EXHIBIT 10.2
HAMILTON
BANCORP INC.
May 7,1997
Ezcony Trading Corporation
Panama, Republica de Panama
Attn: Mr. Ezra Cohen
RE: US$15,000,000 LINE OF CREDIT FACILITY
Dear Sirs,
Hamilton Bank, N.A. (the "Bank") is pleased to offer the following credit
financings to Ezcony Trading Corporation ("Ezcony"), representing an increase of
US$5,100,000 to the Credit Facility, under the following terms and conditions:
BORROWER: Ezcony Trading Corporation
TYPES OF US$15,000,000 line of credit for issuance of sight and time
CREDIT letters of credit, short term advances to refinance letters of
credit and collection, short term import and export financings
and discount of short term third party paper with recourse,
with interest discounted (except for import financings which
shall be payable monthly in arrears) and principal payable at
maturity. The term of a letter of credit draft, any refinancing
thereof or any refinancing of collections shall not exceed 180
days. The remaining term of any discounted paper shall not
exceed 180 days.
Export and import financings shall not at any time exceed
US$3,000,000, and the maximum face amount of any outstanding
discounted paper shall not exceed US$4,000,000.
Export financings shall be made against the assignment of
letters of credit issued in favor of Ezcony and confirmed by
the Bank, and such financings shall not exceed 90 days. Import
financings shall be made against purchase orders or copies of
invoices with payments made directly to the suppliers, and such
financings shall not exceed 180 days.
The line of credit may be terminated at any time, in the Bank's
sole discretion, and in the absence of such termination will
expire on April 30, 1998.
PRICING: The Credit Facility shall bear an interest rate of Prime Rate
plus one and a half percent (1/2%), with a 0.25% disbursement
fee on refinancing of letters of credit and documentary
collections and a 0.25.% disbursement fee on import financings.
The term "Prime Rate" shall mean the annual rate of interest
from time to time
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announced by the Citibank, N.A. as its prime rate with respect
to which rates of interest on sums advanced is calculated, but
shall not under any circumstances, mean the lowest or best rate
of interest charged on sums advanced by such institution. The
Bank reserves the right to increase the rate of interest
payable hereunder by the amount of any increase in the Prime
Rate after the date hereof.
FACILITY FEE: 0.25% of the amount of the increase, payable quarterly in four
equal payments.
FEES: 1/4 of 1% Negotiation Fee
1/4 of 1% Issuance Fee
2% Acceptance Commission per annum
In addition to the aforementioned fees, the Bank will charge
Normal and Customary Administrative Fees, which are subject to
change from time to time at the Bank's sole discretion.
COLLATERAL: Certificates of deposit in the name of Ezcony in the aggregate
principal amount of US$1,257,081.
GUARANTORS: Ezcony Interamerica, Inc.
Ezra Cohen
Ezra Homsany
Daniel Homsany
David Djemal Homsany
CONDITIONS Ezcony shall execute and deliver to the Bank this Agreement,
PRECEDENT the Promissory Note, the Corporate Guarantee of Ezcony
Interamerica, Inc., the Personal Guarantees of Ezra Cohen, Ezra
Homsany, and David Djemal Homsany and other documents as the
Bank may request in connection with this Credit Facility, all
in form and substance satisfactory to the Bank and its legal
counsel (hereinafter referred to as the "Documentation").
REPRESENTATIONS As an inducement to the Bank to enter into this Credit Facility
AND WARRANTIES: as provided herein, Ezcony represents and warrants to the Bank
that:
1) Ezcony is a corporation, duly organized, validly existing
and in good standing under the laws of the Republic of Panama
and is authorized to do business in the jurisdictions in which
its ownership of property or conduct of business legally
requires such authorization.
2) There are no actions, suits or proceedings (whether or not
purportedly on behalf of Ezcony) pending, or to the knowledge
of Ezcony threatened against, or affecting Ezcony, at law or in
equity, before or by any person or entity, which, if adversely
determined, could have a material adverse effect on Ezcony.
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3) Ezcony is not in violation or default with respect to any
applicable laws and/or regulations that could materially affect
the operations and/or condition (financial or otherwise) of
Ezcony, nor is Ezcony in violation or default with respect to
any order, writ, injunction, demand, or decree of any court,
any person or entity.
COVENANTS: Ezcony shall provide to the Bank a copy of its quarterly
interim financial statements no later than 45 days after
quarter end, and audited fiscal year end financial statements
no later than 90 days after fiscal year end. In addition, the
Corporate Guarantor shall provide to the Bank a copy of its
10-K reports and 10-Q reports.
DEFAULT: Failure of Ezcony to perform its obligations under the
Documentations shall constitute an Event of Default hereunder
and shall render all amounts owed to the Bank hereunder or
otherwise immediately due and payable. Likewise, Ezcony's
failure to perform any obligation hereunder shall constitute a
default under the Documentation.
Upon the occurrence of any default under the Documentation, or
hereunder, or if at anytime the Bank feels insecure for any
reason whatsoever, the Bank may, at its option, terminate this
Credit Facility and/or declare all liabilities (matured or
unmatured) of Ezcony to the Bank immediately due and payable
without notice or demand.
No delay or omission on the part of the Bank in exercising any
right hereunder or under any of the Documentation shall operate
as a waiver of such right or of any other right hereunder or
under any of the Documentation. Presentment, demand, including
demand hereunder, protest, notice of dishonor and extension of
time without notice are hereby waived by Ezcony. Ezcony
promises and agrees to pay all costs of collection including,
but not limited to, reasonable fees and costs of the Bank's
legal counsel, regardless of whether any such costs are
incurred before or at trial, upon appeal or otherwise. Any
notice to Ezcony shall be sufficiently served for all purposes
if placed in the mail, postage prepaid, addressed to or left
upon the premises at the address shown below or any other
address shown on Bank's records.
ENTIRE This Agreement supersedes all prior agreements, correspondence,
AGREEMENT: and understandings relating to the subject matter hereof
If any term in any documentation executed by the Ezcony in
connection with any credit extended under this Agreement
conflicts or is inconsistent with the terms of this Agreement,
the terms of this Agreement shall control, PROVIDE, HOWEVER,
that terms that are more comprehensive than equivalent terms
herein shall be deemed to be supplementary of this Agreement
and not inconsistent or in conflict with the terms hereof.
WAIVER OF RIGHT TO TRIAL: EZCONY HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY
IN RESPECT OF ANY ACTION,
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PROCEEDING OR COUNTERCLAIM BASED ON THIS CREDIT FACILITY, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CREDIT
FACILITY OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION WITH THIS
CREDIT FACILITY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY IN
CONNECTION WITH THIS CREDIT FACILITY.
GOVERNING LAW: This Credit Facility shall be governed by and construed in
accordance with the laws of the State of Florida.
If Ezcony is in accordance with the foregoing, please sign and return to us
the enclosed copy of this letter, no later than 5:00 p.m. (New York time) on May
24, 1997.
Very truly yours,
HAMILTON BANK, N.A.
Agreed and Accepted this 7th
day of May, 1997:
By:/s/ JAIME A. MARTIN
----------------------------------
Jaime A. Martin
EZCONY TRADING CORPORATION Officer
International Corporate Banking
/s/ EZRA COHEN
By:-----------------------
Ezra Cohen By:/s/ ANTONIO M. ARBULU
President ----------------------------------
Antonio M. Arbulu
Vice President
International Corporate Banking