agreements to be executed and delivered in connection herewith or therewith: (i)
have been duly authorized by all requisite corporate action by such Borrower;
(ii) will not conflict with or result in the breach of or constitute a default
(upon the passage of time, delivery of notice or both) under such Borrower's
certificate or articles of incorporation, by-laws, any applicable statute, law,
rule, regulation or ordinance or any indenture, mortgage, loan or other document
or agreement to which such Borrower is a party or by which it or its property is
bound or affected; and (iii) will not result in the creation or imposition of
any lien, charge or encumbrance of any nature whatsoever upon any of the
property or assets of such Borrower, except liens in favor of Agent for the
ratable benefit of Lenders; and
10.4 Upon the execution and delivery of this First Amendment
and the other Forbearance Documents, this First Amendment and each other
Forbearance Document shall be the legally binding obligations of such Borrower
enforceable against such Borrower in accordance with the respective provisions
hereof and thereof, except to the extent enforceability is limited by bankruptcy
and other similar laws affecting creditor's rights generally.
11. Certain Fees, Costs and Expenses. In addition to the payment of the
Supplemental Fee, Borrowers will pay all of expenses of Agent and Lenders in
connection with the preparation, negotiation, documentation and closing of this
First Amendment and each other Forbearance Document, and the consummation of the
transactions contemplated hereunder, including, without limitation, fees,
disbursements, expenses, appraisal costs and fees and expenses of counsel
retained by Bank and all fees related to filings, recording of documents and
searches, whether or not the transactions contemplated hereunder are
consummated. Nothing contained herein shall limit in any manner whatsoever the
right of Agent and Lenders to reimbursement under any of the Forbearance
Documents.
12. Defaults. Occurrence of any one or more of the following shall
constitute a default hereunder and under each of the Forbearance Documents:
12.1 The occurrence of an Event of Default or Default (as
defined in the Credit Agreement) (other than the Forbearance Defaults) under the
Credit Agreement or any other Loan Document, hereunder or under any other
Forbearance Document, or any event which, with the giving of notice or passage
of time or both, would constitute a Default hereunder, or an Event of Default
thereunder;
12.2 The failure of Borrowers to comply with the terms hereof
or under any of the other Forbearance Documents; or
12.3 Subject to the modifications thereof as set forth in
Schedule 10.1 hereof, any representation or warranty of either Borrower in the
Credit Agreement, any other Loan Documents, herein, or any other Forbearance
Document, is untrue in any material respect or any statement, certificate or
data furnished by any Borrower pursuant hereto is untrue in any material respect
as of the date as on which such representation, warranty, statement, certificate
or data is stated or certified.
13. Remedies. At the option of Agent, upon the expiration or earlier
termination of the Forbearance Period, and without further notice or demand,
which notice and demand is expressly waived by each Borrower: (i) the entire
outstanding Obligations shall be immediately due and payable; and/or (ii) Agent
and Lenders may (a) terminate any obligation to forbear hereunder; and (b)
exercise each and every right and remedy hereunder, under any other Forbearance
Document, under any Loan Document, at law, in equity or otherwise.
14. Indemnification. Each Borrower expressly jointly and severally
agrees defend, indemnify and hold harmless the Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any losses, penalties, fines, liabilities,
settlements, damages, costs and expenses, suffered by any such Person in
connection with any claim, investigation, litigation or other proceeding
(whether or not the Agent or any Lender is a party thereto) and the prosecution
and defense thereof, including without limitation reasonable attorney's and
consultant's fees, except to the extent that any of the foregoing directly
result from the gross negligence or willful misconduct of the party seeking
indemnification therefor, arising out of or in any way connected with: (i) the
Credit Agreement or any of the other Loan Documents, the Forbearance Agreement
or any of the other Forbearance Documents, or the Loans; (iii) the enforcement,
protection or preservation of the rights of Agent or either Lender under the
Loan Documents, the Forbearance Documents, or any other document or agreement
executed in connection with the Obligations, or any of them; (iii) the validity,
perfection or enforceability of the Loan Documents or the Forbearance Documents;
and (iv) any action or inaction by Agent or any Lender in connection with any of
the foregoing.
15. Waivers. In connection with any proceedings hereunder, under any
other Forbearance Document, the Credit Agreement or any other Loan Document, or
otherwise in connection with any of the Indebtedness or Obligations, including,
without limitation, any action by Agent and Lenders in replevin, foreclosure or
other court process or in connection with any other action related to the
Collateral, each Borrower waives: (i) all errors, defects and imperfections in
such proceedings; (ii) all benefits under any present or future laws exempting
any property, real or personal, or any part of any proceeds thereof from
attachment, levy or sale under execution, or providing for any stay of execution
to be issued on any judgment recovered in connection with the Obligations or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption; (iii) all rights to inquisition on any real
estate, which real estate may be levied upon pursuant to a judgment obtained in
connection with any of the Obligations and sold upon any writ of execution
issued thereon in whole or in part, in any order desired by Agent; (iv)
presentment for payment, demand, notice of demand, notice of nonpayment, protest
and notice of protest of any of the Obligations; (v) any requirement for bonds,
security or sureties required by statute, court rule or otherwise; (vi) any
demand for possession of any Collateral prior to commencement of any suit; (vii)
any right to require or participate in the marshaling of such Borrower's assets;
(viii) any notice or demand from Agent or Lenders with respect to such
Borrower's obligations under the Loan Documents; (ix) all benefits under present
and future laws permitting termination of such Borrower's Obligations by
delivery of notice or otherwise, other than by performance of all such
Borrower's obligations hereunder and under the Loan Documents and the other
Forbearance Documents; and (x) all rights to claim or recover attorney's fees
and costs in the event that such Borrower is successful in any action to remove,
suspend or prevent the enforcement of a judgment entered by confession.
16. Notices. Any notice or other communication by one party hereto to
the other shall be given in the manner set forth in Section 13.1 of the Credit
Agreement.
17. CONFESSION OF JUDGMENT.
17.1 THE FOLLOWING SETS FORTH A WARRANT OF ATTORNEY TO CONFESS
JUDGMENT AGAINST EACH BORROWER. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS
JUDGMENT AGAINST EACH BORROWER, SUCH BORROWER, FOLLOWING CONSULTATION WITH (OR
DECISION NOT TO CONSULT WITH) SEPARATE COUNSEL FOR SUCH BORROWER, AND WITH
KNOWLEDGE OF THE LEGAL EFFECT HEREOF, HEREBY WAIVES ANY AND ALL RIGHTS SUCH
BORROWER HAS, OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY TO BE HEARD UNDER
THE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF
PENNSYLVANIA. EACH BORROWER SPECIFICALLY ACKNOWLEDGES THAT AGENT AND LENDERS
HAVE RELIED ON THIS WARRANT OF ATTORNEY IN GRANTING THE FINANCIAL ACCOMMODATIONS
DESCRIBED HEREIN AND IN CONTINUING TO MAKE AVAILABLE THE FINANCIAL
ACCOMMODATIONS DESCRIBED IN THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS.
17.2 EACH BORROWER IRREVOCABLY AUTHORIZES AND EMPOWERS ANY
ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR SUCH BORROWER IN ANY AND ALL
ACTIONS, AND UPON THE OCCURRENCE OF A DEFAULT OR AN EVENT OF DEFAULT TO: (i)
ENTER JUDGMENT AGAINST SUCH BORROWER FOR THE PRINCIPAL SUM DUE UNDER THE INITIAL
FORBEARANCE AGREEMENT AS AMENDED BY THIS FIRST AMENDMENT, UNDER ANY OF THE OTHER
FORBEARANCE DOCUMENTS, THE CREDIT AGREEMENT OR UNDER ANY OF THE OTHER LOAN
DOCUMENTS; OR (ii) SIGN FOR SUCH BORROWER AN AGREEMENT FOR ENTERING IN ANY
COMPETENT COURT AN AMICABLE ACTION OR ACTIONS TO CONFESS JUDGMENT AGAINST SUCH
BORROWER FOR ALL OR ANY PART OF THE INDEBTEDNESS; AND IN EITHER CASE FOR
INTEREST AND COSTS TOGETHER WITH A REASONABLE COLLECTION FEE IN AN AMOUNT NOT IN
EXCESS OF TEN (10%) PERCENT OF THE INDEBTEDNESS OUTSTANDING. EACH BORROWER
FURTHER IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD
TO APPEAR FOR AND ENTER JUDGMENT AGAINST SUCH BORROWER AND IN FAVOR OF AGENT AND
LENDERS OR ANY HOLDER OF ANY OF THE NOTES WITH RESPECT TO AN AMICABLE ACTION OF
REPLEVIN OR ANY OTHER ACTION WITH RESPECT TO THE COLLATERAL GRANTED TO AGENT FOR
THE RATABLE BENEFIT OF THE LENDERS PURSUANT TO THE LOAN DOCUMENTS AND THE
FORBEARANCE DOCUMENTS. EACH BORROWER WAIVES ALL RELIEF FROM ANY AND ALL
APPRAISEMENT OR EXEMPTION LAWS NOW IN FORCE OR HEREAFTER ENACTED. IF A COPY OF
THIS FORBEARANCE AGREEMENT, VERIFIED BY AFFIDAVIT OF AN OFFICER OF THE AGENT,
ANY LENDER OR ANY OTHER HOLDER OF ANY OF THE NOTES, SHALL BE FILED IN ANY
PROCEEDING OR ACTION WHEREIN JUDGMENT IS TO BE CONFESSED, IT SHALL NOT BE
NECESSARY TO FILE THE ORIGINAL HEREOF AND SUCH VERIFIED COPY SHALL BE SUFFICIENT
WARRANT FOR ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR AND CONFESS
JUDGMENT AGAINST SUCH BORROWER AS PROVIDED HEREIN. JUDGMENT MAY BE CONFESSED
FROM TIME TO TIME UNDER THE AFORESAID POWERS WHICH SHALL NOT BE EXHAUSTED BY ONE
EXERCISE THEREOF.
18. WAIVER OF RIGHT TO TRIAL BY JURY. EACH BORROWER, AGENT AND LENDERS
WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(i) ARISING UNDER THE INITIAL FORBEARANCE AGREEMENT, AS AMENDED BY THIS FIRST
AMENDMENT, ANY OF THE OTHER FORBEARANCE DOCUMENTS, OR ANY OTHER DOCUMENT OR
INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (ii) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF ANY BORROWER
WITH RESPECT TO THIS AGREEMENT, THE FORBEARANCE DOCUMENTS OR ANY OTHER DOCUMENT
OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. EACH BORROWER, AGENT AND LENDERS AGREE AND
CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH BORROWER, AGENT AND LENDERS TO THE WAIVER OF
THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY. EACH BORROWER ACKNOWLEDGES THAT SUCH
BORROWER: (a) HAS HAD AN OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS
SECTION; (b) FULLY UNDERSTANDS THE TERMS, CONTENT AND EFFECT HEREOF; AND (c)
VOLUNTARILY AND KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.
19. Miscellaneous. The provisions of Article 13 of the Credit Agreement
are hereby incorporated herein and made a part hereof as if set forth herein in
full. To the extent of any inconsistency between the terms and conditions of the
Forbearance Agreement and the terms and conditions of the Loan Documents, the
terms and conditions of the Forbearance Documents shall prevail.
IN WITNESS WHEREOF, intending to be legally bound hereby, Borrowers,
Agent and Lenders have executed this Forbearance Agreement as an instrument
under seal as of the day and year first above written.
IMAGEMAX, INC.
IMAGEMAX OF DELAWARE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, CFO of each Borrower
COMMERCE BANK, N.A.
as Agent and Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇, Senior Vice President
FIRSTRUST BANK, as Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇, Vice President
Schedule 10.1 to Forbearance Agreement
Exceptions to the Representations and
Warranties Set Forth in the Credit Agreement
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1. With respect to Section and Schedule 6.1.2 of the Credit Agreement
(Subsidiaries and Capitalization), there are expected to be 7,505,087 shares of
common stock outstanding at September 30, 2003; 213,986 shares were returned to
the Company's treasury in July 2003 in connection with the settlement of the
Digiscribe litigation involving former employees and a former director (which
litigation and settlement were previously discussed with the Bank).
2. With respect to Section and Schedule 6.1.12 of the Credit Agreement
(Material Contracts): (i) the ▇▇▇▇▇▇▇▇▇▇▇ lease was renewed until December 9,
2003; (ii) the Pugnale lease expired on December 9, 2002 and was not renewed;
(iii) the Semasko lease expired on December 9, 2002 and was not renewed; (iv)
the ▇▇▇▇▇▇▇▇▇▇ lease terminated on February 28, 2003 and the facility was moved
to Canton, MA; the new lease with Canton Realty Associates expires on February
28, 2006; and (v) the Schedule is revised to include all contracts identified as
Exhibits to the Borrower's 2002 Annual Report on Form 10-K filed April 15, 2003.
3. With respect to Section and Schedule 6.1.20 (Debt and Guarantee
Obligations), Borrower has capital lease obligations totaling approximately
$319,000 as of the date hereof. Since June 30, 2003, the Company leased a new
truck/van in the ordinary course of business.
4. With respect to Section and Schedule 6.1.21 (Litigation), there is
no longer any pending litigation; both matters listed on Schedule 6.1.21 have
been settled.
5. Section 6.1.16 (No Material Adverse Change), as it refers to
December 31, 2001, is no longer applicable.