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Exhibit 4.13
FLEET BANK - NH
FOURTH AMENDMENT TO COMMERCIAL LOAN AGREEMENT
AND LOAN DOCUMENTS
THIS FOURTH AMENDMENT (the "Amendment") made as of the 20th day of
June, 1997, is by and among FLEET BANK - NH, a bank organized under the laws of
the State of New Hampshire with an address of Mail Stop XXXX X00X, 0000 Xxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 (the "Bank"), and WPI GROUP, INC., WPI
ELECTRONICS, INC., WPI MAGNETEC, INC., WPI MICRO PALM, INC., WPI POWER SYSTEMS,
INC., WPI TERMIFLEX, INC., WPI MICRO PROCESSOR SYSTEMS, INC., and WPI
DECISIONKEY, INC., WPI UK HOLDING, INC., WPI UK HOLDING II, INC., and WPI OYSTER
TERMINALS, INC., each a New Hampshire corporation, WPI GROUP (U.K.), an
unlimited company organized under the laws of England and Wales, and WPI OYSTER
TERMINALS LIMITED, a corporation organized under the laws of England and Wales,
all such entities having executive offices at 0000 Xxx Xxxxxx Xxxxxxxxxx, Xxx
Xxxxxxxxx 00000 (all of such entities are hereinafter referred to collectively
as the "Borrowers").
R E C I T A L S:
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WHEREAS, pursuant to a Commercial Loan Agreement dated October 24,
1995, as amended by First Amendment to Commercial Loan Agreement and Loan
Documents dated March 20, 1996, Second Amendment to Commercial Loan Agreement
and Loan Documents dated July 12 , 1996, and Third Amendment to Commercial Loan
Agreement and Loan Documents dated February 27, 1997, by and among the Borrowers
and the Bank (as amended, the "Loan Agreement") and certain Loan Documents as
defined therein, the Bank has extended to the Borrowers a revolving line of
credit loan in the principal amount of up to Thirty Million Dollars
($30,000,000.00) (the "Revolving Line of Credit Loan");
WHEREAS, the Borrowers have requested, and the Bank has agreed to make,
a Fifteen Million Dollar ($15,000,000.00) term loan to Borrowers to finance the
acquisition by WPI Group, Inc. (the "Acquisition") of Husky Computers Limited, a
corporation organized under the laws of England, Husky Computers, Inc., a
Florida corporation, and Husky Computers GmbH, a corporation organized under the
laws of Germany (individually and collectively, "Husky"), subject to the terms
and conditions of the Loan Agreement, provided Husky, upon completion of the
Acquisition becomes a Borrower under the Loan Agreement and the other Loan
Documents, and the Borrowers pledge all of the shares of stock which each owns
in the other to the Bank as collateral security for all Loans and other
Obligations under the Loan Agreement and the other Loan Documents; and
WHEREAS, to effect the foregoing, as well as to amend certain existing
financial covenants contained in the Loan Agreement and insert an additional
financial covenant respecting debt service coverage, the Bank and the Borrowers
are entering into this Amendment. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
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NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants, agreements and promises contained herein, the parties hereby
agree as follows:
1. ADDITION OF HUSKY AS BORROWER. The Borrowers and the Bank
agree that, effective immediately upon the Acquisition, each of the Loan
Agreement and the Loan Documents shall be amended to join and include Husky,
jointly and severally, as a borrower thereunder, such that each reference to
"Borrower" or "Borrowers" in the Loan Agreement and in each of the Loan
Documents which shall thereupon mean and include each of WPI Group, Inc., WPI
Electronics, Inc., WPI Magnetec, Inc., WPI Micro Palm, Inc., WPI Power Systems,
Inc., WPI Termiflex, Inc., WPI Micro Processor Systems, Inc., WPI Decisionkey,
Inc., WPI UK Holding, Inc., WPI UK Holding II, Inc., WPI Oyster Terminal, Inc.,
WPI Oyster Terminals Limited, WPI Group (U.K.), Husky Computers Limited, Husky
Computers, Inc., and Husky Computers GmbH, jointly and severally. Borrowers
agree to take all such further actions and to execute all such further documents
and instruments as are necessary, proper, or required to effect the provisions
of this Section 1. Failure to so amend the Loan Agreement shall be an Event of
Default under the Loan Agreement and the other Loan Documents.
2. $15,000,000 TERM LOAN. The Bank agrees to make a Fifteen
Million Dollar ($15,000,000.00) term loan ("Term Loan") to the Borrowers and New
Borrower, to be evidenced by the term promissory note in form attached hereto as
Exhibit A (the "Term Note"). Such Term Loan shall be deemed a Loan as defined in
the Loan Agreement, shall be subject to the terms and conditions of the Loan
Agreement, and shall be secured by a pledge of all of the capital stock of the
Borrowers (other than WPI Group, Inc.). The Term Note shall be a Loan Document
and Note as such terms are defined in the Loan Agreement. Furthermore, it is
understood that the proceeds of the Term Loan shall be held in escrow until the
Acquisition is consummated and all requisite governmental, London Stock Exchange
and corporate approvals received. If the Acquisition is not consummated by
September 30, 1997, and in any event if the decision is made prior to that date
to unwind the Acquisition, the proceeds of the Term Loan shall be returned to
the Bank, together with all accrued and unpaid interest, make whole payments and
prepayment fees, and the obligation of the Bank to make the Term Loan
terminated.
3. AMENDMENT OF LOAN AGREEMENT.
(a) Section III. of Schedule A of the Loan Agreement shall be and
hereby is amended by deleting Paragraph A thereof, and inserting in place
thereof the following new Paragraph A:
"A. BORROWER SHALL HAVE ON A CONSOLIDATED BASIS A NET WORTH (AS
HEREINAFTER DEFINED) EQUAL TO AT LEAST EIGHTEEN MILLION DOLLARS
($18,000,000.00) AS AT SEPTEMBER 30, 1996 AND AT ALL TIMES THEREAFTER
THROUGH SEPTEMBER 29, 1997, AND EQUAL TO LEAST TWENTY-ONE MILLION
DOLLARS ($21,000,000.00) AS AT SEPTEMBER 30, 1997 AND AT ALL TIMES
THEREAFTER THROUGH SEPTEMBER 29, 1998, AND. EQUAL TO LEAST TWENTY-FIVE
MILLION DOLLARS ($25,000,000.00) AS AT SEPTEMBER 30, 1998 AND AT ALL
TIMES THEREAFTER. "NET WORTH " MEANS TOTAL ASSETS MINUS TOTAL
LIABILITIES, ALL AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES FROM BORROWER'S FINANCIAL STATEMENTS DELIVERED TO
THE BANK IN ACCORDANCE WITH THE COVENANTS OF BORROWER HEREINABOVE (THE
"FINANCIAL STATEMENTS")".
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(b) Section III of Schedule A of the Loan Agreement shall be and hereby
is further amended by deleting paragraph B thereof and inserting the following
new Paragraph B:
"B. BORROWER SHALL HAVE ON A CONSOLIDATED BASIS A RATIO OF FUNDED DEBT
(AS HEREINAFTER DEFINED) TO EBITDA (AS HEREINAFTER DEFINED) OF NOT
GREATER THAN (I) 3.0:1 AS AT MARCH 31, 1997; (II) 4.5.0:1 AS AT
SEPTEMBER 30, 1997; AND (III) 3.0:1 AS AT SEPTEMBER 30, 1998 AND AS AT
EACH FISCAL QUARTER END THEREAFTER. "FUNDED DEBT " MEANS THE AGGREGATE
INTEREST BEARING INDEBTEDNESS OF THE BORROWER AS OF THE APPLICABLE DATE
OF DETERMINATION, ALL AS DETERMINED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES FROM BORROWER'S FINANCIAL STATEMENTS.
"EBITDA" MEANS EARNINGS FOR THE TWELVE-MONTH PERIOD ENDING ON THE
APPLICABLE DATE OF DETERMINATION, BEFORE REDUCTION FOR INTEREST, TAXES,
DEPRECIATION, AND AMORTIZATION EXPENSE FOR SUCH PERIOD, ALL AS
DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
FROM BORROWER'S FINANCIAL STATEMENTS."
(c) Section III of Schedule A of the Loan Agreement shall be and hereby
is further amended by inserting the following new Paragraph C and re-lettering
the succeeding paragraphs:
"C. THE BORROWER SHALL MAINTAIN EBITDA OF NOT LESS THAN $3,500,000 FOR
THE THREE (3) MONTHS ENDED DECEMBER 31, 1997; $7,500,000 FOR THE SIX
(6) MONTHS ENDED MARCH 31, 1998; AND $11,500,000 FOR THE NINE (9)
MONTHS ENDED JUNE 30, 1998, ALL AS SHOWN ON BORROWER'S FINANCIAL
STATEMENTS."
(d) Section III of Schedule A of the Loan Agreement, Paragraph D
(formerly Paragraph C), shall be and hereby is amended by changing the minimum
ratio of EBIT to Interest Expense from "2.0:1" to "3.0:1".
(e) Section III of Schedule A of the Loan Agreement, Paragraph E
(formerly Paragraph D), shall be and hereby is amended to read in its entirety
as follows:
"E. BORROWER SHALL NOT MAKE CAPITAL EXPENDITURES IN ANY FISCAL YEAR IN
AN AGGREGATE AMOUNT EXCEEDING $2,500,000, COMMENCING WITH THE FISCAL
YEAR ENDING SEPTEMBER 30, 1998."
(f) Section III of Schedule A of the Loan Agreement shall be and hereby
is further amended by inserting the following new Paragraph F and re-lettering
the succeeding paragraph:
"F. BORROWER SHALL HAVE A RATIO OF EBITDA TO DEBT SERVICE (AS
HEREINAFTER DEFINED) OF NOT LESS THAN 2.0:1 AS OF EACH FISCAL QUARTER
END OF BORROWER COMMENCING SEPTEMBER 30, 1997. AS USED HEREIN, "DEBT
SERVICE" MEANS THE AGGREGATE INTEREST ON THE REVOLVING LINE OF CREDIT
LOAN AND PRINCIPAL AND INTEREST ON ALL OTHER LOANS UNDER THE LOAN
AGREEMENT DUE AND PAYABLE DURING THE TWELVE (12) MONTH PERIOD ENDING ON
THE DATE OF DETERMINATION, ALL AS DETERMINED IN ACCORDANCE WITH GAAP
FROM BORROWER'S FINANCIAL STATEMENTS."
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4. PLEDGE OF STOCK OF ALL SUBSIDIARIES. Each of the Borrowers
owning shares of stock in the other Borrowers shall pledge and grant to the Bank
a security interest in all of such shares as collateral security for all
obligations of the Borrowers respecting the Revolving Line of Credit Loan, the
Term Loan and any other obligations under the Loan Agreement and the other Loan
Documents.
5. AMENDMENT OF OTHER LOAN DOCUMENTS. Each of the other Loan
Documents, whether or not specifically referenced herein or hereby, shall be and
hereby is amended to reflect the terms and conditions of this Amendment and to
include within the scope of such Loan Documents and the description of loans and
notes therein, the Term Loan.
6. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers
(including New Borrower) individually hereby makes, confirms, reasserts, and
restates all of the representations and warranties of the Borrowers under the
Loan Agreement and each of the Loan Documents, all as of the date hereof.
7. AFFIRMATIVE COVENANTS. Each of the Borrowers (including New
Borrower) individually hereby makes, confirms, reasserts, and restates all of
the Affirmative Covenants of the Borrowers as set forth in the Loan Agreement
and each of the Loan Documents, as amended hereby, all as of the date hereof.
8. NEGATIVE COVENANTS. Each of the Borrowers (including New
Borrower) individually hereby makes confirms, reasserts, and restates all of the
Negative Covenants of the Borrowers as set forth in the Loan Agreement and each
of the Loan Documents, all as of the date hereof.
9. NO OTHER MODIFICATIONS. Except as specifically modified or
amended herein or hereby, all of the terms and conditions of each of the
Revolving Line of Credit Loan, the Loan Agreement and the Loan Documents, remain
otherwise unchanged, and in full force and effect, all of which are hereby
confirmed and ratified by the parties hereto.
10. COSTS AND EXPENSES OF BANK. The Borrowers and New Borrower
agree to reimburse the Bank for all reasonable costs, expenses, and fees,
including attorneys' fees, associated with the documentation of this Amendment.
Borrowers and New Borrower consent to Bank charging Borrowers' Revolving Line of
Credit Loan account for all such costs, expenses and fees.
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment all as of the date first set forth above.
FLEET BANK - NH
By: /s/ Xxxx X. Xxxxx
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Witness Xxxx X. Xxxxx, Senior Vice President
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BORROWERS:
WPI GROUP, INC.,
WPI POWER SYSTEMS, INC.,
WPI MAGNETEC, INC.,
WPI ELECTRONICS, INC.,
WPI TERMIFLEX, INC.,
WPI MICRO PALM, INC.,
WPI MICRO PROCESSOR SYSTEMS,
INC.,
WPI DECISIONKEY, INC.,
WPI GROUP (U.K.),
WPI OYSTER TERMINALS LIMITED,
WPI UK HOLDING, INC.,
WPI UK HOLDING II, INC., and
WPI OYSTER TERMINALS, INC.,
By: /s/ Xxxxxxx Xxxxxx
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Witness Xxxxxxx Xxxxxx, for, on behalf of,
and as Duly Authorized Officer or
Agent of each of the above-named
entities
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RSA 399-B STATEMENT OF FINANCE CHARGES
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In connection with the $15,000,000 term loan transaction consummated on
this 20th day of June, 1997, by and between FLEET BANK - NH, a New Hampshire
bank with an address of Mail Stop XXXX X00X, 0000 Xxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxxxxx 00000 ("Bank") and WPI GROUP, INC., WPI ELECTRONICS, INC., WPI
MAGNETEC, INC., WPI MICRO PALM, INC., WPI POWER SYSTEMS, INC., WPI TERMIFLEX,
INC., WPI MICRO PROCESSOR SYSTEMS, INC., WPI DECISIONKEY, INC., WPI UK HOLDING,
INC., WPI UK HOLDING II, INC., and WPI OYSTER TERMINALS, INC., each a New
Hampshire corporation, WPI GROUP (U.K.), an unlimited company organized under
the laws of England and Wales, and WPI OYSTER TERMINALS LIMITED, a corporation
organized under the laws of England and Wales, all such entities having
executive offices at 0000 Xxx Xxxxxx Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 (all of
such entities are hereinafter referred to individually and collectively as the
"Borrower"), pursuant to the Commercial Loan Agreement dated October 24, 1995,
as amended to date, among the Bank and the Borrower (the "Loan Agreement"), the
Borrower is hereby informed and advised pursuant to New Hampshire RSA 399-B that
Borrower shall be liable for and shall pay the following charges (all
capitalized terms not defined herein shall have the meanings ascribed to them in
the Loan Agreement):
1. INTEREST. Interest is payable on the outstanding principal balance
of the Term Loan in the amount of Fifteen Million Dollars ($15,000,000.00) (the
"Loan") at the one-month LIBOR Rate plus 162.5 basis points.
2. CLOSING COSTS AND EXPENSES. The Borrower shall pay the Bank's legal
counsel fees and expenses of $3,500 (estimate) in connection with the amendment
of the Loan on the date hereof.
3. BANK FEES. The Borrower shall pay the Bank a fee of $25,000 at
closing.
4. LATE CHARGES. In the event any installment of principal or interest
on the Loan is not paid when due, the Bank may assess a late payment charge of
five percent (5%) of the amount of principal and/or interest which is more than
ten (10) days overdue.
5. DEFAULT RATE. If an Event of Default occurs under the Loan, the
Borrower shall pay interest on all amounts outstanding at the contract rate of
the Loan, plus an additional five percent (5%) per annum.
The Borrower hereby acknowledges receipt of a copy of this Statement at
or before the loan closing of even date, and confirms that this transaction is a
commercial loan not subject to federal truth-in-lending laws and regulations,
including without limitation, the Real Estate Settlement Procedures Act and
Regulation Z.
Disclosed by Bank and acknowledged by Borrower this 20th day of June, 1997.
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WITNESSES: BORROWER:
WPI GROUP, INC.,
WPI POWER SYSTEMS, INC.,
WPI MAGNETEC, INC.,
WPI ELECTRONICS, INC.,
WPI TERMIFLEX, INC.,
WPI MICRO PALM, INC.,
WPI MICRO PROCESSOR SYSTEMS, INC., WPI
DECISIONKEY, INC.,
WPI GROUP (U.K.),
WPI OYSTER TERMINALS
LIMITED, WPI UK
HOLDING, INC., WPI
UK HOLDING II, INC.,
and WPI OYSTER
TERMINALS, INC.
By: /s/ Xxxxxxx Xxxxxx
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Witness Xxxxxxx Xxxxxx, for, on behalf of,
and as Duly Authorized Officer or
Agent of each of the above-named
entities
