EXHIBIT 10(Z)
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement")
made and entered into as of June 10, 2002 by and between ▇▇▇▇▇ SYSTEMS, INC., a
South Dakota corporation ("Borrower"), and SUNTRUST BANK, a Georgia banking
corporation ("Lender").
WITNESSETH:
WHEREAS, the Borrower and the Lender are parties to that
certain Credit Agreement, dated as of March 30, 2001 (as amended, the "Original
Credit Agreement"), pursuant to which Lender provided Borrower with credit and
letter of credit facilities to finance the Borrower's manufacture and sale of
additional glass forming machines to buyers outside the United States and to
finance Borrower's working capital needs to support export sales;
WHEREAS, the Borrower and Lender desire to continue the
Original Credit Agreement but to make certain amendments and modifications
thereto and to certain of the Credit Documents delivered in connection therewith
(as amended, the "Original Credit Documents"), all as reflected in this
Agreement, which upon execution will supercede and replace the Original Credit
Agreement effective as of the Closing Date (as defined herein); and
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Borrower and Lender hereby agree as
follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINITIONS. For purposes of this Agreement,
the following terms shall have the indicated meanings as set forth below:
"Account Debtor" shall mean any Person who is or may become
obligated under or on account of an Account Receivable, including, without
limitation, any Export Account Debtor.
"Accounts Receivable" shall have the meaning given such term
in the form of the Borrower Agreement attached hereto as Exhibit A.
"Adjusted Leverage Ratio" shall mean, for any particular
Person and as of any date of determination, the ratio of (a) such Person's total
liabilities determined in accordance with
GAAP (including the aggregate outstanding stated amount of all Letters of Credit
issued under this Agreement but excluding liabilities for customer deposits) to
(b) such Person's Consolidated Tangible Net Worth, all as determined on a
consolidated basis.
"Adjusted Monthly LIBOR Index Rate" means for any calendar
month a rate per annum equal to the LIBOR Rate for a LIBOR Period equal to the
calendar month for which such rate is to be set.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agreement" shall mean this Amended and Restated Credit
Agreement, as amended, supplemented or modified from time to time.
"Bankruptcy Code" shall mean the Bankruptcy Code of 1978, as
amended (11 U.S.C. Section 101 et seq.).
"Borrower" shall have the meaning given such term in the
preamble to this Agreement and shall include such Person's legal
representatives, successors and assigns.
"Borrower Agreement" shall mean any Borrower Agreement, in
form attached as Exhibit A hereto, that may be executed after the Closing Date,
as the same may be executed, amended, supplemented or modified from time to
time.
"Business Day" shall mean any day excluding a Saturday,
Sunday, any other day on which banks are required or permitted to be closed in
Atlanta, Georgia or New York, New York.
"Capital Expenditures" shall mean, for any fiscal period of
any Person, all expenditures made and liabilities incurred by such Person during
such period for the acquisition of items which are not, in accordance with GAAP,
treated as expense items for such Person in the period made or incurred or as a
prepaid expense applicable to a future period, and such term shall include that
portion of any Capitalized Lease Obligations of such Person originally incurred
during such period that is capitalized under GAAP.
"Capitalized Lease Obligations" shall mean, for any fiscal
period of any Person, any Indebtedness of such Person represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP, and the amount of such Indebtedness for
purposes hereof shall be the capitalized amount of such obligations.
"Closing Date" shall mean June 10, 2002.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
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"Collateral" shall mean (i) any and all of the real or
personal property which is pledged or collaterally assigned to Lender or in
which the Lender is otherwise granted a Lien to secure the Obligations pursuant
to any and all of the Security Documents, and (ii) any and all cash and non-cash
proceeds of the foregoing.
"Consolidated Net Income (Loss)" shall mean, for any fiscal
period, the net income (or loss) of the Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, but excluding
therefrom (to the extent otherwise included therein and without duplication) (i)
any extraordinary gains or losses, (ii) gains attributable to write-ups of
assets, (iii) any equity interest of the Borrower or any Subsidiary of the
Borrower in the unremitted earnings of any Person that is not a Subsidiary, (iv)
any income (or loss) of any Person accrued prior to the date that it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary
on the date that such Person's assets are acquired by the Borrower or any
Subsidiary, or (v) any other non-recurring gains or losses.
"Consolidated Tangible Net Worth" shall mean, as of any date,
(i) the total assets of the Borrower and its Subsidiaries that would be
reflected on the Borrower's consolidated balance sheet as of such date prepared
in accordance with GAAP, after eliminating all amounts properly attributable to
minority interests, if any, in the stock and surplus of Subsidiaries, minus the
sum of (i) the total liabilities of the Borrower and its Subsidiaries that would
be reflected on the Borrower's consolidated balance sheet as of such date
prepared in accordance with GAAP, (ii) the amount of any write-up in the book
value of any assets resulting from a revaluation thereof or any write-up in
excess of the cost of such assets acquired reflected on the consolidated balance
sheet of the Borrower as of such date prepared in accordance with GAAP and (iii)
the net stock amount of all assets of the Borrower and its Subsidiaries that
would be classified as intangible assets on a consolidated balance sheet of the
Borrower as of such date prepared in accordance with GAAP.
"Contractual Obligation" of any Person shall mean any
provision of any written agreement, instrument, security, or undertaking to
which such Person is a party or by which it or any of the property owned by it
is bound.
"Credit Documents" shall mean, collectively, this Agreement,
the Note, the Letters of Credit, and the Security Documents.
"Credit Party" shall mean, collectively, the Borrower and each
of its Subsidiaries other than M-Tron and Spinnaker.
"Default" shall mean any condition or event which would
constitute an Event of Default hereunder but for the giving of notice thereof or
the existence of any applicable cure periods set forth in Article IX hereof.
"Domestic Account Debtor" shall mean any Account Debtor which
is a United States Person.
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"Domestic Contract" shall mean any and all contracts now or
hereafter entered into between Borrower, as seller, and any Domestic Account
Debtor, as buyer, with respect to the sale of glass forming machinery or parts
and accessories therefor
"Downpayment Support Letter of Credit" shall mean a Standby
Letter of Credit which is issued or caused to be issued by Lender to support the
reimbursement obligations of Borrower with respect to the downpayment made by an
Account Debtor under an Export Contract, provided that the face amount of the
Standby Letter of Credit may not exceed the actual dollar amount of the
downpayment deposit.
"Eligible Export-Related Accounts Receivable" shall mean an
Export-Related Account Receivable which is acceptable to Lender and which is
deemed to be eligible pursuant to the Credit Documents, but in no event shall
Eligible Export-Related Accounts Receivable include any Account Receivable:
(a) that does not arise from the sale of goods or the performance
of services in the ordinary course of Borrower's business;
(b) that is not subject to a valid, perfected first priority Lien
in favor of Lender;
(c) as to which any covenant, representation or warranty contained
in the Credit Documents with respect to such Account Receivable has
been breached;
(d) that is not owned by Borrower or is subject to any right,
claim or interest of another Person other than the Lien in favor of
Lender;
(e) with respect to which an invoice has not been sent, except in
the case of Percentage of Completion Accounts Receivable;
(f) that arises from the sale of defense articles or defense
services;
(g) that is due and payable from an Account Debtor located in a
country with which Eximbank is prohibited from doing business as
designated in the Country Limitation Schedule set forth in the Eximbank
Guarantee;
(h) that does not comply with the requirements of the Country
Limitation Schedule set forth in the Eximbank Guarantee;
(i) that is due and payable more than one hundred eighty (180)
days from the date of the invoice, with the exception of an Account
Receivable for Retainage which may not (1) exceed ten percent (10%) of
the aggregate amount the Borrower is to receive under a particular
Export Contract or Domestic Contract and (2) be for a term greater than
thirteen (13) months;
(j) that is not paid within sixty (60) calendar days from its
original due date;
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(k) arises from a sale of goods to or performance of services for
an Affiliate of Borrower, an employee of Borrower, a stockholder of
Borrower, a subsidiary of Borrower, a Person with a controlling
interest in Borrower or a Person which shares common controlling
ownership with Borrower;
(l) that is backed by a letter of credit unless the goods covered
by the subject letter of credit have been shipped, except in the case
of Percentage of Completion Accounts Receivable;
(m) that Lender or Eximbank, in its reasonable judgment, deems
uncollectible for any reason;
(n) that is due and payable in a currency other than Dollars;
(o) that is due and payable from a military Account Debtor;
(p) that does not comply with the terms of sale set forth in
Section 7 of the Eximbank Loan Authorization Agreement, if in effect at
any time;
(q) that is due and payable from an Account Debtor who (i) applies
for, suffers, or consents to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property or calls a meeting of
its creditors, (ii) admits in writing its inability, or is generally
unable, to pay its debts as they become due or ceases operations of its
present business, (iii) makes a general assignment for the benefit of
creditors, (iv) commences a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as
bankrupt or insolvent, (vi) files a petition seeking to take advantage
of any other law providing for the relief of debtors, (vii) acquiesces
to, or fails to have dismissed, any petition which is filed against it
in any involuntary case under such bankruptcy laws, or (viii) takes any
action for the purpose of effecting any of the foregoing;
(r) that arises from a ▇▇▇▇-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase
or return basis or is evidenced by chattel paper;
(s) for which the goods giving rise to such Account Receivable
have not been shipped to the Account Debtor or the services giving rise
to such Account Receivable have not been performed by Borrower or the
Account Receivable otherwise does not represent a final sale, except in
the case of Percentage of Completion Accounts Receivable;
(t) that is subject to any offset, deduction, defense, dispute, or
counterclaim or the Account Debtor is also a creditor or supplier of
Borrower or the Account Receivable is contingent in any respect or for
any reason;
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(u) for which Borrower has made any agreement with the Account
Debtor for any deduction therefrom, except for discounts or allowances
made in the ordinary course of business for prompt payment, all of
which discounts or allowances are reflected in the calculation of the
face value of each respective invoice related thereto; or
(v) for which any of the goods giving rise to such Account
Receivable have been returned, rejected or repossessed.
"Eligible Export-Related Inventory" shall mean Export-Related
Inventory which is acceptable to Lender and which is deemed to be eligible
pursuant to the Credit Documents, but in no event shall Eligible Export-Related
Inventory include any Inventory:
(a) that is not subject to a valid, perfected first priority Lien
in favor of Lender;
(b) that is located at an address that has not been disclosed to
Lender in writing;
(c) that is placed by Borrower on consignment or held by Borrower
on consignment from another Person;
(d) that is in the possession of a processor or bailee, or located
on premises leased or subleased to Borrower, or on premises subject to
a mortgage in favor of a Person other than Lender or First Port City
Bank, unless such processor or bailee or mortgagee or the lessor or
sublessor of such premises, as the case may be, has executed and
delivered all documentation which Lender shall require to evidence the
subordination or other limitation or extinguishment of such Person's
rights with respect to such Inventory and Lender's right to gain access
thereto;
(e) that is produced in violation of the Fair Labor Standards Act
or subject to the "hot goods" provisions contained in 29 U.S.C. Section
215 or any successor statute or section;
(f) as to which any covenant, representation or warranty with
respect to such Inventory contained in the Credit Documents has been
breached;
(g) that is not located in the United States;
(h) that is demonstration Inventory;
(i) that consists of proprietary software (i.e. software designed
solely for Borrower's internal use and not intended for resale);
(j) that is damaged, obsolete, returned, defective, recalled or
unfit for further processing;
(k) that has been previously exported from the United States;
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(l) that constitutes defense articles or defense services;
(m) that is to be incorporated into goods destined for shipment to
a country as to which Eximbank is prohibited from doing business as
designated in the Country Limitation Schedule set forth in the Eximbank
Guarantee;
(n) that is to be incorporated into goods destined for shipment to
an Account Debtor located in a country in which Eximbank coverage is
not available for commercial reasons as designated in the Country
Limitation Schedule set forth in the Eximbank Guarantee, unless and
only to the extent that such goods are to be sold to such country on
terms of a letter of credit confirmed by a bank acceptable to Eximbank;
or
(o) that is to be incorporated into goods whose sale would result
in an Account Receivable which would not be an Eligible Export-Related
Account Receivable.
"Environmental Laws" means all federal, state, local and
foreign laws, rules and regulations relating to pollution or protection of the
environment, including without limitation laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended and in effect from time to time.
"Event of Default" shall have the meaning provided in Article
IX hereof.
"Eximbank" shall mean The Export-Import Bank of the United
States and any successors thereto.
"Eximbank Guarantee" shall mean that certain Master Guarantee
Agreement, dated as of March 28, 2000, from Eximbank in favor of Lender, as
amended, modified or replaced from time to time.
"Eximbank Loan Authorization Agreement" shall mean any Loan
Authorization Agreement that may be executed after the Closing Date, between the
Lender and the Eximbank, as amended, modified or replaced from time to time.
"Exim-Guaranteed Letters of Credit" shall mean any and all
letters of credit (i) to be issued by Lender for the account of Borrower
pursuant to Section 2.01(b) with respect to any Export Contract and pursuant to
the terms of the Eximbank Guarantee, the Eximbank Loan Authorization Agreement
and the Borrower Agreement and (ii) with respect to which Borrower's Obligations
hereunder are guaranteed in part by Eximbank pursuant to the terms of the
Eximbank Guarantee.
"Exim-Guaranteed Loans" shall mean any and all advances made
by Lender to or on behalf of Borrower pursuant to Section 2.01(b) of this
Agreement, which advances are
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guaranteed in part by the Eximbank pursuant to the terms and conditions of the
Eximbank Guarantee.
"Exim-Guaranteed Maximum Availability" shall mean, at any date
of determination, the Maximum Amount, as such term is defined in the Eximbank
Loan Authorization Agreement, if executed.
"Exim-Guaranteed Note" shall mean a promissory note in the
amount of the Exim-Guaranteed Maximum Availability executed by the Borrower and
payable to the order of the Lender.
"Exim-Guaranteed Obligations" shall mean any and all
Obligations of Borrower relating to the Exim-Guaranteed Letters of Credit or
Exim-Guaranteed Loans, which Obligations are guaranteed in part by Eximbank
pursuant to the terms and conditions of the Eximbank Guarantee.
"Exim-Guaranteed Reimbursement Obligations" shall mean any and
all Reimbursement Obligations of Borrower relating to the Exim-Guaranteed
Letters of Credit, which Reimbursement Obligations are guaranteed in part by
Eximbank pursuant to the terms and conditions of the Eximbank Guarantee.
"Existing Letters of Credit" shall mean any and all of (a)
that certain Letter of Credit number P601342 in the amount of $707,000.00 issued
on July 11, 2001 by Lender for the Account of Borrower and for the benefit of
ACBC, (b) that certain Letter of Credit number P601343 in the amount of
$110,795.00 issued on July 13, 2001 by Lender for the Account of Borrower and
for the benefit of Thomson Video, (c) that certain Letter of Credit number
P601375 in the amount of $353,500.00 issued on September 25, 2001 by Lender for
the Account of Borrower and for the benefit of ACBC, (d) that certain Letter of
Credit number P601378 in the amount of $4,703,440.00 issued on September 25,
2001 by Lender for the Account of Borrower and for the benefit of ▇▇ ▇▇▇▇▇▇▇▇,
and (e) that certain Letter of Credit number P601400 in the amount of
$353,500.00 issued on November 1, 2001 by Lender for the Account of Borrower and
for the benefit of ACBC.
"Export Accounts Receivable" shall mean any and all Accounts
Receivable of Borrower arising out of or relating to any Export Contract.
"Export Account Debtor" shall mean any Account Debtor which is
a non-United States Person.
"Export Contracts" shall mean any and all contracts now or
hereafter entered into between Borrower, as seller, and any Export Account
Debtor, as buyer, with respect to the sale of glass forming machinery or parts
and accessories therefor.
"Export Contract Letters of Credit" shall mean any and all
letters of credit which may be now or hereafter issued by any issuing bank for
the account of an Export Account Debtor
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and for the benefit of Borrower with respect to the sale of glass forming
equipment pursuant to an Export Contract, and any extension, renewal,
modification or replacement of any of the foregoing.
"Export-Related Accounts Receivable" shall have the meaning
given such term in the form of the Borrower Agreement attached hereto as Exhibit
A; provided, however, that such term shall also include all other Accounts
Receivable which are due and payable to the Borrower in the United States and
all Percentage of Completion Accounts Receivable.
"Export-Related Accounts Receivable Value" shall mean, at the
date of determination thereof, the aggregate face amount of Eligible
Export-Related Accounts Receivable less taxes, discounts, credits, allowances
and Retainages, except to the extent otherwise permitted by Lender (or Eximbank)
in writing.
"Export-Related Borrowing Base" shall mean, at the date of
determination thereof, the sum of (a) the Export-Related Inventory Value
multiplied by 50% and (b) the Export-Related Accounts Receivable Value
multiplied by 85%; provided, however, that the advance rates set forth above may
be adjusted pursuant to the Eximbank Loan Authorization Agreement, if executed
at any time.
"Export-Related Borrowing Base Certificate" shall mean the
Export-Related Borrowing Base Certificate in the form of Exhibit B attached
hereto.
"Export-Related Inventory" shall have the meaning given such
term in the form of the Borrower Agreement attached hereto as Exhibit A;
provided, however, that such term shall also include all other Inventory of the
Borrower located in the United States.
"Export-Related Inventory Value" shall mean, at the date of
determination thereof, the lower of cost or market value of Eligible
Export-Related Inventory of Borrower as determined in accordance with GAAP.
"First Port City Bank" shall mean First Port City Bank, a
national banking association, and its successors and assigns.
"First Port City Bank Indebtedness" shall mean any and all
Indebtedness of Borrower to First Port City Bank under the First Port City Bank
Notes.
"First Port City Bank Notes" shall mean those certain
promissory notes, dated August 6, 1998 and October 28, 1999, in the principal
amount of $700,000 and $350,050, respectively, executed by Borrower in favor of
First Port City Bank, as each such note is amended, supplemented, replaced or
restated (but not increased) from time to time.
"GAAP" shall mean, as in effect from time to time, United
States generally accepted accounting principles (which the parties acknowledge
and agree shall include the requirement that such principles be consistently
applied).
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"Guaranty" shall mean any contractual obligation, contingent
or otherwise, of a Person with respect to any Indebtedness or other obligation
or liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make any
payment other than for value received.
"Guarantors" shall mean, collectively, the Parent and each
Subsidiary of the Borrower.
"Indebtedness" of any Person shall mean, without duplication:
(i) all obligations for borrowed money and for the deferred purchase price of
property or services, and obligations evidenced by bonds, debentures, notes or
other similar instruments; (ii) all rental obligations under leases required to
be capitalized under GAAP; (iii) all Guaranties of such Person (including
contingent reimbursement obligations under undrawn letters of credit); (iv) all
reimbursement and other obligations with respect to letters of credit, bankers'
acceptances and surety bonds, whether or not matured; (v) all obligations of
such Person under commodity purchase or option agreements or other commodity
price hedging arrangements, in each case whether contingent or matured, (vi) all
obligations of such Person under any foreign exchange contract, currency swap
agreement, interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising from
fluctuations in currency values or interest rates, in each case whether
contingent or matured; (vii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property); and (viii) Indebtedness of others secured by any Lien
upon property owned by such Person, whether or not assumed.
"Interest Payment Date" shall mean the last calendar day of
each month.
"Inventory" shall have the meaning given such term in the form
of the Borrower Agreement attached hereto as Exhibit A.
"Lender" shall have the meaning given such term in the
preamble to this Agreement and shall include such Person's successors and
assigns.
"Lender's Account" shall mean the restricted deposit account
of Lender and into which the remittances on all Accounts Receivable related to
Export Contracts are to be directly paid or deposited by Borrower.
"Letters of Credit" shall mean, collectively, the
Non-Guaranteed Letters of Credit and the Exim-Guaranteed Letters of Credit.
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"Leverage Ratio" shall mean, for any particular Person and as
of any date of determination, the ratio of (a) such Person's total liabilities
determined in accordance with GAAP (but excluding liabilities for customer
deposits) to (b) such Person's Consolidated Tangible Net Worth, all as
determined on a consolidated basis.
"LIBOR Business Day" means a Business Day on which banks in
the City of London are generally open for interbank or foreign exchange
transactions.
"LIBOR Period" means each period commencing on the first LIBOR
Business Day of each month and ending one month thereafter.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Lender equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full LIBOR Business Day next
preceding the first day of such LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be
used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior
to the beginning of such LIBOR Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal
Reserve Board or other governmental authority having jurisdiction with
respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Federal Reserve Board) that are
required to be maintained by a member bank of the Federal Reserve
System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Lender and Borrower.
"Lien" shall mean any mortgage, pledge, security interest,
security deposit, encumbrance, Lien or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the UCC).
"Loans" shall mean, collectively, the Non-Guaranteed Loans and
the Exim-Guaranteed Loans.
"▇▇▇▇▇ Amav" shall mean ▇▇▇▇▇ Amav, LLC, a Delaware limited
liability company.
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"▇▇▇▇▇ International" shall mean ▇▇▇▇▇ International Holding
Corporation, a Delaware corporation.
"Margin Regulations" shall mean Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System, as the
same may be in effect from time to time.
"Material Adverse Effect" shall mean a material adverse effect
upon, or a material adverse change in, any of the (i) business, results of
operations, properties or financial condition of Borrower (other than any such
effect or change resulting from an effect upon or change in (x) the aggregate
value of capital stock of M-Tron or Spinnaker held by Borrower, if any, or (y)
the business, results of operations, properties, prospects or financial
condition of M-Tron, Spinnaker, or any of their respective subsidiaries), (ii)
legality, validity, binding effect or enforceability of any Credit Document, or
(iii) ability of any Credit Party to perform its payment obligations, if any,
under the Credit Documents (other than any such effect or change resulting from
an effect upon or change in (x) the aggregate value of capital stock of M-Tron
or Spinnaker held by Borrower, if any, or (y) the business, results of
operations, properties, prospects or financial condition of M-Tron, Spinnaker,
or any of their respective subsidiaries).
"Maturity Date" shall mean May 30, 2003, as such date may be
extended, accelerated or amended from time to time pursuant to this Agreement.
"M-Tron" shall mean M-Tron Industries, Inc., a Delaware
corporation.
"Non-Guaranteed Letters of Credit" shall mean, collectively,
any and all letters of credit issued by Lender for the account of the Borrower
pursuant to Section 2.01(a) of this Agreement.
"Non-Guaranteed Loan Maximum Availability" shall mean, at any
date of determination, the sum of $7,000,000.
"Non-Guaranteed Loan Obligations" shall mean any and all
Obligations of Borrower relating to the Non-Guaranteed Loans or the
Non-Guaranteed Letters of Credit.
"Non-Guaranteed Loans" shall mean, collectively, any and all
advances made by Lender on behalf of Borrower pursuant to Section 2.01(a) of
this Agreement.
"Note" shall mean, collectively, (i) the $7,000,000 promissory
note executed by the Borrower and payable to the order of the Lender as evidence
of the Non-Guaranteed Loans, (ii) the Exim-Guaranteed Note, if any, and (iii)
any extension, renewal, modification or replacement thereof or therefor.
"Obligations" shall mean, collectively, all amounts now or
hereafter owing to the Lender by the Borrower pursuant to the terms of or as a
result of this Agreement, the Note, or any other Credit Document, including
without limitation, the unpaid principal balance of any and all
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Loans, all Reimbursement Obligations of Borrower hereunder with respect to any
and all Letters of Credit, and all interest, fees, expenses and other charges
relating to or accruing on such Loans or Reimbursement Obligations, as well as
any and all other indebtedness, liabilities, and obligations of the Borrower,
whether direct or indirect, absolute or contingent, or liquidated or
unliquidated, which may be now existing or may hereafter arise under or as a
result of any of the Credit Documents, and together with any and all renewals,
extensions, modifications or refinancings of any of the foregoing.
"Officer's Certificate" shall mean a certificate signed in the
name of the Borrower by the Borrower's president, chief executive officer, chief
financial officer or controller.
"Parent" shall mean ▇▇▇▇▇ Corporation, an Indiana corporation.
"Parent Guaranty" shall mean that certain Parent Guaranty
executed as of even date herewith by the Parent.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Percentage of Completion Accounts Receivables" shall mean
Accounts Receivable for less than the full amount of an Export Contract or
Domestic Contract generated in accordance with GAAP percentage of completion
accounting.
"Permitted Lien" shall mean any Lien of a kind which is not
prohibited under Section 8.01 hereof.
"Person" shall mean any individual, partnership, firm,
corporation, limited liability company, association, joint venture, trust or
other entity, or any government or political subdivision or agency, department
or instrumentality thereof.
"Plan" shall mean any "employee pension benefit plan" (as
defined in Section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by Borrower or any of its
Subsidiaries or by any trade or business, whether or not incorporated, which,
together with Borrower or any of its Subsidiaries, is under common control.
"Reimbursement Obligation" shall mean, with respect to each
Letter of Credit, the Borrower's obligation to reimburse the Lender for drawings
thereunder as provided herein with respect to such Letter of Credit.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA.
"Requirement of Law" for any person shall mean the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of any arbitrator or a court or other governmental
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authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Retainage" shall mean that portion of the purchase price of
an Export Contract or Domestic Contract that an Account Debtor is not obligated
to pay until the end of a specified period of time following the satisfactory
performance under such Export Contract or Domestic Contract.
"SEC" shall mean the Securities and Exchange Commission, or
any successor thereto.
"Security Agreement" shall mean the Amended and Restated
Security Agreement of even date between Borrower, the Subsidiaries of the
Borrower and Lender and any and all other security agreements, pledge
agreements, collateral assignments (including the assignment made pursuant to
Section 3.04 hereof) or similar agreements now or hereafter executed by Borrower
in favor of the Lender with respect to any or all of the Collateral, and any
modifications or replacements thereof or therefor.
"Security Deed" shall mean the Security Deed and Agreement
dated as of March 30, 2001 from Borrower in favor of Lender, the first amendment
thereof dated as of the date hereof, and any modifications or replacements
thereof or therefor.
"Security Documents" shall mean, collectively, the Borrower
Agreement (if executed at any time), the Eximbank Guarantee (if executed at any
time), the Eximbank Loan Authorization Agreement (if executed at any time), the
Security Deed, the Security Agreement, the Parent Guaranty, the Subsidiary
Guaranty, any and all Export Contract Letters of Credit, any and all assignments
of Export Contract Letters of Credit proceeds delivered pursuant to Section 3.03
hereof, and each other guaranty, letter of credit, security, mortgage or other
collateral document, whether now existing or hereafter executed and delivered,
guaranteeing or securing any or all of the Obligations.
"Spinnaker" shall mean Spinnaker Industries, Inc., a Delaware
corporation.
"Standby Letter of Credit" shall mean Letters of Credit issued
or caused to be issued by Lender for Borrower's account that can be drawn upon
by an Account Debtor only if Borrower fails to perform all of its obligations
with respect to an Export Order.
"Subsidiary" means, as applied to Borrower, (i) any
corporation of which 50% or more of the outstanding stock (other than directors'
qualifying shares) having ordinary voting power to elect a majority of its board
of directors (or other governing body), regardless of the existence at the time
of a right of the holders of any class or classes (however designated) of
securities of such corporation to exercise such voting power by reason of the
happening of any contingency, or any partnership of which 50% or more of the
outstanding partnership interests is, at the time, directly or indirectly owned
by Borrower or by one or more Subsidiaries of Borrower, and (ii) any other
entity which is directly or indirectly controlled or capable of being controlled
by
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Borrower or by one or more Subsidiaries of Borrower; provided, however, that as
used herein, "Subsidiary" shall not include M-Tron and Spinnaker or their
respective subsidiaries.
"Subsidiary Guaranty" means that certain Subsidiary Guaranty
of even date herewith executed by the Subsidiaries of Borrower.
"Tangible Net Worth" shall mean, as of any particular date and
with respect to any particular Person, the Net Worth of such Person as of such
date less the sum of (i) all assets of such Person as of such date which should
be classified as intangible assets under GAAP (including, without limitation,
goodwill) and (ii) all accounts receivable and other debts due to such Person at
such time from any of its officers, directors, shareholders, or other
Affiliates, all as determined on a consolidated basis.
"Total Maximum Availability" shall mean the aggregate of the
Non-Guaranteed Maximum Availability plus the Exim-Guaranteed Maximum
Availability (as such amounts may be adjusted from time to time pursuant to this
Agreement).
"UCC" shall mean the Uniform Commercial Code as the same may,
from time to time, be enacted and in effect in the State of Georgia; provided,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, Agent's
or any Lender's Lien on any Collateral is governed by the Uniform Commercial
Code as enacted and in effect in a jurisdiction other than the State of Georgia,
the term "UCC" shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority or remedies and for purposes
of definitions related to such provisions.
"Warranty" shall mean Borrower's warranty to a buyer of goods
that the goods manufactured pursuant to an Export Order will function as
intended during the warranty period set forth in such Export Order.
"Warranty Letter of Credit" shall mean any Standby Letter of
Credit which is issued or caused to be issued by Lender to support the
obligations of Borrower with respect to a Warranty, provided the maximum term
for such Standby Letter of Credit shall not exceed thirteen (13) calendar months
from the date of export of the underlying goods.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be prepared, and all
financial records shall be maintained in accordance with GAAP; provided,
however, that compliance with any and all financial covenants and calculations
provided for herein, and in the definitions used in such covenants and
calculations, shall be calculated, made and applied on a consolidated basis in
accordance with GAAP as in effect on the date of this Agreement applied on a
basis consistent with the preparation of the financial statements referred to in
Section 6.02 hereof unless and until the parties hereto enter into a written
amendment agreement with respect thereto, except that in no event shall (x) the
value of capital stock of M-Tron or Spinnaker
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held by Borrower, if any, or (y) the assets, liabilities, financial results or
business operations of M-Tron, Spinnaker or their respective subsidiaries be
considered in connection with compliance with any conditions to borrowing,
representations and warranties, covenants or default provisions of the Borrower
under the Credit Documents.
SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Any pronoun used herein shall be deemed to cover all genders and
all singular terms used herein shall include the plural and vice versa. Unless
otherwise expressly indicated herein, all references herein to a period of time
which runs "from" or "through" a particular date shall be deemed to include such
date, and all references herein to a period of time which runs "to" or "until" a
particular date shall be deemed to exclude such date. Unless otherwise defined
or specified herein, all other terms used herein shall have the meanings, if
any, given such terms in the Uniform Commercial Code as in effect on this date
in the State of Georgia as the same may be hereafter amended or supplemented
from time to time.
ARTICLE II.
LETTER OF CREDIT AND REVOLVING CREDIT FACILITIES
SECTION 2.01. LOANS; LETTERS OF CREDIT; MAXIMUM AVAILABILITY.
(a) Non-Guaranteed Loans and Non-Guaranteed Letters of
Credit. (i) Subject to the terms and conditions of this Agreement, Lender agrees
that, from time to time prior to the Maturity Date and upon the Borrower's
request therefor, Lender shall make Non-Guaranteed Loans to the Borrower and
issue Non-Guaranteed Letters of Credit for the account of the Borrower;
provided, however, that the sum of the aggregate outstanding principal balance
of the Non-Guaranteed Loans plus the aggregate stated amount of all outstanding
Non-Guaranteed Letters of Credit shall not exceed the Non-Guaranteed Loan
Maximum Availability at any one time; provided further, however, that the
maximum aggregate principal balance of the Non-Guaranteed Loans made under this
Section 2.01(a) shall at no time exceed Two Million Dollars ($2,000,000).
Notwithstanding anything in this Agreement to the contrary, the Existing Letters
of Credit are deemed to be Non-Guaranteed Letters of Credit issued hereunder, an
all applicable fees due thereon under this Agreement shall be paid to the Lender
on the Closing Date. The proceeds of each Non-Guaranteed Loan made under this
Section 2.01(a) shall be used solely to finance the costs of manufacturing or
selling contract items under either Export Contracts or Domestic Contracts.
(ii) Each Non-Guaranteed Letter of Credit issued hereunder
shall be either (1) a Downpayment Support Letter of Credit or (2) a Warranty
Letter of Credit. Any Non-Guaranteed Letter of Credit issued hereunder with
respect to an Export Contract pursuant to which the Borrower has contracted to
receive in the aggregate more than $500,000 must be secured by the assignment to
Lender, pursuant to Section 3.04, of an Export Contract Letter of Credit related
to such Export Contract, which Export Contract Letter of Credit shall be in an
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amount and form acceptable to the Lender in all respects. The proceeds of each
Non-Guaranteed Letter of Credit shall be used solely to finance the costs of
manufacturing or selling contract items under Export Contracts.
(iii) In the event Borrower fails to reimburse Lender
pursuant to Section 2.03 hereof for any drawing honored by Lender under any
Non-Guaranteed Letter of Credit, Lender may, in its discretion, make a
Non-Guaranteed Loan on behalf of Borrower in order to refinance Borrower's
Reimbursement Obligations with respect to such drawing and such Reimbursement
Obligations thereupon shall be converted into a Non-Guaranteed Loan hereunder.
(iv) In the event Borrower fails to reimburse Lender for
any expenses or costs incurred by Lender pursuant to Section 10.03(a) hereof
within fifteen (15) business days after Lender gives written notice to Borrower
of such expenses or costs, Lender may, in its discretion, make a Non-Guaranteed
Loan on behalf of Borrower in order to reimburse Lender for such expenses or
costs incurred pursuant to Section 10.03(a).
(b) Exim-Guaranteed Loans and Letters of Credit. (i)
Subject to the terms and conditions of this Agreement, the Borrower Agreement,
the Eximbank Loan Authorization Agreement, and the Eximbank Guarantee, Lender
agrees that, from and after the date that the conditions precedent for the
making of Exim-Guaranteed Loans and the issuance of Exim-Guaranteed Letters of
Credit set forth in Section 5.02 hereof have been satisfied until the Maturity
Date, and upon the Borrower's request therefor, Lender shall make
Exim-Guaranteed Loans to the Borrower and shall issue Exim-Guaranteed Letters of
Credit for the account of the Borrower; provided however, that (1) the sum of
the aggregate outstanding principal balance of the Exim-Guaranteed Loans plus
the aggregate stated amount of all outstanding Exim-Guaranteed Letters of Credit
shall not exceed the Exim-Guaranteed Maximum Availability at any one time, and
(2) Exim-Guaranteed Loans shall only be made, and shall only be permitted to
remain outstanding, if and so long as Non-Guaranteed Loans have been made and/or
Non-Guaranteed Letters of Credit have been issued in an aggregate amount equal
to the Non-Guaranteed Loan Maximum Availability.
(ii) The proceeds of each Exim-Guaranteed Loan or
Exim-Guaranteed Letter of Credit shall be used solely to finance the costs of
manufacturing or selling contract items under Export Contracts in accordance
with the requirements of the Eximbank Guarantee, the Eximbank Loan Authorization
Agreement and the Borrower Agreement.
(iii) In the event Borrower fails to reimburse Lender
pursuant to Section 2.03 hereof for any drawing honored by Lender under any
Exim-Guaranteed Letter of Credit, Lender may, in its discretion, make an
Exim-Guaranteed Loan on behalf of Borrower in order to refinance Borrower's
Reimbursement Obligations with respect to such drawing and such Reimbursement
Obligations thereupon shall be converted into an Exim-Guaranteed Loan hereunder.
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(c) Revolving Loans. The Loans are revolving in nature,
and any portion of a Loan that is repaid or prepaid may be reborrowed, pursuant
and subject to the other terms and conditions set forth herein.
SECTION 2.02. REPAYMENT OF PRINCIPAL AND INTEREST ON THE
LOANS.
(a) The Borrower's obligations to pay to the Lender the
principal of and accrued interest on the Loans shall be evidenced by the records
of the Lender and the Note.
(b) Accrued interest on the Loans (other than Loans made
or deemed made to refinance the Borrower's Reimbursement Obligations pursuant to
Section 2.01(a)(iii) or 2.01(b)(iii) hereof, to pay for expenses or costs
pursuant to Section 2.01(a)(iv) hereof, or to provide cash collateral for
outstanding Letters of Credit pursuant to Section 9.02(a)(iii) hereof) shall be
payable to the Lender monthly in arrears on each Interest Payment Date as well
as on the Maturity Date. Accrued interest on the Loans made or deemed made to
refinance Borrower's Reimbursement Obligations pursuant to Section 2.01(a)(iii)
or 2.01(b)(iii) hereof, to pay expenses or costs pursuant to Section 2.01(a)(iv)
hereof, or to provide cash collateral for outstanding Letters of Credit pursuant
to Section 9.02(a)(iii) hereof shall be payable on the earlier of demand by
Lender or the Maturity Date.
(c) In addition to any principal reduction which may be
required at any time under Section 2.03 hereof, and subject to any acceleration
of maturity pursuant to Section 9.02 hereof, the aggregate outstanding principal
balance of the Loans (other than Loans made to refinance Borrower's
Reimbursement Obligations pursuant to Section 2.01(a)(iii) or 2.01(b)(iii)
hereof, to pay for expenses or costs pursuant to Section 2.01(a)(iv) hereof, or
to provide cash collateral for outstanding Letters of Credit pursuant to Section
9.02(a)(iii) hereof) shall be due and payable in full on the Maturity Date, and
the aggregate outstanding principal balance of all Loans made or deemed made
pursuant to Section 2.01(a)(iii), 2.01(a)(iv) or 2.01(b)(iii) hereof or
9.02(a)(iii) hereof shall be payable in full on the earlier of demand or the
Maturity Date.
SECTION 2.03 REIMBURSEMENT OBLIGATIONS; REPAYMENT OF
PRINCIPAL AND INTEREST; MAXIMUM EXPIRY DATES.
(a) The Borrower's obligations to pay to the Lender the
principal of and accrued interest on the Reimbursement Obligations shall be
evidenced by the records of the Lender and this Agreement.
(b) Upon receipt by the Lender of a drawing by the
beneficiary under any Letter of Credit, the Lender shall promptly notify the
Borrower of the amount of such drawing and the date on which the payment thereof
is to be made by the Lender to the beneficiary (but the Lender's failure to give
any such notice shall not affect the Borrower's Reimbursement Obligations
hereunder). The Borrower agrees to reimburse the Lender for the amount of each
drawing made under any Letter of Credit which is honored by the Lender, which
reimbursement shall be made in full at or prior to the time the Lender pays such
drawing (but in the event the Lender fails to give the Borrower the aforesaid
prior notice of its intended payment of any such
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drawing, such reimbursement shall not be due until the Lender gives the Borrower
notice of Lender's payment of such drawing). In the event Borrower fails to
honor when due its Reimbursement Obligations with respect to a drawing under any
Letter of Credit, the Lender may, at its option, make a Loan on Borrower's
behalf to refinance such Reimbursement Obligations (and such Loan shall be a
Non-Guaranteed Loan if such Letter of Credit is a Non-Guaranteed Letter of
Credit and an Exim-Guaranteed Loan if such Letter of Credit is an
Exim-Guaranteed Letter of Credit), but Lender shall not be under any obligation
to make any such Loan to refinance any such Reimbursement Obligations.
(c) Accrued interest on any of the Reimbursement
Obligations shall be payable at the same time as is due the payment of principal
of such Reimbursement Obligation.
(d) Each Letter of Credit shall expire no later than 360
days after the issuance thereof; provided, however, that Warranty Letters of
Credit may expire no later than 390 days after the issuance thereof. On the
Maturity Date, any and all Letters of Credit having an expiration date after the
Maturity Date must be cash collateralized in accordance with the terms and
conditions of Section 10.14(ii). No Letter of Credit may be issued on a date
that is less than 30 days prior to the Maturity Date, unless the Lender in its
reasonable judgment believes that the Lender and Borrower are in good faith
negotiations to extend the Maturity Date of this Agreement. Each Letter of
Credit otherwise shall be in a form and shall have terms which are acceptable in
all respects to Lender. Each Exim-Guaranteed Letter of Credit shall comply with
the terms and conditions of the Eximbank Guarantee, the Eximbank Loan
Authorization Agreement and the Borrower Agreement.
SECTION 2.04. MAXIMUM AVAILABILITY; OVERADVANCE.
(a) Notwithstanding anything in this Agreement to the
contrary, the Lender shall not be obligated to make any Loans to or on behalf of
the Borrower, and the Lender shall not be obligated to issue any Letters of
Credit for the account of the Borrower hereunder if, after giving effect to any
such transactions, the aggregate outstanding principal balance of all of the
Loans at such time plus the aggregate stated amount of all outstanding Letters
of Credit at such time shall exceed the amount of the Export-Related Borrowing
Base as then in effect.
(b) In the event that the aggregate principal balance of
any of the Loans outstanding at any one time or the aggregate stated amount of
any of the Letters of Credit outstanding at any one time shall exceed any of the
applicable limits specified in Section 2.01(a) or (b) hereof or any applicable
limit specified in paragraph (a) of this Section 2.04, Borrower shall,
immediately upon Borrower's receipt of notice thereof from Lender or the
Borrower's otherwise acquiring knowledge thereof, prepay such Loans or cause the
early cancellation of such Letters of Credit to the extent necessary to
eliminate such excess.
(c) In the event that the aggregate principal balance of
any of the Loans outstanding at any one time or the aggregate stated amount of
any of the Letters of Credit outstanding at any one time shall exceed any of the
applicable limits specified in Section 2.01(a) or (b) above or any applicable
limit specified in paragraph (a) of this Section 2.04, such excess
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nevertheless shall constitute Loans or Letters of Credit (as the case may be)
for all purposes of this Agreement and the other Credit Documents and shall be
entitled to all benefits and security of this Agreement and the other Credit
Documents.
SECTION 2.05. AMENDMENT AND RESTATEMENT; NO NOVATION.
This Agreement constitutes an amendment and restatement of the Original
Credit Agreement effective from and after the Closing Date. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby are not intended by the parties to be, and shall not constitute, a
novation or an accord and satisfaction of the Obligations or any other
obligations owing to the Lender under the Original Credit Agreement or any other
Original Credit Document. On the Closing Date, the credit facilities and the
terms and conditions thereof described in the Original Credit Agreement shall be
amended and replaced by the credit facilities and the terms and conditions
thereof described herein, and all Loans and other Obligations of Borrower
outstanding as of such date under the Original Credit Agreement shall be deemed
to be Loans and Obligations outstanding under the corresponding facilities
described herein, without further action by any Person.
SECTION 2.06. EFFECTIVENESS OF ORIGINAL LOAN DOCUMENTS.
Borrower, Parent and each Credit Party hereby acknowledge that the
Security Documents and all other Credit Documents previously executed by
Borrower, Parent or any Credit Party and delivered to Lender are and shall
remain in full force and effect, and Borrower, Parent and each Credit Party
hereby ratifies, confirms and approves such Security Documents and such other
Credit Documents and all of the terms and provisions thereof, and agrees that
each of such Security Documents and each of such Credit Documents constitutes
the valid and binding obligation of Borrower, Parent or the Credit Party, as
applicable, enforceable by the Lender in accordance with its terms.
SECTION 2.07. EXTENSION OF MATURITY DATE. Not earlier than 60
days and not later than 45 days prior to the existing Maturity Date, the
Borrower may request in writing that the Lender extend the Maturity Date for an
additional period of time to be mutually agreed upon by the parties. The Lender,
in its sole discretion, may agree to extend or decline to extend the Maturity
Date; provided, however, that if the Lender does not respond in writing to such
request from the Borrower 30 days prior to the existing Maturity Date, then the
Borrower's request for an extension shall be deemed to have been denied by the
Lender.
ARTICLE III.
EXPORT-RELATED BORROWING BASE, EXPORT CONTRACTS AND DOMESTIC CONTRACTS
SECTION 3.01. EXPORT-RELATED BORROWING BASE MATTERS.
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(a) The Export-Related Borrowing Base and the asset
values and credit margins incorporated therein shall be used solely for the
purposes of this Agreement and the credit facilities provided by the Lender to
the Borrower hereunder and shall not prejudice the Lender's right to allege and
prove in any bankruptcy, insolvency or other similar proceeding involving
Borrower a different value of the assets of the Borrower nor shall they be
construed to be an admission by the Lender as to what collateral levels would
adequately protect its interests in any such bankruptcy, insolvency or other
similar proceeding involving Borrower.
(b) With respect to all Export-Related Accounts
Receivable, Borrower represents and warrants to Lender that Lender may rely, in
determining which Export-Related Accounts Receivable are Eligible Export-Related
Accounts Receivable, on all statements and representations made by Borrower with
respect to any Export-Related Accounts Receivable, and, unless otherwise
indicated in writing to Lender, that with respect to each Export-Related Account
Receivable:
(i) It is genuine and in all respects what it purports to be, and
it is not evidenced by a note, instrument or judgment;
(ii) It arises out of a bona fide sale and delivery of goods or
rendition of services by Borrower in the ordinary course of
its business and is due and owing in accordance with the terms
and conditions of the related contract between the Borrower
and the applicable Account Debtor and all purchase orders or
other documents relating thereto;
(iii) It is for a liquidated amount payable in U.S. Dollars and is
due as stated in the duplicate invoice covering such sale or
rendition of services, a copy of which has been furnished or
is available to Lender;
(iv) Such Export-Related Account Receivable, and Lender's security
interest therein, is not, and will not be in the future,
subject to any offset, Lien (other than in favor of Lender),
deduction, defense, dispute, or counterclaim except for
disputes where the amount in controversy is deemed by Lender
to be immaterial, and each such Export-Related Account
Receivable is absolutely owing to Borrower and is not
contingent in any material respect;
(v) Borrower has made no agreement with any Account Debtor for any
deduction therefrom, except discounts or allowances which are
granted by Borrower in the ordinary course of its business for
prompt payment and which are reflected in the calculation of
the net amount of each respective invoice related thereto;
(vi) There are no facts, events or occurrences which in any way
impair the validity or enforceability thereof or tend to
reduce the amount payable thereunder from the net face amount
of the invoice and statements delivered to Lender with respect
thereto; and
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(vii) Borrower has no knowledge of any fact or circumstance which
would impair the validity or collectability of such
Export-Related Account Receivable, and to the best of
Borrower's knowledge there are no proceedings or actions which
are threatened or pending against any Account Debtor
thereunder which might result in any material adverse change
in the collectability of such Export-Related Account
Receivable.
(c) Borrower shall keep accurate and complete records of
all Accounts Receivable and all payments and collections thereon.
(d) Borrower shall cause all Accounts Receivable to be
directly paid to or deposited in a depository account with Lender. Without
limiting the generality of the foregoing sentence, all Accounts Receivable
related to Export Contracts must be directly paid to or deposited in the
Lender's Account. Lender agrees that it will remit funds from the Lender's
Account to an unrestricted account of the Borrower maintained with Lender upon
the request of Borrower unless and until: (1) a Default or Event of Default has
occurred and is continuing or (2) Lender reasonably believes based on
information available to it that an outstanding Letter of Credit may be
presented for drawing under a particular Export Contract. Upon an Event of
Default, Lender may in its discretion apply all amounts in any deposit account
maintained with Lender against the Obligations in the manner set forth in this
Agreement. Lender has no duty to protect, insure, collect or realize upon the
Accounts Receivable or preserve rights in them.
(e) With respect to Export-Related Inventory, Borrower
represents and warrants to Lender that Lender may rely, in determining which
item or items of Export-Related Inventory constitute Eligible Export-Related
Inventory, on all statements and representations made by Borrower with respect
to such Inventory and, unless otherwise indicated in writing to Lender, that:
(i) Such Export-Related Inventory is presently and will continue
to be located at Borrower's places of business listed in the
Security Agreement and will not be removed therefrom except as
authorized by the Security Agreement;
(ii) Such Export-Related Inventory is not now, nor shall such
Export-Related Inventory at any time or times hereafter be,
stored with a bailee, warehouseman or similar party without
Lender's prior written consent and, if Lender gives such
consent, Borrower will concurrently therewith cause any such
bailee, warehouseman, or similar party to issue and deliver to
Lender, in form and substance reasonably acceptable to Lender,
warehouse receipts therefor in Lender's name; and
(iii) Such Export-Related Inventory is not now, nor shall such
Export-Related Inventory at any time or times hereafter be,
delivered by or on behalf of Borrower to any third party for
the purpose of being processed by such third party without
Lender's prior written consent and, if Lender gives such
consent, Borrower will concurrently therewith cause such third
party to
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agree in writing in favor of Lender (which agreement must be
in form and substance satisfactory to Lender) that such
third party will not assert any processor's or other Lien
against such Export-Related Inventory, that such third party
acknowledges that Lender holds a first-priority and
perfected security interest in such Export-Related Inventory
pursuant to the Security Agreement, and that such third
party will turn such Export-Related Inventory over to Lender
upon Lender's request therefor.
SECTION 3.02. EXPORT CONTRACTS AND DOMESTIC CONTRACTS. The
Borrower shall promptly deliver to Lender a copy of each Export Contract and
each Domestic Contract together with a certificate from the president, chief
executive officer, chief financial officer or controller of Borrower certifying
that such copy is a true, correct and complete copy of such Export Contract or
Domestic Contract, as applicable, and has not been amended, restated or
terminated as of the date of such certificate.
SECTION 3.03. DENOMINATION OF EXPORT TRANSACTIONS. The
Borrower shall require payment under any and all Export Contracts and all
Domestic Contracts in U.S. Dollars.
SECTION 3.04. ASSIGNMENT OF EXPORT CONTRACT LETTERS OF
CREDIT PROCEEDS; LENDER AS ADVISING BANK.
(a) The Borrower shall assign to the Lender the proceeds
of each Export Contract Letter of Credit pursuant to an executed assignment of
proceeds complying with the provisions of Sections 9-107 and 5-114 of the UCC
and providing that all payments under such Export Contract Letter of Credit
shall be made directly to Lender's Account and otherwise in form and substance
satisfactory to Lender (a "Assignment of Proceeds"). The Borrower shall cause
each Assignment of Proceeds to be acknowledged by the paying bank.
(b) Each Export Contract Letter of Credit shall be freely
negotiable, and the Borrower shall authorize only the Lender to negotiate such
Export Contract Letter of Credit.
SECTION 3.05. SHIPMENT OF EXPORT CONTRACT ITEMS. Borrower
shall not ship any contract items under any Export Contract to the Account
Debtor thereunder unless and until (a) the Borrower has received the original
Export Contract Letter of Credit relating to such Export Contract, (b) such
Export Contract Letter of Credit is in full force and effect at the time of such
shipment, (c) the proceeds of the Export Contract Letter of Credit relating to
such Export Contract have been assigned to Lender pursuant to Section 3.04
hereof and (d) the paying bank under the Export Contract Letter of Credit has
acknowledged and consented to such assignment.
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ARTICLE IV.
GENERAL CREDIT TERMS
SECTION 4.01. REQUEST FOR LOANS OR LETTERS OF CREDIT. (a)
Whenever Borrower desires to request any Loan hereunder, it shall give the
Lender prior written or telecopied notice (or telephonic notice promptly
confirmed in writing or by telecopy) of such request (a "Notice of Borrowing"),
such Notice of Borrowing to be given to the Lender by 1:00 p.m. (Eastern Time)
on the Business Day prior to the planned borrowing. Each Notice of Borrowing
shall be irrevocable and shall specify the aggregate principal amount of the
Loan requested by the Borrower thereby, whether such Loan is to be a
Non-Guaranteed Loan or an Exim-Guaranteed Loan, the purpose of such Loan, and
the specific Export Contract (or, in the case of a Non-Guaranteed Loan only, the
specific Domestic Contract or Export Contract) for which such Loan shall be
utilized.
(b) Whenever Borrower desires to request any Letter of
Credit hereunder, it shall give the Lender prior written or telecopied notice
(or telephonic notice promptly confirmed in writing or by telecopy) of such
request (a "Notice of Letter of Credit Request"), such Notice of Letter of
Credit Request to be given to the Lender by 1:00 p.m. (Eastern Time) on the
Business Day prior to the planned issuance date of the requested Letter of
Credit, and such Notice of Letter of Credit Request shall be accompanied by a
duly completed and executed letter of credit application for the requested
Letter of Credit on Lender's standard form therefor (but in the event of any
inconsistency between the terms of such application and this Agreement, the
terms of this Agreement shall control). When requesting a Letter of Credit
hereunder, Borrower shall also (a) specify the purpose of such Letter of Credit
and the specific Export Contract for which such Letter of Credit shall be
utilized and (b) deliver to the Lender a copy of such Export Contract together
with a certificate from the president, chief executive officer, chief financial
officer or controller of Borrower certifying that such copy is a true, correct
and complete copy of such Export Contract and has not been amended, restated or
terminated as of the date of such certificate.
SECTION 4.02. FEES.
(a) In consideration of the Lender's entering into this
Agreement and making the Non-Guaranteed Loans and Non-Guaranteed Letters of
Credit available hereunder, Borrower shall pay to Lender the following
non-refundable fees on or before the following dates, which fees shall be deemed
fully earned upon the parties' execution and delivery of this Agreement:
(i) on the date hereof, an origination fee for
Non-Guaranteed Loans and Non-Guaranteed Letters of
Credit in the amount of $8,750 (representing .125% of
the Non-Guaranteed Loan Maximum Availability); and
(ii) Borrower shall pay to Lender a non-refundable
commitment fee from the date of this Agreement to the
Maturity Date computed on the daily unused portion of
the Non-Guaranteed Loan Maximum Availability in
effect during the period for which such rate is made
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(which commitment fee shall be computed by treating
each outstanding Non-Guaranteed Letter of Credit as a
usage of the Non-Guaranteed Loan Maximum
Availability) at a rate per annum equal to one-eighth
of one percent (.125%), which commitment fee shall be
payable by Borrower to the Lender quarterly in
arrears on the first (1st) day of each calendar
quarter, commencing with July 1, 2002, and continuing
to be due on the first (1st) day of each January,
April, July and October thereafter so long as this
Agreement is in effect as well as on the Maturity
Date.
(b) After the date on which all of the conditions
precedent set forth in Section 5.02 hereof have been satisfied, and in
consideration of the Lender's entering into this Agreement and making the
Exim-Guaranteed Loans and Exim-Guaranteed Letters of Credit available hereunder,
Borrower shall pay to Lender the following non-refundable fees on or before the
following dates which fees shall be deemed fully earned upon the satisfaction of
all of the conditions set forth in Section 5.02 hereof:
(i) on or before the date on which all of the conditions
precedent set forth in Section 5.02 hereof have been
satisfied, a non-refundable guaranty fee for the
Exim-Guaranteed Loan and Exim-Guaranteed Letters of
Credit in an amount equal to 1.5% of the
Exim-Guaranteed Maximum Availability, which guaranty
fee shall be used by Lender to pay the comparable
facility fee due from Lender to Eximbank under the
Eximbank Guarantee;
(ii) on or before the date on which all of the conditions
precedent set forth in Section 5.02 hereof have been
satisfied, an origination fee for Exim-Guaranteed
Loans and Exim-Guaranteed Letters of Credit in an
amount equal to 0.125% of the Exim-Guaranteed Loan
Maximum Availability; and
(iii) Borrower shall pay to Lender a non-refundable
commitment fee from the date on which all of the
conditions precedent set forth in Section 5.02 hereof
has been satisfied to the Maturity Date computed on
the daily unused portion of the Exim-Guaranteed Loan
Maximum Availability in effect during the period for
which such rate is made (which commitment fee shall
be computed by treating each outstanding
Exim-Guaranteed Letter of Credit as a usage of the
Exim-Guaranteed Maximum Availability) at a rate per
annum equal to one-eighth of one percent (.125%),
which commitment fee shall be payable by Borrower to
the Lender quarterly in arrears on the first (1st)
day of each calendar quarter, commencing with the
first day of the first month of January, April, July
or October after the date on which all of the
conditions set forth in Section 5.02 hereof are
satisfied, and continuing to be due on the first
(1st) day of each
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January, April, July and October thereafter so long
as this Agreement is in effect as well as on the
Maturity Date.
(c) In consideration of the Lender entering into this
Agreement and making the Letters of Credit available, Borrower shall pay to
Lender, on demand, (1) upon the issuance of each Non-Guaranteed Letter of Credit
with an original stated amount of $2,000,000 or greater, a letter of credit fee
equal to one and one-half percent (1.50%) per annum of the original stated
amount of such Non-Guaranteed Letter of Credit, (2) upon the issuance of each
Non-Guaranteed Letter of Credit with an original stated amount of less than
$2,000,000, a letter of credit fee equal to the greater of $1000 or two percent
(2.0%) per annum of the original stated amount of such Non-Guaranteed Letter of
Credit, or (3) upon the issuance of each Exim-Guaranteed Letter of Credit, a
letter of credit fee equal to the greater of $1000 or one and one-half of one
percent (1.50%) per annum of the original stated amount of such Exim-Guaranteed
Letter of Credit, which fees shall be fully earned and non-refundable upon the
issuance of such Letter of Credit. If any of the Existing Letters of Credit is
extended at the request of Borrower after the Closing Date, the Borrower shall
pay to the Lender at the time of such extension a new letter of credit fee in an
amount equal to the fee prescribed in the preceding sentence for such extended
term. The Borrower shall also pay, on demand, in addition to all standard
documentary fees and out-of-pocket expenses related to the handling of the
Letter of Credit, the following rates and fees in connection with any Letter of
Credit:
(i) For each amendment of a Letter of Credit, a fee in
the amount of $100 (plus a new issuance fee under the
first sentence of this Section if the amount or
expiration date of such Letter of Credit is amended
or extended); and
(ii) For each draft presented and paid under a Letter of
Credit, a fee in an amount equal to the greater of
$300 or one-half of one percent (0.50%) of the amount
so paid.
SECTION 4.03. INTEREST.
(a) The Borrower agrees to pay interest in respect of all
unpaid principal amounts of the Loans and Reimbursement Obligations at the
following rates per annum (subject to adjustment as set forth in Section 4.03(b)
below):
(i) a variable rate per annum equal to the Adjusted
Monthly LIBOR Index Rate (adjusted on the first LIBOR
Business Day of each LIBOR Period) plus two percent
(2.0%) on the aggregate outstanding principal balance
from time to time of all of the Non-Guaranteed Loans
and the then due and payable Reimbursement
Obligations (other than the Exim-Guaranteed
Reimbursement Obligations); and
(ii) a variable rate per annum as agreed to by the parties
hereto and Eximbank on the aggregate principal
balance of the Exim-
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Guaranteed Loans and the then due and payable Exim-
Guaranteed Reimbursement Obligations outstanding from
time to time.
(b) If a Loan is paid on the same date it is made, one
day's interest shall be paid thereon by the Borrower. In addition, if Borrower's
Reimbursement Obligation with respect to any drawing under any Letter of Credit
is paid by 2:00 p.m. (Eastern Time) on the date on which such drawing is honored
by the Lender, no interest shall be charged on such Reimbursement Obligation;
otherwise interest therein shall accrue from and after such date.
(c) After the occurrence and during the continuation of
any Event of Default, the principal amount of all of the Obligations (and, to
the extent permitted by applicable law), all accrued interest thereon may, if
elected by Lender in its discretion, bear interest at a rate per annum equal to
as much as two hundred basis points (2.00%) above the interest rate otherwise in
effect pursuant to this Section 4.03, which rate adjustment shall be effective
from and after the tenth (10th) day after the date written notice thereof is
given by the Lender to the Borrower, and at the option of the Lender, the
ability of the Borrower to obtain any further Loans or Letters of Credit may be
suspended.
SECTION 4.04. PAYMENTS, PREPAYMENTS AND COMPUTATIONS.
(a) Except as may be otherwise specifically provided
herein, all payments by the Borrower with respect to the Loans, the
Reimbursement Obligations or any other Obligations under this Agreement or any
of the other Credit Documents shall be made without defense, set-off or
counterclaim to the Lender not later than 2:00 p.m. (Eastern Time) on the date
when due and shall be made in lawful money of the United States of America in
immediately available funds. Any payment received by Lender before 2:00 p.m. on
a Business Day shall be credited to the Obligations in the manner set forth in
this Agreement on such Business Day. Any payment received by Lender on a
non-Business Day or after 2:00 p.m. (Eastern Time) on any Business Day shall be
deemed received by Lender at the opening of its business on the next Business
Day and shall be credited to the Obligations in the manner set forth in this
Agreement on such next Business Day. Whenever any payment to be made hereunder
or under the Note or any of the other Credit Documents shall be stated to be due
on a day which is not a Business Day, the due date thereof shall be extended to
the next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the applicable rate during such extension.
All computation of interest or fees due hereunder or under any of the other
Credit Documents shall be made on the basis of a year of 360 days and the actual
number of days elapsed.
(b) Any voluntary prepayment made on the Loans shall be
applied, first, to interest accrued thereon through the date thereof and then
principal in the manner set forth in Section 4.04(c) below.
(c) All payments or prepayments of principal, interest or
otherwise received by Lender prior to any payment default under the Note or with
respect to any Obligations relating to a Letter of Credit shall be applied,
first, to the Exim-Guaranteed Obligations, and, second, to the Non-Guaranteed
Obligations; provided, however, that any
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payment received by Lender from Borrower subsequent to any payment default under
the Note or with respect to any Obligations relating to a Letter of Credit shall
be applied pro-rata to all of the Obligations (or to a trust or collateral
account described in Section 9.02 hereof with respect to any Letters of Credit
then outstanding), based upon the total amount of such Obligations outstanding
and the total stated amount of any Letters of Credit outstanding as of the date
of the payment default.
(d) Borrower may voluntarily prepay the Loans, in whole
or in part (which prepayment shall be applied in accordance with Section
4.04(b)(iv) above), at any time without premium or penalty.
SECTION 4.05. COLLATERAL AND GUARANTIES. The Obligations
shall be secured pursuant to the Security Documents. The repayment of ninety
percent (90%) of the Exim-Guaranteed Obligations shall be guaranteed pursuant to
the terms of the Eximbank Guarantee. The Borrower also shall execute or deliver
(or cause to be executed and delivered) any and all financing statements,
financing statement amendments, notice filings and such other documents as the
Lender may reasonably request from time to time in order to perfect or maintain
the perfection of the Lender's Liens under such Security Documents. The
Obligations shall be fully guaranteed by each Guarantor pursuant to the Parent
Guaranty and the Subsidiary Guaranty.
SECTION 4.06. LOAN ACCOUNT. The Lender shall open and
maintain on its books one or more loan accounts in the name of the Borrower, and
such loan account or accounts shall show as debits thereto the Lender's Loans
made to the Borrower under this Agreement and as credits thereto all payments
received by the Lender and applied thereto so that the balance of the loan
account or accounts of the Borrower with the Lender at all times shall reflect
the principal amount of the Loans then outstanding from the Lender to the
Borrower. The entries made in the aforesaid loan account or accounts shall be
prima facie evidence, in the absence of manifest error, of the existence and
amounts of the Obligations of the Borrower therein recorded and any payments
thereon. The Lender will account to the Borrower from time to time with periodic
statements of borrowings, charges and payments made pursuant to this Agreement
and the other Credit Documents, and each such account rendered by the Lender
shall be deemed final, binding and conclusive unless the Lender is notified by
the Borrower in writing within thirty (30) days after the date such account is
so rendered that the Borrower disputes any item thereof (but any such notice by
the Borrower shall be deemed an objection only to those items specifically set
forth in such notice). Failure by the Lender to render any such account shall in
no way affect Lender's rights hereunder or under any of the other Credit
Documents.
SECTION 4.07. CAPITAL ADEQUACY. Without limiting any other
provisions of this Agreement, in the event that the Lender determines after the
date hereof that the introduction or change after the date of this Agreement of
any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, or any change therein or in the
interpretation or application thereof after the date of this Agreement, or
compliance by the Lender with any request or directive regarding capital
adequacy (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) from a central bank or governmental
authority or body having jurisdiction which is introduced or changed after the
date of this
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Agreement, does or shall have the effect of reducing the rate of return on the
Lender's capital as a consequence of its obligations hereunder or under a Letter
of Credit to a level below that which the Lender could have achieved but for
such law, treaty, rule, regulation, guideline or order or such change or
compliance (taking into consideration the Lender's policies with respect to
capital adequacy and assuming the full utilization of the Lender's capital
immediately before such adoption, change or compliance) by an amount reasonably
deemed by the Lender to be material, then the Lender shall promptly after its
determination of such occurrence notify the Borrower thereof. The Borrower
agrees to pay to the Lender as an additional fee from time to time, within ten
(10) days after written notice and demand by the Lender, such amount as the
Lender certifies to be the amount that will compensate it for such reduction in
connection with its obligations hereunder or under a Letter of Credit. A
certificate of the Lender claiming compensation under this Section 4.07 shall be
conclusive in the absence of manifest error or fraud and shall set forth the
nature of the occurrence giving rise to such compensation, the additional amount
or amounts to be paid to it hereunder and the method by which such amounts were
determined. In determining such amount, the Lender may use reasonable averaging
and attribution methods.
SECTION 4.08. AGREEMENTS REGARDING INTEREST AND OTHER
CHARGES. Borrower and the Lender hereby agree that the only charges imposed or
to be imposed by the Lender upon Borrower for the use of money in connection
with the Loans or Letters of Credit is and will be the interest required to be
paid under the provisions of this Agreement as well as the related provisions of
the Note. In no event shall the amount of interest due and payable under this
Agreement, the Note or any of the other Credit Documents exceed the maximum rate
of interest allowed by applicable law and, in the event any such payment is made
by the Borrower or any other Credit Party or received by the Lender, such excess
sum shall be credited as a payment of principal. It is the express intent hereof
that the Borrower not pay and the Lender not receive, directly or indirectly or
in any manner, interest in excess of that which may be lawfully paid under
applicable law. All interest and other charges, fees or other amounts deemed to
be interest which are paid or agreed to be paid to the Lender under this
Agreement, the Note or any of the other Credit Document shall, to the maximum
extent permitted by applicable law, be amortized, allocated and spread on a pro
rata basis throughout the entire actual term of the Loans (including any
extension or renewal period). Any and all fees payable hereunder are not
intended, and shall not be deemed, to be interest or a charge for the use of
money, but rather shall constitute an "other charge" within the meaning of
O.C.G.A. Section 7-4-2(a)(1).
SECTION 4.09. OBLIGATIONS ABSOLUTE; LIMITATION OF LIABILITY
WITH RESPECT TO LETTERS OF CREDIT. The Borrower's Obligations under this
Agreement (including without limitation its Obligations hereunder to reimburse
the Lender for the amount of any draft drawn under any Letter of Credit) are
primary, absolute, independent, irrevocable, continuing and unconditional, and
such obligations shall be performed by the Borrower strictly in accordance with
the terms of this Agreement under all circumstances whatsoever. As between the
Borrower and the Lender, the Borrower assumes all risks of the acts and
omissions of, or misuse of any Letter of Credit by the beneficiaries of such
Letter of Credit. Without limiting the generality of the foregoing, the
Obligations of the Borrower under this Agreement shall not be impaired, affected
or released by: (i) the voluntary or involuntary liquidation, dissolution,
merger, consolidation, sale or other disposition of all or substantially all of
the assets of the Borrower or any marshalling
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of assets and liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, moratorium, arrangement or similar
proceeding affecting the Borrower; (ii) any lack of validity or enforceability
of the transactions contemplated by or related to any Letter of Credit; (iii)
any amendment or waiver of or consent to depart from all or any of the terms of
the transactions contemplated by any Letter of Credit; (iv) the existence of any
claim, set-off, defense or other right which the Borrower may have at any time
against the Lender, the beneficiary or other user of any Letter of Credit, or
any other person or entity, whether in connection with this Agreement, the
transactions contemplated herein, the transactions contemplated by any Letter of
Credit, or any unrelated transaction; or (v) the fact that any draft, affidavit,
certificate, letter, invoice or other document presented under any Letter of
Credit proves to have been forged, fraudulent, invalid or insufficient in any
respect or any statement therein proves to have been untrue or inaccurate in any
respect. Notwithstanding the foregoing, nothing contained in this Section 4.09
is intended to relieve the Lender of any of its obligations under this Agreement
or the other Credit Documents or under applicable law, including the Uniform
Customs and Practice for Documentary Credits, 1993 Revision, ICC Publication No.
500.
ARTICLE V.
CONDITIONS PRECEDENT
The obligation of the Lender to make any Loan (other than a
Loan deemed made pursuant to Section 2.01(a)(iii), 2.01(b)(iii) or 9.02(a)(iii)
hereof) or issue any Letter of Credit hereunder shall be subject to the
satisfaction of the following conditions precedent:
SECTION 5.01. CONDITIONS PRECEDENT TO INITIAL LOAN OR INITIAL
LETTER OF CREDIT. At the time of the initial Loan under this Agreement or the
issuance of the initial Letter of Credit (other than the Existing Letters of
Credit and an Exim-Guaranteed Letter of Credit) under this Agreement, and
subject to such exceptions as may be granted by Lender in its discretion, the
Lender shall have received the following (all documents to be in form and
substance satisfactory to the Lender):
(a) this Agreement and the Note duly completed and
executed;
(b) the duly executed and completed Security Documents
(other than the Borrower Agreement, the Eximbank Loan Authorization
Agreement and the Eximbank Guarantee);
(c) satisfactory evidence of the recording of such
Uniform Commercial Code financing statements and other documents in
such filing offices as Lender may deem necessary or appropriate to
perfect or maintain the perfection of the Lender's Liens under the
aforesaid Security Documents as well as written reports of
examinations of the public records of such filing office as the Lender
may deem necessary or appropriate indicating
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that there are no other Liens of record covering any of the Collateral
covered by such Security Documents (except Permitted Liens);
(d) a closing certificate of the Borrower, each of its
Subsidiaries and the Parent duly executed and appropriately completed
and attaching the authorizing resolutions of the Borrower, each of its
Subsidiaries or the Parent, as applicable, and setting forth
incumbency provisions for the officers thereof;
(e) an opinion of counsel for the Borrower and the
Parent, satisfactory to the Lender, addressed to the Lender and
covering such matters as Lender may deem appropriate;
(f) a copy of the Certificate of Incorporation (or other
comparable charter instrument) of the Borrower, each of its
Subsidiaries and the Parent (certified as of a recent date by the
Secretary of State of the state of incorporation of the Borrower, each
of its Subsidiaries or the Parent, as applicable) together with current
good standing certificates or certificates of existence for the
Borrower, each of its Subsidiaries and the Parent issued as of a recent
date by the Secretary of State of the state of incorporation of the
Borrower, each of its Subsidiaries and the Parent and of such other
jurisdictions where the Borrower, each of its Subsidiaries and the
Parent presently is qualified to do business as a foreign corporation
(subject to such exceptions as may be acceptable to the Lender);
(g) copies of all documents and instruments, including
all consents, authorizations and filings, required under any
Requirement of Law or by any Contractual Obligation of Borrower in
connection with the execution, delivery, performance, validity and
enforceability of the Credit Documents and the other documents to be
executed and delivered hereunder, and such consents, authorizations,
filings and orders shall be reasonably satisfactory in form and
substance to the Lender and shall be in full force and effect and all
applicable waiting periods shall have expired;
(h) all corporate proceedings and all other legal matters
in connection with the authorization, legality, validity and
enforceability of the Credit Documents shall be reasonably satisfactory
in form and substance to Lender;
(i) the initial Export-Related Borrowing Base Certificate
duly completed and executed by Borrower;
(j) the payment by Borrower to Lender of the applicable
fees specified in Section 4.02 hereof;
(k) satisfactory written evidence of the assignment of
the proceeds of the Export Contract Letters of Credit related to the
Existing Letters of Credit;
(l) since December 31, 2001, there shall have been no
change which has had or could reasonably be expected to have a Material
Adverse Effect; and
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(m) such other documents, certificates, approvals,
filings or other items as the Lender may reasonably request.
SECTION 5.02. ADDITIONAL CONDITIONS PRECEDENT TO
EXIM-GUARANTEED LOANS AND ISSUANCE OF EXIM-GUARANTEED LETTERS OF CREDIT. At the
time of the making of any Exim-Guaranteed Loan and the issuance of each
Exim-Guaranteed Letter of Credit, and subject to such exceptions as may be
granted by Lender in its discretion, all conditions precedent set forth in
Section 5.01 and 5.03 shall have been satisfied and the Lender shall have
received the following (all documents to be in form and substance satisfactory
to Lender):
(a) the duly executed and completed Eximbank Guarantee,
Eximbank Loan Authorization Agreement, Borrower Agreement and
Exim-Guaranteed Note;
(b) such other documents, pledge agreements, guaranties,
certificates, approvals, filings or other items as Eximbank may request
or require;
(c) satisfactory written evidence that all conditions
precedent to the effectiveness of the Eximbank Guarantee have been
satisfied (or waived in writing by Eximbank);
(d) an opinion of counsel for the Borrower satisfactory
to both Lender and Eximbank addressed to both Lender and Eximbank and
covering such matters as Lender may deem appropriate;
(e) the payment by Borrower to Lender of the applicable
fees specified in Section 4.02 hereof; and
(e) such other documents, certificates, approvals,
filings or other items as the Lender may reasonably request.
SECTION 5.03. CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS
OF CREDIT. At the time of (and after giving effect to) the making of any Loan
under this Agreement or the issuance of any Letter of Credit, the following
conditions shall have been satisfied or shall exist:
(a) there shall then exist no Default or Event of
Default, including, without limitation, any Default or Event of Default
arising from any violation of Section 8.08 (restrictions on advances to
stockholders and affiliates);
(b) Borrower shall have delivered to Lender an
Export-Related Borrowing Base Certificate within the past 30 calendar
days;
(c) all representations and warranties by the Borrower
contained herein or in the other Credit Documents (other than those
representations and warranties which are, by their terms, expressly
limited to the date made or given) shall be true and correct in all
material
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respects with the same effect as though such representations and
warranties had been made on and as of the date of such Loan;
(d) since the date of the most recent financial
statements described in Section 6.02 or received pursuant to Section
7.01, there shall have been no change which has had or could reasonably
be expected to have a Material Adverse Effect;
(e) there shall be no action or proceeding instituted or
pending before any court or other governmental authority or, to the
knowledge of the Borrower, threatened (i) which has had or reasonably
could be expected to have a Material Adverse Effect or (ii) seeking to
prohibit or restrict Borrower's ownership or operation of any material
portion of its business or assets or to compel Borrower to dispose of
or hold separate all or any material portion of its businesses or
assets, which has had or reasonably could be expected to have a
Material Adverse Effect;
(f) the Loan to be made or the Letter of Credit to be
issued and the use of proceeds thereof shall not contravene, violate or
conflict with, or involve Borrower or the Lender in a violation of, any
law, rule, injunction, or regulation, or determination of any court of
law or other governmental authority; and
(g) In the case of any Exim-Guaranteed Loan or
Exim-Guaranteed Letter of Credit, all applicable conditions precedent
to the making of such Loan or the issuance of such Letter of Credit set
forth in the Eximbank Guarantee, the Borrower Agreement and the
Eximbank Loan Authorization Agreement shall have been satisfied, the
Lender shall not have received notice from the Eximbank directing that
the Lender not make such Loan or issue such Letter of Credit and the
Eximbank Guarantee shall not prohibit the Lender from making such Loan
or issuing such Letter of Credit.
Each request by Borrower for a Loan and each request by
Borrower for the issuance of a Letter of Credit shall constitute a
representation and warranty by the Borrower to the Lender, as of the date of
such Loan or the date of the issuance of such Letter of Credit (as the case may
be), that all of the applicable conditions specified in this Article have been
satisfied.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to the Lender as
follows:
SECTION 6.01. ORGANIZATION; SUBSIDIARIES; AUTHORIZATION;
VALID AND BINDING OBLIGATIONS. The Borrower is a corporation duly organized and
validly existing in good standing under the laws of South Dakota. The Borrower
is duly qualified as a foreign corporation in good standing in the State of
Georgia and each other jurisdiction where the ownership of property or the
nature of the business transacted by it makes such qualification necessary,
except where the failure
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to be so qualified would not have a Material Adverse Effect. The Borrower has
all requisite power and authority to execute and deliver the Credit Documents to
which it is a party, to perform its obligations under such Credit Documents and
to own its property and carry on its business. The Credit Documents have been
duly authorized by all requisite corporate action on the part of the Borrower
and duly executed and delivered by authorized officers of the Borrower. Each of
the Credit Documents to which the Borrower is a party constitutes a valid
obligation of the Borrower, legally binding upon and enforceable against the
Borrower in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by
general principles of equity.
SECTION 6.02. FINANCIAL STATEMENTS. All of the financial
statements for Borrower and its Subsidiaries provided to the Lender fairly
present the financial condition of the Borrower and its Subsidiaries as at the
dates thereof and the results of their operations for the periods covered
thereby in conformity with GAAP (subject, in the case of interim financial
statements, to normal year-end adjustments), except that in no event shall the
assets, liabilities, financial results or business operations of M-Tron,
Spinnaker or their respective subsidiaries be considered in connection with the
preparation of such financial statements for the Borrower. Since the date of the
most recent annual financial statements for Borrower and its Subsidiaries
presented to the Lender, there has been no Material Adverse Effect.
SECTION 6.03. ACTIONS PENDING. There is no action, suit,
investigation or proceeding pending or, to the knowledge of the Borrower,
threatened against any Credit Party or any properties or rights of any Credit
Party, by or before any court, arbitrator or administrative or governmental body
which has had or could reasonably be expected to result in any Material Adverse
Effect.
SECTION 6.04. TITLE TO PROPERTIES. Borrower and its
Subsidiaries have good and marketable title to all of its respective properties
and assets (other than properties and assets disposed of in the ordinary course
of business), subject to no Lien of any kind except Liens granted under the
Security Documents or Permitted Liens. As of the date hereof, Borrower or and
its Subsidiaries own no real property other than the real property covered by
the Security Deed.
SECTION 6.05. TAXES. Borrower has filed all federal, state
and other income tax returns which, to the knowledge of the Borrower, are
required to be filed, and each has paid all taxes as shown on such returns and
on all assessments received by it to the extent that such taxes have become due,
except such taxes as are not due or which are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP as required below.
SECTION 6.06. CONFLICTING AGREEMENTS AND OTHER MATTERS.
Neither the execution nor delivery of this Agreement, nor fulfillment of or
compliance with the terms and provisions of this Agreement, will conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien (other than any Lien arising under any Credit Document) upon any of the
properties or
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assets of any Credit Party pursuant to the charter or by-laws of such Credit
Party, any award of any arbitrator or any agreement, instrument, order,
judgment, decree, statute, law, rule or regulation to which any Credit Party or
any of its property is subject.
SECTION 6.07. ERISA. Except as may have been expressly
disclosed in writing by Borrower to the Lender, no accumulated funding
deficiency (as defined in Section 302 of ERISA or Section 412 of the Code),
whether or not waived, exists with respect to Borrower's Plans (other than a
Multiemployer Plan), no liability to the PBGC has been or is expected to be
incurred by Borrower with respect to any Plan (other than a Multiemployer Plan)
which has or could reasonably be expected to have a Material Adverse Effect, and
Borrower has not incurred any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which has or could reasonably be expected to
have a Material Adverse Effect. The execution and delivery of the Credit
Documents will not involve any transaction which is subject to any prohibitions
of Section 406 of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code.
SECTION 6.08. GOVERNMENTAL AND THIRD PARTY CONSENTS. Except
for any recording or filing which may be required by applicable law to perfect
or maintain the perfection of the Lender's Liens in the Collateral, and except
for the execution and delivery of the Eximbank Guarantee and the Eximbank Loan
Authorization Agreement, no consent, approval or authorization of, or
declaration or filing with, any governmental authority or third party is
required for the valid execution, delivery and performance by any Credit Party
of the Credit Documents executed by such Person or the consummation of any of
the transactions contemplated by the Credit Documents.
SECTION 6.09. COMPLIANCE WITH LAWS AND REGULATIONS. Borrower
is in compliance with all federal, state, local, and other laws, ordinances and
other governmental rules or regulations to which it is subject, including
without limitation, Environmental Laws and laws and regulations relating to
equal employment opportunity and employee safety, and Borrower will promptly
comply with all such laws and regulations which may be legally imposed on
Borrower in the future, except where the failure to so comply has not had or
could not reasonably be expected to have a Material Adverse Effect.
SECTION 6.10. POSSESSION OF LICENSES, LEASES, FRANCHISES,
ETC.. Borrower possesses any and all licenses, leases, franchises, certificates,
permits and other authorizations from any governmental or regulatory authorities
or from any other Person that are necessary in any material respect for the
ownership, maintenance and operation of their respective properties and assets
and Borrower is not is in violation of any thereof in any material respect.
SECTION 6.11. ENVIRONMENTAL COMPLIANCE. Borrower has obtained
all material permits, licenses and other authorizations which are required under
Environmental Laws, and Borrower is in compliance in all material respects with
all terms and conditions of such permits, licenses and authorizations and are
also in compliance in all material respects with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Laws.
Borrower is not aware of, or has received notice of, any past, present or future
events, conditions, circumstances, activities, practices, incidents, actions or
plans which, with respect to Borrower, may interfere with or prevent
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compliance or continued compliance in all material respects with Environmental
Laws, or may give rise to any material common law or legal liability, or
otherwise form the basis of any material claim, action, demand, suit,
proceeding, hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or, threatened
release into the environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste. There is no civil, criminal
or administrative action, suit, demand, claim, hearing, notice or demand
proceeding pending or, to the knowledge of the Borrower, threatened against
Borrower relating in any way to Environmental Laws.
SECTION 6.12. MARGIN REGULATIONS AND INVESTMENT COMPANY ACT,
ETC.. No part of the proceeds of any of the Loans or the Letters of Credit will
be used for any purpose which violates, or which would be inconsistent or not in
compliance with, the provisions of the applicable Margin Regulations. Borrower
is not an "investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the Investment
Company Act of 1940, as amended). Borrower is not subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, or any
foreign, federal or local statute or regulation limiting its ability to incur
Indebtedness for money borrowed, to guarantee such Indebtedness or to grant
Liens on any of its assets to secure such indebtedness, as contemplated by this
Agreement or by any other Credit Document.
SECTION 6.13. LABOR MATTERS. Except as may have been
expressly disclosed in writing to Lender by Borrower, Borrower has not
experienced any strike, labor dispute, slow down or work stoppage due to labor
disagreements, and, to the knowledge of the Borrower, there is no strike,
dispute, slow down or work stoppage threatened against Borrower. There are no
claims or lawsuits which have been asserted or instituted against Borrower on
the basis that it did not perform in respect of any undertakings made towards
its employees or their representatives and no basis for such claim or lawsuits
exists. Borrower has acted in all material respects in accordance with any
agreements entered into with representatives of its employees relating to their
relations with and obligations towards their employees.
SECTION 6.14. DISCLOSURE. Neither this Agreement nor any
other document, certificate or statement furnished to the Lender by or on behalf
of any Credit Party in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not materially misleading. There is no
fact peculiar to any Credit Party which could reasonably be expected to have a
Material Adverse Effect and which has not been set forth in this Agreement or in
the other documents, certificates and statements furnished to the Lender by or
on behalf any Credit Party prior to the date hereof in connection with the
transactions contemplated hereby.
SECTION 6.15. INSURANCE. Borrower maintains insurance with
respect to its properties and businesses, with financially sound and reputable
insurers, having coverages against losses or damages of the kinds customarily
insured against by reputable companies engaged in the same or similar
businesses, such insurance being in amounts no less than those amounts which are
customary for such companies under similar circumstances. Borrower has paid all
insurance
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premiums due and owing with respect to such insurance policies and coverages and
such policies and coverages, are in full force and effect.
SECTION 6.16. REAFFIRMATION. Each request by Borrower for the
advance of a Loan or the issuance of a Letter of Credit shall constitute (i) an
automatic representation and warranty by Borrower to Lender that there does not
exist any Default or Event of Default as of the date of such request as well as
after giving effect to the advance of such Loan or the issuance of such Letter
of Credit (as the case may be) and (ii) a reaffirmation as of the date of said
request as well as after giving effect to such Loan advance or such Letter of
Credit issuance of all of the representations and warranties of the Credit
Parties contained in this Agreement and the other Credit Documents except as to
those changes (if any) otherwise consented to by the Lender or contemplated
herein.
ARTICLE VII.
AFFIRMATIVE COVENANTS
For so long as this Agreement is in effect, and unless the
Lender expressly consents in writing to the contrary, the Borrower covenants and
agrees to comply with the following covenants:
SECTION 7.01. FINANCIAL STATEMENTS AND NOTICES. Borrower
shall promptly deliver to the Lender:
(a) within forty-five (45) days after the end of each
fiscal quarter of Borrower, a consolidated and consolidating balance
sheet, income statement and statement of cash flow of Borrower and its
Subsidiaries as at the end of such period, setting forth in the case of
each quarterly statement in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable
detail, prepared in accordance with GAAP (subject to changes resulting
from normal year-end adjustments, and except that in no event shall the
assets, liabilities, financial results or business operations of
M-Tron, Spinnaker or their respective subsidiaries be considered in
connection with the preparation of such financial statements for the
Borrower), but not audited, and, accompanied by a duly completed and
executed Officer's Certificate certifying Borrower's compliance with
the covenants in this Agreement as of the date of the delivery of such
financial statements;
(b) within one hundred twenty (120) days after the end of
each fiscal year of Parent, consolidated and consolidating statement of
income and cash flows of Parent (including Borrower and its
Subsidiaries) for such year, and a balance sheet of Parent (including
Borrower and its Subsidiaries) as at the end of such year, setting
forth in each case in comparative form corresponding figures from the
preceding annual audit, all in reasonable detail, including all
footnotes and disclosures, prepared in accordance with GAAP and
reasonably satisfactory in scope to the Lender and audited in
accordance with generally accepted auditing standards and certified to
Parent by independent public accountants of recognized standing
selected by Parent and reasonably acceptable to the
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Lender whose certificate shall be unqualified, which financial
statements shall be accompanied by a duly completed and executed
Officer's Certificate certifying Borrower's compliance with the
covenants in this Agreement as of the date of the delivery of such
financial statements;
(c) promptly upon receipt thereof, a copy of each other
report submitted to Borrower by its independent public accountants in
connection with any annual, interim or special audit made by them of
the books of Borrower (including, without limitation any management
report prepared in connection with such accountants' annual audit of
Borrower);
(d) promptly upon obtaining knowledge of an Event of
Default, an Officer's Certificate specifying the nature and period of
existence thereof and what action the Borrower proposes to take with
respect thereto;
(e) immediately upon becoming aware that the holder of
any evidence of indebtedness or any security of Borrower has given
notice or taken any other action with respect to a claimed default or
event of default with respect to such indebtedness or security or event
which, with the giving of notice or passage of time, or both, would
constitute a default with respect to such indebtedness or security, an
Officer's Certificate specifying the notice given or action taken by
such holder and the nature of the claimed default or event and what
action Borrower is taking or proposes to take with respect thereto,
provided that in each and every case noted above the aggregate
outstanding principal balance of the indebtedness or security involved
(or all such indebtedness or securities combined) must equal or exceed
$50,000;
(f) promptly after (i) the occurrence thereof, notice of
the institution by any Person of any action, suit or proceeding or any
governmental investigation or any arbitration, before any court or
arbitrator or any governmental or administrative body, agency, or
official, against Borrower, or any material property of Borrower, in
which the amount in controversy is stated to be more than $50,000
individually or in the aggregate or, where no amount in controversy is
stated, which might, if adversely determined, have a Material Adverse
Effect or (ii) the receipt of actual knowledge thereof, notice of the
threat of any such action, suit, proceeding, investigation or
arbitration, each such notice under this subsection to specify, if
known, the amount of damages being claimed or other relief being
sought, the nature of the claim, the Person instituting the action,
suit, proceeding, investigation or arbitration, and any other
significant features of the claim;
(g) promptly after learning thereof, notice of the
occurrence of any Reportable Event or any other act or condition
arising in connection with any Plan which Borrower believes might
constitute grounds for the termination thereof by the PBGC or for the
appointment by any appropriate United States district court of a
trustee to administer such Plan;
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(h) prompt notice in writing of the occurrence of any of
the following: (i) the Borrower begins or consents in any manner to any
proceeding or arrangement for its liquidation in whole or in part or to
any other proceeding or arrangement whereby any of its assets are
subject generally to the payments of its liabilities or by any
receiver, trustee, liquidator or the like is appointed for it or any
substantial part of its assets (including without limitation the filing
by the Borrower of a petition for appointment as a debtor-in-possession
under Title 11 of the U.S. Code); (ii) the Borrower fails to obtain the
dismissal or stay on appeal within thirty (30) calendar days of the
commencement of any proceeding arrangement referred to in (i) above;
(iii) the Borrower begins any other procedure for the relief of
financially distressed or insolvent debtors, or such procedure has been
commenced against it, whether voluntarily or involuntarily, and such
procedure has not been effectively terminated, dismissed or stayed
within thirty (30) calendar days after the commencement thereof; or
(iv) the Borrower begins any procedure for its dissolution, or a
procedure therefor has been commenced against it;
(i) not less than twenty (20) days after the end of each
month, (i) a written project progress report on the status of work
completed on each Export Contract and each Domestic Contract in form
and substance satisfactory to Lender, (ii) a written aging of
Borrower's accounts payables and accounts receivables in form and
substance satisfactory to Lender, (iii) a backlog report listing of all
unfilled orders, and (iv) a Export-Related Borrowing Base certificate
in form and substance satisfactory to Lender, which report shall be
duly completed and shall be certified by the president, chief financial
officer or controller of Borrower and shall be used by the Lender to
determine the Export-Related Borrowing Base then in effect, together
with such other monthly written inventory statements and accounts
receivable reconciliation statements covering the Collateral as the
Lender may request;
(j) all statements, reports and notices required to be
delivered by Borrower to Lender pursuant to (and within the time period
specified in) the Borrower Agreement, if in effect; and
(k) with reasonable promptness, such other information
relating to the operations, management, business, properties or
financial condition of Borrower or any Plan as the Lender may
reasonably request in writing from time to time.
SECTION 7.02. INSPECTION OF PROPERTY. Borrower will permit
any Person designated by the Lender to visit and inspect any of the properties
of Borrower, to examine the books and records of Borrower and such other
documents as the Lender may reasonably request and make copies thereof or
extracts therefrom, and to inspect and discuss the activities, affairs, finances
and accounts of Borrower with the officers of Borrower and with Borrower's
independent public accountants, all at such reasonable times and as often as the
Lender may reasonably request. Borrower shall cause its officers and employees
to give full cooperation and assistance in connection with any such visit and
inspection. Without limiting the generality of the foregoing, Borrower agrees
(at Borrower's expense) to permit Lender, or any Person designated by Lender to
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visit and inspect the Collateral and the books and records relating thereto at
least one time every six (6) months.
SECTION 7.03. BOOKS AND RECORDS. Borrower shall keep its
books, records and accounts in accordance with GAAP, except that in no event
shall the assets, liabilities, financial results or business operations of
M-Tron, Spinnaker or their respective subsidiaries be considered in connection
with the preparation of such books, records and accounts.
SECTION 7.04. MAINTENANCE OF INSURANCE. Borrower shall
maintain with financially sound and responsible insurers reasonably acceptable
to the Lender, insurance with respect to its properties and business against
such casualties and contingencies (including fire, worker's compensation and
public liability, larceny, embezzlement or other criminal misappropriation) and
in such amounts as is customary in the case of similarly situated corporations
engaged in the same or similar businesses.
SECTION 7.05. MAINTENANCE OF CORPORATE EXISTENCE, PROPERTIES,
LICENSES, ETC. Except to the extent otherwise permitted hereby, Borrower will do
or cause or cause to be done all things reasonably necessary to preserve, renew
and keep in full force and effect the corporate, partnership or other legal
existence of each Credit Party and the patents, trademarks, service marks, trade
names, service names, copyrights, licenses, leases, permits, franchises and
other rights, that continue to be useful in some material respect to the
business of each Credit Party, and at all times maintain, preserve and protect
all licenses, leases, permits, franchises and other rights that continue to be
useful in some material respect to the business of each Credit Party, and
preserve all the remainder of its property useful in the conduct of its business
and keep the same in good repair, working order and condition (ordinary wear and
tear excepted), and from time to time, make, or cause to be made, all needful
and proper repairs, renewals, replacements, betterments and improvements thereto
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
SECTION 7.06. PAYMENT OF TAXES AND CLAIMS. Borrower will pay
and discharge or cause to be paid and discharged all taxes, assessments and
governmental charges or levies imposed upon it or upon its respective income and
profits or upon any of its property, real, personal or mixed or upon any part
thereof, before the same shall become in default as well as all lawful claims
for labor, materials and supplies or otherwise, which, if unpaid, might become a
Lien or charge upon such properties or any part thereof, provided that Borrower
shall not be required to pay and discharge or cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as the validity thereof
shall be timely contested in good faith by appropriate proceedings and it shall
have set aside on its books adequate reserves with respect to any such tax,
assessment, charge, levy or claim, so contested in accordance with GAAP; and
provided, further, that payment with respect to any such tax, assessment,
charge, levy or claim shall be made before any property of Borrower shall not be
seized or sold in satisfaction thereof.
SECTION 7.07. TYPE OF BUSINESS. Borrower will remain
substantially in the same businesses in which Borrower is engaged as of the date
of this Agreement or in such other types of business which are reasonably
related or incidental thereto.
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SECTION 7.08. COMPLIANCE WITH LAWS, ETC. The Borrower shall
comply, and cause each of its Subsidiaries to comply with all Requirements of
Laws (including, without limitation, all Environmental Laws and all laws under
ERISA) and Contractual Obligations (including without limitation, all Export
Contracts and all Domestic Contracts) applicable to or binding on it where the
failure to comply with such Requirements of Law and Contractual Obligations
would reasonably be expected to have a Material Adverse Effect.
SECTION 7.09. FINANCIAL COVENANTS. Borrower shall comply
with the following financial covenants:
(a) Borrower's Leverage Ratio as of the end of each
fiscal month or year of Borrower shall not be more than 2.5 to 1.0.
(b) Borrower shall at all times maintain a Consolidated
Tangible Net Worth of at least $4,400,000 plus (1) fifty percent (50.0%) of
Consolidated Net Income, if any, for each fiscal quarter commencing with the
fiscal quarter ended March 31, 2002 and (2) fifty percent (50.0%) of the amount
by which the Borrower's "total stockholder's equity" is increased as a result of
any public or private offering of common stock of the Borrower after the Closing
Date.
(c) Borrower's Adjusted Leverage Ratio as of the end of
each fiscal month or year of Borrower shall not be more than 4.0 to 1.0.
SECTION 7.10. BANK ACCOUNTS. The Borrower and its
Subsidiaries shall not open or maintain any deposit account with any institution
other than the Lender.
ARTICLE VIII.
NEGATIVE COVENANTS
For so long as this Agreement is in effect, and unless the
Lender expressly consents in writing to the contrary, the Borrower covenants and
agrees to comply with the following covenants:
SECTION 8.01. LIENS. Borrower will not create, assume or
suffer to exist any Lien upon any of its property or assets, whether now owned
or hereafter acquired, except: (a) Liens for taxes (including ad valorem taxes),
assessments or other governmental charges or levies not yet due or which are
being actively contested in good faith by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of Borrower in
accordance with GAAP; (b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created in
the ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings, if adequate reserves with
respect thereto are maintained on the books of Borrower in accordance with GAAP;
(c) Liens incurred or deposits made in the ordinary course of business in
connection with workers'
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compensation, unemployment insurance and other types of social security benefits
or obligations or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations, provided that such Liens
were not incurred in connection with the borrowing of money or the obtaining of
advances; (d) zoning ordinances, easements, licenses, restrictions on the use of
real property and minor irregularities in title thereto which do not materially
impair the use of such property in the operation of the business of Borrower or
the value of such property; (e) inchoate Liens arising under ERISA to secure
current service pension liabilities as they are incurred under the provisions of
Plans from time to time in effect; (f) rights reserved to or vested in any
municipality or governmental, statutory or public authority to control or
regulate any property of Borrower, or to use such property in a manner which
does not materially impair the use of such property for the purposes for which
it is held by Borrower; (g) Liens created under the Security Documents or other
Liens in favor of Lender; (h) Liens outstanding as of the date hereof and which
secure the First Port City Bank Indebtedness so long as such Liens do not attach
to any of Borrower's Accounts Receivable or Inventory; and (i) Liens outstanding
on the Closing Date and which are set forth on the UCC search report of the
Credit Parties attached hereto as Exhibit C.
SECTION 8.02. MERGER, CONSOLIDATION, ACQUISITIONS, ETC.
Borrower shall not (a) merge, consolidate or exchange shares with any other
entity; (b) liquidate or dissolve itself; (c) sell, lease, transfer or otherwise
dispose of all or any substantial part of its properties, or any part of its
properties which are essential to the conduct of its business or operations; (d)
acquire all or substantially all of the assets or stock of any other Person; (e)
make any material change in its corporate structure or identity or change its
corporate name or state of incorporation; or (f) enter into any agreement to do
any of the foregoing; provided, however, Borrower may sell or transfer all or
part of the capital stock of M-Tron and Spinnaker, but only if (i) prior to such
sale, Borrower has delivered to Lender a duly executed certificate of the chief
financial officer of Borrower, in the form set forth as Exhibit D hereto,
certifying to Lender that no Material Adverse Effect, Default or Event of
Default would result from such sale or transfer, and (ii) the Borrower shall not
pay or reimburse any other party for any legal, accounting or other fees
incurred in connection with such sale or transfer.
SECTION 8.03. ERISA MATTERS. Borrower shall not incur or
suffer to exist any material accumulated funding deficiency within the meaning
of ERISA or incur any material liability to the PBGC established under ERISA (or
any successor thereto under ERISA) or otherwise take or fail to take any action
with respect to any Plan where such action or failure has had or could
reasonably be expected to result in a Material Adverse Effect.
SECTION 8.04. USE OF PROCEEDS. Borrower shall not use
the proceeds of any of the Loans for any purpose other than as and to the extent
permitted by Sections 2.01 hereof.
SECTION 8.05. TRANSFER OF CONTROLLING EQUITY INTEREST.
Borrower shall not make any change in its capital structure, including without
limitation the issuance or sale of any shares of Borrower's or its Subsidiaries'
stock, warrants or other securities convertible into stock or any revision of
the terms of the Credit Parties' outstanding stock. Borrower shall not make any
payment on account of the purchase, redemption, defeasance, sinking fund or
other retirement of its
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stock or warrants or any other payment or distribution made in respect thereof,
either directly or indirectly.
SECTION 8.06. DIVIDENDS. The Borrower shall not declare or
pay, or set apart any funds for the payment of, any dividends on any shares of
stock of any class of the Borrower, or apply any of its funds, property or
assets to, or set apart any funds, property or assets for, the purchase,
redemption or other requirement of, or make any other distribution, by reduction
of capital or otherwise, in respect of any class of shares of the Borrower's
stock, or with respect to any other funds or assets; provided, however, that
notwithstanding the foregoing, and provided further that no Default or Event of
Default shall have occurred and be continuing at the time of such or shall
result from such action, (i) Borrower may declare and pay on an annual basis a
cash dividend to the Parent equal to fifty percent (50.0%) of the Consolidated
Net Income of the Borrower and its Subsidiaries for the prior fiscal year, (ii)
the Borrower may declare and pay dividends payable in stock of the Borrower,
M-Tron or Spinnaker, (iii) upon each receipt by the Borrower of any dividend in
respect of its shares of stock in M-Tron or Spinnaker, the Borrower may declare
and pay a dividend on the shares of stock in the Borrower in form and amount
identical to such dividend on the shares of stock in M-Tron or Spinnaker, and
(iv) Borrower may declare and pay dividends of proceeds realized by the Borrower
upon the sale or other disposition of its shares of stock in M-Tron or
Spinnaker.
SECTION 8.07. ADVANCES TO STOCKHOLDERS AND AFFILIATES.
Neither the Borrower nor any Subsidiary of the Borrower (other than M-Tron,
Spinnaker or their respective subsidiaries) shall make any advances or payments
of any kind to any stockholder or affiliated or related entity (including but
not limited to, partnerships, joint ventures, joint stock companies,
corporations, parent companies or Subsidiaries); provided, however, that
notwithstanding the foregoing, and provided further that no Default or Event of
Default shall have occurred and be continuing at the time of such action or
shall result from such action, (i) until such time, if any, that the Borrower
fails to maintain a positive Consolidated Net Income during any fiscal quarter,
the Borrower may pay an annual management fee in an amount not to exceed
$250,000 to the Parent in quarterly payments of $62,500.00 each, (ii) the
Borrower may reimburse to the Parent the Borrower's share (but not the shares of
M-Tron, Spinnaker or their respective subsidiaries) of audit expenses,
directors' and officers' insurance and taxes actually incurred or paid by the
Parent on behalf of the Borrower, provided that prior to making such
reimbursement payment the Borrower delivers to Lender a certificate stating the
amount and purpose of such reimbursement payment and certifying that such
payment is an actual and direct operating expense of Borrower and is not for the
benefit of any other Person, and (iii) Borrower may make intercompany loans to
▇▇▇▇▇ Amav or ▇▇▇▇▇ International pursuant to the terms and conditions of
Section 8.08.
SECTION 8.08. INDEBTEDNESS. Neither the Borrower nor any
Subsidiary of the Borrower (other than M-Tron, Spinnaker and their respective
subsidiaries) shall create, incur, assume, guarantee or suffer to exist any
Indebtedness other than (i) Indebtedness of Borrower hereunder, (ii)
Indebtedness of Borrower consisting of obligations to trade creditors incurred
in the ordinary course of business that are unsecured and not overdue by more
than 6 months unless being contested in good faith, (iii) First Port City Bank
Indebtedness, (iv) all rental obligations under leases that are not required to
be capitalized under GAAP, and (v) Indebtedness consisting of
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intercompany loans and advances made by Borrower to either ▇▇▇▇▇ Amav or ▇▇▇▇▇
International; provided, however, that with respect to such intercompany loans
and advances: (A) Borrower shall record all intercompany transactions on its
books and records in a manner reasonably satisfactory to Lender; (B) at the time
any such intercompany loan or advance is made by Borrower to ▇▇▇▇▇ Amav or ▇▇▇▇▇
International and after giving effect thereto, each of the Borrower, ▇▇▇▇▇ Amav
and ▇▇▇▇▇ International shall be solvent; (C) no Default or Event of Default
would occur and be continuing after giving effect to any such proposed
intercompany loan; (D) the aggregate principal amount of all intercompany loans
made by Borrower to both ▇▇▇▇▇ Amav and ▇▇▇▇▇ International shall not exceed
$1,850,000 at any time and (E) the aggregate principal amount of all additional
intercompany loans made by Borrower to both ▇▇▇▇▇ Amav and ▇▇▇▇▇ International
after the Closing Date shall not exceed $250,000.
SECTION 8.09. CAPITAL EXPENDITURES. Borrower shall not make
Capital Expenditures in excess of $250,000 in any calendar year; provided,
however, that for purposes of this Section 8.09, Capital Expenditures shall not
include expenditures relating to the purchase of patterns, computers and machine
tools acquired by Borrower in the ordinary course of its business.
SECTION 8.10. AFFILIATE TRANSACTIONS. No Credit Party shall
enter into or be a party to any transaction with either the Borrower or any of
its Subsidiaries or any Affiliate thereof, except in the ordinary course of and
pursuant to the reasonable requirements of such Credit Party's business and upon
fair and reasonable terms that are no less favorable to such Credit Party than
would be obtained in a comparable arm's length transaction with a Person not an
Affiliate of such Credit Party.
SECTION 8.11. CORPORATE FORMALITIES. The Borrower shall
maintain all corporate formalities and fulfill all other obligations to minimize
the risk that Borrower could be held liable for the debts of any of Spinnaker,
M-Tron or their respective subsidiaries.
SECTION 8.12. INVESTMENTS; LOANS AND ADVANCES. Except as
otherwise expressly permitted by this Agreement, including without limitation
the intercompany loans from Borrower to ▇▇▇▇▇ Amav or ▇▇▇▇▇ International
permitted pursuant to the terms and conditions of Section 8.08, no Credit Party
shall make or permit to exist any investment in, or make, accrue or permit to
exist loans or advances of money to, any Person, through the direct or indirect
lending of money, holding of securities or otherwise, except that: (a) Borrower
may continue to hold its investments in M-Tron and Spinnaker as of the Closing
Date and (b) each Credit Party may maintain its existing investments in its
Subsidiaries as of the Closing Date.
SECTION 8.13. GUARANTEED INDEBTEDNESS. No Credit Party shall
create, incur, assume or permit to exist any Guaranty of any Indebtedness except
by endorsement of instruments or items of payment for deposit to the general
account of any Credit Party.
SECTION 8.14. NO SPECULATIVE TRANSACTIONS. No Credit Party
shall engage in any transaction involving commodity options, futures contracts,
interest swaps, caps, collars or similar transactions.
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SECTION 8.15. NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. No
Credit Party shall directly or indirectly enter into or become bound by any
agreement, instrument, indenture or other obligation (other than this Agreement
and the other Loan Documents) that could directly or indirectly restrict,
prohibit or require the consent of any Person with respect to (a) the creation
of liens on the assets of any Credit Party, (b) the payment of dividends or
distributions by any Credit Party, (c) the making or repayment of intercompany
loans by any Subsidiary to the Borrower or (d) the Subsidiary Guaranty.
SECTION 8.16. SUBSIDIARIES. Borrower shall not create any
Subsidiary without the written consent of the Lender. Borrower shall cause ▇▇▇▇▇
Amav to cease all production and operations on or before July 30, 2002, and
Borrower shall cause ▇▇▇▇▇ Amav to be entirely and legally dissolved in
accordance with the laws of its state of organization within a reasonably
expeditious time period thereafter.
ARTICLE IX.
EVENTS OF DEFAULT
SECTION 9.01. EVENTS OF DEFAULT. Each of the following
events shall constitute an Event of Default under this Agreement:
(i) failure by Borrower to pay any of the Obligations
(whether principal, interest, fees or other amounts) when and as the
same become due and payable (whether at maturity, on demand, or
otherwise) and, in the case of any failure to pay any interest or fees
due hereunder (other than the fees specified in Section 4.02 hereof),
the continuation of such failure for five (5) days after the later to
occur of (Y) the date on which the Borrower received written or
telephonic notice of such interest or fees and (Z) the date such
interest or fees are due; or
(ii) Any Credit Party or any Guarantor shall (1) apply for
or consent to the appointment of or the taking of possession by a
receiver, custodian, trustee or liquidator of Borrower or of all or a
substantial part of the property of such Credit Party or Guarantor, (2)
admit in writing the inability of such Credit Party or Guarantor, or be
generally unable, to pay its debts as such debts become due, (3) make a
general assignment for the benefit of its creditors, (4) commence a
voluntary case under the Bankruptcy Code (as now or hereafter in
effect), (5) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, (6) fail to controvert in a timely
or appropriate manner, or acquiesce in writing to, any petition filed
against such Credit Party or Guarantor in an involuntary case under the
Bankruptcy Code, or (7) take any action for the purpose of effecting
any of the foregoing; or
(iii) a proceeding or case shall be commenced, without the
application of any Credit Party or any Guarantor, in any court of
competent jurisdiction, seeking
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(1) the liquidation, reorganization, dissolution, winding-up or
composition or readjustment of debts of such Credit Party or Guarantor,
(2) the appointment of a trustee, receiver, custodian, liquidator or
the like of such Credit Party or Guarantor or of all or any substantial
part of its assets, or (3) similar relief in respect of such Credit
Party or Guarantor under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition and adjustment of debts, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue in effect, for a period of sixty (60) days from
commencement of such proceeding or case or the date of such order,
judgment or decree, or any order for relief against such Credit Party
or Guarantor shall be entered in an involuntary case or proceeding
under the Bankruptcy Code; or
(iv) any representation or warranty made by any Credit
Party herein in any of the other Credit Documents shall be false or
misleading in any material respect on the date as of which made (or
deemed made); or
(v) any default shall occur in the performance or
observance of any term, condition or provision contained in Section
3.04, 3.05, 4.05, 7.09 or Article VIII of this Agreement or in Section
2.01, 2.07, 2.08, 2.11, 2.16, 2.18 or 2.19 of the Borrower Agreement,
if in effect; or
(vi) any default shall occur in the performance or
observance by Borrower of any term, condition or provision contained in
this Agreement or the Borrower Agreement and not referred to in clauses
(i) through (v) above, which default shall continue for thirty (30)
days after the earlier of the date Borrower acquires knowledge thereof
or the Lender gives Borrower written notice thereof; or
(vii) any material provision of this Agreement or any other
Credit Document shall at any time for any reason cease to be valid and
binding in accordance with its terms on any Credit Party that is a
party thereto, or the validity, enforceability, or priority thereof
shall be contested by any Credit Party, or any Credit Party shall
terminate or repudiate (or attempt to terminate or repudiate) any
Credit Document executed by it; or
(viii) the occurrence of an Event of Default under (and
after giving effect to any notice and/or cure rights expressly provided
in) any of the other Credit Documents; or
(ix) default in the payment of principal of or interest on
any other obligation of any Credit Party for money borrowed, including
without limitation under any hedging agreement (or any obligation under
conditional sale or other title retention agreement or any obligation
secured by purchase money mortgage or deed to secure debt or any
obligation under notes payable or drafts accepted representing
extensions of credit or on any Capitalized Lease Obligation), in an
aggregate
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principal amount of not less than $250,000, or default (after the
application of any applicable grace period) in the performance of any
other agreement, term or condition contained in any indenture or
agreement under which any such obligation is created, guaranteed or
secured, if the effect of such default is to cause such obligation to
become due prior to its stated maturity; or
(x) Borrower fails to pay when due any amount payable to
the Lender under any loan from Lender to Borrower which is not
guaranteed by Eximbank (other than the Loans) or Borrower defaults in
the payment of principal of or interest on any other obligation for
money borrowed or equipment leased from the Lender or any Affiliate of
the Lender (other than an Obligation), including without limitation any
hedging agreement entered into with Lender or any Affiliate of Lender,
or default in the performance of any other agreement, term, or
condition contained in any agreement under which any such obligation is
created, guaranteed or secured if the effect of such default is to
entitle the Lender to then cause such obligation to become due prior to
its stated maturity (the parties intend that a default may constitute
an Event of Default under this paragraph (x) even if such default would
not constitute an Event of Default under paragraph (ix) immediately
above); or
(xi) a judgment or order for the payment of money in
excess of $250,000 or otherwise having a Material Adverse Effect (other
than a judgment or order fully-covered by an insurance policy issued by
an insurer meeting the requirements of Section 7.04 hereof who has
confirmed in writing coverage of such judgment or order) shall be
rendered against Borrower and such judgment or order shall not be
released, vacated, stayed or fully bonded-off within thirty (30) days
after the date of its issue or entry; or
(xii) any material change in the executive management of
Borrower, including without limitation the resignation, termination or
retirement of any senior personnel deemed material by the Lender, or
any material change in the control of Borrower; or
(xiii) a Reportable Event shall occur which the Lender
determines in good faith would reasonably be expected to result in
liability to the Borrower and its Subsidiaries in an aggregate amount
exceeding $250,000 or which the Lender determines in good faith
constitutes grounds for the termination by the PBGC of any Plan or for
the appointment by the appropriate United States district court of a
trustee for any Plan, or if any Plan shall be so terminated or any such
trustee shall be so requested or appointed, or if the Borrower is in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan resulting from Borrower complete or
partial withdrawal from such Plan; or
(xiv) the occurrence of a Default under (and as such term
is defined in) the First Port City Bank Notes; or
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(xv) any Guarantor shall terminate or revoke (or attempt
to terminate or revoke) its obligations under the Parent Guaranty or
Subsidiary Guaranty, as applicable, or the Parent Guaranty or
Subsidiary Guaranty shall no longer be in effect for any reason, or
after all of the conditions set forth in Section 5.02 hereof have been
satisfied, Eximbank shall terminate or revoke (or attempt to terminate
or revoke) the Eximbank Guarantee or the Eximbank Guarantee shall no
longer be in effect for any other reason.
SECTION 9.02. REMEDIES.
(a) Upon the occurrence of an Event of Default, the
Lender may, in its discretion, exercise one or more of the following remedies:
(i) by written notice to Borrower, terminate any and all
remaining commitments the Lender may have hereunder to make any further
Loans to Borrower or issue any further Letters of Credit for the
account of Borrower, whereupon any such commitment shall terminate
immediately and any remaining accrued but unpaid commitment fees shall
become forthwith due and payable by Borrower to Lender without any
other notice or demand of any kind; and
(ii) by written notice to the Borrower, declare any or all
of the unpaid principal of and any accrued interest on the Note and any
or all other Obligations, to be, and whereupon the same shall become,
immediately due and payable, and the same shall thereupon become due
and payable without further demand, presentment, protest or notice of
any kind, all of which are hereby expressly waived by the Borrower; and
(iii) by written notice to Borrower, require that Borrower
immediately pay to the Lender an amount of immediately available funds
equal to the aggregate maximum aggregate amount then available for
drawing under any or all Letters of Credit which may be outstanding at
such time (and Borrower shall be deemed to have requested that Lender
make, and Lender in its discretion may make, Loans in an amount
sufficient to make such payment on Borrower's behalf, and any such Loan
made by the Lender with respect to any particular outstanding Letter of
Credit shall be deemed to be a Non-Guaranteed Loan if such Letter of
Credit is a Non-Guaranteed Letter of Credit, and an Exim-Guaranteed
Loan if such Letter of Credit is an Exim-Guaranteed Letter of Credit)
and the funds so paid by or on behalf of Borrower shall be deposited by
the Lender in a trust or collateral account with Lender for which the
Lender shall have the sole power of access, investment and withdrawal,
and such funds shall be applied by the Lender at such times and from
time to time to satisfy the Borrower's reimbursement obligations with
respect to such Letters of Credit and the Borrower hereby pledges,
assigns and grants to the Lender a first-priority security interest in
and Lien on such account and any and all funds therein and the proceeds
thereof as collateral for the Obligations (and upon the termination of
this Agreement, the expiration or release of all Letters of Credit, and
the payment in full of all Obligations, any remaining surplus of such
funds shall be paid by the Lender to the Borrower, but the Lender shall
have no obligation or responsibility to invest any such funds or to pay
interest thereon
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and the Lender shall have no liability to Borrower for any investment
loss resulting from any investment of such funds by the Lender in its
discretion); and
(iv) exercise all or any of its rights and remedies as it
may otherwise have under any of the other Credit Documents or any
applicable law;
provided, however, that upon the occurrence of an Event of Default specified in
Section 9.01(ii) or Section 9.01(iii) above, the result which would occur upon
the giving of notice pursuant to Section 9.02(i), (ii) and (iii) shall occur
automatically without the giving of any such notice; and provided, further, that
upon the occurrence of an Event of Default, Eximbank shall have the right to (x)
direct that the Lender declare the principal of and accrued interest on the
Exim-Guaranteed Obligations to be immediately due and payable and (y) request
that the Lender accelerate the maturities of any of Borrower's other Obligations
to the full extent of the Lender's right thereunder.
(b) No failure or delay on the part of the Lender to
exercise any right or remedy hereunder or under the Credit Documents
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy hereunder preclude any further exercise
thereof or the exercise of any further right or remedy hereunder or
under the Credit Documents. No exercise by the Lender of any remedy
under the other Credit Documents shall operate as a limitation on any
rights or remedies of the Lender under this Agreement, except to the
extent of moneys actually received by the Lender under the other Credit
Documents.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other
communications hereunder or under any of the other Credit Documents shall be in
electronic, telephonic (confirmed in writing) or written (including telecopier
or similar writing) form and shall be given to the party to whom sent, addressed
to it at its address set forth beneath its signature below. Each such notice,
request or communication shall be effective (i) if given by telecopy, when such
communication is transmitted to the telecopy number herein specified (any such
notice, request or communication sent by telecopy shall be confirmed promptly
thereafter by personal delivery or mailing in accordance with the other
provisions of this Section, but such confirmation requirement shall not affect
the date on which such telecopy shall be deemed to be effective for purposes
hereof), (ii) if given by mail, three (3) Business Days after such communication
is deposited in the United States mail with first class postage prepaid, return
receipt requested, addressed as aforesaid, (iii) if sent for overnight delivery
by Federal Express or other reputable national overnight delivery service, one
(1) Business Day after such communication is entrusted to such service for
overnight delivery and with recipient signature required, addressed as
aforesaid, or (iv) if given by any other means, when delivered at the address of
the party to whom such notice is being delivered.
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SECTION 10.02. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Lender in exercising any right or remedy hereunder and
no course of dealing between Borrower and the Lender shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy hereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Lender would otherwise have. No notice to or demand on Borrower not required
hereunder or under any other Credit Document in any case shall entitle Borrower
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Lender to any other or further action
in any circumstances without notice or demand.
SECTION 10.03. PAYMENT OF EXPENSES; INDEMNITY.
(a) Borrower agrees to: (i) pay all reasonable
out-of-pocket costs and expenses of the Lender incurred in connection
with its negotiation, structuring, documenting, closing, administration
or modification of, or in connection with the preservation of Lender's
rights under, enforcement of, or any refinancing, renegotiation,
restructuring or termination of, this Agreement or any other Credit
Document or any instruments referred to therein or any amendment,
waiver or consent relating thereto, including, without limitation, the
reasonable fees and disbursements of counsel for the Lender actually
incurred, and (ii) pay and hold the Lender harmless from and against
any and all present and future stamp, documentary, property, ad valorem
or other similar non-income taxes with respect to this Agreement, the
Note or any other Credit Documents, any Collateral described therein,
or any payments due thereunder, and save the Lender harmless from and
against any and all liabilities with respect to or resulting from any
delay or omission to pay such taxes.
(b) In addition to the other amounts payable by the
Borrower under this Agreement (including, without limitation,
subsection (a) above), the Borrower hereby agrees to pay and indemnify
the Lender from and against all claims, liabilities, losses, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) which the Lender may (other than as a result of the gross
negligence or willful misconduct of such Person) incur or be subjected
to as a consequence, directly or indirectly, of (i) any actual or
proposed use of any of the Loans or Letters of Credit or Borrower's
entering into or performing under any Credit Document, (ii) any breach
by Borrower of any representation, warranty, covenant or condition in,
or the occurrence of any other default under, this Agreement or any of
the other Credit Documents, including without limitation all reasonable
attorney's fees or expenses resulting from the settlement or defense of
any claims or liabilities arising as a result of any such breach or
default, (iii) allegations of participation or interference by the
Lender in the management, contractual relations or other affairs of
Borrower, (iv) the Lender's holding any Lien on or administering any of
the Collateral, (v) allegations that the Lender has joint liability
with Borrower to any third party for any reason, or (vi) any suit,
investigation or proceeding as to which the Lender is involved as a
consequence, directly or indirectly, of its execution of this Agreement
or any of the other Credit Documents, the making of any Loan, the
issuance of any Letter of Credit, the holding of any Lien on any of the
Collateral or any other event or transaction contemplated by this
Agreement or any of the Credit Documents.
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SECTION 10.04. FURTHER ASSURANCES. Upon notice from the
Lender, Borrower will, at any and all times, execute and deliver all such
further documents, assignments, recordings, filings, transfers and assurances as
may be reasonably necessary for the better assuring and confirming of all of the
rights, revenues and other funds pledged or assigned to or mortgaged for the
payment of its obligations hereunder, or intended so to be. If Borrower fails to
do so after demand by Lender, Borrower hereby authorizes and empowers the Lender
to file any financing statement or any amendments thereto with respect to any of
the Collateral and the Lender's Liens therein or in accordance with the Uniform
Commercial Code as in effect in the State of Georgia or any other applicable
jurisdiction without the signature of Borrower.
SECTION 10.05. SUCCESSORS AND ASSIGNS; SALE OF INTEREST. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties hereto;
provided that Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Lender. Lender
may sell, assign or grant participations in all or any part of Lender's rights,
titles or interests hereunder and under the other Credit Documents without the
prior written consent of the Borrower (hereinafter, a "Sale of Interest"), which
Sale of Interest shall be at Borrower's expense if such Sale of Interest is made
to Eximbank or if such Sale of Interest occurs after the occurrence of an Event
of Default. A Sale of Interest shall be at Lender's expense at all other times.
SECTION 10.06. AMENDMENTS. No amendment or waiver of any
provision of this Agreement or the other Credit Documents, nor consent to any
departure by any party hereto, or any other Credit Party therefrom, shall in any
event be enforceable against any party to this Agreement unless the same shall
be in writing and signed by such party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 10.07. TIME OF ESSENCE. Time is of the essence of this
Agreement and each of the other Credit Documents.
SECTION 10.08. GOVERNING LAW. This Agreement is intended to be
performed in the State of Georgia, and shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Georgia without regard to principles of conflicts of laws thereof.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 10.10. EFFECTIVENESS; SURVIVAL
(a) This Agreement shall become effective on the date on
which all of the parties hereto shall have signed a copy hereof
(whether the same or different copies) and the Lender shall have
received the same.
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(b) All representations and warranties made herein, in
the certificates, reports, notices, and other documents delivered
pursuant to this Agreement shall survive the execution and delivery of
this Agreement, the other Credit Documents, and such other agreements
and documents, the making of the Loans hereunder, the issuance of the
Letters of Credit and the execution and delivery of the Note.
SECTION 10.11. SEVERABILITY. In case any provision in or
Obligation under this Agreement or the other Credit Documents shall be invalid,
illegal or unenforceable, in whole or in part, in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 10.12. INDEPENDENCE OF COVENANTS. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation of, another
covenant, shall not avoid the occurrence of a Default or an Event of Default if
such action is taken or condition exists.
SECTION 10.13. HEADINGS DESCRIPTIVE. The headings of the
several sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
SECTION 10.14. TERMINATION OF AGREEMENT. At such time as (i)
Lender is no longer obligated under this Agreement (whether by the terms hereof
or as a result of a release of such obligations by the Borrower) to make any
further Loans or issue any Letters of Credit, (ii) no Letters of Credit are
outstanding, or if any Letters of Credit are outstanding, the Borrower shall
have delivered cash or cash equivalents acceptable to Lender in an amount equal
to 102% of the maximum amount then available to be drawn under each applicable
Letter of Credit outstanding, which funds are to be deposited in a separate,
blocked account (the "Cash Collateral Account") maintained by Borrower with the
Lender and are to be held in the Cash Collateral Account for the benefit of the
Lender as cash collateral for the Borrower's Reimbursement Obligations with
respect to such outstanding Letters of Credit, and the Borrower shall have
executed such additional documentation to evidence such cash collateral
arrangement as Lender shall reasonably request, and (iii) all Obligations have
been paid and satisfied in full, this Agreement shall terminate; provided,
however, that any and all indemnity obligations of Borrower to the Lender
arising hereunder or under any of the other Credit Documents shall survive the
termination of this Agreement. Upon the termination of this Agreement as set
forth in this Section 10.14, the Lender shall deliver to Borrower termination
statements and other documents necessary or appropriate to evidence the
termination of the Lender's liens in the Collateral.
SECTION 10.15. ENTIRE AGREEMENT. This Agreement and the other
Credit Documents constitute the entire agreement between the Borrower and the
Lender with respect to the Loans, the other Obligations and the Collateral and
supersede all other prior agreements, representations and understandings related
to such subject matters, including without limitation the
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Original Credit Agreement, but excluding each Application and Agreement for
Irrevocable Standby Letter of Credit previously executed with respect to each
Existing Letter of Credit. If the Borrower desires to terminate this Agreement
before all of the conditions specified in Section 5.01 hereof have been
satisfied, all funds pledged by Borrower to Lender as cash collateral for the
Existing Letters of Credit shall continue to be retained by the Lender as cash
collateral for the Borrower's Reimbursement Obligations with respect to the
Existing Letters of Credit, and the Borrower shall execute such additional
documentation to evidence such cash collateral arrangement as Lender shall
reasonably request.
SECTION 10.16. RESERVED.
SECTION 10.17. M-TRON AND SPINNAKER. At no time shall (x) the
value of capital stock of M-Tron or Spinnaker held by Borrower, if any, or (y)
the assets, liabilities, financial results or business operations of M-Tron,
Spinnaker or their respective subsidiaries be considered in connection with
compliance with any conditions to borrowing, representations and warranties,
covenants or default provisions of the Borrower under the Credit Documents.
SECTION 10.18. JURY TRIAL WAIVER; CONSENT TO FORUM.
(a) THE BORROWER AND THE LENDER IRREVOCABLY WAIVE ALL
RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY
MATTER ARISING HEREUNDER OR THEREUNDER TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW.
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(b) THE BORROWER AND THE LENDER ALSO AGREE THAT ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS OR TO ENFORCE ANY JUDGMENT OBTAINED AGAINST THE BORROWER IN CONNECTION
WITH THIS AGREEMENT OR SUCH OTHER CREDIT DOCUMENT, MAY BE BROUGHT BY THE LENDER
OR BORROWER IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF THE STATE IN
WHICH LENDER'S ADDRESS SHOWN BELOW IS LOCATED, OR IN ANY OTHER COURT TO THE
JURISDICTION OF WHICH SUCH BORROWER OR ANY OF ITS PROPERTY IS OR MAY BE SUBJECT.
EACH OF THE BORROWER AND THE LENDER IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE AFORESAID STATE AND FEDERAL COURTS, AND IRREVOCABLY WAIVES ANY PRESENT OR
FUTURE OBJECTION TO VENUE IN ANY SUCH COURT, AND ANY PRESENT OR FUTURE CLAIM
THAT ANY SUCH COURT IS AN INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered on their behalf and the Borrower has
caused its corporate seal to be hereunto affixed, all as of the date first above
stated.
BORROWER:
(CORPORATE SEAL) ▇▇▇▇▇ SYSTEMS, INC.
Attest:
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER:
SUNTRUST BANK
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address for Notices:
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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The following Persons acknowledge the terms and conditions of this
Agreement in their capacity as Guarantors and not as Borrowers.
▇▇▇▇▇ INTERNATIONAL HOLDING CORPORATION
By:_________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇▇▇ AMAV, LLC
By:_________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
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EXHIBIT A
See the attached Borrower Agreement
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EXHIBIT B
See the attached Export-Related Borrowing Base Certificate
EXHIBIT C
UCC Lien search reports
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EXHIBIT D
CERTIFICATE REGARDING SALE
The undersigned officer of ▇▇▇▇▇ SYSTEMS, INC. (the
"Corporation"), a South Dakota corporation, hereby certifies and covenants on
behalf of the Corporation as follows:
1. He is the Chief Financial Officer of the Corporation,
and in such capacity is authorized to deliver this Certificate on behalf of the
Corporation.
2. The Corporation intends to sell all or a portion of
the capital stock of M-Tron and/or Spinnaker held by the Corporation to one or
more purchasers pursuant to the terms of the stock purchase agreement dated as
of ________ ___, 200__ (the "Sale Transaction").
3. No Material Adverse Effect and no Default or Event of
Default will result from the Sale Transaction.
4. This Certificate shall be deemed to be a
representation and warranty of the Corporation under the Credit Agreement.
Capitalized terms used but not defined in this Certificate shall have the
meanings ascribed thereto in that certain Amended and Restated Credit Agreement,
dated as of June 10, 2002, between the Corporation and SunTrust Bank, as the
same may be amended or modified from time to time (the "Credit Agreement").
IN WITNESS WHEREOF, the undersigned has hereunto set his
signature as of the ____ day of ______, 200__.
____________________________
Chief Financial Officer of
▇▇▇▇▇ Systems, Inc.
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