SECOND AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT is made this 13th day of April, 2000, by and between
AMERICAN TECHNICAL CERAMICS CORP. (the "Borrower"), a Delaware corporation, and
BANK OF AMERICA, N.A. (the "Bank"), successor to NationsBank, N.A., successor by
merger to Xxxxxxx Bank, N.A.
Recitals
The Borrower and the Bank entered into a Loan Agreement (as amended
from time to time, the "Loan Agreement") dated November 25, 1998, pursuant to
which the Bank has provided a credit facility to the Borrower. The parties
amended the Loan Agreement on February 4, 1999, and the parties wish to further
amend the Loan Agreement in accordance with the terms hereof.
NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:
1. Article I of the Loan Agreement is hereby amended so that, from and
after the date hereof, such article shall read as follows:
ARTICLE I
BORROWING AND PAYMENT
1.01 Revolving Credit Advances.
(a) The Bank hereby establishes in favor of the Borrower a
revolving line of credit. The Borrower shall be entitled to borrow,
repay and reborrow funds from the Bank in accordance with the terms
hereof so long as the total principal amount owed to the Bank under the
revolving line of credit does not exceed $4,000,000 (or such lesser
amount as is set forth herein) through the end of the Revolving Period
(as defined below). The Bank s obligation to make advances under this
revolving line of credit shall terminate on the last day of the
Revolving Period or such earlier date as is set forth herein. This
indebtedness shall be evidenced by a Renewal Promissory Note (as
amended, extended or renewed from time to time, the "Revolving Note")
dated April 13, 2000, executed by the Borrower in favor of the Bank in
the original principal amount of $4,000,000. The Revolving Note shall
bear interest at the rate set forth therein and shall be payable as set
forth therein.
(b) The Bank shall make each advance under the Revolving Note upon
notice from the Borrower to the Bank specifying the date and amount of
such advance. The Bank will make each requested advance available to
the Borrower not later than the close of business on the business day
following the day of the request by crediting the Borrower s account
maintained with the Bank in the amount of the advance if as of such
time: (i) the Bank s obligation to make advances hereunder has not
terminated or expired; (ii) a Default or Event of Default (as
hereinafter defined) has not occurred; and (iii) all conditions to the
advance set forth herein or in any other Loan Documents (as hereinafter
defined) have been satisfied.
(c) The Borrower shall pay the Bank a facility fee of $6,700 on
April 13, 2000, for establishing the credit arrangements under the
Revolving Note. In addition, the Borrower shall pay the Bank a facility
fee on the daily average unused amount of the Revolving Note during the
Revolving Period at the rate of one-quarter percent (1/4%) per annum
(calculated on the basis of a 360 day year for the actual number of
days elapsed). The Borrower shall pay the fee quarterly in arrears
within 15 days after each October 1, January 1, April 1 and July 1,
commencing July 1, 2000, and on the termination or expiration of the
Revolving Period.
1.02 Equipment Line of Credit.
(a) The Bank hereby establishes in favor of the Borrower a line of
credit (the "Equipment Line of Credit") pursuant to which the Borrower
may obtain advances during the Revolving Period on a revolving basis in
accordance with the terms hereof to finance equipment (collectively,
the "Equipment") purchased by the Borrower for use by it in the
ordinary course of business. The Borrower may borrow, repay and
reborrow funds under the Equipment Line of Credit in accordance with
the terms hereof for so long as the aggregate outstanding principal
amount under the Equipment Line of Credit does not exceed $3,500,000.00
at any time. The Equipment Line of Credit shall be evidenced by the
following promissory notes: (i) promissory note executed by the
Borrower in favor of the Bank in the principal amount of $3,500,000.00
(as amended, extended or renewed from time to time, the "Sub-Line
Note"); and (ii) such other fully amortizing notes (as amended,
extended or renewed from time to time, the "Term Notes") as the balance
of the Sub-Line Note may be rolled into from time to time in accordance
with the terms hereof. The Equipment Line of Credit (including, without
limitation, all amounts outstanding under the Sub-Line Note and the
Term Notes) shall be secured by a first priority security interest in,
and lien upon, all Equipment financed with advances thereunder pursuant
to the Security Agreement (as amended or restated from time to time,
the "Security Agreement") dated November 25, 1998, executed by the
Borrower in favor of the Bank.
(b) For so long as no Default or Event of Default has occurred
hereunder, the Borrower may obtain advances (each, an "Advance") from
the Bank under the Sub-Line Note so long as the outstanding principal
balance thereunder does not at any time exceed $3,500,000.00 (or such
lesser amount as is set forth herein). In no event shall the amount of
any Advance under the Sub-Line Note exceed 100% of the Borrower s cost
of the Equipment to be financed with such Advance. The Borrower shall
deliver a request (each, a "Request") for each Advance to the Bank
together with such documents as the Bank may from time to time request,
including, without limitation, each of the following:
(i) The invoice or other contract relating to the Borrower s
purchase of the Equipment to be financed therewith;
(ii) A certificate of title for any motor vehicle to be
financed with the Advance (or, at the Bank's option, such other
evidence of title as the Bank may request);
(iii) Evidence satisfactory to the Bank that the Borrower owns
good and marketable title to the Equipment to be financed free and
clear of all liens, claims and encumbrances;
(iv) If requested by the Bank, UCC financing statements,
assignments of title and such other security documents as the Bank
may require in form satisfactory to the Bank for all appropriate
jurisdictions showing the Bank as secured party and the Borrower
as debtor and encumbering: (aa) the Equipment to be financed with
the Advance; and (bb) all proceeds thereof; and
(v) Such other instruments or documents as the Bank shall
reasonably require.
(c) Not later than three business days after the Bank s receipt of
the items described in the foregoing subparagraph (b), the Bank will
make the requested Advance available to the Borrower by crediting an
account of the Borrower maintained with the Bank in the amount of the
Advance if as of such time: (i) the Bank s obligation to make Advances
hereunder has not terminated or expired; (ii) a Default or Event of
Default (as hereinafter defined) has not occurred; and (iii) all
conditions to the Advance set forth herein or in any other Loan
Documents (as hereinafter defined) have been satisfied.
(d) For so long as no Default or Event of Default has occurred,
the outstanding principal balance of the Sub-Line Note shall be rolled
over into a fully amortizing Term Note every six months or, if sooner,
at the expiration of the Revolving Period or when the outstanding
principal balance of the Sub-Line Note reaches $3,500,000.00. If any
Default or Event of Default has occurred under this Agreement, the
2
Sub-Line Note shall not be rolled into a Term Note but shall instead be
fully due and payable in accordance with the terms hereof. At the time
that any amount is rolled from the Sub-Line Note into a Term Note, all
accrued and unpaid interest under the Sub-Line Note shall be paid and
brought current. In no event shall the total combined principal amount
outstanding under the Sub-Line Note and the Term Notes, or otherwise
owed under the Equipment Line of Credit, exceed $3,500,000.00.
(e) The Term Notes shall be subject to the following terms and
conditions:
(i) Each Term Note shall provide for: (aa) payment of all
accrued interest on the first day of each July, October, January
and April after the date of the Term Note; and (bb) payment of
principal in quarterly installments on the first day of each July,
October, January and April after the date of the Term Note. Each
such principal installment shall equal an amount sufficient to
fully amortize the original principal amount of the Term Note in
equal quarterly installments over the term of the Term Note. The
Borrower shall pay the remaining outstanding principal amount of
each Term Note, if any, at the expiration of the term thereof. The
term of each Term Note shall be determined by mutual consent of
the parties prior to the execution of the Term Note (but in no
event, however, shall the term of any Term Note be less than four
years or more than seven years).
(ii) Interest shall initially accrue on the outstanding
principal balance of each Term Note at a rate that is equal to the
Adjusted Libor Rate (as defined herein) in effect as of the date
of the Term Note. The rate of interest shall be adjusted on each
Interest Rate Adjustment Date (as defined herein) so that interest
shall accrue at the Adjusted Libor Rate for the Interest Period
(as defined herein) commencing on such Interest Rate Adjustment
Date. For purposes of this paragraph, the following terms shall
have the following meanings:
(aa) "Adjusted Libor Rate" for each Interest Period shall
mean a rate that is equal to the applicable Libor Rate plus
1.5% per annum. The Libor Rate for each Interest Period shall
mean the offered rate for deposits in United States dollars in
the London Interbank market for a one month period which
appears on the Libor Rate Reference Page (as defined herein)
as of 11:00 a.m. (London time) on the day that is two London
Banking Days (as defined herein) preceding the first Banking
Business Day (as defined herein) of the Interest Period. If at
least two such offered rates appear on the Libor Rate
Reference Page, the rate will be the arithmetic mean of such
offered rates. The Bank may, in its discretion, use rate
quotations for a 30 day period in lieu of quotations for a
substantially equivalent one month period.
(bb) "Banking Business Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in Jacksonville, Florida are closed for business.
(cc) "Interest Period" shall mean: (1) an initial period
commencing on the date of each Term Note and continuing
through the day immediately preceding the first Interest Rate
Adjustment Date during the term of the Term Note; and (2) each
period thereafter commencing on each Interest Rate Adjustment
Date and continuing through the day immediately preceding the
next Interest Rate Adjustment Date.
(dd) "Interest Rate Adjustment Date" shall mean the first
day of each calendar month during the term of each Term Note.
(ee) "Libor Rate Reference Page" shall mean any of the
following reference pages or sources (as selected from time to
time by the Bank in its discretion): (1) the Reuters Screen
LIBO Page; (2) the Dow Xxxxx Telerate Page 3750; or (3) if the
Bank is unable to obtain rates pursuant to the foregoing
clauses (1) or (2), such other index or
3
source as the Bank may reasonably select showing rates
offered for United States dollar deposits in the London
Interbank market.
(ff) "London Banking Day" shall mean each day other than
a Saturday, a Sunday or any holiday on which commercial banks
in London, England are closed for business.
(iii) Interest shall be calculated on the basis of a 360 day
year (based upon the actual number of days elapsed). The total
liability of the Borrower and any endorsers or guarantors for
payment of interest shall not exceed any limitations imposed on
the payment of interest by applicable usury laws. If any interest
is received or charged by any holder of any Term Note in excess of
that amount, the Borrower shall be entitled to an immediate refund
of the excess. Upon the occurrence of an Event of Default
hereunder, interest shall accrue at the Default Rate set forth in
each Term Note notwithstanding the provisions of this section.
(f) The Term Notes shall be in such form as the Bank may
reasonably require.
1.03 Certain Terms.
(a) The Revolving Note, the Sub-Line Note and each Term Note are
collectively referred to herein as the "Notes". This Agreement, the
Notes, the Security Agreement and all documents related to the
foregoing documents are referred to herein as the "Loan Documents."
(b) For purposes hereof, the "Revolving Period" shall mean a
period commencing on the date hereof and ending on November 30, 2000.
Notwithstanding the foregoing, the Revolving Period shall be extended
on November 30, 2000, and each November 30 thereafter through November
30, 2001 (each such date, including November 30, 2000, an "Extension
Date") for a one-year period commencing on each such Extension Date and
continuing until the next November 30 thereafter unless the Bank in its
sole discretion elects not to extend the Revolving Period in accordance
with the terms hereof. If the Bank elects not to extend the Revolving
Period, it shall provide written notice of such election to the
Borrower at least 45 days prior to the next scheduled Extension Date.
If the Bank provides such notice, then: (i) the Revolving Period shall
terminate on the next scheduled Extension Date; and (ii) the Revolving
Period shall not be further extended beyond such Extension Date. The
Bank's election shall be final and binding, and the Bank may elect not
to extend the Revolving Period whether or not a Default or Event of
Default (as defined herein) has occurred. The Bank may condition any
extension of the Revolving Period on such terms as it may deem
appropriate. Notwithstanding any contrary provision set forth herein,
the Revolving Period shall not in any event extend beyond November 30,
2002.
2. The Loan Agreement shall continue in full force and effect except as
modified herein.
DATED the day and year first above written.
AMERICAN TECHNICAL CERAMICS CORP.
By:
-------------------------------
Xxxxxxxx X. Xxxxx
Vice President - Administration
4
BANK OF AMERICA, N.A.
By:
-------------------------------
Its:
---------------------------
STATE OF NEW YORK
COUNTY OF SUFFOLK
The foregoing instrument was executed, acknowledged and delivered
before me this ____ day of April, 2000, by Xxxxxxxx X. Xxxxx, the Vice President
- Administration of American Technical Ceramics Corp., on behalf of the
corporation, in Suffolk County, New York.
------------------------------------
Notary Public, State and County
Aforesaid
Print Name:_________________________
My commission expires:______________
My commission number:_______________
(NOTARIAL SEAL)
at2-atla
5
AMENDMENT TO SECURITY AGREEMENT
THIS AMENDMENT is made this 13th day of April, 2000, by and between
AMERICAN TECHNICAL CERAMICS CORP. (the "Borrower"), a Delaware corporation, and
BANK OF AMERICA, N.A. (the "Bank"), successor to NationsBank, N.A., successor by
merger to Xxxxxxx Bank, N.A.
Recitals
The Borrower executed a Security Agreement (as amended from time to
time, the "Security Agreement") dated November 25, 1998, in favor of the Bank.
The parties wish to amend the Security Agreement in accordance with the terms
hereof.
NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:
1. The Security Agreement is hereby amended by attaching thereto the
schedule attached hereto as Schedule "1". All equipment and other assets
described on such schedule shall be included in the "Equipment" as that term is
used in the Security Agreement.
2. The Borrower certifies that as of the date hereof: (a) all of its
representations and warranties in the Security Agreement are true and correct as
if made on the date hereof; and (b) no Default or Event of Default has occurred
under the Security Agreement. The Security Agreement shall continue in full
force and effect except as modified herein.
DATED the day and year first above written.
AMERICAN TECHNICAL CERAMICS CORP.
By:
-------------------------------
Xxxxxxxx X. Xxxxx
Vice President - Administration
BANK OF AMERICA, N.A.
By:
-------------------------------
Its:
---------------------------
at2-atsa
1
RENEWAL PROMISSORY NOTE
$4,000,000.00 April 13, 2000
FOR VALUE RECEIVED, the undersigned, American Technical Ceramics Corp.
(the "Borrower"), a Delaware corporation, hereby promises to pay to the order of
Bank of America, N.A. (the "Bank"), successor to NationsBank, N.A., whose
address is 00 X. Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, the principal sum of
Four Million and No/100 Dollars ($4,000,000), or such other principal amount as
may be disbursed from time to time pursuant to Section 1.01 of the Loan
Agreement (as defined herein), together with interest on the outstanding
principal balance hereof from the date of disbursement until payment in full at
the rate provided herein. This Note shall be governed by the following
provisions:
1. Loan Agreement. The Borrower and the Bank have executed an Amended
and Restated Loan Agreement (as amended or restated from time to time, the "Loan
Agreement") dated November 25, 1998. The loan evidenced by this Note shall be a
revolving loan during the Revolving Period (as defined in the Loan Agreement),
and the Borrower may borrow, repay and reborrow principal amounts hereunder
during the Revolving Period subject to the terms contained herein and in the
Loan Agreement. Notwithstanding the foregoing: (a) the outstanding principal
balance hereof shall not exceed $4,000,000 at any one time (or such lesser
amount as may be set forth in the Loan Agreement); and (b) the Borrower shall
not in any event be entitled to obtain further advances hereunder on or after
the expiration of the Revolving Period. This Note is the Revolving Note
described in the Loan Agreement.
2. Payments.
(a) The Borrower shall pay all accrued interest hereunder on
the first day of each January, April, July and October during the term
hereof commencing on July 1, 2000.
(b) The Borrower shall pay principal hereunder in equal
quarterly installments on the first day of each December, March, June
and September after the expiration of the Revolving Period (commencing
on the second such date after the expiration of the Revolving Period).
The amount of each installment shall equal 1/8 of the outstanding
principal balance hereof as of the expiration of the Revolving Period.
(c) The Borrower shall pay all remaining outstanding principal
hereunder two years after the expiration of the Revolving Period.
3. Interest.
(a) Interest shall initially accrue on the outstanding
principal balance of this Note at a rate that is equal to the Adjusted
Libor Rate (as defined herein) in effect as of the date hereof. The
rate of interest shall be adjusted on each Interest Rate Adjustment
Date (as defined herein) so that interest shall accrue at the Adjusted
Libor Rate for the Interest Period (as defined herein) commencing on
such Interest Rate Adjustment Date. For purposes hereof, the following
terms shall have the following meanings:
(i) "Adjusted Libor Rate" for each Interest Period
shall mean a rate that is equal to the applicable Libor Rate
plus 1.5% per annum. The Libor Rate for each Interest Period
shall mean the offered rate for deposits in United States
dollars in the London Interbank market for a one month period
which appears on the Libor Rate Reference Page (as defined
herein) as of 11:00 a.m. (London time) on the day that is two
London Banking Days (as defined herein) preceding the first
Banking Business Day (as defined herein) of the Interest
Period. If at least two such offered rates appear on the Libor
Rate Reference Page, the rate will be the arithmetic mean of
such offered rates. The Bank may, in its discretion, use rate
quotations for a 30 day period in lieu of quotations for a
substantially equivalent one month period.
(ii) "Banking Business Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in Jacksonville, Florida are closed for business.
1
(iii) "Interest Period" shall mean: (aa) an initial
period commencing on the date hereof and continuing through
the day immediately preceding the first Interest Rate
Adjustment Date; and (bb) each period thereafter commencing on
each Interest Rate Adjustment Date and continuing through the
day immediately preceding the next Interest Rate Adjustment
Date.
(iv) "Interest Rate Adjustment Date" shall mean the
first day of each calendar month during the term hereof.
(v) "Libor Rate Reference Page" shall mean any of the
following reference pages or sources (as selected from time to
time by the Bank in its discretion): (aa) the Reuters Screen
LIBO Page; (bb) the Dow Xxxxx Telerate Page 3750; or (cc) if
the Bank is unable to obtain rates pursuant to the foregoing
clauses (aa) or (bb), such other index or source as the Bank
may reasonably select showing rates offered for United States
dollar deposits in the London Interbank market.
(vi) "London Banking Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in London, England are closed for business.
(b) Interest shall be calculated on the basis of a 360 day
year (based upon the actual number of days elapsed). The total
liability of the Borrower and any endorsers or guarantors for payment
of interest shall not exceed any limitations imposed on the payment of
interest by applicable usury laws. If any interest is received or
charged by any holder of this Note in excess of that amount, the
Borrower shall be entitled to an immediate refund of the excess. Upon
the occurrence of an Event of Default hereunder, interest shall accrue
at the Default Rate set forth herein notwithstanding the provisions of
this Section.
4. Prepayment. The Borrower shall be entitled to prepay this Note in
whole or in part at any time without penalty.
5. Application of Payments. All payments hereunder shall be applied
first to the Bank s costs and expenses payable under the Loan Agreement or
hereunder, then to fees authorized hereunder or under the Loan Agreement, then
to interest and then to principal.
6. Default. Any Event of Default under the Loan Agreement shall be
considered an "Event of Default" hereunder. If any Default (as defined in the
Loan Agreement) shall occur, any obligation of the Bank to make advances
hereunder shall be terminated without notice to the Borrower. In addition, if
any Event of Default shall occur, the outstanding principal of this Note, all
accrued and unpaid interest hereunder and all other amounts payable under this
Note shall be and become, in the manner and as provided in the Loan Agreement,
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower.
Upon the occurrence of any Event of Default, the outstanding principal of this
Note, and any accrued and unpaid interest, shall bear interest at a rate of
either four percent (4%) per annum above the Prime Rate after default until paid
or, if such rate is usurious under the laws of Florida, then at the highest
legal rate permissible thereunder (the "Default Rate"). For purposes hereof, the
"Prime Rate" shall mean the rate of interest announced from time to time by the
Bank (or any successor thereto) as its prime rate. The Default Rate shall change
on each day that the Prime Rate changes.
7. Expenses. The Borrower agrees to pay the Bank all costs incurred by
it in connection with the collection of this Note. Such costs include, without
limitation, reasonable fees for the services of counsel and legal assistants
employed to collect this Note, whether or not suit be brought, and whether
incurred in connection with collection, trial, appeal or otherwise. The Borrower
further agrees to indemnify and hold the Bank harmless against liability for the
payment of state documentary stamp taxes, intangible taxes or other taxes
(including interest and penalties, if any), excluding income or service taxes of
the Bank, which may be determined to be payable with respect to this
transaction.
2
8. Late Charge. If any scheduled payment hereunder is 15 or more days
late, the Borrower shall pay a fee equal to 4% of the unpaid portion of the
scheduled payment. The fee is not a penalty, but liquidated damages to defray
administrative and related expenses due to such late payment. The fee shall be
immediately due and payable and shall be paid by the Borrower to the Bank
without notice or demand. This provision for a fee is not and shall not be
deemed a grace period, and Bank has no obligation to accept a late payment.
Further, the acceptance of a late payment shall not constitute a waiver of any
default then existing or thereafter arising under this Note.
9. Setoffs. The Borrower hereby grants to the Bank a continuing first
lien security interest in any and all money, general or specific deposits, or
property of the Borrower now or hereafter in the possession of the Bank. The
Borrower authorizes and empowers the Bank, in its sole discretion, at any time
after the occurrence of a default hereunder to appropriate and, in such order as
the Bank may elect, apply any such money, deposits or property to the payment
hereof or to the payment of any and all indebtedness, liabilities and
obligations of the Borrower to the Bank or any of the Bank s affiliates, whether
now existing or hereafter created or arising or now owned or howsoever after
acquired by the Bank or any of the Bank s affiliates (whether such indebtedness,
liabilities and obligations are or will be joint or several, direct or indirect,
absolute or contingent, liquidated or unliquidated, matured or unmatured,
including, but not limited to, any letter of credit issued by the Bank for the
account of the Borrower).
10. Miscellaneous. The Borrower and all sureties, endorsers and
guarantors of this Note shall make all payments hereunder in lawful money of the
United States at the Bank s address set forth herein or at such other place as
the Bank may designate in writing. The remedies of the Bank as provided herein
shall be cumulative and concurrent, and may be pursued singly, successively or
together, at the sole discretion of the Bank and may be exercised as often as
occasion therefore shall arise. No act of omission or commission of the Bank,
including specifically any failure to exercise any right, remedy or recourse,
shall be effective, unless set forth in a written document executed by the Bank,
and then only to the extent specifically recited therein. A waiver or release
with reference to one event shall not be construed as continuing, as a bar to,
or as a waiver or release of any subsequent right, remedy or recourse as to any
subsequent event. This Note shall be construed and enforced in accordance with
Florida law and shall be binding on the successors and assigns of the parties
hereto. The term "Bank" as used herein shall mean Bank of America, N.A. and its
successors and permitted assignees under the Loan Agreement. The Bank may, at
its option, round any or all fractional interest rates under paragraph 3 upwards
to the next higher 1/100 of 1%. The Borrower hereby: (i) waives demand, notice
of demand, presentment for payment, notice of nonpayment or dishonor, protest,
notice of protest and all other notice, filing of suit and diligence in
collecting this Note, or in the Bank s enforcing any of its rights under any
guaranties securing the repayment hereof; (ii) agrees to any substitution,
addition or release of or any party or person primarily or secondarily liable
hereon; (iii) agrees that the Bank shall not be required first to institute any
suit, or to exhaust its remedies against the Borrower or any other person or
party to become liable hereunder, or against any collateral in order to enforce
payment of this Note; and (iv) agrees that, notwithstanding the occurrence of
any of the foregoing (except with the express written release by the Bank of the
Borrower), the Borrower shall be and remain directly and primarily, liable for
all sums due under this Note.
AMERICAN TECHNICAL CERAMICS CORP.
By:
-------------------------------
Xxxxxxxx X. Xxxxx
Vice President - Administration
(CORPORATE SEAL)
3
STATE OF NEW YORK
COUNTY OF SUFFOLK
The foregoing instrument was executed, acknowledged and delivered
before me this ____ day of April, 2000, by Xxxxxxxx X. Xxxxx, the Vice President
- Administration of American Technical Ceramics Corp., on behalf of the
corporation, in Suffolk County, New York.
---------------------------------------
Notary Public, State and County
Aforesaid
Print Name:____________________________
My commission expires:_________________
My commission number:__________________
(NOTARIAL SEAL)
at2-pn1
4
SUB-LINE PROMISSORY NOTE
$3,500,000.00 April 13, 2000
FOR VALUE RECEIVED, the undersigned, American Technical Ceramics Corp.
(the "Borrower"), a Delaware corporation, hereby promises to pay to the order of
Bank of America, N.A. (the "Bank"), successor to NationsBank, N.A., whose
address is 00 X. Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, the principal sum of
Three Million Five Hundred Thousand and No/100 Dollars ($3,500,000.00), or such
other principal amount as may be disbursed from time to time pursuant to Section
1.02 of the Loan Agreement (as defined herein), together with interest on the
outstanding principal balance hereof from the date of disbursement until payment
in full at the rate provided herein. This Note shall be governed by the
following provisions:
1. Loan Agreement. The Borrower and the Bank have executed an Amended
and Restated Loan Agreement (as amended or restated from time to time, the "Loan
Agreement") dated November 25, 1998. The loan evidenced by this Note shall be a
revolving loan, and the Borrower may borrow, repay and reborrow principal
amounts hereunder subject to the terms contained herein and in the Loan
Agreement. Notwithstanding the foregoing: (a) the outstanding principal balance
hereof shall not exceed $3,500,000 at any one time (or such lesser amount as may
be set forth in the Loan Agreement); and (b) the Borrower shall not in any event
be entitled to obtain further advances hereunder on or after the expiration of
the Revolving Period (as defined in the Loan Agreement). This Note is the
Sub-Line Note described in the Loan Agreement.
2. Payments.
(a) The Borrower shall pay all accrued interest hereunder on
the first day of each January, April, July and October during the term
hereof.
(b) The Borrower shall pay all outstanding principal
hereunder, together with all then accrued and unpaid interest
hereunder, at the expiration of the Revolving Period (as defined in the
Loan Agreement) (except to the extent that such principal amounts have
been rolled into a Term Note (as defined in the Loan Agreement)
pursuant to the terms of the Loan Agreement on or before such date).
3. Interest.
(a) Interest shall initially accrue on the outstanding
principal balance of this Note at a rate that is equal to the Adjusted
Libor Rate (as defined herein) in effect as of the date hereof. The
rate of interest shall be adjusted on each Interest Rate Adjustment
Date (as defined herein) so that interest shall accrue at the Adjusted
Libor Rate for the Interest Period (as defined herein) commencing on
such Interest Rate Adjustment Date. For purposes hereof, the following
terms shall have the following meanings:
(i) "Adjusted Libor Rate" for each Interest Period
shall mean a rate that is equal to the applicable Libor Rate
plus 1.5% per annum. The Libor Rate for each Interest Period
shall mean the offered rate for deposits in United States
dollars in the London Interbank market for a one month period
which appears on the Libor Rate Reference Page (as defined
herein) as of 11:00 a.m. (London time) on the day that is two
London Banking Days (as defined herein) preceding the first
Banking Business Day (as defined herein) of the Interest
Period. If at least two such offered rates appear on the Libor
Rate Reference Page, the rate will be the arithmetic mean of
such offered rates. The Bank may, in its discretion, use rate
quotations for a 30 day period in lieu of quotations for a
substantially equivalent one month period.
1
(ii) "Banking Business Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in Jacksonville, Florida are closed for business.
(iii) "Interest Period" shall mean: (aa) an initial
period commencing on the date hereof and continuing through
the day immediately preceding the first Interest Rate
Adjustment Date; and (bb) each period thereafter commencing on
each Interest Rate Adjustment Date and continuing through the
day immediately preceding the next Interest Rate Adjustment
Date.
(iv) "Interest Rate Adjustment Date" shall mean the
first day of each calendar month during the term hereof.
(v) "Libor Rate Reference Page" shall mean any of the
following reference pages or sources (as selected from time to
time by the Bank in its discretion): (aa) the Reuters Screen
LIBO Page; (bb) the Dow Xxxxx Telerate Page 3750; or (cc) if
the Bank is unable to obtain rates pursuant to the foregoing
clauses (aa) or (bb), such other index or source as the Bank
may reasonably select showing rates offered for United States
dollar deposits in the London Interbank market.
(vi) "London Banking Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in London, England are closed for business.
(b) Interest shall be calculated on the basis of a 360 day
year (based upon the actual number of days elapsed).
(c) The total liability of the Borrower and any endorsers or
guarantors hereof for payment of interest shall not exceed any
limitations imposed on the payment of interest by applicable usury
laws. If any interest is received or charged by any holder hereof in
excess of that amount, the Borrower shall be entitled to an immediate
refund of the excess.
(d) Upon the occurrence of an Event of Default hereunder,
interest shall accrue at the Default Rate hereinafter set forth
notwithstanding the provisions of this section.
4. Prepayment. The Borrower shall be entitled to prepay this Note in
whole or in part at any time without penalty.
5. Application of Payments. All payments hereunder shall be applied
first to the Bank s costs and expenses payable under the Loan Agreement or
hereunder, then to fees authorized hereunder or under the Loan Agreement, then
to interest and then to principal.
6. Default. Any Event of Default under the Loan Agreement shall be
considered an "Event of Default" hereunder. If any Default (as defined in the
Loan Agreement) shall occur, any obligation of the Bank to make advances
hereunder shall be terminated without notice to the Borrower. In addition, if
any Event of Default shall occur, the outstanding principal of this Note, all
accrued and unpaid interest hereunder and all other amounts payable under this
Note shall be and become, in the manner and as provided in the Loan Agreement,
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower.
Upon the occurrence of any Event of Default, the outstanding principal of this
Note, and any accrued and unpaid interest, shall bear interest at a rate of
either four percent (4%) per annum above the Prime Rate after default until paid
or, if such rate is usurious under the laws of Florida, then at the highest
legal rate permissible thereunder (the "Default Rate"). For purposes hereof, the
"Prime Rate" shall mean the rate of interest announced from time to time by the
Bank (or any successor thereto) as its prime rate. The Default Rate shall change
on each day that the Prime Rate changes.
7. Expenses. The Borrower agrees to pay the Bank all costs incurred by
it in connection with the collection of this Note. Such costs include, without
limitation, reasonable fees for the services of counsel and legal assistants
employed to collect this Note, whether or not suit be brought, and whether
incurred in connection with
2
collection, trial, appeal or otherwise. The Borrower further agrees to indemnify
and hold the Bank harmless against liability for the payment of state
documentary stamp taxes, intangible taxes or other taxes (including interest and
penalties, if any), excluding income or service taxes of the Bank, which may be
determined to be payable with respect to this transaction.
8. Late Charge. If any scheduled payment hereunder is 15 or more days
late, the Borrower shall pay a fee equal to 4% of the unpaid portion of the
scheduled payment. The fee is not a penalty, but liquidated damages to defray
administrative and related expenses due to such late payment. The fee shall be
immediately due and payable and shall be paid by the Borrower to the Bank
without notice or demand. This provision for a fee is not and shall not be
deemed a grace period, and Bank has no obligation to accept a late payment.
Further, the acceptance of a late payment shall not constitute a waiver of any
default then existing or thereafter arising under this Note.
9. Setoffs. The Borrower hereby grants to the Bank a continuing first
lien security interest in any and all money, general or specific deposits, or
property of the Borrower now or hereafter in the possession of the Bank. The
Borrower authorizes and empowers the Bank, in its sole discretion, at any time
after the occurrence of a default hereunder to appropriate and, in such order as
the Bank may elect, apply any such money, deposits or property to the payment
hereof or to the payment of any and all indebtedness, liabilities and
obligations of the Borrower to the Bank or any of the Bank s affiliates, whether
now existing or hereafter created or arising or now owned or howsoever after
acquired by the Bank or any of the Bank s affiliates (whether such indebtedness,
liabilities and obligations are or will be joint or several, direct or indirect,
absolute or contingent, liquidated or unliquidated, matured or unmatured,
including, but not limited to, any letter of credit issued by the Bank for the
account of the Borrower).
10. Miscellaneous. The Borrower and all sureties, endorsers and
guarantors of this Note shall make all payments hereunder in lawful money of the
United States at the Bank s address set forth herein or at such other place as
the Bank may designate in writing. The remedies of the Bank as provided herein
shall be cumulative and concurrent, and may be pursued singly, successively or
together, at the sole discretion of the Bank and may be exercised as often as
occasion therefor shall arise. No act of omission or commission of the Bank,
including specifically any failure to exercise any right, remedy or recourse,
shall be effective, unless set forth in a written document executed by the Bank,
and then only to the extent specifically recited therein. A waiver or release
with reference to one event shall not be construed as continuing, as a bar to,
or as a waiver or release of any subsequent right, remedy or recourse as to any
subsequent event. This Note shall be construed and enforced in accordance with
Florida law and shall be binding on the successors and assigns of the parties
hereto. The term "Bank" as used herein shall mean Bank of America, N.A. and its
successors and permitted assignees under the Loan Agreement. The Bank may, at
its option, round any or all fractional interest rates under paragraph 3 upwards
to the next higher 1/100 of 1%. The Borrower hereby: (i) waives demand, notice
of demand, presentment for payment, notice of nonpayment or dishonor, protest,
notice of protest and all other notice, filing of suit and diligence in
collecting this Note, or in the Bank s enforcing any of its rights under any
guaranties securing the repayment hereof; (ii) agrees to any substitution,
addition or release of or any party or person primarily or secondarily liable
hereon; (iii) agrees that the Bank shall not be required first to institute any
suit, or to exhaust its remedies against the Borrower or any other person or
party to become liable hereunder, or against any collateral in order to enforce
payment of this Note; and (iv) agrees that, notwithstanding the occurrence of
any of the foregoing (except with the express written release by the Bank of the
Borrower), the Borrower shall be and remain directly and primarily, liable for
all sums due under this Note.
AMERICAN TECHNICAL CERAMICS CORP.
By:
-------------------------------
Xxxxxxxx X. Xxxxx
Vice President - Administration
(CORPORATE SEAL)
3
STATE OF NEW YORK
COUNTY OF SUFFOLK
The foregoing instrument was executed, acknowledged and delivered
before me this ____ day of April, 2000, by Xxxxxxxx X. Xxxxx, the Vice President
- Administration of American Technical Ceramics Corp., on behalf of the
corporation, in Suffolk County, New York.
------------------------------------
Notary Public, State and County
Aforesaid
Print Name:_________________________
My commission expires:______________
My commission number:_______________
(NOTARIAL SEAL)
at2-pn2
4
TERM PROMISSORY NOTE
$796,811.99 April 13, 2000
FOR VALUE RECEIVED, the undersigned, American Technical Ceramics Corp.
(the "Borrower"), a Delaware corporation, hereby promises to pay to the order of
Bank of America, N.A. (the "Bank"), successor to NationsBank, N.A., whose
address is 00 X. Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, the principal sum of
Seven Hundred Ninety Six Thousand Eight Hundred Eleven and 99/100 Dollars
($796,811.99), together with interest on the outstanding principal balance
hereof at the rate provided herein. This Note shall be governed by the following
provisions:
1. Loan Agreement. The Borrower and the Bank have executed an Amended
and Restated Loan Agreement (as amended or restated from time to time, the "Loan
Agreement") dated November 25, 1998. This Note is one of the Term Notes
described in the Loan Agreement, and all or a part of the outstanding principal
balance of the Sub-Line Note (as defined in the Loan Agreement) is this day
being rolled into this Note in accordance with the terms of the Loan Agreement.
This Note shall be secured, without limitation, by the Security Agreement dated
November 25, 1998, as amended or restated from time to time, executed by the
Borrower in favor of the Bank. In the event of any conflict between the payment
terms set forth in the Loan Agreement and the payment terms set forth herein,
the payment terms set forth herein shall control.
2. Payments.
(a) The Borrower shall pay all accrued interest hereunder on
the first day of each July, October, January and April during the term
hereof commencing on July 1, 2000.
(b) The Borrower shall pay principal installments of
$28,457.57 each on the first day of each July, October, January and
April during the term hereof commencing on July 1, 2000.
(c) The Borrower shall pay all outstanding principal
hereunder, together with all then accrued and unpaid interest
hereunder, on April 1, 2007.
3. Interest.
(a) Interest shall initially accrue on the outstanding
principal balance of this Note at a rate that is equal to the Adjusted
Libor Rate (as defined herein) in effect as of the date hereof. The
rate of interest shall be adjusted on each Interest Rate Adjustment
Date (as defined herein) so that interest shall accrue at the Adjusted
Libor Rate for the Interest Period (as defined herein) commencing on
such Interest Rate Adjustment Date. For purposes hereof, the following
terms shall have the following meanings:
(i) "Adjusted Libor Rate" for each Interest Period
shall mean a rate that is equal to the applicable Libor Rate
plus 1.5% per annum. The Libor Rate for each Interest Period
shall mean the offered rate for deposits in United States
dollars in the London Interbank market for a one month period
which appears on the Libor Rate Reference Page (as defined
herein) as of 11:00 a.m. (London time) on the day that is two
London Banking Days (as defined herein) preceding the first
Banking Business Day (as defined herein) of the Interest
Period. If at least two such offered rates appear on the Libor
Rate Reference Page, the rate will be the arithmetic mean of
such offered rates. The Bank may, in its discretion, use rate
quotations for a 30 day period in lieu of quotations for a
substantially equivalent one month period.
(ii) "Banking Business Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in Jacksonville, Florida are closed for business.
(iii) "Interest Period" shall mean: (aa) an initial
period commencing on the date hereof and continuing through
the day immediately preceding the first Interest Rate
Adjustment
1
Date; and (bb) each period thereafter commencing on each
Interest Rate Adjustment Date and continuing through the day
immediately preceding the next Interest Rate Adjustment Date.
(iv) "Interest Rate Adjustment Date" shall mean the
first day of each calendar month during the term hereof.
(v) "Libor Rate Reference Page" shall mean any of the
following reference pages or sources (as selected from time to
time by the Bank in its discretion): (aa) the Reuters Screen
LIBO Page; (bb) the Dow Xxxxx Telerate Page 3750; or (cc) if
the Bank is unable to obtain rates pursuant to the foregoing
clauses (aa) or (bb), such other index or source as the Bank
may reasonably select showing rates offered for United States
dollar deposits in the London Interbank market.
(vi) "London Banking Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in London, England are closed for business.
(b) Interest shall be calculated on the basis of a 360 day
year (based upon the actual number of days elapsed). The total
liability of the Borrower and any endorsers or guarantors for payment
of interest shall not exceed any limitations imposed on the payment of
interest by applicable usury laws. If any interest is received or
charged by any holder of this Note in excess of that amount, the
Borrower shall be entitled to an immediate refund of the excess. Upon
the occurrence of an Event of Default hereunder, interest shall accrue
at the Default Rate set forth herein notwithstanding the provisions of
this Section.
4. Prepayment. The Borrower shall be entitled to prepay this Note in
whole or in part at any time without penalty. Prepayments of principal shall be
applied in the inverse order of principal payments required hereunder.
5. Application of Payments. All payments hereunder shall be applied
first to the Bank s costs and expenses payable under the Loan Agreement or
hereunder, then to fees authorized hereunder or under the Loan Agreement, then
to interest and then to principal.
6. Default. Any Event of Default under the Loan Agreement shall be
considered an "Event of Default" hereunder. If any Event of Default shall occur,
the outstanding principal of this Note, all accrued and unpaid interest
hereunder and all other amounts payable under this Note shall be and become, in
the manner and as provided in the Loan Agreement, forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower. Upon the occurrence of any Event of
Default, the outstanding principal of this Note, and any accrued and unpaid
interest, shall bear interest at a rate of either four percent (4%) per annum
above the Prime Rate after default until paid or, if such rate is usurious under
the laws of Florida, then at the highest legal rate permissible thereunder (the
"Default Rate"). For purposes hereof, the "Prime Rate" shall mean the rate of
interest announced from time to time by the Bank (or any successor thereto) as
its prime rate. The Default Rate shall change on each day that the Prime Rate
changes.
7. Expenses. The Borrower agrees to pay the Bank all costs incurred by
it in connection with the collection of this Note. Such costs include, without
limitation, reasonable fees for the services of counsel and legal assistants
employed to collect this Note, whether or not suit be brought, and whether
incurred in connection with collection, trial, appeal or otherwise. The Borrower
further agrees to indemnify and hold the Bank harmless against liability for the
payment of state documentary stamp taxes, intangible taxes or other taxes
(including interest and penalties, if any), excluding income or service taxes of
the Bank, which may be determined to be payable with respect to this
transaction.
2
8. Late Charge. If any scheduled payment hereunder is 15 or more days
late, the Borrower shall pay a fee equal to 4% of the unpaid portion of the
scheduled payment. The fee is not a penalty, but liquidated damages to defray
administrative and related expenses due to such late payment. The fee shall be
immediately due and payable and shall be paid by the Borrower to the Bank
without notice or demand. This provision for a fee is not and shall not be
deemed a grace period, and Bank has no obligation to accept a late payment.
Further, the acceptance of a late payment shall not constitute a waiver of any
default then existing or thereafter arising under this Note.
9. Setoffs. The Borrower hereby grants to the Bank a continuing first
lien security interest in any and all money, general or specific deposits, or
property of the Borrower now or hereafter in the possession of the Bank. The
Borrower authorizes and empowers the Bank, in its sole discretion, at any time
after the occurrence of a default hereunder to appropriate and, in such order as
the Bank may elect, apply any such money, deposits or property to the payment
hereof or to the payment of any and all indebtedness, liabilities and
obligations of the Borrower to the Bank or any of the Bank s affiliates, whether
now existing or hereafter created or arising or now owned or howsoever after
acquired by the Bank or any of the Bank s affiliates (whether such indebtedness,
liabilities and obligations are or will be joint or several, direct or indirect,
absolute or contingent, liquidated or unliquidated, matured or unmatured,
including, but not limited to, any letter of credit issued by the Bank for the
account of the Borrower).
10. Miscellaneous. The Borrower and all sureties, endorsers and
guarantors of this Note shall make all payments hereunder in lawful money of the
United States at the Bank s address set forth herein or at such other place as
the Bank may designate in writing. The remedies of the Bank as provided herein
shall be cumulative and concurrent, and may be pursued singly, successively or
together, at the sole discretion of the Bank and may be exercised as often as
occasion therefore shall arise. No act of omission or commission of the Bank,
including specifically any failure to exercise any right, remedy or recourse,
shall be effective, unless set forth in a written document executed by the Bank,
and then only to the extent specifically recited therein. A waiver or release
with reference to one event shall not be construed as continuing, as a bar to,
or as a waiver or release of any subsequent right, remedy or recourse as to any
subsequent event. This Note shall be construed and enforced in accordance with
Florida law and shall be binding on the successors and assigns of the parties
hereto. The term "Bank" as used herein shall mean Bank of America, N.A. and its
successors and permitted assignees under the Loan Agreement. The Bank may, at
its option, round any or all fractional interest rates under paragraph 3 upwards
to the next higher 1/100 of 1%. The Borrower hereby: (i) waives demand, notice
of demand, presentment for payment, notice of nonpayment or dishonor, protest,
notice of protest and all other notice, filing of suit and diligence in
collecting this Note, or in the Bank s enforcing any of its rights under any
guaranties securing the repayment hereof; (ii) agrees to any substitution,
addition or release of or any party or person primarily or secondarily liable
hereon; (iii) agrees that the Bank shall not be required first to institute any
suit, or to exhaust its remedies against the Borrower or any other person or
party to become liable hereunder, or against any collateral in order to enforce
payment of this Note; and (iv) agrees that, notwithstanding the occurrence of
any of the foregoing (except with the express written release by the Bank of the
Borrower), the Borrower shall be and remain directly and primarily, liable for
all sums due under this Note.
AMERICAN TECHNICAL CERAMICS CORP.
By:
--------------------------------
Xxxxxxxx X. Xxxxx
Vice President - Administration
(CORPORATE SEAL)
3
STATE OF NEW YORK
COUNTY OF SUFFOLK
The foregoing instrument was executed, acknowledged and delivered
before me this ____ day of April, 2000, by Xxxxxxxx X. Xxxxx, the Vice President
- Administration of American Technical Ceramics Corp., on behalf of the
corporation, in Suffolk County, New York.
-------------------------------------
Notary Public, State and County
Aforesaid
Print Name:__________________________
My commission expires:_______________
My commission number:________________
(NOTARIAL SEAL)
at2-pn3
4
TAX INDEMNITY AGREEMENT
This Agreement is made this 13th day of April, 2000, by and between
AMERICAN TECHNICAL CERAMICS CORP. (the "Borrower"), a Delaware corporation, and
BANK OF AMERICA, N.A. (the "Bank"), successor to NationsBank, N.A., successor by
merger to Xxxxxxx Bank, N.A.
Recitals
The Bank and the Borrower executed an Amended and Restated Loan
Agreement (as amended or restated from time to time, the "Loan Agreement") dated
November 25, 1998. The Borrower may, pursuant to the Loan Agreement, execute and
deliver the Notes (as defined in the Loan Agreement). The Loan Agreement and the
Notes, together with all other Loan Documents (as defined in the Loan Agreement)
are collectively referred to herein as the "Credit Documents". The Borrower has
indicated that the Credit Documents are exempt from Florida documentary stamp
taxes (collectively, the "Taxes"). The Borrower is executing this Agreement to
induce the Bank to accept the Credit Documents without payment of such taxes.
NOW THEREFORE, for good and valuable consideration, the parties agree
as follows:
1. The Borrower assumes full liability for payment of all Taxes
(including interest and penalties, if any) now or hereafter due with respect to
or in connection with the Credit Documents. The Borrower agrees to indemnify the
Bank, its directors, officers, agents and employees from and against any and all
liability and costs (including, without limitation, reasonable attorneys fees)
that may accrue to or be sustained by the Bank, its directors, officers, agents
or employees in connection with or as a result of: (a) the failure to pay any
Taxes on or in connection with the Credit Documents when due; and (b) any claim
or action filed or brought by or in the name of the State of Florida or any
department or agency thereof (including, without limitation, the Florida
Department of Revenue) with respect to any non-payment of Taxes on or in
connection with the Credit Documents when due.
2. From and after the date hereof, the Bank agrees that promptly upon
receipt by it of notice of any demand, assertion, claim, action or proceeding,
judicial or otherwise, giving rise to a potential claim for indemnification
under this Agreement, the Bank will give prompt notice thereof in writing to the
Borrower, together in each instance with such information regarding such
proceeding as the Bank shall then have. The Borrower reserves the right to
contest and defend all appropriate legal or other proceedings, any demand,
assertion, claim, action or proceeding with respect to which it has been called
upon to indemnify the Bank under the provisions of this Agreement, provided,
however, that: (a) notice of the intention so to contest shall be delivered to
the Bank within twenty (20) calendar days form the date of receipt by the
Borrower of notice of the assertion of such demand, assertion, claim, action or
proceeding; and (b) the Borrower shall pay all costs and expenses of such
contest, including all attorneys fees.
3. The Borrower's rights and obligations herein shall continue in full
force and effect notwithstanding the expiration or termination of the Credit
Documents for any reason.
4. This Agreement shall be governed by Florida law. No modifications,
amendments or waivers of this Agreement, or any of its provisions, shall be
binding on any party unless evidenced by a written instrument duly executed by
the parties.
1
Dated as of the date first set forth above.
AMERICAN TECHNICAL CERAMICS CORP.
By:
-------------------------------
Xxxxxxxx X. Xxxxx
Vice President - Administration
BANK OF AMERICA, N.A.
By:
-------------------------------
Its:
---------------------------
at2-tax
2
