Exhibit 10.1

 

SECOND AMENDMENT AND CONSENT TO CREDIT AND SECURITY AGREEMENT

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    This Second Amendment and Consent to Credit and Security Agreement (this
“Amendment”) is dated as of August 6, 2019 by and among MICRON PRODUCTS INC., a
Massachusetts corporation ("Borrower"), MICRON SOLUTIONS, INC. a Delaware
corporation (“Guarantor”, Borrower and Guarantor, each an “Obligor” and
collectively,  “Obligors”), and ROCKLAND TRUST COMPANY, a Massachusetts trust
company ("Lender").

RECITALS

A.    Borrower and Lender are parties to that certain Credit and Security
Agreement dated as of December 29, 2017, as amended by a First Amendment and
Waiver to Credit and Security Agreement dated as of March 7, 2019 (the "Credit
Agreement"), and Guarantor has guaranteed the obligations of Borrower thereunder
and relating thereto.

B.    Obligors have disclosed that (i) Guarantor incurred $500,000 in
Indebtedness in breach of Section 5.6 of the Credit Agreement, and (ii) Borrower
has breached Section 4.3 of the Credit Agreement with respect to the Debt
Service Coverage Ratio test for the fiscal quarter ending June 30, 2019.  Such
breaches have resulted in Events of Default under Section 6.1(c) of the Credit
Agreement (the "Existing Defaults"). 

C.    Obligors have requested that, notwithstanding the Existing
Defaults, Lender agree to amend certain provisions of the Credit Agreement and
continue to make Advances.

D.    Lender has agreed to so amend the Credit Agreement and to make Advance on
the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Obligors hereby agree as follows:

1.    Capitalized Terms.  Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to them in the Credit Agreement.

2.    Amendments to Credit Agreement.    

a.    The definition of “Permitted Indebtedness” in Schedule A of the Credit
Agreement is amended in its entirety as follows:

“‘Permitted Indebtedness’ means (a) the Obligations, (b) the Indebtedness
existing on the date hereof disclosed in each case along with extensions,
refinancings, modifications, amendments and restatements thereof, provided that
(i) the principal amount thereof is not increased, (ii) if such Indebtedness is
subordinated to any or all of the Obligations, the applicable subordination
terms shall not be modified without the prior written consent of Lender, and
(iii) the terms thereof are not modified to impose more burdensome terms upon
any Obligor, (c) obligations under Capitalized Leases and purchase money
Indebtedness secured by Permitted Liens in an amount not to exceed $150,000 in
the aggregate at any one time, (d) Indebtedness incurred as a result of
endorsing negotiable instruments received in the ordinary course of business,
(e) guaranty obligations permitted hereunder, (f) obligations in respect of
performance bonds or sureties incurred in the ordinary course of business, (g)
Indebtedness between and among Corporate Obligors, and (h) the Indebtedness of
Parent not to exceed $500,000 in the aggregate under subordinated promissory
notes dated on or before August 5, 2019 in form and substance satisfactory to
Lender, provided such Indebtedness is subordinated to the Obligations on terms
and conditions satisfactory to Lender pursuant to subordination agreements, in
form and substance satisfactory to Lender, executed in favor of Lender by the
holders of such Indebtedness.”

b.    Notwithstanding anything to the contrary contained in the Credit Agreement
and as a result of the Existing Defaults, Lender may make Advances (without any
obligation to do so) in its absolute and sole discretion.

3.    Consent to Sale of Certain Real Estate Collateral.  Notwithstanding
anything contained in the Credit Agreement (including, without limitation,
Section 5.2(e) thereof) or any other Loan Document, Lender hereby consents to
Borrower’s sale of certain Real Estate Collateral described on Exhibit A
attached hereto (the “Released

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Real Estate Collateral”).  The Real Estate Collateral that is not the Released
Real Estate Collateral is referred to herein as the “Remaining Real Estate
Collateral”.

4.    Representations and Warranties.  Obligors represents and warrants to
Lender that, except as set forth on Schedule I attached hereto, (a) all of the
representations and warranties made in the Credit Agreement are true and
accurate as of the date hereof as if made as of the date hereof (except as the
same may relate to an earlier date), and (b) no Default or Event of Default
exists.

5.    Conditions Precedent.    The effectiveness of this Amendment is subject to
the satisfaction of the following:

a.    the execution and delivery of this Amendment by all parties hereto;

b.    receipt by Lender of a final settlement statement, executed by all parties
thereto, showing the amount due to Borrower, as seller thereunder, representing
Borrower’s proceeds from the sale of the Released Real Estate Collateral in an
amount equal to $662,759.28 (the “Sales Proceeds”), and receipt by Lender from
Borrower of the Sales Proceeds for application by Lender to Advances;

c.    receipt by Lender of evidence that Fidelity National Title Insurance
Company (the “Title Company”) is unconditionally committed, subject only to the
recording of the Declaration of Easements and the Deed (each as defined below),
to issue an endorsement to its Title Policy No. 27307-213042491 (the “Title
Policy”), in form and substance acceptable to Lender, insuring that the
Remaining Real Estate Collateral has the benefit of easements created by that
certain Declaration of Easements (the “Declaration of Easements”) to be recorded
prior to the deed from Borrower conveying the Released Real Estate Collateral
(the “Deed”); and

d.    receipt by the Lender from Obligors of such other documents reasonably
requested by Lender.

6.    Additional Obligation of Borrower.  Within (a) ten (10) days following the
date of this Agreement, Borrower shall deliver copies of the executed promissory
note described in clause (h) of the definition of “Permitted Indebtedness”,
along with the subordination agreement described therein, executed by the payees
of such notes, and (b) sixty (60) days following the date of this Amendment,
Borrower shall use commercially reasonable efforts, at Borrower’s sole cost and
expense, to cause the Title Company to issue an endorsement to the Title Policy
to add the parcel of land shown as Parcel VIII on a plan entitled “Plan of Land
in Fitchburg, Massachusetts owned by: Micron Products, Inc.” which plan is dated
July 26, 2018, and is recorded with the Worcester North District Registry of
Deeds in Plan Book 517, Page 6, as part of the Land referred to in the Title
Policy and amending Exhibit “A” attached to the Title Policy accordingly.  As
used in this Section 6, “commercially reasonable efforts” shall include, but not
be limited to, paying the cost for title examination required by the Title
Company to issue such endorsement.

7.    Acknowledgements.  Each Obligor hereby acknowledges, ratifies, reaffirms,
and agrees that the (a) Credit Agreement and the other Loan Documents are
enforceable against the Obligors party thereto in accordance with
their respective terms and applicable law, (b) the security interests granted
to Lender thereunder in the Collateral are and will remain enforceable perfected
first priority security interests which secure the payment and performance by
Borrower of the Obligations, (c) the Existing Defaults have occurred and are
continuing, and (d) no delay or inaction by Lender in the exercise of its rights
and remedies under the Loan Documents shall (i) constitute a (x) modification or
an alteration of the terms, conditions or covenants of the Loan Documents, all
of which remain in full force and effect or (y) a waiver, release or limitation
upon Lender's exercise of any of its rights and remedies thereunder or under
applicable law, all of which are hereby expressly reserved or (ii) relieve or
release Obligors in any way from any of their respective duties, obligations,
covenants or agreements under the Loan Documents or from the consequences of the
Existing Defaults, any other Events of Default or any Defaults, whether now
existing or occurring after the date of this letter.

8.    Release.  Each Obligor hereby acknowledges and agrees that it has no
defense, counterclaim, offset, cross-complaint, claim or demand of any kind of
nature whatsoever that can be asserted to reduce or eliminate all or any part of
its liability to repay the Obligations or to seek affirmative relief or damages
of any kind or nature from Lender which are known to it as of the date
hereof.  Borrower hereby voluntarily and knowingly releases and forever
discharges Lender and each of its respective predecessors, agents, employees,
affiliates, successors and assigns (collectively, the “Released Parties”) from
all known claims, demands, actions, causes of action, damages, costs, expenses
and liabilities whatsoever, anticipated or unanticipated, suspected or
unsuspected, fixed, contingent or conditional, at law or in equity, in any case
originating in whole or in part on or before the date this Amendment becomes
effective that such Obligor may now or hereafter have against the Released
Parties, if any, irrespective of whether any such claims arise out of contract,
tort, violation of law or regulations, or otherwise, and that arise from any
extension of credit made

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under the Credit Agreement, the exercise of any rights and remedies under the
Credit Agreement or any other Loan Document, and/or the negotiation for and
execution of this Amendment, including, without limitation, any contracting for,
charging, taking, reserving, collecting or receiving interest in excess of the
highest lawful rate applicable.

9.    Counterparts.  This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
constituting one and the same instrument.

10.    Governing Law.  This Amendment shall be governed by and construed in
accordance with the laws of the Applicable State.

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[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as a sealed
instrument as of the first date above written.

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BORROWER:

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MICRON PRODUCTS INC.

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By:

/s/ Wayne Coll

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Name: Wayne Coll

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Title: Chief Financial Officer

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GUARANTOR:

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MICRON SOLUTIONS, INC.

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By:

/s/ Wayne Coll

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Name: Wayne Coll

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Title: Chief Financial Officer

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LENDER:

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ROCKLAND TRUST COMPANY

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By:

/s/ Thomas Meehan

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Name: Thomas Meehan

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Title: Vice President

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Signature Page to Second Amendment and Consent to Credit and Security Agreement

 

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Exhibit A

Description of Released Real Estate Collateral

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FIRST PARCEL:

A certain parcel of land, with the buildings thereon, situated on the southerly
side of Main Street in Fitchburg, Worcester County, Massachusetts, being shown
as Parcel V on a plan entitled “Plan of Land in Fitchburg, Massachusetts owned
by: Micron Products, Inc.” which plan is dated July 26, 2018, and is recorded
with the Worcester North District Registry of Deeds in Plan Book 517, Page 6,
and to which plan reference may be made for a more particular description.

Parcel V contains 10,186 square feet according to said plan.

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SECOND PARCEL:

A certain parcel of land on southwesterly side of Summer Street and at land
formerly of The Brown Bag Filling Machine now of Micron Products, Inc., being
shown as Parcel VI on a plan entitled “Plan of Land in Fitchburg, Massachusetts
owned by: Micron Products, Inc.” which plan is dated July 26, 2018, and is
recorded with the Worcester North District Registry of Deeds in Plan Book 517,
Page 6, and to which plan reference may be made for a more particular
description.

Parcel VI contains 9,687 square feet according to said plan.

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THIRD PARCEL:

A certain parcel of land, with the buildings thereon, situated on the southerly
side of Summer Street in Fitchburg, Worcester County, Massachusetts, being shown
as Parcel VII on a plan entitled “Plan of Land in Fitchburg, Massachusetts owned
by: Micron Products, Inc.” which plan is dated July 26, 2018 and is recorded
with the Worcester North District Registry of Deeds in Plan Book 517, Page 6,
and to which plan reference may be made for a more particular description.

Parcel VII contains 5,062 square feet according to said plan.

 

 

 

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Schedule I

Exceptions to Representations and Warranties.

    (i)    Section 3.9 on account of the Existing Defaults

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Defaults and Events of Default.

    (i)    Existing Defaults

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