FOURTH AMENDMENT TO FORBEARANCE AGREEMENT
THIS FOURTH AMENDMENT TO FORBEARANCE AGREEMENT (the
"Agreement") is made this 27th day of August, 2007, by and among
UNITED BANK, a Virginia banking institution (the "Bank" or "Lender"),
and WILLIAMS INDUSTRIES, INC., a Virginia corporation with offices
at 8624 J.D. Reading Drive, Manassas, VA 20109; INSURANCE RISK
MANAGEMENT GROUP, INC., a Virginia corporation; PIEDMONT METAL
PRODUCTS, INC., a Virginia corporation, WILLIAMS BRIDGE COMPANY.,
a Virginia corporation, WII REALTY MANAGEMENT, INC., a Virginia
corporation, WILLIAMS STEEL ERECTION COMPANY, INC., a Virginia
corporation, GREENWAY CORPORATION, a Maryland corporation,
WILLIAMS EQUIPMENT CORPORATION, a District of Columbia corporation
(collectively, "Original Borrower" or the "Borrower"), WILLIAMS
FAMILY LIMITED PARTNERSHIP, a Virginia limited partnership ("WFLP")
and FRANK E. WILLIAMS, JR., individually.
RECITALS:
A. As more fully provided in the underlying loan documents,
on or about April 16, 1999, the Bank made a revolving loan to
Original Borrower in the original principal amount of $2,500,000,
evidenced by Revolving Credit Note No. 3 of even date therewith
bearing initial interest at prime plus 1.25%, as thereafter amended
and restated, from time to time (the Revolving Loan), secured by,
among other things, business assets pledged under a Revolving Credit
and Term Loan Agreement and a related Security Agreement of even date,
as thereafter amended, from time to time, and is also secured by land
in Manassas and Bedford, Virginia pledged to the Bank under deeds of
trust on the respective properties (the "Manassas Deed of Trust" and
the "Bedford Deed of Trust", respectively). This loan is further
secured by common stock of S.I.P. Inc. of Delaware, a Delaware
corporation, under a Pledge Agreement dated August 31, 2000,. The
sum of $2,529,016.70 was due on the Revolving Loan at May 12, 2005,
when the Bank made demand for payment, plus legal fees and costs,
which are additional. Interest and other fees and charges continue
to accrue thereafter, and as of the date hereof. Borrower
acknowledges that this loan is matured and is now fully due and
owing, without defense, offset or counterclaim.
B. As more fully provided in the underlying loan documents, on
or about April 16, 1999, the Bank made a draw term loan to Original
Borrower, due April 1, 2014, evidenced by Term Note No. 1 in the
amount of $2,260,750 of even date, initially bearing interest at 8.7%,
as amended, from time to time, secured by, among other things, the same
collateral as secures the Revolving Loan. The sum of $1,848,996.42,833
was due and owing on this loan (the "Term Loan No. 1") as of May 12,
2005, when demand for payment was made by the Bank ,plus legal fees and
costs, which are additional. Interest and other charges continue to
accrue thereafter and as of the date hereof. Borrower acknowledges
that this loan has now been accelerated by the Bank and is now fully
due and owing, without defense, offset or counterclaim.
C. As more fully provided in the underlying loan documents, on
or about April 16, 1999, the Bank made a second term loan to Original
Borrower evidenced by a promissory note in the original principal amount
of $639,250, bearing interest at 8.7%, as amended, from time to time,
which loan (Term Loan No. 2), due April 1, 2009, secured by, among other
things, the same collateral as secures the Revolving Loan. The sum of
$314,221.29 was due on this loan as of May 12, 2005, when notice of
default and demand for payment of this loan was made by the Bank, plus
legal fees and costs, which are additional. Interest and other charges
continued to accrue thereafter and as of the date thereof. Borrower
acknowledges that this loan was accelerated by the Bank and was fully
due and owing, without defense, offset or counterclaim. This loan has
since been paid.
D As more fully provided in the underlying loan documents, on
or about August 31, 2000, the Bank made a further term loan to Original
Borrower in the original principal amount of $250,000, evidenced by Term
Note No. 6 of even date, bearing interest at prime plus 1%, due
September 1, 2005, (Term Loan No. 6), as amended, from time to time,
which loan is secured by, among other things, the same collateral which
secures the Revolving Loan. The sum of $35,369.14 was due on this loan
as of May 12, 2005, when notice of default and demand for payment was
made by the Bank, plus legal fees and costs, which are additional.
Interest and other charges continued to accrue thereafter. Borrower
acknowledges that this loan was accelerated by the Bank and was fully
due and owing, without defense, offset or counterclaim. This loan has
since been paid.
E. As more fully provided in the underlying loan documents, on
or about May 1, 2001, the Bank made a further term loan to Original
Borrower in the original principal amount of $1,000,000, evidenced by a
Term Note No. 7 of even date, bearing interest at prime plus 1%, due May
1, 2006 (Term Loan No. 7), which loan is secured by, among other things,
the same collateral which secures the Revolving Loan. The sum of
$211,111.83 was due on this loan as of May 12, 2005, when notice of
default and demand for payment was made by the Bank, plus legal fees and
costs, which are additional. Interest and other charges continued to
accrue thereafter. Borrower acknowledges that this loan was accelerated
by the Bank and was fully due and owing, without defense, offset or
counterclaim. This loan has since been paid.
F. On or about April 4, 2002, the Bank made a term loan to
Williams Industries, Inc. evidenced by a promissory note of even date in
the amount of $43,000, bearing interest at 7.5%, due April 4, 2005 (the
Williams Industries Loan), secured by equipment pledged under a
Commercial Security Agreement dated April 4, 2002. The sum of $3,060.29
was due on this loan as of May 12, 2005, when the Bank gave notice of
default and demand for payment, plus legal fees and costs, which are
additional. Interest and other charges continued to accrue thereafter.
Borrower acknowledges that this loan matured and was fully due and
owing, without defense, offset or counterclaim. This loan has since
been paid.
G. On or about June 4, 2001, the Bank made a demand loan to
Williams Equipment Corporation (the Williams Equipment Loan), evidenced
by a promissory note of even date in the amount of $34,500, bearing
interest at 8.25%, due on demand and, if no demand is made, on June 4,
2006. The sum of $11,483.75 was due on this loan as of May 12, 2005,
when the Bank gave notice of default and demand for payment, plus legal
fees and costs, which are additional. Interest and other charges
continued to accrue thereafter. Borrower acknowledges that this loan
was accelerated by the Bank and was fully due and owing, without
defense, offset or counterclaim. This loan has since been paid.
H. On or about January 12, 2004, the Bank made a term loan to
Williams Steel Erection Co. evidenced by a promissory note of even date
in the amount of $31,083.86. bearing interest at 5.75%, due January 12,
2008 (the Williams Steel Erection Co. Loan), which loan is secured by a
2000 Ford F-250 pickup truck under a Commercial Security Agreement of
even date. The sum of $24,189.29 was due on this loan as of May 12,
2005, when the Bank gave notice of default and demand for payment, plus
legal fees and costs, which are additional. Interest and other charges
continued to accrue thereafter. Borrower acknowledges that this loan
was accelerated by the Bank and was now fully due and owing, without
defense, offset or counterclaim. This loan has since been paid.
I. On or about June 29, 2000, the Bank made a term loan to
Williams Bridge Company in the original amount of $87,948, bearing
interest at 9.5%, secured by business assets, principally accounts and
equipment, pledged under a Commercial Loan and Security Agreement dated
June 29, 2000, due 29, 2005. The sum of $12,551.49 was due on this
loan as of May 12, 2005, when the Bank gave notice of default and demand
for payment, plus legal fees and costs, which are additional. Interest
and other charges continued to accrue thereafter. Borrower acknowledges
that this loan was accelerated by the Bank and was fully due and owing,
without defense, offset or counterclaim. This loan has since been paid.
J. On or about May 13, 2002, the Bank made a term loan to
Borrower (i.e., to S.I.P. Inc. of Delaware, and the others noted above)
evidenced by a promissory note of even date in the amount of $900,000,
reduced to $765,000 under a Change In Terms Agreement dated August 2,
2002, bearing interest at prime plus .5%, due August 2, 2007 (the SIP
Loan), which loan is secured by business assets pledged under a
Commercial Security Agreement dated May 13, 2002. The sum of
$332,247.05 was due on this Loan as of June 29, 2005, plus legal fees
and costs, which are additional. Interest and other charges continued
to accrue. Borrower, by its signature below, agreed to treat this loan
as having been accelerated by the Bank, and acknowledges that it was
fully due and owing, without defense, offset or counterclaim. This
loan has since been paid.
K. Williams Industries, Inc. and other obligors are further
indebted to the Bank in the sum of $114,185 as of May 19, 2005, pursuant
to the terms of an Application and Agreement For Irrevocable Standby
Letter of Credit No. 2351666-5001 dated March 1, 2004, plus legal fees
and costs, which are additional. Borrower acknowledges that this
obligation was declared due by the Bank and was fully due and owing,
without defense, offset or counterclaim. This loan has since been paid.
L. The various obligations and indebtedness of Borrower,
Original Borrower, Williams Bridge Company, Williams Equipment
Corporation and Williams Steel Erection Company referred to in recitals
A-K above is hereinafter referred to, collectively, as the
"Indebtedness." The Indebtedness, and the other obligations and
covenants and duties of the Borrowers under the associated loan
documents (the "Loan Documents"), are hereinafter referred to,
collectively, as the "Obligations".
M. Borrower, and each party hereto which is an obligor to the
Bank on the Indebtedness or any part thereof, together with Borrower's
principal, Frank Williams, Jr. (the "Guarantor"), and Williams Family
Limited Partnership ("WFLP") requested the Bank to forbear from
exercising its rights under the various loan documents which evidence
the Indebtedness (collectively, the "Loan Documents"). Pursuant to the
same, the parties hereto entered into a Forbearance Agreement dated June
30, 2005, and, subsequently, a First Amendment thereto dated September
29, 2005, and a Second Amendment dated March 30, 2006, and a Third
Amendment dated December 31, 2006, under which the Bank agreed to
forbear from exercising its legal remedies under the Loan Documents,
under and on the terms and conditions thereof.
N. The Borrower, the Guarantor and WFLP have now requested
certain modifications to the Forbearance Agreement, as set forth below,
and the Bank is amenable to the same.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Recitals. The recitals above are acknowledged to be true and
correct.
2. Extension of the Forbearance Agreement. The term of the
Bank's forbearance is extended to December 31, 2007, on condition that,
to the extent the $200,000 deposit under paragraph 3 of the Second
Amendment dated March 30, 2006 has been drawn down prior hereto, such
deposit shall be replenished to $150,000 by August 27, 2007. It is
agreed that the Bank may charge its legal fees related to the
Forbearance against this reserve, which reserve Borrower shall not use
or withdraw, other than for debt service to the Bank.
2. Debt Service. Debt service during the extended term of the
Forbearance Agreement shall continue to be paid monthly, interest only,
as if the Obligations of Borrower to the Bank had not been previously
accelerated. It is acknowledged that all Obligations covered by the
Bank's forbearance were previously accelerated or otherwise matured and
are now fully due and owing, subject to the terms of the Bank's
forbearance hereunder, without defense, offset or counter-claim. It is
further agreed that the Bank's acceptance of interest-only payments
during the extended forbearance period shall not waive the prior
acceleration or extend any maturity of the Obligations.
3. Reaffirmation of Guaranty of Frank E. Williams, Jr. Frank E.
Williams, Jr. ("Guarantor") hereby ratifies, confirms and extends
Amended And Restated Guaranty Agreement dated September 29, 2005, and
further consents to the terms of this Agreement.
4. Representations and Warranties. To induce the Lender to
enter into this Agreement, Borrower, WFLP and the Guarantor re-affirm,
as of the date hereof, all representations and warranties under the
Forbearance Agreement, all being incorporated herein by reference, both
as of the date of the Forbearance Agreement and again as of the date
hereof.
5. No Novation, Waivers or Impairment. The parties hereto agree
that neither this Agreement nor any other document executed in
accordance herewith is intended to be a novation of any of the Loan
Documents or of the Forbearance Agreement or of any obligation under the
Loan Documents or the Forbearance Agreement.
As modified herein, the Forbearance Agreement, the Loan
Documents and all obligations therein continue in full force and effect.
The parties further agree that:
(a) Subject to Lender's duty to forbear under the terms of this
Agreement, and to the prior payment of certain loans as noted above,
nothing herein shall release or waive any of the Original Borrowers'
obligations under any of the Loan Documents or those of WFLP or the
Original Borrower under the Forbearance Agreement, all of which remain
in full force and effect, or impair the validity, perfection or priority
of any security interest or collateral therefore, nor release the
obligations of any guarantee thereof, all of which obligations, security
interests, collateral, duties, rights and guarantees are hereby ratified
and affirmed by the Original Borrower, WFLP and the Guarantor, without
prejudice to their rights herein or therein;
(b) Subject to the Lender's duty to forbear under the terms
of the Forbearance Agreement as modified by this Agreement, and to the
prior payment of certain loans as noted above, nothing herein shall
waive or impair any rights, powers or remedies of the Lender under the
Loan Documents or under the Forbearance Agreement, including, without
limitation, any right or remedy of Lender against the Guarantor under
his Guaranty, as amended by the Amended and Restated Guaranty Agreement
of September 29, 2005 (the "Guaranty");
(c) Nothing herein shall be construed to constitute an
agreement by the Lender or to require the Lender to extend the
Forbearance Period or grant additional forbearance periods, or to
otherwise forbear, except on the terms hereof;
(d) The Lender shall have the right at any time to take any
action at law or in equity with respect to the Loan Documents and/or the
Guaranty provided that such action is not inconsistent with the terms
and conditions of this Agreement and Lender's duty to forbear under the
terms and conditions hereof, including seeking the entry of such court
orders and judgments as the Lender in its sole discretion deems
appropriate to enforce the terms of this Agreement or to protect its
security interests and rights to repayment under the Loan Documents and
the Guaranty.
6. Release of the Lender. In consideration of Lender's entry
into this Agreement, the Borrower, WFLP and the Guarantor hereby
release, remise, acquit and forever discharge the Lender, the Lender's
employees, agents, representatives, consultants, attorneys, fiduciaries,
servants, officers, directors, partners, predecessors, successors and
assigns, subsidiary corporations, parent corporations and related
corporate divisions (all of the foregoing hereinafter called the
"Released Parties") from any and all actions and causes of action,
judgments, executions, suits, debts, claims, demands, liabilities,
obligations, damages and expenses, breaches, rights of setoff,
counterclaims and statutory rights, of any and every character, known or
unknown, direct or indirect, liquidated or unliquidated, contingent or
non-contingent, at law or in equity, of every kind or nature, including
any which may arise in a bankruptcy or insolvency proceeding, whether
heretofore or hereafter arising, for or because of any manner of things
done, omitted or suffered to be done by any of the Released Parties
prior to and including the date of execution hereof, arising from or in
any way directly or indirectly related to this Agreement, the
Forbearance Agreement as originally executed on June 30, 2005, or any of
the Loan Documents or from the performance and payment by Borrower or
WFLP thereunder, or from the Guarantee of Borrowers' obligations to
Lender by the Guarantor, and also from all other claims, rights, demands
or causes of action of any kind, in law or in equity against the Lender,
except for Lenders duties hereunder (all of the foregoing hereinafter
called, collectively, the "Released Matters"). Borrower, WFLP and the
Guarantor acknowledge that the agreements in this Section are intended
to be in full satisfaction of any and all alleged injuries or damages
arising in connection with the Released Matters, whether known or
unknown, at law or in equity, and that this release is a material
inducement to the Lender's entry into this Agreement. Each of the
Borrower, WFLP and the Guarantor further represents and warrants to the
Lender that it has not transferred, assigned or otherwise conveyed, or
purported to transfer, assign or otherwise convey, any right, title or
interest in the Released Matters as to any Person and that the foregoing
constitutes a full and complete release of all Released Matters.
7. No Partnership. Nothing herein shall be construed to make
the Lender, the Borrower, WFLP or the Guarantor the agent, partner, or
joint venturer of the other, and the Borrower, WFLP and the Guarantor
have no relationship with Lender other than that of debtor and creditor.
8. Entire Agreement. This Agreement constitutes the entire
agreement of the parties concerning the subject matter hereof and
supersedes any prior or contemporaneous representations or agreements
not contained herein. In entering into this Agreement, each of
Borrower, WFLP and the Guarantor acknowledges that it is not relying on
any statement, representation, warranty, covenant or agreement of any
kind made by the Lender or by any agent or employee thereof, except for
the agreements of the Lender set forth herein. They further acknowledge
that Lender will only be bound by written instruments, duly executed by
Lender, and that no officer, agent or representative of Lender has
authority to act in any other manner.
9. Construction. The parties acknowledge that all parties and
their counsel have reviewed this Agreement and any rule of construction
to the effect that any ambiguity should be construed against the
drafting party will not be employed in the interpretation of this
Agreement or any amendments hereto. All signatories to this Agreement
acknowledge that it has been negotiated at arms length and in good
faith, and that each has relied upon independent legal counsel of their
choice.
10. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding on the parties and their successors and
assigns; provided, however, that this Agreement may not be assigned by
any of the Borrowers without the prior written consent of the Lender.
11. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties on different counterparts, each
of which shall constitute an original and all of which together shall
constitute one and the same agreement.
12. Time of the Essence. Time is of the essence under this
Agreement. Closing must occur by no later than 2:00 P.M. on August 27,
2007, and post-Closing obligations must thereafter timely occur.
13. No waivers. By entering into this Agreement it is agreed
that Lender does not waiver or limit any right it may have against
Original Borrower, WFLP or the Guarantor, except as may be expressly
stated herein, all rights and remedies of Lender being reserved.
14. Signatures. Faxed signatures shall be accepted for all
purposes, with originals to be provided within three (3) business days
thereafter. This Agreement may be signed in counterparts, each of which
so executed shall be deemed an original and all of which, taken
together, shall constitute one and the same instrument. All signators
represent that their signatures are given with full approval, after, for
non-individual signators, all required corporate and partnership action,
and that their entry into this Agreement does not violate any contract,
agreement or law to which they are subject or to which they are a party
nor require the further consent of any person not a party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as a
sealed instrument as of the day and year set forth above.
[SIGNATURES OMITTED FROM THIS COPY]