EXHIBIT 10.22
THIRTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS THIRTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is entered into as of the 20th day of October, 2006 by and among the banks that
are or may from time to time become parties hereto (individually a "Bank" and
collectively, the "Banks"), LASALLE BANK NATIONAL ASSOCIATION, a national
banking association (in its individual capacity, "LaSalle"), as agent ("Agent")
for the Banks, and SIGMATRON INTERNATIONAL, INC., a Delaware corporation (the
"Borrower").
WITNESSETH:
WHEREAS, Agent, the Banks and Borrower are parties to that certain Loan and
Security Agreement dated as of August 25, 1999 (the "Original Agreement"), as
amended by that certain Amendment to Loan and Security Agreement dated as of
August 31, 2000, that certain Forbearance Agreement and Second Amendment to Loan
and Security Agreement dated as of February 1, 2001, that certain Forbearance
Agreement and Third Amendment to Loan and Security Agreement dated as of May 31,
2001, that certain Forbearance Agreement and Fourth Amendment to Loan and
Security Agreement dated as of July 31, 2001, that certain Fifth Amendment to
Loan and Security Agreement dated as of November 30, 2001, that certain Sixth
Amendment to Loan and Security Agreement dated as of April 22, 2002, that
certain Seventh Amendment to Loan and Security Agreement dated as of October 16,
2002, that certain Eighth Amendment to Loan and Security Agreement dated as of
February 19, 2004, that certain Ninth Amendment to Loan and Security Agreement
dated as of March 11, 2005, that certain Tenth Amendment to Loan and Security
Agreement dated as of July 14, 2005, that certain Eleventh Amendment to Loan and
Security Agreement dated as of September 12, 2005 and that certain Twelfth
Amendment to Loan and Security Agreement dated as of July 31, 2006 (the Original
Agreement and all of the foregoing amendments are collectively referred to as
the "Agreement"); and
WHEREAS, the Borrower and the Banks have agreed to further amend the
Agreement to, among other items, increase the principal amount of the Revolving
Credit Commitment (as defined in the Agreement).
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements herein contained and for the purposes of setting forth the terms and
conditions of this Amendment, the parties, intending to be bound, hereby agree
as follows:
1. Incorporation of the Agreement. All capitalized terms which are not
defined hereunder shall have the same meanings as set forth in the Agreement,
and the Agreement, to the extent not inconsistent with this Amendment, is
incorporated herein by this reference as though the same were set forth in its
entirety. To the extent any terms and provisions of the Agreement are
inconsistent with the amendments set forth in Paragraph 2 below, such terms and
provisions shall be deemed superseded hereby. Except as specifically set forth
herein, the Agreement shall remain in full force and effect and its provisions
shall be binding on the parties hereto.
2. Amendment of the Agreement.
(a) The definition of the term "Revolving Note" appearing in Paragraph
1.1 of the Agreement is hereby amended and restated to read as follows:
"Revolving Note" means that certain Substitute Revolving Note dated as
of October 20, 2006 payable by Borrower to LaSalle Bank National
Association in the maximum principal amount of $32,000,000, as may be
amended, modified, substituted or restated from time to time, together with
all renewals and exchanges therefore.
(b) Paragraph 2.1 of the Agreement is hereby amended and restated to
read as follows:
2.1 Revolving Credit Commitment. On the terms and subject to the
conditions set forth in this Agreement, Bank agrees to make revolving
credit available and Letters of Credit available to Borrower from time to
time prior to the Termination Date with respect to Revolving Loans in such
aggregate amounts as Borrower may from time to time request but in no event
exceeding the maximum principal amount available of Twenty-Seven Million
Dollars ($27,000,000) in the aggregate (the "Revolving Credit Commitment");
provided, however, that in no event shall the Revolving Credit Commitment
at any one time exceed the Revolving Loan Borrowing Base nor shall
outstanding Letters of Credit issued under the Revolving Credit Commitment
at any time exceed the Letter of Credit Limit. The Revolving Credit
Commitment shall be available to Borrower by means of Revolving Loans, it
being understood that Revolving Loans and Letters of Credit may be repaid
and used again during the period from the date hereof to and including the
Termination Date with respect to Revolving Loans, at which time the
Revolving Credit Commitment shall expire. The Revolving Credit may be
prepaid at any time without premium or penalty. Notwithstanding the
foregoing, so long as no Event of Default has occurred and is continuing,
the aggregate amount of the Revolving Credit Commitment shall be increased
to Thirty-Two Million Dollars ($32,000,000) solely for the period beginning
October 20, 2006 through April 30, 2007 and not for any other period.
(c) Exhibit A to the Agreement is hereby amended and restated with
Exhibit A attached hereto.
(d) Exhibit E to the Agreement is hereby amended and restated with
Exhibit E attached hereto.
3. Representations and Warranties. The representations and warranties set
forth in the Agreement and all covenants set forth in the Agreement shall be
deemed remade and affirmed as of the date hereof by Borrower, except any and all
references to the Agreement in such representations, warranties and covenants
shall be deemed to include this Amendment. Borrower hereby expressly reaffirms,
reinstates and assumes (on the same basis as set forth in the Agreement) all of
the obligations and liabilities to the Agent as set forth in the Agreement
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and this Amendment, and agrees to be bound by and abide by and operate and
perform under and pursuant to and comply fully with all of the terms,
conditions, provisions, agreements, representations, undertakings, warranties,
guarantees, indemnities, grants of security interest and covenants contained in
the Agreement. Borrower also acknowledges and reaffirms that the Agreement, as
amended by this Amendment, is in full force and effect and that no defenses
exist as of the date of this Amendment to Borrower's full compliance with the
Agreement, as amended by this Amendment. Borrower hereby acknowledges that the
security interests granted in the Agreement constitute a valid continuing first
Lien in and to the Collateral. No Event of Default has occurred and is
continuing and no event has occurred and is continuing which, with the lapse of
time, the giving of notice, or both, would constitute such an Event of Default
under the Agreement.
4. Delivery of Documents/Information. Prior to entering into this
Amendment, Agent shall have received from the Borrower the following fully
executed documents, in form and substance satisfactory to Agent and each Bank,
and all of the transactions contemplated by each such document shall have been
consummated or each condition contemplated by each such document shall have been
satisfied:
(a) this Amendment;
(b) Substitute Revolving Note in favor of LaSalle Bank;
(c) Opinion of Borrower's Counsel;
(d) Secretary's Certificate of Borrower with resolutions and
incumbency;
(e) Officer's Certificate (Closing Bring-Down) of Borrower; and
(f) such other documents, certificates and opinions as Agent may
request.
5. Reference to the Effect on the Agreement.
(a) References. Upon the date of this Amendment and on and after the
date hereof, each reference in the Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Agreement, as amended hereby.
(b) Ratification. As specifically modified above, the Agreement and
all other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect, and are hereby
ratified and confirmed.
6. Representations and Warranties of the Borrower. Borrower hereby
represents and warrants to Agent and the Banks as of the date hereof as follows:
(a) The execution and delivery of this Amendment and the performance
by Borrower of its obligations hereunder are within Borrower's powers and
authority, have been duly authorized by all necessary corporate action and do
not and will not contravene or conflict with the Certificate/Articles of
Incorporation or By-laws of Borrower.
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(b) The Agreement (as amended by this Amendment) and the Other
Agreements constitute legal, valid and binding obligations enforceable in
accordance with their terms by Agent and the Banks against Borrower, and
Borrower expressly reaffirms each of its obligations under the Agreement (as
amended by this Amendment) and each of the Other Agreements, including, without
limitation, Borrower's Liabilities. Borrower further expressly acknowledges and
agrees that Agent has a valid, duly perfected, first priority and fully
enforceable security interest in and lien against each item of Collateral except
as otherwise set forth in the Agreement. Borrower agrees that it shall not
dispute the validity or enforceability of the Agreement (as it was stated before
and after this Amendment) or any of the Other Agreements or any of its
respective obligations thereunder, or the validity, priority, enforceability or
extent of Agent's security interest in or lien against any item of Collateral,
in any judicial, administrative or other proceeding;
(c) No consent, order, qualification, validation, license, approval or
authorization of, or filing, recording, registration or declaration with, or
other action in respect of, any governmental body, authority, bureau or agency
or other Person is required in connection with the execution, delivery or
performance of, or the legality, validity, binding effect or enforceability of,
this Amendment; and
(d) The execution, delivery and performance of this Amendment by
Borrower does not and will not violate any law, governmental regulation,
judgment, order or decree applicable to Borrower and does not and will not
violate the provisions of, or constitute a default or any event of default
under, or result in the creation of any security interest or lien upon any
property of Borrower pursuant to, any indenture, mortgage, instrument, contract,
agreement or other undertaking to which Borrower is a party or is subject or by
which Borrower or any of its real or personal property may be bound.
7. Consent and Limited Waiver Regarding Investment. Agent and the Banks
hereby consent to the purchase by Borrower of a minority equity interest in
Intrinsic Quality for an aggregate purchase price not to exceed $200,000 (the
"Investment"); provided, however, (i) no Event of Default shall exist or be
caused by any payments made as a result of such Investment after giving effect
thereto and (ii) Borrower shall provide Agent with a copy of the executed
purchase agreement evidencing such Investment promptly following execution
thereof. Agent and the Banks waive any default or Event of Default under the
Loan Agreement arising under Paragraph 11.3(f) as a result of the Investment
effective as of the date hereof. The Borrower hereby acknowledges that the
waiver contained in this Amendment is granted by Agent and the Banks only for
the limited purpose set forth herein and each term and provision of the Loan
Agreement continues in full force and effect. The waiver in no manner creates a
course of dealing or otherwise impairs the future ability of Agent or the Banks
to declare an Event of Default under or otherwise enforce the terms of the Loan
Agreement.
8. Releases; Indemnities.
(a) In further consideration of the Banks' execution of this
Amendment, Borrower, and on behalf of its successors, assigns, subsidiaries and
Affiliates, hereby forever releases Agent and each Bank and their respective
successors, assigns, parents, subsidiaries, Affiliates, officers, employees
directors, agents and attorneys (collectively, the "Releasees")
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from any and all debts, claims, demands, liabilities, responsibilities,
disputes, causes, damages, actions and causes of action (whether at law or in
equity) and obligations of every nature whatsoever, whether liquidated or
unliquidated, known or unknown, matured or unmatured, fixed or contingent
(collectively, "Claims"), that Borrower may have against the Releasees which
arise from or relate to any actions which the Releasees may have taken or
omitted to take prior to the date this Amendment was executed, including without
limitation with respect to Borrower's Liabilities, any Collateral, the
Agreement, any Other Agreement and any third parties liable in whole or in part
for Borrower's Liabilities. This provision shall survive and continue in full
force and effect whether or not Borrower shall satisfy all other provisions of
this Amendment, the Other Agreements or the Agreement, including payment in full
of Borrower's Liabilities.
(b) Borrower hereby agrees that its obligation to indemnify and hold
the Releasees harmless as set forth in Paragraph 8(a) of this Amendment shall
include an obligation to indemnify and hold the Releasees harmless with respect
to any and all liabilities, obligations, losses, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
incurred by the Releasees, or any of them, whether direct, indirect or
consequential, as a result of or arising from or relating to any proceeding by,
or on behalf of, any Person, including, without limitation, officers, directors,
agents, trustees, creditors, partners or shareholders of Borrower, whether
threatened or initiated, asserting any claim for legal or equitable remedy under
any statute, regulation or common law principle arising from or in connection
with the negotiation, preparation, execution, delivery, performance,
administration and enforcement of this Amendment or any other document executed
in connection herewith. The foregoing indemnity shall survive the payment in
full of the Borrower's Liabilities and the termination of this Amendment, the
Agreement and the Other Agreements.
9. Fees and Expenses. Borrower agrees to pay on demand all costs, fees and
expenses of or incurred by the Agent in connection with the evaluation,
negotiation, preparation, execution and delivery of this Amendment and the other
instruments and documents executed and delivered in connection with the
transactions described herein (including the filing or recording thereof),
including, but not limited to, the reasonable fees and expenses of counsel for
the Agent, search fees and taxes payable in connection with this Amendment and
any future amendments to the Agreement.
10. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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(THIRTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT SIGNATURE PAGE)
IN WITNESS WHEREOF, the parties hereto have duly executed this Thirteenth
Amendment to Loan and Security Agreement as of the date first above written.
SIGMATRON INTERNATIONAL, INC.
By: /s/ Linda K. Blake
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Its: Chief Financial Officer
LASALLE BANK NATIONAL ASSOCIATION,
for itself and as Agent
By: /s/ Chris O'Hara
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Its: Senior Vice President