EXHIBIT 10.19
HAMILTON BANK, N.A.
December 30, 1998
Ezcony Trading Company, S.A.
Ezcony International Corporation
Attention: Mr. Ezra Cohen
Dear Sirs:
We are pleased to inform you that a US$12,000,000 line of credit facility (the
"Credit Facility") has been approved in favor of Ezcony Trading Company, S.A.
and Ezcony International Corporation (the "Borrowers") under the following terms
and conditions:
Borrowers: Ezcony Trading Company, S.A.
Ezcony International Corporation
AMOUNT: US$12,000,000
TYPE OF FACILITY: Issuing Letters of Credit payable at sight
or by time up to 180 days not to exceed
US$9,500,000, refinancing thereof, documentary
collections up to 150 days from bill of
lading date not to exceed US$9,500,000,
stand by letters of credit not to exceed
US$3,500,000, and import financing up to
180 days against purchase orders or copies
of invoices not to exceed US$10,500,000,
which shall be reduced to US$9,500,000 on
May 31, 1999.
Aggregate outstanding letters of credit,
refinances and import financing shall not
at any time exceed US$12,000,000,
and is to be reduced to by US$200,000 per
month for five months to US$11,000,000 by
May 31, 1999.
Interest is payable monthly. Principal is
payable at maturity.
INTEREST RATE: Citibank, N.A. New York prime rate plus one
percent (1.00%) for refinancing of
letters of credit and import financing.
The Bank reserves the right to effect any
increase in prime rate on the date
of such increase.
MATURITY AND
REVOCATION DATE: This Credit Facility may be terminated at
any time at Bank's sole and absolute
discretion and, to the absence of such
termination, will expire on August 31,
1999. Upon revocation of the line of credit,
any outstanding letters of credit and
refinances will be payable according
Ezcony Trading Company, S.A.
Ezcony International Corporation
December 30, 1998
Page 2
to their respective terms and will not
be rolled over or renewed without the
prior written consent of the Bank.
FEES: Letters of Credit:
1/4% Issuance (for every 90 days or
fraction thereof)
1/4% Negotiation
2.00% Acceptance
Import Financing:
.50% flat per each advance.
The Bank's standard loan and Letter of Credit
charges as set from time to time.
EXPENSES: All legal, documentation and other costs and
expenses of the Bank will be for the account of
the Borrowers.
COLLATERAL: Cash collateral in the amount of US$1,350,000.
Trade drafts covering outstanding amounts for the
refinancing of letters of credit and import
financing to be in compliance as follows: 50% of
the outstanding balance no later than December 31,
1998; 75% of the outstanding balance no later than
January 31, 1999; 100% of the outstanding
balance no later than February 28, 1999; and 115%
no later than March 31, 1999.
First mortgage on commercial property located in
Colon Free Zone, Panama.
GUARANTORS: Personal guarantees of Messrs. Ezra Cohen,
Daniel Homsany, and David Djemal Homsany. Cross
corporate guarantees between Ezcony Trading
Company, S.A., Ezcony International Corporation,
and Ezcony Interamerica, Inc.
Taxes:
All payments made on or in respect of this Credit
Facility shall be made free and clear of and
without deduction for any and all present and
future taxes. The Borrowers agree to cause all
such taxes to be paid on behalf of the Bank
directly to the appropriate governmental
authority. If for any reason the Borrowers are
prohibited from paying any taxes on behalf of the
Bank, then all payments made on or in
Ezcony Trading Company, S.A.
Ezcony International Corporation
December 30, 1998
Page 3
respect of this Credit Facility including payments
made pursuant to this paragraph, shall be
increased so that, after provisions for such
taxes, including taxes on such increase, the
amounts received by the Bank will equal the
amounts the Bank would have received if no such
taxes were due on such payments. Within
thirty (30) days after any written demand by the
Bank, the Borrowers shall indemnify the Bank and
hold the Bank harmless for the full amount of any
taxes payable by the Bank with respect to this
Credit Facility and any liabilities (including
penalties, interest and expenses) arising from
such taxes. If the Borrowers deduct or retain any
amounts pursuant to this paragraph, the Borrowers
will furnish to the Bank, within 30 days after
such deduction (and in any event no later than
30 days after such taxes are due), tax receipts
(or certified copies of such receipts),
and other evidence satisfactory to the Bank that
the Borrowers have paid such amounts to the
appropriate authorities.
Conditions Precedent: The Borrowers shall execute and deliver to the
Bank such agreements and documents (hereinafter,
referred to as the "Documentation") as the Bank
may request in connection with the Credit
Facility, all in form and substance satisfactory
to the Bank and its legal counsel.
Representations and
Warranties: As an inducement to the Bank to enter into this
Credit Facility, the undersigned represent and
warrant to the Bank that;
1) The Borrowers and corporate guarantor are
corporations, duly organized, validly existing and
in good standing under the laws of the
jurisdiction of its incorporation and is
authorized to do business in the jurisdictions
in which its ownership of property or conduct of
business legally requires such authorizations.
2) There are no actions, suits or proceedings
pending, or to the knowledge of the Borrowers
threatened, against or affecting the Borrowers
or corporate guarantor before or by any person or
entity, which, if adversely determined, could
have a material adverse effect on the Borrowers or
corporate Guarantor as the case may be.
3) The Borrowers are not in violation or
default with respect to any applicable laws
and/or regulations that could materially affect
the
Ezcony Trading Company, S.A.
Ezcony International Corporation
December 30, 1998
Page 4
operations and/or condition (financial or
otherwise) of the Borrowers or corporate
Guarantor, and is not in violation or default
with respect to any order, writ, injunction,
demand or decree of any court, any person or
entity.
COVENANTS: 1) The Borrowers shall provide audited
fiscal year end financial statements no later
than 90 days from fiscal year end, and company
prepared quarterly financial statements no later
than 45 days from quarter end.
2) Payments from import financing
transactions shall be made directly to
suppliers acceptable to the bank at its sole
discretion.
3) The import financing limit and the aggregate
limit is to be reduced by US$200,000 per month
for five months to US$11,000,000 by May 31,
1999.
DEFAULT: Failure of the Borrowers to perform its
obligations under the Documentation shall
constitute an Event of Default hereunder and
shall render all amounts owed to the Bank
hereunder or otherwise immediately due and
payable.
Under the occurrence of any default under the
Documentation or hereunder, or if at anytime the
Bank deems itself insecure for any reason
whatsoever, the Bank may, at its option,
terminate this Credit Facility and/or declare
all liabilities (matured or unmatured) of the
Borrowers 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 the
Borrowers. The Borrowers promise and agree 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
the Borrowers shall be sufficiently served for
all purposes if placed in the mail, postage
prepaid, addressed to or
Ezcony Trading Company, S.A.
Ezcony International Corporation
December 30, 1998
Page 5
left upon the premises at the address shown below
or any other address shown on Bank's records.
ENTIRE AGREEMENT: This Agreement supersedes all prior agreements,
correspondence and understandings relating to the
subject matter hereof.
If any term in any documentation executed by the
Borrowers in connection with any credit extended
under this credit facility conflicts or is
inconsistent with the terms of this letter
agreement, the terms of this letter agreement
shall control, provided, however, that terms
that are more comprehensive than equivalent
terms herein shall be deemed to be supplementary
of this letter agreement and not inconsistent or
in conflict with the terms hereof.
RELEASE: The Borrower freely and voluntarily release
the Bank and its shareholders, affiliates,
subsidiaries, employees, officers, directors,
successors and assigns from all claims, damages,
costs, expense and liabilities which the
Borrower now have or may hereafter have, whether
known or unknown.
WAIVER OF RIGHT: THE BORROWERS HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION,
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 letter agreement shall be governed by and
construed in accordance with the laws of the
State of Florida.
If the foregoing is acceptable to you, please so indicate on the
enclosed copy of this letter and return it to the undersigned on or before
January 30, 1999.
Very truly yours,
Ezcony Trading Company, S.A.
Ezcony International Corporation
December 30, 1998
Page 6
HAMILTON BANK, N.A.
By: /S/ MARGARET LOPEZ By: /S/ FELIPE S. BLANCO
- ---------------------------------- ----------------------------------
Margaret Lopez Felipe S. Blanco
Assistant Vice President Vice President
Agreed to and Accepted
this ___ day of ______________________, 1999:
EZCONY TRADING COMPANY, S.A.
By: /S/ EZRA COHEN
--------------------------------
Name: EZRA COHEN
Title: PRESIDENT
By:
---------------------------------
Name:
Title:
EZCONY INTERNATIONAL CORPORATION
By: /S/ EZRA COHEN
----------------------------------
Name: EZRA COHEN
Title: PRESIDENT
By:
-----------------------------------
Name:
Title:
Main Office 3750 NW 87th Avenue, Miami, Florida 33173
Hamilton Bank, N.A.
Fax Transmission
From: Felipe S. Blanco Date: February 10, 1999
To: Ezra Cohen Time: 9:33 AM
Company: Ezcony Trading Corporation Fax # (507) 441-1860
AMENDMENT TO LETTER DATED DECEMBER 30, 1998
Dear Ezra:
Please be advised that I received the signed copy of the subject facility
letter. In further reviewing the text, inadvertently, the following items were
omitted. Please proceed to sign this modification to proceed with the
implementation.
Under pricing, the following should be added:
One quarter percent (0.25%) on the sublimits covering the issuance of letters of
credits, refinancing of letters of credit, and import financing.
One percent fee (1.0%) covering the term loan.
If you have any questions, please call me at (305) 717-5517.
Truly yours,
/S/ FELIPE S. BLANCO
Felipe S. Blanco
Vice President
Agreed and Acknowledged on this 10th day of February 1999.
By: /S/ EZRA COHEN
Ezra Cohen
3750 NW 87th Avenue, Suite 600, Miami, FL 33173