CREDIT AGREEMENT
Dated as of July 23, 1997
By and Among
NEW M-TECH CORPORATION
and NEWTECH (HONG KONG) LIMITED,
as the Borrowers
and
BANK LEUMI LE-ISRAEL B.M., COMERICA BANK and
NATIONAL BANK OF CANADA,
as the Banks
and
BANK LEUMI LE-ISRAEL B.M.,
as the Agent
TABLE OF CONTENTS
TABLE OF CONTENTS..................................................................i-v
/section/1. DEFINITIONS AND INTERPRETATION....................................................1
/section/ 1.01 Definitions........................................................1
(a) Capitalized Terms..................................................1
(b) Other Definitional and Interpretive Provisions....................12
/section/ 1.02 Accounting Matters..................................................13
/section/ 1.03 Representations and Warranties......................................13
/section/ 1.04 Captions. ........................................................13
/section/ 1.05 Neutral Interpretation..............................................13
/section/2 COMMITMENTS; LOANS, LETTERS OF CREDIT AND
ACCEPTANCES.........................................................13
/section/ 2.01 Overall Commitments.................................................13
/section/ 2.02 Loans...............................................................14
/section/ 2.03 Manner of Borrowings and Fundings...................................14
(a) Direct and Convesion Borrowings...................................14
(b) Refinancing Borrowings............................................15
(c) Agent May Assume Funding. .......................................15
(d) Banks' Obligations Independent....................................16
/section/ 2.04 Interest and Servicing Fees on Loans................................16
(a) Interest Rates....................................................16
(b) Loan Servicing Fees...............................................16
(c) Post-Default Interest.............................................16
(d) Time of Payment. ................................................16
(e) Maximum Interest Rate.............................................16
(f) Computation of Interest...........................................17
(g) Selection of Interest Periods.....................................17
/section/ 2.05 Mandatory Repayment of Loans........................................17
(a) At Maturity.......................................................17
i
(b) Prior to Maturity.................................................17
/section/ 2.06 Optional Prepayments of Loans.......................................17
/section/ 2.07 Evidence of Indebtedne/section/.....................................18
/section/ 2.08 Letters of Credit...................................................18
(a) Trade Letters of Credit...........................................18
(b) Standby Letters of Credit.........................................18
/section/ 2.09 Letter of Credit Requests. ........................................18
/section/ 2.10 Drawings Under Letters of Credit; Payments Under Acceptances........18
/section/ 2.11 Letter of Credit and Acceptance Fees and Commissions and
Servicing Fees....................................................19
(a) Trade Letters of Credit...........................................19
(b) Standby Letters of Credit.........................................20
(c) Acceptances. ....................................................20
(d) Administrative Fees...............................................21
(e) Source of Fees....................................................21
/section/ 2.12 General Provisions as to Letters of Credit..........................21
(a) Limitation on Agent's Duty to Issue...............................21
(b) Borrowers' Obligations Absolute...................................21
(c) Limitation of Liability With Respect To Letters of Credit.........22
(d) Exculpation.......................................................23
/section/ 2.13 Letter of Credit and Acceptance Participations......................23
/section/ 2.14 Manner and Allocation of Payments...................................25
/section/ 2.15 Payment by Agent to Banks, Etc......................................25
/section/ 2.16 Withholding Taxes...................................................26
/section/ 2.17 Weekly Reconciliation...............................................26
/section/ 2.18 Concerning Joint and Several Liability of the Borrowers.............27
/section/3 CONDITIONS TO EXTENSIONS OF CREDIT................................................28
/section/ 3.01 Conditions to Initial Extension of Credit...........................28
/section/ 3.02 Conditions to Each Extension of Credit. ...........................30
/section/4 CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWERS...............................31
ii
/section/ 4.01 Organization; Power; Qualification:...............................31
/section/ 4.02 Authorization and Compliance of Agreement, Notes and Extensions
of Credit.........................................................32
/section/ 4.03 Litigation........................................................32
/section/ 4.04 Burdensome Provisions.............................................32
/section/ 4.05 No Adverse Change or Event........................................33
/section/ 4.06 No Adverse Fact...................................................33
/section/ 4.07 Title to Properties...............................................33
/section/ 4.08 Environmental Matters.............................................33
/section/ 4.09 Debt..............................................................33
/section/ 4.10 Patents, Trademarks, Etc..........................................33
/section/ 4.11 Solvency..........................................................34
/section/ 4.12 Security Interests................................................34
/section/ 4.13 Certain Contracts.................................................34
/section/5 COVENANTS.........................................................................34
A. Affirmative Covenants. ............................................................34
/section/ 5.01 Preservation of Existence and Properties, Scope of Business,
Compliance with Law, Payment of Taxes and Claims....................34
/section/ 5.02 Insurance...........................................................35
/section/ 5.03 Use of Proceeds.....................................................35
B. Negative Covenants. ...............................................................35
/section/ 5.04 Guaranties..........................................................35
/section/ 5.05 Liens...............................................................35
/section/ 5.06 Merger and Consolidation............................................35
/section/ 5.07 Transactions with Affiliates. .....................................35
/section/ 5.08 Taxes of Other Persons..............................................35
/section/ 5.09 Limitation on Restrictive Covenants.................................36
/section/ 5.10 Change of Control or Management.....................................36
/section/ 5.11 Debt................................................................36
/section/ 5.12 Minimum Consolidated Tangible Net Worth.............................36
iii
/section/ 5.13 Environmental Matters...............................................36
/section/ 5.14 Limitation on Investments...........................................36
/section/ 5.15 Remittance of Overseas Receipts.....................................36
/section/ 5.16 Fictitious Names....................................................37
/section/6 INFORMATION.......................................................................37
/section/ 6.01 Financial Statements and Information to be Furnished. ...........37
(a) Monthly Financial Statements; Officer's Certificate...............37
(b) Year-End Statement; Accountants' and Officer's Certificates.......37
(c) Additional Materials..............................................38
(d) Notice of Defaults, Litigation and other Matters..................39
/section/ 6.02 Accuracy of Financial Statements and Information..................39
(a) Historical Financial Statements...................................39
(b) Future Financial Statements.......................................39
(c) Historical Information............................................40
(d) Future Information................................................40
(e) Change in Fiscal Year.............................................40
/section/ 6.03 Additional Covenants Relating to Disclosure.......................40
(a) Accounting Methods and Financial Records..........................40
(b) Visits and Inspections............................................41
/section/ 7 DEFAULT..........................................................................41
/section/ 7.01 Events of Default.................................................41
/section/ 7.02 Remedies Upon Event of Default....................................44
/section/8 CHANGES IN CIRCUMSTANCES..........................................................44
/section/ 8.01 Mandatory Suspension and Conversion of Loans......................44
/section/ 8.02 Regulatory Changes................................................45
/section/ 8.03 Change of Lending Office..........................................45
/section/ 8.04 Funding Losses....................................................46
/section/ 8.05 Determinations. .................................................46
/section/9 THE AGENT.........................................................................46
/section/ 9.01 Appointment and Authorization.....................................46
iv
/section/ 9.02 Agent and Affiliates..............................................47
/section/ 9.03 Action by Agent...................................................47
/section/ 9.04 Consultation with Experts. ......................................47
/section/ 9.05 Liability of Agent................................................47
/section/ 9.06 Indemnification...................................................48
/section/ 9.07 Credit Decision...................................................48
/section/ 9.08 Successor Agent...................................................48
/section/ 9.09 Security Documents, Etc...........................................48
/section/ 9.10 Obtaining Consent of Required Banks...............................49
/section/10 MISCELLANEOUS....................................................................49
/section/10.01 Notices...........................................................49
(a) Manner of Delivery................................................49
(b) Addresses.........................................................49
(c) Effectivene/section/..............................................50
/section/10.02 Expenses: Indemnification.........................................50
/section/10.03 Rights Cumulative. ...............................................51
/section/10.04 Waivers; Amendments...............................................51
/section/10.05 Set-Off. ........................................................52
/section/10.06 Assignment and Participation......................................52
(a) Assignments by Borrowers..........................................52
(b) Assignment by Banks. ............................................52
(c) Participations....................................................52
/section/10.07 Determinations by Agent...........................................53
/section/10.08 Severability of Provisions. .....................................53
/section/10.09 Counterparts......................................................53
/section/10.10 Survival of Obligations...........................................53
/section/10.11 No Joint Venture..................................................53
/section/10.12 Further Assurances; Power of Attorney.............................53
/section/10.13 No Representations Regarding Renewal..............................54
/section/10.14 Successors and Assigns............................................54
v
/section/10.15 Limitation of Liability; Acknowledgment...........................54
/section/10.16 Governing Law.....................................................54
/section/10.17 Judicial Proceedings. ...........................................54
/section/10.18 Waiver of Jury Trial..............................................55
Exhibits:
Exhibit A-1 Form of Security Agreement
Exhibit A-2 Form of Debenture
Exhibit B-1 Form of Xxxxxx Guaranty Agreement
Exhibit B-2 Form of Windmere Guaranty Agreement
Exhibit C Form of Borrowing Base Certificate
Exhibit D-1 Form of Monthly Officer's Certificate
Exhibit D-2 Form of Annual Officer's Certificate
Schedules:
2.13(b) Pre-Existing Acceptances, Standby Letters of Credit and Trade
Letters of Credit
4.03 Litigation
4.08 Environmental Matters
4.09 Debt
vi
CREDIT AGREEMENT
----------------
Dated as of July 23, 1997
This CREDIT AGREEMENT is made as of the date set forth above by and
among (a) NEW M-TECH CORPORATION, a Florida corporation, ("New M-Tech") and
NEWTECH (HONG KONG) LIMITED, a Hong Kong limited liability company, ("NewTech
Hong Kong," and, collectively with New M-Tech, the "Borrowers," each a
"Borrower"), (b) BANK LEUMI LE-ISRAEL B.M., an Israeli banking corporation
("Leumi"), COMERICA BANK, a Michigan banking corporation, and NATIONAL BANK OF
CANADA, a Canadian-chartered bank, (collectively, the "Banks," each a "Bank"),
and (c) BANK LEUMI LE-ISRAEL B.M., as agent for the Banks (the "Agent").
/section/1. DEFINITIONS AND INTERPRETATION
/section/1.01 DEFINITIONS.
(a) CAPITALIZED TERMS. For the purposes of this Agreement:
"AAAA WORLD SBLC" means the standby letter of credit no. 919650, dated
February 7, 1997, issued by NationsBank, N.A. (South) for the account of AAAA
World Import-Export, Inc. and for the benefit of New M-Tech, in the face amount
of $2,000,000, as amended.
"ACCEPTANCE" means an acceptance created by the Agent pursuant to a
Trade Letter of Credit.
"ACCEPTANCE OBLIGATIONS" means the aggregate outstanding face amount of
all Acceptances (whether matured or unmatured) plus the aggregate amount of all
unreimbursed payments in respect of Acceptances.
"ACCUMULATED FUNDING DEFICIENCY" has the meaning ascribed to that term
in Section 302 of ERISA.
"ADJUSTED LIBOR RATE" means for any Interest Period a rate per annum
(rounded upward, if necessary, to the next higher 1/16 of 1.00%) equal to the
rate obtained by dividing (a) the LIBOR Rate (similarly rounded) for such
Interest Period by (b) a percentage equal to one minus the Reserve Requirement
in effect from time to time during such Interest Period.
"AFFILIATE" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such first Person; unless
otherwise specified, "Affiliate" means an affiliate of one of the Borrowers.
"AGENT'S OFFICE" means the office of the Agent in Miami, Florida.
"AGREEMENT" means this Agreement, as amended from time to time.
"AGREEMENT DATE" means the date as of which this Agreement is dated.
"APPLICABLE LAW" means (i) all applicable common law and principles of
equity and (ii) all applicable provisions of all (A) constitutions, statutes,
rules, regulations and orders of governmental bodies, (B) Governmental Approvals
and (C) orders, decisions, judgments and decrees of all courts and arbitrators.
"BENEFICIAL OWNER" shall have the meaning ascribed to such term in Rule
13d-3 of the General Rules and Regulations under the Securities and Exchange Act
of 1934, as in effect on the date hereof.
"BORROWING" means all Loans made on the same day (a) pursuant to the
same Notice of Borrowing or (b) to refinance the same Reimbursement Obligation.
"BORROWING BASE" means, at any time, the sum (without duplication) of
(i) 80% of the Eligible Accounts Amount at that time attributable to Eligible
Domestic Accounts, plus (ii) the lesser of (A) 40% of the Eligible Accounts
Amount at that time attributable to Eligible Foreign Accounts or (B) $1,000,000,
plus (iii) (A) the lesser of (1) 90% of the Eligible Accounts Amount at that
time attributable to Eligible Kmart Accounts that are secured by the Kmart SBLC
or (2) the amount then available under the Kmart SBLC plus (B) 80% of any
portion of the Eligible Accounts Amount at that time attributable to Eligible
Kmart Accounts that exceeds 111% of the amount referred to in clause (1) of the
immediately preceding clause (A), plus (iv) (A) the lesser of (1) 90% of the
Eligible Accounts Amount at that time attributable to Eligible AAAA World
Accounts that are secured by the AAAA World SBLC or (2) the amount then
available under the AAAA World SBLC plus (B) the lesser of (i) 80% of any
portion of the Eligible Accounts Amount at that time attributable to Eligible
AAAA World Accounts that exceeds 111% of the amount referred to in clause (1) of
the immediately preceding clause (A) or (ii) $1,000,000, plus (v) the lesser of
(A) 40% of the Eligible Inventory Amount at that time or (B) $1,500,000, plus
(vi) 70% of the Eligible Letters of Credit Amount at that time, plus (vii) 70%
of the lesser of the cost or fair market value of the Eligible In-Transit Kmart
Inventory at that time, plus (viii) 95% of the Eligible Securities Value at that
time. For purposes of this Agreement, an account is considered to be "secured"
by a particular letter of credit if the Borrower owning such account may draw
upon the letter of credit to obtain payment of such account.
"BORROWING BASE CERTIFICATE" means a certificate of an authorized
officer of each of the Borrowers substantially in the form of Exhibit C.
"BUSINESS DAY" means any day on which most banks in Miami, Florida are
open for commercial business and, if the day relates to a Loan, on which most
banks are open for international business (including dealings in Dollar
deposits) in London.
"CAPITAL SECURITIES" means, with respect to any Person, any shares of
capital stock of such Person or any security convertible into, or any option,
warrant or other right to acquire, any shares of capital stock of such Person.
2
"CASH COLLATERAL ACCOUNTS" means the two restricted, non-interest
bearing cash collateral accounts established by the Borrowers with the Agent,
one in the name of New M-Tech and the other in the name of NewTech Hong Kong.
"CHANGE OF CONTROL" means (a) any Person or group of Persons (as
defined under Section 13(d)(3) of the Securities and Exchange Act of 1934),
other than Windmere or Xxxx Xxxxxx, being or becoming a Beneficial Owner of any
of the capital stock or other interests having ordinary power for the election
of directors (or others performing similar functions) of New M-Tech or (b) New
M-Tech's ceasing to own 100% of such stock or other interests of NewTech Hong
Kong.
"CHANGE OF MANAGEMENT" means Xxxx Xxxxxx'x ceasing to be the chief
executive officer of New M-Tech, his ceasing to be the chief executive officer
of NewTech Hong Kong, or any other significant (in the Agent's or the Required
Banks' reasonable judgment) change in the senior management of either Borrower.
"CLOSING DATE" means the date on which the initial Extension of Credit
is made.
"COLLATERAL" has the meaning ascribed to it in the Security Agreement.
"COMMITMENT" of any Bank means the obligation of such Bank to make
Loans, to purchase participations in Acceptances, and to purchase participations
in Letters of Credit, such that the sum of the outstanding principal amount of
its Loans plus its participation in Acceptance Obligations and Letter of Credit
Obligations does not exceed the amount set forth opposite its name on the
signature pages hereof.
"CONSOLIDATED TANGIBLE NET WORTH" means at any time the consolidated
stockholders' equity of the Borrowers less their Intangible Assets (to the
extent included in determining such consolidated stockholders' equity) and less
the aggregate amount of the Windmere Notes and any other amounts owing by
Affiliates (other than each other) to either Borrower (to the extent included in
determining such consolidated stockholders' equity), in each case, as of such
time. For purposes of this definition, "Intangible Assets" means the amounts of
intangible assets (including, without limitation, goodwill, licenses, patents,
trademarks, trademark licenses, trade names, copyrights and franchises)
determined in accordance with Generally Accepted Accounting Principles.
"CONTRACT" means an indenture, agreement (other than this Agreement and
any other Loan Document), other contractual restriction, lease, instrument
(other than the Notes), certificate of incorporation or charter, or bylaw.
"DEBENTURE" means the Debenture in the form of Exhibit A-2, executed by
NewTech Hong Kong in favor of the Agent as of the Agreement Date.
"DEBT" of any Person means at any time, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of
3
property or services, except trade accounts payable that arise in the ordinary
course of business but only if and so long as the same are payable on customary
trade terms, (iv) capitalized lease obligations of such Person, (v) all
obligations of such Person to reimburse any other Person in respect of amounts
paid under a letter of credit or similar instrument, (vi) all obligations with
respect to interest rate and currency swaps and similar obligations obligating
such Person to make payments, whether periodically or upon the happening of a
contingency, except that if any agreement relating to such obligations provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligations shall be the net
amount thereof, (vii) all of the foregoing of others secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, and (viii) all of the foregoing of others guaranteed by
such Person.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DIRECT BORROWING" means any Borrowing other than a Refinancing
Borrowing.
"DIRECT LOAN" means a Loan that is part of a Direct Borrowing.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"ELIGIBLE AAAA WORLD ACCOUNTS" means Eligible Accounts which are owed
by AAAA World Import-Export, Inc.
"ELIGIBLE ACCOUNTS" means the Borrowers' trade accounts receivable for
goods sold by a Borrower in the ordinary course of such Borrower's business and
shipped or delivered by it to the applicable account debtor, each of which is
evidenced by an invoice or other similar written billing, each of which is a
valid, legally enforceable obligation of the account debtor thereunder, each of
which represents an arms-length, bona fide transaction completed in accordance
with the terms and provisions contained in any documents related thereto, and in
each of which the Agent as agent for the Banks has a valid, perfected,
first-priority security interest securing the Obligations, excluding (1)
accounts receivable that are outstanding 90 days (or 150 days in the case of
accounts receivable secured to the Agent's satisfaction by an irrevocable letter
of credit issued or confirmed by a prime United States bank) or more from their
respective invoice dates and all accounts receivable not secured to the Agent's
satisfaction by an irrevocable letter of credit issued or confirmed by a prime
United States Bank (and regardless of how long outstanding) that are owed by an
obligor if more than 25% of the accounts receivable owed by that obligor to
either Borrower are outstanding 90 (or 150 days in the case of accounts
receivable secured to the Agent's satisfaction by an irrevocable letter of
credit issued or confirmed by a prime United States bank) days or more from
their respective invoice dates, (2) accounts receivable that are outstanding
against customers who are also employees or Affiliates of either Borrower, (3)
accounts receivable that are subject to asserted setoff, credit (other than
customary discount for prompt payment) or dispute, and (4) accounts receivable
that the Agent
4
determines in its reasonable judgment to be uncollectible, difficult to collect,
or otherwise unsatisfactory for any reason (which determination shall be
conclusive and binding on the Borrowers) (it being understood that an account
receivable that initially is an Eligible Account shall cease to be such if and
when it ceases to meet any of the foregoing criteria).
"ELIGIBLE ACCOUNTS AMOUNT" means, at any time and with respect to a
particular category of Eligible Accounts, (i) the total amount owed to either of
the Borrowers with respect to those Eligible Accounts at that time, less (ii)
the total amount owed by either of the Borrowers to the obligors of those
Eligible Accounts at that time.
"ELIGIBLE DOMESTIC ACCOUNT" means an Eligible Account (other than an
Eligible Kmart Account or Eligible AAAA World Account) that either (a) is owed
by an obligor whose principal place of business is in the United States or (b)
is secured by a letter of credit which is issued or confirmed by a bank
acceptable to the Agent located in the United States and the proceeds of which
are assigned to the Agent in a manner satisfactory to it.
"ELIGIBLE FOREIGN ACCOUNT" means an Eligible Account which is not an
Eligible Domestic Account.
"ELIGIBLE INVENTORY" means inventory owned by either Borrower which is
saleable in the ordinary course of such Borrower's business, which is brand new
and not refurbished, which the Agent determines is not obsolete, which is
located in a public warehouse located in the State of Florida, the State of
California or the State of Tennessee, which is subject to a valid, perfected,
first-priority security interest in favor of the Agent as agent for the Banks
securing the Obligations, and which is otherwise acceptable to the Agent.
"ELIGIBLE IN-TRANSIT KMART INVENTORY" means inventory which bears the
White-Westinghouse or Double W trademark or logo, which is in transit to the
United States, which a Borrower has paid for and is not the subject of an open
Trade Letter of Credit, which is earmarked to be sold to Kmart Corporation
pursuant to the Kmart Contract but has not yet been converted into Eligible
Kmart Accounts (or other accounts receivable) and in which (together with the
documents covering which) the Agent as agent for the Banks has a valid,
perfected, purchase-money, first-priority security interest in favor of the
Agent as agent for the Banks securing the Obligations.
"ELIGIBLE INVENTORY AMOUNT" means, at any time, an amount equal to the
lower of fair market value or cost of the Borrowers' then existing Eligible
Inventory.
"ELIGIBLE KMART ACCOUNTS" means Eligible Accounts which are owed by
Kmart Corporation.
"ELIGIBLE LETTERS OF CREDIT AMOUNT" means, at any time, the sum of the
then aggregate undrawn amount of open Trade Letters of Credit issued to finance
a Borrower's purchase of goods in which (together with the documents covering
which) the Agent as agent for the Banks then has a valid, perfected,
first-priority security interest securing the Obligations.
5
"ELIGIBLE SECURITY" means a U.S. Treasury xxxx or note, a Federal
National Mortgage Association note or a Federal Farm Credit Bank note which in
each case is owned by New M-Tech and held in an account with Xxxxxxx Xxxxx
Xxxxxx Xxxxxx & Xxxxx Incorporated's office in Aventura, Florida and in which in
each case the Agent as agent for the Banks has a valid, perfected,
first-priority security interest securing the Obligations.
"ELIGIBLE SECURITIES VALUE" means, at any time, the aggregate fair
market value (as reasonably determined by the Agent) of the Eligible Securities
at that time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"EVENT OF DEFAULT" means any of the events specified in /section/7.01.
"EXTENSION OF CREDIT" means the making of a Loan, the conversion of a
Loan of one type into a Loan of another type, the creation of an Acceptance or
the issuance of a Letter of Credit.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means the generally accepted
accounting principles as in effect in the United States of America from time to
time.
"GOVERNMENTAL APPROVALS" means an authorization, consent, approval,
license or exemption of, registration or filing with, or report or notice to,
any governmental unit, including, without limitation, any such approval required
under ERISA or by the PBGC.
"GUARANTIES" means the Xxxxxx Guaranty and the Windmere Guaranty.
"GUARANTORS" means Xxxx Xxxxxx and Windmere.
"HIGH SEASON" means the period May 1st through October 31st of each
year.
"INFORMATION" means written data, services, reports, statements
(including, but not limited to, financial statements delivered pursuant to or
referred to in /section//section/6.01 and 6.02), opinions of counsel, documents
and other information, whether, in the case of any such in writing, it was
prepared by either Borrower, either Guarantor or any other Person on behalf of
either Borrower or either Guarantor.
6
"INTEREST PAYMENT DATE" means (a), with respect to each LIBOR Rate
Loan, the last day of each Interest Period for that Loan and each and any day
that falls one month or two months after the first day of an Interest Period for
that Loan but before the end of that Interest Period, and (b), with respect to
each Reference Rate Loan, the first Business Day of each month .
"INTEREST PERIOD" means, with respect to each LIBOR Rate Loan, a period
commencing, in the case of the first Interest Period applicable to such Loan, on
the date of the making of, or conversion into, such Loan, and, in the case of
each subsequent, successive Interest Period applicable thereto, on the last day
of the immediately preceding Interest Period, and ending, at the Borrowers'
election, one month, two months or three months thereafter on the same day,
except that (a) any Interest Period which would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (b) any Interest Period
which begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month in which such
Interest Period ends) shall end on the last Business Day of a calendar month,
and (c) no Interest Period shall extend past the Termination Date.
"KMART CONTRACT" means the Purchase, Distribution and Marketing
Agreement between New M-Tech and Kmart Corporation, dated as of January 27,
1997, including all supplements and amendments thereto.
"KMART SBLC" means the standby letter of credit no. P-268797, dated
April 14, 1997, issued by Chase Manhattan Bank for the account of Kmart
Corporation and for the benefit of New M-Tech, in the face amount of
$10,000,000.
"LENDING OFFICE" of a Bank means the branch or office designated by
such Bank, from time to time, as the branch or office of such Bank at which
Loans are to be made and maintained. Each Bank's initial Lending Office is set
forth on the signature pages hereof.
"LETTER OF CREDIT" means a Standby Letter of Credit or Trade Letter of
Credit.
"LETTER OF CREDIT APPLICATION" means an application to the Agent for
the issuance of a Letter of Credit in a form approved by the Agent.
"LETTER OF CREDIT OBLIGATION" means, in respect of each Letter of
Credit, the undrawn face amount of such Letter of Credit, plus the aggregate
amount of all unreimbursed draws in respect of such Letter of Credit.
"LETTER OF CREDIT OBLIGATIONS" means the sum of all Letter of Credit
Obligations.
"LIBOR RATE" means, with respect to any Interest Period for a LIBOR
Rate Loan, the rate which the Agent determines to be the prevailing rate per
annum (rounded upward, if necessary, to the next higher 1/16 of 1.00%) at which
deposits in Dollars are or would be offered to the Agent in
7
the London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of such LIBOR Rate Loan to which
such Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIBOR RATE LOAN" means a Loan the interest on which is, or is to be,
as the context may require, computed on the basis of the Adjusted LIBOR Rate.
"LIEN", as applied to the property or assets (or the income or profits
therefrom) of any Person, means (in each case, whether the same is consensual or
nonconsensual or arises by Contract, operation of law, legal process or
otherwise): any mortgage, lien, pledge, attachment, levy, charge, or other
security interest or encumbrance of any kind in respect of any property or
assets of such Person, or upon the income or profits therefrom.
"LOAN" means an amount advanced pursuant to /section/2.02.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security
Agreement, the Debenture, the Guaranties, the Letters of Credit Applications,
each Schedule to this Agreement and each document, instrument, certificate, and
opinion executed and delivered in connection with any of the foregoing, each as
amended or modified from time to time.
"LOW SEASON" means the period November 1st through April 30th of each
year.
"MARKS" means trademarks, trademark rights or licenses, logos, trade
names, trade name rights or licences, copyrights, patents, patent rights or
licenses, and any right with respect to any of the foregoing.
"MATERIALLY ADVERSE EFFECT" means, (i) with respect to any Person, a
materially adverse effect on such Person's business, assets, liabilities,
financial condition, results of operations or business prospects, (ii) with
respect to a group of Persons "taken as a whole", a materially adverse effect on
such Persons' business, assets, liabilities, financial conditions, results of
operations or business prospects taken as a whole on, where appropriate, a
consolidated basis in accordance with Generally Accepted Accounting Principles
and (iii) with respect to any Contract or any other obligation (other than the
Loan Documents), a materially adverse effect, as to either Borrower or either
Guarantor, upon the binding nature, validity or enforceability thereof, and with
respect to this Agreement and the other Loan Documents, an adverse effect,
whether or not material, upon the binding nature, validity or enforceability of
any material provision thereof or on the obligations of either Borrower or
either Guarantor for the payment of money thereunder.
"MAXIMUM PERMISSIBLE RATE" means, with respect to interest payable on
any amount, the rate of interest on such amount that, if exceeded, could, under
Applicable Law, result in (i) civil or criminal penalties being imposed on any
Bank or (ii) any Bank being unable to enforce payment of (or if collected, to
retain) all or part of such amount or the interest payable thereon.
8
"XXXXXX GUARANTY" means a Guaranty Agreement, in the form of Exhibit
B-1, executed by Xxxx Xxxxxx in favor of the Agent and the Banks as of the
Agreement Date.
"NOTES" means each Revolving Note of the Borrowers payable to the order
of a Bank, evidencing such Bank's Loans and executed by the Borrowers as of the
Agreement Date.
"NOTICE OF BORROWING" has the meaning given it in /section/2.03.
"OBLIGATIONS" means all loans, fees, indebtedness, liabilities,
obligations, Acceptance Obligations, Letter of Credit Obligations, covenants and
duties of each Borrower and each Guarantor to the Banks and/or the Agent of
every kind, nature and description, direct or indirect, absolute or contingent,
due or not due, in contract or tort, liquidated or unliquidated, arising under
this Agreement, or under the other Loan Documents, by operation of law or
otherwise, now existing or hereafter arising, and whether or not for the payment
of money or the performance or non-performance of any act, including, but not
limited to, all damages which either Borrower or either Guarantor may owe to the
Agent and/or the Banks by reason of any breach by either Borrower or either
Guarantor of any representation, warranty, covenant, agreement or other
provision of this Agreement or any of the other Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERSON" means an individual, corporation, partnership, trust or
unincorporated organization or a government or any agency or political
subdivision thereof.
"PLAN" means, at any time, any employee benefit plan (including a
multiemployer plan), the funding requirements of which (under Section 302 of
ERISA or Section 412 of the Code) are, or at any time within six years
immediately preceding the time in question were, in whole or in part, the
responsibility of the Borrower, any Guarantor or an ERISA Affiliate.
"POST-DEFAULT RATE" means a rate per annum equal to the Reference Rate
as in effect from time to time plus 4.00%; PROVIDED that, if, in the case of a
particular LIBOR Rate Loan in default, the due date is a day prior to the last
day of an Interest Period therefor, the "Post-Default Rate" for such Loan shall
be (x), from such day through the last day of such Interest Period, the rate
applicable to such Loan for such Interest Period as provided in /section/2.04
plus 6.50%, and (y) thereafter the Reference Rate as in effect from time to time
plus 4.00%.
"PROHIBITED TRANSACTION" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.
"PROPORTIONATE SHARE" means, in respect of a particular Bank and a
particular amount, the product obtained by multiplying such amount by a fraction
the numerator of which is such Bank's Commitment and the denominator of which is
the Total Commitment.
9
"REFERENCE RATE" means the higher of (a) the per annum rate of interest
publicly announced or otherwise established by the Agent as its "Reference Rate"
(which rate is a discretionary benchmark and may not be the lowest rate of
interest offered by the Agent to its customers), and (b) the Federal Funds Rate
plus 2.50%.
"REFERENCE RATE LOAN" means a Loan the interest on which is, or is to
be, as the context may require, computed on the basis of the Reference Rate.
"REFINANCING BORROWING" means a Borrowing used to pay a Reimbursement
Obligation.
"REFINANCING LOAN" means a Loan that is part of a Refinancing
Borrowing.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, and any regulation
successor thereto.
"REGULATORY CHANGE" means (i) any new, or any change in any existing
Applicable Law, interpretation, directive or request (whether or not having the
force of law) and (ii) any change in the administration or enforcement of any
such Applicable Law, interpretation, directive or request, in each case, that
becomes effective after the Agreement Date, whether as a result of an enactment
by a government or any agency or political subdivision thereof, a determination
of a court or a regulatory authority, or otherwise.
"REIMBURSEMENT OBLIGATION" means an obligation of the Borrowers set
forth in /section/2.10.
"REPORTABLE EVENT" means, to the extent the same relates to or affects
a Plan, (i) any of the events set forth in ERISA Sections 4043(b) (other than a
Reportable Event as to which the provision of 30 days, notice to the PBGC is
waived under applicable regulations), 4068(f) or 4063(a) or the regulations
thereunder, (ii) any event requiring the Borrower, any Guarantor or any ERISA
Affiliate to provide security to a Plan under Code Section 401(a)(29) and (iii)
any failure to make a payment required by Code Section 412(m).
"REPORTING PERIOD" means each period beginning at the start of business
on a Friday and ending on the close of business on the following Thursday.
"REPRESENTATION AND WARRANTY" means each representation and warranty
made pursuant to or under (i) /section/3.02, /section/4, /section/6.02 or any
other provision of this Agreement or any other Loan Document, (ii) any amendment
of or waiver or consent under this Agreement, (iii) any Schedule to this
Agreement or any such amendment, waiver or consent, or (iv) any statement
contained in any certificate, financial statement, legal opinion or other
instrument or document delivered by or on behalf of either Borrower or either
Guarantor pursuant to any Loan Document, whether or not (except as expressly
provided to the contrary herein), in the case of any representation or warranty
10
referred to in clause (i), (ii), (iii) or (iv) of this definition, the
information that is the subject matter thereof is within the knowledge of either
Borrower or either Guarantor.
"REQUIRED BANKS" means, at any time, the Banks holding at least 60% of
the then aggregate unpaid principal amount of the Loans and the interests and
participations in Acceptance Obligations and Letter of Credit Obligations, or,
if no such Loans or Acceptance Obligations or Letter of Credit Obligations are
outstanding, the Banks having at least 60% of the Banks' Commitments.
"RESERVE REQUIREMENT" means at any time the then current maximum rate
at which reserves (including any marginal, supplemental or emergency reserve)
are required to be maintained under Regulation D by member banks of the Federal
Reserve System in Miami with deposits comparable in amount to those of the Agent
against "Eurocurrency liabilities", as that term is used in Regulation D. The
Adjusted LIBOR Rates shall be adjusted automatically on and as of the effective
date of any change in the Reserve Requirement.
"SECURITY AGREEMENT" means the Security Agreement in the form of
Exhibit B-1, executed by the Borrowers and NewTech International Corporation in
favor of the Agent as of the Agreement Date.
"SECURITY DOCUMENTS" means the Security Agreement, the Debenture and
each other guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, assignment of proceeds agreement or other security or
collateral document securing any or all of the Obligations.
"SECURITY INTERESTS" means the security interests, liens, charges,
pledges and collateral assignments created by the Security Documents.
"STANDBY LETTER OF CREDIT" means a standby letter of credit issued by
the Agent for the account of one or both of the Borrowers.
"SUBSIDIARY", when used to determine the relationship of a Person to
another Person, means any Person of which (a) securities having ordinary voting
power to elect a majority of the board of directors (or other persons having
similar functions), or (b) other ownership interests ordinarily constituting a
majority voting interest, in each case, are at the time, directly or indirectly,
owned or controlled by such other Person, or by one or more other Subsidiaries
of such other Person, or by such other Person and one or more of its
Subsidiaries. Unless otherwise specified "Subsidiary" means a Subsidiary of a
Borrower.
"TAX" means any federal, state or foreign tax, assessment or other
governmental charge or levy (including any withholding tax) upon a Person or
upon its assets, revenues, income or profits other than income and franchise
taxes imposed upon a Bank by the jurisdiction (or any political subdivision
thereof) in which such Bank has its head office.
"TERMINATION DATE" means the earlier of (i) June 30, 1998 and (ii) the
date of termination in whole of the Banks' Commitments pursuant to/section/7.02.
11
"TERMINATION EVENT" means (i) a Reportable Event, (ii) the termination
of a Plan, or the filing of a notice of intent to terminate a Plan, or the
treatment of a Plan amendment as a termination under Section 4041(c) of ERISA,
(iii) the institution of proceedings to terminate a Plan under Section 4042(a)
of ERISA, or (iv) the appointment of a trustee to administer any Plan under
Section 4042(b) of ERISA.
"TOTAL COMMITMENT" means the sum of the Banks' Commitments.
"TRADE LETTER OF CREDIT" means a commercial letter of credit issued by
the Agent for the account of either or both of the Borrowers.
"UNFUNDED BENEFIT LIABILITIES" means, with respect to any Plan at any
time, the amount of unfunded benefit liabilities of such Plan at such time as
determined under Section 4001(18) of ERISA.
"VOTING STOCK" means, with respect to any Person, Capital Securities of
such Person entitling the holder thereof to vote in the election of directors of
such Person.
"WCI LICENSE AGREEMENT" means the License Agreement between White
Consolidated Industries, Inc. and New M-Tech (or "NewTech Corporation"), dated
as of May 1, 1996, including all supplements and amendments thereto.
"WINDMERE" means Windmere Durable-Holdings, Inc., a Florida
corporation.
"WINDMERE GUARANTY" means a Guaranty Agreement, in the form of Exhibit
B-2, executed by Windmere in favor of the Agent and the Banks as of the
Agreement Date.
"WINDMERE NOTES" means the two promissory notes, each dated April 16,
1996, made by Windmere Corporation (k/n/a Windmere Durable-Holdings, Inc.) to
the order of New M-Tech as agent for itself, NewTech Hong Kong and New Tech
International Corporation, in the principal amounts of $3,000,000 and
$2,000,000, respectively.
(b) OTHER DEFINITIONAL AND INTERPRETIVE PROVISIONS.
(i) Except as otherwise specified herein, all
references herein (A) to any Person, other than either Borrower or either
Guarantor, shall be deemed to include such Person's successors, transferees and
assignees, but only, in the case of transferees and assignees of the Banks, to
the extent the applicable transfer or assignment complies with the provisions of
this Agreement, (B) to either Borrower or either Guarantor shall be deemed to
include such Person's successors, (C) to any Applicable Law specifically defined
or referred to herein shall be deemed references to such Applicable Law as the
same may be amended or supplemented from time to time, and (D) to any Contract
defined or referred to herein shall be deemed references to such Contract (and,
in the case of any instrument, any other instrument issued in substitution
therefor) as the terms thereof may have been or may be amended, supplemented,
waived or otherwise modified from time to time.
12
(ii) When used in this Agreement, the words "herein",
"hereof" and "hereunder" and words of similar import shall refer to this
Agreement as a whole and not to any particular section or subsection of this
Agreement, and "Schedule" and "Exhibit" shall refer to sections and subsections
of, and Schedules and Exhibits to, this Agreement unless otherwise specified.
(iii) Whenever the context so requires, when used in
this Agreement the neuter gender includes the masculine or feminine, and the
singular number includes the plural, and vice versa.
(iv) The words "includes" and "including" when used
herein are not limiting.
/section/1.02 ACCOUNTING MATTERS. Unless otherwise specified herein,
all accounting determinations hereunder and all computations utilized by the
Borrowers in complying with the covenants contained herein shall be made, all
accounting terms used herein shall be interpreted, and all financial statements
requested to be delivered hereunder shall be prepared, in accordance with
Generally Accepted Accounting Principles, except, in the case of such financial
statements, for departures from Generally Accepted Accounting Principles that
may from time to time be approved in writing by the independent certified public
accountants who are at the time, in accordance with /section/6.01(b), reporting
on the financial statements of the Borrowers.
/section/1.03 REPRESENTATIONS AND WARRANTIES. All Representations and
Warranties shall be made at and as of the Agreement Date, at and as of the time
of each Extension of Credit, and, in addition, in the case of any particular
Representation and Warranty, at such other time or times as such Representation
and Warranty is made or deemed made in accordance with the provisions of this
Agreement or the document pursuant to, under, or in connection with which such
Representation and Warranty is made or deemed made, except to the extent that
any such Representation or Warranty expressly states that it relates to a
different specified date.
/section/1.04 CAPTIONS. Section and subsection captions in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
/section/1.05 NEUTRAL INTERPRETATION. This Agreement and each other
Loan Document has been thoroughly reviewed by counsel for the Borrowers and the
Guarantors. No provision of this Agreement or other Loan Document shall be
construed less favorably to the Agent or the Banks because it was drafted by the
Agent's counsel.
/section/2 COMMITMENTS; LOANS, LETTERS OF CREDIT AND ACCEPTANCES
/section/2.01 OVERALL COMMITMENTS. Upon the terms and subject to the
conditions set forth herein, from the Agreement Date to but excluding the
Termination Date, each of the Banks severally, and not jointly, agrees (i) to
make Loans, (ii) to purchase participations in Acceptances created by the Agent,
and (iii) to purchase participations in Standby Letters of Credit and Trade
Letters of Credit issued by the Agent. The sum of (i) the aggregate unpaid
principal amount of any Bank's Loans, plus
13
(ii) the aggregate amount of such Bank's participations in Acceptance
Obligations plus (iii) the aggregate amount of such Bank's participations in
Letter of Credit Obligations, shall not exceed at any time such Bank's
Commitment. The sum of (i) the aggregate unpaid principal amount of all Loans,
plus (ii) the aggregate amount of all Acceptance Obligations, plus (iii) the
aggregate amount of all Letter of Credit Obligations shall not exceed at any
time the Borrowing Base at that time and shall not exceed $32,000,000 at any
time during the High Season or $14,000,000 at any time during the Low Season.
Moreover, the sum of the aggregate unpaid principal amount of all Loans plus the
aggregate amount of all Acceptance Obligations shall not exceed $10,000,000 at
any time during the High Season or $5,000,000 at any time during the Low Season;
the aggregate amount of all Letter of Credit Obligations with respect to Standby
Letters of Credit shall not exceed $1,000,000 at any time; and there shall be no
Loans outstanding or Acceptance Obligations in existence for a period of 30
consecutive days between the Closing Date and the Termination Date.
/section/2.02 LOANS. Upon the terms and subject to the conditions of
this Agreement, each Bank shall, from time to time from the Agreement Date to
but excluding the Termination Date, make one or more Loans to the Borrowers each
in an amount equal to its Proportionate Share of a Borrowing. On any Business
Day, Loans, at the option of the Borrowers, may be made as, or may from time to
time be converted into, Reference Rate Loans or LIBOR Rate Loans, or any
combination thereof; PROVIDED, that LIBOR Rate Loans may be converted only on
the last day of an applicable Interest Period, only conversions to Reference
Rate Loans shall be made so long as a Default shall have occurred and be
continuing and each Refinancing Loan shall initially for at least two Business
Days be a Reference Rate Loan. Each Borrowing of LIBOR Rate Loans shall be in a
minimum amount of $1,000,000 and in greater whole multiples of $1,000,000. There
shall at no time be in effect more than six Borrowings with respect to LIBOR
Rate Loans.
/section/2.03 MANNER OF BORROWINGS AND FUNDINGS.
(a) DIRECT AND CONVERSION BORROWINGS. Whenever a Borrower
wishes to incur a Direct Borrowing or to convert Borrowings consisting of
Reference Rate Loans into Borrowings consisting of LIBOR Rate Loans or vice
versa, it shall give the Agent notice of such Borrowing or conversion in a form
approved by the Agent (a "Notice of Borrowing"), in the case of the incurrence
of or conversion into a Reference Rate Loan, one Business Day, and, in the case
of the incurrence of or conversion into a LIBOR Rate Loan, two Business Days,
before the requested date of such Borrowing, specifying (a) the requested date
of the Borrowing, (b) the amount of the Borrowing to be incurred or converted
into, (c) whether the Borrowing to be incurred or converted into is to consist
of Reference Rate Loans or LIBOR Rate Loans, (d) in the case of the incurrence
of, or conversion into, a Borrowing consisting of LIBOR Rate Loans, the duration
of the initial Interest Period and (e) which Borrower is to receive the proceeds
of the Borrowing. If a request for the conversion of Loans of one type into a
Borrowing consisting of Loans of another type is not made in accordance with
this /section/2.03, such Borrowing shall be converted into a Borrowing
consisting of Reference Rate Loans. Any Notice of Borrowing received after 11:00
a.m. (Miami time) shall be deemed received on the following Business Day. On the
Business Day it receives a Notice of Borrowing, the Agent shall notify each
Bank, by 1:00 p.m. (Miami time) on such Business Day, by telefax or by telephone
confirmed by telefax, of the contents of such Notice of Borrowing and of such
14
Bank's Proportionate Share of such Borrowing and, in the case of a Borrowing
consisting of LIBOR Rate Loans, the applicable initial interest rate. Prior to
4:00 p.m. (Miami time) on the Business Day requested for such Borrowing, each
Bank shall make available to the Agent, at the Agent's office, its Proportionate
Share of such Borrowing in lawful money of the United States of America in same
day funds. The Agent shall, subject to the satisfaction of the conditions set
forth in /section/3, on such day credit the amounts so received by it in like
funds to an account of the applicable Borrower maintained with the Agent at the
Agent's Office (PROVIDED that the amounts so received in respect of the initial
Borrowing shall be used to repay indebtedness owed by the Borrowers to Leumi). A
Notice of Borrowing, once given, shall be irrevocable. Unless the Required Banks
consent in writing otherwise, Direct Borrowings shall be used only to pay
vendors of either Borrower, to otherwise finance such normal operations of
either Borrower as are conducted as of the Agreement Date and as qualify as
"international banking transactions" and to repay indebtedness owed by either
Borrower to Leumi as of the Closing Date.
(b) REFINANCING BORROWINGS. Subject to satisfaction of the
conditions set forth in /section/3, whenever a Reimbursement Obligation becomes
due, the Banks shall, without any need for a request from or notice to the
Borrowers, make Reference Rate Loans in an aggregate amount equal to the amount
of such Reimbursement Obligation, and the Borrowers irrevocably authorize the
Agent to apply the proceeds of any such Loans to repay the corresponding
Reimbursement Obligation. After paying an Acceptance or a draw under a Letter of
Credit the Reimbursement Obligation with respect to which is to be paid with a
Refinancing Borrowing, the Agent shall notify each Bank, by 1:00 p.m. (Miami
time) on the Business Day on which payment of the Acceptance or draw is made, by
telefax or by telephone confirmed by telefax, of such Banks' Proportionate Share
of the resulting Reimbursement Obligation. Prior to 4:00 p.m. (Miami time) on
the Business Day on which the payment of an Acceptance or draw under a Letter of
Credit is made or to be made, each Bank shall make available to the Agent, at
the Agent's Office, its Proportionate Share of the amount of the resulting
Reimbursement Obligation in lawful money of the United States in same day funds
and, subject to satisfaction of the conditions set forth in /section/3, the
Agent shall (and the Borrowers hereby irrevocably authorize it to) apply the
amounts so received to pay such Reimbursement Obligation.
(c) AGENT MAY ASSUME FUNDING. Unless the Agent shall have
received notice from a Bank prior to the date of any Borrowing that such Bank
will not make available to the Agent such Bank's Proportionate Share of such
Borrowing, the Agent may assume that such Bank has made such amount available to
the Agent on the date of such Borrowing in accordance with /section/2.03(a) or
/section/2.03(b) (as applicable) and the Agent may, in reliance upon such
assumption, make available on such date a corresponding amount. If and to the
extent that such Bank shall not have so made such Proportionate Share available
to the Agent, such Bank shall pay to the Agent, forthwith on demand, such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is paid
to the Agent, at the Federal Funds Rate. If such Bank shall pay to the Agent
such corresponding amount, such amount so paid shall constitute such Bank's Loan
as part of such Borrowing for purposes of this Agreement. If such Bank shall
fail to pay such corresponding amount upon such demand, the Borrowers shall,
forthwith on demand, repay to the Agent such corresponding amount, together with
interest thereon for each
15
day from the date such amount is made available to a Borrower until the date
such amount is paid to the Agent, at the interest rate applicable at the time to
the Loans comprising such Borrowing.
(d) BANKS' OBLIGATIONS INDEPENDENT. The failure of any Bank to
make a Loan to be made by it as part of any Borrowing shall not relieve any
other Bank of its obligation hereunder to make its Loan on the date of such
Borrowing, but no Bank shall be responsible for the failure of any other Bank to
make the Loan to be made by such other Bank on the date of any Borrowing.
/section/2.04 INTEREST AND SERVICING FEES ON LOANS.
(a) INTEREST RATES. Each Loan shall bear interest on the
outstanding principal amount thereof until due at a rate per annum equal to, (i)
so long as it is a Reference Rate Loan, the Reference Rate as in effect from
time to time, and (ii), so long as it is a LIBOR Rate Loan, the applicable
Adjusted LIBOR Rate plus 2.50%. The interest rate applicable to each Reference
Loan shall change simultaneously with each change in the Reference Rate.
(b) LOAN SERVICING FEES. Each Bank shall, with respect to each
Loan, pay to the Agent, for the Agent's account and by way of compensation for
its services hereunder, a fee (a "Loan Servicing Fee") equal to 0.25% per annum
on the outstanding principal amount of such Loan until such Loan is paid in
full. Each Loan Servicing Fee owed by a Bank shall be payable only from amounts
distributable by the Agent to such Bank. The Agent is irrevocably authorized to
deduct each Loan Servicing Fee owed it by a Bank from any amounts distributable
by the Agent to such Bank.
(c) POST-DEFAULT INTEREST. If all or any part of a Loan or
other amount owed by the Borrowers to the Banks or the Agent hereunder is not
paid when due (whether at maturity, by reason of prepayment or acceleration or
otherwise), such unpaid amount shall bear interest for each day during the
period from the date such amount became so due until it shall be paid in full
(whether before or after judgment) at a rate per annum equal to the Post-Default
Rate.
(d) TIME OF PAYMENT. Interest and Loan Servicing Fees with
respect to each Loan shall be due and payable monthly in arrears on the Interest
Payment Dates for such Loan and when such Loan shall be due (whether at
maturity, by reason of prepayment or acceleration, or otherwise). Interest at
the Post-Default Rate on each Loan and Loan Servicing Fees applicable to any
period after the maturity of each Loan shall be due and payable on demand.
(e) MAXIMUM INTEREST RATE. Nothing contained in this Agreement
or any Note shall require either Borrower or either Guarantor to pay interest at
a rate exceeding the Maximum Permissible Rate. If amounts payable to the Agent
or the Banks on any date would be treated as interest in excess of the Maximum
Permissible Rate, such amounts shall be automatically reduced to the Maximum
Permissible Rate, and, if allowed by Applicable Law, payments for any subsequent
period, to the extent less than the Maximum Permissible Rate, shall, to that
extent, be increased by the amount of such reduction.
16
(f) COMPUTATION OF INTEREST. Interest and Loan Servicing Fees
payable pursuant to this /section/2.04 or any Note shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed
(including the first but excluding the last day, which, in the case of any
Interest Period, means from and including the first day of such Interest Period
to but excluding the last day thereof). If the date for any payment of principal
is extended (whether by operation of this Agreement, any provision of law or
otherwise), the Loan Servicing Fees payable pursuant to /section/2.04(b), as
well as interest, shall be payable for such extended time.
(g) SELECTION OF INTEREST PERIODS. The initial Interest Period
applicable to each LIBOR Rate Loan shall be as specified in the Notice of
Borrowing therefor delivered pursuant to /section/ 2.03(a). Each subsequent,
successive Interest Period applicable to such Loan, subject to /section/ 2.02,
shall be as specified by the Borrowers in a notice to the Agent (captioned
"Notice of Selection of Interest Period") at least two Business Days prior to
the end of the current Interest Period. If the Agent shall not have received
such notice prior to 11:00 a.m. (Miami time) on the Business Day by which such
notice is required to be delivered, such LIBOR Rate Loan shall continue after
the current Interest Period as a LIBOR Rate Loan with an Interest Period of the
same duration as that of the current Interest Period. No such notice shall be
effective under this /section/ 2.04(g) so long as a Default shall have occurred
and be continuing.
/section/2.05 MANDATORY REPAYMENT OF LOANS.
(a) MATURITY. All Loans then outstanding shall mature and
become immediately due and payable in full on the Termination Date.
(b) PRIOR TO MATURITY. If at any time any of the limitations
set forth in /section/2.01 are exceeded, the Borrowers shall immediately prepay
the Loans in the amount of the exce/section/ If after repayment of all the Loans
any limitation set forth in /section/2.01 is still exceeded, the Borrowers shall
pay to the Agent an amount equal to the remaining excess, to be retained by the
Agent in one or both Cash Collateral Accounts as collateral security for the
Letter of Credit Obligations and Acceptance Obligations (as well as any other
Obligations). Nothing in this /section/2.05(b) shall be construed to restrict
the Agent's right to accelerate the Obligations or pursue its other remedies
under /section/7 based on a limitation in /section/2.01 being exceeded.
/section/2.06 OPTIONAL PREPAYMENTS OF LOANS. The Borrowers may at any
time and from time to time, upon two Business Days' advance notice, prepay the
Loans in whole or in part without premium or penalty, except that any prepayment
shall be in an aggregate principal amount of at least $100,000 or an integral
multiple thereof, and except that any prepayment of a LIBOR Rate Loan shall be
made only on the last day of an Interest Period for such Loan. Amounts to be
prepaid shall irrevocably be due and payable on the date specified in the
applicable notice of prepayment, together with interest thereon as provided in
/section/2.04(d). Amounts prepaid in respect of Loans may be reborrowed, subject
to the terms and conditions hereof. Notwithstanding anything herein to the
contrary, the Agent is hereby irrevocably authorized, at its option, on each
Business Day, to apply any funds in either or both Cash Collateral Accounts on
that day to the prepayment of Reference Rate Loans.
17
/section/2.07 EVIDENCE OF INDEBTEDNESS. The Loans by each Bank to the
Borrowers and the Borrowers' obligations to repay such Loans and other
indebtedness of the Borrowers under this Agreement, with interest in accordance
with the terms of this Agreement, (without duplication) shall be evidenced by
this Agreement, the Acceptances, the Letters of Credit and drafts drawn
thereunder, the records of the Agent and such Bank, and a single Note for each
Bank. The records of the Agent and each Bank shall be prima facie evidence of
the Loans by such Bank and the other indebtedness of the Borrowers under this
Agreement, of accrued interest thereon, of accrued fees, and of all payments
made in respect of any thereof.
/section/2.08 LETTERS OF CREDIT. Upon the terms and subject to the
conditions of this Agreement, from the Agreement Date to but excluding the
Termination Date, the Agent shall issue and amend Trade Letters of Credit and
Standby Letters of Credit for the joint account of the Borrowers and shall
create Acceptances pursuant to Trade Letters of Credit providing for
presentation of time drafts. Each Bank shall, upon the issuance of any Letter of
Credit, be deemed to have purchased a participation in each such Letter of
Credit as provided in /section/2.13, and shall, upon the creation of any
Acceptance, be deemed to have purchased a participation in such Acceptance as
provided in /section/2.13.
(a) TRADE LETTERS OF CREDIT. Each Trade Letter of Credit shall
(i) require presentation of either a sight draft or a time draft with a maturity
no later than 30 days after its date, a xxxx of lading and whatever other
documents the Agent considers necessary or desirable to give it control over and
a perfected security interest in the related goods, (ii) have an expiration date
no later than 90 days after the date of issuance of such Letter of Credit, (iii)
be used only for the shipment or importation of inventory of a Borrower and the
payment of the purchase price thereof (inclusive, at the election of the
Borrowers, of freight and insurance charges), (iv) may indicate only the
Borrower requesting it as the account party on the face of the Letter of Credit,
and (v) be otherwise reasonably acceptable to the Agent in form and content.
(b) STANDY LETTERS OF CREDIT. Each Standby Letter of Credit
shall (i) have an expiration date not later than the earlier of (A) 180 days
after the date of issuance of such Letter of Credit (not including any
provision, consented to by all the Banks, providing for the automatic extension
of the term of such Letter of Credit for an additional period of time upon
notice from the Agent), and (B) the Termination Date, and (ii) be used only to
secure (A) bid, tender, customs, surety, payment, performance or similar bonds
needed by a Borrower in the ordinary course of business, and (B), with the
consent of the Required Banks, for other general corporate purposes.
/secition/2.09 LETTER OF CREDIT REQUESTS. Whenever a Borrower wishes to
have a Letter of Credit issued, it shall submit to the Agent a Letter of Credit
Application prior to 11:00 a.m. (Miami time) at least two Business Days before
the requested date of issuance of a Letter of Credit. The Agent shall give each
Bank a written (which may be by telecopier) report of all Letters of Credit
outstanding hereunder on a weekly basis.
/section/2.10 DRAWINGS UNDER LETTERS OF CREDIT; PAYMENTS UNDER
ACCEPTANCES.
18
(a) Upon receipt by the Agent of any draft upon, or other
notice of drawing under, a Letter of Credit, the Agent shall promptly give the
Borrowers written or telephone notice of the amount of such draft or drawing, of
the Letter of Credit against which it is drawn and of the date upon which the
Agent proposes to honor such draft. Upon presentation to the Agent of an
Acceptance for payment, the Agent shall promptly give the Borrowers written or
telephone notice of such presentation.
(b) The Borrowers shall pay to the Agent for the ratable
account of the Banks the amount of each drawing under a Letter of Credit on the
date of such drawing.
(c) The Borrowers shall pay to the Agent for the ratable
account of the Banks the face amount of each Acceptance on the maturity date
thereof.
(d) Any amount required to be paid by the Borrowers pursuant
to this /section/2.10 that is not paid when due shall bear interest, payable on
demand, from the date of such drawing until paid, at a rate per annum equal to
the Post-Default Rate.
(e) The Borrowers agree that they shall be jointly and
severally indebted to each Bank for an amount equal to the amount paid by the
Agent for the account of such Bank with respect to any Letter of Credit or
Acceptance together with interest on such amount.
/section/2.11 LETTER OF CREDIT AND ACCEPTANCE FEES AND COMMISSIONS AND
SERVICING FEES.
(a) TRADE LETTERS OF CREDIT.
(i) Upon the issuance of each Trade Letter of Credit
(and, if such Trade Letter of Credit's term extends for more than 90 days, every
90 days after its issuance), the Borrowers shall pay the Agent, for the ratable
account of each Bank, a fee equal to .1875% of such Bank's Proportionate Share
of the face amount of such Trade Letter of Credit (or, if more, such Bank's
Proportionate Share of the Agent's minimum commercial letter of credit issuance
commission then in effect).
(ii) Upon each drawing under a Trade Letter of
Credit, the Borrowers shall pay to the Agent, for the ratable account of each
Bank, a fee equal to .1875% of such Bank's Proportionate Share of such drawing
(or, if more, such Bank's Proportionate Share of the Agent's minimum commercial
letter of credit negotiation fee then in effect).
(iii) Upon the issuance of each Trade Letter of
Credit (and, if the Trade Letter of Credit's term extends for more than 90 days,
every 90 days after its issuance) and upon each drawing under a Trade Letter of
Credit, each Bank shall pay to the Agent, for the Agent's account and by way of
compensation for the Agent's services hereunder, a fee (a "Trade Letter of
Credit Servicing Fee") equal to such Bank's Proportionate Share of .0375% of the
face amount of such Trade Letter of Credit or of the amount of such drawing (as
the case may be). The Agent is
19
irrevocably authorized to deduct each Trade Letter of Credit Servicing Fee owed
to it by a Bank from any amount distributable by the Agent to such Bank.
(b) STANDBY LETTERS OF CREDIT.
(i) When each Standby Letter of Credit is issued or
renewed, the Borrowers shall pay the Agent, for the ratable account of each
Bank, a fee equal to 1.50% per annum on such Bank's Proportionate Share of the
face amount of such Letter of Credit. Each such fee shall be based on a year of
360 days and computed for the actual number of days to elapse in the initial
term or renewal term (as the case may be) of the applicable Standby Letter of
Credit, and shall, for each Standby Letter of Credit, be payable in full in
advance on the date such Standby Letter of Credit is issued or renewed (as the
case may be) based on the face amount of such Standby Letter of Credit.
(ii) Upon each drawing under a Standby Letter of
Credit, the Borrowers shall pay to the Agent, for the ratable account of each
Bank, a fee equal to .1875% of such Bank's Proportionate Share of such drawing
(or, if more, such Bank's Proportionate Share of the Agent's minimum standby
letter of credit negotiation fee then in effect).
(iii) When each Standby Letter of Credit is issued
or renewed, each Bank shall pay to the Agent, for the Agent's account and by way
of compensation for its services hereunder, a fee (an "SBLC Issuance Servicing
Fee") equal to 0.25% per annum on the face amount of such Standby Letter of
Credit. Each such SBLC Issuance Servicing Fee shall be based on a year of 360
days and computed for the actual number of days to elapse in the initial term or
renewal term (as the case may be) of the applicable Standby Letter of Credit,
and shall for each Standby Letter of Credit be payable in full in advance on the
date such Standby Letter of Credit is issued or renewed (as the case be) based
on the face amount of such Standby Letter of Credit. In addition, upon each
drawing under a Standby Letter of Credit, each Bank shall pay to the Agent, for
the Agent's account and by way of compensation for its services hereunder, a fee
(an "SBLC Drawing Servicing Fee") equal to such Bank's Proportionate Share of
.0375% of the amount of such drawing. The Agent is irrevocably authorized to
deduct each SBLC Issuance Servicing Fee and each SBLC Drawing Servicing Fee owed
to it by a Bank from any amount distributable by the Agent to such Bank.
(c) ACCEPTANCES. (i) Upon the creation of each Acceptance, the
Borrowers shall pay the Agent, for the ratable account of each Bank, a
non-refundable commission thereon calculated on a daily basis on the face amount
of such Bank's Proportionate Share of such Acceptance for each day from and
including the date of the creation thereof to and excluding the stated maturity
date thereon at a per annum rate of 1.50%.
(ii) Upon the creation of each Acceptance, each Bank
shall pay the Agent, for the Agent's account and by way of compensation for its
services hereunder, a fee (an "Acceptance Servicing Fee") calculated on a daily
basis on such Bank's Proportionate Share of the face amount of such Acceptance
for each day from and including the date of creation thereof to and excluding
the stated maturity date thereon at a per annum rate of 0.25%. The Agent is
hereby authorized to deduct
20
each Acceptance Servicing Fee owed to it by a Bank from any amount distributable
by the Agent to such Bank.
(iii) All commissions and fees due pursuant to this
/section/2.11(c) shall be based on a year of 360 days and computed for the
actual number of days from creation of the relevant Acceptance to the stated
maturity thereof.
(d) ADMININSTRATIVE FEES. In addition to the foregoing fees
payable to the Banks and the Agent, the Borrowers shall pay to the Agent, for
the Agent's account, such other administrative fees as the Agent customarily
charges in respect of Letter of Credit and Acceptance transactions (which fees
are subject to change from time to time by the Agent) together with all
telecommunication fees and other expenses incurred by the Agent in connection
with the issuance, amendment, honoring or payment of any Letter of Credit or
Acceptance.
(e) SOURCE OF FEES. Each fee owed by a Bank to the Agent
pursuant to this /section/2.11 shall be payable only from amounts distributable
by the Agent to such Bank.
/section/2.12 GENERAL PROVISIONS AS TO LETTERS OF CREDIT.
(a) LIMITATION ON AGENT'S DUTY TO ISSUE. The Agent shall have
no obligation to issue any Letter of Credit if the aggregate undrawn face amount
of Letters of Credit outstanding, after giving effect to the issuance of such
Letter of Credit, would exceed any limit imposed on the Agent or any Bank by, or
if the issuance of such Letter of Credit would otherwise cause a violation of,
Applicable Law or any regulatory directive, interpretation or request, to which
the Agent or any Bank is subject.
(b) BORROWERS' OBLIGATIONS ABSOLUTE. The obligation of the
Borrowers to reimburse the Agent for the account of the Banks for each drawing
under a Letter of Credit and each payment under an Acceptance shall be
irrevocable, shall not be subject to any qualification or exception whatsoever
and shall be binding in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or
right which either Borrower may have at any time against a beneficiary of any
Letter of Credit or a payee of any Acceptance or any transferee of any Letter of
Credit or Acceptance (or any person for whom any such transferee may be acting),
the Agent, the Banks or any other Person, whether in connection with this
Agreement, any Letter of Credit, any Acceptance, the transactions contemplated
herein or any unrelated transactions;
21
(iii) any draft, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient (unless, in each case, manifestly so) in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of this Agreement or the other
Loan Documents;
(v) any failure of the Agent to provide notice to the
Borrowers of any drawing under any Letter of Credit or any presentation of any
Acceptance; or
(vi) the occurrence or continuance of any Default or
Event of Default.
(c) LIMITATION OF LIABILITY WITH RESPECT TO LETTER OF CREDIT.
As among the Borrowers the Guarantors, the Banks, and the Agent, the Borrowers
and the Guarantors assume 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 foregoing, the Agent and the Banks shall not be responsible for:
(i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any draft, demand, application or other documents
submitted by any party in connection with any Letter of Credit (but not
including the Letter of Credit itself), even if such document should in fact
prove to be in any and all respects invalid, insufficient, inaccurate,
fraudulent or forged;
(ii) the validity, genuineness or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part which may prove to be invalid or ineffective for any reason;
(iii) failure of the beneficiary of a Letter of
Credit to comply fully with the conditions required in order to draw upon such
Letter of Credit to the extent that the documents presented in connection with a
drawing manifestly comply with the terms of the Letter of Credit;
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher;
(v) errors in interpretations of technical terms;
(vi) any loss or delay in the transmission or
otherwise of any document required to make a drawing under any Letter of Credit
or with respect to the proceeds thereof;
(vii) the misapplication by the beneficiary of a
Letter of Credit or of the proceeds of any drawing or Acceptance under such
Letter of Credit; or
(viii) any consequences arising from causes beyond
the control of Agent or the Banks, including, without limitation, any act or
omission, rightfully or wrongfully of any present or future governmental
authority.
22
None of the above circumstances shall affect, impair or prevent the vesting of
any of the Agent's and the Banks' rights or powers under this /section/2.12.
(d) EXCULPATION. In furtherance and extension, and not in
limitation, of the specified provisions set forth above, any action taken or
omitted by the Agent under or in connection with any Letter of Credit, any
Acceptance or any related documents, if taken or omitted in good faith, shall
not expose the Agent or any Bank to any liability to either Borrower or either
Guarantor or relieve either Borrower or either Guarantor of any of its
obligations hereunder. The rights of the Agent set forth in this /section/2.12
are in addition to, and not exclusive of, the rights of the Agent set forth in
any Letter of Credit Application.
/section/2.13 LETTER OF CREDIT AND ACCEPTANCE PARTICIPATIONS.
(a) Simultaneously with the issuance by the Agent of any
Letter of Credit or the creation by the Agent of any Acceptance, each Bank shall
be deemed to have irrevocably and unconditionally purchased and received from
the Agent, without recourse or warranty, an undivided interest and participation
in such Letter of Credit or Acceptance, as the case may be, (including, without
limitation, all obligations of the Borrowers with respect thereto) and any
security therefor or Guaranty pertaining thereto, equal to such Bank's
Proportionate Share of such Letter of Credit or Acceptance.
(b) Each of the Banks hereby irrevocably and unconditionally
purchases and receives from the Agent, without recourse or warranty, an
undivided interest and participation in the acceptances described on Schedule
2.13(b) (the "Pre-Existing Acceptances"), in the standby letters of credit
described on Schedule 2.13(b) (the "Pre-Existing Standby Letters of Credit") and
in the commercial letters of credit described on Schedule 2.13(b) (the
"Pre-Existing Trade Letters of Credit"). On the Closing Date, Leumi shall pay to
each Bank, such Bank's Proportionate Share of an Acceptance Commission in
respect of each Pre-Existing Acceptance created by Leumi, calculated at a rate
of 1.25% per annum for each day from and including the Closing Date to and
excluding the stated maturity date of such Pre-Existing Acceptance. Each Bank
shall be entitled to share in the fees payable pursuant to /section/2.11(b), and
shall be liable to the Agent for the SBLC Issuance Servicing Fees, with respect
to the Pre-Existing Standby Letters of Credit to the extent (but only to the
extent) that such fees accrue on and after the Closing Date. On the Closing
Date, the Agent shall pay to each Bank, such Bank's Proportionate Share of a fee
equal to .150% of the aggregate undrawn face amount of the Pre-Existing Trade
Letters of Credit, which shall serve as such Bank's share of any issuance fee
with respect to the Pre-Existing Trade Letters of Credit. On and after the
Agreement Date, the Pre-Existing Acceptances shall constitute Acceptances
hereunder, including for purposes of /section/2.01, and the Pre-Existing Standby
Letters of Credit and the Pre-Existing Trade Letters of Credit shall constitute
Standby Letters of Credit hereunder and Trade Letters of Credit hereunder,
respectively, including for purposes of /section/2.01. In the event of any
conflict between the terms of this Agreement, on the one hand, and the terms of
any acceptance request with respect to the Pre-Existing Acceptances or any
letter of credit application or reimbursement agreement with respect to any of
23
the Pre-Existing Standby Letters of Credit or any of the Pre-Existing Trade
Letters of Credit, on the other hand, the terms of this Agreement shall control.
(c) Each Bank hereby agrees that it shall pay to the Agent,
prior to 4:00 p.m. (Miami time) on the maturity date of each Acceptance or on
the date of each Letter of Credit drawing, as the case may be, such Bank's
Proportionate Share of such Letter of Credit drawing or Acceptance; PROVIDED,
that if the Borrowers should pay in full or in part any Acceptance on its
maturity date or any Letter of Credit drawing on the date thereof with its own
funds or the proceeds of a Loan, the obligation of each Bank to pay to the Agent
pursuant to this /section/2.13 with respect to such drawing or Acceptance shall
be reduced by an amount equal to such Bank's Proportionate Share of such payment
by the Borrowers that is received by the Agent. Amounts paid in excess of the
net amount so owed shall promptly be refunded by the Agent to such Bank.
(d) The obligation of each Bank to pay to the Agent its
Proportionate Share of each Acceptance payment or Letter of Credit drawing, or
of the amount thereof not repaid by the Borrowers as described above, shall be
irrevocable and unconditional, shall not be subject to any qualification or
exception whatsoever and shall be binding in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or other Loan Document;
(ii) the existence of any claim, set-off, defense or
other right which either Borrower or any Bank may have at any time against the
other, any transferee of any Acceptance (or any Person for whom any such
transferee may be acting), the Agent, any Bank or any other Person, whether in
connection with this Agreement, any Acceptance, the transactions contemplated
herein or any unrelated transactions;
(iii) any draft or any other document presented under
this Agreement proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of this Agreement (provided
that nothing herein shall be construed to allow the Agent to surrender
Collateral in violation of this Agreement without the consent of all the Banks);
or
(v) the occurrence or continuance of any Default or
Event of Default.
(e) If any Bank shall fail to pay the amount of its
participation in an Acceptance or Letter of Credit drawing on the date such
amount is due in accordance with this /section/2.13, the Agent shall be deemed
to have advanced funds in that amount on behalf of such Bank. Each such advance
shall be secured by such Bank's participation interest, and the Agent shall be
subrogated to such
24
Bank's rights hereunder in respect thereof. Such advance may be repaid by
application by the Agent of any payment which such Bank is otherwise entitled to
receive under this Agreement. Any amount not paid by such Bank to the Agent
hereunder shall bear interest for each day from the day such payment was due
until such payment shall be paid in full at a rate per annum equal to the
Federal Funds Rate then in effect.
/section/2.14 MANNER AND ALLOCATION OF PAYMENTS.
(a) Unless otherwise provided herein, all payments and
deposits due by the Borrowers to the Banks or the Agent hereunder or under or
with respect to the Notes, Acceptances or Letters of Credit, shall be made not
later than 12:00 noon (Miami time) (or, in the case of payments by the Banks to
the Agent, 4:00 p.m. (Miami time)), on the due date thereof, in Dollars and in
funds immediately available to the Agent at the Agent's Office, for the account
of, (a) in the case of amounts due to the Agent, the Agent, and (b) in the case
of all other payments hereunder, the Banks' respective Lending Offices, without
any deduction whatsoever, including, but not limited to, any deduction for any
set-off, recoupment, counterclaim or Tax. Whenever any payment hereunder shall
be due on a day which is not a Business Day, the date of such payment shall be
extended to the next succeeding Business Day and any extension shall be included
in computing interest and fees, if any, in connection with such payment. All
payments received from the Borrowers shall be applied first against fees,
commissions and other charges (other than interest) then due, next against
interest then due and the remainder, if any, against outstanding principal.
(b) Each Borrower hereby irrevocably authorizes the Agent --
if and to the extent any payment is not made to the Agent when due hereunder or
under any other agreement relating to any Extension of Credit, and any
applicable grace period has expired -- to charge from time to time against a
demand credit balance account in such Borrower's name (which such Borrower
hereby agrees to maintain with the Agent) any amount so due even if doing so
creates an overdraft. Any overdraft so created shall (to the extent permitted by
applicable law) bear interest until paid in full at the Post-Default Rate and
shall be due and payable, together with any accrued interest, immediately after
being created.
/section/2.15 PAYMENT BY AGENT TO BANKS, ETC.
(a) Except as otherwise expressly stated in this Agreement,
each payment received by the Agent from the Borrowers shall (before any
distribution to any Bank) be allocated and applied by the Agent against any and
all Obligations of any types (and any interest hereon) which are then due or
past due hereunder to the Agent itself (in its capacity as Agent and not as a
Bank hereunder) and, by way of deduction, any and all obligations of the Banks
to the Agent (in such capacity) and shall then be distributed by the Agent by
4:00 p.m. (Miami time) on the day received in good funds by the Banks. The Agent
shall give notice of any payment to be distributed to the Banks on a particular
Business Day by 1:00 p.m. (Miami time) on such Business Day. All such
distributions shall be paid by the Agent to or to the credit of each Bank in
such manner as is reasonably requested in written instructions from such Bank.
25
(b) If any payment by or recovery whatsoever against the
Borrowers (or either Borrower) hereunder or under any Note is made directly to
or recovered directly by any Bank (rather than made to or recovered by the
Agent), such Bank shall receive such payment or recovery in trust for all the
Banks and shall immediately (without receiving any demand therefor) pay the full
amount of such recovery or payment to the Agent to be allocated and distributed
by the Agent (and applied by the Banks) as provided in /section/2.15(a).
Notwithstanding any other provisions of this Agreement or of any Notes, the
Borrowers hereby expressly acknowledge and agree that: (i) the recoveries
against the Borrowers referred to in this /section/2.15(b) shall include all
recoveries by any means whatsoever against either of the Borrowers or any assets
of either of the Borrowers (including without limitation any recoveries by
setoff against bank deposits, by settlement of lawsuits or by enforcement of
judgments obtained by suit hereunder or under any Note); and (ii) for all
purposes under this Agreement or any Note, any payment to or recovery by any
Bank hereunder or under any Note shall effectively reduce the amounts (of
principal, interest and other Obligations) otherwise owing or payable to such
Bank hereunder (and/or under any Note) to the extent, and only to the extent,
that the amounts owing or payable to such Bank are or would be reduced after
such payment or recovery is remitted in full by such Bank to the Agent, as
provided above in this /section/2.15, and is allocated by the Agent and
distributed by it among the Banks as provided in /section/2.15. Notwithstanding
any other provisions of this Agreement or of any Notes, all of the parties to
this Agreement hereby expressly agree that any Bank receiving any payment from
or making any recovery against either of the Borrowers or either of the
Guarantors (or any asset of either of the Borrowers or either of the Guarantors)
hereunder or under any Note shall be deemed to purchase (or, if necessary, shall
in fact purchase) from any or all of the other Banks such participation, and
only such participation (if any), in the Notes and participations payable to or
held by such Banks as may be necessary, under Applicable Law, to give full
effect to clause (ii) of this /section/2.15(b).
(c) If the Agent shall be required by any court, trustee or
debtor-in-possession or other person to return any amount previously received by
it in respect of the Obligations, each Bank shall, upon receipt of notice from
the Agent, immediately pay over to the Agent such Bank's Proportionate Share of
the amount to be returned.
/section/2.16 WITHHOLDING TAXES. All payments provided for in this
Agreement, any Note or any other Loan Document shall be made free and clear of
any deductions for any present or future Taxes. If any Taxes are imposed or
required to be withheld from any payment, the Borrowers shall (a) increase the
amount of such payment so that each Bank will receive a net amount (after
deduction of all Taxes) equal to the amount due to it hereunder and (b) pay all
Taxes to the appropriate taxing authority for the account of the Banks and, as
promptly as possible thereafter, send the Agent an original receipt showing
payment thereof, together with such additional documentary evidence as the Agent
may from time to time require. The Borrowers shall jointly and severally
indemnify each Bank from and against any and all Taxes (irrespective of when
imposed) and any related interest and penalties that may become payable by Bank
as a consequence of the Borrowers' failure to perform any of its obligations
under the preceding sentence.
/section/2.17 WEEKLY RECONCILIATION. Notwithstanding the provisions of
/section/2.15(a), until further notice from the Agent to the Banks, all payments
of interest, fees or commissions received by the
26
Agent from the Borrowers during a particular Reporting Period shall be
distributed to the Banks (after deduction of all Servicing Fees and other
amounts then owing to the Agent) on the Business Day following the last day of
such Reporting Period. Each such payment by the Agent to a Bank shall be made by
electronically transferring the amount to be paid to such Bank's Lending Office.
/section/2.18 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Banks under this Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of each other Borrower to accept joint and several liability
for the Obligations.
(b) Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrower with respect to the payment and
performance of all the Obligations, it being the intention of the parties hereto
that all of the Obligations shall be joint and several Obligations of both of
the Borrowers without preferences or distinction among them.
(c) If and to the extent that either Borrower shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such event
the other Borrower will make such payment with respect to, or perform, such
Obligation.
(d) The Obligations of each of the Borrowers hereunder and under the
other Loan Documents constitute full recourse Obligations of such Borrower
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Agreement or
any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each of
the Borrowers hereby waives notice of acceptance of its joint and several
liability, notice of any Extensions of Credit made under this Agreement, notice
of any action at any time taken or omitted by the Agent or the Banks under or in
respect of any of the Obligations, and, generally, to the extent permitted by
Applicable Law, all demands, notices and other formalities of every kind in
connection with this Agreement. Each of the Borrowers hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of
any of the Obligations, the acceptance of any payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by the Banks at any time or times in respect of any
default by either of the Borrowers in the performance or satisfaction of any
term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Banks in respect of any of the Obligations, and
the taking, addition, substitution or release, in whole or in part, at any time
or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of either of the Borrowers.
Without limiting the generality of the foregoing, each of the Borrowers assents
to any other action or delay in acting or failure to act on the part of the
Banks with
27
respect to the failure by any of the Borrowers to comply with any of its
respective Obligations, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
any Applicable Law which might, but for the provisions of this /section/2.18,
afford grounds for terminating, discharging or relieving either Borrower, in
whole or in part, from any of its Obligations, it being the intent of each
Borrower that so long as any of its Obligations remain unsatisfied, the
Obligations of such Borrower shall not be discharged except by performance and
then only to the extent of such performance. The Obligations of each of the
Borrowers shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, re-construction or similar proceeding
with respect to either of the Borrowers or the Banks. The joint and several
liability of the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of either
of the Borrowers or the Banks.
(f) The provisions of this /section/2.18 are made for the benefit of
the Banks and their successors and assigns, and may be enforced in good faith by
them (or by the Agent on their behalf) from time to time against each Borrower
as often as the occasion therefor may arise and without requirement on the part
of the Banks first to xxxxxxxx any of their claims or to exercise any of their
rights against the other Borrower or to exhaust any remedies available to them
against the other Borrower or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this /section/2.18 shall remain in effect until all of
the Obligations shall have been paid in full or otherwise fully satisfied and
the commitments terminated. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Banks upon insolvency, bankruptcy or reorganization
of either of the Borrowers, or otherwise, the provisions of this /section/2.18
will forthwith be reinstated in effect, as though such payment had not been
made.
/section/3 CONDITIONS TO EXTENSIONS OF CREDIT
/section/3.01 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The obligation
of each Bank and the Agent to make the initial Extension of Credit is subject to
the receipt by the Agent of each of the following in form and substance
satisfactory to the Agent:
(a) a certificate of the Secretary or an Assistant Secretary
of each Borrower confirming the identity of the officers of such Borrower
authorized to execute and deliver this Agreement, the Notes and the other
documents required or contemplated hereunder to be executed or delivered by such
Borrower, to which shall be attached copies of the resolutions and bylaws
referred to in such certificate;
(b) a certificate of the Secretary or an Assistant Secretary
of Windmere confirming the identity of the officers of Windmere authorized to
execute and deliver the Windmere Guaranty and the other documents required or
contemplated hereunder to be executed or delivered by Windmere, to which shall
be attached copies of the resolutions and bylaws referred to in such
certificate;
28
(c) a copy of the articles of incorporation of each Borrower
and Windmere, certified (if possible) by the Secretary of State or other
appropriate official of such Borrower's or Windmere's jurisdiction of
incorporation;
(d) a good standing certificate with respect to New M-Tech
Corporation and Windmere, issued as of a recent date by the Secretary of State
or other appropriate official of the jurisdiction of such Borrower's or
Windmere's incorporation;
(e) a favorable written opinion (addressed to the Agent and
the Banks) of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Quentel, P.A., Miami,
Florida, counsel for the Borrowers and the Guarantors, dated the Agreement Date
or the Closing Date and covering such matters as the Agent or any Bank may
request;
(f) a favorable written opinion (addressed to the Agent and
the Banks) of Coudert Brothers, Hong Kong, counsel for Agent and the Banks,
dated the Agreement Date or the Closing Date and covering such matters as the
Agent or any Bank may request (including perfection of the Security Interests in
accounts receivable owed to NewTech Hong Kong);
(g) a copy of each Governmental Approval;
(h) The Notes, each duly executed by the Borrowers and payable
to the order of a Bank in a principal amount equal to such Bank's Proportionate
Share of $10,000,000;
(i) a duly executed counterpart of this Agreement;
(j) a duly executed counterpart of the Security Agreement and
a duly executed counterpart of the Debenture;
(k) a duly executed counterpart of the Xxxxxx Guaranty and a
duly executed counterpart of the Windmere Guaranty;
(l) a duly executed counterpart of whatever agreement with
Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx the Agent requests to establish the Agent's
control over the account in which the Eligible Securities are contained and
confirmation that there exist Eligible Securities having an Eligible Securities
Value of at least $1,200,000;
(m) the agreements of Kmart and Windmere required by the
Security Agreement;
(n) an appointment by each of NewTech Hong Kong and Xxxx
Xxxxxx of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Xxxxxxx, P.A., as its
agent to receive service of process on its behalf in any State or Federal court
located in the State of Florida and an acceptance by Greenberg, Traurig,
Hoffman, Lipoff, Xxxxx & Quentel, P.A. of each such appointment;
29
(o) evidence of the issuance of all insurance policies
required by the terms of the Loan Documents and of endorsements thereto naming
the Agent as lender loss payee;
(p) duly executed assignments in favor of the Agent as agent
for the Banks of the proceeds of the AAAA World SBLC and the proceeds of the
Kmart SBLC, both duly acknowledged by the issuer of the applicable SBLC;
(q) the originals of the Windmere Notes, each duly endorsed to
the Agent;
(r) executed copies of UCC-1 financing statements (or the
equivalent) to be filed in each office necessary or, in the Agent's judgment,
desirable to perfect the Security Interests and evidence of the payment of all
taxes and fees required to be paid in connection with the filing thereof;
(s) evidence that whatever filings or other actions required
to perfect the Security Interests under the law of Hong Kong have been made or
taken;
(t) certified UCC-11, lien, judgment and tax search reports
for each jurisdiction in which either Borrower is located or has inventory,
showing no Liens or financing statements of record against either Borrower;
(u) a Borrowing Base Certificate as of a date not more than
two Business Days prior to the Closing Date;
(v) whatever certificates and affidavits the Agent requests to
establish that no Florida documentary stamp tax or intangible tax is or will be
owing in connection with the Loan Documents and a Tax Indemnity Agreement
executed by the Borrowers in favor of the Bank covering any liability for any
such Tax;
(w) such other certificates, documents, instruments and
opinions as the Agent shall reasonably request.
/section/3.02 CONDITIONS TO EACH EXTENSION OF CREDIT. The obligation of
each Bank and the Agent to make each Extension of Credit, including the initial
Extension of Credit, is subject to the fulfillment of each of the following
conditions to the reasonable satisfaction of the Banks:
(a) each of the Representations and Warranties shall, in the
determination of the Banks in their reasonable discretion, be true and correct
at and as of the time of such Extension of Credit, with and without giving
effect to such Extension of Credit and to the application of the proceeds
thereof, except those expressly stated to be made as of a particular date which
shall be true and correct as of such date;
(b) no Default shall have occurred and be continuing at the
time of such Extension of Credit, with or without giving effect to such
Extension of Credit and to the application of the proceeds thereof;
30
(c) receipt by the Agent within a reasonable time after
request by the Agent of such materials as may have been requested pursuant to
/section/6.01(c);
(d) such Extension of Credit will not contravene any
Applicable Law applicable to any of the Banks or the Agent;
(e) all legal matters incident to such Extension of Credit and
the other transactions contemplated by this Agreement shall be reasonably
satisfactory to counsel for the Agent;
(f) no Federal tax liens or other Liens (besides the Security
Interests) shall have been filed against the property of either Borrower;
(g) no limitation set forth in /section/2.01 will be exceeded
after such Extension of Credit is made; and
(h) the Agent shall have received such other approvals,
consents and documents as it may reasonably request.
Each Notice of Borrowing under /section/2.03 and Letter of Credit
Application under /section/2.09 shall constitute a Representation and Warranty
by the Borrowers, made as of the time of the making of such Extension of Credit,
that the conditions specified in clauses (a) and (b) have been fulfilled as of
such time, unless a notice to the contrary specifically captioned "Disclosure
Statement" is received by the Agent from the Borrowers prior to 5:00 p.m. (Miami
time), on the Business Day preceding the date of the requested Extension of
Credit. To the extent that the Banks agree to make any Extension of Credit after
receipt of a Disclosure Statement in accordance with the preceding sentence, the
Representations and Warranties pursuant to the preceding sentence will be deemed
made as modified by the contents of such statement and repeated at the time of
the making of such Extension of Credit as so modified. Any such modification
shall be effective only for the occasion on which the Banks elect to make such
Extension of Credit, and unless expressly agreed by the Banks in writing to the
contrary, shall not be deemed a waiver or modification of any condition to any
future Extension of Credit.
/section/4 CERTAIN REPRESENTATIONS AND WARRANTIES OF BORROWERS
In order to induce the Banks and the Agent to enter into this Agreement
and to make Extensions of Credit, each Borrower represents and warrants to the
Agent and the Banks as follows:
/section/4.01 ORGANIZATION: POWER; QUALIFICATION: The Borrowers are
corporations duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation, have the corporate
power and authority to own their respective properties and to carry on their
respective businesses as now being and proposed to be conducted hereafter and
are duly qualified and are in good standing, and are authorized to do business,
in all jurisdictions in which the character of their respective properties or
the nature of their respective businesses requires such qualification or
31
authorization, except for qualifications and authorizations the lack of which,
singly or in the aggregate, has not had and is not reasonably likely to have a
Materially Adverse Effect upon the Borrowers taken as a whole. New M-Tech owns
100% of the outstanding Capital Securities of NewTech Hong Kong and has the
unrestricted right to vote, and (subject to limitations imposed by Applicable
Law) to receive dividends and distributions on, all of the issued and
outstanding shares of the Capital Securities of New Tech Hong Kong, and all such
shares of Capital Securities have been duly authorized and issued and are fully
paid and nonassessable. The Guarantors each own 50% of the Capital Securities of
New M-Tech. NewTech International Corporation, whose stock is wholly owned by
Xxxx Xxxxxx, is inactive and has no assets. Other than each other, New Tech
International Corporation and the Guarantors, neither Borrower has any
Affiliates.
/section/4.02 AUTHORIZATION AND COMPLIANCE OF AGREEMENT, NOTES AND
EXTENSIONS OF CREDIT. Such Borrower has the corporate power, and has taken all
necessary corporate (including stockholder, if necessary) action to authorize it
to execute, deliver and perform this Agreement and each of the other Loan
Documents to which it is a party in accordance with their respective terms, to
borrow hereunder, to request the issuance of Letters of Credit hereunder, and to
incur its other obligations under this Agreement and each of the other Loan
Documents to which it is a party. Each of this Agreement and the other Loan
Documents delivered on the Agreement Date has been duly executed and delivered
by such Borrower and is, and each Letter of Credit Application when executed and
delivered by such Borrower will be, a legal, valid and binding obligation of
such Borrower enforceable against such Borrower in accordance with its terms.
The execution, delivery and performance of this Agreement and the other Loan
Documents by such Borrower in accordance with their respective terms, and the
incurring of obligations thereunder by such Borrower, do not and will not (a)
require (i) any Governmental Approval or (ii) any consent or approval of the
stockholders of such Borrower that has not been obtained, (b) violate or
conflict with, result in a breach of, or constitute a default under, (i) any
Contract to which such Borrower or any Subsidiary is a party or by which any of
them or any of their respective properties may be bound, (ii) any Applicable Law
or (iii) such Borrower's charter or bylaws, or (c) result in or require the
creation of any Lien upon any assets of such Borrower or any Subsidiary.
/section/4.3 LITIGATION. Except as set forth on Schedule 4.03, there
are not, in any court or before any arbitrator of any kind or before or by any
governmental or non-governmental body, any actions, suits or proceedings,
pending or probable (nor, to the knowledge of such Borrower, is there any basis
therefor) against or in any other way relating to or affecting (a) such
Borrower, any Subsidiary or the business or any property of such Borrower or any
Subsidiary, except actions, suits or proceedings that, if adversely determined,
would not, (i) singly result in liability more than $250,000 above the amount of
insurance coverage in effect with respect thereto or (ii) in the aggregate for
the Borrowers result in liability more than $250,000 above the amount of
insurance coverage in effect with respect thereto or (iii) singly or in the
aggregate otherwise have a Materially Adverse Effect on (a) the Borrowers taken
as a whole or (b) the validity or enforceability of this Agreement or any of the
other Loan Documents.
/section/4.04 BURDENSOME PROVISIONS. Such Borrower is not a party to or
bound by any Contract or Applicable Law that could have a Materially Adverse
Effect on (i) such Borrower or such
32
Borrower and its Subsidiaries, taken as a whole, or (ii) this Agreement or any
of the other Loan Documents.
/section/4.05 NO ADVERSE CHANGE OR EVENT. Since March 31, 1997, no
change in the business, assets, liabilities, financial condition, results of
operations or business prospects of such Borrower or any Subsidiary has
occurred, and no event has occurred or failed to occur, which has had or might
have, either alone or in conjunction with all other such changes, events and
failures, a Materially Adverse Effect on (a) such Borrower or such Borrower and
its Subsidiaries, taken as a whole, or (b) this Agreement or any other Loan
Document. (In determining whether an adverse change has occurred, it is
understood that such an adverse change may have occurred, and such an event may
have occurred or failed to occur, at any particular time notwithstanding the
fact that at such time no Default shall have occurred and be continuing.)
/section/4.06 NO ADVERSE FACT. No fact or circumstance is known to such
Borrower as of the Agreement Date which, either alone or in conjunction with all
other such facts and circumstances, has had or might in the future have (so far
as such Borrower can foresee) a Materially Adverse Effect upon such Borrower or
on this Agreement or any other Loan Documents, that has not been set forth or
referred to in the financial statements referred to in /section/6.02(a) or in a
writing specifically captioned "Disclosure Statement" and delivered to the Agent
prior to the Agreement Date. If a fact or circumstance disclosed in such
financial statements or Disclosure Statement, or if an action, suit or
proceeding disclosed in Schedule 4.03, should in the future have a Materially
Adverse Effect upon such Borrower or upon this Agreement or any other Loan
Documents, such Materially Adverse Effect shall be a change or event subject to
/section/4.05 notwithstanding such disclosure.
/section/4.07 TITLE TO PROPERTIES. Such Borrower has title to its
respective properties reflected on the financial statements referred to in
/section/6.02(a) subject to no Liens or adverse claims except as disclosed
thereon.
/section/4.08 ENVIRONMENTAL MATTERS. Except as disclosed on Schedule
4.08, such Borrower has not received notice to the effect that its respective
operations are (a) not in material compliance with any of the requirements of
any applicable federal, state or local environmental, health and safety statute
or regulation or (b) the subject of any federal, state or local investigation
evaluating whether any remedial action is needed to respond to a release of any
toxic or hazardous waste or substance into the environment or the workplace or
the use of any such substance in any of its products or manufacturing
operations, which noncompliance or remedial action could have a Materially
Adverse Effect on such Borrower or such Borrower and its Subsidiaries, taken as
a whole.
/section/4.09 DEBT. All agreements relating to Debt of such Borrower,
or commitments or agreements to permit such Borrower to incur Debt (other than
any Loan Document), are listed on Schedule 4.09.
/section/4.10 PATENTS, TRADEMARKS, ETC. Such Borrower owns, or is
licensed or otherwise has the lawful right to use, all Marks, technology,
know-how and processes ("Intellectual Property") used
33
in or necessary for the conduct of its business as currently, or contemplated to
be, conducted. The use of such Intellectual Property by such Borrower does not
infringe on the rights of any Person.
/section/4.11 SOLVENCY. Such Borrower hereby (i) acknowledges receipt
of fair consideration and reasonably equivalent value for the incurrence of its
obligations hereunder, in each case for the benefit of the Agent and the Banks,
(ii) represents and warrants that, after giving effect to the incurrence of such
obligations and the acquisition of the rights obtained hereunder, the present
fair saleable value of its assets exceeds its liabilities and that it retains
sufficient capital to meet the reasonably anticipated needs and risks of its
ongoing business, and (iii) represents and warrants that, after giving effect to
the incurrence of such obligations and the acquisition of such rights, it has
not incurred, nor is it obligated for, debts beyond its ability to pay such
debts as they mature, and that the present fair saleable value of its assets is
greater than that needed to pay its probable existing debts as they become due.
/section/4.12 SECURITY INTERESTS. The Security Interests are all valid,
perfected, first-priority security interests securing all the Obligations.
/section/4.13 CERTAIN CONTRACTS. The Kmart Contract, the WCI License
Agreement, the AAAA World SBLC, and the Kmart SBLC are in full force and effect
and no default has occurred under any of them on the part of either Borrower
nor, to such Borrower's knowledge, by any other party thereto. Such Borrower is
in full compliance with all agreements and conditions of the Kmart Contract and
the WCI License Agreement. To such Borrower's knowledge, no default has occurred
under either Windmere Note. No prepayment of principal has been made under
either Windmere Note.
/section/5 COVENANTS
So long as (i) any Acceptance Obligation or Letter of Credit Obligation
is outstanding (ii) any indebtedness or obligation is outstanding under this
Agreement or any Loan Document or (iii) the Banks or the Agent shall have any
obligation to make any Extension of Credit,
A. AFFIRMATIVE COVENANTS. Each Borrower shall:
/section/5.01 PRESERVATION OF EXISTENCE AND PROPERTIES, SCOPE OF
BUSINESS, COMPLIANCE WITH LAW, PAYMENT OF TAXES AND CLAIMS. (a) Preserve and
maintain its corporate existence and all of its other franchises, licenses,
rights and privileges, (b) preserve, protect and obtain all Marks, and preserve
and maintain in good repair, working order and condition all other properties,
required for the conduct of its business, (c) engage only in the manufacture,
importation, distribution (within the same distribution network) and warehousing
of consumer electronics products and appliances and other consumer products, (d)
comply with all Applicable Laws, (e) pay or discharge when due (or as permitted
by the Security Agreement) all Taxes owing by it or imposed upon its property
(for the purposes of this clause, such Taxes shall be deemed to be due on the
date after which they become delinquent), and all liabilities which might become
a Lien on any of its properties and (f) take all
34
action and obtain all consents and Governmental Approvals required so that its
obligations hereunder will at all times be valid and binding and enforceable in
accordance with their respective terms.
/section/5.02 INSURANCE. Maintain insurance with responsible insurance
companies against such risks and in such amounts as iS customarily maintained by
similar businesses, as may be required by the Security Documents or by
Applicable Law, or as may be reasonably requested by the Agent.
/section/5.03 USE OF PROCEEDS. Use any Extension of Credit only for the
manufacture, purchase, importation or shipment in or froM abroad of inventory,
for refinancing indebtedness of the Borrowers to Leumi existing as of the
Closing Date and for paying Reimbursement Obligations. None of the proceeds of
any of the Extensions of Credit shall be used to purchase or carry, or to reduce
or retire or refinance any credit incurred to purchase or carry, any margin
stock (within the meaning of Regulations U and X) or to extend credit to others
for the purpose of purchasing or carrying any margin stock. If requested by the
Agent, the Borrowers shall furnish to the Agent statements in conformity with
the requirements of Federal Reserve Form U-1 referred to in Regulation U.
B. NEGATIVE COMMENTS Each Borrower shall not, directly or indirectly:
/section/5.04 GUARANTIES. Become or remain liable with respect to any
guaranty of any liability of any other Person excepT pursuant to this Agreement.
/section/5.05 LIENS. Create, assume or incur, or permit or suffer to
exist or to be created, assumed or incurred, any LieN upon any of its properties
or assets of any character, whether now owned or hereafter acquired, or upon any
income or profits therefrom, except for the security interests created by the
Security Documents.
/section/5.06 MERGER AND CONSOLIDATION. Merge into or consolidate with
any Person, PROVIDED that, with the approval of the Required Banks (whicH will
not be unreasonably withheld) such Borrower may merge into Windmere or a
Subsidiary of Windmere provided that, in conjunction therewith, the Loan
Documents are modified as reasonably requested by the Required Banks to take
account of the merger, there are taken whatever steps the Required Banks
consider necessary or advisable to continue perfection of the Security Interests
and otherwise protect the value thereof, and, if the merger is into a Subsidiary
of Windmere and the Banks all agree to release the Xxxxxx Guaranty, the
limitation of liability contained in the Windmere Guaranty is doubled.
/section/5.07 TRANSACTIONS WITH AFFILIATES. Effect any transaction
with any Affiliate (except for transactions among the Borrowers involvinG
inventory at not less than cost) on a basis less favorable to such Borrower than
would at the time be obtainable for a comparable transaction in arms-length
dealing with an unrelated third party.
/section/5.08 TAXES OF OTHER PERSONS. (a) File a consolidated tax
return with any other Person other than the other Borrower, or (b) except aS
required by Applicable Law pay any Taxes owing by any Person other than the
Borrowers.
35
/section/5.09 LIMITATION ON RESTRICTIVE COVENANTS. Enter into any
Contract, or otherwise create or cause or permit to exist or become effective
anY consensual restriction, limiting the ability (whether by covenant, event of
default or otherwise) of any of its Subsidiaries to (a) pay dividends or make
any other distributions on shares of its capital stock held by such Borrower or
any of its Subsidiaries, (b) pay any obligation owed to such Borrower or any of
its Subsidiaries, (c) make any loans or advances to or investments in such
Borrower or in any of its Subsidiaries, (d) transfer any of its property or
assets to such Borrower or any of its Subsidiaries, or (e) create any Lien upon
its property or assets whether now owned or hereafter acquired or upon any
income or profits therefrom.
/section/5.10 CHANGE OF CONTROL OR MANAGEMENT. Permit any Change of
Control or Change of Management.
/section/5.11 DEBT. Create, incur, assume or suffer to exist any Debt,
other than:
(a) Debt arising under this Agreement or the other Loan
Documents,
(b) Capital leases in an aggregate amount not exceeding
$250,000 for both of the Borrowers together,
(c) Trade debt incurred in the ordinary course of its
business as conducted as of the Agreement Date, and
(d) Debt incurred to purchase equipment in an aggregate
amount not exceeding $250,000 for both of the
Borrowers together.
/section/5.12 MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Without the
prior written consent of the Required Banks, permit Consolidated Tangible Net
Worth to bE less than $6,500,000 at any time before December 31, 1997 or
$14,000,000 at any time on or after December 31, 1997.
/section/5.13 ENVIRONMENTAL MATTERS. (a) Fail to be in material
compliance with all requirements of applicable federal, state or locaL
environmental, health and safety statutes and regulations or (b) be the subject
of any federal, state or local investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or hazardous waste or
substance into the environment or the workplace or the use of any such substance
in any of its products or manufacturing operations, which noncompliance or
remedial action could have a Materially Adverse Effect on such Borrower and its
Subsidiaries, taken as a whole.
/section/5.14 LIMITATION ON INVESTMENTS. Without the prior written
consent of the Required Banks, make any advances, loans or other extensionS of
credit to, or equity or other investments in, any Person or Persons that exceed
the aggregate amount of $500,000.
/section/5.15 REMITTANCE OF OVERSEAS RECEIPTS. Promptly transfer to an
account of such Borrower maintained with a commercial bank in the United StateS
all amounts collected by it outside the United
36
States on accounts receivable other than, in the case of NewTech Hong Kong, an
amount (not to exceed $200,000 at any time) required from time to time to
operate its Hong Kong office.
/section/ 5.16 FICTITIOUS NAMES. Issue invoices for its accounts and
otherwise do business in or under any fictitious name.
/section/6 INFORMATION
/section/6.01 FINANCIAL STATEMENTS AND INFORMATION TO BE FURNISHED. So
long as (i) any Loan, Acceptance Obligation or Letter of Credit Obligation is
outstanding, (ii) anY other indebtedness or obligation is outstanding under this
Agreement or any of the other Loan Documents or (iii) the Banks or the Agent
shall have any obligation to make an Extension of Credit, the Borrowers shall
furnish to each Bank:
(a) MONTHLY FINANCIAL STATEMENTS; OFFICER'S CERTIFICATE. As
soon as available and in any event within 30 days after the end of each month in
each fiscal year of the Borrowers:
(i) consolidated balance sheets of the Borrowers as
at the end of such month and an individual statement of income and retained
earnings of each Borrower for such month and the elapsed portion of the year
ended with the last day of such month, setting forth in each case in comparative
form the figures for the corresponding period of the previous fiscal year;
(ii) a certificate of an authorized officer of the
Borrower in the form of Exhibit D-1.
(b) YEAR-END STATEMENT; ACCOUNTANTS' AND OFFICER'S
CERTIFICATES. As soon as available and in any event within 90 days after the end
of each fiscal year of the Borrowers:
(i) consolidated and consolidating balance sheets of
the Borrowers and the as at the end of such fiscal year and related consolidated
and consolidating statements of income, retained earnings and cash flows of the
Borrowers for such fiscal year, setting forth in comparative form the figures as
at the end of and for the previous fiscal year;
(ii) a report of Ernst & Young, or other independent
certified public accountants of recognized standing satisfactory to the Agent,
on such of the consolidated financial statements referred to in clause (i) as
are consolidated financial statements, which report shall be unqualified as to
scope of audit and shall state that, based upon an audit conducted in accordance
with generally accepted auditing standards, such consolidated financial
statements present fairly, in all material respects, the consolidated financial
condition of the Borrowers as at the end of such fiscal year, and the
consolidated results of operations and cash flows of the Borrowers for such
fiscal year in accordance with Generally Accepted Accounting Principles
consistently applied since the date of the financial statements referred to in
/section/6.02(a);
37
(iii) a certificate of such accountants addressed and
in form and substance satisfactory to the Agent (A) confirming that (1) the
Borrowers are authorized to deliver the report referred to in clause (ii) to the
Banks pursuant to this Agreement and (2) it is their understanding that the
Banks are relying on such report and such certificate, and (B) stating they have
caused this Agreement and the other Loan Documents to be reviewed and that, in
making the examination necessary for their report on such consolidated financial
statements, nothing came to their attention that caused them to believe that, as
of the date of such financial statements, any Default exists or, if such is not
the case, specifying such Default and its nature, when it occurred and whether
it is continuing; and
(iv) a certificate of the president or chief
financial officer of the Borrowers in the form of Exhibit D-2.
(c) ADDITIONAL MATERIALS.
(i) Promptly upon receipt thereof, copies of any
management letters submitted to either Borrower, or the Board of Directors of
either Borrower, by its independent certified public accountants;
(ii) Promptly upon the sending thereof, copies of all
notices, reports and other communications from either Borrower to any of its
shareholders or securities holders;
(iii) Promptly upon the filing thereof, copies of all
registration statements and all annual, quarterly, monthly and other reports
which either Borrower may file with the Securities and Exchange Commission;
(iv) Promptly upon either Borrower's becoming aware
thereof, notice of each federal statutory Lien, tax or other state or local
government Lien or other Lien (other than the Security Interests) filed against
the property of either Borrower;
(V) Within 10 Business Days after the end of every
month, a schedule of each Borrower's inventory certified by an authorized
officer of such Borrower and indicating, with respect to any such inventory, the
location thereof (whether in a warehouse specified in the schedule, or in
transit);
(vi) Within 10 Business Days after the end of every
month, a report of each Borrower's receivable agings certified by an authorized
officer of such Borrower;
(vii) On the 10th day of each month (or, if the Agent
or the Required Banks so request, on a more frequent basis) a Borrowing Base
Certificate;
(viii) With the financial statements referred to in
/section/6.01(b), projections for eacH Borrower's balance sheet and profit and
loss statement for the next fiscal year, with monthly details;
38
(ix) On the dates indicated in the Guaranties,
whatever financial statements and information the Guarantors are required to
furnish to the Agent or the Banks;
(x) From time to time and within a reasonable time
after request of the Agent or any Bank, such data, certificates, reports,
statements, opinions of counsel, documents or further information regarding this
Agreement, any Extension of Credit or any Loan Document or any transaction
contemplated thereby, or the business, assets, liabilities, financial condition,
results of operations or business prospects of the Borrowers or the Guarantors,
as the Agent or the Required Banks may reasonably request, in each case in form
and substance and certified in a manner reasonably satisfactory to the Required
Banks.
(d) NOTICE OF DEFAULTS, LITIGATION AND OTHER MATTERS. Prompt
notice of: (i) any Default; (ii) any change or event referred to in /section/
4.05; (iii) anY event or condition referred to in clauses (i) through and
including (vii) of /section/7.01(h), whether or not such evenT or condition
shall constitute an Event of Default; (iv) the commencement of any action, suit
or proceeding or investigation in any court or before any arbitrator of any kind
or by or before any governmental or non-governmental body against or in any
other way relating adversely to or affecting (A) either Borrower, either
Guarantor or any of their respective businesses or properties, that, if
adversely determined, (1) singly would result in liability more than $250,000
or, in the case of Windmere or any of its Subsidiaries, $1,000,000, not covered
by insurance; or (2) in the aggregate for the Borrowers and the Guarantors and
their respective Subsidiaries, taken as a whole, would result in liability more
than $500,000 (or $1,500,000 not covered by insurance if liability of Windmere
is involved) or (3) otherwise might, singly or in the aggregate, have a
Materially Adverse Effect on either Borrower, or (B) this Agreement or the other
Loan Documents or any transaction contemplated hereby or thereby; (v) any
amendment of the certificate of incorporation or bylaws of either Borrower or
Windmere; (vi) any default by New M-Tech or the other party thereto under the
Kmart Contract or the WCI License Agreement; (vii) any default by Windmere under
either Windmere Note; and (viii) any significant development in the lawsuits
described in Schedule 4.03.
/section/6.02 ACCURACY OF FINANCIAL STATEMENTS AND INFORMATION.
(a) HISTORICAL FINANCIAL STATEMENTS. Each Borrower hereby
represents and warrants to the Banks and the Agent: (i) that the financial
statements listed on /section/6.02, are complete and correct and present fairly,
in accordance with GenerallY Accepted Accounting Principles consistently applied
throughout the periods involved, the consolidated financial position of the
Borrowers as at their respective dates and the consolidated results of
operations, retained earnings and, as applicable, the changes in financial
position or cash flows of the Borrowers for the respective periods to which such
statements relate, and (ii) that, except as disclosed or reflected in such
financial statements or in Schedule 4.03, as at March 31, 1997, neither Borrower
has any liabilities, contingent or otherwise, nor any unrealized or anticipated
losses, that, singly or in the aggregate, have had or might have a Materially
Adverse Effect on either Borrower.
(b) FUTURE FINANCIAL STATEMENTS. All financial statements
delivered pursuant to /section/6.01(a) or (b), shall be complete and correct and
present fairly, in accordance with Generally
39
Accepted Accounting Principles consistently applied, the consolidated financial
position of the Borrowers, as at their respective dates and the consolidated
results of operations, retained earnings, and consolidated cash flows of the
Borrowers for the respective periods to which such statements relate, and the
furnishing of the same to the Banks shall constitute a representation and
warranty by each Borrower made on the date the same are furnished to the Banks
to that effect and to the further effect that, except as disclosed or reflected
in such financial statements, as at the respective dates thereof, neither
Borrower had any liability, contingent or otherwise, nor any unrealized or
anticipated loss, that, singly or in aggregate, has had or might have a
Materially Adverse Effect on either Borrower.
(c) HISTORICAL INFORMATION. Each Borrower hereby represent and
warrants to the Banks and the Agent that all Information furnished to the Banks
or the Agent by or on behalf of either Borrower prior to the Agreement Date in
connection with or pursuant to this Agreement and the relationship established
hereunder, at the time the same was so furnished, but in the case of Information
dated as of a prior date, as of such date, (i) in the case of any such prepared
in the ordinary course of business, was complete and correct in the light of the
purpose prepared, and, in the case of any such the preparation of which was
requested by the Agent, was complete and correct in all material respects to the
extent necessary to give the Banks true and accurate knowledge of the subject
matter thereof, (ii) did not contain any untrue statement of a material fact,
and (iii) did not omit to state a material fact necessary in order to make the
statements contained therein not misleading in the light of the circumstances
under which they were made.
(d) FUTURE INFORMATION. All Information furnished to the Banks
or the Agent by or on behalf of the Borrowers, on and after the Agreement Date
in connection with or pursuant to this Agreement or in connection with or
pursuant to any amendment or modification of, or waiver under, this Agreement,
shall, at the time the same is so furnished, but in the case of Information
dated as of a prior date, as of such date, (i) in the case of any such prepared
in the ordinary course of business, be complete and correct in the light of the
purpose prepared, and, in the case of any such required by the terms of this
Agreement or the preparation of which was requested by the Banks, or the Agent,
be complete and correct in all material respects to the extent necessary to give
the Banks true and accurate knowledge of the subject matter thereof, (ii) not
contain any untrue statement of a material fact, and (iii) not omit to state a
material fact necessary in order to make the statements contained therein not
misleading, and the furnishing of the same to the Banks or the Agent shall
constitute a representation and warranty by each Borrower made on the date the
same are furnished to the Banks or the Agent to the effect specified in clauses
(i), (ii) and (iii).
(e) CHANGE IN FISCAL YEAR. Neither Borrower shall change its
fiscal year without the consent of the Agent and the Required Banks.
/section/6.03 ADDITIONAL COVENANTS RELATING TO DISCLOSURE. From the
Agreement Date until the Termination Date, each Borrower shall:
(a) ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete), as may be required
40
or necessary to permit (i) the preparation of financial statements required to
be delivered pursuant to /section/6.01(a) and (b) and (ii) the determination of
such Borrower's compliancE with the terms of this Agreement and the other Loan
Documents.
(b) VISITS AND INSPECTIONS. Permit representatives (whether or
not officers or employees) of the Agent or any of the Banks, from time to time,
as often as may be reasonably requested, but only during normal business hours,
to (i) visit and inspect any properties of such Borrower, (ii) inspect and make
extracts from their books and records, including but not limited to management
letters prepared by such Borrower's independent accountants, (iii) discuss with
their principal officers and their independent accountants their respective
businesses, assets, liabilities, financial conditions, results of operations and
business prospects and (iv) inspect and audit the Collateral and the premises
upon which any of the Collateral is located, and verify the amount, quality,
quantity, value and condition of, or any other matter relating to, the
Collateral. In the event that any of the Collateral is under the exclusive
control of any third party, such Borrower shall cause such parties to make such
inspection rights available to the Agent.
/section/7 DEFAULT
/section/7.01 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for sucH event and whether it shall be
voluntary or involuntary, or within or without the control of the Borrowers or
the Guarantors, or be effected by operation of law or pursuant to any judgment
or order of any court or any order, rule or regulation of any governmental or
quasi-governmental body:
(a) The Borrowers shall fail to pay any amount (i) in respect
of principal when and as due (whether at maturity, by reason of notice of
prepayment, acceleration or otherwise) in accordance with the terms of this
Agreement and the Notes; or (ii) in respect of interest, discount, commitment or
other fee, commission, or other charge due under this Agreement or any other
Loan Document when and as due (whether at maturity, by reason of notice of
prepayment or acceleration or otherwise) in accordance with the terms of this
Agreement or such other Loan Documents, and such failure shall continue for five
Business Days; or
(b) Any Representation and Warranty shall at any time prove to
have been incorrect or misleading in any material respect when made; or
(c) Either Borrower or either Guarantor shall default in the
performance or observance of:
(i) any term, covenant, condition or Agreement
contained in /section/ 5.01(a) (insofar as such Section requires the
preservation of the corporate existence of each Borrower), /section/5.02 through
/section/5.14, or /section/6.01(d) or /section/6.03(b); or
(ii) any term, covenant, condition or agreement
contained in this Agreement (other than a term, covenant, condition or agreement
a default in the performance or
41
observance of which is elsewhere in this /section/7.01 specifically dealt with)
or any other Loan Document and such default shall continue unremedied for a
perioD of 20 days after it initially occurs; or
(d) Either Borrower shall fail to pay, in accordance with its
terms and when due and payable, the principal of or interest on any Debt having
an aggregate outstanding balance in excess of $100,000 (other than the
Obligations), or the maturity of any such Debt, in whole or in part, shall have
been accelerated, or any such Debt, in whole or in part, shall have been
required to be prepaid prior to the stated maturity thereof, in accordance with
the provisions of any Contract evidencing, providing for the creation of or
concerning such Debt or, if any event shall have occurred and be continuing
that, with the passage of time or the giving of notice or both, would permit any
holder or holders of such Debt, any trustee or agent acting on behalf of such
holder or holders or any other Person so to accelerate such maturity or require
any such prepayment; or
(e) A default shall occur and be continuing under any Contract
(other than a Contract relating to Debt to which clause (d) of this
/section/7.01 is applicable) binding upon either Borrower, except such a default
that, together with all other such defaults, has not had and will not have a
Materially Adverse Effect on (i) either Borrower or the Borrowers taken as a
whole or (ii) the Loan Documents or the Obligations; or
(f) (i) Either Borrower or either Guarantor shall (A) commence
a voluntary case under the Federal bankruptcy laws (as now or hereafter in
effect) or under any other bankruptcy or insolvency law of any jurisdiction ,
(B) file a petition seeking to take advantage of any other laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, (C) consent to, or fail to contest in a
timely and appropriate manner, any petition filed against it in an involuntary
case under such bankruptcy laws or other laws, (D) apply for, or consent to, or
fail to contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of a substantial part of its assets, domestic or foreign, (E) admit in
writing its inability to pay, or generally not be paying, its debts (other than
those that are the subject of bona fide disputes) as they become due, (F) make a
general assignment for the benefit of creditors, or (G) take any corporate
action for the purpose of effecting any of the foregoing; or
(ii) A case or other proceeding shall be commenced
against either Borrower or either Guarantor in any court of competent
jurisdiction seeking (A) relief under the Federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(B) the appointment of a trustee, receiver, custodian, liquidator or the like of
either Borrower or either Guarantor of all or any substantial part of the
assets, domestic or foreign, of either Borrower or either Guarantor or, and, in
each case, such case or proceeding shall continue undismissed or unstayed for a
period of 60 days, or an order granting the relief requested in such case or
proceeding against either Borrower or either Guarantor (including, but not
limited to, an order for relief under such Federal bankruptcy laws) shall be
entered; or
42
(g) (i) A judgment or order for the payment of money in an
amount that (A) individually, exceeds by $100,000 (or, in the case of one
against Windmere, $1,500,000) or (B) when aggregated with all other unpaid
judgments outstanding against either Borrower or either Guarantor, exceeds by
$200,000 (or, if one against Windmere is included, $1,600,000) the amount of
insurance coverage applicable thereto shall be entered against either Borrower,
either Guarantor or any Subsidiary of any of them by any court, and (ii) either
(A) such judgment or order shall continue undischarged and/or unbonded or
unstayed for a period of 30 days or (B) enforcement proceedings shall have been
commenced upon such judgment or order; or
(h) (i) Any Termination Event shall occur, (ii) any Person
shall engage in any Prohibited Transaction involving any Plan, (iii) any
Accumulated Funding Deficiency, whether or not waived, shall exist with respect
to any Plan, (iv) either Borrower or any ERISA Affiliate of either Borrower
shall be in "default" (as defined in ERISA Section 4219(c)(5)) with respect to
payments owing to a multi-employer plan (as defined in ERISA Section 4001(a)(3))
as a result of such Borrower's or such Affiliate's complete or partial
withdrawal (as described in ERISA Section 4203 or 4205) from such Plan, (v) such
Borrower or any ERISA Affiliate shall fail to pay when due any amount that is
payable by it to the PBGC or to a Plan under Title IV of ERISA, (vi) a
proceeding shall be instituted by a fiduciary of any Plan against either
Borrower or any ERISA Affiliate to enforce ERISA Section 515 and such proceeding
shall not have been dismissed within 30 days thereafter, or (vii) any other
event or condition shall occur with respect to a Plan, except that no event or
condition referred to in any of the clauses (i) through (vii) shall constitute
an Event of Default if it, together with all other events or conditions at the
time existing, has not subjected, or in the reasonable determination of the
Required Banks would not subject, either Borrower or any of its Subsidiaries to
any liability that, alone or in the aggregate with all such liabilities, would
have a Materially Adverse Effect on either Borrower or the Borrowers and their
Subsidiaries taken as a whole; or
(i) Any Security Interest shall fail or cease to be fully
perfected, enforceable in accordance with its terms, and prior to the rights of
all third parties; or
(j) Any material provision of any Loan Document, or any
portion of any obligation for the payment of money under any Loan Document,
shall fail or cease to be in full force and effect, or either Borrower or either
Guarantor shall make any written statement or bring any action challenging the
enforceability or binding effect of any of the Loan Documents or any of the
Security Interests; or
(k) Any other event which is likely to have a Materially
Adverse Effect on either Borrower or either Guarantor, or on this Agreement, the
other Loan Documents or the Obligations shall occur; or
(l) The death or dissolution of either Borrower or either
Guarantor shall occur; or
(m) Any Change of Control or Change of Management shall occur;
or
43
(n) The Kmart Contract or the WCI License Agreement shall fail
or cease to be in full force and effect or the Borrowers shall be prevented from
using the White-Westinghouse or Double W trademarks; or
(o) Either Borrower shall engage in any conduct or activity
that is illegal.
/section/7.02 REMEDIES UPON EVENT OF DEFAULT.Upon and at any time after
occurrence of any Event of Default (other than one specified in
/section/7.01(f)) And in every such event, the Agent may and, if requested by
the Required Banks, shall do any or all of the following: (a) declare, in whole
or, from time to time, in part, the principal of, interest on and any other
components of the Obligations to be, and the same shall thereupon become, due
and payable to the Banks, (b) demand in writing that the Borrowers deposit with
the Agent, at once and in full, an amount sufficient to reimburse the Agent and
the Banks for all outstanding Acceptance Obligations and Letter of Credit
Obligations, which amount shall be immediately due and payable by the Borrowers,
and to the extent paid by the Borrowers shall constitute a prepayment under this
Agreement, and (c) terminate, in whole or, from time to time, in part, each
Bank's Commitment and the Agent's obligations hereunder. Upon the occurrence of
an Event of Default specified in /section/7.01(f), automatically and without any
notice, (a) the Obligations shall be due and payable in full, including, without
limitation, all outstanding Acceptance Obligations and Letter of Credit
Obligations, (b) each Bank's Commitment shall terminate, and (c) the Agent's
obligations hereunder shall terminate. Presentment, demand, protest, notice of
intent to accelerate and all other notices of any kind are hereby expressly
waived. The remedies specified in this /section/7.02 shall be in addition to and
not in limitation of the remedies set fortH elsewhere herein and in the other
Loan Documents.
/section/8 CHANGES IN CIRCUMSTANCES
/section/8.01 MANDATORY SUSPENSION AND CONVERSION OF LOANS. Any Bank's
obligations to make or maintain Loans or convert into LIBOR Rate Loans shall be
suspended, all outstanding LIBOR Rate Loans shall be converted on the last day
of their applicable Interest Periods (or, if earlier, in the case of clause (b)
below, on the last day such Bank may lawfully continue to maintain Loans of that
type or, in the case of clause (c) below, the day determined by such Bank to be
the last Business Day before the effective date of the applicable restriction)
into, and all pending requests for the making of or conversion into Loans of
that type shall be deemed requests for, Reference Rate Loans, if:
(a) on or prior to the determination of an interest rate for a
LIBOR Rate Loan for any Interest Period, the Agent determines that for any
reason appropriate quotations are not available to it in the London interbank
market for purposes of determining the LIBOR Rate, or that such Rate would not
accurately reflect the cost to such Bank of making, maintaining or converting
into a LIBOR Rate Loan for such Interest Period;
(b) at any time such Bank determines that any Regulatory
Change makes it unlawful or impracticable for such Bank to make or maintain any
LIBOR Rate Loan, or to comply with its obligations hereunder in respect thereof;
or
44
(c) such Bank determines that by reason of any Regulatory
Change it is restricted, directly or indirectly, in the amount which it may hold
of (1) a category of liabilities that includes deposits by reference to which,
or on the basis of which, the interest rate applicable to LIBOR Rate Loans is
directly or indirectly determined, or (2) the category of assets which includes
LIBOR Rate Loans.
The Agent or any such Bank, as the case may be, shall promptly notify
the Borrowers and the other parties to this Agreement of any circumstances that
would make the provisions of this /section/8.01 applicable, but the failurE to
give any such notice shall not affect such Bank's rights hereunder.
/section/8.02 REGULATORY CHANGES. If any Regulatory Change:
(a) shall subject the Agent or any Bank to any Tax, duty or
other charge determined by the Agent, or such Bank, as the case may be, to be
applicable to any Extension of Credit, to its obligation to make or maintain any
such Extension of Credit, or to this Agreement, any Note or any other Loan
Document, or shall, in the determination of the Agent or such Bank, change the
basis of taxation of payments to such Bank or the Agent or the principal of or
interest on any Loan or of any other amounts payable under this Agreement in
respect of any Loan or its obligation to make or maintain any Loan; or
(b) shall impose, increase, modify or deem applicable any
reserve, special deposit, assessment, capital adequacy or other requirement or
condition against assets of, deposits with or to the account of, Extensions of
Credit by, or the Commitment or obligations of, any Bank, or the Agent, or shall
impose on the Agent or such Bank or on any relevant interbank market for
Dollars, any condition; and the result of the foregoing, in the determination of
the Agent or such Bank, as the case may be, is (x) to reduce the amount of any
sum received or receivable by such Bank with respect to any Loan or the return
to be earned by the Agent or such Bank on any Extension of Credit, (y) to impose
a cost or increase any existing cost on the Agent or such Bank, as the case may
be, or any parent company of the Agent or such Bank, that is attributable to the
making or maintaining of any Extension of Credit or its Commitment or its
obligation to make any Extension of Credit, or (z) to require the Agent or such
Bank, or any parent company of the Agent or such Bank, to make any payment on or
calculated by reference to the gross amount of any amount received by it
hereunder or under any Note, then, within 15 days after request by the Agent or
such Bank, the Borrowers shall pay to the Agent or such Bank such additional
amount or amounts as the Agent or such Bank determines will compensate it for
such reduction, increased cost or payment. The Agent or any such Bank, as the
case may be, will promptly notify the Borrowers of any Regulatory Change of
which it has knowledge which will entitle the Agent or such Bank to compensation
pursuant to this /section/8.02, but the failure to give such notice shall not
affect the Agent or such Bank's right tO such compensation.
/section/8.03 CHANGE OF LENDING OFFICE. Any Bank will, if an event
occurs with respect to a Lending Office that makes /section/8.01 or 8.02
applicabLe, and if requested by the Borrowers, use reasonable efforts to
designate another Lending Office or Offices, provided that such designation
would not, in the sole and absolute discretion of any such Bank, be
disadvantageous to such Bank in any manner or contrary to such Bank's policy.
Any Bank may at any time and from time to time
45
change any Lending Office and shall give notice of any such change to the
Borrowers. Except in the case of a change in Lending Offices made at the request
of the Borrowers, the designation of a new Lending Office by a Bank shall not
make operable the provisions of /section/8.01 or entitle such Bank to make a
claim under /section/8.02 if The operability of such clause or such claim
results solely from such designation and not from a subsequent Regulatory
Change.
/section/8.04 FUNDING LOSSES. The Borrowers shall pay to the Agent and
each Bank, upon request, such amount or amounts as such BanK determines are
necessary to compensate it for any loss, cost or expense incurred by it as a
result of (a) any payment or prepayment of a LIBOR Rate Loan on a date other
than the last day of an Interest Period for such LIBOR Rate Loan, (b) a Loan for
any reason not being made after the Borrowers shall have given a Notice of
Borrowing, or any payment of principal of or interest thereon not being made on
the date therefor determined in accordance with the applicable provisions of
this Agreement or (c) any payment of any Acceptance on a date other than the
date therefor determined in accordance with this Agreement or any prepayment
thereof. In the case of a LIBOR Rate Loan, at the election of such Bank, and
without limiting the generality of the foregoing, but without duplication, such
compensation on account of losses referred to in (a) and (b) above may include
an amount equal to the excess of (a) the interest that would have been received
from the Borrowers under this Agreement on any amounts to be reemployed during
an Interest Period or its remaining portion over (b) the interest component of
the return which such Bank determines it could have obtained had it placed such
amount on deposit in the London interbank market for a period equal to such
Interest Period or its remaining portion.
/section/8.05 DETERMINATIONS. In making the determinations contemplated
by /section//section/8.01, 8.02 and 8.04, the Agent and the Banks may make such
reasonable estimates, assumptions, allocations and the like that they, in good
faith, reasonably determine to be appropriate, but a Bank's or the Agent's
selection thereof in accordance with this /section/ 8.05, and thE determinations
made by a Bank or the Agent on the basis thereof, shall be final, binding and
conclusive upon the Borrowers, except, in the case of such determinations, for
manifest errors in computation or transmission. Any such Bank or the Agent, as
the case may be, shall furnish to the Borrowers upon request a certificate
outlining in reasonable detail the computation of any amounts claimed by it
under this /section/8 and the assumptions underlyinG such computations.
/section/9 THE AGENT
/section/9.01 APPOINTMENT AND AUTHORIZATION.
(a) Each Bank irrevocably appoints and authorizes the Agent to
take such action as Agent on its behalf and to exercise such powers under this
Agreement, the Notes, the Acceptances and the Letters of Credit as are delegated
to the Agent by the terms hereof or thereof, together with all such powers as
are reasonably incidental thereto. For purposes of this /section/9, the term
"Agent" shall include Leumi in its capacity as Agent undeR the Security
Documents.
46
(b) Each Bank irrevocably authorizes the Agent to issue, amend
and make on its behalf Letters of Credit and Acceptances as provided in this
Agreement, and to take all other actions specifically delegated to it under this
Agreement and reasonably incidental thereto.
(c) The Agent may perform any of its duties hereunder by or
through its agents or employees.
/section/9.02 AGENTS AND AFFILIATES. Leumi shall have the same rights
and powers under this Agreement as any other Bank and may exercise oR refrain
from exercising the same as though it were not the Agent, and Leumi and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrowers, the Guarantors or any Subsidiary or
Affiliate of Borrowers or Guarantors as if it were not the Agent hereunder.
/section/9.03 ACTION BY AGENT. The obligations hereunder of the Agent
are only those expressly set forth herein. Without limiting thE generality of
the foregoing, the Agent shall not be required to take any action with respect
to any Default or Event of Default, except as expressly provided in
/section/7.02. The Agent shall in all cases be fully protected iN acting or in
refraining from acting hereunder in accordance with the written instructions
signed by the Required Banks and each such instruction and any action taken or
any failure to act pursuant thereto shall be binding on all of the Banks, their
successors and assigns. The Agent shall have no duty to exercise any right or
power or remedy hereunder or to take any affirmative action hereunder unless
directed to do so in writing by the Required Banks and unless first indemnified
by the Banks to its satisfaction against the costs and expenses of taking such
action.
/section/9.04 CONSULTATION WITH EXPERTS. The Agent may consult with
legal counsel (who may be counsel for the Borrowers and the Guarantors),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
/section/9.05 LIABILITY OF AGENT. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable for takinG or omitting
to take any action in connection herewith (i) if it does so with the consent or
at the request of the Required Banks or (ii) to the extent its doing so does not
constitute its own gross negligence or willful misconduct. Neither the Agent,
nor any of its respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement,
any of the other Loan Documents or any Extension of Credit hereunder; (ii) the
performance or observance of any of the covenants or agreements of either
Borrower or either Guarantor; (iii) the satisfaction of any condition specified
in /section/3, except the receipt (but not the execution, genuineness or
sufficiency) of documents required to be delivered to the Agent; or (iv) the
validity, effectiveness, enforceability, or genuineness of this Agreement, the
Notes, the other Loan Documents, the Acceptances, the Letters of Credit or any
other instrument or writing furnished in connection herewith or therewith. The
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
telex, telecopy or similar writing) believed by it to be genuine or to be signed
by the proper party or parties.
47
/section/9.06 INDEMNIFICATION. Each Bank shall, ratably in accordance
with its Commitment, indemnify and hold harmless the Agent (tO the extent it is
not reimbursed by the Borrowers or the Guarantors) against any reasonable cost
or expense (including counsel fees and disbursements) (provided that any Bank
asserting that a cost or expense is unreasonable shall have the burden of
proving that it is) and any claim, demand, action, loss or liability (except to
the extent resulting from the Agent's gross negligence or willful misconduct)
that the Agent may suffer or incur in connection with this Agreement or any
action taken or omitted hereunder by the Agent.
/section/9.07 CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and its own decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement. Except as expressly
provided herein, the Agent shall have no duty to provide any Bank with any
credit or other information with respect to either Borrower, either Guarantor or
any Collateral.
/section/9.08 SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrowers. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, (which may be Comerica Bank or National Bank of Canada) which successor
shall be a bank having a combined capital and surplus of at least $250,000,000
(or the equivalent in another currency). If no such successor shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the retiring Agent's giving of notice of resignation, then the
retiring Agent, may, on behalf of the Banks, appoint a successor meeting the
requirements set forth in the immediately preceding sentence. Upon the
acceptance of its appointment hereunder, such successor shall thereupon succeed
to and become vested with all the rights and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's or resignation hereunder, the provisions
of this /section/9 shall inure to its benefit as tO any actions taken or omitted
to be taken by it while it was the Agent.
/section/9.09 SECURITY DOCUMENTS, ETC.
(a) Each Bank hereby authorizes the Agent to enter into each
of the Security Documents and to take all action contemplated thereby. All
rights and remedies under the Security Documents may be exercised by the Agent
for the benefit of the Banks and the other beneficiaries thereof upon the terms
thereof. The Agent may assign its rights and obligations as Agent under any of
the Security Documents to any Affiliate of the Agent or to any trustee, which
assignee in each such case shall be entitled to all the rights of the Agent
under the applicable Security Document and all rights hereunder of the Agent
with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any
Security Document, the Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by the
Agent under such Security Document, the Agent shall act
48
in respect of such consent, exercise or remedies, determination or action, as
the case may be, with consent of and at the direction of the Required Banks;
provided, HOWEVER, that no such consent of the Required Banks shall be required
with respect to any consent, determination or other matter that is, in the
Agent's judgment, ministerial or administrative in nature; and PROVIDED,
FURTHER, that the Agent shall not expressly release any Collateral (except
inventory (and related documents) and equipment sold by a Borrower as permitted
by the Security Agreement) without the consent of the Required Banks.
/section/9.10 OBTAINING CONSENT OF REQUIRED BANKS. In each circumstance
where any consent or approval of or direction from the Required Banks iS
required, the Agent shall send to the Banks a written notice setting forth a
description in reasonable detail of the matter as to which consent, approval or
direction is required and the Agent's proposed course of action with respect
thereto. In the event the Agent shall not have received a response from any Bank
within five Business Days after receipt of such written notice, such Bank shall
be deemed to have agreed to the course of action proposed by the Agent.
/section/10 MISCELLANEOUS
/section/10.01 NOTICES.
(a) All notices and other communications under this Agreement,
including but not limited to materials delivered pursuant to /section/6, shall,
except in those cases where a telephone notice is expressly permitted, be in
writing (which shall include communications by telefax). All written notices and
communications shall be sent by registered or certified mail, postage prepaid,
return receipt requested, by prepaid telefax, reputable overnight courier,
freight prepaid, or delivered by hand.
(b) All notices and other communications under this Agreement
shall be given at the following respective addresses and telex, telefax and
telephone numbers and to the attention of the following Persons:
(i) If to either Borrower:
00000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(ii) If to the Agent:
Bank Leumi Le-Israel B.M., Miami Agency
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
00
Xxxxx, XX 00000
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(ii) if to the Banks, at their respective address and
telex, telefax and telephone numbers set forth on the signature pages hereto (as
the same may be amended from time to time); or at such other address or telex,
telefax or telephone number or to the attention of such other person as the
party to whom such information pertains may hereafter specify for the purpose in
a notice to the other specifically captioned "Notice of Change of Address".
(c) EFFECTIVENESS. Each notice and other communication under
this Agreement shall be effective or deemed delivered or furnished (i) if given
by mail, on the third Business Day after such communication is deposited in the
mail, addressed as above provided, (ii) if given by telex or telefax, when such
communication is transmitted to the appropriate number determined as above
provided in this /section/10.01 and the appropriate answer-back is receiveD or
receipt is otherwise acknowledged, (iii) if given by hand delivery or overnight
courier, when left at the address of the addressee addressed as above provided,
and (iv) if given by telephone, when communicated to the Person or to the holder
of the office specified as the Person or officeholder to whose attention
communications are to be given, except that notices of a change of address,
telex, telefax or telephone number, and notices to the Agent shall not be
effective, and materials furnished to the Banks pursuant to /section/6 shall not
be deemeD furnished until received, and in the case of the Agent, such notices
and materials shall not be deemed received until physically received by a
responsible officer at the Agent's Office not later than 12:00 noon (Miami time)
on any day if such day is to count as a Business Day for the purpose of
determining the adequacy of any notice to the Agent hereunder. Where expressly
permitted by other provisions of this Agreement, notices may be by telephone,
promptly confirmed in writing (which shall include communications by telex and
telefax). The failure to give written confirmation of any such notice shall not
effect the validity thereof. In the event of a discrepancy between telephonic
notice and the written confirmation thereof, or in the event written
confirmation of such notice is not furnished, the telephonic notice as
understood by the Agent will be deemed the effective notice.
/section/10.02 EXPENSES: INDEMNIFICATION. Whether or not any Extension
of Credit is made hereunder, the Borrowers shall, on demand, pay oR reimburse
the Banks and the Agent for (a) all transfer, documentary stamp and similar
taxes, and all recording and filing fees, if any, payable in connection with,
arising out of or in any way related to the negotiation, preparation, execution,
delivery and performance of this Agreement, the other Loan Documents or the
Extensions of Credit, and (b) all reasonable costs and expenses (including fees
and disbursements of legal counsel and other experts) incurred, and all payments
made, (and shall indemnify and hold the Banks and the Agent harmless from and
against all losses suffered) in connection with, arising out of, or in any way
related to (i) the negotiation, syndication, preparation, execution and delivery
of (A) this Agreement and the other Loan Documents, and (B) (whether or not
executed) any waiver, amendment or consent hereunder or thereunder, or hereto or
thereto, (ii) the administration of operations under this
50
Agreement and the other Loan Documents, including without limitation the matters
set forth in /section/6.03(b), (iii) consulting with respect to any matter in
any way arising out of, relating to, or connected with, this Agreement or any of
the other Loan Documents, including, but not limited to, the enforcement by the
Banks or the Agent of any of their rights hereunder or any of the other Loan
Documents, or the performance by the Banks or the Agent of any of their
obligations hereunder, (iv) protecting, preserving, exercising or enforcing any
of the rights of the Banks or the Agent hereunder or any of the other Loan
Documents, (v) any claim (whether asserted by the Banks, the Agent, the
Borrowers, the Guarantors or any other Person and whether asserted before or
after the payment, performance and observance in full of the Borrower's
obligations hereunder and under the other Loan Documents) and the prosecution or
defense thereof, in any way arising under, related to, or connected with, this
Agreement, or any of the other Loan Documents or the relationship established
hereunder, and (vi) any governmental investigation arising out of, relating to,
or in any way connected with this Agreement or any of the other Loan Documents,
PROVIDED that the foregoing indemnity shall not be applicable to any loss
suffered by any Bank or the Agent to the extent such loss is determined by a
judgment of a court that is binding on such Bank or the Agent, final and not
subject to review on appeal, to be the result of acts or omissions of such Bank
or the Agent, constituting gross negligence or willful misconduct. The Agent is
hereby irrevocably authorized to debit any account of either Borrower with the
Agent to pay any amount referred to in this /section/10.02 and the Banks are
hereby irrevocably authorized, at the instance of the Agent and whether or noT
requested by the Borrowers, to make Loans to pay any such amount.
/section/10.03 RIGHTS CUMULATIVE. The rights and remedies of the Banks
and the Agent under this Agreement and the other Loan DocumentS shall be
cumulative and not exclusive of nor limiting upon any rights or remedies that
they would otherwise have, and no failure or delay by any Bank or the Agent in
exercising any right shall operate as a waiver of it, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
any other power or right.
/section/10.04 WAIVERS; AMENDMENTS. Any term, covenant, agreement or
condition of this Agreement may be amended in writing with the consenT of the
Borrowers and the Required Banks, or compliance therewith may be waived in
writing by the Required Banks, or by the Agent when authorized by the Required
Banks, and in any such event, the failure to observe, perform or discharge any
such covenant, condition or obligation (whether such amendment is executed or
such consent or waiver is given before or after such failure) shall not be
construed as a breach of such covenant, condition or obligation or an Event of
Default, provided that no such amendment, consent or waiver shall:
(a) affect the amount or extend the time of the Commitment of
any Bank, of the obligation of the Agent to create Acceptances or to issue
Letters of Credit, or of the obligation of the Agent or any Bank to pay amounts
on account of Loans, Acceptances or Letters of Credit, and thereby extend credit
to the Borrowers, without the prior written consent of all the Banks;
(b) alter the time or times of payment of the principal of or
interest on any Obligation held by a Bank or with respect to any Bank's
participation in an Acceptance or Letter of Credit or the amount of the
principal of any Note, Acceptance or Letter of Credit, or the rate of
51
interest, commission or fees thereon or permit any subordination of the
principal of or interest on any Obligation without the prior written consent of
such Bank as to its interest in such Obligation;
(c) alter any provision of /section/8 or any provision
requiring the ratable application of amountS received by the Agent in payment
of, or for application on, indebtedness under this Agreement or under any of the
Notes or any Acceptance Obligation or Letter of Credit Obligation, or change the
percentage required to authorize or direct the taking of any action under this
Agreement, without the prior written consent of all the Banks; or
(d) expressly release Collateral except as contemplated by the
Security Documents or/section/9.09(b).
Unless otherwise specified in such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given. Notwithstanding the foregoing, the Banks may, without
either Borrower's agreement, amend, between themselves, any provision of the
Loan Documents if the amendment has no effect on the Borrowers.
/section/10.05 SET-OFF. Upon the occurrence and during the continuance
of any Event of Default, each of the Agent and each Bank, and each of its
branches and offices, is hereby authorized by the Borrowers, at any time and
from time to time, (i) to set off against, and to appropriate and apply to the
payment of the obligations (whether matured or unmatured, fixed or contingent or
liquidated or unliquidated) any and all amounts owing by the Agent, or such
Bank, or any such office or branch, to either Borrower (whether payable in
Dollars or any other currency, whether matured or unmatured, and, in the case of
deposits, whether general or special time or demand and however evidenced) and
(ii) pending any such action, to the extent necessary, to hold such amounts as
collateral to secure such Obligations and to return as unpaid for insufficient
funds any and all checks and other items drawn against any deposits so held as
such Bank in its sole discretion may elect. The Borrowers agree, to the fullest
extent they may effectively do so under Applicable Law, that any holder of a
participation in any Extension of Credit may exercise rights of set-off and
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrowers in the
amount of such participation.
/section/10.06 ASSIGNMENT AND PARTICIPATION
(a) ASSIGNMENTS BY BORROWERS. The Borrowers may not assign or
transfer any of their rights or obligations under this Agreement without the
prior written consent of the Agent and all the Banks, and any such attempted
assignment or transfer shall be null and void.
(b) ASSIGNMENT BY BANKS. A Bank may assign its rights and
delegate its obligations under this Agreement only with the prior written
consent of the Agent and the other Banks.
(c) PARTICIPATIONS. Any Bank may transfer participation
interests in its Commitment, the Note held by it, its participations in
Acceptance Obligations and Letter of Credit
52
Obligations, and any of its other rights and obligations hereunder PROVIDED that
the Agent and the Borrowers may continue to deal only with such Bank, the
purchaser of any such participation shall not be deemed a "Bank" and the
purchaser of any such participation shall have no right to vote on or approve
any matter hereunder and no right to contact, negotiate with or seek information
from the Borrowers or to enforce such Note or this Agreement. Each Borrower
hereby authorizes each Bank at its sole discretion to divulge any and all
information which such Bank may have acquired by any means or from any Person,
including such Borrower, regarding such Borrower or its property, books and
accounts, to any potential or prospective assignee of or participant in
Extensions of Credit and agrees to hold such Bank harmless under all
circumstances from any and all liability, cost or expense arising from any such
disclosure under any Applicable Law.
/section/10.07 DETERMINATIONS BY AGENT. Each determination by the Agent
with regard to the subject matter of this Agreement shall, in the absence of
manifest error, be conclusive and binding on all parties.
/section/10.08 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
sucH jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, each of the Borrowers
hereby waives any provision of law that renders any provision hereof prohibited
or unenforceable in any respect.
/section/10.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be aN original and
shall be binding upon all parties, their successors and permitted assigns.
/section/10.10 SURVIVAL OF OBLIGATIONS. Except as otherwise expressly
provided herein, the representations, warranties, rights and obligationS
(including indemnity obligations) of the parties hereunder shall survive the
execution of this Agreement, any investigation of any matter by the Agent or any
Bank and the extension and repayment of the Loans, Letters of Credit Obligations
and Acceptance Obligations and termination of this Agreement.
/section/10.11 NO JOINT VENTURE. Nothing contained in any Loan Document
shall be deemed or construed by the parties hereto or by anY third person to
create the relationship of principal and agent or of partnership or joint
venture or of any association between the Banks and the Borrowers other than the
relationship of creditors and debtors.
/section/10.12 FURTHER ASSURANCES; POWER OF ATTORNEY. Each Borrower
agrees, upon the request of the Agent, to execute and deliver such further acts
as thE Agent may reasonably request in order to fully effectuate the purposes of
any Loan Document. Each Borrower hereby irrevocably appoints the Agent as its
true and lawful attorney-in-fact (such appointment being coupled with an
interest) with full power (in the name of such Borrower or otherwise) to execute
and deliver such documents and do such acts as the Agent may reasonably deem
necessary in order to fully effectuate the purposes of this Agreement.
53
/section/10.13 NO REPRESENTATIONS REGARDING RENEWAL. Each Borrower
acknowledges that neither the Agent nor any of the Banks has agreed with or
representeD to such Borrower that the credit facility created hereby will be
renewed or extended past the Termination Date or that any Extensions of Credit
will be made after the Termination Date.
/section/10.14 SUCCESSORS AND ASSIGNS. Subject to the provisions of
/section/10.06, all of the provisions of this Agreement shall be binding upon
And inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
/section/10.15 LIMITATION OF LIABILITY; ACKNOWLEDGEMENT. NEITHER THE
BANKS, THE AGENT, NOR ANY AFFILIATE THEREOF SHALL HAVE ANY LIABILITY WITH
RESPECT TO, AND EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, EACH OF THE
BORROWERS HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX UPON, ANY CLAIM FOR ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED BY EITHER BORROWER IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT, OR
THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH. EACH
BORROWER ACKNOWLEDGES THAT IT HAS NO RIGHT OF OFFSET AGAINST OR CLAIM OR DEFENSE
IN RESPECT TO ITS OBLIGATIONS TO LEUMI EXISTING AS OF THE AGREEMENT DATE AND
HEREBY WAIVES ANY THAT IT MAY HAVE.
/section/10.16 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF
THE STATE OF FLORIDA WITHOUT REGARD TO ANY CONFLICTS- OF- LAW PRINCIPLE OR RULE
THAT WOULD GIVE EFFECT TO THE LAW OF ANY OTHER JURISDICTION.
/section/10.17 JUDICIAL PROCEEDINGS. ANY JUDICIAL PROCEEDING BROUGHT
AGAINST EITHER BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF
FLORIDA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS
(A) ACCEPTS, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF
SUCH COURTS AND ANY RELATED APPELLATE COURTS AND IRREVOCABLY AGREES (WITHOUT
WAIVING ANY RIGHT TO APPEAL) TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND (B) IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. EACH OF THE BORROWERS HEREBY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, (WITH A COPY BY OVERNIGHT COURIER),
AT ITS ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF
/section/10.01, AND SERVICE
54
SO MADE SHALL BE DEEMED COMPLETED ON THE THIRD DAY AFTER SUCH SERVICE IS
DEPOSITED IN THE MAIL. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
BANK TO BRING PROCEEDINGS AGAINST EITHER BORROWER OR EITHER GUARANTOR IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY EITHER BORROWER
AGAINST ANY BANK OR THE AGENT INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE BROUGHT ONLY IN A COURT LOCATED IN DADE COUNTY IN
THE STATE OF FLORIDA.
/section/10.18 WAIVER OF JURY TRIAL. EACH BORROWER, THE AGENT, AND EACH
BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH ANY OF THEM
ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER AND WHETHER ARISING OR ASSERTED BEFORE OR AFTER THE
AGREEMENT DATE OR BEFORE OR AFTER PAYMENT, OBSERVANCE AND PERFORMANCE IN FULL OF
THE BORROWERS' OBLIGATIONS HEREUNDER OR THEREUNDER.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers all as of the day and year first
written above.
NEW M-TECH CORPORATION,
as a Borrower
By: /S/ XXXX XXXXXX
------------------------------------
Name: XXXX XXXXXX
------------------------------------
Title: PRESIDENT
------------------------------------
NEWTECH (HONG KONG) LIMITED,
as a Borrower
By: /S/ XXXX XXXXXX
------------------------------------
Name: XXXX XXXXXX
------------------------------------
Title: PRESIDENT
------------------------------------
55
BANK LEUMI LE-ISRAEL B.M.,
as the Agent
By: /S/ XXXXXX X. XXXXXXX
------------------------------------
Name: XXXXXX X. XXXXXXX
------------------------------------
Title: VICE PRESIDENT
------------------------------------
Amount of
Commitment: $15,000,000 BANK LEUMI LE-ISRAEL B.M., as a Bank
By: /S/ XXXXXX X. XXXXXXX
------------------------------------
Name: XXXXXX X. XXXXXXX
------------------------------------
Title: VICE PRESIDENT
------------------------------------
Lending Office:
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Address for Notices:
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention:
Xx. Xxxxxxx Xxxxxxxxx
Telefax No.:
(000) 000-0000
Telephone No.:
(000) 000-0000
56
Amount of
Commitment: $12,000,000 COMERICA BANK, as a Bank
By: /S/ XXXXXX XXXXXXXX
------------------------------------
Name: XXXXXX XXXXXXXX
------------------------------------
Title: VICE PRESIDENT
------------------------------------
Lending Office:
000 X.X. 0xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Address for Notices:
000 X.X. 0xx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxx
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
57
Amount of
Commitment: $5,000,000 NATIONAL BANK OF CANADA, as a Bank
By: /S/ XXXXXXX XXXXXXXXXXX
------------------------------------
Name: XXXXXXX XXXXXXXXXXX
------------------------------------
Title: VICE PRESIDENT
------------------------------------
Lending Office:
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Address for Notices:
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx X. Page
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
58
AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT TO CREDIT AGREEMENT ("this Amendment") is made as of
September 8, 1997 and amends that certain Credit Agreement, dated as of July
23, 1997, by and among NEW M-TECH CORPORATION and NEWTECH (HONG KONG) LIMITED
(collectively the "Borrowers," each a "Borrower"), BANK LEUMI LE-ISRAEL B.M.,
COMERICA BANK and NATIONAL BANK OF CANADA (collectively the "Banks," each a
"Bank") and BANK LEUMI LE-ISRAEL B.M., as the Agent (the "Agent") (the "Credit
Agreement," the capitalized terms used but not otherwise defined herein being
used herein as therein defined).
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrowers, the Banks and the
Agent hereby agree as follows:
1. The following definitions in /section/1.01(a) of the Credit Agreement are
hereby amended as follows:
"NOTES" means each Revolving Note of the Borrowers payable to the order
of a Bank, evidencing such Bank's Loans and executed by the Borrowers
in September, 1997.
"WINDMERE GUARANTY" means the Guaranty Agreement executed by Windmere
in favor of the Agent and the Banks as of the Agreement Date, as
amended by an Amendment to Guaranty Agreement, dated in September,
1997.
2. The last sentence of /section/2.01 of the Credit Agreement is hereby amended
to read as follows:
Moreover, the sum of the aggregate unpaid principal amount of all Loans
plus the aggregate amount of all Acceptance Obligations shall not
exceed $20,000,000 at any time prior to November 15, 1997 or
$10,000,000 on or at any time after November 15, 1997; the aggregate
amount of all Acceptance Obligations shall not exceed $10,000,000 at
any time prior to November 15, 1997 or $5,000,000 on or at any time
after November 15, 1997; the aggregate amount of all Letter of Credit
Obligations with respect to Standby Letters of Credit shall not exceed
$1,000,000 at any time; and there shall be no Loans outstanding or
Acceptance Obligations in existence for a period of 30 consecutive days
between the Closing Date and the Termination Date.
3. The last sentence of /section/2.02 of the Credit Agreement is hereby amended
to read as follows:
There shall at no time be in effect more than six Borrowings with
respect to LIBOR Rate Loans, and at no time shall the
aggregate outstanding principal balance of LIBOR Rate Loans exceed
$10,000,000.
4. /section/2.04(a) of the Credit Agreement is hereby amended (effective as of
August 13, 1997) to read as follows:
INTEREST RATES. Each Loan shall bear interest on the outstanding
principal amount thereof until due at a per annum rate equal to, (i) so
long as it is a Reference Rate Loan, the Reference Rate as in effect
from time to time; and (ii), so long as it is a LIBOR Rate Loan, the
applicable Adjusted LIBOR Rate plus 2.50%; provided, however, that, on
any day after August 12, 1997 on which the outstanding principal
balance of all the Loans exceeds $10,000,000, a portion of each Bank's
then outstanding Reference Rate Loans equal to its Proportionate Share
of such excess shall bear interest on that day at a per annum rate
equal to the Reference Rate in effect on that day plus 1.00%. The
interest rate applicable to each Reference Loan shall change
simultaneously with each change in the Reference Rate.
5. The total commission payable by the Borrowers pursuant to /section/2.11(c)(i)
with respect to each Acceptance shall not be less than the Agent's minimum
acceptance commission.
6. In connection with /section/5.05 of the Credit Agreement and /section/19(b)
of the Security Agreement, the Banks hereby consent to the Borrowers' granting
to Windmere a security interest in the Borrowers' assets to secure indebtedness
of one or both of the Borrowers to Windmere in the approximate principal amount
of $3,000,000 stemming from Windmere's obtaining (and making reimbursements with
respect to) certain letters of credit for the Borrowers' benefit and to secure
indemnity or reimbursement obligations of one or both of the Borrowers to
Windmere with respect to Windmere's payment of a total amount in excess of
$3,000,000 (plus interest thereon and collection costs) under the Windmere
Guaranty. Said security interest shall be subordinate and inferior to the
Security Interests in all respects and shall terminate when the aforesaid
indebtedness and indemnity or reimbursement obligations are repaid in full.
Borrowers shall repay the aforesaid indebtedness and indemnity or reimbursement
obligations in full before repaying any other indebtedness of either or both of
the Borrowers to Windmere.
7. When it executes this Amendment and as a condition precedent to the
effectiveness of the amendment hereby of /section/2.01 of the Credit Agreement,
the Borrowers shall deliver to the Agent the following in form and substance
satisfactory to the Agent:
(a) A certificate of the Secretary and Assistant Secretary of each
Borrower authorizing this Amendment and the Notes;
-2-
(b) A certificate of the Secretary and Assistant Secretary of
Windmere authorizing Windmere's Amendment to Guaranty
Agreement referred to below and its Subordination Agreement
referred to below;
(c) The Notes (as redefined hereby) duly executed by the
Borrowers;
(d) Whatever supplemental debentures or amendments to debentures
and filings are recommended by Coudert Brothers, Hong Kong,
counsel for Agent and the Banks, to take account of the
substitution of the Notes (as redefined hereby) for the Notes
(as originally defined in the Credit Agreement);
(e) A Subordination Agreement duly executed by Xxxx Xxxxxx as of
the date of this Amendment and a Subordination Agreement duly
executed by Windmere as of the date of this Amendment;
(f) A Confirmation of Guaranty Agreement duly executed by Xxxx
Xxxxxx and an Amendment to Guaranty Agreement duly executed by
Windmere;
(g) A favorable, written opinion (addressed to the Agent and the
Banks) of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx &
Quentel, P.A., counsel for the Borrowers and the Guarantors,
dated the date of this Amendment and covering such matters as
the Agent or any Bank may request and a favorable, written
opinion (addressed to the Agent and the Banks) of Coudert
Brothers, counsel for the Banks, dated the date of this
Amendment and covering such matters as the Agent or any Bank
may request; and
(h) Such other certificates, documents, instruments and opinions
as the Agent shall reasonably request.
8. The term "the Obligations" as used in the Security Agreement shall include
all obligations and liabilities of the Borrowers now or hereafter existing under
the Credit Agreement as amended hereby or any or all of the Notes (as redefined
hereby). The term "the Notes" as used in the Tax Indemnity Agreement among the
Borrowers and the Banks means both the Notes as originally defined in the Credit
Agreement and the Notes as redefined hereby. The term "Loan Documents" as used
in the Appointment of Process Agent made by NewTech (Hong Kong) Limited shall
include the Notes (as redefined hereby).
9. As amended hereby, the Credit Agreement shall remain in full force and effect
and is hereby confirmed. The Borrowers acknowledge that neither of them has any
right of offset against or claim or defense in respect of the Obligations, waive
any such
-3-
defense that either of them may have and represent to the Agent and the Banks
that no Event of Default (or event or circumstance which, with the passage of
time, the giving of notice, or both, would constitute an Event of Default)
exists as of the date hereof. The Banks hereby accept the Subordination
Agreements, of approximately even date herewith, made in their favor by Xxxx
Xxxxxx and Windmere.
10. On or before their execution hereof, the Borrowers shall pay to the Agent a
restructuring fee of $5,000, to be shared by the Banks PRO RATA in proportion to
their Commitments.
11. Each Borrower jointly and severally agrees to pay (or, if appropriate,
reimburse) the Agent on demand the amount of any and all attorneys' fees,
documentary stamp taxes and other costs and expenses relating to this Amendment
and any documents executed in connection herewith and hereby authorizes the
Banks to make one or more Loans to pay any such costs and expenses.
12. THE BORROWERS, THE BANKS AND THE AGENT EACH HEREBY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
HEREUNDER OR RELATING HERETO.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date indicated at the head of it.
NEW M-TECH CORPORATION,
as a Borrower
By: /s/ Xxxxxx Xxxxxx
-------------------------
Name: Xxxxx Xxxxxx
-------------------------
Title: Vice President, Finance
------------------------------
NEWTECH (HONG KONG) LIMITED,
as a Borrower
By: /s/ Xxxxxx Xxxxxx
-------------------------
Name: Xxxxx Xxxxxx
-------------------------
Title: Vice President, Finance
------------------------------
Additional Signatures Appear On Pages 6, 7 and 8
-4-
BANK LEUMI LE-ISRAEL B.M.,
as the Agent
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxxx
-------------------------
Title: Vice President
-------------------------
BANK LEUMI LE-ISRAEL B.M.,
as a Bank
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxxx
-------------------------
Title: Vice President
-------------------------
-5-
COMERICA BANK, as a Bank
By: /s/ Xxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------
Title: Vice President
-------------------------
-0-
XXXXXXXX XXXX XX XXXXXX, as a Bank
By: /s/ Xxxx Page
-------------------------
Name: Xxxx Page
-------------------------
Title: Vice President
-------------------------
-7-
AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT TO CREDIT AGREEMENT ("this Amendment") is made as of
November 5, 1997 (the "Effective Date") and amends that certain Credit
Agreement, dated as of July 23, 1997, by and among NEW M-TECH CORPORATION and
NEWTECH (HONG KONG) LIMITED (collectively the "Borrowers," each a "Borrower"),
BANK LEUMI LE-ISRAEL B.M., COMERICA BANK and NATIONAL BANK OF CANADA
(collectively the "Banks," each a "Bank") and BANK LEUMI LE-ISRAEL B.M., as the
Agent (the "Agent"), as previously amended (the "Credit Agreement," the
capitalized terms used but not otherwise defined herein being used herein as
therein defined).
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrowers, the Banks and the
Agent hereby agree as follows:
1. The following definitions in /section/1.01(a) of the Credit Agreement are
hereby amended as follows effective as of the Effective Date:
"NOTES" means each Revolving Note of the Borrowers payable to the order
of a Bank, evidencing such Bank's Loans and executed by the Borrowers
in November, 1997.
"COMMITMENT" of any Bank means the obligation of such Bank to make
Loans, to purchase participations in Acceptances, and to purchase
participations in Letters of Credit, such that the sum of the
outstanding principal amount of its Loans plus its participations in
Acceptance Obligations and Letter of Credit Obligations does not exceed
the amount set forth below opposite its name:
Bank Leumi le-Israel B.M. $15,000,000
Comerica Bank $13,000,000
National Bank of Canada $ 9,000,000
2. The last two sentences of /section/2.01 of the Credit Agreement are hereby
amended to read as follows:
The sum of (i) the aggregate unpaid principal amount of all Loans, plus
(ii) the aggregate amount of all Acceptance Obligations, plus (iii) the
aggregate amount of all Letter of Credit Obligations shall not exceed
at any time the Borrowing Base at that time and shall not exceed
$32,000,000 at any time during the High Season or $14,000,000 at any
time during the Low Season (except the month of November, 1997 during
which such sum shall not exceed $37,000,000). Moreover, the sum of the
aggregate unpaid principal amount of all Loans plus the aggregate
amount of all Acceptance Obligations shall not exceed $20,000,000 at
any time during the High Season or $10,000,000 at any time during the
Low Season (except the
month of November, 1997 during which such sum shall not exceed
$30,000,000), and shall not exceed $4,000,000 during a period of 30
consecutive days between the Closing Date and the Termination Date; the
aggregate amount of all Acceptance Obligations shall not exceed
$10,000,000 at any time during the High Season or $5,000,000 at any
time during the Low Season (except the month of November, 1997 during
which such aggregate amount shall not exceed $10,000,000); and the
aggregate amount of all Letter of Credit Obligations with respect to
Standby Letters of Credit shall not exceed $1,000,000 at any time.
3. On the Effective Date, the Banks shall make whatever sales to and purchases
from one another of the then existing Extensions of Credit and participations
therein as are necessary so that immediately thereafter the outstanding
Extensions of Credit and participations therein are owned by the Banks in
proportion to their respective Commitments (as redefined by this Amendment).
4. When it executes this Amendment and as a condition precedent to the
effectiveness of the amendment hereby of /section/2.01 of the Credit Agreement,
the Borrowers shall deliver to the Agent the following in form and substance
satisfactory to the Agent:
(a) A certificate of the Secretary (and, if required by the Agent,
the Assistant Secretary) of each Borrower authorizing this
Amendment and the Notes (as redefined by this Amendment);
(b) The Notes (as redefined by this Amendment) duly executed by
the Borrowers;
(c) Whatever supplemental debentures or amendments to debentures
and filings are recommended by Coudert Brothers, Hong Kong,
counsel for Agent and the Banks, to take account of the
substitution of the Notes (as redefined by this Amendment) for
the Notes (as originally defined in the Credit Agreement) or
the Notes (as defined in the previous Amendment to Credit
Agreement among the Borrowers and the Banks));
(d) A Confirmation of Guaranty Agreement duly executed by Xxxx
Xxxxxx and a Confirmation of Guaranty Agreement duly executed
by Windmere;
(e) A favorable, written opinion (addressed to the Agent and the
Banks) of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx &
Quentel, P.A., counsel for the Borrowers and the Guarantors,
dated the date of this Amendment and covering such matters as
the Agent or any Bank may request and a favorable, written
opinion (addressed to the Agent and the Banks) of Coudert
Brothers, counsel for the Banks,
-2-
dated the date of this Amendment and covering such matters as
the Agent or any Bank may request; and
(f) Such other certificates, documents, instruments and opinions
as the Agent or any Bank shall reasonably request.
5. The term "the Obligations" as used in the Security Agreement shall include
all obligations and liabilities of the Borrowers now or hereafter existing under
the Credit Agreement as amended by this Amendment or any or all of the Notes (as
redefined by this Amendment). The term "the Notes" as used in the Tax Indemnity
Agreement among the Borrowers and the Banks means both the Notes as originally
defined in the Credit Agreement, the Notes as defined in the previous Amendment
to Credit Agreement among the Borrowers and the Banks and the Notes as redefined
by this Amendment. The term "Loan Documents" as used in the Appointment of
Process Agent made by NewTech (Hong Kong) Limited shall include the Notes (as
redefined by this Amendment).
6. As amended hereby, the Credit Agreement shall remain in full force and
effect. The Borrowers acknowledge that neither of them has any right of offset
against or claim or defense in respect of the Obligations, waive any such
defense that either of them may have and represent to the Agent and the Banks
that no Event of Default (or event or circumstance which, with the passage of
time, the giving of notice, or both, would constitute an Event of Default)
exists as of the date hereof.
7. On or before their execution hereof, the Borrowers shall pay to the Agent a
restructuring fee of $15,000, to be shared by the Banks PRO RATA in proportion
to their Commitments as they existed prior to the Effective Date.
8. The Borrowers jointly and severally agree to pay (or, if appropriate,
reimburse) the Agent on demand the amount of any and all attorneys' fees,
documentary stamp taxes and other costs and expenses relating to this Amendment
and any documents executed in connection with this Amendment and hereby
authorize the Banks to make one or more Loans to pay any such costs and
expenses.
9. THE BORROWERS, THE BANKS AND THE AGENT EACH HEREBY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING UNDER
OR RELATING TO THIS AMENDMENT.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date indicated at the head of it.
NEW M-TECH CORPORATION,
as a Borrower
-3-
By: /s/ Xxxxxx Xxxxxx
-------------------------
Name: Xxxxxx Xxxxxx
-------------------------
Title: Vice President, Finance
------------------------------
NEWTECH (HONG KONG) LIMITED,
as a Borrower
By: /s/ Xxxxxx Xxxxxx
-------------------------
Name: Xxxxxx Xxxxxx
-------------------------
Title: Vice President, Finance
------------------------------
Additional Signatures Appear On Pages 5, 6 and 7
BANK LEUMI LE-ISRAEL B.M.,
as the Agent
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxxx
-------------------------
Title: Vice President
-------------------------
BANK LEUMI LE-ISRAEL B.M.,
as a Bank
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxxx
-------------------------
Title: Vice President
-------------------------
-4-
COMERICA BANK, as a Bank
By: /s/ Xxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------
Title: Vice President
-------------------------
-0-
XXXXXXXX XXXX XX XXXXXX, as a Bank
By: /s/ Xxxx Page
-------------------------
Name: Xxxx Page
-------------------------
Title: Vice President
-------------------------
-6-
AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT TO CREDIT AGREEMENT ("this Amendment") is made as of
December 30, 1997 (the "Effective Date") and amends that certain Credit
Agreement, dated as of July 23, 1997, by and among NEW M-TECH CORPORATION and
NEWTECH (HONG KONG) LIMITED (collectively the "Borrowers," each a "Borrower"),
BANK LEUMI LE-ISRAEL B.M., COMERICA BANK and NATIONAL BANK OF CANADA
(collectively the "Banks," each a "Bank") and BANK LEUMI LE-ISRAEL B.M., as the
Agent (the "Agent"), as previously amended (the "Credit Agreement," the
capitalized terms used but not otherwise defined herein being used herein as
therein defined).
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrowers, the Banks and the
Agent hereby agree as follows:
1. The last two sentences of /section/2.01 of the Credit Agreement are hereby
amended to read as follows:
The sum of (i) the aggregate unpaid principal amount of all Loans, plus
(ii) the aggregate amount of all Acceptance Obligations, plus (iii) the
aggregate amount of all Letter of Credit Obligations shall not exceed
at any time the Borrowing Base at that time and shall not exceed
$32,000,000 at any time during the High Season or $14,000,000 at any
time during the Low Season (except the months of November and December,
1997 and January, 1998 during which such sum shall not exceed
$37,000,000). Moreover, the sum of the aggregate unpaid principal
amount of all Loans plus the aggregate amount of all Acceptance
Obligations shall not exceed $20,000,000 at any time during the High
Season or $10,000,000 at any time during the Low Season (except the
months of November and December, 1997 and January, 1998 during which
such sum shall not exceed $30,000,000); the aggregate amount of all
Acceptance Obligations shall not exceed $10,000,000 at any time during
the High Season or $5,000,000 at any time during the Low Season (except
the months of November and December, 1997 and January, 1998 during
which such aggregate amount shall not exceed $10,000,000); and the
aggregate amount of all Letter of Credit Obligations with respect to
Standby Letters of Credit shall not exceed $1,000,000 at any time.
2. When it executes this Amendment and as a condition precedent to the
effectiveness of the amendment hereby of /section/2.01 of the Credit Agreement,
the Borrowers shall deliver to the Agent the following in form and substance
satisfactory to the Agent:
(a) A certificate of the Secretary (and, if required by the Agent,
the Assistant Secretary) of each Borrower authorizing this
Amendment;
(b) A consent to this Amendment duly executed by each Guarantor;
and
(c) Such other certificates, documents, instruments and opinions
as the Agent or any Bank shall reasonably request.
3. The term "the Obligations" as used in the Security Agreement shall include
all obligations and liabilities of the Borrowers now or hereafter existing under
the Credit Agreement as amended by this Amendment or any or all of the Notes.
4. As amended hereby, the Credit Agreement shall remain in full force and
effect. The Borrowers acknowledge that neither of them has any right of offset
against or claim or defense in respect of the Obligations, waive any such
defense that either of them may have and represent to the Agent and the Banks
that no Event of Default (or event or circumstance which, with the passage of
time, the giving of notice, or both, would constitute an Event of Default)
exists as of the date hereof.
5. The Borrowers jointly and severally agree to pay (or, if appropriate,
reimburse) the Agent on demand the amount of any and all attorneys' fees,
documentary stamp taxes and other costs and expenses relating to this Amendment
and any documents executed in connection with this Amendment and hereby
authorize the Banks to make one or more Loans to pay any such costs and
expenses.
6. This Amendment may be executed in one or more counterparts.
7. THE BORROWERS, THE BANKS AND THE AGENT EACH HEREBY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING UNDER
OR RELATING TO THIS AMENDMENT.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date indicated at the head of it.
NEW M-TECH CORPORATION,
as a Borrower
By: /S/ XXXXXX XXXXXX
------------------------------
Name: XXXXXX XXXXXX
------------------------------
Title: VICE PRESIDENT, FINANCE
------------------------------
NEWTECH (HONG KONG) LIMITED,
as a Borrower
By: /S/ XXXXXX XXXXXX
------------------------------
Name: XXXXXX XXXXXX
------------------------------
Title: VICE PRESIDENT, FINANCE
------------------------------
Additional Signatures Appear On Pages 4, 5 and 6
-2-
BANK LEUMI LE-ISRAEL B.M.,
as the Agent
By: /S/ XXXXXXX XXXXXXXXX
------------------------------
Name: XXXXXXX XXXXXXXXX
------------------------------
Title: VICE PRESIDENT
------------------------------
BANK LEUMI LE-ISRAEL B.M.,
as a Bank
By: /S/ XXXXXXX XXXXXXXXX
------------------------------
Name: XXXXXXX XXXXXXXXX
------------------------------
Title: VICE PRESIDENT
------------------------------
-4-
COMERICA BANK, as a Bank
By: /S/ XXXXXX XXXXXXXX
------------------------------
Name: XXXXXX XXXXXXXX
------------------------------
Title: VICE PRESIDENT
------------------------------
-0-
XXXXXXXX XXXX XX XXXXXX, as a Bank
By: /S/ XXXXXXX XXXXXXXXXXX
------------------------------
Name: XXXXXXX XXXXXXXXXXX
------------------------------
Title: VICE PRESIDENT
------------------------------
-6-
AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT TO CREDIT AGREEMENT ("this Amendment") is made as of
March 18, 1998 (the "Effective Date") by and among NEW M-TECH CORPORATION, a
Florida corporation, NEWTECH (HONG KONG) LIMITED, a Hong Kong limited liability
company, DURABLE ELECTRONICS INDUSTRIES LIMITED, a Hong Kong limited liability
company, ("DEI") and NEWTECH ELECTRONICS INDUSTRIES LIMITED (formerly known as
Pomillo Limited), a Hong Kong limited liability company, ("XXXX") (collectively
the "Borrowers", each a "Borrower") BANK LEUMI LE-ISRAEL B.M., COMERICA BANK and
NATIONAL BANK OF CANADA (collectively the "Banks", each a "Bank") and BANK LEUMI
LE-ISRAEL B.M., as the Agent for the Banks (the "Agent").
BACKGROUND
A. New M-Tech Corporation, Newtech (Hong Kong) Limited, the Banks and the Agent
are parties to a Credit Agreement, dated as of July 23, 1997 (as previously
amended, the "Credit Agreement", the capitalized terms used but not otherwise
defined herein being used herein as therein defined).
B. New M-Tech Corporation and Newtech (Hong Kong) Limited have requested that
DEI and XXXX become parties to the Credit Agreement, being jointly and severally
entitled to the rights of the Borrowers thereunder and liable for the
obligations of the Borrowers thereunder, and have also requested that the
duration of certain sub-limits for extensions of credit set forth in
/section/2.01 of the Credit Agreement be extended.
C. The Banks and the Agent have agreed to the foregoing requests on the terms
and conditions set forth in this Amendment.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrowers, the Banks and the
Agent hereby agree as follows:
1. From and after the Effective Date, the term "the Borrowers" , as used in the
Credit Agreement, shall mean and refer to New M-Tech, Newtech Hong Kong, DEI and
XXXX,
collectively; all references to "either Borrower" or "either of the Borrowers"
in the Credit Agreement shall be read as references to "any Borrower" or "any of
the Borrowers"; and DEI and XXXX (in addition to New M-Tech and Newtech Hong
Kong) shall be entitled to all the benefits of being a Borrower under the Credit
Agreement (as revised by this Amendment) and shall be jointly and severally
liable for all the Obligations. DEI and XXXX each hereby agrees to be bound by
all the terms and conditions of the Credit Agreement (as revised by this
Amendment).
2. The following definitions in /section/1.01(a) of the Credit Agreement are
hereby amended or added as follows effective as of the Effective Date:
"DEBENTURES" means the Debenture executed by Newtech (Hong Kong) in
favor of the Agent as of the Agreement Date (as amended, supplemented
or restated from time to time), the Debenture executed by DEI in favor
of the Agent in March, 1998 and the Debenture executed by XXXX in favor
of the Agent in March, 1998.
"NOTES" means each Revolving Note of the Borrowers payable to the order
of a Bank, evidencing such Bank's Loans and executed by the Borrowers
in March, 1998.
"SECURITY AGREEMENTS" means the Security Agreement executed by New
M-Tech, Newtech (Hong Kong) and NewTech International Corporation in
favor of the Agent as of the Agreement Date (as amended, supplemented
or restated from time to time), the Security Agreement executed by DEI
in favor of the Agent in March, 1998 (as amended, supplemented or
restated from time to time), and the Security Agreement executed by
XXXX in favor of the Agent in March, 1998 (as amended, supplemented or
restated from time to time).
"SECURITY DOCUMENTS" means the Security Agreements, the Debentures and
each other guaranty agreement, mortgage, deed of trust, security
agreement, pledge agreement, assignment of proceeds agreement or other
security or collateral document securing any or all of the Obligations.
From and after the Effective Date, all references in the Credit Agreement to
"the Security Agreement" shall be read as "the Security Agreements" and all
references to "the Debenture" shall be read as "the Debentures".
3. The last two sentences of /section/2.01 of the Credit Agreement are hereby
amended to read as follows:
The sum of (i) the aggregate unpaid principal amount of all Loans, plus
(ii) the aggregate amount of
-2-
all Acceptance Obligations, plus (iii) the aggregate amount of all
Letter of Credit Obligations shall not exceed at any time the Borrowing
Base at that time and shall not exceed $32,000,000 at any time during
the High Season or $14,000,000 at any time during the Low Season
(except the months of November and December, 1997 and January through
April, 1998 during which such sum shall not exceed $37,000,000).
Moreover, the sum of the aggregate unpaid principal amount of all Loans
plus the aggregate amount of all Acceptance Obligations shall not
exceed $20,000,000 at any time during the High Season or $10,000,000 at
any time during the Low Season (except the months of November and
December, 1997 and January through April, 1998 during which such sum
shall not exceed $30,000,000); the aggregate amount of all Acceptance
Obligations shall not exceed $10,000,000 at any time during the High
Season or $5,000,000 at any time during the Low Season (except the
months of November and December, 1997 and January through April, 1998
during which such aggregate amount shall not exceed $10,000,000); and
the aggregate amount of all Letter of Credit Obligations with respect
to Standby Letters of Credit shall not exceed $1,000,000 at any time.
4. When it executes this Amendment and as a condition precedent to DEI's and
NEIL's being entitled to request Extensions of Credit, the Borrowers shall
deliver to the Agent the following in form and substance satisfactory to the
Agent:
(a) Three Notes, each duly executed by the Borrowers and payable
to the order of a Bank in a principal amount equal to such
Bank's Proportionate Share of $37,000,000;
(b) A Security Agreement in favor of the Agent duly executed by
DEI and a Security Agreement in favor of the Agent duly
executed by XXXX;
(c) A Debenture in favor of the Agent duly executed by DEI and a
Debenture in favor of the Agent duly executed by XXXX (both
governed by Hong Kong law and suitable for recordation in the
appropriate registries in Hong Kong as deemed necessary or
desirable by the Agent);
(d) A certificate of the Secretary (and, if required by the Agent,
the Assistant Secretary) or, as the case may be, resolutions
duly passed by the Directors and (if applicable) Shareholders
of each Borrower authorizing this Amendment, the Notes (as
redefined by this Amendment) and, in the case of each of DEI
and XXXX, the Security Agreement and Debenture to which it is
a party;
(e) Copies of the up-to-date memorandum and articles of
association or equivalent document of each of DEI, XXXX and
Durable Electrical Metal Factory Limited, certified as sure
and correct by its Director;
-3-
(f) A Confirmation of Guaranty Agreement duly executed by Xxxx
Xxxxxx and a Confirmation of Guaranty Agreement duly executed
by Windmere;
(g) A Subordination Agreement duly executed by Durable Electrical
Metal Factory Limited ("DEM") in favor of the Banks with
respect to obligations owed by DEI and XXXX to DEM, together
with the resolutions duly passed by the Directors and (if
applicable) the Shareholders of DEM approving and authorizing
such Subordination Agreement;
(h) A favorable, written opinion (addressed to the Agent and the
Banks) of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx &
Quentel, P.A., Florida counsel for the Borrowers and the
Guarantors, dated the date of this Amendment and covering such
matters as the Agent or any Bank may request and a favorable,
written opinion (addressed to the Agent and the Banks) of
Coudert Brothers, Hong Kong counsel for the Banks, dated the
date of this Amendment and covering such matters as the Agent
or any Bank may request;
(i) An appointment by each of DEI, XXXX and DEM of Greenberg,
Traurig, Hoffman, Lipoff, Xxxxx & Quentel, P.A. as its agent
to receive service of process on its behalf in any state or
federal court located in the State of Florida and an
acceptance of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx &
Quentel, P.A. of such appointment;
(j) Certified UCC-11, lien, judgment and tax search reports for
each jurisdiction in which any Borrower is located or has
inventory, showing no Liens or financing statements of record
against any Borrower except those permitted by the Credit
Agreement;
(k) Whatever certificates and affidavits the Agent requests to
establish that no Florida documentary stamp tax or intangible
tax is or will be owing in connection with the Loan Documents;
(l) Executed copies of UCC financing statements (and the
equivalent to be filed in each office necessary and in the
Agent's judgment desirable to perfect the Security Interests
created by the Security Agreements referred to above) and
evidence of the payment of all taxes and fees required to be
paid in connection with the filing thereof and also evidence
that whatever filings or other actions required to perfect the
Security Interests under the law of Hong Kong have been made
or taken; and
(m) Such other certificates, documents, instruments and opinions
as the Agent or any Bank shall reasonably request.
-4-
Any failure to comply with this section 4 shall constitute an Event of Default.
5. /section/5.05 of the Credit Agreement is hereby amended to read as follows:
LIENS. Create, assume or incur, or permit or suffer to exist or to be
created, assumed or incurred, any Lien upon any of its properties or
assets of any character, whether now owned or hereafter acquired, or
upon any income or profits therefrom, except for the Security Interests
created by the Security Documents and, in the case of Durable
Electronics Industries Limited ("DEI"), liens in favor of Durable
Electrical Metal Factory Limited ("DEM") on equipment and machinery
owned by DEI as of March 18, 1998 and on all DEI's inventory (now owned
or hereafter acquired) securing Debt of DEI to DEM in an amount not
exceeding $6,700,000, provided such liens are subordinate to the
Security Interests.
6. The term "the Obligations" as used in the Security Agreements and the term
"Secured Liabilities" as used in the Debentures shall include all obligations
and liabilities of the Borrowers now or hereafter existing under the Credit
Agreement as amended by this Amendment or any or all of the Notes (as redefined
by this Amendment). The term "the Notes" as used in the Tax Indemnity Agreement
among the Borrowers (except DEI and XXXX) and the Banks means all of the Notes
as originally defined in the Credit Agreement, the Notes as defined in the
previous Amendments to Credit Agreement among the Borrowers (except DEI and
XXXX) and the Banks and the Notes as redefined by this Amendment. The term "Loan
Documents" as used in the Appointment of Process Agent made by Newtech (Hong
Kong) Limited shall include without limitation the Notes (as redefined by this
Amendment) and the Tax Indemnity Agreement, of even date herewith, made by the
Borrowers in favor of the Banks.
7. DEI shall fully comply with /section/11(a) of the Security Agreement, of even
date herewith, made by it in favor of the Agent as soon as reasonably
practicable and in any event no later than May 20, 1998. In the meantime, DEI
shall keep in full force and effect the Deed of Assignment, dated as of November
1, 1997, made by Durable Electrical Metal Factory Limited in DEI's favor
relating to the insuring of DEI's plant, equipment and inventory and shall cause
Durable Electrical Metal Factory Limited to pay over any insurance proceeds
covered thereby directly to the Agent.
8. As amended hereby, the Credit Agreement shall remain in full force and
effect. The Borrowers acknowledge that none of them has any right of offset
against or claim or defense in respect of the Obligations, waive any such
defense that any of them may have and represent to the Agent and the Banks that
no Event of Default or Default exists as of the date hereof.
-5-
9. The Borrowers jointly and severally agree to pay (or, if appropriate,
reimburse) the Agent on demand the amount of any and all attorneys' fees,
documentary stamp taxes and other costs and expenses relating to this Amendment
and any documents executed in connection with this Amendment and hereby
authorize the Banks to make one or more Loans to pay any such costs and expenses
or to debit any account of any Borrower with the Agent or any Bank to do so.
10. This Amendment may be executed in any number of counterparts, each of which
shall be deemed to be an original, and shall be binding upon and inure to the
benefit of all parties and their successors and permitted assigns.
11. ANY JUDICIAL PROCEEDING BROUGHT AGAINST ANY BORROWER WITH RESPECT TO THE
CREDIT AGREEMENT AS AMENDED HEREBY O R ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF FLORIDA, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS (A) ACCEPTS, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED
APPELLATE COURTS AND IRREVOCABLY AGREES (WITHOUT WAIVING ANY RIGHT TO APPEAL) TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THE CREDIT
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND (B) IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
EACH OF THE BORROWERS HEREBY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS
THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, (WITH A COPY BY OVERNIGHT COURIER), AT ITS ADDRESS
SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF /section/10.01 OF
THE CREDIT AGREEMENT, AND SERVICE SO MADE SHALL BE DEEMED COMPLETED ON THE THIRD
DAY AFTER SUCH SERVICE IS DEPOSITED IN THE MAIL. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE AGENT OR ANY BANK TO BRING PROCEEDINGS AGAINST ANY BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY BORROWER
AGAINST ANY BANK OR THE AGENT INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THE CREDIT AGREEMENT OR
THE OTHER LOAN DOCUMENTS SHALL BE BROUGHT ONLY IN A COURT LOCATED IN MIAMI-DADE
COUNTY IN THE STATE OF FLORIDA.
-6-
12. This Amendment shall be governed by and construed in accordance with the
laws of the State of Florida, U.S.A.
13. THE BORROWERS, THE BANKS AND THE AGENT EACH HEREBY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING UNDER
OR RELATING TO THIS AMENDMENT OR ANY LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date indicated at the head of it.
NEW M-TECH CORPORATION,
as a Borrower
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
NEWTECH (HONG KONG) LIMITED,
as a Borrower
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
DURABLE ELECTRONICS INDUSTRIES LIMITED,
as a Borrower
By: [ILLEGIBLE]
-----------------------
Name: [ILLEGIBLE]
-----------------------
Title: [ILLEGIBLE]
-----------------------
NEWTECH ELECTRONICS INDUSTRIES LIMITED
formerly known as Pomillo Limited), as a Borrower
By: [ILLEGIBLE]
-----------------------
Name: [ILLEGIBLE]
-----------------------
Title: [ILLEGIBLE]
-----------------------
-7-
BANK LEUMI LE-ISRAEL B.M.,
as the Agent
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxxx
----------------------------------
Title: Vice President
----------------------------------
BANK LEUMI LE-ISRAEL B.M.,
as a Bank
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxxx
----------------------------------
Title: Vice President
----------------------------------
-8-
COMERICA BANK, as a Bank
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
--------------------------------
Title: Vice President
--------------------------------
-0-
XXXXXXXX XXXX XX XXXXXX, as a Bank
By: /s/ Xxxx Page
---------------------------
Name: Xxxx Page
---------------------------
Title: Vice President
---------------------------
-10-
