EXHIBIT 10.10
EXPORT LOAN AGREEMENT
THIS EXPORT LOAN AGREEMENT between AMX Corporation, formerly known as Panja,
Inc., and Bank One, N.A. with its main off ice in Chicago, Illinois is made and
executed as of September 30, 2002. This Agreement governs the Credit
Accommodations described herein. Borrower understands and agrees that: (a) in
granting, issuing, renewing, or extending such, Credit Accommodations, Lender is
relying upon Borrower's representations, warranties, and agreements set forth in
this Agreement and the other Financing Documents; and (b) such Credit
Accommodations shall be and remain subject to the following terms and conditions
of this Agreement until all Borrower's Obligations hereunder have been paid and
performed in full.
DEFINITIONS.
Defined Terms. The following words shall have the following meanings when
used in this Agreement.
Affiliate. The word "Affiliate" means any Person directly or indirectly
controlling, controlled by or under common control with, another Person.
Agreement. The word "Agreement" means this Export Loan Agreement, as it may
be amended, modified, restated, renewed and extended from time to time,
together with all exhibits and schedules attached hereto from time to time.
The Agreement is the Loan Agreement, as defined in the Borrower Agreement.
Borrower. The word "Borrower" means AMX Corporation, formerly known as
Panja, Inc., its successors and assigns.
Borrower Agreement. The words "Borrower Agreement" mean the Borrower
Agreement relating to Loan executed by Borrower for the benefit of Lender
and Ex-Im Bank, in the form prescribed by Ex-Im Bank attached hereto as
Exhibit B.
Borrower's Obligations. The words "Borrower's Obligations" mean all loans,
advances, debts, expenses, fees, liabilities, and obligations for the
performance of covenants, tasks or duties or for payment of monetary
amounts (whether or not such performance is then required or contingent, or
such amounts are liquidated or determinable) owing by Borrower to Lender,
of any kind or nature, present or future, arising in connection with the
Loan. Borrower's Obligations are the Loan Facility Obligations, as defined
in the Borrower Agreement, and are included in the Indebtedness, as defined
in the Security Agreement and the Guaranty.
Collateral. The word "Collateral" means all property and interests in
property in and upon which Lender has been granted a Lien, including the
Security Interest, as security for the payment and performance of
Borrower's Obligations, including the Collateral identified in Section 6 of
the Loan Authorization Notice and all Proceeds thereof. The Collateral is
included in the Collateral, as defined in the Security Agreement.
Commitment. The word "Commitment" means the commitment of Lender to extend
to Borrower the Loan in accordance with the terms and conditions of this
Agreement.
Commitment Period. The words "Commitment Period" mean the period commencing
on the Effective Date and ending on the Commitment Termination Date.
Commitment Termination Date. The words "Commitment Termination Date" mean
the Final Disbursement Date for the Loan, unless the Commitment Termination
Date is accelerated in accordance with the Section titled "EFFECT OF AN
EVENT OF DEFAULT."
Debt Service Coverage Ratio. The words "Debt Service Coverage Ratio" mean,
as of the date of determination, the ratio of (i) the sum of Borrower's net
income, non-cash charges and interest expenses to (ii) the sum of Current
Maturities of Funded Debt and interest expenses of Borrower.
Dollars. "Dollars" and the sign "$" mean dollars in lawful money of the
United States of America and, in relation to all payments in Dollars
hereunder, (i) same day funds paid through the Regional Clearing House
Interbank Payments System, or (ii) immediately available funds paid through
the Regional Federal Reserve Bank, or (iii) such other funds as may then be
required by the customary procedure of member banks of the Regional
Clearing House Association for the settlement of payments.
EBITDA. "EBITDA" means, Net Income plus, to the extent deducted in
determining Net Income, (i) Interest Expense, (ii) expense for income taxes
paid or accrued, (iii) depreciation, and (iv) amortization.
Event of Default. The words "Event of Default" have the meaning assigned
them in the Section titled "EVENTS OF DEFAULT."
Ex-Im Bank. The word "Ex-Im Bank" means the Export-Import Bank of the
United States, its successors and assigns.
Ex-Im Bank Guarantee. The words "Ex-Im Bank Guarantee" mean the Master
Guarantee Agreement between Bank One, NA with its main office in Chicago,
Illinois and Ex-Im Bank, together with (i) the Delegated Authority Letter
Agreement between Bank One, NA with its main office in Chicago, Illinois
and Ex-Im Bank, (ii) the Affiliate Guarantee Authorization Agreement
between Bank One, NA with its main office in Chicago, Illinois and Ex-Im
Bank, and (iii) the Loan Authorization Notice.
Export-Related Collateral. The words "Export-Related Collateral" mean all
Export-Related Inventory, Export-Related Accounts Receivable,
Export-Related General Intangibles, and all Proceeds.
Financing Documents. The words "Financing Documents" mean, collectively,
this Agreement, the Note, the Security Agreement, the Borrower Agreement,
the Ex-Im Bank Guarantee, the Letter of Credit Application(s), all Letters
of Credit issued pursuant hereto, and any other documents, certificates and
agreements which are executed and delivered by Borrower, any Guarantor or
any other Person evidencing, securing, guaranteeing or otherwise relating
to Borrower's Obligations. The Financing Documents are the Loan Documents,
as defined in the Borrower Agreement, and are included in the Loan
Documents, as defined in the Security Agreement and the Guaranty.
Interest Expense. "Interest Expense" means, with reference to any period,
the interest expense of Borrower during such period as reflected in the
financial statements of Borrower prepared in accordance with generally
accepted accounting principals ("GAAP").
Lender. The word "Lender" means Bank One, NA with its main office in
Chicago, Illinois, its successors and assigns.
Leverage Ratio. The words "Leverage Ratio" mean, as of the date of
determination, the ratio of Borrower's (i) total liabilities to (ii)
Tangible Net Worth.
Loan. The word "Loan" means the credit facility described in the Section
titled "LOAN." The Loan is the Loan Facility, as defined in the Borrower
Agreement.
Loan Authorization Notice. The words "Loan Authorization Notice" mean the
Loan Authorization Notice executed by Lender or Bank One, NA with its main
office in Chicago, Illinois and delivered to and acknowledged by Ex-Im Bank
setting forth the terms and conditions of the Loan, a copy of which is
attached hereto as Annex A. The Loan Authorization Notice is the Loan
Authorization Notice, as defined in the Borrower Agreement.
Maturity Date. The words "Maturity Date" mean the first Business Day
following the Stated Final Disbursement Date; provided, however, that with
regard to Letter of Credit Obligations outstanding on the Stated Final
Disbursement Date, the Maturity Date for any Disbursement under the
Letter(s) of Credit related thereto shall be the earlier to occur of (i)
the first Business Day following the date of such Disbursement, or (ii) the
20th day after the expiry date of the Letter(s) of Credit related to such
Letter of Credit Obligations.
Net Income. The words "Net Income" means, with reference to any period, the
net income (or loss) of Borrower during such period as reflected in the
financial statements of Borrower prepared in accordance with GAAP.
Note. The word "Note" means the promissory note of even date herewith in
the original principal amount of Five Million and 00/100 Dollars
($5,000,000) executed by Borrower and payable to Lender evidencing
Borrower's Obligations, together with all renewals, extensions,
modifications, refinancings and consolidations of and substitutions for
such promissory note.
Proceeds. The words "Proceeds" or "proceeds" mean, when used with respect
to any of the Collateral, all products and proceeds, cash and non-cash,
within the meaning of the UCC and shall include the proceeds of any and all
contracts, letters of credit and insurance policies.
Security Agreement. The words "Security Agreement" means collectively, the
Security Agreement dated as of September 30, 2002, Intellectual Property
Security Agreement dated as of September 30, 2002, and Pledge Agreement
dated as of September 30, 2002 executed by Borrower in favor of Lender
creating the Security Interest in the Collateral, together with all
amendments, modifications and extensions thereof.
Security Interest. The words "Security Interest" have the meaning assigned
to them in the Security Agreement.
Stated Final Disbursement Date. The words "Stated Final Disbursement Date"
mean the date stipulated as the Final Disbursement Date in Section 10 of
the Loan Authorization Notice.
Tangible Net Worth. The words "Tangible Net Worth" means, as of any date,
the total shareholder's equity ( including capital stock, additional
paid-in-capital and retained earnings after deducting treasury stock) which
would appear on a balance sheet of Borrower, less the aggregate book value
of intangible assets shown on such balance sheet, plus any subordinated
debt as of such date.
Working Capital. The words "Working Capital" mean, as of the date of
determination, the amount by which Borrower's current assets exceed its
current liabilities, determined as to classification of items and as to
amounts in accordance with GAAP, except that there shall be excluded from
current assets (i) all prepaid expenses and (ii) all amounts due from
Affiliates (including, without limitation, officers and directors) of
Borrower.
Additional Definitions. Capitalized terms used but not defined in this Agreement
shall have the meanings assigned those terms in the Borrower Agreement. All
accounting terms used but not defined in this Agreement or the Borrower
Agreement shall be construed in accordance and conformity with GAAP applied on a
consistent basis. Except as expressly provided herein, terms used herein that
are defined in the UCC and are not otherwise defined in this Agreement or the
Borrower Agreement shall have the meanings assigned to such terms in the UCC.
LOAN. Subject to the provisions of this Agreement, including without limitation
the satisfaction of the conditions described in the Section titled "CONDITIONS
PRECEDENT AND SUBSEQUENT," Lender agrees to establish a Revolving Loan Facility
and make and incur Credit Accommodations in support of Export Orders as
hereinafter provided, provided the aggregate Credit Accommodation Amount
outstanding at any time shall not exceed the lesser at such time of (a) the
Export-Related Borrowing Base and (b) the Maximum Amount. All Disbursements
hereunder shall be made in Dollars.
Advances. Lender agrees to make advances directly to Borrower or for
Borrower's account during the Commitment Period. Borrower shall request
each advance under the Loan by delivering to Lender a written request
therefor, an Export-Related Borrowing Base Certificate, a copy of the
Export Order(s) against which Borrower is requesting an advance, and such
other information and documentation as Lender may require, in accordance
with the Subsection titled "Export-Related Borrowing Base Certificates."
Upon receipt of the above described information and documents by Lender,
Lender shall make such advance within one Business Day following Lender's
determination that all conditions to the making of such advance have been
satisfied. Each advance shall be conclusively deemed to have been made at
the request of and for the benefit of Borrower (a) when credited to any
deposit account of Borrower maintained with Lender, or (b) when advanced in
accordance with the instructions of an authorized Person. Lender, at its
option, may set a cutoff time, after which all requests for advances under
the Loan will be treated as having been requested on the next succeeding
Business Day.
Modification of Eligible Export-Related Accounts Receivable.
Notwithstanding the definition of the term "Eligible Export-Related
Accounts Receivable" in the Borrower Agreement, for purposes of this
Agreement and furnishing Export-Related Borrowing Base Certificates (1) in
no event will the Accounts Receivable of any single Buyer be deemed to be
eligible pursuant to the Financing Documents if more than 20% of the
Accounts Receivable of such Buyer have not been paid within 90 days from
the invoice date, and (2) there shall be excluded from Eligible
Export-Related Accounts Receivable that portion of all Accounts Receivable
from Buyers located in any single country which exceeds 25% of all of the
Eligible Export- Related Accounts Receivable (excluding AMX (UK) Limited).
Available Credit Accommodations. The amount of the Credit Accommodations
available to be made or incurred hereunder at any particular time from time
to time shall be equal to the difference between (a) the lesser at such
time of (i) the Maximum Amount, (ii) the Export-Related Borrowing Base, and
(iii) Borrower's unfunded export-related working capital needs; and (b) the
Credit Accommodation Amount at such time. The Export-Related Borrowing Base
shall be determined in accordance with this Agreement, the Borrower
Agreement and the Export-Related Borrowing Base Certificate.
- 2 -
(a) Any Eligible Export-Related Account Receivable or Eligible
Export-Related Inventory included in the Export-Related Borrowing Base
which subsequently fails to satisfy any of the applicable eligibility
criteria shall immediately cease to be included in the Export-Related
Borrowing Base.
(b) Upon the sale, shipment, delivery to and acceptance by Buyer of
any Item of Eligible Export-related Inventory, such Item shall cease
to be included in the Export-related Borrowing Base as Export-related
Inventory; however, the resulting Export-related Account Receivable
shall be included in the Export-related Borrowing Base provided that
it otherwise satisfies all of the eligibility criteria for Eligible
Export-related Accounts Receivable.
Prohibited Credit Accommodations. Notwithstanding anything contained in
this Agreement to the contrary:
(a) Lender shall not at any time make or incur a Credit Accommodation
under this Agreement:
(i) after the Final Disbursement Date, except
for Disbursements to fund drawings under Letters of
Credit outstanding on the Final Disbursement Date
made within 30 days after the expiry date of the
Letter of Credit related thereto;
(ii) following the occurrence of an Event of Default
hereunder;
(iii) if the Credit Accommodation has been or will be used
in a manner prohibited by the Borrower Agreement; or
(iv) if no outstanding Export Order(s) exist with respect
to Borrower.
(b) No Warranty Letters of Credit shall be issued by Lender
under this Agreement without the prior written approval of Lender
and Ex-Im Bank; and if such approval is obtained, any Warranty
Letter of Credit so approved shall be issued only upon the
satisfaction of all conditions to such issuance, including
reserves from the Export-Related Borrowing Base, established by
Lender and Ex-Im Bank.
PAYMENT AND PREPAYMENT OF BORROWER'S OBLIGATIONS.
(a) Borrower's Obligations shall be paid (and may be prepaid) in
accordance with the provisions of this Agreement, the Borrower
Agreement and the Note. Unless sooner due and payable or paid pursuant
to the other provisions of this Agreement, the Borrower Agreement and
the Note, Borrower shall pay to Lender in full on the Maturity Date
all outstanding Borrower's Obligations, including, without limitation,
the aggregate principal amount of all Disbursements then outstanding
and all accrued but unpaid interest, together with all other
applicable fees, costs and charges, if any, not yet paid. If the Loan
is a Revolving Loan Facility, Disbursements made to Borrower or for
Borrower's account and repaid by Borrower during the Commitment Period
shall be available on a continuous basis until the Final Disbursement
Date to fund Credit Accommodations made or incurred under the Loan in
accordance with the terms of this Agreement and the Borrower
Agreement.
(b) In accordance with the Borrower Agreement, upon demand by Lender,
Borrower shall provide additional Collateral or make additional
payment(s) to Lender to ensure that at all times (i) the
Export-related Borrowing Base equals or exceeds the Credit
Accommodation Amount; and (ii) if the Loan is a Revolving Loan
Facility (other than a Transaction Specific Revolving Loan Facility),
the outstanding principal balance of the Credit Accommodations that is
supported by Export-Related Inventory does not exceed 60% of the sum
of (y) the outstanding principal balance of the Disbursement(s), and
(z) the undrawn face amount of all outstanding Commercial Letters of
Credit hereunder.
Application of Payments. All payments made by or received from Borrower or
for Borrower's account in respect of Borrower's Obligations (including
prepayments by Borrower and Proceeds received by Lender) shall be applied
by Lender first to the payment of accrued and unpaid interest, second to
the payment of the principal amount of Borrower's Obligations, and third to
any unpaid costs, fees and expenses due under this Agreement and the other
Financing Documents.
Reliance by Lender on Communications and Authorizations from Borrower. In
making or incurring any Credit Accommodation pursuant to this Agreement and
the other Financing Documents, Lender shall be authorized to rely on any
Export-related Borrowing Base Certificate, or other information,
documentation, notice or communication which appears to have been executed
and delivered by any of the authorized representatives of Borrower who are
designated in the general certificate delivered by Borrower to Lender. In
the event that the Person(s) authorized to execute and deliver such
documents or to take action hereunder on behalf of Borrower become(s)
unavailable or unable to do so, Borrower promptly shall appoint one or more
successor representative(s) and shall furnish Lender with a certificate
satisfactory to Lender which shall contain a copy of the resolutions or
other actions taken by Borrower to authorize such appointment(s) and the
specimen signature of each Person so appointed to act on behalf of Borrower
pursuant to this Agreement.
CONDITIONS PRECEDENT AND SUBSEQUENT.
Conditions Precedent. The obligation of Lender to make or incur any Credit
Accommodation in each case is subject to satisfaction of the following
conditions precedent, with all documents, instruments, opinions, reports,
and other items required under this Agreement to be in form and substance
satisfactory to Lender:
(a) Lender shall have received evidence that this Agreement and all
other Financing Documents have been duly authorized, executed, and
delivered by the parties thereto and shall be and remain valid and
enforceable.
(b) To the extent not previously received by Lender, Lender shall have
received a general certificate of the Secretary of Borrower, dated no
later than the date of the execution and delivery of this Agreement,
certifying (i) that attached thereto is a true, complete and correct
copy of the Certificate or Articles of Incorporation of Borrower as in
effect on the date of such certification and a true, complete and
correct copy of the By-Laws of Borrower, (ii) that attached thereto is
a true, complete and correct copy of resolutions adopted by the Board
of Directors of Borrower authorizing the execution and delivery of
this Agreement and each of the other Financing Documents and
authorizing Borrower to incur Borrower's Obligations and to perform
all other covenants and agreements of Borrower contained in this
Agreement and in the other Financing Documents, and (iii) as to the
incumbency and specimen signature of each officer of Borrower who is
authorized to execute and deliver this Agreement, all Export-related
Borrowing Base Certificates and Letter of Credit Applications to be
delivered pursuant hereto, and any other Financing Documents and other
instruments, certificates and documents to be executed and delivered
by Borrower hereunder.
- 3 -
(c) Lender shall have received satisfactory evidence that the
insurance which Borrower is required to maintain pursuant to this
Agreement is in full force and effect.
(d) Borrower shall have paid all of the fees, costs and expenses which
are due and payable under this Agreement and any other Financing
Document.
(e) Ex-Im Bank shall have acknowledged receipt of the Loan
Authorization Notice to Lender to effect the coverage of Borrower's
Obligations under the Ex-Im Bank Guarantee and Lender shall have
provided a copy of the fully executed and acknowledged Loan
Authorization Notice to Borrower.
(f) All conditions set forth in the Loan Authorization Notice that
were to be satisfied as of the date of Lender's making or incurring
the requested Credit Accommodation shall have been satisfied, and
Lender otherwise shall be permitted under the Ex-Im Bank Guarantee to
make and incur Credit Accommodations hereunder.
(g) All legal matters incident to the Loan and all documents necessary
in the opinion of Lender to the making or incurring of Credit
Accommodations shall be satisfactory in all respects to counsel for
Lender.
(h) All Liens, including the Security Interest, in and upon the
Collateral shall have been duly authorized, created and perfected,
(i) with first priority, with respect to the Collateral described in
Section 6(A) of the Loan Authorization Notice, and (ii) with the
priorities set forth in Sections 6(E) and (F) of the Loan
Authorization Notice with respect to other Collateral, in each case
subject only to Permitted Liens, and shall be and remain valid and
enforceable.
(i) Lender, at its option and for its sole benefit, shall have
conducted an audit of Borrower's Export-related Collateral, books,
records, and operations, and Lender shall be satisfied as to their
condition.
(j) Lender shall have received a completed and executed Export-related
Borrowing Base Certificate and any other information and documentation
that Lender may require, in accordance with the Subsection titled
"Export-related Borrowing Base Certificates."
(k) (i) Borrower shall have complied with, and shall then be in
compliance with, all the terms, covenants, and conditions of this
Agreement, the Borrower Agreement, and all other Financing Documents
which are binding upon it, (ii) there shall exist no Event of Default
under this Agreement, and (iii) all representations and warranties of
Borrower contained in this Agreement and all other Financing Documents
shall be true and correct.
(l) Borrower shall have complied with, and shall then be in compliance
with, all the terms, covenants, and conditions of any other agreement
now existing or hereafter arising between Lender and Borrower, and
there shall exist no default or event of default thereunder.
Condition Subsequent. The obligation of Lender to make or incur any Credit
Accommodation hereunder is conditioned upon Lender's receipt at Borrower's
expense of a post closing lien search confirming that all UCC financing
statements and other documents necessary to perfect the Liens in the
Collateral in favor of Lender in the priorities required hereunder have
been filed among all appropriate records.
COLLATERAL. To secure payment and performance of all Borrower's Obligations,
Borrower shall grant to Lender valid, enforceable and duly perfected Liens,
including the Security Interest, in all Collateral. The Liens shall be of first
priority with respect to the Collateral described in Section 6(A) of the Loan
Authorization Notice, and the Liens shall have the priorities set forth in
Sections 6(E) and (F) of the Loan Authorization Notice with respect to the other
Collateral, in each case subject only to Permitted Liens. Borrower agrees that
Lender shall have in respect of all Collateral that is subject to the UCC all of
the rights and remedies of a secured party under the UCC in all states in which
any portion of the Collateral may be located, as well as those provided in this
Agreement. In the event Lender has extended or extends a loan or other credit
accommodation to Borrower in addition to the Loan and receives a Lien on any
assets or property, the Lien on such assets and property shall also secure
Borrower's Obligations, and Borrower agrees to execute such documents and
instruments as Lender requires to extend such security to Borrower's
Obligations.
Perfection of Security Interest. Borrower agrees to execute such financing
statements and other documents and to take whatever other actions are
requested by Lender to perfect and continue Lender's Liens upon the
Collateral. Borrower hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any financing statements and
other documents necessary to perfect or to continue its Liens. Lender may
at any time, and without further authorization from Borrower, file a
carbon, photograph, facsimile, or other reproduction of any financing
statement for use as a financing statement. Borrower will reimburse Lender
for all expenses for the perfection, termination, and the continuation of
the perfection of Lender's Liens upon the Collateral. Borrower will
promptly notify Lender of any change in Borrower's name including any
change to the assumed business names of Borrower. Borrower also will
promptly notify Lender of any change in Borrower's social security number
or employer identification number. Lender's Security Interest in any
Export-Related Accounts Receivable shall be further perfected by Borrower's
execution and delivery to Lender of any instruments, the giving of any
notices and the taking of any additional steps that may be required under
foreign law in order to ensure the effectiveness of the assignment of such
Export-Related Accounts Receivable against the Buyer.
Collateral Records and Reports. Borrower does now, and at all times
hereafter shall keep correct and accurate books and records of the
Collateral, all of which books and records shall be available to Lender or
Lender's representative upon demand for inspection and copying at any
reasonable time. In this connection, Borrower acknowledges that Lender is
required by Ex-Im Bank to perform (or contract to perform) a field
examination of Borrower and the Collateral in accordance with Lender's
customary procedures but in no event less than every six months. Such field
examination shall include without limitation an inspection and valuation of
Inventory and Other Assets, a book audit of Accounts Receivable and a
review of the Accounts Receivable aging report For Revolving Loan
Facilities, if Lender elects in its sole discretion to make Credit
Accommodations based upon summaries of Export Orders, then at least once
each quarter, Lender shall review a sampling selected by Lender of those
Export Orders representing at least 10% of the aggregate Dollar volume of
Export Orders and 10% of the number of Export Orders supporting Credit
Accommodations made or incurred during the past quarter. Specifically with
respect to Export-Related Collateral, Borrower agrees to keep and maintain
such books and records as Lender may require, including, without
limitation, information concerning the eligibility of Export-Related
Collateral for Export-Related Borrowing Base purposes, Export-Related
Accounts Receivable balances and number of days outstanding, descriptions
and itemizations of the kind, type, quality, and quantity of Export-Related
Inventory, Inventory costs and selling prices, and records of daily
withdrawals and additions to Export-rRlated Inventory. Borrower shall
submit to Lender in writing from time to time upon Lender's request and in
any event no later than the 20th day of each month (a) an Inventory
schedule for the immediately preceding month, which schedule shall include
the location of each Item of Inventory, (b) an Accounts Receivable aging
report for the immediately preceding month, which report shall include the
customer name,
- 4 -
Dollar amount due and number of days outstanding for each Export-Related
Account Receivable, (c) information concerning the status of completion of
Export Orders, and (d) such other information, reports, contracts, invoices
and other data relating to the Collateral as Lender may request.
Assignment of Foreign Credit Insurance Policy Proceeds and Buyer/Supplier
Financing. Borrower shall, simultaneously with the execution of this
Agreement and as and when such policies are put into effect or financing is
obtained by Borrower for the benefit of any Buyer, at any time prior to the
payment and performance in full of Borrower's Obligations, assign to Lender
the proceeds of all foreign credit insurance policies maintained by
Borrower and any financing obtained by Borrower for the benefit of any
Buyer, including, without limitation, any financing the repayment of which
is guaranteed or insured by Ex-Im Bank, such assignment to provide for
payment to be made directly into Borrower's account with Lender or to
Lender.
Loss of Collateral. Lender shall not be liable for the loss of any
Collateral in its possession, nor shall such loss diminish Borrower's
Obligations.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants the following
to Lender and Ex-Im Bank, as of the Effective Date, as of the date each Credit
Accommodation is made or incurred hereunder, as of the date of any Renewal,
extension or modification of the Loan, and at all times any of Borrower's
Obligations are outstanding, and it is the affirmative obligation of Borrower to
notify Lender in writing promptly, but in any event within five (5) Business
Days, of any occurrence, circumstance or fact which would affect its ability to
make the representations and warranties contained herein:
Organization. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the state of Borrower's
incorporation and is duly qualified and in good standing in all other
states in which Borrower is doing business. Borrower has the full power and
authority to own its properties and to transact the businesses in which it
is presently engaged or presently proposes to engage. Borrower has not been
suspended or debarred from doing business with the United States
government.
Authorization. The execution, delivery, and performance of this Agreement
and all other Financing Documents to which Borrower is a party have been
duly authorized by all necessary action by Borrower; do not require the
consent or approval of any other Person; and do not conflict with, result
in a violation of, or constitute a default under (a) any provision of its
certificate or articles of incorporation or organization, or bylaws, or
partnership, limited liability or operating agreement, or any other
agreement or instrument binding upon Borrower, or (b) any law, governmental
regulation, court decree, or order applicable to Borrower. Borrower has all
requisite power and authority to execute and deliver this Agreement and all
other Financing Documents to which Borrower is a party.
Financial Information. Each financial statement of Borrower supplied to
Lender truly and completely discloses financial condition of Borrower as of
the date of the statement, and there has been no change in Borrower's
financial condition subsequent to the date of the most recent financial
statement supplied to Lender, which has had or could reasonably be expected
to have a Material Adverse Effect. Borrower has no material contingent
obligations except as disclosed in such financial statements.
Legal Effect. This Agreement and all other Financing Documents to which
Borrower is a party constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective
terms.
Properties. Borrower is the sole owner of, and has good title to, all of
Borrower's properties free and clear of all security interests except for
liens and security interests in favor of Lender and Permitted Liens, and
has not executed any security documents or financing statements relating to
such properties. Title to all of Borrower's properties are in Borrower's
legal name, and Borrower has not used, or filed a UCC financing statement
under, any other name for at least the last six (6) years.
Compliance. Except as disclosed to and acknowledged by Lender in writing,
(a) Borrower is conducting Borrower's businesses in material compliance
with all applicable federal, state and local laws, statutes, ordinances,
rules, regulations, orders, determinations and court decisions, including,
without limitation, those pertaining to health or environmental matters,
and (b) Borrower otherwise does not have any contingent liability in
connection with the release into the environment, disposal or the improper
storage of any toxic or hazardous substance or solid waste which has had or
could reasonably be expected to have a Material Adverse Effect.
Licenses. All necessary licenses, permits and authorizations required for
the exporting of the Export-related Inventory have been or will be timely
obtained by Borrower, and to the best of Borrower's knowledge, all required
necessary licenses, permits and authorizations have been or will be timely
obtained by each importer.
Performance. Borrower has an operating history of at least one year.
Borrower has sufficient financial resources with which to perform its
Export Orders and to pay any costs of completing its Export Orders which
are not paid from the proceeds of the Loan.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which
has had or could reasonably be expected to have a Material Adverse Effect
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
Taxes. All tax returns and reports of Borrower that are or were required to
be filed have been filed in a timely manner, and all taxes, assessments and
other governmental charges have been paid in full, except those that have
been disclosed in writing to Lender which are presently being or to be
contested by Borrower in good faith in the ordinary course of business and
for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to and approved by
Lender in writing, Borrower has not entered into any security agreements,
granted a Lien or permitted the filing or attachment of any Lien (other
than Permitted Liens) on or affecting any of the Collateral, except in
favor of Lender.
Use of Proceeds. Borrower shall not use any Loan proceeds for the
purchasing or carrying of "margin stock" as defined in Regulation U issued
by the Board of Governors of the Federal Reserve System.
Employee Benefit Plans. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (a) no Reportable Event nor
Prohibited Transaction (as defined in ERISA) has occurred with respect to
any such plan, (b) Borrower has not withdrawn from any such plan or
initiated steps to do so, (c) no steps have been taken to terminate any
such plan, and (d) there are no unfunded liabilities other than those
previously disclosed to Lender in writing.
- 5 -
Location of Borrower's Offices and Records. Borrower's place of business,
or Borrower's chief executive office if Borrower has more than one place of
business, is located at the address for notices to Borrower set forth in
the Subsection titled "Notices". Unless Borrower has notified Lender and
Lender has acknowledged in writing to the contrary, said address is also
the location of Borrower's books and records concerning the Collateral.
Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will
be, true and accurate in every material respect on the date as of which
such information is dated or certified; and none of such information is or
will be incomplete by omitting to state any material fact necessary to make
such information not misleading.
Export-related Accounts Receivable. (a) All Export-related Accounts
Receivable represented by Borrower to constitute Eligible Export-related
Accounts Receivable satisfy all relevant eligibility criteria; (b) all
Export-related Receivables information contained in Export-related
Borrowing Base Certificates and related reports delivered to Lender will be
true and correct, subject to immaterial variance; and (c) Lender shall have
the right at any time during normal business hours and at Borrower's
expense to confirm with Buyers the accuracy of such Export-related Accounts
Receivable information.
Export-related Inventory and Other Assets. (a) All Export-related Inventory
represented by Borrower to constitute Eligible Export-related Inventory
satisfies all relevant eligibility criteria; (b) all information regarding
Export-related Inventory and Other Assets (if any) contained in
Export-related Borrowing Base Certificates and related schedules delivered
to Lender will be true and correct, subject to immaterial variance; (c) the
Export-related Inventory Value and the Other Assets Value (if any) will be
determined in accordance with GAAP; (d) except as agreed to the contrary by
Lender in writing, all Eligible Export-related Inventory and Other Assets
are now and at all times hereafter will be in Borrower's physical
possession; (e) all Eligible Export-related Inventory is now and at all
times hereafter will be of good and merchantable quality, free from
defects; (f) no Eligible Export-related Inventory is now and none at any
time hereafter will be stored with a processor, bailee, warehouseman, or
similar party without Lender's prior written consent; and (g) Lender and
Ex-Im Bank shall have the right at any time during normal business hours
and at Borrower's expense to check and test Export-related Inventory and
Other Assets (if any) as to quality, value, and condition.
Borrower understands and agrees that Lender, without independent investigation,
is relying upon the above representations and warranties in extending the Loan
to Borrower. Borrower further agrees that the foregoing representations and
warranties shall be continuing in nature and shall remain in full force and
effect as long as any of Borrower's Obligations remain outstanding.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect and until all of Borrower's Obligations are fully
paid and performed, Borrower shall:
Additional Liabilities. Promptly, but in any event within five (5) Business
Days, inform Lender in writing (a)in the event any litigation, claim,
investigation, administrative proceeding or similar action affecting
Borrower or any Guarantor which could reasonably be expected to have a
Material Adverse Effect is filed or threatened against Borrower or any
Guarantor, and (b) of the creation, occurrence or assumption by Borrower of
any actual or contingent liabilities not permitted under this Agreement.
Financial Records. Maintain or cause to be maintained books and records in
accordance with GAAP, and permit Lender and Ex-Im Bank or their
representatives to examine, review, audit and make and take away copies or
reproductions of Borrower's books and records at all reasonable times. If
any books and records, including, without limitation, computer generated
records and computer software programs for the generation of such records,
now or hereafter are maintained in the possession of a third party,
Borrower, upon request of Lender, shall instruct such party to permit
Lender and Ex-Im Bank or their representatives free access to such records
at all reasonable times and to provide Lender with copies of any records it
may request, all at Borrower's expense.
Reporting Requirements. Furnish to Lender:
(a) As soon as available and in any event not later than 45 days after
the end of each fiscal quarter, the unaudited balance sheets of
Borrower as of the end of such quarter, and the related unaudited
statements of income, shareholders' equity and cash flows for the
period commencing at the end of the previous year and ending with the
end of such quarter, and the corresponding figures as at the end of,
and for, the corresponding period in the preceding fiscal year, all in
reasonable detail and duly certified with respect to such statements
(subject to year-end audit adjustments) by an authorized financial
officer of Borrower as having been prepared in accordance with GAAP;
(b) As soon as available and in any event not later than [90] days
after the end of each fiscal year of Borrower and any Guarantor (other
than an individual Guarantor), a copy of the annual audit for such
year for Borrower and any such Guarantor ,including therein audited
balance sheets of Borrower and any such Guarantor as of the end of
such fiscal year and the related statements of income, shareholders'
equity and cash flows for such fiscal year, and the corresponding
figures as at the end of, and for, the preceding fiscal year, in each
case audited and certified by a firm of independent certified public
accountants of recognized standing acceptable to Lender and including
any management letters delivered by such accounting firm to Borrower
or such Guarantor in connection with such audit together with a
certificate of such accounting firm to Lender stating that, in the
course of the regular audit of the business of Borrower or such
Guarantor which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting
firm has obtained no knowledge that an Event of Default has occurred
and is continuing, or if, in the opinion of such accounting firm, an
Event of Default has occurred and is continuing, a statement as to the
nature thereof;
(c) Within 30 days after filing with the Internal Revenue Service and
in any event not later than 90 days after March 31 of each year,
copies of each Guarantor's signed federal income tax returns for the
prior year; and
(d) To the extent not hereinabove described, the financial statements
of Borrower and each Guarantor deliverable pursuant to the Loan
Authorization Notice by the dates set forth therein.
Taxes, Charges and Liens. Pay and discharge when due all of Borrower's
indebtedness and obligations, including, without limitation, all
assessments, taxes, governmental charges, levies and liens, of every kind
and nature, imposed upon Borrower or its properties, income, or profits,
prior to the date on which penalties would attach, and all lawful claims
that, if unpaid, might become a lien or charge upon any of Borrower's
properties, income, or profits; provided, however, Borrower will not be
required to pay and discharge any such assessment, tax, charge, levy, lien
or claim so long as (a) the legality of the same shall be contested in good
faith by appropriate proceedings, and (b) Borrower shall have established
or caused to have been established adequate reserves with respect to such
contested assessment, tax, charge, levy, lien, or claim in accordance with
GAAP. Borrower, upon demand of Lender, will furnish to Lender evidence of
payment of
- 6 -
the assessments, taxes, charges, levies, liens and claims and will
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of any assessments, taxes, charges, levies, liens
and claims against Borrower's properties, income, or profits.
Additional Information. Furnish to Lender such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, financial information on
principal suppliers of Borrower, and other reports with respect to
Borrower's financial condition and business operations as Lender may
request from time to time, including, without limitation, those reports
listed in Section 9 of the Letter Loan Agreement dated as of September 30,
2002.
Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insurance companies reasonably acceptable to Lender. If Borrower fails to
provide any required insurance or fails to continue such insurance in
force, Lender may, but shall not be required to, obtain such insurance at
Borrower's expense, and the cost of such insurance will be added to
Borrower's Obligations. Borrower, upon request of Lender, will deliver to
Lender from time to time the policies or certificates of insurance in form
and substance satisfactory to Lender, including stipulations that coverages
will not be canceled or changed without at least 10 days' prior written
notice to Lender. In connection with all policies covering any of the
Collateral, Borrower will provide Lender with such loss payable or other
endorsements as Lender may require; and each such policy in any event shall
contain a standard non-contributing, non-reporting mortgagee or loss payee
clause naming Lender as mortgagee and loss payee. Each liability insurance
policy shall name Lender as additional insured. At Lender's request
Borrower shall furnish to Lender from time to time reports on each existing
insurance policy including, without limitation, the following: (a) the name
of the insurer; (b) the risks insured; (c) the amount of the policy; (d)
the properties insured; (e) the then current property values on the basis
of which insurance has been obtained, and the manner of determining those
values; (f) the expiration date of the policy; and (g) such additional
information as Lender may request.
Other Agreements. Comply with all material terms and conditions of all
other agreements, whether now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any material
default in connection with any other such agreements.
Performance. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in the other Financing Documents and in all
Export Orders (including, without limitation, the delivery of the goods
required thereby free and clear of defects and prior to the deadline
specified therein) in a timely manner, and promptly notify Lender
(including, without limitation, providing such notice of events as is
required pursuant to the Borrower Agreement) of the occurrence of any event
which constitutes or may constitute an Event of Default under this
Agreement or a default under any of the other Financing Documents or Export
Orders. Borrower shall, as soon as possible, take all actions necessary to
entitle Borrower to receive any payments due under all Export Orders,
including, without limitation, the timely drawing of drafts under any
letters of credit issued for the benefit of Borrower in connection
therewith and the timely presentation of any claims under any insurance
policy issued by, or financing guaranteed by, Ex-Im Bank or any other
insurer or guarantor.
Operations. Conduct its business affairs in a reasonable and prudent manner
and in compliance with all applicable federal, state, municipal, and
foreign laws, ordinances, rules and regulations respecting its properties,
charters, businesses and operations, including without limitation,
compliance with the Americans with Disabilities Act, all applicable
environmental statutes, rules, regulations and ordinances and with all
minimum funding standards and other requirements of ERISA and other laws
applicable to Borrower's employee benefit plans.
Compliance Certificate. Unless waived in writing by Lender, provide Lender
within 45 days after the end of each fiscal quarter with a certificate
executed by Borrower's chief financial officer or other officer or person
acceptable to Lender (a) certifying that the representations and warranties
set forth in this Agreement and the other Financing Documents are true and
correct in all material respects as of the date of the certificate and
that, as of the date of the certificate, no Event of Default exists under
this Agreement, and (b) demonstrating compliance with all financial
covenants and ratios set forth in this Agreement.
Export-Related Borrowing Base Certificates. In addition to deliveries at
the time each request for a Credit Accommodation is made by Borrower (if
required by Lender) or as otherwise required by Lender and Ex-Im Bank, and
so long as there are any Credit Accommodations outstanding under the Loan,
deliver to Lender no later than the 20th day of each calendar month an
Exported-Related Borrowing Base Certificate, along with such supporting
documentation as Lender may request. Without limiting the generality of the
foregoing, each Export-Related Borrowing Base Certificate shall include or
be accompanied by (a) in the event Borrower is requesting Credit
Accommodations, a copy of the Export Order(s) (or, for Revolving Loan
Facilities, if permitted in writing by Lender, a written summary of the
Export Orders) and related invoice(s) against which Borrower is requesting
Credit Accommodations, and copies of all other documentation pursuant to
which the Buyer's obligations in respect of the Export Order(s) are
evidenced, secured or guaranteed, and (b) in all cases, an Accounts
Receivable aging report and Inventory schedule as described in the
Subsection titled "Collateral Records and Reports," reconciled directly to
Borrower's month-end Accounts Receivable report, its month-end Inventory
schedule, and its general ledger, adjusted for intra-month sales, receipts,
credits and other adjustments.
Additional Assurances. Execute, acknowledge and deliver, or cause to be
executed, acknowledged or delivered, to Lender and Ex-Im Bank such
promissory notes, mortgages, deeds of trust, security agreements, financing
statements, instruments, documents and other agreements as Lender or Ex-Im
Bank may reasonably request to evidence and secure the Loan, to perfect the
Liens or otherwise facilitate the performance of this Agreement and any of
the other Financing Documents.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect and until all Borrower's Obligations are fully paid and
performed, Borrower shall not, without the prior written consent of Lender and,
to the extent required, Ex-Im Bank:
FINANCIAL COVENANTS.
(a) Permit its Leverage Ratio at any time to be in excess of 1.50 to
1.0 as of the end of any fiscal quarter.
(b) Permit its Tangible Net Worth at any time to be less than
$14,000,000 as of the end of any fiscal quarter..
(d) Maintain EBITDA (excluding tax refunds) at all times for the
immediately preceding 12 month period of not less than $3,500,000.
Maintain Basic Business. Engage in any business activities substantially
different than those in which Borrower is presently engaged.
Continuity of Operations. Cease operations, liquidate, dissolve or merge or
consolidate with or into any other entity or make any material change in
its corporate structure or identity, or enter into any agreement to do any
of the following.
- 7 -
Indebtedness. Create, incur or assume additional indebtedness for borrowed
money, including capital leases, or guarantee any indebtedness owing by
others, other than (a) current unsecured trade debt incurred in the
ordinary course of business, (b) indebtedness owing to Lender, (c)
borrowings outstanding as of the Effective Date and disclosed to Lender in
writing, and (d) any borrowings otherwise approved by Lender in writing.
Capital Expenditures. Make or advance any payment(s) directly or indirectly
which in the aggregate exceed $4,000,000 during any 12 month period for the
purpose of acquiring or constructing fixed assets, real property or
equipment which in accordance with GAAP would be added as a debit to the
Borrower's fixed asset account including, without limitation, amounts paid
or payable for such purpose under any conditional sale or other title
retention agreement or capital lease.
Transfer of Assets and Liens. Transfer, sell or otherwise dispose of any of
Borrower's assets other than in the ordinary course of business, or
mortgage, assign, pledge, or grant a security interest in or otherwise
encumber Borrower's assets other than liens in favor of Lender and
Permitted Liens.
Transfer of Ownership. Permit the sale, pledge or other transfer of any
ownership interest in Borrower.
Investments and Loans. Make any substantial investment in or loan to, or
purchase, create, form or acquire any substantial interest in, any other
Person or enterprise including, without limitation, any Affiliate
(including, without limitation, any officer or director) of Borrower other
than loans to Affiliates that do not exceed the aggregate amount of
$150,000.
Dividends. Pay any dividends of Borrower's capital stock or purchase,
redeem, retire or otherwise acquire any of Borrower's capital stock or
alter or amend Borrower's capital structure; provided, however if Borrower
is and becomes a Subchapter S corporation, Borrower may make distributions
to each of its shareholders equal to each shareholder's additional federal
and state income tax liability attributable to such shareholder's ownership
of capital stock in Borrower.
Affiliates. Enter into any transaction, including, without limitation, the
purchase, sale, lease or exchange of property or the rendering of any
service, with any Affiliate (including, without limitation, any officer or
director) of Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and reasonable
terms no less favorable than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of Borrower.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
Default on Borrower's Obligations Regarding Payment. Failure of Borrower to
make any payment within ten (10) days after the date when due on any of
Borrower's Obligations, including, without limitation, any mandatory
prepayments of Borrower's Obligations from the Proceeds of or comprising
Export-related Accounts Receivable and Export-related Inventory.
Other Defaults. (a) Failure of Borrower to comply with or to perform when
due any other term, obligation, covenant or condition contained in this
Agreement, the Note, the Borrower Agreement or in any of the other
Financing Documents, and such failure remains uncured or uncorrected for a
period of thirty (30) days; or (b) failure of Borrower to pay when due any
amount payable to Lender under any other loan or credit accommodation to
Borrower; or (c) the occurrence of any default or event of default under
any other agreement now existing or hereafter arising between Lender and
Borrower.
False Statements. Any warranty, representation or statement made in or
furnished to Lender under this Agreement or the other Financing Documents
is false or misleading in any material respect when made or furnished, or
becomes false or misleading at any time thereafter.
Default toThird Party. The occurrence of any event which permits the
acceleration of the maturity of any indebtedness in excess of $100,000
owing by Borrower or any Guarantor to any third party under any agreement
or undertaking, or any such indebtedness shall not be paid as and when due.
Insolvency. Borrower or any Guarantor (a) applies for, consents to or
suffers the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all or
a substantial part of its property or calls a meeting of its creditors, (b)
admits in writing its inability, or is generally unable, to pay its debts
as they become due or ceases operations of its present business, (c) makes
a general assignment for the benefit of creditors, (d) commences a
voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (e) is adjudicated as bankrupt or insolvent, (f)
files a petition seeking to take advantage of any other law providing for
the relief of debtors, (g) acquiesces to, or fails to have dismissed within
60 days, any petition filed against it in any involuntary case under such
bankruptcy laws, (h) is the subject of any proceeding for the liquidation
of its assets or dissolution, or (i) takes any action for the purpose of
effecting any of the foregoing.
Change in Ownership. Any change in ownership of 25% or more of the capital
stock of Borrower, or Borrower becomes the subject of any merger or
consolidation.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or any
Guarantor, or by any governmental agency; or the issuance of any levy,
assessment, attachment, seizure or Lien, other than a Permitted Lien,
against any of the Collateral which is not stayed or lifted within 30 days.
Ex-Im Bank Guarantee. The occurrence of an event of default under the Ex-Im
Bank Guarantee or the Ex-Im Bank Guarantee ceases to be in effect for any
reason whatsoever without Lender's prior written consent, including,
without limitation, Borrower's failure to pay all fees due Ex-Im Bank.
Contract Fulfillment; Change in Supplier Financial Condition. Any material
delay occurs in Borrower's performance of its obligations under any
material Export Order, unless such delay is due to force majeure and
Borrower is able to satisfy Lender that the delay will not cause a default
under the applicable Export Order or diminish the Buyer's payment
obligations thereunder; or a material adverse change occurs in the
financial condition of any material supplier to Borrower which could
reasonably be expected to result in a material adverse effect on the
financial condition of the Borrower.
Material Adverse Effect. An event occurs which has had or could reasonably
be expected to have a Material Adverse Effect.
- 8 -
Failure of Lien. Any Lien in any of the Collateral granted or intended by
the Financing Documents to be granted to Lender ceases to be a valid,
enforceable, perfected, first priority Lien (or a lesser priority if
expressly permitted pursuant to Section 6 of the Loan Authorization Notice)
subject only to Permitted Liens.
Invalidity. Any material provision of any Financing Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms.
Litigation. Any litigation is filed against Borrower or any Guarantor which
has had or could reasonably be expected to have a Material Adverse Effect
and such litigation is not withdrawn or dismissed within 30 days of the
filing thereof.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, and unless
such Event of Default shall be cured to the satisfaction of Lender and Ex-Im
Bank, Lender may, at its option, without further notice or demand, (a)
accelerate the Commitment Termination Date, whereupon the Commitment shall
terminate as of the accelerated Commitment Termination Date; (b) terminate all
other commitments and obligations of Lender to make loans or other credit
accommodations to Borrower, if any; (c) declare the Loan and any other
indebtedness of Borrower to Lender immediately due and payable; (d) refuse to
make or incur any additional Credit Accommodations under this Agreement or the
Note; (e) assemble, sell, lease, buy, transfer or otherwise dispose of the
Collateral or the Proceeds thereof; and (f) exercise all the rights and remedies
provided in this Agreement, the Note or in any of the other Financing Documents
or available at law, in equity, or otherwise; provided, however, that if any
Event of Default of the type described in the Subsection titled "Insolvency"
shall occur, the Loan and any other indebtedness of Borrower to Lender shall
automatically become fully due and payable, without any notice, demand or action
by Lender. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Guarantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS.
Amendments. This Agreement, together with the other Financing Documents,
constitute the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment. This Agreement and the other Financing Documents supersede all
existing agreements, oral or written, previously entered into between
Borrower and Lender with respect to the Loan unless Borrower and Lender
agree in writing to the contrary.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
Consent to Loan Participation. Borrower agrees and consents to Lender's
sale or transfer, at Lender's sole discretion, whether now or later, of one
or more participation interests in the Loan to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without any
limitation whatsoever, to any one or more purchasers, potential purchasers,
or affiliates of Lender, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower
hereby waives any rights to privacy it may have with respect to such
matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of such
participation interests.
Notices. All communications and notices required to be given under this
Agreement shall be hand delivered or sent by nationally recognized
overnight courier or United States mail, certified or registered, postage
prepaid, addressed to the party to whom the notice is to be given at the
address shown below. All such communications and notices shall be effective
upon delivery. Any party may change its address for notices under this
Agreement by giving formal written notice to the other parties, specifying
that the purpose of the notice is to change the party's address. To the
extent permitted by applicable law, if there is more than one Borrower,
notice to any Borrower will constitute notice to all Borrowers:
if to Borrower:
AMX Corporation
3000 Research Drive
Richardson, Texas 75082
ATTN: Jean Nelson
if to Lender:
Bank One, NA
1717 Main Street
Dallas, Texas 75201
ATTN: Fred Points
- 9 -
with copy to:
Bank One, NA
1700 Pacific Avenue, 21st Floor
Dallas, Texas 75201
ATTN: Martha Gentry
if to Ex-Im Bank:
Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
ATTN: Vice President, Business Credit Division
Survival; Successors and Assigns. All covenants, agreements,
representations and warranties of Borrower and any Guarantor made herein
and in the other Financing Documents and in the certificates, instruments
and other documents delivered pursuant hereto or thereto shall survive the
making or incurring of Credit Accommodations hereunder, and shall continue
in full force and effect until all of Borrower's Obligations have been paid
and performed in full. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors
and permitted assigns of such party; and all covenants, promises and
agreements by or on behalf of Borrower which are contained in this
Agreement or in the other Financing Documents shall inure to the benefit of
the successors and assigns of Lender and Ex-Im Bank, which is a third-party
beneficiary of this Agreement and each of the other Financing Documents to
which it is not a direct party. Borrower may not assign any interest that
it may have under this Agreement, including, without limitation, the right
to receive the benefit of the Loan to be extended hereunder, without the
prior written consent of Lender and Ex-Im Bank. Any assignment made or
attempted by Borrower without the prior written consent of Lender and Ex-Im
Bank shall be void and of no effect. No consent by Lender and Ex-Im Bank to
an assignment by Borrower shall release Borrower as the party primarily
obligated and liable under the terms of this Agreement unless Borrower
shall be released specifically by Lender and Ex-Im Bank in writing. No
consent by Lender and Ex-Im Bank to an assignment shall be deemed to be a
waiver of the requirement of prior written consent by Lender and Ex-Im Bank
with respect to each and every further assignment and as a condition
precedent to the effectiveness of such assignment. Lender may assign its
interest in any or all of the Financing Documents to any Person, including
Ex-Im Bank, without the consent of or notice to Borrower, any Guarantor, or
any other Person, upon such terms as Lender in its sole discretion deems
appropriate.
Payment of Fees and Expenses. At Lender's discretion, Borrower will pay all
out-of-pocket expenses, including, without limitation, the fees and
disbursements of legal counsel employed by Lender, incurred by Lender in
connection with (i) the preparation and negotiation of this Agreement and
the other Financing Documents, (ii) the making or incurring of Credit
Accommodations by Lender, (iii) the protection of the Collateral and any
other security for the repayment of Borrower's Obligations, and (iv) the
enforcement and protection of the rights of Lender in connection with this
Agreement or any of the other Financing Documents. Prior to Lender's making
or incurring any Credit Accommodations hereunder, Borrower shall pay to
Lender, in consideration for the establishment of the Commitment and as an
additional condition precedent to the making or incurring of Credit
Accommodations, the Ex-Im Bank facility fee determined in accordance with
the Loan Authorization Notice and all other fees and expenses due Lender.
Applicable Law; Jurisdiction; Consent to Service of Process. Except as
hereinafter expressly provided, this Agreement is governed by and shall be
construed in accordance with the laws of the State of Texas. The Ex-Im Bank
Guarantee is governed by New York law. Accordingly, notwithstanding any
provision to the contrary contained herein or in any of the other Financing
Documents, to the extent, but only to the extent, necessary to assure full
satisfaction of and compliance with all terms and conditions of Ex-Im
Bank's guaranty of Borrower's Obligations under the Ex-Im Bank Guarantee
and to preserve Lender's rights thereunder, this Agreement and each of the
other Financing Documents shall be governed by and construed in accordance
with the laws of the State of New York. Lender and Borrower hereby submit
to the non-exclusive jurisdiction of any New York court or federal court
sitting in New York City over any suit, action or proceeding arising out of
or relating to this Agreement. Final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon
Borrower and may be enforced in any court to the jurisdiction of which
Borrower is subject, by a suit upon the judgment.
No Liability of Lender. Neither Lender nor Ex-Im Bank shall be liable for
any act or omission by it pursuant to the provisions of this Agreement, in
the absence of fraud or gross negligence. Borrower hereby agrees that
neither Lender nor Ex-Im Bank shall be chargeable for any negligence,
mistake, act or omission of any accountant, examiner, agency or attorney
employed by it in making examinations, investigations or collections, or
otherwise in perfecting, maintaining, protecting or realizing upon any lien
or Security Interest in the Collateral or any other interest in any
security for Borrower's Obligations. Neither Lender nor Ex-Im Bank shall
incur any liability to Borrower or to any other party in connection with
the acts or omissions of Lender or Ex-Im Bank in reliance upon any
certificate or other paper believed by Lender or Ex-Im Bank to be genuine
or with respect to any other thing which Lender or Ex-Im Bank may do or
refrain from doing, unless such act or omission amounts to fraud or gross
negligence.
Indemnification. Borrower agrees to protect, indemnify, defend and hold
harmless Lender and Ex-Im Bank from and against any and all claims,
damages, losses, liabilities, costs or expenses (including, without
limitation, attorneys' fees) whatsoever which Lender and Ex-Im Bank may, at
any time, sustain or incur by reason of or in consequence of or arising out
of extending the Loan to Borrower, the making or incurring of Credit
Accommodations, or the issuance of a guaranty of Borrower's Obligations, as
the case may be except to the extent caused by the willful misconduct or
gross negligence of Lender; it being the intention of the parties that this
Agreement shall be construed and applied to protect, indemnify, defend and
hold harmless Lender and Ex-Im Bank against any and all risks involved in
the transactions contemplated by this Agreement and the other Financing
Documents, all of which risks are hereby assumed by Borrower except to the
extent any such claim, damage, loss, liability, cost or expense is caused
by the willful misconduct or gross negligence of Lender. The provisions of
this Section shall survive the expiration or termination of this Agreement,
the other Financing Documents, and the Commitment and the payment and
performance of Borrower's Obligations.
No Partnership. Nothing contained in this Agreement shall be construed in a
manner to create any relationship among Borrower, Lender and Ex-Im Bank
other than the relationship of borrower, lender and credit enhancement
provider, and Borrower, Lender and Ex-Im Bank shall not be considered
partners or co-venturers for any purpose on account of this Agreement.
Controlling Agreement. Borrower acknowledges and agrees that (a) the
Borrower Agreement contains additional representations, terms, covenants
and conditions related to Borrower and the Loan, and (b) as between Lender
and Borrower this Agreement and the Borrower Agreement together govern the
establishment of the Loan as a Loan Facility guaranteed pursuant to the
Ex-Im Bank Guarantee and the making and incurring of Credit Accommodations
under the Loan. In the event any of the representations, terms, covenants
or conditions
- 10 -
contained in this Agreement conflict with those contained in the Borrower
Agreement, then as between Lender and Borrower, the more stringent
provisions of each with respect to Borrower shall govern and prevail.
WAIVER OF TRIAL BY JURY. EACH OF BORROWER AND LENDER HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND LENDER MAY BE
PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT OR ANY
OF THE OTHER FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES
WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY MADE BY EACH OF BORROWER AND LENDER, AND BORROWER HEREBY
REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
PERSON TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS THAT IT HAS HAD THE
OPPORTUNITY TO BE REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity, however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respect shall remain valid and enforceable.
Rules of Construction. For purposes of this Agreement, the following
additional rules of construction shall apply, unless specifically indicated
to the contrary: (a) wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the singular and
the plural, and pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, the feminine and the neuter; (b) the term "or"
is not exclusive; (c) the term "including" (or any form thereof) shall not
be limiting or exclusive; (d) all references to statutes and related
regulations shall include any amendments of same and any successor statutes
and regulations; (e) the words "this Agreement", "herein", "hereof",
"hereunder" or other words of similar import refer to this Agreement as a
whole including the exhibits hereto as the same may be amended, modified or
supplemented; (f) all references in this Agreement to sections,
subsections, paragraphs and exhibits shall refer to the corresponding
sections, subsections, paragraphs and exhibits of or to this Agreement; and
(g) all references to any instruments or agreements, including references
to any of the Financing Documents, shall include any and all modifications,
amendments and supplements thereto and any and all restatements, extensions
or renewals thereof to the extent permitted under this Agreement.
Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute the same document. Signature pages may be detached from the
counterparts to a single copy of this Agreement to physically form one
document.
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any
Guarantor, shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Guarantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not constitute
continuing consent in subsequent instances where such consent is required,
and in all cases such consent may be granted or withheld in the sole
discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL OF THE PROVISIONS OF THIS AGREEMENT, AND
BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS EXECUTED AS OF THE DATE FIRST
SET FORTH ABOVE.
BORROWER:
By: /s/ Jean M. Nelson
-----------------------------
Name: Jean M. Nelson
---------------------------
Title: VP & CFO
--------------------------
LENDER: ACKNOWLEDGED:
BANK ONE, NA BANK ONE, NA
Main Office Chicago Main Office Chicago
By: /s/ Fred Points, FVP By: /s/ Martha Gentry
----------------------------- --------------------------
Authorized Officer Authorized Officer
Martha Gentry
- 11 -