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EXHIBIT 10.44
THIRD AMENDMENT TO LOAN AGREEMENT
BETWEEN
STANDARD FEDERAL BANK
AND
GALION HOLDING COMPANY,
GALION SOLID WASTE EQUIPMENT, INC.,
GALION DUMP BODIES, INC.
AND M.E.G. EQUIPMENT SALES OF FLORIDA, INC.
THIS AMENDMENT AGREEMENT made and delivered this 22nd day of June, 1995,
by and between Galion Holding Company, a Michigan corporation, Galion Solid
Waste Equipment, Inc., a Michigan corporation, and Galion Dump Bodies, Inc., a
Michigan corporation (collectively, "Borrower"), and M.E.G. Equipment Sales of
Florida, Inc. ("M.E.G."), a Florida corporation, whose address/principal office
is 6200 Elmridge, Sterling Heights, Michigan 48310, McClain Industries, Inc., a
Michigan corporation, whose address/principal office is 6200 Elmridge, Sterling
Heights, Michigan 48310 ("Guarantor"), and Standard Federal Bank, a federal
savings bank ("Standard Federal"), whose address is 2600 West Big Beaver Road,
Troy, Michigan 48084.
RECITALS:
A. On September 15, 1994, the Borrower and Standard Federal
entered into a Loan Agreement, as amended by a First Amendment to Loan
Agreement, dated February 16, 1995, and by a Second Amendment to Loan
Agreement, dated May 5, 1995 (the "Loan Agreement"), pursuant to which the
Borrower opened a revolving line of credit facility with Standard Federal, Loan
No. 0250012691, with a credit limit of up to $9,000,000.00 (the "Line of
Credit"), as evidenced by an Amended and Restated Promissory Note (Line of
Credit), dated May 5, 1995, in the principal amount of $9,000,000.00 (the
"Note"), secured by a Security Agreement, dated September 15, 1994 (the
"Security Agreement"), and two Open-End Commercial Mortgages and Assignments of
Lease and Rentals, dated June 29, 1993, as amended September 15, 1994, February
6, 1995, February 16, 1995 and May 5, 1995 (the "Mortgages") and supported by a
Guaranty, dated May 5, 1995, executed by the Guarantor (the "Guaranty").
B. The Borrower has requested an increase in the credit limit of
the Line of Credit and a change in the advance formula thereunder, as herein
provided, and Standard Federal is willing to supply such financing subject to
the terms and conditions set forth in this Amendment Agreement and the
Guarantor is agreeable thereto.
NOW, THEREFORE, in reliance upon the representations herein provided and
in consideration of the premises and the mutual prom-
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ises herein contained, the Borrower and Standard Federal hereby agree as
follows:
1. The Borrower is a Michigan corporation in good standing. All
corporate resolutions heretofore delivered to Standard Federal relative to
borrowing money and granting security interests remain in full force and
effect. Borrower has duly authorized and validly executed and delivered this
Amendment Agreement and such Amendment Agreement and the Loan Agreement (as
hereby amended) are valid and enforceable according to their terms and do not
conflict with or violate Borrower's corporate charter or by-laws or any
agreement or covenants to which Borrower is a party.
2. The Security Agreement is valid and enforceable in accordance
with its terms. Standard Federal's security interest in the collateral
described in the Security Agreement is valid and perfected and Borrower is
aware of no claims or interests in such collateral prior or paramount to
Standard Federal's.
3. The Mortgages are valid and enforceable in accordance with
their terms. Standard Federal holds valid first mortgage interests in the real
property described in the Mortgages which are valid and perfected and Borrower
is aware of no claims or interests in such property prior or paramount to
Standard Federal's.
4. The Guaranty is valid and enforceable in accordance with its
terms and the Guarantor presently has no valid and existing defense to
liability thereunder.
5. Section 1.1 of the Loan Agreement is hereby deleted in its
entirety and replaced by the following new Section 1.1:
1.1 Standard Federal hereby extends to the Borrower a
revolving line of credit (the "Line of Credit") which shall not exceed
at any one time outstanding the Credit Limit as hereafter defined.
The term "Credit Limit" shall mean the lesser of: (a) Ten Million and
00/100 Dollars ($10,000,000.00), or (b) an amount equal to the sum of:
(i) an amount equal to 80% of Eligible Accounts Receivable, plus (ii)
an amount equal to the lesser of: (1) Five Million and 00/100 Dollars
($5,000,000.00), or (2) an amount equal to 50% of Qualified Inventory.
As used herein, the term "Eligible Accounts Receivable" shall mean
accounts receivable of the Borrower less than 90 days old, not
doubtful as to collectibility or disputed as to existence or amount or
subject to offset, contra- indebtedness or return and not
intra-company or owing from any affiliated or related company or other
entity, exclusive of any account receivable arising under a government
contract, the assignment of which is subject to the Assignment of
Claims Act of 1940, as amended, or any other similar federal or state
statute or regulation governing the assignment of contracts with a
governmental
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agency. The term "Qualified Inventory" shall mean the inventory of
Borrower in which Standard Federal holds a perfected first security
interest exclusive of any returned or damaged items and
work-in-process.
6. Simultaneously with the execution of this Amendment Agreement,
the Borrower shall execute and deliver to Standard Federal a Third Amended and
Restated Promissory Note (Line of Credit) in the stated principal amount of
$10,000,000.00 (the "Amended Note") to evidence the Line of Credit as hereby
amended and to replace the Note. The "Line of Credit Note" referred to in the
Loan Agreement shall hereafter be deemed to refer to the Amended Note.
7. M.E.G. is hereby added as a borrower under the Loan Agreement
and the term "Borrower," as used in the Loan Agreement, shall hereafter be
deemed to refer to M.E.G., jointly and severally with the other entities
referred to as "Borrower" in the Loan Agreement. M.E.G. shall also execute
and deliver the Amended Note, jointly and severally, with the other entities
referred to as "Borrower" in the Loan Agreement. M.E.G. shall also execute and
deliver to Standard Federal with this Amendment Agreement a Security Agreement
whereby M.E.G. shall grant to Standard Federal a security interest of first
priority in all personal property of M.E.G., in accordance with the provisions
of Section 5.1(c) of the Loan Agreement.
8. Simultaneously with the execution of this Amendment Agreement,
the Borrower shall also execute and deliver amendment agreements whereby the
Mortgages are amended to secure the Line of Credit as hereby amended.
9. Except as herein amended, the Loan Agreement, Security
Agreement, Mortgages and Guaranty shall remain in full force and effect.
10. Guarantor acknowledges and consents to the amendment to the
Loan Agreement herein provided and agrees that the Guaranty shall continue and
remain in full force and effect with respect to the Loan Agreement as herein
amended and to the Amended Note.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be executed as of the day and year first written above.
Witnesses: BORROWER:
GALION HOLDING COMPANY, a Michigan
corporation
By:
- --------------------------- --------------------------------
E. James Zabinski
Vice President/Treasurer
Taxpayer Identification Number:
38-3060196
GALION SOLID WASTE EQUIPMENT, INC.,
a Michigan corporation
By:
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E. James Zabinski
Treasurer
Taxpayer Identification Number:
----------------------------------
GALION DUMP BODIES, INC., a Michigan
corporation
By:
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Carl Jaworski
Treasurer
Taxpayer Identification Number:
----------------------------------
M.E.G. EQUIPMENT SALES OF FLORIDA,
INC., a Florida corporation
By:
- --------------------------- --------------------------------
E. James Zabinski
Treasurer
Taxpayer Identification Number:
59-3241829
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GUARANTOR:
MCCLAIN INDUSTRIES, INC., a Michigan
corporation
By:
- -------------------------- -----------------------------
E. James Zabinski
Its: Treasurer
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38-1867649
--------------------------------
Taxpayer Identification Number
STANDARD FEDERAL BANK, a
federal savings bank
By:
----------------------------
Its:
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