FIRST AMENDMENT TO FORBEARANCE AGREEMENT
THIS FIRST
AMENDMENT TO FORBEARANCE AGREEMENT (the "Agreement") is made
this 29th day of September, 2005, 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") and S.I.P., INC. OF DELAWARE, a
Delaware corporation ("S.I.P.";
collectively, with "Original Borrower", 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 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
continue to accrue thereafter and as
of the date hereof. Borrower acknowledges that this
loan has been
accelerated by the Bank and is now fully
due and owing, without defense,
offset or counterclaim.
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
continue to accrue thereafter and
as of the date hereof. Borrower acknowledges that this
loan has been
accelerated by the Bank and is now fully
due and owing, without defense,
offset or counterclaim.
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 continue to accrue
thereafter and as of the date hereof.
Borrower acknowledges that this loan has
been accelerated by the Bank and is
now fully due and owing, without defense,
offset or counterclaim.
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 continue to
accrue thereafter and as of the date
hereof. Borrower
acknowledges that this
loan has matured and is now fully due and
owing, without defense, offset or
counterclaim.
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
continue to accrue thereafter and as
of the date hereof. Borrower acknowledges that this
loan has been
accelerated by the Bank and is now fully
due and owing, without defense,
offset or counterclaim.
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
continue to accrue thereafter and
as of the date hereof. Borrower acknowledges that this
loan has been
accelerated by the Bank and is now fully
due and owing, without defense,
offset or counterclaim.
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
continue to accrue
thereafter and as of the date hereof.
Borrower acknowledges
that this loan
has been accelerated by the Bank and is now
fully due and owing, without
defense, offset or counterclaim.
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
continue to accrue. Borrower, by its signature below,
agrees to treat this
loan as having been accelerated by the
Bank, and as now fully due and owing,
without defense, offset or
counterclaim.
K. Williams
Industries, Inc. and other obligors were 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 Lett
