EX-2 4 exhibit23.txt EXHIBIT 2.3 EXHIBIT 2.3 AMENDMENT AGREEMENT This Amendment Agreement is made this 5th day of July, 2001, by and between MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking organization having its chief executive office at One M&T Plaza, Buffalo, New York 14240 (the Bank), and AMERICAN LOCKER GROUP INCORPORATED, a Delaware business corporation having its chief executive office at 608 Allen Street, P.O. Box 1000, Jamestown, New York 14702-1000 (the Borrower). Whereas, the Bank and the Borrower previously entered into a corporate term loan agreement dated August 30, 1991, which was amended by (1) an amendment agreement dated May 1, 1994; (2) an amendment agreement dated March 12, 1996; (3) an amendment agreement dated August 22, 1997; and (4) an amendment agreement dated June 9, 1999 (as so amended the Loan Agreement), and Whereas, the Bank and the Borrower now desire to amend certain provisions of the Loan Agreement; Now, Therefore, effective on the date of this Amendment Agreement, the Bank and the Borrower agree as follows: 1. A new clause (jiv) to read "(jiv) Loan IV" is added to Section 1 of the Loan Agreement after clause (jiii) of such Section 1. 2. There is added to the Loan Agreement after Section 2C thereof a new Section 2D to read as follows: 2D. Loan IV. a. MAKING AND OBTAINING LOAN IV. Upon and subject to each term and condition of this Agreement, the Bank shall make Loan IV to the Borrower and the Borrower shall obtain Loan IV from the Bank. The principal amount of Loan IV as evidenced by two notes in the principal amounts of $6,300,000 and $2,100,000 shall be $8,400,000. b. TERMINATION OF OBLIGATION. Any obligation of the Bank to make Loan IV shall terminate no later than July 6, 2001. c. REPAYMENT. The Borrower shall repay the outstanding principal of the two notes to the Bank in 84 consecutive monthly installments commencing on August 6, 2001, and continuing thereafter on the same day of each succeeding calendar month consisting of 83 equal installments each in the total amount of $100,000, and one final installment on the maturity date in an amount equal to the outstanding principal on both notes, together with all other amounts outstanding hereunder, including, without limitation, accrued interest, costs, and expenses. In addition, until the outstanding principal is paid in full, payments of all accrued and unpaid interest on both notes will become due and payable on the 6th day of each month commencing on August 6, 2001. d. OPTIONAL PREPAYMENT IN ADVANCE. The Borrower shall have the option of paying the principal sum to the Bank in advance of the maturity date, in whole or in part, at any time and from time to time upon written notice received by the Bank prior to making such prepayment. With respect to the term note in the amount of $2,100,000 for which the Borrower has elected a fixed rate option, the Borrower shall pay to the Bank, together with the prepayment, as consideration of the privilege of making such prepayment, a premium equal to the greater of (a) 1 percent of the principal sum prepaid; or (b) an amount equal to the present value of the difference between (i) the amount of interest that would have accrued on the principal sum during the remaining term of the note, at the interest rate set forth in the note in effect on the date of prepayment; and (ii) the amount of interest that would have accrued on the principal sum during the remaining term of the note at the current market rate. With respect to the libor term note, the Borrower shall be liable for and shall pay the Bank, on demand, the higher of $250 or the actual amount of the liabilities, expenses, costs or funding losses that are a direct or indirect result of such prepayment (based on the entire principal amount prepaid). e. MATURITY DATE. The maturity date of both notes shall be July 6, 2008. f. INTEREST. The unpaid principal balance of each note will bear interest equal to (A) an interest rate based on the London Interbank Offered Rate ("LIBOR") plus 2.00 percent (any designation of an interest period for LIBOR shall be made on two business days prior notice) or (B) Fixed rate, at the Bank's Cost of Funds plus 2.00 percent. "Fixed Rate" shall mean the greater of (i) 2.00 percentage points above the Cost of Funds, or (ii) 7.00 percent. "Cost of Funds" shall mean the most recent yield on United States Treasury Obligations adjusted to a constant maturity of seven years in effect two business days prior to closing date as published by the Board of Governors of the Federal Reserve System in the Federal Reserve Statistical Release H.15 (519), or by such other quoting service, index or commonly available source utilized by the Bank, plus the "ask" side of the seven year swap spread in effect two business days prior to closing date as set forth in Bloomberg, L.P., or by such other quoting service, index or commonly available source utilized by the Bank. Interest is payable monthly on the same date that principal installments are payable. g. GENERAL PROVISIONS AS TO REPAYMENT AND PAYMENT. Repayment of the principal amount of Loan IV, payment of all interest owing pursuant to this Agreement in connection with Loan IV and payment of all other amounts owing by the Borrower to the Bank pursuant to this Agreement in connection with Loan IV shall be made in lawful money of the United States and in immediately available funds at the banking office of the Bank located at One Fountain Plaza, Buffalo, New York, or at such other office of the Bank as may at any time and from time to time be specified in any notice delivered, given or sent to the Borrower by the Bank. No such repayment or payment shall be deemed to have been received by the Bank until received by the Bank at the office of the Bank determined in accordance with the preceding sentence, and any such repayment or payment received by the Bank at such office after 2:00 p.m. on any day shall be deemed to have been received by the Bank at the time such office opens for business on the next business day of the Bank. If the time by which any of the principal amount of Loan IV is to be repaid is extended by operation of law or otherwise, the Borrower shall pay interest on the outstanding portion thereof during such period of extension as provided in Section 2C of this Agreement. 3. Section 3 of the Loan Agreement is amended in its entirety to read as follows: 3. PREREQUISITES TO THIS LOAN. The obligation of the Bank to make this loan shall be conditioned upon the following: a. NO DEFAULT. (i) There not having occurred or existed at any time during the period beginning on the date of this Agreement and ending at the time such loan is made, any Event of Default or Potential Event of Default, and (ii) the Bank not believing in good faith that any Event of Default or Potential Event of Default has so occurred or existed or so exists; b. REPRESENTATIONS AND WARRANTIES. (i) Each representation and warranty made in this Agreement being true and correct as of all times during the period beginning on the date of this Agreement and ending at the time such loan is made, except to the extent updated in (A) a certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the Chief Financial Officer of the Borrower, and received by the Bank before the time such loan is to be made, or (B) Exhibit A attached to and made a part of this Agreement; (ii) each other representation and warranty made to the Bank by or on behalf of the Borrower or by or on behalf of any subsidiary or other obligor before the time such loan is to be made being true and correct as of the date thereof, except to the extent updated and (A) a certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the Chief Financial Officer of the Borrower, and received by the Bank before the time such loan is to be made, or (B) Exhibit A attached to and made a part of this Agreement; (iii) each financial statement provided to the Bank by or on behalf of the Borrower or by or on behalf of any subsidiary or other obligor before the time such loan is to be made being true and correct as of the date thereof; and (iv) the Bank not believing in good faith that (A) any such representation or warranty, except as so updated, was or is other than true and correct as of any such time, or as of such date of determination of the truth and correctness thereof, or (B) any such financial statement was other than true and correct as of the date thereof; c. PROCEEDINGS. The Bank being satisfied as to each corporate or other proceeding in connection with any transaction contemplated by this Agreement; and d. RECEIPT BY BANK. The receipt by the Bank at or before the time Loan IV is to be made of the following, in form and substance satisfactory to the Bank: i) Two Promissory Notes in the principal amounts of $6,300,000 and $2,100,000, appropriately completed and duly executed by the Borrower; ii) A Ratification of General Guaranty Agreement, appropriately completed and duly executed by American Locker Security Systems, Inc.; iii) A Ratification of General Guaranty Agreement, appropriately completed and duly executed by American Locker Company, Inc.; iv) A certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the Chief Financial Officer of the Borrower and stating that (A) there did not occur or exist at any time during the period beginning on the date of this Agreement and ending at the time such loan is to be made, and there does not exist at the time such loan is to be made, any Event of Default or Potential Event of Default, and (B) each representation and warranty made in this Agreement was true and correct as of all times during the period beginning on the date of this Agreement and ending at the time of such loan and is true and correct as of the date of the loan, except to the extent updated in a certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the Chief Financial Officer of the Borrower and received by the Bank before the time of such loan; v) Evidence that each of the Borrower and all subsidiaries is at the time such loan is to be made in good standing under the laws of the jurisdiction in which it is incorporated; vi) A copy of the certificate or articles of incorporation or other charter document of each of the Borrower and all subsidiaries certified by its Secretary to be complete and accurate at the time such loan is to be made; vii) A copy of the bylaws or other organizational document of each of the Borrower and all subsidiaries certified by its Secretary to be complete and accurate at the time such loan is to be made; viii) Evidence of the taking, and of the continuation in full force and effect at the time such loan is to be made, of each corporate or other action of the Borrower or of any other Person necessary to authorize the obtaining of such loan by the Borrower, the execution, delivery to the Bank and performance of each Loan Document and the imposition or creation of any security interest, mortgage and other lien and encumbrance imposed or created pursuant to any Loan Document; ix) Evidence that each requirement contained in any Loan Document with respect to insurance is being met at the time such loan is made; x) Each additional writing required by any Loan Document or deemed necessary or desirable by the Bank at the sole option of the Bank; and xi) Payment of all costs and expenses payable pursuant to the first sentence of Section 8 of this Agreement at or before the time such loan is made. 4. Section 4a of the Loan Agreement is amended to add the following: "The proceeds of Loan IV will be used only to purchase stock of B.L.L. Corporation, d/b/a Security Manufacturing Corp., and to refinance the existing $333,000 term loan." 5. Section 5 of the Loan Agreement shall be amended, in part, as follows: 5. AFFIRMATIVE COVENANTS. During the term of this Agreement, the Borrower shall do the following unless the prior written consent of the Bank to not doing so shall have been obtained by the Borrower: d. NET WORTH; LIABILITIES. At any time, the Borrower shall not permit (i) Borrower's consolidated tangible net worth to be less than $5 million, or (ii) its consolidated liabilities to exceed 250 percent of its consolidated tangible net worth. 6. Section 6 of the Loan Agreement shall be amended as follows: 6. NEGATIVE COVENANTS. During the term of this Agreement, neither the Borrower nor any subsidiary shall, without the prior written consent of the Bank do, attempt to do, or agree or otherwise incur, assume, or have any obligation to do any of the following: j. CAPITAL EXPENDITURES. With the exception of this loan and the purchase of the stock of B.L.L. Corporation, d/b/a Security Manufacturing Corp., make (whether by purchase or other acquisition of any Asset or Security, by means of any Capital Lease or otherwise) capital expenditures exceeding $3 million in the aggregate for the Borrower and all subsidiaries during any fiscal year of the Borrower. 7. Section 10j of the Loan Agreement is amended in its entirety to read as follows: j. LOAN. "Loan" means Loan I, Loan II, Loan III, or Loan IV. 8. There is added to the Loan Agreement after Section 10j(iii) thereof a new section 10j(iv) to read as follows: j(iv). LOAN IV. "Loan IV" means a loan by the Bank to the Borrower in the principal amount of $8,400,000. 9. The Loan Agreement is changed by this Amendment Agreement only to the extent that is specifically amended by this Amendment Agreement and, as so amended, the Loan Agreement shall remain in full force and effect. Effective on the date of this Amendment Agreement, references in the Loan Agreement to "this Agreement" shall be deemed to be references to the Loan Agreement as amended by this Amendment Agreement. In Witness Whereof, the Bank and the Borrower have caused this Amendment Agreement to be duly executed on the date shown at the beginning of this Amendment Agreement. MANUFACTURERS AND TRADERS TRUST COMPANY By /s/ KEVIN K. BROMBACHER ----------------------------- KEVIN K. BROMBACHER, Vice President AMERICAN LOCKER GROUP INCORPORATED By /s/ EDWARD F. RUTTENBERG ----------------------------- EDWARD F. RUTTENBERG, Chairman