1/29/98
Loan Agreement
January 29, 1998
Between
BORROWER
OPTEK TECHNOLOGY, INC.
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
BANK
NATIONSBANK OF TEXAS, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
In consideration of the creation of the revolving
facility described below and the mutual
covenants and agreements contained herein, and intending to be
legally bound hereby, Bank and
Borrower agree as follows:
1.0 Certain Definitions. The terms
"Floating Base Rate", "LIBO Rate", "LIBO Business
Day" and "LIBO Interest Period" are defined in the Note referred
to below. In addition, the
following terms shall have the meaning set forth with respect
thereto:
"Adjusted Current Liabilities": see
Section 5.2.
"Agreement" means this Loan Agreement
and all subsequent modifications and
amendments hereto.
"Commitment" means the obligation of
Bank, subject to the terms and conditions of
this Agreement, to make Loans which shall not exceed
at any one time outstanding
$10,000,000.
"Contested in Good Faith" means, as to
any payment, tax, assessment, charge, levy,
lien, encumbrance or claim, contesting the amount,
applicability or validity thereof in good
faith by appropriate proceedings or other
appropriate actions promptly initiated and diligently
conducted in a manner satisfactory to Bank, provided
(a) adequate reserves satisfactory to
Bank have been established, and (b) the enforcement
of the contested payment, tax,
assessment, charge, levy, lien, encumbrance or claim
is stayed in a manner satisfactory to
Bank pending the resolution of such contest.
"EBITDA": see Section 5.1.
"ERISA" means the Employee Retirement
Income Security Act of 1974, as amended,
and the regulations promulgated thereunder, as in
effect as of the date hereof and any
subsequent provisions which are amendatory thereof,
supplemental thereto or substituted
therefor. In addition, the terms "Commonly
Controlled Entity," "Multiemployer Plan,"
"PBGC," "Plan," "Prohibited Transaction," and
"Reportable Event" have the same means as
provided therefor in ERISA.
"GAAP" means generally accepted
accounting principles as in effect from time to
time, applied on a basis consistent (except for
changes approved by Borrower s independent
public accountant) with the most recent financial
statements of Borrower delivered to Bank.
"Guarantor" means each subsidiary
executing a Guaranty Agreement.
"Guaranty Agreement": see Section 2.4.
"Hazardous Materials" include all
materials defined as hazardous materials or
substances under any local, state or federal
environmental laws, rules or regulations, and
petroleum, petroleum products, oil and asbestos.
"Loan Documents" means this Agreement,
the Note, the Negative Pledge Agreement,
the Guaranty Agreements, the Officer's Certificates,
the Section 26.02 Notice, and all other
documents, instruments, guarantees, security
agreements, deeds of trust, pledge agreements,
certificates and agreements executed and/or
delivered by Borrower, or any guarantor or third
party in connection with any Loan.
"Loans": see Section 2.0.
"Material Adverse Effect" means a set
of circumstances or events any one of which
(i) has or could have a material and adverse effect
upon the validity or enforceability of or
would result in a Potential Default under any of the
Loan Documents, (ii) is material and
adverse to the business, operations, affairs,
financial condition, assets or properties of
Borrower or any Guarantor, (iii) could materially
and adversely impair the ability of
Borrower or any Guarantor to fulfill its obligations
under the Loan Documents, or (iv) could
materially and adversely impair the value of any
collateral or the ability of the secured party
to realize thereon.
"Maturity Date" means January 15, 2001.
"Mexican Subsidiaries" mean Optron De
Mexico, S.A. de C.V., and Semicondores
Opticos, S.A. de C.V.
"Negative Pledge Agreement": see
Section 2.3
"Net Depreciation": see Section 5.1.
"Net Income": see Section 5.1.
"No Cure Period Covenants" mean any
term, covenant or agreement set forth in
Sections 5.1 through 5.4, Sections 6.1 and 6.2,
Sections 7.1 through 7.12, Section 9.1,
Section 9.2, Section 12.0 and Section 13.9 hereof.
"Note" means that certain promissory
note made by Borrower payable to the order of
Bank in the original principal sum of $10,000,000
dated January 29, 1998, and all renewals,
extensions, modifications and amendments thereto,
and substitutions therefor.
"Obligations" means the obligations of
Borrower:
(a) to pay all indebtedness
arising out of this Agreement, any future
advances under this Agreement, and all
renewals, extensions or amendments of such
indebtedness or any part thereof or any
such future advances;
(b) to pay the principal of
and interest on the Note in accordance with the
terms thereof, and all renewals,
extensions, modifications and amendments of such
Note or any part thereof, and any
future advances made pursuant thereto;
(c) to repay to Bank all
amounts advanced by Bank hereunder or under
the other Loan Documents on behalf of
Borrower, including, without limitation,
advances for principal or interest
payments to prior secured parties, mortgagees, or
lienors, or for taxes, levies,
insurance, rent, repairs to or maintenance or storage of
any of the collateral;
(d) to pay any and all other
indebtedness of Borrower to Bank of every
kind, nature and description, direct or
indirect, primary or secondary, secured or
unsecured (including overdrafts), joint
or several, absolute or contingent, due or to
become due, now existing or hereafter
arising, regardless of how it may be evidenced,
including without limitation all future
advances, whether or not presently contemplated
by the parties hereto;
(e) to perform fully all of
the terms and provisions of each of the
instruments constituting the Loan
Documents; and
(f) to reimburse Bank, on
demand, for all of Bank's expenses and costs,
which Borrower and Guarantors are
obligated to pay pursuant to the terms of the
Loan Documents.
"Permitted Liens" mean (i) liens for
current taxes not delinquent or for taxes being
Contested in Good Faith, (ii) liens arising in the
ordinary course of business for sums being
Contested in Good Faith, or for sums not due, and in
either case not involving any deposits
or advances for borrowed money or the deferred
purchase of property or services, (iii) liens
incurred in the ordinary course of business for
amounts not yet due and payable in connection
with worker s compensation, unemployment insurance
or other forms of governmental
insurance or benefits, (iv) mechanic s, worker s,
materialmen s and other like liens arising in
the ordinary course of business in respect of
obligations which are not delinquent or which are
being Contested in Good Faith, (v) liens and
security interests, if any, in favor of Bank,
(vi) purchase-money liens and security interests on
any property acquired after the date of this
Agreement securing Purchase Money Debt up to
$500,000 in the aggregate at any time
outstanding, (vii) liens securing lease expenditures
permitted by Section 7.2 hereof, and
(viii) minor defects and irregularities which
neither (1) are liens or security interests which
secure other indebtedness or obligations, nor (2)
materially impair the value of such asset or
the use thereof for the purposes for which such
asset is held.
"Plan" means, at any time, any employee
benefit plan which is covered by ERISA
and in respect of which Borrower or any Commonly
Controlled Entity is (or, if such plan
were terminated at such time, would under ERISA be
deemed to be) an "employer" as defined
in ERISA.
"Potential Default" means any
condition, event or act, which with the giving of
notice of the lapse of time, or both, will
constitute an Event of Default hereunder.
"Principal Debt": see Section 2.2.
"Quick Assets": see Section 5.2.
"Section 26.02 Notice": see Section
4.6.
"subsidiary" means, with respect to
Borrower, any corporation, limited liability
company, partnership, limited partnership,
association or other entity the accounts of which
would be consolidated with those of Borrower if such
financial statements were prepared with
accordance with GAAP, including without limitation,
the Mexican Subsidiaries.
"Tangible Net Worth": see Section 5.3.
"Total Funded Debt": see Section 5.1.
2.0 Loans. Bank agrees, subject to the
terms and conditions hereof, to lend Borrower at
any time and from time to time on or before the Maturity Date
sums (each year-end called a "Loan"
and collectively the "Loans") which may be repaid and reborrowed
pursuant to the terms hereof and
which shall not exceed at any one time outstanding the amount of
the Commitment. Whenever
Borrower desires a Loan hereunder, Borrower shall give Bank
notice in the form of Exhibit "A"
attached hereto (a "Borrowing and Interest Notice Request")
specifying (a) the date (which shall be a
Business Day in the case of a Loan based upon the Floating Base
Rate or a LIBO Business Day in the
case of a Loan based upon the LIBO Rate) of the proposed
borrowing, (b) the amount to be
borrowed, (c) the portion of the borrowing constituting a Loan
based upon the Floating Base Rate
and/or a Loan based upon the LIBO Rate (which LIBO Rate based
Loan may only be in integral
multiples of $500,000), and (d) if any portion of the proposed
borrowing constitutes a LIBO Rate
based Loan, the initial LIBO Interest Period selected by Borrower
(thirty days, sixty days or ninety
days). Such notice shall be given by 10 a.m. (Dallas, Texas
time) on the date of the proposed
borrowing in the case of a Floating Base Rate Loan, and by 10
a.m. (Dallas, Texas time) two (2)
Business Days prior to the date of the proposed borrowing in the
case of a LIBO Rate based Loan.
The notice required may be given telephonically by Borrower to
Bank, but upon giving such
telephonic notice Borrower shall immediately thereafter provide
Bank with the written notice attached
hereto as Exhibit A. All notices given under this Section shall
be irrevocable. Not later than 12
noon (Dallas, Texas time) on the date of the proposed borrowing
and upon fulfillment of all other
conditions required by this Agreement, Bank will make such Loan
available to Borrower by crediting
the amount thereof to Borrower's account with Bank or otherwise
disbursing it as Borrower shall
request in writing. No Loans may be obtained after the Maturity
Date.
2.1 Use of Proceeds. The
proceeds of Loans may be used solely for general
corporate purposes.
2.2 Promissory Note. The
obligation of Borrower to repay the aggregate
principal balance of all Loans hereunder outstanding
at any one time (the "Principal Debt")
shall be evidenced by the Note which (a) shall be
payable as to principal on or before the
Maturity Date for the amount of $10,000,000, or the
Principal Debt then outstanding,
whichever is less, (b) shall bear interest and be
payable as to interest in the manner therein
provided, (c) be entitled to the benefits of this
Agreement in the security provided for herein,
and (d) be in such form as is acceptable to Bank.
2.3 Negative, Negative
Pledge. The Obligations shall be unsecured. However,
except for liens expressly permitted by Section 7.5
hereof, until full payment and performance
of all Obligations of Borrower under the Loan
Documents, all assets of Borrower shall be
maintained by Borrower free and clear of all liens,
encumbrances, pledges or commitments to
pledge or not to pledge Borrower s assets to another
creditor. This obligation shall be further
evidenced by an agreement (the "Negative Pledge
Agreement"), which shall be in form and
substance satisfactory to Bank.
2.4 Guaranties. If the
combined Tangible Net Worth of all subsidiaries exceeds
25% of the Tangible Net Worth of Borrower, then the
payment and performance of the Note
and all of the other Obligations hereunder and under
the Loan Documents shall be
unconditionally guaranteed by all subsidiaries then
in existence and thereafter formed or
acquired pursuant to the terms of one or more
guaranty agreements (each a "Guaranty
Agreement"), which shall be in form and substance
satisfactory to Bank. Borrower shall pay
the reasonable fees and expenses of counsel for Bank
incurred in connection with the
preparation of the Guaranty Agreements.
2.5 Unused Commitment Fee.
Borrower agrees to pay Bank an unused
commitment fee for the period commencing with the
date of this Agreement to the Maturity
Date, computed at the rate of 3/8's of one percent
(0.375%) per annum on the average daily
unused portion of the Commitment. The phrase
"unused portion of the Commitment" as used
in the preceding sentence means the difference
between (a) $10,000,000, and (b) the
Principal Debt. The unused commitment fee shall be
payable quarterly in arrears
commencing with the calendar quarter ending March
31, 1998. Borrower authorizes Bank to
effect payment of the unused commitment fee by
debiting Borrower s account specified in
Section 5 of the Note for automatic payment. This
authorization shall not affect the obligation
of Borrower to pay such sum when due, without
notice, if there are insufficient funds in such
account to make such payment in full on the due date
thereof, or if Bank fails to debit the
account.
3.0 Conditions Precedent to Closing. The
obligations of Bank as set forth herein are
subject to the satisfaction, unless waived in writing by Bank, of
each of the following conditions:
3.1 Loan Origination Fee.
Borrower shall have paid Bank a loan origination fee
of $30,000.
3.2 Effectiveness of Loan
Documents. Each of the Loan Documents shall be in
full force and effect.
3.3 Termination of First
Source Financial Credit Facility. Borrower shall
provide documentation satisfactory to Bank
evidencing the termination of lending relationships
with First Source Financial, Inc., and all other
lenders in existence immediately prior to the
date hereof, excluding lease arrangements by
Borrower and its subsidiaries previously
disclosed to Bank in writing.
3.4 Credit Opinion. There
shall have been delivered a favorable credit opinion
of counsel for Borrower covering organization,
authority, enforceability and such other
matters incident to the Loan as Bank may reasonably
request.
3.5 Insurance Certificate.
Bank shall have received evidence that Borrower has
obtained the policies of insurance specified and
required by Section 6.6 hereof.
3.6 Documentation and
Proceedings. Borrower shall have delivered resolutions
of its boards of directors authorizing its
execution, delivery and performance of the Loan
Documents to which they are parties.
3.7 Section 26.02 Notice.
Borrower shall have executed a notice in compliance
with the provisions of Section 26.02 of the Texas
Business and Commerce Code (the "Section
26.02 Notice").
3.8 Representations and
Warranties. All representations and warranties
contained herein or in the documents referred to
herein or otherwise made in writing in
connection herewith or therewith shall be true and
correct with the same force and effect as
though such representations and warranties have been
made on and as of this date.
4.0 Conditions Precedent to All Loans. The
obligation of Bank to make all Loans to
Borrower is subject, at the time of the funding of each such Loan
(the "Funding Date"), to the
satisfaction, unless waived in writing by Bank, of each of the
following conditions:
4.1 Borrowing and Interest
Notice Request. Borrower shall have delivered to
Bank, within the time frame specified in Section 2.0
hereof, a Borrowing and Interest Notice
Request appropriately completed in compliance
herewith.
4.2 Availability of
Commitment. The then Principal Debt plus the amount of
the requested Loan shall be equal to or less than
the Commitment.
4.3 Expenses. Borrower shall
have paid all reasonable expenses of Bank in
connection with the making of the Loan (other than
those specified in the first sentence of
Section 12.0 hereof).
4.4 Representations and
Warranties. All representations and warranties
contained herein shall be true and correct in all
material respects as though such
representations and warranties have been made on and
as of the Funding Date (except to the
extent that such representations and warranties
relate solely to an earlier date).
4.5 No Default. There shall
exist no Event of Default or Potential Default
hereunder.
4.6 Change in Condition. No
change in the condition (financial or otherwise) of
Borrower or Guarantors or any other event shall have
occurred which has had or is likely to
have a Material Adverse Effect.
4.7 (a)0 Financial
Covenants.
4.8 Leverage Ratio. Borrower
will not permit its ratio of Total Funded Debt as
of the last day of each fiscal quarter to EBITDA for
the period of four consecutive fiscal
quarters ending on such day, to be greater than 2.0
to 1.0. "Total Funded Debt" means, as
of any date of determination, without duplication,
the aggregate principal amount of all
indebtedness of Borrower and its subsidiaries
outstanding as of such date determined on a
consolidated basis in accordance with GAAP.
"EBITDA" means, for any period, Net Income
for such period, plus, without duplication and to
the extent deducted from revenues in
determining Net Income, the sum of (a) the aggregate
amount of Consolidated Interest
Expense for such period, (b) the aggregate amount of
letter of credit fees paid during such
period, (c) the aggregate amount of income tax
expense for such period, (d) all amounts
attributable to Net Depreciation and amortization
for such period, and (e) all other non-cash
charges, minus, all cash dividends paid during such
period, all determined on a consolidated
basis with respect to Borrower and its subsidiaries
in accordance with GAAP. "Net Income"
means, for any period, net income or loss (after
income taxes) of Borrower and its
subsidiaries for such period determined on a
consolidated basis in accordance with GAAP,
provided, there shall be excluded (a) extraordinary
gains, (b) gains due to sales or write-up of
assets, (c) earnings of any entity newly acquired,
if earned prior to acquisition, and (d) gains
due to acquisitions of any securities of any entity.
"Interest Expense" means, for any period,
the interest expense, both expensed and capitalized
(including the interest component in
respect of capital lease obligations), accrued or
paid by Borrower and its subsidiaries during
such period, determined on a consolidated basis in
accordance with GAAP. Net
Depreciation means depreciation expense during such
period determined on a consolidated
basis in accordance with GAAP, less $500,000 for
capital expenditures.
4.9 Quick Asset Ratio.
Borrower shall maintain at all times a ratio of Quick
Assets to Adjusted Current Liabilities of not less
than .75 to 1.0. "Quick Assets" means the
sum of (a) cash on hand or on deposit in banks, (b)
readily marketable securities issued by the
United States, (c) readily marketable commercial
paper rated "A-1" by Standard & Poors
Corporation (or a similar rating by any similar
organization which rates commercial paper),
(d) certificates of deposit or banker s acceptances
issued by commercial banks of recognized
standing operating in the United States, and (e)
receivables not more than 90 days overdue.
"Adjusted Current Liabilities" means current
liabilities determined in accordance with GAAP
excluding the Principal Debt outstanding at any
time.
4.10 Minimum Tangible Net
Worth. Borrower shall maintain at all times a
Tangible Net Worth of not less than the sum of the
following:
(a) $20,000,000; plus
(b) 50% of Net Income for which purpose
Net Income is a
positive number measured cumulatively
for each fiscal year beginning
with the fiscal year ending October 30,
1998; plus
(c) 100% of the net proceeds of any
offering of any equity
securities sold for the account of
Borrower and otherwise permitted by
the terms hereof and consummated after
the date hereof; plus
(d) 100% of any capital contributions
made to Borrower after
the date hereof.
Tangible Net Worth means the amount by which total
assets exceed total liabilities, total
assets and total liabilities each being determined
on a consolidated basis in accordance with
GAAP consistent with those applied in the
preparation of the financial statements previously
furnished to Bank referred to in Section 8.2,
excluding however, from the determination of
total assets all assets which would be classified as
intangible assets under GAAP, including
without limitation, good will, licenses, patents,
trademarks, trade names, copyrights, and
franchises.
4.11 Consecutive Losses.
Borrower will not realize any negative Net Income in
any two consecutive fiscal quarters.
5.0 Affirmative Covenants. Until full
payment and performance of all Obligations of
Borrower under the Loan Documents, Borrower will, unless Bank
consents otherwise in writing (and
without limiting any requirement of any other Loan Document):
5.1 Financial Statements and
Other Information. Deliver or cause to be
delivered to Bank (a) quarterly consolidated and
consolidating financial statements of
Borrower within forty-five (45) days after the end
of the first three fiscal quarters of each
fiscal year, and annual audited consolidated
financial statements of Borrower within one
hundred twenty (120) days after the end of each
fiscal year, in each instance to include a
balance sheet, an income statement, a statement of
cash flows and such other financial
statements and supporting schedules or documentation
reasonably requested by Bank, prepared
in accordance with generally accepted accounting
principles consistently applied and presented
in a format reasonably acceptable to Bank, and (b)
such additional information, reports and
statements with respect to the business operations
and financial condition of Borrower as Bank
may reasonably request from time to time, and (c)
within one hundred twenty (120) days after
the end of each fiscal year, and within forty-five
(45) days after the end of the first three
fiscal quarters of each fiscal year, a compliance
certificate in the form of Exhibit B attached
hereto, and (d) immediately after the filing
thereof, copies of any report, proxy statement,
financial statement, or other filing made by
Borrower with the Securities and Exchange
Commission, any state securities agency, or any
national stock exchange or quotation service,
and promptly upon receipt thereof, copies of any
notices received from the Securities and
Exchange Commission or any state securities agency
relating to any order, rule, statute, or
other laws or information that could have a Material
Adverse Effect.
5.2 Adverse Conditions or
Events. Promptly advise Bank in writing of (i) any
condition, event or act which comes to its attention
that could or can reasonably be expected
to have a Material Adverse Effect, (ii) any
litigation filed by or against Borrower or any
Guarantor involving an amount in excess of $500,000,
(iii) the occurrence of any Event of
Default, or of any Potential Default, or the failure
of Borrower or any Guarantor to observe
any of its undertakings hereunder or under any of
the other Loan Documents, (iv) any
uninsured or partially uninsured loss through fire,
theft, liability or property damage in excess
of an aggregate of $500,000, (v) any and all
enforcement, cleanup, remedial, removal or
other governmental or regulatory actions instituted,
completed or threatened pursuant to any
applicable federal, state or local laws, ordinances
or regulations relating to any Hazardous
Materials affecting the business operations of
Borrower or any Guarantor, (vi) all claims made
or threatened by any third party against Borrower or
any Guarantor relating to damages,
contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous
Materials, (vii) any circumstances that constitute
grounds entitling the PBGC to institute
proceedings to terminate a Plan subject to ERISA,
and the receipt of any notice to Borrower
or any Commonly Controlled Entity that the PBGC
intends to terminate a Plan, and the
receipt of notice concerning the imposition of
withdrawal liability in excess of $25,000 with
respect to Borrower or any Commonly Controlled
Entity; and (viii) the formation or
acquisition of any subsidiary and the occurrence of
any event which will require the execution
of Guaranty Agreements pursuant to Section 2.4
hereof.
5.3 Taxes and Other
Obligations. Pay all of its taxes, assessments and other
obligations, including, but not limited to taxes,
costs or other expenses arising out of this
transaction, as the same become due and payable,
except to the extent the same are being
contested in good faith by appropriate proceedings
in a diligent manner.
5.4 Insurance. Maintain insurance with responsible insurance
companies on
such of its properties, in such amounts and against such
risks as is customarily maintained
by similar businesses operating in the same vicinity,
specifically to include fire and extended
coverage insurance covering all assets, business interruption
insurance, workers
compensation insurance and liability insurance, all providing
for at least 30 days prior
notice to Bank of any cancellation thereof. Satisfactory
evidence of such insurance will be
supplied to Bank at closing, thereafter as and when requested
by Bank, and 30 days prior to
each policy renewal.
5.5 Existence and Compliance. (a) Maintain its existence,
good standing and
qualification to do business, in each jurisdiction in which,
under then applicable law, the
nature of its business and the ownership of its properties
require such qualification and the
failure to so qualify would have a Material Adverse Effect;
and (b) comply with all laws,
regulations and governmental requirements including, without
limitation, environmental laws
applicable to it or to any of its property, business
operations and transactions, a breach of
which (when considered alone or when aggregated with the
effect of other breaches) could
have a Material Adverse Effect.
5.6 Maintenance. Maintain all of its tangible property in
good condition and
repair and make all necessary replacements thereof, and
preserve and maintain all licenses,
trademarks, privileges, permits, franchises, certificates and
the like necessary for the
operation of its business.
5.7 Inspection of Books and Records. Allow any
representative of Bank to
examine its books of record and account and to discuss its
affairs, finances and accounts with
any of its officers, directors, employees and agents, all at
such reasonable times and as often
as Bank may reasonably request.
5.8 Audits. Submit to, and bear the expense of (except that
Borrower shall not
be required to pay more than $10,000 of such expenses in any
period of 12 consecutive
months), such audits and inspections as Bank may from time to
time reasonably request.
5.9 Further Assurances. Make, execute or endorse,
acknowledge and deliver or
file or cause the same to be done, all such vouchers,
invoices, notices, certifications and
additional agreements, undertakings, conveyances, deeds of
trust, mortgages, assignments,
financing statements or other assurances, and take any and
all such other action as Bank may
from time to time reasonably request in connection with this
Agreement or any of the other
Loan Documents (a) to cure any defects in the creation of the
Loan Documents, or (ii) to
correct any omissions in the Loan Documents.
6.0 Negative Covenants. Until full payment and performance
of all Obligations of
Borrower under the Loan Documents, Borrower will not, without the
prior written consent of Bank
(and without limiting any requirement of any other Loan
Documents):
6.1 Capital Expenditures. Make capital expenditures during
each fiscal year
(including capitalized leases) in excess of $7,500,000.
6.2 Lease Expenditures. Incur new obligations for the lease
or hire of real or
personal property in any fiscal year in excess of an
aggregate of $1,000,000.
6.3 Transfer of Assets. Convey, assign, transfer, sell,
lease or otherwise dispose
of in one transaction or a series of transactions (or agree
to do any of the foregoing at any
future time) all or substantially all or a substantial part
of its properties or assets (whether
now owned or hereafter acquired) or any part of such
properties or assets which are essential
to the conduct of its business substantially as now
conducted.
6.4 Merger, Etc. Enter into any merger or consolidation,
except that Borrower
may merge into or consolidate with any of its subsidiaries so
long as Borrower is the
survivor.
6.5 Liens. Grant, suffer or permit any contractual or
noncontractual lien on or
security interest in its assets, except Permitted Liens.
6.6 Extensions of Credit. Make, or permit any Guarantor to
make, any loan or
advance to any person or entity, or purchase or otherwise
acquire, or permit any Guarantor to
purchase or otherwise acquire, any capital stock, assets,
obligations or other securities of, or
make any capital contribution to, or otherwise invest in or
acquire any interest in any entity;
provided that Borrower may acquire or invest in entities
where the cumulative aggregate cash
and/or stock consideration does not exceed $10,000,000 over
the term of this Agreement.
6.7 Borrowings. Create, incur, assume or become liable in
any manner for any
indebtedness (whether direct or contingent, for borrowed
money, deferred payment for the
purchase of assets, lease payments, as surety or guarantor
for the debt for another, or
otherwise) other than to Bank, except for (i) normal trade
debts incurred in the ordinary
course of Borrower's business, (ii) purchase-money debt up to
$500,000 in the aggregate at
any time outstanding, (iii) lease expenditures permitted by
Section 7.2 hereof, and (iv)
existing indebtedness disclosed to Bank in writing and
acknowledged by Bank prior to the date
of this Agreement.
6.8 Dividends and Distributions. Make any distribution
(other than dividends
payable in capital stock of Borrower) on any shares of any
class of its capital stock, or
apply any of its property or assets to the purchase,
redemption or other retirement of any
shares of any class of capital stock of Borrower exceeding in
the aggregate 50% of net
profit per fiscal year.
6.9 Change of Character of Business or Location. Change the
general
character of business as conducted at the date hereof, or
engage in any type of business not
reasonably related to its business as presently conducted, or
fail to maintain in Texas its
principal place of business, its primary administrative
office, and its billing and collection
operations.
.
6.10 Principal Debt not to Exceed Commitment. Permit at any
time the
Principal Debt to exceed the Commitment.
6.11 Change of Control. Permit the change of control of
Borrower. "Change of
control" as used in the preceding sentence means the
acquisition by a third party of more than
fifty percent (50%) of the outstanding voting stock of
Borrower.
6.12 Arm's Length Transactions. Enter into a transaction
with any affiliate (other
than services rendered by an officer, employee or director),
except a transaction upon terms
that are not less favorable to it than would be obtained in a
transaction negotiated at arm's
length with an unrelated third party.
7.0 Representations and Warranties. Borrower hereby
represents and warrants to Bank
as follows:
7.1 No Liens. Borrower and each Guarantor have good and
defensible title to all
of their assets, and none of such assets are subject to any
security interest, mortgage, deed of
trust, pledge, lien, title retention document or encumbrance
of any character, except for
Permitted Liens.
7.2 Financial Statements. The financial statements of
Borrower dated as of
July 31, 1997, have been prepared in accordance with
generally accepted accounting
principles on a consistent basis throughout the period
involved and fairly present Borrower s
financial condition as of the date or dates thereof, and
there have been no material adverse
changes in Borrower s financial condition or operation since
the date or dates thereof.
7.3 Good Standing. Borrower is a corporation, duly
organized, validly existing
and in good standing under the laws of Delaware and has the
power and authority to own its
property and to carry on its business in Texas and in every
other state in which, under
presently applicable law, the nature of its property or
business requires such qualification and
in which the failure to be so qualified would (when
considered alone or when aggregated with
the effect of failure to qualify in all other jurisdictions)
have a Material Adverse Effect.
7.4 Binding Agreements. This Agreement and the other Loan
Documents
executed by Borrower constitute valid and legally binding
obligations of Borrower,
enforceable in accordance with their terms. Each of the Loan
Documents executed by each
Guarantor constitutes the valid and binding obligation of
such Guarantor, enforceable in
accordance with its terms.
7.5 Litigation. There is no proceeding involving Borrower
or any Guarantor
pending or, to the knowledge of Borrower, threatened before
any court or governmental
authority, agency or arbitration authority, except as
disclosed to Bank in writing and
acknowledged by Bank prior to the date of this Agreement.
7.6 No Conflicting Agreements. There is no charter, bylaw,
stock provision,
partnership agreement or other document pertaining to the
power or authority of Borrower or
any Guarantor and no provision of any existing agreement,
mortgage, indenture or contract
binding on Borrower or any Guarantor or affecting any
property of Borrower or any
Guarantor, which would conflict with or in any way prevent
the execution, delivery or
carrying out of the terms of this Agreement and the other
Loan Documents.
7.7 Taxes. All taxes and assessments due and payable by
Borrower and any
Guarantor have been paid or are being contested in good faith
by appropriate proceedings in a
diligent manner, and the Borrower and Guarantors have filed
all tax returns which they are
required to file.
7.8 Accuracy of Information. To the best of Borrower's
knowledge, all factual
information furnished to Bank in connection with this
Agreement and the other Loan
Documents is and will be accurate and complete in all
material respects on the date as of
which such information is delivered to Bank and is not and
will not be incomplete by the
omission of any material fact necessary to make such
information not misleading.
7.9 ERISA. Borrower is in compliance in all material
respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred
and is continuing with respect to any Plan; no notice of
intent to terminate a Plan has been
filed, nor has any Plan been terminated; neither Borrower nor
any Commonly Controlled
Entity has completely or partially withdrawn from a
Multiemployer Plan; and Borrower and
each Commonly Controlled Entity have met their minimum
funding requirements under
ERISA with respect to all of their Plans.
7.10 Environmental. The conduct of Borrower s business
operations and the
condition of Borrower s property does not and will not
violate any federal laws, rules or
ordinances for environmental protection, or regulations of
the Environmental Protection
Agency, or any applicable local or state law, rule,
regulation or rule of common law, or any
judicial interpretation thereof relating primarily to the
environment or Hazardous Materials.
7.11 Subsidiaries. Borrower has no subsidiaries other than
the Mexican
Subsidiaries, Optek Holdings, Inc. and OTX Corporation.
7.12 Continuation of Representations and Warranties. All
representations and
warranties made under this Agreement shall be deemed to be
made at and as of the date
hereof and at and as of the date of any future Loan and in
all instances shall be true and
correct (except to the extent that such representations and
warranties relate solely to an earlier
date).
8.0 Default. Any of the following shall constitute events
of default (each an Event of
Default ):
8.1 Nonpayment. (a) Borrower shall default in the due and
punctual payment of
any principal or interest of the Note when due and payable,
whether at maturity or otherwise,
or (b) Borrower or any Guarantor shall default in the due and
punctual payment of any of the
other Obligations when due and payable.
8.2 Representations and Warranties. Any representation,
warranty or statement
made by Borrower or any Guarantor herein or otherwise in
writing in connection herewith or
in connection with any of the other Loan Documents and the
agreements referred to herein or
therein or in any financial statement, certificate or
statement signed by any officer or
employee of Borrower and furnished pursuant to any provision
of the Loan Documents shall
be breached, or shall be materially false, incorrect or
incomplete when made.
8.3 Default in Covenants Under Agreement. (a) Borrower shall
default in the
due performance or observance by it of any term, covenant or
agreement set forth in the No
Cure Period Covenants; or (b) Borrower shall default in the
due performance or observance
of any term, covenant or agreement contained in this
Agreement other than the No Cure
Period Covenants, and such default continues unremedied for a
period of thirty (30) days after
notice thereof from Bank or Bank is notified of such default
or should have been so notified
pursuant to the provisions of Section 6.2 hereof, whichever
is earlier.
8.4 Default in Other Loan Documents. Borrower or any
Guarantor shall default
in the due performance of or observance by it of any term,
covenant or agreement on its part
to be performed pursuant to the terms of any of the other
Loan Documents and the default
shall continue unremedied beyond any grace or cure period
therein provided.
8.5 Default in Other Debt. An event of default shall occur
under the provisions
of any instrument (other than the Loan Documents) evidencing
indebtedness of Borrower for
the payment of borrowed money or of any agreement relating
thereto, the effect of which is to
permit the holder or holders of such instrument to cause the
indebtedness evidenced by such
instrument to become due and payable prior to its stated
maturity (whether or not the holder
actually exercises such option).
8.6 Validity of Loan Documents. Any of the Loan Documents
shall cease to be
a legal, valid and binding agreement enforceable against any
party executing the same in
accordance with the respective terms thereof, or shall in any
way be terminated, or become or
be declared ineffective or inoperative by operation of law,
or shall in any way whatsoever
cease to give or provide the respective rights, remedies,
powers and privileges intended to be
created thereby.
8.7 Bankruptcy. Borrower or any Guarantor shall suspend or
discontinue its
business operations, or shall generally fail to pay its debts
as they mature, or shall file a
petition commencing a voluntary case concerning Borrower
under any chapter of the United
States Bankruptcy Code; or a court of competent jurisdiction
enters an order or decree under
any bankruptcy law that remains unstayed and in effect for
forty-five (45) days that is for
relief against Borrower or any Guarantor in an involuntary
case or appoints a custodian of
Borrower or any Guarantor for all or substantially all of its
property; or Borrower or any
Guarantor shall become insolvent (howsoever such insolvency
may be evidenced).
8.8 Judgments and Decrees. Borrower or any Guarantor shall
suffer a final
judgment for the payment of money in excess of $500,000 and
shall not discharge the same
within a period of thirty (30) days unless, pending further
proceedings, execution has not been
commenced, or, if commenced, has been effectively stayed.
Any order, judgment or decree
shall be entered in any proceeding against Borrower or any
Guarantor decreeing the
dissolution or split up of such entity and such order shall
remain undischarged or unstayed for
a period in excess of thirty (30) days.
8.9 ERISA. Any of the following events shall occur or exist
with respect to
Borrower and any Commonly Controlled Entity under ERISA and
the regulations
promulgated thereunder:
(a) any Reportable Event shall occur;
(b) complete or partial withdrawal from any
Multiemployer Plan shall
take place;
(c) any Prohibited Transaction shall occur;
(d) a notice of intent to terminate a Plan shall be
filed, or a Plan shall
be terminated; or
(e) circumstances shall exist which constitute
grounds entitling the
PBGC to institute proceedings to terminate a Plan, or
the PBGC shall institute such
proceedings;
and in each case above, such event or condition, together
with all other events or
conditions, if any, could subject Borrower to any tax,
penalty or other liability which in the
aggregate may exceed $25,000.
9.0 Remedies. Upon the occurrence of an Event of Default
described in Section 9.7
hereof, the entire principal of and accrued interest on the Note
shall forthwith be due and payable
without demand, presentment for payment, notice of nonpayment,
protest, notice of protest, notice of
intent to accelerate, notice of acceleration and all other
notices and further actions of any kind, all of
which are hereby expressly waived by Borrower. In the event that
any other Event of Default occur
and be continuing, Bank may, without demand or notice of its
election terminate its obligation to
make further Loans hereunder and/or declare the entire unpaid
balance of the Note and all other
indebtedness of Borrower to Bank, or any part thereof,
immediately due and payable, whereupon the
principal of and accrued interest on such Note and other
indebtedness shall be forthwith due and
payable without demand, presentment for payment, notice of
nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all
other notices and further actions of any
kind, all of which are hereby expressly waived by Borrower. Upon
the occurrence and during the
continuance of any Event of Default, Bank may (a) exercise any
and all rights under or pursuant to
any of the Loan Documents, and (b) exercise any and all rights
afforded to Bank by the laws of the
State of Texas or any other applicable jurisdiction or in equity
or otherwise, as Bank may deem
appropriate, and (c) terminate the Commitment.
10.0 Notices. All notices, requests or demands which any
party is required or may desire
to give to any other party under any provision of this Agreement
must be in writing (including
telegraphic, telex and facsimile transmission) delivered to the
other party at the addresses set forth on
the first page of this Agreement or to such other address as any
party may designate by written notice
to the other party. Each such notice, request and demand shall
be deemed given or made (whether
actually received or not) (a) if sent by mail, upon the earlier
of the date of receipt or five (5) days
after deposit in the U.S. Mail, first class postage prepaid, and
(b) if sent by any other means, upon
delivery. Unless otherwise changed by notice given pursuant to
this Section, the facsimile
transmission number for Borrower shall be (000) 000-0000, and the
facsimile transmission number for
Bank shall be (000) 000-0000.
11.0 Costs, Expenses and Attorneys' Fees. Each party shall
bear its own attorneys fees
incurred by it in connection with the negotiation and preparation
of this Agreement and each of the
Loan Documents executed as part of the initial closing. Borrower
shall pay to Bank immediately
upon demand the full amount of all costs and expenses, including
reasonable attorneys' fees (including
outside counsel fees but excluding any allocation of costs of
Bank s in-house counsel), incurred by
Bank in connection with (a) if initiated or requested by
Borrower, any modifications of or consents or
waivers under or amendments to this Agreement, the Note, the
other Loan Documents and the
agreements described therein, and (b) all other costs and
attorneys fees incurred by Bank for which
Borrower is obligated to pay in accordance with the terms of the
Loan Documents. Borrower further
agrees to pay on demand all costs and expenses of Bank incurred
in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of
the Loan Documents. Borrower
further agrees to indemnify Bank and its employees and agents,
from and hold it harmless against any
and all losses, liabilities, claims, damages or expenses which
any of them suffers or incurs as a result
of its entering into this Agreement, or the consummation of the
transactions contemplated by this
Agreement and the Loan Documents, or the use or contemplated use
of the proceeds of the Loan, or
due to a release or alleged release of Hazardous Materials,
including, without limitation, the fees and
disbursements of counsel incurred in connection with any
litigation, arbitration or other proceeding
arising out of or by reason of any of the aforesaid. Borrower
shall defend any claim for which an
indemnified party is entitled to seek indemnity pursuant to the
preceding sentence, and the
indemnified party shall cooperate with the defense. The
indemnified party may have separate
counsel, and Borrower will pay the expenses and reasonable fees
of such separate counsel if either
counsel for Borrower or counsel for the indemnified party shall
advise the indemnified party that the
interests of both Borrower and the indemnified party with respect
to such claim are or with reasonable
certainty will become adverse.
12.0 Miscellaneous. Borrower and Bank further covenant and
agree as follows, without
limiting any requirement of any other Loan Document:
12.1 Cumulative Rights and No Waiver. Each and every right
granted to Bank
under any Loan Document, or allowed it by law or equity shall
be cumulative of each other
and may be exercised in addition to any and all other rights
of Bank, and no delay in
exercising any right shall operate as a waiver thereof, nor
shall any single or partial exercise
by Bank of any right preclude any other or future exercise
thereof or the exercise of any other
right. Borrower expressly waives any presentment, demand,
protest or other notice of any
kind, including but not limited to notice of intent to
accelerate and notice of acceleration. No
notice to or demand on Borrower in any case shall, of itself,
entitle Borrower to any other or
future notice or demand in similar or other circumstances.
12.2 Choice of Law and Venue. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS (BUT
NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE STATE OF
TEXAS AND SHALL BE PERFORMABLE IN DALLAS COUNTY, TEXAS.
12.3 Amendment. No modification, consent, amendment or
waiver of any
provision of this Agreement, nor consent to any departure by
a party therefrom, shall be
effective unless the same shall be in writing and signed by
an officer of the other party, and
then shall be effective only in the specified instance and
for the purpose for which given.
This Agreement is binding upon the parties, their successors
and assigns, and inures to the
benefit of the parties, their successors and assigns;
however, no assignment or other transfer
of Borrower's rights or obligations hereunder shall be made
or be effective without Bank's
prior written consent, nor shall it relieve Borrower of any
obligations hereunder. There is no
third party beneficiary of this Agreement.
12.4 Documents. All documents, certificates and other items
required under this
Agreement to be executed and/or delivered to Bank shall be in
form and content satisfactory
to Bank and its counsel.
12.5 Partial Invalidity. The unenforceability or invalidity
of any provision of this
Agreement shall not affect the enforceability or validity of
any other provision herein and the
invalidity or unenforceability of any provision of any Loan
Document to any person or
circumstance shall not affect the enforceability or validity
of such provision as it may apply to
other persons or circumstances.
12.6 Survivability. All covenants, agreements,
representations and warranties
made herein or in the other Loan Documents shall survive the
making of the initial Loan and
shall continue in full force and effect so long as the
Obligations are outstanding or the
Commitment has not expired.
12.7 Accounting Terms. Unless specified elsewhere herein,
all accounting terms
used herein shall be interpreted, all accounting
determinations hereunder shall be made, and
all financial statements to be delivered hereunder shall be
prepared in accordance with GAAP.
12.8 Expiration of Commitment/Renewal. The Commitment of
Bank hereunder
shall expire on the Maturity Date. Bank is under no express
or implied duty or obligation to
renew the Note or extend the Maturity Date.
12.9 Environmental. Borrower shall immediately notify Bank
of any
remedial action taken by Borrower under environmental laws
with respect to
Borrower's business operations. Borrower will not use or
permit any other party to
use any Hazardous Materials at any of Borrower's places of
business or at any
other property owned by Borrower except such materials as are
incidental to
Borrower's normal course of business, maintenance and repairs
and which are
handled in compliance with all applicable environmental laws.
Borrower agrees to
permit Bank, its agents, contractors and employees to enter
and inspect any of
Borrower's places of business or any other property of
Borrower at any reasonable
times upon three (3) days prior notice for the purposes of
conducting an
environmental investigation and audit (including taking
physical samples) to insure
that Borrower is complying with this covenant and Borrower
shall reimburse Bank
on demand for the costs of any such environmental
investigation and audit not to
exceed $10,000 per year. Borrower shall provide Bank, its
agents, contractors,
employees and representatives with access to and copies of
any and all data and
documents relating to or dealing with any Hazardous Materials
used, generated,
manufactured, stored or disposed of by Borrower's business
operations within five
(5) days of the request therefore.
13.0 Agreement Controlling. In the event of a conflict
between the terms and provisions
of this Agreement and the terms and provisions of any of the
other Loan Documents, the terms and
provisions of this Agreement shall control.
14.0 Arbitration. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG
THE
PARTIES HERETO ARISING OUT OF OR RELATING TO THIS INSTRUMENT,
AGREEMENT
OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT,
SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL
ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW).
THE
RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL
DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF
(J.A.M.S.), AND THE
"SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE
SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD
MAY
BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING
A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY
CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT
HAVING JURISDICTION OVER SUCH ACTION.
14.1 Special Rules. THE ARBITRATION SHALL BE CONDUCTED IN
THE
CITY OF BORROWER S DOMICILE AT THE TIME OF THE EXECUTION OF
THIS
INSTRUMENT, AGREEMENT OR DOCUMENT, AND ADMINISTERED BY
J.A.M.S.
WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR
LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE
AMERICAN
ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL
BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION;
FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE,
BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP
TO
AN ADDITIONAL 60 DAYS.
14.2 Reservation of Rights. NOTHING IN THIS ARBITRATION
PROVISION
SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS
CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II)
BE A
WAIVER BY THE BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C.
SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III)
LIMIT THE
RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES
SUCH AS
(BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY
REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT
PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED
TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER, OR (IV) LIMIT THE RIGHTS OF THE PARTIES HERETO
UNDER THE
BANKRUPTCY CODE OR SIMILAR LAWS AFFECTING THE RIGHTS OF
CREDITORS
GENERALLY. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE
UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY
REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR
DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR
THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER
OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH
ACTION,
TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM
OCCASIONING
RESORT TO SUCH REMEDIES.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year
first above written.
OPTEK TECHNOLOGY, INC.
By
Title
NATIONSBANK OF TEXAS, N.A.
By
Xxxxxx X. Xxxxx
Senior Vice President
LIST OF EXHIBITS
A. . . . . . . . . Borrowing and Interest Notice Request . . . .
. . 2.1
B. . . . . . . . . . . . .Compliance Certificate . . . . . . . .
. . 6.1
14.3PAGE
EXHIBIT A
BORROWING AND INTEREST NOTICE REQUEST
Reference is made to that certain Loan Agreement between
OPTEK TECHNOLOGY, INC.
and NATIONSBANK OF TEXAS, N.A. dated as of January 29, 1998 (the
"Loan Agreement").
The terms used herein shall have the same meanings as provided
therefor in the Loan Agreement
unless the context hereof otherwise requires or provides.
A. AVAILABILITY.
1. Enter: Amount of Commitment
$10,000,000
2. Enter: Principal Debt outstanding
as of this date.
3. Excess (deficit) available for Loans
(subtract line A2 from line A1).
4. Description of use of proceeds of Loan:
5. The Borrower hereby certifies that all
conditions precedent specified by the Loan
Agreement for this Loan have been complied with in
all respects.
B. FLOATING BASE LOAN.
1. Amount of Floating Base Rate loan:
____________________
2. Type of Floating Base loan
New Floating Base loan
Conversion of LIBO Rate loan to
Floating Base loan
3. Date of funding or conversion
____________________
PAGE
C. LIBO RATE LOAN.
1. Amount of LIBO Rate loan (minimum of $500,000
and in $100,000 increments thereafter)
____________________
2. Type of LIBO Rate loan
New LIBO Rate loan
Renewal of existing LIBO Rate loan
Conversion of Floating Base Rate loan to LIBO Rate loan
3. Date of funding or renewal or conversion
____________________
4. LIBO Interest Period (30 days, 60 days or 90
days)____________________
The Borrower hereby certifies that on the date hereof the
representations and warranties
contained the Loan Agreement are true in all material respects as
if made on the date hereof (except
to the extent that such representations and warranties relate
solely to an earlier date), and no Event of
Default or Potential Default exists.
Dated ____________, 199__.
OPTEK TECHNOLOGY, INC.
By
Title
14.4PAGE
EXHIBIT B
COMPLIANCE CERTIFICATE
TO:NATIONSBANK OF TEXAS, N.A.
Reference is made to that certain Loan Agreement between OPTEK
TECHNOLOGY, INC.
and NATIONSBANK OF TEXAS, N.A. dated as of January 29, 1998 (the
"Loan Agreement").
The terms used herein shall have the same meanings as provided
therefor in the Loan Agreement,
unless the context hereof otherwise requires or provides.
The undersigned HEREBY CERTIFIES that he is the duly elected
and qualified officer of
_________________________ holding the office set forth opposite
his signature below, AND DOES
FURTHER CERTIFY, individually and on behalf of the Borrower,
that:
1. Attached hereto are complete and detailed financial
statements of the Borrower
as of, and for the period ending _________________, 199__,
which are complete and correct
in all respects.
2. A review of the activities of the Borrower during the
preceding fiscal quarter
has been made under his supervision with a view to determining
whether, during such fiscal
quarter, Borrower has kept, observed, performed and fulfilled
all of its obligations under the
Loan Documents, and that to the best of his knowledge Borrower
has kept, observed,
performed and fulfilled all of such obligations, except as set
forth in Schedule I attached
hereto. (If no Schedule I is attached, then such exception
does not apply and no such failures
exist.)
3. Set forth below is the calculation of the financial
covenants of the Loan
Agreement determined as of the last day of the immediately
preceding fiscal quarter of the
Borrower, which calculations have been made in accordance with
the requirements of the
Loan Agreement and which are true and correct in all material
respects.
A. Leverage Ratio. Borrower will not permit its ratio of
Total Funded Debt as of the last
day of each fiscal quarter to EBITDA for the period of
four consecutive fiscal quarters
ending on such day to be greater than 2.0 to 1.0 The
leverage ratio of Borrower as
of the last day of the date set forth above for the
period of four consecutive fiscal
quarters ending on such day is:
(1) Computation of EBITDA
Net Income, plus
$__________
Consolidated Interest Expense, plus
$__________
Aggregate Letter of Credit Fees, plus
$__________
Aggregate Income Tax Expense, plus
$__________
Net Depreciation, plus
$__________
15. Amortization, plus
$__________
All other non-cash charges, minus
$__________
Cash dividends, minus
$__________
Extraordinary gains
$__________
EBITDA
$__________
(2) Total Funded Debt
$__________
(3) Leverage Ratio (Total Funded Debt
divided by EBITDA)
_____ to _____
B. Quick Asset Ratio. Borrower will at all times maintain a
ratio of Quick Assets to
Adjusted Current Liabilities of not less than .75 to 1.0.
Such ratio as of the date
above is:
(1) Computation of Quick Assets
Cash on hand or on deposit, plus
$__________
Readily marketable securities issued by U.S., plus
$__________
Readily marketable commercial paper rated
"A-1", plus
$__________
Certificates of deposit/banker s acceptances, plus
$__________
Receivables not more than 90 days overdue
$__________
Quick Assets
$__________
(2) Computation of Adjusted Current Liabilities
__________
Current liabilities, less
$__________
Principal debt outstanding
$__________
Adjusted current liabilities
$__________
(3) Quick Asset Ratio (Quick Assets divided by
Adjusted Current Liabilities)
_____ to _____
C. Minimum Tangible Net Worth. Borrower must maintain at
all times a
Tangible Net Worth of not less than the sum of (a)
$20,000,000; plus (b) 50%
of Net Income for which purpose Net Income is a positive
number measured
cumulatively for each fiscal year beginning with the
fiscal year ending October
30, 1998; plus (c) 100% of the net proceeds of any
offering of any equity
securities sold for the account of Borrower and otherwise
permitted by the
terms hereof and consummated after January 29, 1998; plus
(d) 100% of any
capital contributions made to Borrower after January 29,
1998.
(1) $20,000,000 Threshold
$20,000,000
(2) 50% of Net Income for which purpose Net Income is
a positive number measured cumulatively for
each fiscal year beginning with the fiscal year
ending October 30, 1998
$__________
(3) 100% of the net proceeds of any offering of any
equity securities sold for the account of Borrower
and otherwise permitted by the terms hereof and
consummated after January 29, 1998
$__________
(4) 100% of any capital contributions made to
Borrower after January 29, 1998
$__________
(5) Sum of lines (1), (2), (3) and (4)
$__________
(6) Tangible Net Worth as of the date above is (amount
on line (6) must be greater than amount on line (5)):
$__________
D. Tangible Net Worth of Mexican Subsidiaries.
(1) Tangible Net Worth of Optron De Mexico, S.A. de C.V.
$__________
(2) Tangible Net Worth of Semicondores Opticos, S.A. de
C.V.$__________
(3) Total of lines (1) and (2)
$__________
(4) Tangible Net Worth of Borrower
$__________
(5) Multiply amount on line (4) by 25%
$__________
(6) If amount on line (5) is less than
the amount on line (3), Mexican Subsidiaries
must guarantee Obligations.
4. Set forth below is the calculation of those negative
covenants contained in the
Loan Agreement which are determined as of the last day of the
fiscal year of Borrower.
These calculations have been made in accordance with the
requirements of the Loan
Agreement and are true and correct in all respects:
A. Capital Expenditures. The total of all capital
expenditures during the fiscal year
ending on the date set forth above (including capitalized
leases) were $___________.
B. Lease Expenditures. The total of all new obligations for
lease or hire of real or
personal property incurred in the fiscal year ending on
the date set forth above are
$______________.
C. Fifty percent of the net profits of Borrower during the
fiscal year ending on the date
set forth above is $___________. The aggregate of all
distributions (other than
dividends payable in capital stock of Borrower) on any
shares of any class of
Borrower s capital stock made during the fiscal year
ended on the date set forth above
and the aggregate of all property or assets of Borrower
applied to the purchase or
redemption or other retirement of its shares during the
fiscal year ending on the date
set forth above, are $___________.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate on
________________, 199__.
Office Signature
Printed Name
