Exhibit 4.1
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A-OK Controls Engineering, Inc.
July 15, 2003
VIA FACSIMILE AND OVERNIGHT MAIL
A-OK Controls Engineering, Inc.
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▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
Re: Loans by LaSalle Business Credit, LLC
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Dear ▇▇. ▇▇▇▇▇▇:
Reference is made to that certain 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 A-OK Controls
Engineering, Inc. ("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 and extend the Original Term to August 15,
2003. In the event Borrower and each guarantor set forth herein executes this
letter and returns a copy of same to Lender by facsimile transmission on or
before July 15, 2003, and an original of same to Lender by overnight courier for
delivery on or before July 17, 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
(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 the definition of "Loan Commitment" set forth in
Section 1 of the Agreement is hereby amended and restated, effective as of
July 16, 2003, to read in its entirety as follows:
"Loan Commitment" shall mean Four Hundred Fifty Thousand and No/100
Dollars ($450,000.00); and
(e) That Borrower agrees that Section 12(a) of the Agreement is hereby amended
by deleting the date "July 15, 2003" and by inserting the phrase "August 15,
2003 or, if earlier, the date upon which Borrower repays all Liabilities"
in lieu thereof; and
(f) That if Borrower shall fail to repay all Liabilities, or if Nematron shall
fail to repay all "Liabilities" (as such term is defined in the Nematron
Loan Agreement), in each case on or before July 31, 2003, Borrower shall
pay Lender a fee (which fee shall be in addition to any fee payable by
Nematron) in the amount of Five Thousand and No/100 Dollars ($5,000.00) as
an accommodation fee, which fee shall be payable, fully earned and
nonrefundable on July 31, 2003.
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.
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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 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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, First Vice President
Accepted and agreed to this 15th day of July, 2003.
A-OK CONTROLS ENGINEERING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its Chairman of the Board of Directors
Consented and agreed to by the following guarantors of the obligations of A-OK
Controls Engineering, Inc. to LaSalle Business Credit, LLC
NEMATRON CORPORATION OPTIMATION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its President Its Chairman of the Board of Directors
Date: July 15, 2003 Date: July 15, 2003
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