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EXHIBIT 10.28
June 6, 1997
Xx. Xxxxxxx X. Xxxxx
President & Chief Operating Officer
Brunswick Technologies, Inc.
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Dear Xxxx:
Fleet Bank of Maine is pleased to renew a $2,500,000 working capital line of
credit to Brunswick Technologies, Inc. with Advanced Textiles, Inc. as
Guarantor. This letter, when properly signed and accepted, will constitute an
agreement between Fleet Bank of Maine of Portland, Maine (hereinafter referred
to as "Bank"), which agrees to lend, and Brunswick Technologies, Inc. of
Brunswick Maine and Advanced Textiles, Inc. of Seguin, Texas, (hereinafter
referred to as "Co-Borrowers") which agree to borrow, in accordance with the
following terms and conditions, in addition to those as outlined in the loan
documents:
BORROWER: Brunswick Technologies, Inc.
GUARANTOR: Advanced Textiles, Inc.
PURPOSE: Short term working capital
MAXIMUM AMOUNT: $2,500,000
INTEREST RATE: At the Borrower's option, either Fleet Bank of Maine's Prime
Lending Rate (presently 8.50%) or the London Interbank Offered Rate plus
1.75% for amounts of $100,000 or more for periods of 30 to 360 days,
payable monthly and based on actual days outstanding over a 360 day year.
FEES: 1/8 of 1% on the unused portion, charged quarterly in arrears.
TERM: On demand, with interest payable monthly. Subject to your continued
favorable financial condition (in the sole judgment of the Bank) this line
of credit is available for your use through May 31, 1998 and is subject to
review prior to renewal.
Payments not made within 10 days of the due date will be assessed a late fee
equal to 5% of the payment amount.
PREPAYMENTS/YIELD MAINTENANCE FEE ASSESSMENT: At any time that (i) the interest
rate on the loan is a fixed rate and (ii) the Bank in its sole discretion
should
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determine that current market conditions can accommodate a prepayment
request, the Borrower shall have the right at any time and from time to
time to prepay the loan in whole (but not in part), and the Borrower shall
pay to the Bank a yield maintenance fee in an amount computed as follows.
The current rate for United States Treasury securities (Bills on a
discounted basis shall be converted to a bond equivalent) with a maturity
date closest to the maturity date of the term chosen pursuant to the Fixed
Rate Election as to which the prepayment is made shall be subtracted from
the "Cost of Funds" component of the fixed rate in effect at the time of
prepayment. If the result is zero or a negative number, there shall be no
yield maintenance fee. If the result is a positive number, then the
resulting percentage shall be multiplied by the amount of the principal
balance being prepaid. The resulting amount shall be divided by 360 and
multiplied by the number of days remaining in the term chosen pursuant to
the Fixed Rate Election as to which the prepayment is made. Said amount
shall be reduced to present value calculated by using the number of days
remaining in the designated term and using the above referenced United
States Treasury security rate and the number of days remaining in the term
chosen pursuant to the Fixed Rate Election as to which the prepayment is
made. The resulting amount shall be the yield maintenance fee due to the
Bank upon prepayment of the fixed rate loan. Each reference in the
paragraph to "Fixed Rate Election" shall mean the election by the Borrower
pursuant to the paragraph labeled "Interest Rate" in this Agreement.
MINIMUM ADVANCES: Advances under the Line will be subject to a minimum advance
of $5,000 per request.
REPORTING: The Borrower shall submit to the Bank the following reports and such
other as the Bank may request without limitation:
(a) Borrower's quarterly 10Q reports submitted within 45 days of the
end of each quarter.
(b) Borrower's annual audited and consolidated financial statement
(with consolidating schedules) to include its 10K report within 120
days of year-end prepared by a certified public accountant acceptable
to the Bank.
(c) Quarterly covenant compliance certificates, within 45 days of
quarter-end.
FINANCIAL DISCLOSURE: Bank shall be satisfied that the financial information
previously delivered to it fairly presents the business and financial
condition of the Borrower and Guarantor and the results of operations for
the periods covered by such information, and that there have been no
material adverse change in the business, assets or financial condition of
the Borrower and Guarantor since the date of the most recent financial
information delivered to us.
DEPOSITORY RELATIONSHIP: The rate and terms of this credit facility are in
express reliance on Brunswick Technologies maintaining its deposit and
commercial banking
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relationships with the Bank. The Bank shall have the right to charge any of
the borrower's accounts for any amounts due in connection with the credit
facility.
NON-ASSIGNABILITY OF COMMITMENT: This commitment is expressly offered only to
the Co-borrowers and only for the purposes described herein. This
commitment may not be assigned without the written permission of Fleet Bank
of Maine.
FINANCIAL AND BUSINESS COVENANTS:
- Borrower and Guarantor shall maintain a combined maximum leverage
ratio of 1.0:1 (tested quarterly). For covenant purposes the leverage
ratio will be equal to total senior liabilities divided by the
Company's tangible net worth plus subordinated debt.
- Borrower and Guarantor shall maintain a combined cash flow coverage
ratio of 1.2:1 (i.e., net income plus depreciation expense plus
interest expense / current maturities of long term debt plus interest
expense.) Terms are as defined by GAAP. (tested annually)
- Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx shall remain actively involved with
the operation of Borrower.
MISCELLANEOUS REQUIREMENT AND CONDITION:
- All debt currently subordinated to the Bank will continue to be
subordinated including the notes due to Burlington Industries by
Brunswick Technologies.
- Execution and delivery of loan documentation, opinions and other
documentation in form and substance satisfactory to Bank.
WRITTEN MODIFICATIONS: The Co-borrowers may not maintain any action against the
Bank on any agreement to lend money, extend credit, forbear from collection
of a debt or make any other accommodation for repayment of a debt for more
than $250,000 unless the promise, contract or agreement is in writing and
signed by a duly authorized representative of Bank.
EXPENSES: All reasonable out-of-pocket expenses, including without limitation,
attorney's fees, searches, filing fees and appraisal costs, will be paid by
the Borrower regardless of whether or not a financing package in concluded.
The Bank reserves the right to participate out any portion of the Line.
Accordingly, you grant the Bank the right to provide prospective participants
with any information relative to the Line, including but not limited, to any
information supplied to the Bank by you.
The parities hereto agree that this commitment shall survive the loan closing
and that each of the obligations and undertakings of the Borrower and Guarantor
hereunder shall be
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continuing and shall not cease until the entire loan, together with interest and
fees, is paid in full.
If the foregoing terms are acceptable to you, please sign and return a copy of
this letter to me indicating your acceptance thereof. The commitment set forth
herein will expire without further action if I have not received your written
acceptance of this letter on or before June 15, 1997. The Bank reserves the
right to terminate this commitment at any time upon the occurrence of any
adverse change in the Borrower's or Guarantor's financial condition or business
as determined by the Bank in its sole discretion or the occurrence of any event
of default under the existing loan arrangements dated May 30, 1996 by and
between Brunswick Technologies and the Bank.
By signing below the undersigned also agrees and acknowledges that any dispute
arising out of or relating to this commitment letter or any actual or alleged
modification thereof, or any alleged breach thereof, shall be settled by
arbitration in Portland, Maine in accordance with the rules of the American
Arbitration Association governing commercial arbitration.
Sincerely,
\s\ Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Vice President
ACCEPTED AND ACKNOWLEDGED:
Brunswick Technologies, Inc.
Date: June 6, 1997 By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Its President
Enclosure Advanced Textiles, Inc.
By:
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Its
