Exhibit No, 10.45
AMENDED AND RESTATED
LOAN AGREEMENT
BETWEEN
COMPUTER PRODUCTS, INC.,
FIRST UNION NATIONAL BANK
AND
FIRST UNION NATIONAL BANK, LONDON BRANCH
DATED AS OF JULY 15, 1997
TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................... 1
ARTICLE II CREDIT FACILITY ..................................5
Section 2.1 The Credit Facility........................5
Section 2.2 Note.......................................7
Section 2.3 Option to Elect Interest Rate on the
Loans......................................7
Section 2.4 Interest Rates.............................7
Section 2.5 Mandatory Prepayments.....................15
Section 2.6 Fees......................................16
Section 2.7 Business Days.............................16
Section 2.8 Guarantees................................16
Section 2.9 Mode of Payment...........................16
Section 2.10 Prepayment...............................16
Section 2.11 Use of Proceeds..........................17
Section 2.12 Payment..................................17
ARTICLE III REPRESENTATIONS AND WARRANTIES..................18
Section 3.1 Organization, Powers, Etc.................19
Section 3.2 Authorization of Loan, Etc................19
Section 3.3 Litigation, Administrative and
Regulatory Proceedings....................20
Section 3.4 Payment of Taxes and Other Charges........20
Section 3.5 Federal Reserve Regulations...............20
Section 3.6 Subsidiaries..............................21
Section 3.7 Consents, Etc.............................21
Section 3.8 Properties................................21
Section 3.9 Ownership.................................22
Section 3.10 Intentionally Left Blank..................22
Section 3.11 Agreements..........................23
Section 3.12 Enforceability of the Loan Documents23
Section 3.13 Guaranty............................23
Section 3.14 Relationship of the Borrower and
Subsidiaries........................23
Section 3.15 Public Utility Holding Company Act..24
Section 3.16 Survival of Representations and
Warranties..........................24
ARTICLE IV CONDITIONS OF LENDING............................24
Section 4.1 Representations and Warranties............24
Section 4.2 No Default................................24
Section 4.3 Supporting Documents and Other
Conditions................................24
Section 4.4 Loan Fees.................................26
Section 4.5 Closing...................................26
Section 4.6 Approval of Counsel for Bank..............27
Section 4.7 Conditions Precedent to the Advance.......27
ARTICLE V AFFIRMATIVE COVENANTS.............................28
Section 5.1 Notice....................................28
Section 5.2 Accounts and Reports......................28
Section 5.3 Maintain Insurance........................30
Section 5.4 Future Taxes..............................30
Section 5.5 Legal Existence, Properties, Stock
Ownership and Solvency....................30
Section 5.6 Warranties and Conditions.................31
Section 5.7 Further Agreements........................31
Section 5.8 Erisa.....................................32
Section 5.9 Environmental Matters.....................32
Section 5.10Guarantors................................32
ARTICLE VI NEGATIVE COVENANTS...............................32
Section 6.1 Sale of Assets............................32
Section 6.2 Reorganizations...........................34
Section 6.3 Liens.....................................34
Section 6.4 Guarantees................................35
Section 6.5 Indebtedness..............................35
Section 6.6 No Loans..................................35
Section 6.7 Investments...............................36
Section 6.8 Acquisitions..............................36
Section 6.9 Fiscal Year...............................37
ARTICLE VI A FINANCIAL COVENANTS............................37
Section 6A.1 EBITDA to Debt Service Coverage Ratio....37
Section 6A.2 Tangible Net Worth.......................37
Section 6A.3 Total Debt to EBITDA.....................37
ARTICLE VII EVENTS OF DEFAULT...............................38
Section 7.1 Events of Default.........................38
ARTICLE VIII MISCELLANEOUS..................................41
Section 8.1 Cost of Loan..............................41
Section 8.2 Survival of Representations...............42
Section 8.3 Termination of Loan.......................42
Section 8.4 Applicable Law............................42
Section 8.5 Modification..............................42
Section 8.6 No Waiver of Rights by Bank...............42
Section 8.7 Interest..................................42
Section 8.8 Severability..............................43
Section 8.9 Successors and Assigns....................43
Section 8.10 Notices..................................43
Section 8.11 Incorporation of Terms...................45
Section 8.12 Counterparts.............................45
ARTICLE IX INDEMNIFICATION..................................46
Section 9.1 Net Payments........ .....................46
ARTICLE X WAIVER OF JURY TRIAL AND VENUE. ..................46
Section 10.1 Arbitration........... ..................46
Section 10.2 Preservation and Limitation of
Remedies............... .................47
Section 10.3 Waiver of Plea of Jurisdiction
or Venue................ ................47
Schedules
Schedule 2.8 List of Guarantors
Schedule 3.1 Jurisdictions in which Transacting Business
Schedule 3.8 Property Leased from Others
Schedule 3.9 Capital Stock Issued by each Subsidiary
Schedule 6.3 Permitted Encumbrances
Exhibits
Exhibit A Credit Facility A Note
Exhibit B Credit Facility B Note
Exhibit C Unconditional Guaranty
Exhibit D Indemnification Agreement
Exhibit E Advance Request
AMENDED AND RESTATED LOAN AGREEMENT
This Amended and Restated Loan Agreement, (the "Agreement") is made and entered
into with an effective date of July 15, 1997, by and among First Union National
Bank, London Branch, located at One Bishopsgate, London EC2N 3AB England (the
"Branch") and First Union National Bank, with an address at 200 East Broward
Boulevard, Ft. Lauderdale, Florida 33301 ("FUNB", and collectively with the
Branch referred to herein as the "Bank" or the "Lender"), and Computer Products,
Inc., a Florida corporation (the "Borrower"), having a place of business at 7900
Glades Road, Boca Raton, Florida 33434.
R E C I T A L S
WHEREAS, the Borrower and FUNB have entered into that certain Loan
Agreement dated as of April 4, 1995 (the "Prior Loan Agreement");
WHEREAS, the Borrower has requested certain amendments to the Prior Loan
Agreement, including the ability to borrow in currencies other than Dollars, and
the Bank is willing to do so in accordance with the terms and conditions set
forth herein; and
WHEREAS, in order to facilitate the making of Loans other than Prime-Based
Loans (as defined herein), the Bank desires to utilize the Branch, so that the
Branch will also become a party to this Agreement, and the Branch is willing to
do so;
WHEREAS, the parties hereto executed that certain Amended and Restated
Loan Agreement as of July 15, 1997, and have determined that certain corrections
were required, and desire to enter into this Agreement to reflect those
corrections and their agreement, but with an effective date of July 15, 1997;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
"Advance" shall mean an advance of proceeds of Credit Facility
B to the Borrower pursuant to this Agreement and shall include any Dollar
Advance or any Optional Currency Advance. All Advances must be in a principal
amount of at least $100,000.00. or an Equivalent Amount thereof for Optional
Currency Advances.
"Advance Request" shall mean the written request for an
Advance under Credit Facility B as identified in Section 2.4(f) hereof and shall
among other things (i) specify the date of the requested Advance, which shall be
a Business Day; (ii) specify the amount of the Advance and; (iii) specify the
currency in which the Advance is to be made.
"Application" shall mean the application required to be
submitted for the issuance of a letter of credit pursuant to Section 2.1(d)
hereof.
"Business Day" shall mean a weekday other than a day on which
banks are required or authorized to close in Jacksonville, Florida, and, in
respect of a transaction relating to either a LIBOR-Based Loan or Optional
Currency, in (i) London, England and (ii) if the transaction involves Option
Currency, in a money market city in the country issuing the Optional Currency
selected.
"Closing" shall mean the meaning described in Section 4.1
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hereof.
"Credit Facilities" shall mean Credit Facility A and Credit
Facility B.
"Credit Facility A" shall mean the loan facility described in
Section 2.1(a) hereof.
"Credit Facility A Maturity" shall have the meaning set forth
in Section 2.1(a) hereof.
"Credit Facility A Note" shall mean the note evidencing Credit
Facility A.
"Credit Facility B" shall mean the loan facility described in
Section 2.1(b) hereof.
"Credit Facility B Maturity" shall have the meaning set forth
in Section 2.1(b) hereof.
"Credit Facility B Note" shall mean the note evidencing Credit
Facility B.
"Control" shall have the meaning set forth in Section 7.1
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hereof.
"Debt Service" shall mean scheduled principal repayment plus
interest expense for the period being measured.
"Default" or "Event of Default" shall have the meaning set
forth in Section 7.1 hereof.
"Default Rate" shall have the meaning set forth in Section
7.1 hereof.
"Direct Subsidiary" shall mean a Subsidiary in which the
shares are owned of record by the Borrower.
"Dollar" shall mean United States Dollars.
"Dollar Advance" shall mean an Advance which the Borrower
requests to be made (or is deemed to have requested to be made) in Dollars, in
accordance with the provisions of Section 2.4(h) hereof.
"EBITDA" shall mean net income plus interest plus taxes plus
depreciation plus amortization for the period being measured.
"Equivalent Amount" shall mean, in relation to any Optional
Currency Advance or FX Calculation Date, the amount of Dollars converted from
the relevant amount of Optional Currency at the Bank's spot buying rates (based
on the market rates then prevailing) for the exchange of Dollars and Optional
Currency on or about 11:00 a.m. (London, England time) on (a) the second
Business Day immediately preceding the Optional Currency Advance in relation to
such Advance or (b) the second Business Day immediately preceding a FX
Calculation Date in relation to such date.
"FX Calculation Date" shall mean any date on which the Bank
makes a determination of the Equivalent Amount of Optional Currency Advances,
which shall include, without limitation, the second day succeeding the date on
which an Optional Currency Advance is requested, the last day of an Interest
Period, and, in the event that an Interest Period is six months, the last day of
the third month of such Interest Period and the last day of such Interest
Period.
"Guaranty" shall mean the guaranty described in Section 2.8
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hereof.
"Indebtedness" shall have the meaning given to such term in
Section 6.5 hereof.
"Indirect Subsidiary" shall mean Subsidiary shares of which
are owned of record directly by a Subsidiary, and indirectly by the Borrower.
"Interest Period" shall have the meaning given to such term in
Section 2.4(a)(i) hereof.
"LIBOR-Based Rate" shall have the meaning given to such term
in Section 2.4 hereof.
"LIBOR Loan" shall have the meaning set forth in Section
2.4(a)(i) hereof.
"Loan" or "Loans" refers to amounts outstanding under Credit
Facility A or Credit Facility B.
"LIBOR Reserve Percentage" shall mean either (i) the
percentage which is in effect from time to time under Regulation D of the Board
of Governors of the Federal Reserve System, as such regulation may be amended
from time to time, as the maximum reserve requirement applicable with respect to
Eurocurrency Liabilities (as that term is defined in Regulation D), whether or
not any Lender has any Eurocurrency Liabilities subject to such reserve
requirement at that time; or (ii) any reserve imposed by the Bank of England for
loans made by Bank in British Pound Sterling. The LIBOR-Based Rate for any
Advance shall be adjusted as of the effective date of any change in the LIBOR
Reserve Percentage.
"Mandatory Prepayment" shall have the meaning set forth in
Section 6.1(e) hereof.
"Maximum Loan Amount" shall have the meaning given such term in
Section 2.1(b) hereof.
"Net Sale Price" shall have the meaning set forth in 6.1(e)
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hereof.
"Optional Currency" shall mean any currency which is freely
transferable and convertible into Dollars in the London foreign exchange market
as agreed to by the parties hereto including initially British Pounds Sterling,
Japanese Yen, German Deutschemarks and European Currency Units but excluding:
(i) any currency for which central bank or other governmental
authorization in the country of the currency is required to permit its use by
the Bank for lending under this Agreement (unless the authorization has been
obtained and is full force and effect at the relevant time); and
(ii) any currency, the use of which is restricted or prohibited by
any request, directive regulation or guideline of any governmental body, agency,
department or regulatory or other authority (whether or not having the force of
law) in accordance with which any Bank is accustomed to act. As of the date
hereof, the above limitations do not apply to the above specifically enumerated
currencies.
"Optional Currency Advance" shall mean an Advance which the
Borrower requests to be made in Optional Currency, in accordance with the
provisions of Section 2.4(h) hereof.
"Permitted Encumbrances" shall have the meaning set forth
in Section 6.3 hereof.
"Prime-Based Loan" shall have the meaning set forth in
Section 2.4(b) hereof.
"Prime-Based Rate" shall have the meaning set forth in
Section 2.4(b) hereof.
"Significant Subsidiary" shall have the meaning set forth
in Section 3.6 hereof.
"Solvent" shall mean, as to the entity, or entities for which
a determination is being made, that: (i) its or their assets exceed its or their
liabilities (with the calculation of liabilities excluding debt among the
Borrower and its Subsidiaries or between the Subsidiaries); (ii) that it or they
will have sufficient capital to engage in its or their business on an on-going
basis; and (iii) that it or they have the ability to pay its obligations as they
mature.
"Subsidiary" shall have the meaning set forth in Section
3.6 hereof.
"Tangible Net Worth" shall have the meaning set forth in
Section 6A.2 hereof.
"Total Capitalization" shall have the meaning set forth in
Section 6.1(D) hereof.
"Total Debt" shall mean debt on payment obligation for
borrowed money plus leases required to be capitalized in accordance with GAAP.
ARTICLE II
CREDIT FACILITIES
2.1 THE CREDIT FACILITIES.
(a) Credit Facility A. Pursuant to the Prior Loan Agreement, FUNB
has extended to the Borrower a credit facility referred to under the Prior Loan
Agreement as Credit Facility A. There is presently outstanding under Credit
Facility A the principal sum of Twenty-Two Million Dollars ($22,000,000.00), and
accrued interest thereon of $75,625.00 through July 16, 1997 and if such date is
prior to the Closing, the sum of $5,041.67 per each day thereafter through the
date of Closing. That loan remains outstanding and shall be governed hereafter
by the terms of this Agreement, and shall continue to be referred to as Credit
Facility A. The principal amount of borrowings under Credit Facility A shall be
repaid as follows: (i) principal payments of $2,200,000.00 shall be due on April
1 and October 1 of each year beginning October 1, 1997; and (ii) the remaining
outstanding principal balance together with all accrued interest of borrowings
under Credit Facility A, if not paid earlier, shall be due on April 1, 2002
("Credit Facility A Maturity"); provided, however, that at such time after July
15, 1997 as the outstanding principal balance under Credit Facility A is less
than $2,200,000, the remaining outstanding principal balance together with all
accrued interest thereon shall be due on the next succeeding April 1 or October
1, as the case may be.
(b) Credit Facility B. Subject to the terms and conditions hereof,
the Bank agrees to extend to the Borrower Credit Facility B and make loans
thereunder, in one or more Advances in an aggregate amount not to exceed, taking
into account the outstanding undrawn amount of any Letter of Credit issued
hereunder as provided in Section 2.1(d) hereof, at any one time the lesser of
(1) Twenty Million and 00/100 Dollars ($20,000,000.00); or, (ii) in respect of
aggregate Optional Currency Advances, Five Million Dollars plus the Equivalent
Amount of $15,000,000.00, provided, however, that if on an FX Calculation Date
the Equivalent Amount of all Optional Currency Advances exceeds $15,000,000.00,
but the sum of all (A) Dollar Advances under Credit Facility B plus (B) the
available amount of any letters of credit issued under Section 2.1(d) hereof
plus (C) the Equivalent Amount of Optional Currency Advances under Credit
Facility B does not exceed $20,000,000, the Borrower shall not be required to
make the prepayment required by Section 2.5 hereof. The amounts described in the
preceding subsections (i) and (ii) are referred to herein as the Maximum Loan
Amount. The outstanding balance of Credit Facility B may increase and decrease
from time to time, and the Advances thereunder may be repaid and reborrowed, but
the total of Advances outstanding at any one time under Credit Facility B shall
never exceed the limitation set forth hereinabove. The principal amount of
Credit Facility B plus all accrued interest thereon shall mature and be due and
payable in full on July 17, 2000 (the "Credit Facility B Maturity"), and no
Advance may be requested after July 14, 2000.
(c) Credit Facilities. Credit Facility A and the Credit Facility B
are singularly referred to herein as a Credit Facility and are collectively
referred to in this Agreement variously as the "Loans" or "Credit Facilities."
The outstanding principal amounts of the Loans together with all accrued and
unpaid interest thereon, any amounts for which the Borrower may be directly or
indirectly liable with respect to any letter of credit, all other amounts owed
to the Bank by the Borrower hereunder or under any instrument executed in
connection herewith, plus all amounts expended by the Bank or for which the Bank
may have incurred direct or contingent liability in connection with enforcement
of this Agreement, as a result of the Borrower's or any Subsidiary's breach of
any agreement or for which the Borrower or any Subsidiary may otherwise be
liable under any of the Loan Documents (as defined herein), including but not
limited to all costs of the Loans as provided in Section 8.1 shall be referred
to sometimes hereafter as the "Obligation."
(d) Letters of Credit. The Borrower may request, and the Bank shall
from time to time issue, create, extend or renew letters of credit for the
account of the Borrower or its Subsidiaries, subject to the terms and conditions
hereof or of any application or agreement signed or entered into in connection
with the issuance of any Letter of Credit, and subject to a limit that the face
amount of the Letters of Credit does not exceed Five Million Dollars
($5,000,000) or an Equivalent Amount thereof. The availability of Advances under
Credit Facility B shall be reduced by the amount of any then outstanding letters
of credit issued by the Bank. All payments made by the Bank under any such
letters of credit (whether or not the Borrower is the account party) and all
fees, commissions, discounts and other amounts owed or to be owed to the Bank in
connection therewith, if not repaid upon demand, shall be deemed to be Advances
under Credit Facility B. The Borrower shall complete and sign such Applications
and supplemental agreements and provide such other documentation as the Bank
may, reasonably require as a condition to the issuance of a letter of credit
hereunder.
2.2 NOTES. The obligation of the Borrower to repay the indebtedness
outstanding under Credit Facility A shall be further evidenced by a promissory
note in the form attached hereto as Exhibit A (the "Credit Facility A Note") and
the obligation of the Borrower to repay indebtedness outstanding under Credit
Facility B shall be further evidenced by a promissory note in the form attached
hereto as Exhibit B (the "Credit Facility B Note"), each of which shall be dated
as of the date hereof and shall be executed and delivered by the Borrower to the
Bank simultaneously herewith. Each of the Credit Facility A Note and Credit
Facility B Note shall be deemed to reflect the aggregate unpaid principal amount
of all indebtedness outstanding under Credit Facility A or Credit Facility B, as
the case may be, whether or not the face amount of such note is in excess of the
amount actually outstanding from time to time. The Credit Facility A Note and
Credit Facility B Note are collectively referred to herein as the "Notes".
2.3 OPTION TO ELECT INTEREST RATE ON THE LOANS. Interest on a Loan shall
accrue, subject to the terms hereof, at the Prime-Based Rate or the LIBOR-Based
Rate as each such term is defined herein with the Borrower having the right to
elect which such rate will apply. In the event the Borrower has not selected an
interest rate initially or on a Reset Date for (i) a Dollar Advance, interest
shall accrue thereon at the Prime-Based Rate; and (ii) an Optional Currency
Advance, interest shall accrue thereon at the LIBOR-Based Rate with an Interest
Period of one month.
2.4 INTEREST RATES.
(a) LIBOR-Based Rate.
(i) Interest Payable. Interest accruing on a Loan at a
LIBOR-Based Rate (a "LIBOR Loan") shall be payable (A) on the last day of the
applicable Interest Period (as defined below); (B) upon maturity of the
particular Credit Facility; (C) upon acceleration of repayment of the Loan; (D)
if the LIBOR Interest Period (as defined herein) is six months, on the ninetieth
(90th) day of that Interest Period, as well as on the last day of the Interest
Period; or (E) if the Loan is subject to an interest rate swap agreement, on the
dates payments are contemplated under the interest rate swap agreement to which
the Loan is subject.
In the case of an Optional Currency Advance, LIBOR shall mean the rate per
annum for deposits of the Optional Currency in question offered to the Bank in
the London Interbank market two (2) Business Days prior to the first day of such
Interest Period for deposits of the Optional Currency in question for a period
of time comparable to the Interest Period for, and in an amount comparable to
the principal amount of, the Advance sought by the Borrower. This determination
of LIBOR is referred to herein as the "Optional Currency LIBOR."
(ii) Definitions. For purposes hereof, the following terms
shall have the meanings specified.
"LIBOR-Based Rate" shall mean the LIBOR Rate plus: (a) .75%
in the case of Credit Facility A, and (b) .50% in the case of Credit Facility
B.
"LIBOR Rate" shall mean USD-LIBOR BBA or USD-LIBOR Reference
Banks, as applicable, in the case of Dollar Advances, or Optional Currency
LIBOR, in the case of Optional Currency Advances.
"USD-LIBOR-BBA" means that the rate for a Reset Date will be
the rate for deposits in U.S. Dollars for a period equal to the Interest Period
for such Loan selected by the Borrower in accordance with the terms hereof,
which appears on the Telerate Page 3750 as of 11:00 a.m., London time, on the
day that is two London Banking Days preceding that Reset Date. If such rate does
not appear on the Telerate Page 3750, the rate for the Reset Date will be
determined as if the parties had specified "USD-LIBOR-Reference Banks" as the
applicable LIBOR-Rate.
"USD-LIBOR-Reference Banks" means that the rate for a Reset
Date for a Loan will be determined on the basis of the rates at which deposits
in U.S. Dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on the day that is two London Banking Days preceding that Reset
Date to prime banks in the London interbank market for a period equal to the
Interest Period for such Loan selected by the Borrower in accordance with the
terms hereof. The Bank will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for the Reset Date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that Reset Date will be the arithmetic mean of the rates quoted by
major banks in New York City, selected by the Bank, at approximately 11:00 a.m.,
New York City time, on that Reset Date for loans in U.S. Dollars to leading
European banks for a period equal to the Interest Period commencing on that
Reset Date.
"Optional Currency LIBOR" shall have the meaning given to such
term in the second paragraph of Section 2.4(a)(i) hereof.
"London Banking Day" means any Business Day on which
commercial banks, are in fact open for international business, including
dealings in dollar deposits on the London interbank market in London, England.
"Reset Date" means a date on which a Loan is made and each
date on which an Interest Period commences.
"Reference Banks" means four major banks in the London
interbank market, designated by the Bank.
"Interest Period" shall mean a period of one month, two
months, three months or six months, as chosen by Borrower as provided herein;
provided that:
1. any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding London
Banking Day unless such London Banking Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding London Banking
Day;
2. any Interest Period which begins on the last London Banking
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Interest
Period) shall end on the last London Banking Day of a calendar month;
3. Borrower may not select an Interest Period for a Loan if
the scheduled last day in the selected Interest Period would extend beyond the
stated maturity for that Loan; and
4. The Borrower may not have more than three (3) LIBOR Loans
with different Interest Periods under either Credit Facility existing at any one
time.
(b) Prime-Based Rate.
(i) Interest Payable. Interest accruing on a Loan
at the Prime-Based Rate (a "Prime-Based Loan") shall be payable (A) quarterly in
arrears on the first day of each January, April, July and October hereafter,
commencing October 1, 1997; (B) upon maturity of the respective Credit Facility;
and (C) upon acceleration of repayment of such Loan; or (D) if the Loan is
subject to an interest rate swap agreement, on the dates payments are
contemplated under the interest rate swap agreements to which the Loan is
subject.
(ii) Definitions. For purposes hereof, the
following terms shall have the meanings specified:
"Prime-Based Rate" shall mean with respect to Credit
Facility A, the Prime Rate minus .25% and with respect to Credit Facility B, the
Prime Rate minus .75%.
"Prime Rate" shall mean the rate announced by the
Bank from time to time as its Prime Rate, which rate is one of several interest
rate bases used by Bank. Bank lends at rates both above and below Bank's Prime
Rate, and Borrower acknowledges and agrees that Bank's Prime Rate is not
represented or intended to be the lower or most favorable rate of interest
offered by Bank. Each change of the rate of interest due to a change in the
Prime Rate shall be effective as of, and such new rate of interest shall
commence to accrue on, the opening of business on the effective date of such
change in the Prime Rate.
(c) Interest Billing Procedures. Interest will be billed in
accordance with the customary practices of the Bank or as otherwise agreed
between Bank and the Borrower; provided, however, the failure of the Bank to
send a bill shall not excuse the duty of the Borrower to ascertain and pay the
correct amount on the date it is due. The Borrower's duty to pay interest
payments hereunder shall be absolute and not contingent.
(d) Interest Determined on 360 Day Year. All interest payable
hereunder shall be at a per annum rate computed by dividing the applicable per
annum interest rate by three hundred sixty (360) and multiplying the result by
the actual number of days elapsed; provided, however, that if as to any Optional
Currency the convention is to compute interest on an Advance thereunder on the
basis of a 365 day year, the Bank will compute such interest on the basis of a
365 day year.
(e) Selection of Applicable Interest Rates and Period. Subject to
the provisions hereof, at the election of Borrower, Loans under either Credit
Facility shall bear interest at either the Prime-Based Rate or the LIBOR-Based
Rate (each, an "Interest Rate"), provided, that Borrower may not select a
LIBOR-Based Interest Rate if there has occurred and is continuing an Event of
Default or if prior to the commencement of an Interest Period the Bank in good
faith determines that adequate and fair means do not exist for determining the
LIBOR-Based Rate. If a LIBOR-Based Rate is unavailable, then Bank shall promptly
transmit notice thereof to Borrower. Borrower shall elect the Interest Rates and
in case of a LIBOR-Based Rate, the Interest Period applicable thereto for each
Loan bearing interest at a LIBOR-Based Rate at the time of each borrowing and
each conversion as provided and subject to the limitations herein.
(f) Notice and Manner of Borrowing. Borrower shall give FUNB
irrevocable telephonic notice (confirmed in writing) of each proposed borrowing
not later than 10:00 a.m. Miami, Florida time (i) on the same Business Day as
each proposed Prime-Based Loan is to be made and (ii) at least two (2) Business
Days prior to the date a LIBOR-Based Rate Loan is to be made, unless such Loan
is to be a Loan of Optional Currency, in which case such notice shall be given
by 11:00 a.m. London, England time, at least 4 Business Days before the Loan is
to be made. The notice for a LIBOR-Based Rate Loan and an Optional Currency
Advance shall also be given to the Branch simultaneously with delivery of the
notice to FUNB. Each such notice shall specify (A) the date of such Loan, (B)
the amount to be borrowed, which, with respect to an Advance shall be in a
minimum amount as provided in the definition of the particular type of Advance,
(C) the interest rate option selected by Borrower, and (D) in the case of
LIBOR-Based Rate, the duration of any Interest Period applicable thereto.
Notices received after 10:00 a.m. (Miami, Florida time) shall be deemed received
on the next business day. A request for an Advance involving an Optional
Currency is also subject to the terms of Section 2.4(h) hereof.
(g) Notice of Conversion. Once a Loan has been made it shall bear
interest at the rate selected by the Borrower in its loan request made in
Section 2.4(f) above. If such rate shall be a Prime-Based Rate, interest shall
accrue thereat until the Loan is repaid or the rate converted in accordance
herewith. If such rate shall be a LIBOR-Based Rate, interest shall accrue
thereat until the earlier of the end of the Interest Period selected in
accordance herewith or the date on which such Loan is repaid. The Borrower may,
with respect to all or any portion of any Loan, but subject to the restrictions
set forth herein, convert a rate from a Prime-Based Rate to a LIBOR-Based Rate
and may continue a LIBOR-Based Rate Loan by providing Bank telephonic notice
(which shall be irrevocable and shall be confirmed in writing) not later than
10:00 a.m. Miami, Florida time two Business Days prior to the date of the
proposed conversion or continuance of each such rate conversion date or end of
the then current Interest Period for the subject Loan, as the case may be;
provided, however, if such continuance or conversion shall also involve a
request for an Optional Currency Advances, such request shall be made on or
before 1:00 p.m. London, England time at least four (4) Business Days prior to
the date of such conversion. Each notice to convert to or continue in a
LIBOR-Based Rate shall specify (i) the date of such rate conversion or
continuance, which shall be a London Banking Day, (ii) the amount of the Loan or
portion thereof with respect to which the notice applies and (iii) the duration
of the Interest Period applicable thereto. If by the second London Banking Day
before the end of the Interest Period during which a LIBOR-Based Rate is in
effect, the Borrower has not provided the foregoing notice, the Loan shall, in
the case of a Dollar Advance, at the end of the Interest Period accrue interest
at a Prime-Based Rate and, in the case of an Optional Currency Advance, shall at
the end of the Interest Period accrue interest at the LIBOR-Based Rate with an
Interest Period of one month. In the event of a conversion of Interest Rates,
such notice shall also make provision for payment of accrued interest on the
Loan so converted.
(h) Choice of Currency; Notices. Borrower may, in accordance with
and subject to the terms and conditions of this Agreement, including in
particular, but not by limitation, Article II hereof, including Section 2.1(b)
and hereof request Advances as Dollar Advances or Optional Currency Advances, or
elect to convert a Dollar Advance to an Optional Currency Advance, or to convert
an Optional Currency Advance to a Dollar Advances, or convert an Optional
Currency Advances from one Optional Currency to another Optional Currency. The
Bank shall not make an Optional Currency Advance if the Equivalent Amount of all
Optional Currency Advances, including the Optional Currency Advance being
requested, and the amount of any Dollar Advances exceeds the amounts specified
in Section 2.1(b) hereof. Notice of a request for an Optional Currency Advance
shall be made by the Borrower to FUNB and the Branch on or before 1:00 p.m.
London, England time at least (4) Business Days before each Optional Currency
Advance. All such notices shall be in writing or by facsimile (effective upon
receipt). Each notice of an Advance Request shall be irrevocable and binding on
Borrower and shall be given not later than 11:00 a.m. Jacksonville, Florida time
on the day which is not less than the number of Business Days specified above
for such notice. In the event that the Borrower has not provided notice to the
Bank on or before 4 Business Days prior to the end of an Interest Period of
whether it elects to maintain an Optional Currency Advance in an Optional
Currency or as to the Interest Period therefor, the Advance shall at the end of
the duration of the next Interest Period remain in the currency in which the
Optional Currency Advance was made with an Interest Period of one month.
(i) Indemnity. Borrower hereby indemnifies Bank against any loss or
expense which may arise or be attributable to Bank's obtaining, liquidating or
employing deposits or other funds acquired to effect, fund or maintain any loan
(i) as a consequence of any failure by Borrower to make any payment when due of
any amount due hereunder, for whatever reason including acceleration, in
connection with any loan bearing interest at the LIBOR-Based Rate, (ii) due to
any failure of Borrower to borrow on a date specified therefor in a notice of
borrowing, (iii) due to any payment, prepayment or conversion of any loan
bearing interest at the LIBOR-Based Rate on a date other than the last day of
the Interest Period therefor, or (iv) due to a conversion of an Optional
Currency Advance pursuant to Section 2.4(j) (ii) hereof. The amount of such loss
or expense shall be determined by the Bank, as the amount actually incurred by
the Bank as a result of the foregoing. Bank's calculations of any such loss or
expense shall be furnished to Borrower and shall be prima facie evidence
thereof.
(j) Changed Circumstances.
(i) If, after the date hereof, the introduction of, or any
change in, any applicable law or in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by Bank with any
request or directive (whether or not having the force of law) of such
governmental authority, central bank or comparable agency:
1. shall subject Bank to any tax, duty or other
charge with respect to this Note or shall change the basis of taxation of
payments to Bank of the principal of or interest on this Note or any other
amounts due in respect thereof (except for changes in the rate of tax on the
overall net income of Bank imposed by any governmental authority); or
2. shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by the Federal
Reserve Board), special deposit or similar requirement against assets of the
Bank, deposits with or for the account of Bank, or credit extended by Bank, or
shall impose on Bank or the foreign exchange and interbank markets any other
condition affecting the Note; and the result of any of the foregoing is to
increase the cost to Bank of maintaining any LIBOR-Based Rate or; to reduce the
amount of any sum received or receivable by Bank under this Note in respect of
interest at the LIBOR-Based Rate; then the Bank shall promptly notify Borrower
of such fact and demand compensation therefor and, within fifteen (15) days
after such notice by Bank, Borrower agrees to pay to Bank such additional amount
or amounts as will compensate Bank for such increased cost or reduction. Bank
will promptly notify Borrower of any event of which it has knowledge which will
entitle Bank to compensation pursuant to this Subparagraph 2.4 (j); provided,
however, that Bank shall incur no liability whatsoever to Borrower in the event
it fails to do so. The amount of such compensation shall be determined, by the
Bank, as the amount actually incurred by the Bank as a result of the foregoing.
Bank's calculations of any such loss or expense shall be furnished to Borrower
and shall be prima evidence thereof.
(ii) If, at any time, Bank shall determine in good faith that,
by reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in Dollars or Optional Currency in the applicable amounts
are not being offered to Bank, then Bank shall promptly give notice thereof to
Borrower. Thereafter, until Bank notifies Borrower that such circumstances no
longer exist, the obligation of Bank to make the LIBOR-Based Rate available to
Borrower shall be suspended, and Borrower shall subject to the following
sentence hereof, repay in full the then outstanding principal amount of each
portion of an Optional Currency Advance together with accrued interest thereon
or in the case of a Dollar Advance bearing interest at a LIBOR Rate repay the
Loan in full, together with interest accrued therein and amounts owed under
Section 2.4(i), or convert such LIBOR-Based Rate to a Prime-Based Rate in the
case of a Dollar Advance. Notwithstanding the foregoing, in the event that the
Bank determines that Optional Currency is not available to it, the Bank will
make a good faith effort to convert any outstanding Optional Currency Advance to
a Dollar Advance, and the Borrower shall be responsible for paying all costs or
expenses arising from such conversion, including those set forth in Section
2.4(i) hereof.
(iii) If, after the date hereof, the introduction of, or any
change in, any applicable law or in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by Bank with any
request or directive (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, shall make it
unlawful or impossible for Bank to honor its obligations hereunder to make or
maintain any LIBOR-Based Rate or make an Optional Currency Advance, Bank shall
promptly give notice thereof to Borrower. Thereafter, until Bank notifies
Borrower that such circumstances no longer exists, (A) the obligations of Bank
to make available the LIBOR-Based Rate or Optional Currency Advances and the
right of Borrower to convert any rate to a LIBOR-Based Rate or receive Optional
Currency Advances shall be suspended, and (B) if Bank may not lawfully continue
to maintain a LIBOR-Based Rate or extend Optional Currency Advances, as the case
may be, to the end of the then current Interest Period applicable thereto, the
applicable LIBOR-Based Rate in the case of a Dollar Advance shall immediately be
converted to a Prime-Based Rate for the remainder of such Interest Period, and
the Loan shall, subject to the following sentence hereof, be immediately due in
the event of an Optional Currency Advance. Notwithstanding the foregoing, in the
event that the Bank determines that Optional Currency is not available to it,
the Bank will make a good faith effort to convert any outstanding Optional
Currency Advance to a Dollar Advance, and the Borrower shall be responsible for
paying all costs or expenses arising from such conversion, including those set
forth in Section 2.4(i) hereof.
(iv) The provisions of Sections 2.4 (i) and (j) shall
similarly inure to the benefit to any party to whom the Lender sells an
interest, or participates on interest herein, as authorized pursuant to Section
8.9 hereof.
(k) [Intentionally left blank]
(l) SURVIVAL OF CERTAIN AGREEMENTS. Without prejudice to the
survival of any other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section shall survive the payment
in full of principal and interest hereunder and under the Notes.
2.5 MANDATORY PREPAYMENTS. In addition to the other repayment obligations
set forth herein, and subject to any prepayment penalties described in Section
2.4(i) hereof, the Borrower shall also pay to the Bank the amounts required to
be paid pursuant to Section 6.1 hereof. If on any FX Calculation Date the
Equivalent Amount of outstanding Optional Currency Advances shall have increased
such that the outstanding principal balance of Loans under Credit Facility B,
including such Equivalent Amount of outstanding Optional Currency Advances, and
the amount of Dollar Advances plus the undrawn portion of each outstanding
letter of credit issued hereunder exceeds the Maximum Loan Amount, then
immediately upon notice from Bank to Borrower, Borrower shall prepay a portion
of the Loans Credit Facility B, in an amount sufficient to reduce the
outstanding principal balance of the Loans under Credit Facility B, plus the
undrawn portion of each outstanding letter of credit to an amount equal to or
less than the Maximum Loan Amount. In the event a payment is required hereunder,
and if there are then outstanding both Dollar Advances and Optional Currency
Advances, the prepayment to the particular type of Advance shall be in order of
priority selected by the Borrower. The Borrower shall simultaneously reimburse
the Lender for any loss or out-of-pocket expenses incurred by Lender on account
of such prepayment, as set forth in Section 2.4(i) hereof.
2.6 FEES
(a) Unused Fee. In consideration for making Credit Facility B
available to the Borrower, the Borrower agrees to pay to the Bank an Unused Fee
(defined below), payable (i) quarterly in arrears on the first day of each
January, April, July and October during the term of Credit Facility B beginning
October 1, 1997; (ii) upon Credit Facility B Maturity; and (iii) upon
acceleration of repayment of Credit Facility B. "Unused Fee" shall mean the
amount calculated by (1) subtracting (x) the average daily outstanding principal
amount of Credit Facility B over the applicable period from (y) the Maximum Loan
Amount, and multiplying that resulting amount by (2) the amount calculated by
(x) dividing one-quarter of one percent (.25%) by three hundred sixty (360) and
(y) multiplying the result by the number of days elapsed.
(b) Fees Deemed Earned. All fees paid hereunder will be deemed
earned at the time of payment.
2.7 BUSINESS DAYS. If any scheduled date of repayment of any portion of a
Loan shall be due on a day which is not a Business Day, subject to the
provisions of Section 2.4 hereof, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in
computing interest in connection with such payment.
2.8 GUARANTEES. As a condition to the Bank making of the Loans to the
Borrower, the Borrower shall cause each of the Subsidiaries described on
Schedule 2.8 hereof (sometimes collectively referred as the "Guarantors") to
execute and deliver their joint and several unconditional guaranty of repayment
of the Loans, which guaranty shall be in the form attached hereto as Exhibit C
(the "Guaranty").
2.9 MODE OF PAYMENT. All funds payable to the Bank hereunder shall be paid
to the Bank at its office set out in Section 8.10 hereof, or at such place as
otherwise directed by the Bank, in actually and finally collected funds in the
currency required under in Section 2.12 hereafter on or before 2:00 P.M. (local
time) on the date when due. Payments shall not be deemed made or received until
they are received by the Bank as actually and finally collected funds in the
currency required under Section 2.12 hereafter. Any payment received after 2:00
P.M. (local time) on any business day shall, for the purposes of determining
time of payment under this Agreement as between the Borrower and the Bank only,
be treated as received on the next following business day; provided, however,
that this treatment shall not postpone the time of receipt for any other purpose
or computation, such as preference periods applicable to bankruptcy laws, or
dates relative to priority between creditors, or the like.
2.10 PREPAYMENT. Subject to the provisions of Section 2.4(i) hereof, upon
giving the Bank thirty (30) days prior written notice, the Borrower shall have
the right to prepay any amounts owed under Credit Facility A or reduce the
maximum amount available under Credit Facility B, in whole or in part, in
integral multiples of not less than One Hundred Thousand Dollars (U.S.
$100,000.00), or Equivalent Amount of Optional Currency Advances provided,
however, that any notice to permanently reduce the Maximum Loan Amount available
under Credit Facility B shall be accompanied by that amount of money, if any,
sufficient so that after giving effect to such payment the aggregate amount
outstanding under Credit Facility B does not exceed the Maximum Loan Amount
available under Credit Facility B and accrued interest thereon. Prepayments
applied to Credit Facility A shall be applied in inverse order of the scheduled
principal payments thereunder. Each notice of prepayment shall specify the
prepayment date and the principal amount to be prepaid. All prepayments of any
Loan hereunder shall include accrued interest upon the principal amount being
prepaid to the date of the payment, and any amounts owed pursuant to Section
2.4(i) hereof. Amounts prepaid under Credit Facility A may not be reborrowed.
Prepayment shall be in the currency specified in Section 2.12 hereof.
2.11 USE OF PROCEEDS. The proceeds of Credit Facility A were used by the
Borrower to redeem the outstanding convertible subordinated debentures (the
"Debentures") issued by the Borrower pursuant to that certain trust indenture
dated as of May 15, 1987, between the Borrower and the LaSalle National Bank and
(ii) to acquire shares of its common stock in open market purchases in a manner
consistent with applicable Federal or state law. Proceeds under Credit Facility
B shall be used (i) to provide funding for working capital and general corporate
purposes of the Borrower, and (ii) to issue letters of credit in accordance with
Section 2.1(d) hereof.
2.12 PAYMENT. All payments (including prepayments) of Dollar Advances
shall be made in Dollars, and all payments (including prepayments) of Optional
Currency Advances shall be made in the currency in which Optional Currency
Advance is then outstanding.
(a) The specification herein that payment be made in Dollars
or an Optional Currency, as the case may be, is of the essence hereof. If
payment is not made in the currency due under this Agreement (the "Contractual
Currency") or if any court or tribunal shall render a judgment or order for the
payment of amounts due hereunder or under the Credit Facility B Note and such
judgment is expressed in a currency other than the Contractual Currency, the
Borrower shall indemnify and hold the Bank harmless against any deficiency
incurred by the Bank in terms of the amount received by the Bank to the extent
the rate of exchange at which the Contractual Currency is convertible into the
currency actually received or the currency in which the judgment is expressed
(the "Received Currency") is not the reciprocal of the rate of exchange at which
the Bank would be able to purchase the Contractual Currency with the Received
Currency, in each case on the Business Day following receipt of the Received
Currency in accordance with normal banking procedures. If the court or tribunal
has fixed the date on which the rate of exchange is determined for the
conversion of the judgment currency into the Contractual Currency (the
"Conversion Date") and if there is a change in the rate of exchange prevailing
between the Conversion Date and the date of receipt by the Bank, then the
Borrower will, notwithstanding such judgment or order, pay such additional
amount as may be necessary to ensure that the amount paid in the Received
Currency when converted at the rate of exchange prevailing on the date of
receipt will produce the amount then due to the Bank from the Borrower hereunder
in the Contractual Currency.
(b) If any Borrower shall wind up, liquidate, dissolve or
become a debtor in bankruptcy while there remains outstanding (i) any amounts
owing to the Bank hereunder or under the Notes, (ii) any damages owing to the
Bank in respect of a breach of any of the terms hereof or (iii) any judgment or
order rendered in respect of such amounts or damages, the Borrower shall
indemnify and hold the Bank harmless against any deficiency in terms of the
Contractual Currency in the amounts received by the Bank arising or resulting
from any variation as between (i) the rate of exchange at which the Contractual
Currency is converted into another currency (the "Liquidation Currency") for
purposes of such winding-up, liquidation, dissolution or bankruptcy with regard
to the amount in the Contractual Currency due or contingently due hereunder or
under the Notes or under any judgment or order to which the relevant obligations
hereunder or under the Notes shall have been merged and (ii) the rate of
exchange at which the Bank could, in accordance with normal banking procedures,
be able to purchase the Contractual Currency with the Liquidation Currency at
the earlier of (A) the date of payment of such amounts or damages and (B) the
final date or dates for the filing of proofs of a claim in a winding-up,
liquidation, dissolution or bankruptcy. As used in the preceding sentence, the
"final date or dates for the filing of proofs of a claim in a winding-up,
liquidation, dissolution or bankruptcy" shall be the date fixed by the
liquidator under the applicable law as being the last practicable date as of
which the liabilities of the applicable Borrower may be ascertained for such
winding-up, liquidation, dissolution or bankruptcy before payment by the
liquidator or other appropriate person in respect thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement and extend the financing
contemplated hereby, the Borrower represents and warrants to the Bank as
follows:
3.1 ORGANIZATION, POWERS, ETC. The Borrower (a) is a corporation duly
incorporated and organized, validly existing and its status is active or current
under the laws of each jurisdiction in which it is transacting business; (b) has
all requisite corporate power and authority and all requisite licenses, permits
and authorizations to own, operate, lease, assign, mortgage, sell or otherwise
hypothecate or dispose of its assets and to carry on its business as now
conducted and as proposed to be conducted pursuant to this Agreement; (c) is
duly qualified or licensed to transact business and is in good standing in the
every other jurisdiction in which failure to so qualify or be licensed would
have a material adverse effect on its business or financial condition or its
ability to perform its agreements hereunder, which jurisdictions are set forth
on Schedule 3.1 hereof, and (d) has the full power and authority to enter into,
execute and perform those Loan Documents (as defined herein) to which it is a
party. This Agreement, the Notes, the Guaranty, and any and all other documents,
if any, required or contemplated to be executed and/or performed by the Borrower
or each Guarantor hereunder are referred to collectively herein as the "Loan
Documents".
3.2 AUTHORIZATION OF LOAN, ETC. The execution, delivery, and performance
of the Loan Documents to which it is a party or a signatory:
(a) have been duly authorized by all requisite corporate action of
the Borrower and each Subsidiary (as defined herein);
(b) do not require any consent or approval of shareholders of the
Borrower or any Subsidiary which has not been obtained;
(c) will not, in any respect material to the financial condition of
the Borrower and the Subsidiaries taken as a whole, violate or contravene
(i) any provisions of law applicable to the Borrower or
any Subsidiary;
(ii) any order, rule or regulation of any regulatory
authority, court or other agency of government applicable to the Borrower or any
Subsidiary;
(iii) any provision of the Articles of Incorporation or the
Bylaws of the Borrower or any Subsidiary; or
(iv) any agreement or obligation to which the Borrower or any
Subsidiary is a party or by which the Borrower or any Subsidiary or any of its
or their property is or may be bound, or be in conflict with, result in a breach
of or constitute (with or without notice or lapse of time, or both) a default
under, any such agreement or other instrument; and
(d) shall not result in the creation of any lien of any nature
whatsoever upon any property or assets of the Borrower or any Subsidiary.
3.3 LITIGATION, ADMINISTRATIVE AND REGULATORY PROCEEDINGS. There are no
actions, suits, investigations or proceedings (whether or not purportedly on
behalf of the Borrower or any Subsidiary, or any of its or their respective
officers, directors or management officials in their capacities as such),
pending or, to the knowledge of the Borrower or any Subsidiary or any of the
above officers, directors or management officials, threatened against or
affecting the Borrower or any Subsidiary or the above officers, directors or
management officials in their capacities as such, at law or in equity, or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, regulatory agency or instrumentality, domestic or
foreign, which are reasonably expected to be determined adversely to the
Borrower or any Subsidiary and which would result in any material adverse change
in the business or financial condition of the Borrower and the Subsidiaries
taken as a whole nor are there any factual situations which might reasonably be
expected to result in any such action, suit, investigation or proceeding which
are known to the Borrower or any Subsidiary or the above officers, directors or
management officials, but unasserted at the present time which would result in a
material adverse change in the business or financial condition of the Borrower
and the Subsidiaries taken as a whole. Neither is the Borrower nor any
Subsidiary in default of any law, rule, regulation, ordinance or order of any
court or federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign which would result
in a material adverse change in the business or financial condition of the
Borrower and the Subsidiaries taken as a whole.
3.4 PAYMENT OF TAXES AND OTHER CHARGES. The Borrower and each Subsidiary
has duly filed, paid and discharged, all federal, state and local tax returns
and taxes, and other governmental assessments and other charges, liens or claims
levied or imposed, which if unpaid would become a lien or charge for a material
amount upon the property, assets, earnings or business of the Borrower or any
Significant Subsidiary, or have an adverse effect on its financial condition or
its ability to perform its agreements hereunder, as the case may be. The
Borrower knows of no material tax or other assessment against it or any
Significant Subsidiary, which has not been properly reserved against as
reflected in the financial statements provided to the Bank in accordance with
Section 5.2 hereof.
3.5 FEDERAL RESERVE REGULATIONS.
1. Neither the Borrower nor any Subsidiary is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation G of the Federal Reserve Board ("FRB"));
2. No part of the proceeds of the Loans shall be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock; and
3. No part of the proceeds of the Loans shall be used for any
purpose that violates, or which is inconsistent with, the provisions of
Regulations G, T, U or X of the FRB.
3.6 SUBSIDIARIES. A complete list of the subsidiaries of the Borrower as
of the date hereof, as well as the place of incorporation and a list of all
jurisdictions in which each is transacting business is set forth in Schedule 3.1
hereof. This Schedule and Schedule 3.9 hereof shall be updated by Borrower
promptly of the time any new Subsidiary is added in accordance with Section 6.8
hereof. "Subsidiary" shall mean any corporation, partnership, or any other
entity either properly classified as a subsidiary of the Borrower for purposes
of generally accepted accounting principles ("GAAP") or as to which the Borrower
or any of its Subsidiaries exercises or has the right, whether by contract or
otherwise, to exercise control of its business. Each Subsidiary is a corporation
duly incorporated and organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and principal place of business,
has all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted, and
has full power and authority to enter into, execute and perform those Loan
Documents to which it is a party. "Significant Subsidiary" shall for all
purposes hereunder except as further limited in Section 5.5(c) hereof, mean
those Subsidiaries selected by Borrower owning sufficient assets which when
aggregated with the assets of the Borrower equal at least 95% of the aggregate
amount of the consolidated assets of the Borrower and all Subsidiaries;
provided, however, that any Subsidiary which borrows money from the Bank shall
be a Significant Subsidiary.
3.7 CONSENTS, ETC. No consent, approval, authorization of, or
registration, declaration or filing with any governmental authority (federal,
state or local, domestic or foreign) is required in connection with the
execution or delivery by the Borrower or any Subsidiary of any Loan Document to
which it is a party, or the performance of or compliance with the terms,
provisions and conditions hereof or thereof.
3.8 PROPERTIES. The Borrower and each Subsidiary has good and marketable
legal and equitable title to all of its properties and assets as of the date
hereof necessary for the conduct of its business, except property leased from
others, with each lease in which the annual rent is in excess of Fifty Thousand
Dollars ($50,000) being described in Schedule 3.8. As of the date of this
Agreement, all properties and assets of the Borrower and each Significant
Subsidiary shall be free and clear of all interests, claims, reversionary rights
or interests, mortgages, pledges, liens, restrictions, forfeitures, charges,
attachments, levies, encumbrances or other matters adversely affecting the
Borrower's title hereof except (i) as contemplated herein; (ii) for Permitted
Encumbrances (as defined in Section 6.3 hereof), and (iii) Liens securing
obligations on the date hereof which are not obligations for borrowed money in
excess of $250,000 individually or $1,000,000 aggregate and there have not been
filed or executed any UCC financing statements, amendments or continuations
naming the Borrower as debtor, except for lease filings and those filed in
connection with the indebtedness described above.
3.9 OWNERSHIP. The respective classes of capital stock of each Subsidiary,
and the number of issued and outstanding share of each are as set forth in
Schedule 3.9 hereof. The Borrower owns directly as indirectly, as reflected on
Schedule 3.9, all of the issued and outstanding stock of each Subsidiary, except
for stock held by other persons, as set forth on Schedule 3.9 hereof, which
ownership is required by law, or is non-voting, and in either case none of which
vests control of any Subsidiary in any person other than Borrower. There are no
rights, warrants, options or similar agreements or understandings in existence
pursuant to which any other person may acquire any capital stock, or the right
to vote such stock, of any Subsidiary, or otherwise acquire control of any
Subsidiary. "Control" shall have the meaning ascribed to such term in Section
7.1 hereof.
3.10 ERISA.
1. The Borrower and each Subsidiary is in compliance in all material
respects with all applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the regulations and
interpretations thereunder. With respect to any of the pension or employee
benefit plans maintained by the Borrower, each Subsidiary or other affiliates
(hereinafter called a "Plan") subject to Title IV of ERISA, no Accumulated
Funding Deficiency (as defined in Section 302(a)(2) of ERISA and Section 412(a)
of the Code) has occurred. No Reportable Event (as defined in Section 4043(b) of
ERISA) exists in connection with any such Plan which presents a material risk
for the termination of such Plan by the Pension Benefit Guaranty Corporation
("PBGC") or for the appointment of a trustee to administer such Plan or which
would cause a Borrower or any Subsidiary to incur any material liability to the
PBGC. "Plan" for purposes of this Agreement includes any Plan maintained by a
member of a Controlled Group (as defined in Section 1563 of the Code) of which
Borrower or any Subsidiary is part, or any such Plan to which Borrower or any
Subsidiary, or any member of the Controlled Group, is required to contribute on
behalf of any of its employees.
2. Neither the Borrower nor any Subsidiary is a member of any
multi-employer Plan.
3.11 AGREEMENTS. Neither the Borrower nor any Subsidiary is a party to any
agreement or instrument or subject to any charter or other corporate restriction
materially adversely affecting the business, properties or assets, operations or
condition (financial or other) of the Borrower and the Subsidiaries, taken as a
whole, or its ability to perform its agreement under the Loan Documents to which
it is a party. Neither the Borrower nor any Significant Subsidiary is in default
in the performance, service or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party,
which may result in a material adverse change in the condition, financial or
otherwise of the Borrower and its Subsidiaries taken as a whole, or its ability
to perform its agreements hereunder.
3.12 ENFORCEABILITY OF THE LOAN DOCUMENTS. The Loan Documents and the
performance of the Borrower's and each Subsidiary's obligations under those Loan
Documents to which it is a party or a signatory, or under any other instrument
executed or to be executed by or on its behalf hereunder constitute, or upon
execution and delivery thereof shall constitute the legal, valid and binding
obligations of the Borrower or such Subsidiary, enforceable against the Borrower
or such Subsidiary, as the case may be, in accordance with their respective
terms.
This representation is subject to the qualification that enforcement of
the foregoing described loan documents is subject to:
a. equitable remedies;
b. bankruptcy, insolvency, reorganization, moratorium and other laws
applicable to creditors' rights generally;
c. any restrictions or constraints peculiarly applicable to
Bank; and
d. as to certain remedial, waiver and other provisions of the Loan
Documents, other provisions of general Florida law.
3.13 GUARANTY. All representations and warranties of each of the
Guarantors in the Guaranty are true and correct in all material respects.
3.14 RELATIONSHIP OF THE BORROWER AND SUBSIDIARIES. The Borrower and the
Subsidiaries are engaged as a globally integrated group of designers and
producers of electronic products and subsystems, providing the required
services, credit and other facilities for those integrated operations. The
Borrower requires financing on such a basis that funds can be made available
from time to time to the extent required for the continued successful operation
of their integrated operations. The Advances made to the Borrower under this
Agreement and the Loans made under Credit Facility A are for the purpose of
financing the integrated operations of the Borrower, and the Subsidiaries and
the Borrower expect to derive benefit, directly or indirectly, from the Loans,
both individually and as a member of the integrated group, because the financial
success of the operations of the Borrower and each Subsidiary is dependent upon
the continued successful performance of the integrated group as a whole.
3.15 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
3.16 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The foregoing
representations and warranties shall be true and correct as of the date hereof
and at all times during the term of the Loans.
ARTICLE IV
CONDITIONS OF LENDING
The obligation of the Bank to extend the financing contemplated hereby is
subject to the terms of this Agreement and to the following conditions
precedent:
4.1 REPRESENTATIONS AND WARRANTIES. On the date of execution of this
Agreement, such date being sometimes referred to hereafter as the "Closing," the
representations and warranties of the Borrower and the Subsidiaries contained
herein or in any the Loan Document shall be true and correct in all material
respects.
4.2 NO DEFAULT. On the date hereof, after giving effect to such borrowing
hereunder, the Borrower shall have observed and performed all the terms,
conditions and agreements set forth herein, or on its part to be observed or
performed in all material respects, and no Event of Default specified in Article
VII hereof, nor any other event which, upon notice or lapse of time or both,
would constitute an Event of Default shall have occurred.
4.3 SUPPORTING DOCUMENTS AND OTHER CONDITIONS. On the date hereof, but in
any event prior to any further Advance hereunder or the issuance of a letter of
credit hereunder, the Borrower shall have delivered to the Bank the following:
(a) a certificate of the Secretary of State or other applicable
governmental authority of each state or country in which Borrower or a Guarantor
is transacting business, certifying:
(i) that attached thereto is a true and complete copy of the
Articles of Incorporation or other charter documents of the Borrower and each
Guarantor as of a date within ten (10) days of the date hereof; and
(ii) that the Borrower and each Guarantor is in good standing,
or its status is active where the applicable jurisdiction is Florida, in that
State or other applicable jurisdiction;
(b) a certificate of a duly authorized officer of the Borrower and
each Subsidiary, dated the date of such borrowing, certifying:
(i) that attached thereto is a true and complete copy of the
Bylaws of the Borrower or Subsidiary, and the articles of incorporation for each
Subsidiary other than a Guarantor, as applicable, as in effect on the date of
such certification;
(ii) that the Borrower or Subsidiary is in good standing, or
its status is active where the applicable jurisdiction is Florida, in each
jurisdiction in which it is transacting business;
(iii) that attached thereto is a true and complete copy of
resolutions of the Board of Directors of the Borrower or Subsidiary, as
applicable, directing the execution and delivery by the Borrower of the Loan
Documents to which it is a party, indicating the officers of the Borrower or
Subsidiary, as applicable, authorized to execute such instruments and act on its
behalf, which resolutions are in full force and effect without modification on
the date of such certification;
(iv) the incumbency and signatures of the officers
of the Borrower or each Subsidiary executing the Loan Documents to which it
is a party; and
(v) that the Articles of Incorporation or other charter
documents of the Borrower or Subsidiary, as applicable, described in Section
4.3(a)(i) or Section 4.3(b) hereof have not been amended and are true and
complete as of the date hereof;
(c) a certificate of a duly authorized officer of the Borrower and
each Guarantor to the effect that after giving effect to the transaction
contemplated herein (i) the Obligation of the Borrower will not be greater than
the value of the consolidated property of the Borrower at a fair valuation; (ii)
the Borrower will have sufficient capital to engage in its business on an
ongoing basis; (iii) the Borrower will have the ability to pay its Obligations
as they mature;
(d) Credit Facility A Note duly executed by the Borrower;
(e) Credit Facility B Note duly executed by the Borrower;
(f) Indemnification Agreement, substantially in the form attached
hereto as Exhibit D;
(g) the Guaranty duly executed by the Guarantors;
(h) the opinions of counsel to the Borrower, Stevens-Arnold, Inc.,
JETA Power Systems, Inc., RT Holding Corp., Heurikon Corp. from attorney(s)
licensed to practice law in the states of such entities organizations in form
attached reasonably acceptable to the Bank;
(i) the ISDA Master Agreement dated as of July 14, 1997 between the
Lender and the Borrower (the "ISDA Master Agreement") and any other documents
required by the terms thereof to be delivered in connection therewith;
(j) searches from each jurisdiction in which it and each Subsidiary
is transacting business within the State of Florida, Wisconsin, California and
Massachusetts demonstrating that there are no liens upon the Borrower's or any
Subsidiary's property except as permitted hereunder; and
(k) all other additional opinions, documents, certificates and other
assurances that the Bank or its counsel may reasonably require.
4.4 LOAN FEES. The Borrower shall pay at the time of execution hereof all
costs of the Bank incurred through such dates as provided in Section 8.1 hereof.
4.5 CLOSING. This Agreement, the Notes, and the Guaranty shall by executed
by the Borrower or Guarantor, as the case may be, at the place set forth on the
signature pages hereof, and the execution of this Agreement by the Branch and
the Bank shall occur in Charlotte, North Carolina, and the delivery of the
originals of such documents to the Bank shall occur at the office of Bank's
agent in Charlotte, North Carolina, and the delivery of the balance of the
documents described in Article IV hereof shall be at a time agreed upon by the
parties hereto, at the offices of Holland & Knight LLP, Suite 3000, 701 Brickell
Avenue, Miami, Florida.
4.6 APPROVAL OF COUNSEL FOR BANK. All legal matters incident to this
Agreement shall be reasonably satisfactory to Messrs. Holland & Knight LLP,
counsel for the Bank.
4.7 CONDITIONS PRECEDENT TO EACH ADVANCE AND ISSUANCE OF EACH LETTER OF
CREDIT. The following conditions, in addition to any other requirements set
forth in this Agreement, shall have been met or performed on or prior to the
date any Advance or issuance of any letter of credit hereunder shall be made by
the Bank:
a. Request to Make an Advance or Issue a Letter of Credit. The
Borrower shall have delivered to the Bank a request to make an Advance which
request shall be substantially in the form attached hereto as Exhibit E (the
"Request), or deliver such application (the "Application") to issue a letter of
credit in accordance with Section 2.4(d)(i) hereof.
b. No Default. On the date of the Request or Application as the case
may be, the Borrower and each Subsidiary shall be in compliance in all material
respects with all the terms and provisions set forth in the Loan Documents on
its part to be observed or performed, and no Event of Default shall have
occurred or be continuing at such time, or will occur upon the making of the
Advance or issuance of the Letter of Credit in question.
c. Correctness of Representations. All representations and
warranties made by the Borrower and any Guarantor herein or in the other Loan
Documents or otherwise in writing in connection herewith shall be true and
correct with the same effect as though the representations and warranties had
been made on an as of the proposed date of the Advance or issuance of the Letter
of Credit, except to the extent such representation and warranty relates to an
earlier date.
d. No Adverse Change. There shall have been no material adverse
change in the condition, financial or otherwise, of the Borrower and the
Subsidiaries, taken as whole, from such condition as it existed on the date of
the most recent financial statements of such person delivered prior to the date
hereof.
e. Further Assurances. The Borrower shall have delivered such
further documentation or assurances as the Bank may reasonably require.
f. Advance Limitations. Any Request for an Advance or filing of any
Application shall be irrevocable, made in the time frame as specified in Section
2.4 hereof, in the case of an Advance, shall be in a minimum amount of $100,000
or a whole multiple of $100,000 in excess thereof, or Equivalent Amounts thereof
for Optional Currency Advances. No Request for an Advance may be made or
Application filed after the Credit Facility B Maturity.
g. Maximum Amount. The amount of the Advance sought in the Request
or the amount of the letter of credit requested in the Application, either by
itself or in the aggregate with other amounts outstanding under Credit Facility
B or the amount of other outstanding letters of credit, shall not exceed the
Maximum Amount.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of the Borrower and the Subsidiaries consents and agrees that, from
the effective date and so long as this Agreement shall remain in force and
effect, and until payment in full of the principal and interest due under the
Notes and until full satisfaction of the Obligation described hereunder, it
shall:
5.1 NOTICE. Give prompt written notice to the Bank of:
a. the institution, or threat of institution, or the occurrence of
facts known to it which might reasonably be expected to result in, any action,
suit, investigation or proceeding instituted by or against the Borrower or any
Subsidiary or the officers, directors or management officials of the Borrower or
any Subsidiary in their capacity as such, at law or in equity, in any federal or
state court or before any federal, state, municipal or other governmental
department, commission, board, bureau agency, regulatory authority or
instrumentality, domestic or foreign, which seeks damages or other relief in
excess of One Million Dollars ($1,000.000.00) or the Equivalent Amount thereof
if such judgment is rendered in other than Dollars, or which if determined
adversely to the Borrower or any Subsidiary would have a material adverse effect
upon the business or financial condition of the Borrower and the Subsidiaries,
taken as a whole; and
b. any other action, event or condition of any nature which, in the
reasonable opinion of the Borrower, with or without notice, or lapse of time, or
both, constitutes or would constitute an Event of Default under this Agreement.
Each notice required to be delivered pursuant to this Section 5.1
shall include a reasonably detailed description of the matter, the amount in
controversy (or other non-monetary relief sought or both), the title of the
applicable forum, style of the proceeding, case number, docket number and the
like, and the attorney or law firm (together with address) providing
representation on behalf of the Borrower, or officers, directors or management
officials of the Borrower, in their capacities as such, with respect to each
item of litigation listed.
5.2 ACCOUNTS AND REPORTS. Maintain a standard system of accounting in
accordance with generally accepted accounting principles consistently applied,
and furnish or cause to be furnished to the Bank copies of each of the
following:
a. Within ninety (90) days after the end of its fiscal year, (i) an
annual consolidated financial statement of the Borrower and its Subsidiaries,
and related statements of income, shareholders' equity, and changes in position
for such fiscal year, all with accompanying notes, in reasonable detail and
stating in comparative form the figures as of the end of and for the previous
fiscal year, audited without scope limitations by an independent certified
public accountants of recognized standing selected by the Borrower and
acceptable to the Bank (the foregoing shall have been certified pursuant to an
audit as presenting fairly the financial position of the Borrower and its
Subsidiaries, and the results of operations and changes in financial position
for the fiscal year, without qualification, in conformity with GAAP consistently
applied together with a copy of the management letter or a statement that none
was issued); provided, however, that the delivery of the Borrower's Form 10-K
for that fiscal year shall satisfy this requirement, so long as the financial
statement was prepared by either Arthur Anderson or by an accounting firm
reasonably satisfactory to the Bank; (ii) a compliance certificate executed by
the Chief Financial Officer certifying that as of the date thereof the Borrower
is in compliance in all material respects with the terms hereof and itemizing
the computations performed to test such compliance as to Sections 6.1 or 6.8 or
Article 6A hereof, in sufficient detail (including the aggregate amount of
previous sales required to be included in calculation of amounts due under
Section 6.1 hereof) to permit the Bank to relate the items involved in the
computation to the figures shown on the financial statements; and (iii) a copy
of accountants' management letter or statement that none was prepared.
b. Within 120 days after the end of its fiscal year, a consolidating
financial statement of the Borrower and its Subsidiaries, which may be
unaudited.
c. Within forty-five (45) days of the end of each fiscal quarter,
(i) a detailed profit and loss statement and balance sheet of the Borrower and
its Subsidiaries, each of which may be compiled by the Borrower, and need not be
audited or reviewed by an independent accountant (each of the foregoing must
reflect GAAP, applied consistently with the annual financial statements);
provided, however, that the delivery of the Borrower's Form 10-Q for the fiscal
quarter then ending shall satisfy this requirement; (ii) a compliance
certificate executed by the Chief Financial Officer of the Borrower, certifying
that as of the date thereof, the Borrower is in compliance in all material
respects with the terms hereof and itemizing the computations performed to test
such compliance as to Sections 6.1 or 6.8 or Article 6A hereof in sufficient
detail (including the aggregate amount of previous sales required to be included
in calculation of amounts due under Section 6.1 hereof) to permit the Bank to
relate the items involved in the computation to the figures shown on the
financial statements; and (iii) a certification by the Chief Financial Officer
as to compliance with Section 5.5(c) hereof.
d. Promptly upon becoming available, (but no later than ninety (90)
days after the end of Borrowers fiscal year in the case of the delivery of Form
10-K and forty-five (45) days after the end of Borrower's fiscal quarter in the
case of the delivery of Form 10-Q), copies of all financial statements, reports,
and notices sent by the Borrower to its stockholders, and of all regular and
periodic reports and other material (including copies of all registration
statements and reports under the Securities Act of 1934, as amended) filed by
the Borrower and any securities exchange or any governmental authority or
commission, except material filed with governmental authorities or commissions
in the ordinary course of the business of the Borrower and which does not relate
to or disclose any material adverse effect to the affairs of the Borrower.
e. Promptly, from time to time, such other information regarding the
operation, business affairs and financial condition of the Borrower and the
Subsidiaries as the Bank may reasonably request.
5.3 MAINTAIN INSURANCE.
a. Keep the insurable properties of the Borrower and its
Subsidiaries adequately insured with sound and reputable insurers to the extent
and against such risks (including fire and other risks commonly insured against
by extended coverage) as is customary with companies in the same or similar
businesses.
b. Maintain in full force and effect public liability insurance
against claims for personal injury or death or property damage occurring upon,
in, or about or in connection with the use of any properties owned, occupied or
controlled by the Borrower or any of its Subsidiaries.
5.4 FUTURE TAXES. Pay all taxes and other governmental assessments as the
same shall become due, excepting only taxes and governmental assessments which
the Borrower or any Significant Subsidiary is contesting in good faith and for
which the Borrower or any Significant Subsidiary has set aside adequate
reserves, including reserves for interest with respect thereto in the manner
provided hereafter.
5.5 CORPORATE EXISTENCE, PROPERTIES, STOCK OWNERSHIP AND SOLVENCY.
a. Except as otherwise permitted by Section 6.2 hereof, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect the Borrower's and the Significant Subsidiaries' corporate existence, and
its and their rights, licenses, permits and franchises and charters, and conduct
and operate its and their business in substantially the manner in which the
business is presently conducted and operated (subject to changes in the ordinary
course of business); and at all times maintain, preserve and protect all
material franchises and trade names; and comply in all material respects with
all laws, statutes, regulations and ordinances of any governmental entity or
agency thereof, applicable to the Borrower or any Significant Subsidiary;
b. maintain the percentage share ownership of each Subsidiary as in
effect on the day hereof, as well as control of the right to vote such stock,
and to own and control 100% of the title, and control the right to vote, the
stock of any Subsidiary created after the date hereof;
c. the Borrower and each Significant Subsidiary, and the Borrower
and all Subsidiaries on a consolidated basis, will remain Solvent at all times;
provided, however, that for purposes of the foregoing, a Significant Subsidiary
will mean each Subsidiary selected by the Borrower having assets which, when
aggregated with the assets of the Borrower, equal or exceed 80% of the
consolidated assets of the Borrower and all Subsidiaries, except that each
Subsidiary borrowing money from the Bank shall be a Significant Subsidiary; and
d. each Subsidiary other than a Significant Subsidiary will also be
Solvent at all times except to the extent it is not Solvent because of other
indebtedness permitted hereunder.
5.6 WARRANTIES AND CONDITIONS. Do all acts or refrain from action, as
necessary to cause all of the representations and warranties set forth in
Article III hereof to continue to be true in all material respects at all times
that this Agreement is in effect.
5.7 FURTHER AGREEMENTS. Comply with any and all procedures reasonably
established by the Bank for processing, handling and accounting for the Loans
and all payments involved, and the documents or instruments pertaining thereto.
The Borrower and each Subsidiary shall execute and deliver to the Bank all such
additional agreements, documents, instruments and affidavits necessary or as may
reasonably be required by the Bank to evidence and accurately account for and
ratify all amounts advanced or payable pursuant to this Agreement or any of the
Obligations. The Borrower and each Subsidiary shall pay all taxes (other than
income or similar taxes of the Lender), recording fees and other reasonable
costs incurred by the Bank in connection with such subsequent loans. At the
option of the Bank, the Notes may be modified or renewed, an additional note may
be executed, or overdrafts may be allowed on any account of the Borrower or any
Subsidiary with the Bank, or advances made against uncollected funds under
drafts presented by the Borrower or any Subsidiary to the Bank for collection.
5.8 ERISA. Comply in all material respects with the provisions of ERISA to
the extent applicable to any pension or welfare benefit plan maintained for any
of its or their employees, not incur any material accumulated funding
deficiency, as defined in Section 302(a)(2), or any material liability to the
Pension Benefit Guarantee Corporation ("PBGC"); not permit any Reportable Event,
as defined in Section 403(b) of ERISA, or other event to occur which may
indicate that its plan is not sound, which constitutes grounds for termination
of a plan by the PBGC, which would be the basis for the PBGC to assert a
material liability against the Borrower or any Subsidiary, or which may result
in the imposition of a lien on any of the Borrower's or any Subsidiary's assets
or which constitutes grounds for the appointment by the appropriate United
States District Court of a trustee to administer any Plan; and notify the Bank
in writing promptly after it has come to the attention of the officers of the
Borrower or any Subsidiary of the assertion or threat of any Reportable Event,
the existence of any Reportable Event or other event which may give rise to any
of the foregoing events.
5.9 ENVIRONMENTAL MATTERS. Represents to the Bank that the places of
business operated by the Borrower and its Significant Subsidiaries have not in
the past been used by Borrower, any Significant Subsidiary, or, to its
knowledge, any other party, are not presently being used, and will not in the
future be used for the handling, storage, transportation, or disposal of
hazardous or toxic materials in any manner not in compliance with applicable
law. The Borrower agrees to indemnify, defend, and hold the Bank harmless from
and against any loss to the Bank (including, without limitation, reasonable
attorneys' fees) incurred by the Bank as a result of such past, present or
future use, handling, storage, transportation, or disposal of hazardous or toxic
materials.
5.10 GUARANTORS. The Borrower agrees that it will promptly forward to the
Guarantors any notices or documents or information which it is required
hereunder or under the Loan Documents to forward to the Bank.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower and the Subsidiaries covenant and agree that, during the term
of this Agreement, neither the Borrower nor the Subsidiaries will:
6.1 SALE OF ASSETS. Sell, lease or otherwise dispose of any shares of
stock or other interest in any Significant Subsidiary, or of any other assets of
the Borrower, or allow any of its Significant Subsidiaries to do so, in a single
transaction or series of transactions, without the prior written consent of the
Bank, which may be withheld at the Bank's sole discretion; provided, however,
that the Borrower may sell, lease or dispose of assets in the ordinary course of
business and provided, further, that the foregoing by itself shall not act to
prevent the Borrower or any Subsidiary, so long as there does not then exist an
Event of Default or so long as no Event of Default is created as a result of
such sale, lease or disposition, from selling, leasing or otherwise disposing
of, or engaging in:
(a) subject to the restriction set forth in Section 6.1(d) hereof, a sale
and leaseback involving assets (x) in an amount not to exceed, in the aggregate
for each such twelve month period ten percent (10%) of the Borrower's
consolidated Net Tangible Assets measured on a quarterly basis based on the
twelve (12) month period then ending, with the first twelve (12) month period
being the period of July 1, 1996 through June 30, 1997; or (y) in transactions
in which the resulting lease is less than one year or the proceeds of the sale
of which shall be used to purchase new assets or retire existing indebtedness.
"Net Tangible Assets" shall mean such amount as computed in accordance with
GAAP;
(b) the real property and facilities of Stevens - Arnold, Inc., located at
7 Elkin Street, South Boston, Massachusetts;
(c) subject to the restriction set forth in Section 6.1(d) hereof, the
real property and facilities located at 13-15 Shing Wan Road, Hong Kong (the
"Hong Kong Property"); and
(d) any other sale not otherwise described in (a) and (b) above in which
(A) the aggregate amount of the sale of assets in a calendar year does not
exceed ten percent (10%) of total Capitalization or (B) there is paid to the
Bank, together with amounts owed under Section 2.4(i) hereof, within twenty-four
(24) months after the sale of such assets, an amount equal to fifty percent
(50%) of the Net Sale Price (which payment is referred to herein as a "Mandatory
Prepayment"), if the Net Sale Price therefore, together with the Net Sales Price
for any other item sold in that calendar year, including, sale price of assets
sold under (a) above, is for an aggregate amount in excess of ten percent of the
Total Capitalization; provided, however, that the foregoing shall not permit any
sale or other disposition not otherwise permitted hereunder where the aggregate
amount of the Net Sale Price of assets sold or disposed of under this subsection
or Subsection 6.1(a) hereof over the term of this Agreement including the
expected Net Sale Price of the intended sale or disposition, exceeds twenty
percent of the Total Capitalization as calculated at the time of the proposed
sale or disposition; provided, further, however, that the Net Sale Price shall
not include and the Mandatory Prepayment shall not be required in respect
thereof to the extent proceeds received by the Borrower or any Subsidiary from
the sale of assets to the extent such moneys are reinvested by the Borrower or a
Subsidiary in making an acquisition permitted by Section 6.8 hereof or acquiring
other capital assets within twenty-four (24) months from the date of sale
provided, however, pending such reinvestment, such proceeds are to be maintained
for a period not to exceed twenty-four (24) months, in short term investments
(as defined under GAAP) pending such reinvestment described above. The amounts
required to be paid to the Bank under this subsection (e) are referred to herein
as a Mandatory Prepayment. The cash proceeds from the sale of the Hong Kong
Property will also be treated as subject to the requirement that 50% of the Net
Sale Price be paid to the Bank as a Mandatory Prepayment and the requirement
that the Net Sales Price be invested for the period and in the investments
specified above, all as if the sale had been a sale permitted only pursuant to
Section 6.1(d) hereof, provided that the proceeds from the sale of the Hong Kong
Property shall not be included in calculating whether the aggregate amount of
sales of assets is in excess of 20% of Total Capitalization. Borrower agrees
that (i) all sales proceeds invested as provided herein if not previously
reinvested in acquisitions permitted under Section 6.8 hereof or acquisition of
capital assets, or (ii) at the option of the Borrower, an equivalent amount of
cash will become subject to a lien in favor of the Bank if there occurs an Event
of Default and will promptly enter into a security agreement with the Bank in
form acceptable to the Bank upon the occurrence of an Event of Default.
Mandatory Prepayments made hereunder shall be applied to installments of
principal of indebtedness owed by Borrower or any Subsidiary to the Bank in the
inverse order of scheduled monthly maturity of such indebtedness. "Total
Capitalization" shall mean debt or payment obligations for borrowed money with a
stated maturity longer than 365 days plus Net Worth (as such term is computed
under GAAP) determined for the Borrower and its Subsidiaries on a consolidated
basis. "Net Sale Price" shall mean the aggregate cash consideration paid to the
Borrower and Subsidiaries as result of the sale, less the expenses involved in
selling the assets, including any taxes payable as a result of such transaction.
6.2 REORGANIZATIONS. Dissolve, liquidate or discontinue its normal
operations, or merge, consolidate or enter into any syndicate or other
combination with any corporation, firm or partnership, or transfer any of its
accounts receivable or enter into a joint venture or partnership, or offer or
enter into any agreement or memorandum of intent or understanding or the like to
do any of the above, without the prior written consent of the Bank, unless one
Subsidiary merges or consolidated with another Subsidiary in a transaction where
the assets and liabilities of one of the Subsidiaries become the assets and
liabilities of another Subsidiary.
6.3 LIENS. Attempt to create, incur, assume or suffer to be created,
incurred or assumed, or permit, any claims, interest, mortgage, lien, charge,
security interest, pledge or encumbrance on any of the Borrower's or any
Significant Subsidiary's assets; provided, however, that this Section shall not
apply to (i) such claims, interests, mortgages, liens, charges, security
interests, pledges or encumbrances upon the Borrower's and Subsidiaries'
Property, Plant and Equipment which in the aggregate secure indebtedness owed to
persons or entities other than the Bank in an amount not to exceed fifteen
percent (15%) of the consolidated Tangible Net Worth of the Borrower and its
Subsidiaries or (ii) other liens or mortgages approved in writing by the Bank or
set forth on Schedule 6.3 hereof (the "Permitted Encumbrances") or (iii) a lien
upon the Hong Kong Property (as defined in Section 6.1(d) hereof) in an amount
not to exceed Ten Million Dollars. The foregoing shall not be deemed to
authorize the foregoing transactions, if there then exists an Event of Default
or there would then exist an Event of Default after giving effect to such
transaction. "Property, Plant and Equipment" shall mean any assets that would be
classified and accounted for as property, plant and equipment in accordance with
GAAP.
Notwithstanding the foregoing, neither Borrower nor any Subsidiary will
grant any lien, pledge, security interest or encumbrances on the stock of any
Subsidiary.
6.4 GUARANTEES. Guarantee or otherwise in any way become or be responsible
for the obligations of any other person (whether by agreement to purchase the
indebtedness of any other person, or agreement for the furnishing of funds to
any other person through the purchase of goods, supplies or services (or by way
of stock purchase, capital contribution, advance or loan) for the purpose of
paying or discharging indebtedness of any other person, or otherwise) unless the
Borrower has received the prior written consent of the Bank or with respect to
the Guaranty or any other guaranty in favor of the Bank or Guaranty in favor of
a third party lender secured solely by the Hong Kong Property, provided such
Guaranty does not exceed Ten Million Dollars or provided there does not then
exist an Event of Default or provided an Event of Default is not created as a
result of such Guaranty.
6.5 INDEBTEDNESS. Create, incur, assume or suffer to exist any
indebtedness, except for (i) the Obligation; (ii) accounts payable arising in
the ordinary course of business; (iii) other indebtedness permitted hereunder;
(iv) indebtedness secured by mortgages described in Schedule 6.3 and any
renewals or extensions (but not any increases thereof); and (v) indebtedness
permitted by the Bank in writing. "Indebtedness" shall mean all of the
Borrower's and the Subsidiaries' obligation and liabilities to any person or
entity, including, without limitation, all debts, claims and indebtedness,
contingent, fixed or otherwise, heretofore, now or from time to time hereafter
due or payable, however evidenced and however arising, and any leases required
to be capitalized under GAAP.
6.6 NO LOANS. Make any loans, advances or extensions of credit except that
the Borrower may have trade receivables and may make advances and deposit in the
ordinary course of business not to exceed $2,000,000 in the aggregate. The
Borrower may also make advances to its officers, directors and employees from
time to time in the ordinary course, provided that the maximum aggregate amount
of all such advances will not exceed One Million Dollars ($1,000,000.00) at any
time.
6.7 INVESTMENTS. Make or suffer to exist any investments other than:
1. in direct obligations of the United States of America, or any
agency thereof or obligations guaranteed by the United States of America;
provided, that such obligations mature within one year from the date of
acquisition thereof;
2. in certificates of deposit maturing within one year from the date
of acquisition issued by the Bank, or by any other bank or trust company
organized under the laws of the United States or any state thereof having
capital surplus and undivided profits aggregating at least $100 million and not
known by the Borrower to be having financial difficulties;
3. commercial paper rated P-1 and P-2 by Moody's Investors
Service, Inc. (Commercial Paper Record) and rated A-1 or A-2 by Standard and
Poor Corporation (Commercial Paper Ratings Guide);
4. private placements with daily maturities;
5. other investments (after consultation with the Bank) of up to an
aggregate amount of $500,000.00 outstanding at any one time(s); and
6. the Borrower's ownership of the Subsidiaries as of the date of
this Agreement, and as permitted pursuant to Section 6.8 hereof.
6.8 ACQUISITIONS. Acquire all or a substantial portion of another
business, whether by purchase of stock, assets or otherwise, for an aggregate
purchase price in excess of (i) Ten Million and 00/100 Dollars ($10,000,000.00)
plus (ii) forty percent (40%) of EBITDA for the most recent four (4) fiscal
quarters plus (iii) one hundred percent (100%) of such acquired business' EBITDA
(excluding compensation of officers and distributions paid out by closely held
entities), for the most recent four (4) fiscal quarter without the Bank's prior
written consent. Any such business, if not made a part of Borrower or an
existing Subsidiary, shall be deemed to be a Subsidiary for purposes of this
Agreement, and shall be subject to this Agreement. Notwithstanding the
foregoing, the acquisition of Elba Electric GmbH and affiliated entities
("Elba") as described in that certain letter of intent dated June 3, 1997 and
July 2, 1997, from Borrower to Elba is a permitted acquisition under this
Section 6.8.
6.9 FISCAL YEAR. Change its fiscal year from its present fiscal year.
ARTICLE VI A
FINANCIAL COVENANTS
6A.1 EBITDA TO DEBT SERVICE COVERAGE RATIO. Each of the Borrower and the
Subsidiaries agree so long as this Agreement shall remain in place that it shall
maintain on a consolidated basis, a minimum EBITDA to Debt Service Coverage
Ratio of 1.75 to 1.0 through June 30, 1997, measured for the period of July 1,
1996 through June 30, 1997, and 2.50 to 1.0 at all times thereafter, measured on
the last day of each fiscal quarter thereafter beginning September 30, 1997 for
the twelve (12) month period then ending for the twelve (12) month period ending
September 30, 1997.
6A.2 TANGIBLE NET WORTH. (a) Each of the Borrower and the Subsidiaries
agree that it shall maintain on a consolidated basis until December 31, 1997, a
minimum Tangible Net Worth at all times in the total amount of $20,060,000.00
plus fifty percent (50%) of the Borrower's consolidated cumulative net income
April 4, 1995, (b) a minimum tangible Net Worth of $50,000,000 on December 31,
1997, and (c) at all times maintain on a consolidated basis after December 31,
1997, a minimum Tangible Net Worth of at least $50,000,000 plus fifty percent
(50%) of the Borrower's consolidated cumulative net income after December 31,
1997, plus 100% of the amount of the proceeds from any issuance of stock by
Borrower and its Subsidiaries after payment of all expenses associated with the
issuance of such stock. In calculating the amount under (c) above, there shall
not be subtracted cumulative net income for any 12 month period if that number
is a negative number. "Tangible Net Worth" shall mean the total of (the assets
of the Borrower and Subsidiaries on a consolidated basis less assets properly
classified under GAAP as intangible assets, including the value of goodwill and
intellectual property) minus the liabilities of the Borrower and the
Subsidiaries on a consolidated basis.
6A.3 TOTAL DEBT TO EBITDA. Each of the Borrower and the Subsidiaries agree
that it will not permit on a consolidated basis the ratio of Total Debt to
EBITDA to exceed (i) 3.00 to 1.00 through June 30, 1997 measured for the period
of July 1, 1996 through June 30, 1997, or (ii) 2.25 to 1.0 at any time after
June 30, 1997, measured on the last day of each fiscal quarter hereafter for the
twelve (12) month period then ended, with the first such twelve (12) month
period being the period of October 1, 1996 through September 30, 1997.
ARTICLE VII
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. Any of the below listed events happening to the
Borrower or any Subsidiary are sometimes referred to herein alternatively as
"Events of Default" or "Default":
a. Failure to pay, perform, or comply with any material obligation,
promise, covenant, agreement or provision under any of the Loan Documents, or
upon the occurrence of any other event of default and the continuation beyond
the expiration of any cure period relating thereto under any other agreement
between the Borrower or any Subsidiary and the Bank;
b. Any warranty, representation or statement made or furnished to
Lender by or on behalf of Borrower or any Subsidiary shall prove to have been
false or misleading in any material respect when made or furnished;
c. Dissolution or liquidation of the Borrower or any
Significant Subsidiary;
d. The Borrower or any Significant Subsidiary shall fail to pay any
additional monetary obligation in excess of One Hundred Thousand Dollars
($100,000.00) when due, however arising and to whomever owed, except in
immaterial amounts through inadvertent clerical error;
e. The Borrower or any Significant Subsidiary should make a general
assignment for the benefit of creditors, or any proceeding of any other similar
nature be instituted by or against the Borrower or any Significant Subsidiary or
any proceeding be instituted against the Borrower or any Significant Subsidiary
alleging that such entity is insolvent, or a receiver be appointed for the
Borrower or any Significant Subsidiary or for any property of the Borrower or
any Significant Subsidiary, and such proceeding shall not be dismissed within
ninety (90) days after the date such action is commenced;
f. Any verdict or judgment in excess of Two Hundred Fifty Thousand
and No/Dollars ($250,000.00) or an Equivalent Amount if the judgment is not in
Dollars individually or in the aggregate in any twelve (12) month period during
the term hereof be obtained or entered against the Borrower or any Significant
Subsidiary, or any property of such entity, and remain unsatisfied or not stayed
by court order upon posting a bond, after thirty (30) days from the rendition of
such judgment unless fully covered by insurance less permitted deductible;
g. A decree or order shall be entered by a court for relief in
respect of the Borrower or any Significant Subsidiary under Title 11 of the
United States Code, as now or hereafter constituted, or any other applicable
foreign, federal or state bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or similar official) of the Borrower or any Significant Subsidiary or of any
substantial part of either the Borrower's or any Significant Subsidiary's
property, or ordering the winding-up or liquidation of its affairs and the
continuance of any such decree or order unstayed and in effect for a period of
ninety (90) consecutive days;
h. Borrower or any Significant Subsidiary shall file a petition or
answer or consent seeking relief under Title 11 of the United States Code, as
now or hereafter constituted, or any other applicable foreign, federal or state
bankruptcy, insolvency or other similar law, or consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking possession of a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Borrower or any
Significant Subsidiary or any substantial part of the Borrower's or any
Significant Subsidiary's property, or Borrower or any Significant Subsidiary
shall fail generally to pay their respective debts as such debts become due, or
take action in furtherance of any such action;
i. The Borrower or any Significant Subsidiary is in default under
any agreement, mortgage or security agreement with any person or corporation
whatsoever which would reasonably be expected to materially adversely affect the
ability of the Borrower by itself or the Borrower and the Subsidiaries, taken as
a whole, to perform any action or make any payment required by this or any other
agreement between the Borrower or any Significant Subsidiary and the Bank;
j. The making of any levy, seizure, garnishment, or attachment of or
on any assets of the Borrower or any Significant Subsidiary if the effect of
such action may reasonably be expected to have a material adverse affect on the
ability of the Borrower or the Borrower and the Subsidiaries taken as a whole to
perform its obligations hereunder;
k. In the event that control of the Borrower or any Significant
Subsidiary is transferred, directly or indirectly, to any person other than
another Subsidiary;
l. The Guarantors, or any of them, default in their obligations
under the Guaranty; or
m. The occurrence of any material adverse change to the financial
condition of the Borrower, or the Borrower and the Subsidiaries taken as a
whole.
For purposes of the foregoing subsection (k), "control" shall be deemed to be
the ownership of a sufficient number of shares of the Borrower so that the
holder thereof holds the right to vote, directly or indirectly, in excess of
fifty percent (50%) of the voting stock of the Borrower, or can otherwise elect,
whether directly or indirectly, through stock ownership, proxy, shareholder
agreement or otherwise, one-half (1/2) or more of the members of the Board of
Directors of the Borrower.
The Bank agrees that if an Event of Default has occurred (i) pursuant to Section
6.1(a) hereof because of the failure of the Borrower to make a required payment
hereunder, the Borrower shall have five (5) days to cure such default prior to
the Lender having the right to accelerate the payment of all amounts owed
hereunder; or (ii) pursuant to any other provision of Section 7.1 hereof, that
is not due to (a) the Borrower's failure to make a required payment under
Section 6.1(a); (b) the Borrower's failure to comply with the provisions of
Sections 6.3, 6A.1 or 6A.2 or 6A.3 hereof; or (c) the provisions of Sections 7.1
(e), (g) or (h), the Borrower shall have thirty (30) days to cure such default
prior to the Bank having the right to accelerate the payments of all amounts
owed hereunder.
Upon the occurrence of an Event of Default and the continuation thereof beyond
any applicable cure period as set forth above or at any time thereafter during
the continuance of any such Event of Default, the Notes, the Guaranty, the
Obligation and all other payments required to be made hereunder shall be
forthwith due and payable at the Bank's option, except that on Event of Default
under Sections 7.1(e), (g) or (h), the Obligations and all other amounts
hereunder shall be automatically due and payable without further action by the
Bank, both as to principal and interest, without presentment, demand, protest or
other notice of nonpayment or default or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding. Upon the occurrence of an Event of Default, (i) the
principal amounts owed hereunder on the Loans shall bear interest at the highest
rate allowable under applicable law, or, if there is no such limit, at the
Default Rate, until such Event of Default is cured or until the amounts
outstanding hereunder are paid in full; and (ii) any money held as a result of a
transaction otherwise permitted pursuant to Section 6.1 hereof shall be
delivered to the Bank as collateral for the Obligations. Upon the occurrence of
an Event of Default, the Bank may exercise any rights given to it by law, the
Notes, or given by this Agreement, and the Bank may apply any sums received by
the Bank to any of the Obligations or any portion thereof in such order as the
Bank in its sole discretion may determine, any request to the contrary by the
Borrower notwithstanding.
If the Borrower fails to pay any amount payable by it under this
Agreement, the Borrower shall forthwith on demand by the Bank pay interest on
the overdue amount from the due date, whether by maturity or acceleration, up to
the date of actual payment, as well after as before judgment, at the Default
Rate, which for Prime Based Loans shall be the Prime Rate plus 4 percent per
annum and for all LIBOR-Based Rate Loans, a rate determined by the Bank to be 4
percent above the rate which would otherwise be payable for Advances in such
Currency, whether Dollars or an Optional Currency, under Credit Facility B for
an Interest Period, or Interest Periods, selected by the Bank; provided,
however, if failure to pay occurs upon acceleration, for LIBOR-Based Rate Loans
denominated in Dollars immediately prior to acceleration, the Bank may if it
chooses select for all such Dollar overdue amounts the Default Rate of the Prime
Rate plus 4 per cent per annum.
Without limitation to any other rights under law, the Bank may at any time
while an Event of Default is outstanding set off any matured obligation owed by
the Borrower or any Subsidiary under this Agreement against any obligation
(whether or not matured) owed by the Bank to the Borrower or any Subsidiary,
regardless of the place of payment, booking branch or currency of either
obligation. If the obligations are in different currencies, the Bank may convert
either obligation at a market rate of exchange in its usual course of business
for the purpose of the set-off. If either obligation is unliquidated or
unascertained, the Bank may set off in an amount reasonably estimated by it in
good faith to be the amount of that obligation.
ARTICLE VIII
MISCELLANEOUS
8.1 COSTS OF LOAN. The Borrower shall pay all reasonable out-of-pocket
expenses incurred by the Bank in connection with the preparation and closing of
this Agreement, the making of each Funding or Advance, the administration of
this Agreement, and in the enforcement of the rights of the Bank under the Loan
Documents and under the Notes and any other agreements between the Borrower and
the Bank, including the reasonable attorneys' fees incurred by the Bank in
preparing and closing this Agreement which attorneys' fees (exclusive of
out-of-pocket expenses) shall not exceed $___________, together with the
out-of-pocket fees of such counsel, whether in consultation or in judicial,
administrative, bankruptcy, conservatorship or receivership proceedings, through
all appeals. Such out-of-pocket expenses specifically include all filing fees,
the cost of all documentary tax stamps, if any, and other taxes, excluding
federal or Florida taxes on corporate income, which are or become payable by
reason of the transactions between the Borrower and the Bank which are
encompassed by this Agreement, as well as any penalties or additional taxes
which may become due by reason of the Borrower's instructions to the Bank
concerning the payment of such taxes, and at the Bank's option costs of tax,
judgment and lien searches, and recording fees, if any. Costs incurred to the
date of Closing shall be paid at Closing, by separate check payable to the order
of the Bank.
8.2 SURVIVAL OF REPRESENTATIONS. All covenants, agreements,
representations and warranties by the Borrower and any Guarantor in the Loan
Documents or otherwise in writing in connection herewith shall survive the
execution and delivery to the Bank of this Agreement and the Notes, and shall be
true and correct and continue in full force and effect so long as any portion of
any Obligation or the Notes is outstanding or this Agreement has not been
terminated, except to the extent such representation and warranty relates to an
earlier date.
8.3 TERMINATION OF LOAN. This Agreement may not be terminated by the
Borrower until payment of the Obligation in full.
8.4 APPLICABLE LAW. The terms and performance of this Agreement and the
terms and payment of Notes shall be construed in accordance with and controlled
and governed by the laws of the State of Florida, and applicable federal law, as
amended from time to time. The Bank, the Borrower and each Guarantor agree that
the venue of any action brought to enforce any rights created hereunder will be
in Dade County, Florida.
8.5 MODIFICATION OF LOAN AGREEMENT. Unless otherwise specifically provided
for in this Agreement, no consent, modification, amendment or waiver of any
provision of this Agreement, the Notes, or the other the Loan Documents executed
in conjunction herewith, nor any consent of the Bank to any variance therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Bank.
8.6 NO WAIVER OF RIGHTS BY Bank. Neither any failure nor any delay on the
part of the Bank in exercising any right, power or privilege under the Loan
Documents shall operate as a waiver thereof; nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege. It is further agreed between the parties that
no waiver of any duty or condition contained in any of the Loan Documents shall
at any time be held to be a waiver of the other duties or conditions of the
Borrower thereunder, or of the same duties or conditions upon a future occasion.
8.7 INTEREST. All interest payable hereunder shall be at a per annum rate
computed by dividing the applicable per annum interest rate by three hundred
sixty (360), except as otherwise provided herein, and multiplying the result by
the actual number of days elapsed. Notwithstanding any provision in the Notes or
in any other document executed in connection with this Agreement, the Borrower's
total liability during any payment period for payment of fees, charges or other
payments which may be deemed interest shall not exceed the higher of the limits
imposed by the usury laws of the State of Florida or of the United States, as
applicable. If, for any reason, total liability for payments which may be deemed
interest, should be greater than the limit imposed by the usury laws of the
State of Florida or of the United States (whichever results in the higher rate
of lawful interest), as applicable, for any interest payment period, then all
sums in excess of those lawfully collectible with interest for that period shall
be applied to the reduction of principal of either or both of the Loans, without
further agreement or notice. The Bank has agreed to accept, and the Borrower has
agreed to apply, such sums as a penalty-free prepayment of principal, unless the
Bank at any time elects, by notice to the Borrower in writing, to waive or limit
the collection of any sums in excess of those lawfully collectible as interest
rather than accept those sums as a prepayment of principal. Upon any demand for
payment, all unlawful interest (if any) shall be eliminated.
8.8 SEVERABILITY. In case all or any part of one or more of the provisions
contained in the Loan Document should be invalid, illegal or unenforceable in
any respect, the validity, legality or enforceability of the remaining
provisions contained herein or therein and the remainder of such provision shall
not in any way be affected or impaired thereby.
8.9 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of the Bank and the
Borrower. The Bank shall have the right to syndicate its interests in the Loans,
or either of them, or to grant participation and transfer interests in the Notes
to other persons and to furnish such information as is reasonably required to
induce such persons to enter into such arrangements and to satisfy any
regulatory requirements pertaining thereto; provided, however, that the Borrower
shall have the right to approve all such participants, which approval shall not
be unreasonably withheld; and provided, further, that the Bank shall not be
entitled to syndicate or transfer interests in more than fifty percent (50%) of
its interest in the Loans. In the event the Bank notifies the Borrower that the
Bank will grant such participation, or assign a portion of the Lender's rights
and obligations in the Loans, the Bank acknowledges that the Borrower will not
be deemed to be acting unreasonably if it denies such request because the entity
to whom the Bank proposes to grant a participation or assign such rights and
obligations will require payments under Section 2.4 hereof materially in excess
of those required to be paid to the Lender. The Borrower will take such actions
as the Bank may reasonably require to effect the grant and performance of such
participation or the assignment of an interest of its rights and obligations to
another entity.
8.10 NOTICES. All notices, demands, requests, consents or other
communications required or permitted to be given or made under this Agreement in
writing, shall be deemed given or made when delivered in person, five (5) days
after such communication is posted in the mails, or one (1) day after such
communication is sent by a nationally recognized overnight courier service.
Notice shall be given as follows:
If to the Bank:
First Union National Bank
200 East Broward Boulevard
Ft. Lauderdale, Florida 33301
ATTN: Corporate Banking,
Mr. M. Walker Duvall, Senior Vice President
AND
First Union National Bank
4299 N.W. 36th Street
Miami Springs, Florida 33166
ATTN: Ms. Missy Morgan, Senior Vice President
AND
First Union National Bank
London Branch
One Bishopgate
LONDON EC2N 3AB ENGLAND
ATTN: Ian G. Morrison, Vice President
With a copy to:
Holland & Knight LLP
701 Brickell Avenue
Suite 3000
Miami, Florida 33131
ATTN: Douglas F. Darbut, Esq.
If to the Borrower:
Computer Products, Inc.
7900 Glades Road
Suite 500
Boca Raton, Florida 33434
ATTN: Richard Thompson
With a copy to:
Hertzog, Calamari & Gleason
100 Park Avenue
New York, New York 10017
ATTN: John D. Vaughan, Esq.
If to the Guarantors:
c/o Computer Products, Inc.
7900 Glades Road
Suite 500
Boca Raton, Florida 33434
ATTN: Richard Thompson
The foregoing addresses may be changed by either party by giving notice to the
other party in accordance with the above.
8.11 INCORPORATION OF TERMS. It is mutually understood and agreed by and
between the parties hereto on behalf of themselves, and their respective
representatives or successors in interest, that the Notes and other agreements
between the Borrower and the Bank heretofore and hereinafter described and all
of the conditions, stipulations, agreements and covenants contained in said Note
and other agreements are hereby incorporated by reference to the same extent and
effect as if they were fully set forth verbatim herein, and made a part of this
Agreement, until this Agreement is terminated by the payment of the Obligation
in full. It is further mutually understood and agreed that the Borrower shall
perform, comply with, and abide by each and every warranty, stipulation,
agreement, condition and covenant in the Notes, and other agreements, and the
provisions of this Agreement.
In the event of an ambiguity or conflict of terms between any of the
provisions of the foregoing documents, the terms of this Agreement shall be
deemed to amend and control all of the other documents; and, to the extent that
any of the agreements are silent, each shall supplement the others; provided,
however, in the event of any conflict between the terms of this Agreement and
any of the instruments referenced above, the terms which, in the Bank's sole
discretion, grant the Bank the greater protection with respect to its security
for the Notes or in any other manner are of greater benefit to the Bank, shall
control. All provisions of contemporaneous or previous agreements and
understandings between the Borrower and the Bank (including the Prior Loan
Agreement) in conflict with any expressed provision hereof shall be merged into
this Agreement and be extinguished and of no further force and effect.
8.12 COUNTERPARTS. This Agreement may be signed in counterparts, each of
which shall be considered an original.
ARTICLE IX
INDEMNIFICATION
9.1 NET PAYMENTS. All payments by the Borrower under this Agreement and
the Notes shall be made without setoff or counterclaim and in such amounts as
may be necessary in order that all payments, after deduction or withholding for
or on account of any present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or any political
subdivision or taxing authority thereof (collectively the "Taxes"), shall not be
less than the amounts otherwise specified to be paid under this Agreement and
the Note. Notwithstanding anything to the contrary contained in this Section
9.1, the Borrower shall not be liable for the payment of any tax on or measured
by net income imposed on or measured by the net income or portion thereof of the
Bank. The Borrower shall pay all Taxes when due (and indemnify the Bank against
any liability therefor) and shall promptly (and in any event not later than
thirty (30) days thereafter) furnish to the Bank any certificates, receipts and
other documents which may be required (in the judgment of the Bank) to establish
any tax credit to which the Bank may be entitled. The Bank shall promptly
reimburse the Borrower upon receipt by the Bank of any refund or credit paid to
the Bank for which and to the extent the Bank has previously been reimbursed by
Borrower under this Section. The obligations of the Borrower under this Section
9.1 shall survive the termination of this Agreement and the repayment of the
Notes. The Bank will cooperate with reasonable requests of the Borrower to seek
refund of amounts owed hereunder, or to minimize amounts owed hereunder,
provided that Borrower shall pay the costs thereof and provided that such
action, in the opinion of the Bank, will not or may not adversely affect the
Bank.
ARTICLE X
WAIVER OF JURY TRIAL AND VENUE
10.1 Arbitration. Upon demand of any party hereto, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Loan Agreement
and the other Loan Documents ("Disputes") between or among parties to this Loan
Agreement shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from Loan Documents
executed in the future, or claims arising out of or connected with the
transaction reflected by the Notes.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Miami, Florida. The expedited
procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000.00. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be entered
in any court having jurisdiction. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted or if such person is not available to serve, the single arbitrator
may be a licensed attorney. Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to swap agreements.
10.2 PRESERVATION AND LIMITATION OF REMEDIES. Notwithstanding the
preceding binding arbitration provisions, Borrower and Bank agree to preserve,
without diminution, certain remedies that any party hereto may employ or
exercise freely, independently or in connection with an arbitration proceeding
or after an arbitration action is brought Borrower and Bank shall have the right
to proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, applicable: (i) all rights of self-help
including peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (ii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment or receiver and filing an involuntary bankruptcy
proceeding; and (iii) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
Borrower and Bank agree that they shall not have a remedy of punitive or
exemplary damages against the other in any Dispute and hereby waive any right or
claim to punitive or exemplary damages they have now or which may arise in the
future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
In the event that the provisions of Section 10.1 or 10.2 hereof are found
to be unenforceable and a Dispute may not be resolved pursuant to those
Sections, the parties hereto agree that the following provision shall be
applicable:
WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER AND EACH GUARANTOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EACH MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOANS, THIS AGREEMENT AND ANY AGREEMENTS
CONTEMPLATED HEREBY TO BE EXECUTED IN CONJUNCTION THEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
EACH PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR Bank AND BORROWER
ENTERING INTO THIS AGREEMENT.
10.3 WAIVER OF PLEA OF JURISDICTIONS OR VENUE. The Borrower and each
Subsidiary hereby waives any plea of jurisdiction or venue as not having a place
of business in Broward County, Florida, and hereby specifically authorizes any
action brought upon the enforcement of the Loan Documents by Bank to be
instituted and prosecuted in either the Circuit Court of Broward County,
Florida, or in the United States District Court for the Southern District of
Florida, at the election of Bank.
IN WITNESS WHEREOF, the Bank and the Borrower have caused these presents
to be executed in their respective names by their duly authorized executive
officers, at the places and on the dates set forth below effective as of the
15th day of July, 1997, and executed on the date set forth below.
FIRST UNION NATIONAL BANK
By:
Joseph M. Mayhew
Its: Senior Vice President
Date Executed: November 7, 1997
Place of Execution: Charlotte, North Carolina
FIRST UNION NATIONAL BANK,
LONDON BRANCH
By: Joseph M. Mayhew
Its: Senior Vice President
Date Executed: November 7, 1997
Place of Execution: Charlotte, North Carolina
COMPUTER PRODUCTS, INC.
By:
Richard Thompson
Its: Vice President
Date Executed: November 7, 1997
Place of Execution: Eden Prairie,
Minnesota
Each of the undersigned acknowledges that it has received a copy of the Loan
Agreement is familiar with the terms and conditions of the Loan Agreement. The
undersigned hereby jointly and severally (i) represent and warrant to you that
each representation and warranty contained in the Loan Agreement is true and
correct to the extent it relates to the undersigned; and (ii) agree that each
will act in compliance with the covenants set forth in the Loan Agreement to the
extent the covenants contemplate that the undersigned will act or refrain from
acting. The undersigned (i) recognize that the foregoing representations,
warranties and covenants are an integral part of the decision by you to make the
Loans (as defined in the Loan Agreement); (ii) represent and warrant to you that
the undersigned, each of which is a wholly-owned subsidiary of the Borrower,
will receive substantial benefit from the making of the Loans to the Borrower;
and (iii) acknowledge that you have relied upon the foregoing in making your
decision to make the Loans and enter into the Loan Agreement. All of the
signatures below are made on the date and at the place set forth under the
signature of Computer Products, Inc. appearing immediately above.
Computer Products GmbH
By:
Gary Duffy
Its: Authorized Signatory
By:Siegfried Kreuzer
Its: Authorized Signatory
Computer Products S.A.R.L.
By:Richard Thompson
Its:
Computer Products Power Conversion Limited
By:Richard Thompson
Its:
RTP Foreign Sales Corp.
By:Richard Thompson
Its:
Power Products Ltd.
By:Richard Thompson
Its:
Stevens-Arnold, Inc.
By:Richard Thompson
Its:
JETA Power Systems, Inc.
By:Richard Thompson
Its:
Heurikon Corporation
By:Richard Thompson
Its:
Computer Products Asia - Pacific Limited
By:Richard Thompson
Its:
Power Products (Ireland) Ltd.
By:Richard Thompson
Its:
C.P. Power Products (Zhong Shan) Co.Ltd.
By:Richard Thompson
Its:
RT Holding Corp.
By:Richard Thompson
Its:
Dutor Holding N.V.
By:Richard Thompson
Its:
Elba Electronics Limited
By:Richard Thompson
Its:
Herbert Zehnte Betelligungs-undVerwaltungs GmbH & Co.
By:Richard Thompson
Its:
El-BA Electric-Bauelemente AG
By:Richard Thompson
Its:
Elba s.r.o.
By:Richard Thompson
Its:
CHARLOTTE, NORTH CAROLINA
I HEREBY CERTIFY that the foregoing instrument was acknowledged before me
this __7th__ day of November, 1997, by Joseph M. Mayhew as Senior Vice
President of First Union National Bank, a national banking association, on
behalf of the association. He is personally known to me (YES) (NO) or who
produced ______________________ as identification.
Notary Public
(NOTARIAL SEAL) Carla Eaker
Printed Name of Notary
My Commission Expires:
(Eden Prairie, Minnesota)
Place of Execution
I HEREBY CERTIFY that the foregoing instrument was acknowledged before me
this _6th_ day of November, 1997, by Richard Thompson, as Vice President or
Authorized Signatory of Computer Products, Inc., a Florida corporation, on
behalf of the corporation and the other corporations above except First Union
National Bank, First Union National Bank, London Branch and Computer Products
GmbH. He is personally known to me (YES) (NO) or who produced
______________________ as identification.
Notary Public
(NOTARIAL SEAL) Karen Scheldroup
Printed Name of Notary
My Commission Expires:January 31, 2000
CHARLOTTE, NORTH CAROLINA
I HEREBY CERTIFY that the foregoing instrument was acknowledged before me
this _7th_ day of November, 1997, by Joseph M. Mayhew, as Senior Vice
President of First Union National Bank, London Branch on behalf of the
corporation. He is personally known to me (YES) (NO) or who produced
______________________ as identification.
Notary Public
(NOTARIAL SEAL) Carla Eaker
Printed Name of Notary
My Commission Expires: August 21, 2002
Youghal County Cork, Ireland
Place of Execution
I, Patrick Lavan, a Notary Public within and for the Republic
of Ireland duly commissioned and acting, do hereby certify that on this 13th day
of _November_, 1997, personally appeared GARY DUFFY, as Authorized Signatory
of Computer Products GmbH, acting as partner and future Limited Partner of
Herbert GmbH & Co. KG upon its registration in the Commercial Register A of
Frankfurt am Main, to me personally known to be the person who signed the
foregoing instrument, who being duly sworn and being informed of the contents of
said instrument, stated and acknowledged on oath that he signed, executed,
sealed and delivered same of his free and voluntarily act and deed, for the
uses, purposes and considerations therein expressed and set forth.
WITNESS my hand and seal this 13th day of November, 1997.
Patrick Lavan
- -----------------------------------
NOTARY PUBLIC
My Commission Expires:
Youghal County Cork, Ireland
Place of Execution
I, Patrick Lavan, a Notary Public within and for the Federal
Republic of Germany, duly commissioned and acting, do hereby certify that on
this 13th day of November, 1997, personally appeared SIEGFRIED GEORG KREUZER,
as Authorized Signatory of Computer Products GmbH, acting as partner and future
Limited Partner of Herbert GmbH & Co. KG upon its registration in the Commercial
Register A of Frankfurt am Main, to me personally known to be the person who
signed the foregoing instrument, who being duly sworn and being informed of the
contents of said instrument, stated and acknowledged on oath that he signed,
executed, sealed and delivered same of his free and voluntarily act and deed,
for the uses, purposes and considerations therein expressed and set forth.
WITNESS my hand and seal this 13th day of November, 1997.
Patrick Lavan
- -----------------------------------
NOTARY PUBLIC
My Commission Expires: