Exhibit 10.1
CREDIT AGREEMENT
This Credit Agreement ("Agreement") is made and entered into as of the first day
of April, 2001 ("Effective Date"), by and between Embrex, Inc. ("Lender") and
Advanced Automation, Inc. ("Borrower").
W I T N E S S E T H:
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WHEREAS, Lender and Borrower will be entering into a Development and Supply
Agreement ("Development and Supply Agreement") in conjunction with this
Agreement.
WHEREAS, Lender desires to extend credit to Borrower by making loans to Borrower
from time to time in sums equal to an aggregate amount not exceeding the Loan
Commitment in order to facilitate Borrower's performance of its obligations
under the Development and Supply Agreement; and
WHEREAS, Borrower desires to borrow from Lender sums equal to an aggregate
amount not exceeding the Loan Commitment.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. As used herein, the following terms shall
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have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
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"Business Day" shall mean any day on which the principal office of
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Lender is not closed.
"Default" shall mean an Event of Default or an event which with notice
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or lapse of time or both would become an Event of Default.
"Indebtedness" shall mean all sums owed or to be owed by Borrower to
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Lender, whether principal or interest.
"Interest Rate" shall mean six percent (6%) per annum.
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"Loan" and "Loans" shall mean loans made issued pursuant to Article II
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of this Agreement.
"Loan Commitment" shall mean an amount equal to Three Million Three
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Hundred Seventy Thousand Dollars ($3,370,000.00).
"Maturity Date" shall mean April 30, 2003.
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"Note" shall mean the promissory note referenced in Section 2.01 hereof
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substantially in the form of Exhibit A hereto.
Accounting terms not specifically defined herein shall be defined in accordance
with generally accepted accounting principles.
ARTICLE II
EXTENSION OF CREDIT
Section 2.01 Loans. Subject to the conditions set forth below in this Article
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II, Lender agrees to make loan(s) (each a "Loan" and collectively, the "Loan")
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to Borrower during the period from and including the Effective Date to the date
falling 30 days before the Maturity Date in an aggregate principal amount not
exceeding at any one time outstanding the Loan Commitment; notwithstanding the
foregoing or any other provision of this Agreement, the payment to be made by
Lender to Borrower on April 26, 2001, in the amount of Forty-Three Thousand Four
Hundred Twenty-Three and 28/100 Dollars ($43,423.28), shall be deemed a Loan
hereunder. The Loans shall mature and be payable in full on the Maturity Date.
The Loans made by Lender shall be evidenced by a single promissory note of
Lender in substantially the form of Exhibit A hereto ("Note"), payable to the
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order of Lender in a principal amount equal to the amount of the Loan
Commitment. The Note shall be dated the date hereof.
Section 2.02 Availability. Availability of Loans hereunder will be limited to
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and conditioned on Borrower's providing Lender with drawdown requests
satisfactory in form and substance to Lender (each a "Drawdown Request"). Each
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Drawdown Request must be in an amount equal to the amount of expenses actually
incurred by Borrower during the calendar month prior to the Drawdown Request in
connection with Borrower's performance of its obligations under the Development
Program (as defined in the Development and Supply Agreement). Lender must
pre-authorize, in writing, each such expense (whether labor, materials or
travel) incurred under the Development Program before being obligated to make
Loans against such expenses pursuant to Drawdown Requests hereunder. Each
Drawdown Request shall include (i) a detailed breakdown of the expenses incurred
and for which a drawdown is requested, (ii) a copy of the related
pre-authorization by Lender, and (iii) a certification of the matters set forth
in Section 2.03 below.
Section 2.03 Conditions. In addition to the foregoing, Lender shall not be
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required to make any Loan unless, on the date of making the requested Loan: (i)
there shall exist no Default; (ii) the representations and warranties of
Borrower set forth in this Agreement shall be true and correct immediately prior
to and after giving effect to the requested
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Loan; and (iii) such Loan shall not violate any requirement of law and shall not
be enjoined in any fashion.
Section 2.04 Use of Loan Proceeds. Borrower shall use proceeds of the Loans
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solely and exclusively to perform its obligations under the Development and
Supply Agreement.
ARTICLE III
INTEREST
Section 3.01 Interest. The Loans shall accrue simple interest at the rate of six
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percent (6%) per annum. All computations of interest shall be made by Lender on
the basis of a year of 360 days, for the actual number of days (including the
first day but excluding the last day) elapsed. In no event will the amount of
any interest due and payable hereunder exceed the maximum rate of interest
allowed by applicable law.
ARTICLE IV
PAYMENTS
Section 4.01 Repayment of Principal. Borrower shall pay Lender the outstanding
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principal amount of the Loans, and all accrued interest, on the Maturity Date,
or such earlier date as provided for in this Agreement.
Section 4.02 Payments. Except to the extent otherwise provided herein, all
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payments of principal and interest to be made by Borrower under this Agreement
and the Note shall be made (i) in United States of America Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to
Lender via commercially acceptable means on the date on which such payment shall
become due, or (ii) in such other form of consideration, including without
limitation the performance of services, as may be mutually agreed upon by Lender
and Borrower.
Section 4.03 Prepayment. If Borrower completes all of its obligations under the
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Development and Supply Agreement, to Lender's satisfaction prior to the Maturity
Date, then Borrower may at such time prepay the entire amount owed on the Loans
(which payment shall include all outstanding principal and accrued interest)
without penalty. Any such prepayment shall be applied first to accrued interest
on the Loans and then to principal.
Section 4.04 Costs. Borrower agrees to pay on demand all costs, expenses and
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losses, if any (including without limitation reasonable attorney's fees)
incurred by Lender in connection with the enforcement of this Agreement and the
Note. In addition, Lender agrees to indemnify Borrower for all costs, expenses
and losses, if any (including without limitation reasonable attorney's fees)
incurred by Borrower in connection with any action bought by a regulatory body
challenging the lawfulness of this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 Borrower represents and warrants to Lender that:
(a) Corporate Existence. Borrower is a corporation duly organized, legally
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existing and in good standing under the laws of South Carolina, and is
duly qualified to transact business in each State or other jurisdiction
in which the character of the properties owned by it or the nature of
its business require such qualification.
(b) Authority; Enforceability; No Conflicts. Borrower is duly authorized
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and empowered to borrow the funds as contemplated hereunder, and to
execute and deliver this Agreement and the Note. All corporate action
requisite for borrowing funds as contemplated hereunder and the due
execution and delivery of this Agreement and the Note has been duly and
effectively taken. This Agreement, the Note and the Loans are valid and
binding obligations of Borrower enforceable in accordance with their
terms (subject to any applicable bankruptcy, insolvency or other laws
generally affecting the enforcement of creditors' rights). This
Agreement, the Note and the Loans do not violate or conflict with any
provisions of Borrower's articles of incorporation, bylaws, or any
agreement, law or regulation to which it is subject, and the same do
not require the consent or approval of any regulatory authority or
governmental body or any political subdivision thereof.
(c) Accuracy of Information. All information previously furnished by or on
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behalf of Borrower to Lender is true and correct and fairly reflects
the financial condition of Borrower as of the dates thereof, and the
financial condition of Borrower has not changed materially and
adversely since the date thereof.
(d) Litigation. There is no pending or threatened action or proceeding
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before any court, commission, governmental agency, whether State or
Federal, or arbitration which may materially adversely affect the
financial condition, operations, properties, or business of Borrower or
the ability of Borrower to perform its obligations hereunder or under
the Note.
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ARTICLE VI
NOTICES
Section 6.01 Notice. All notices and communications directed by Borrower to
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Lender shall be sent to:
Embrex, Inc.
P.O. Box 13989
Research Triangle Park, North Carolina 27709-3989
Attention: Vice President, Finance and Administration
All notices and communications directed by Lender to Borrower shall be sent to:
Advanced Automation, Inc.
17 Haywood Road
Greenville, SC 29607
Attention: Chairman
All notices and communications shall be sent by certified mail return receipt
requested, or by personal delivery. Either party may from time to time notify
the other party of a different address to which all notices and communications
shall thereafter be addressed.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. With respect to Borrower, if any of the
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following events shall occur and be continuing, such event shall be considered
an "Event of Default" as that term is used herein:
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(a) Failure to pay any principal of, or interest on, the Loans when due and
payable,
(b) Default in the observance of performance of any covenant contained
herein, or in the Development and Supply Agreement, to be performed or
kept by Borrower,
(c) Any representation or warranty made by Borrower herein proves to have
been untrue in any material respect as of the date hereof, or any
representation, statement, certificate or data furnished or made by
Borrower hereunder proves to have been untrue in any material respect,
as of the date as of which the facts therein set forth were stated or
certified, or
(d) Borrower shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors, or any
proceeding shall
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be instituted by or against Borrower seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee or
other similar official for it or any substantial part of its property,
or Borrower shall take any corporate action to authorize any of the
actions set forth above in this subsection (d).
Section 7.02 Remedies Upon an Event of Default. Upon the occurrence of any of
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the above listed Events of Default, Lender may at any time thereafter, at its
option, take any or all of the following actions, at the same or at different
times: (i) declare the balance of the Loans and the Note to be immediately due
and payable, both as to principal and interest, without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived by
Borrower; (ii) exercise other rights and remedies as Lender may be provided
hereunder or under the Note, or as provided by law; and (iii) any obligation of
Lender to advance funds hereunder or under the Note and all other obligations
(if any) of Lender shall immediately cease and terminate.
ARTICLE VIII
COVENANTS AND REPRESENTATIONS
Section 8.01 Taxes and Other Liens. Borrower will pay all taxes, assessments,
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governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a lien against the property of Borrower, except
liabilities being diligently contested in good faith and against which Borrower
will set up reserves in accordance with generally accepted accounting
principles.
Section 8.02 Corporate Existence; Maintenance of Properties. Borrower will
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maintain its corporate existence, remain in good standing in each jurisdiction
in which it is required to be qualified, maintain all franchises, permits and
licenses reasonably necessary in its business, comply in all material respects
with all valid and applicable statutes, rule and regulations, and it will at all
times protect, and/or maintain in reasonably good and workable condition, its
properties (including without limitation intangible assets, intellectual
property, trade names and trademarks).
ARTICLE IX
MISCELLANEOUS
Section 9.01 Governing Law. This Agreement shall be interpreted and construed in
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accordance with the laws of the State of North Carolina.
Section 9.02 Amendments. This Agreement shall not be modified or amended except
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by an instrument in writing signed by both parties.
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Section 9.03 Severability. If any one or more provisions of this Agreement shall
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be found to be illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 9.04 Entire Agreement. This Agreement, the Note and the Development and
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Supply Agreement sets forth the entire agreement and understanding between the
parties with respect to the subject matter hereof and thereof. Any oral
representations or modifications concerning this Agreement shall be of no force
or effect unless contained in a subsequent written modification signed by a duly
authorized officer or agent of the party to be bound thereby.
Section 9.05 Headings. The descriptive headings contained herein are for
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convenience only and shall not control or affect the meaning, interpretation or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers on the Effective Date.
Embrex, Inc. Advanced Automation, Inc.
By: /s/ Randall L. Marcuson By: /s/ Sunder Subbaroyan
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Name: Randall L. Marcuson Name: Sunder Subbaroyan
Title: President and CEO Title: Chairman
By: /s/ Don T. Seaquist By: __________________________
-------------------------- Name: _______________________
Name: Don T. Seaquist Title: Secretary
Title: Secretary
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EXHIBIT A
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to
CREDIT AGREEMENT
PROMISSORY NOTE
$3,370,000.00 Dated: April 1, 2001
FOR VALUE RECEIVED, the undersigned ("Borrower"), HEREBY PROMISES TO
PAY to the order of Embrex, Inc., a North Carolina corporation ("Lender"), the
principal amount of Three Million Three Hundred Seventy Thousand Dollars
($3,370,000.00), pursuant to the Loans (as defined in the Credit Agreement
referred to below), on or before April 30, 2003 (the "Maturity Date"); together
with interest (computed on the basis of a year of 360 days for the actual number
of days, including the first day but excluding the last day, elapsed) on the
principal amount hereof outstanding from time to time from and including the
date hereof until the Maturity Date, payable on the Maturity Date at an interest
rate of six percent (6%) per annum.
This Promissory Note is the Note referred to in, and is entitled to
the benefits of, the Credit Agreement, dated April 1, 2001 (the "Credit
Agreement"), between Borrower and Lender. All capitalized terms used herein and
not otherwise defined herein shall have the meanings given to them in the Credit
Agreement.
The Borrower shall have the right to prepay in full the principal
amount hereunder together with accrued interest to the date of such payment on
the principal amount in accordance with Section 4.03 of the Credit Agreement.
If any of the following events shall occur and be continuing:
(a) Borrower shall fail to pay any principal of, or any
interest on, the Loans as evidenced by this Promissory Note when the
same becomes due and payable;
(b) Borrower shall default in the observance of performance
of any covenant contained in the Credit Agreement, or in the
Development and Supply Agreement, to be performed or kept by
Borrower;
(c) Any representation or warranty made by Borrower in the
Credit Agreement proves to have been untrue in any material respect
as of the date hereof, or any representation, statement, certificate
or data furnished or made by Borrower under the Credit Agreement
proves to have been untrue in any material respect, as of the date as
of which the facts therein set forth were stated or certified; or
(d) Borrower shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
Borrower seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it
or any substantial part of its property; or Borrower shall take any
corporate action to authorize any of the actions set forth above in
this subsection (d);
then, and in any such event, Lender may declare this Promissory Note, all
interest thereon and all other amounts payable hereunder to be forthwith due and
payable, whereupon this Promissory Note, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which Borrower hereby expressly
waives.
Borrower shall make payment of all principal and interest hereunder
prior to 2:00 P.M. (North Carolina time) on the day when due in lawful money of
the United States of America to Lender at its office in Research Triangle Park,
North Carolina in immediately available funds. Whenever any payment to be made
hereunder shall be otherwise due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest.
Borrower also agrees to pay on demand all costs and expenses
(including without limitation reasonable attorneys' fees) incurred by Lender in
enforcing this Promissory Note.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of North Carolina, without regard to
principles of conflict of laws.
IN WITNESS WHEREOF, Borrower has executed this instrument under seal,
the day and year first above written.
ADVANCED AUTOMATION, INC.
By: /s/ Sunder Subbaroyan
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Name: Sunder Subbaroyan
Title: Chairman
ATTEST:
By: ___________________________
Name: ___________________________
Title: ___________________________