FIFTH AMENDMENT TO FORBEARANCE AGREEMENT
THIS FIFTH AMENDMENT TO FORBEARANCE AGREEMENT (the
"Agreement") is made this 31st day of December, 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:
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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, and a Fourth
Amendment dated August 27, 2007, 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. Supplemental Pay-down. It is agreed that the Bank
is to receive a $500,000 pay down from Borrower, by or on behalf
of Piedmont Metal Products, Inc., to be applied to principal
outstanding under the loan documents. By its signature below,
the Bank acknowledges that the $500,000 payment called for by
this paragraph has been paid.
3. Release of Piedmont Metal Products. The Bank hereby
releases and discharges Piedmont Metal Products, Inc. from any
financial obligation hereunder and under the Loan Documents.
The Bank agrees to execute such releases and further assurances
as may be requested by Piedmont Metal Products, Inc. to document
this release.
4. Extension of the Forbearance Agreement. The term of
the Bank's forbearance is extended to August 1, 2008, 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 January 4, 2008. 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. If Williams Industries remits
a further five hundred thousand dollars ($500,000) to the Bank
by August 1, 2008, and subject to an appraisal of the Borrowers'
real property acceptable to the Bank in an amount not less than
300% of the remaining principal owed, the Bank agrees to modify
the remaining obligations as follows:
(a) The maturity of the Obligations will be extended to August
1, 2011;
(b) The remaining Borrowers will make monthly payments of
interest;
(c) The remaining Borrowers will make principal payments of
$100,000 by the last day of October, April, and July of each
year until maturity;
(d) The remaining Borrowers will post a CD of $100,000 as
additional collateral for the Obligations.
5. 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.
6. 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. The Bank consents to the Borrowers granting a
mortgage, deed of trust and/or security interest to Guarantor
and WFLP in any or all of the Borrowers' properties, subordinate
in all respects to the Bank's interest.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. Time of the Essence. Time is of the essence under
this Agreement. Closing must occur by no later than 2:00 P.M.
on January 4, 2008, and post-Closing obligations must thereafter
timely occur.
16. 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.
17 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]