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Exhibit 10.22
FIRST AMENDMENT TO LOAN SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement ("Amendment") is
entered into by and among The Provident Bank ("Bank") and Universal Electronics
Inc., a Delaware corporation ("Borrower").
RECITALS
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A. On November 21, 1995, Borrower and Bank entered into a Loan and
Security Agreement (the "Loan Agreement"). Under and subject to the terms and
conditions of the Loan Agreement, Bank agreed to provide a credit facility to
Borrower in the original maximum aggregate principal amount of Twenty Two
Million Dollars ($22,000,000).
B. Borrower and Bank desire to amend the Loan Agreement to, among other
things, permit Borrower to repurchase certain of its issued and outstanding
capital stock, all as set forth in and subject to the terms and provisions of
this Amendment.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is acknowledged, it
is hereby agreed as follows:
1. DEFINED TERMS. Except to the extent otherwise set forth in this
Amendment, all terms used in this Amendment which are defined in the Loan
Agreement are used in this Amendment with the same meanings given them in the
Loan Agreement.
2. AMENDMENT. The Loan Agreement is amended by adding Section 1.16
reading as follows:
" 1.16 On and after the date of this Amendment, each reference
in the Loan Agreement to "this Agreement", "hereunder" and "hereof"
and words of like import referring to the Loan Agreement shall mean
and refer to the Loan Agreement as amended by this Amendment."
3. REPURCHASE OF CAPITAL STOCK. Notwithstanding any provision in the
Loan Agreement or other Loan Documents to the contrary, Borrower is expressly
authorized to proceed to repurchase as
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many as 1,000,000 shares of its issued and outstanding common stock, and any
share of the common stock so repurchased shall not be deemed Collateral and
nothing contained within the Loan Agreement shall preclude Borrower from dealing
in such stock (and proceeds thereof) as it deems appropriate.
4. FINANCIAL COVENANTS. The first sentence of Section 5.15(a) of the
Loan Agreement is revised in its entirety to read as follows:
"Consolidated Tangible Net Worth of not less than $48,500,000
on December 31, 1995, and, thereafter, not less than $48,000,000 less
the aggregate amount expended by Borrower to repurchase its capital
stock as permitted hereunder but in no event to be decreased below
$40,500,000, which minimum shall increase by seventy-five percent
(75%) of net income if positive on December 31, 1996 and on
December 31 of each year thereafter."
5. INVENTORY. Section 6.11 of the Loan Agreement shall be revised in
its entirety to read as follows:
"Maintain Inventory in excess of $35,000,000."
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER. To induce
Bank to enter into this Amendment and to make (i) future advances, and (ii)
other financial accommodations under the Loan Agreement, Borrower represents and
warrants to Bank that:
(a) Borrower has the right and power and is duly authorized and
empowered to enter into, execute, deliver and perform its obligations
under this Amendment and every other document required to be delivered
by it pursuant to this Amendment. This Amendment and every other
document required to be delivered by Borrower pursuant to this
Amendment and to which Borrower is a party have each been duly
authorized and approved by the Board of Directors of Borrower and are
the valid and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms. The execution,
delivery and performance
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of this Amendment and every other document required to be delivered
by Borrower pursuant to this Amendment and to which Borrower is a
party will not conflict with nor result in any breach of the
provisions of, or constitute a default under, or result in the
creation of any lien (other than permitted liens) upon any asset or
property of Borrower under the provisions of the Restated Certificate
of Incorporation, as amended, or the Amended and Restated Bylaws of
Borrower or any material indenture, agreement or other instrument to
which Borrower is a party or by which its assets or properties are
bound.
(b) The representations, warranties and covenants set forth in
this Amendment, as well as all representations, warranties and
covenants in the Loan Agreement (except to the extent that all such
representations, warranties and covenants relate to terms or
documents that have been amended or deleted, as the case may be)
shall continue in effect and shall be binding on Borrower under, and
shall survive the execution of, this Amendment, for the term set
forth in Section 4.19 of the Loan Agreement.
7. CONTINUED EFFECTIVENESS. Notwithstanding anything contained herein,
the terms of this Amendment are not intended to and do not serve to effect a
novation of the Loan Agreement, the Notes or any of the other Loan Documents.
The parties hereto expressly do not intend to extinguish the Loan Agreement, the
Notes or any of the other Loan Documents. Instead, it is the express intention
of the parties hereto to reaffirm the existence of the indebtedness created
under the Loan Agreement, the Notes and the other Loan Documents. Except as
otherwise expressly provided herein or in any of the documents delivered
hereunder, the Loan Agreement, as amended by this Amendment, and each of the
Loan Documents related thereto, remains in full force and effect. The execution,
delivery, and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of Bank under the Loan Agreement or any of the other
Loan Documents to which Bank is a party, nor constitute
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a waiver of any provision in, or Event of Default (now or hereafter existing)
under, the terms of the Loan Agreement or any of the other Loan Documents,
except to the extent that any such term is amended or deleted.
8. CONDITIONS PRECEDENT. Borrower acknowledges that the
effectiveness of this Amendment is subject to the satisfaction of the following
conditions and receipt by Bank on the date hereof, in form and substance
reasonably satisfactory to Bank and its counsel, of the following documents:
(a) Where applicable, the Schedules and Exhibits to Loan
Agreement replacing Schedules and Exhibits delivered at the closing.
(b) A certificate signed by the Treasurer of Borrower and dated
the date of this Amendment, stating that (i) the representations and
warranties set forth in Section 6 of this Amendment are true and correct
on and as of such date, (ii) such Borrower is on such date in compliance
with all of the terms and provisions set forth in this Amendment, and
(iii) on such date no event or condition has occurred or is continuing
which with the giving of notice, the lapse of time, or both, would
constitute an Event of Default.
(c) A certificate of the Secretary of Borrower, dated the date
of this Amendment, certifying that (a) attached thereto is a true and
complete copy of the resolutions, in form reasonably satisfactory to
Bank, adopted by the Board of Directors of Borrower, authorizing the
execution, delivery and performance of the Amendment and every other
document required to be delivered by Borrower pursuant to the Amendment
and the consummation of the transactions contemplated hereby and thereby
and that said resolutions are all of the resolutions adopted with
respect to said subject matter and remain in full force and effect
without modification, and (b)
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attached thereto is a certified copy of Borrower's Certificate of
Incorporation and a true and complete copy of Borrower's Bylaws.
(d) Good standing certificates for Borrower issued by the
Secretary of State of Delaware, and every other jurisdiction in which
the qualification of any of Borrower is required hereunder.
(e) There shall have occurred no material adverse changes to
the other facts and circumstances upon which Bank has based its credit
analysis and approval of which Borrower has knowledge.
(f) Borrower shall have paid all fees and expenses referred to
in Section 9 below.
9. FEES AND EXPENSES. Borrower acknowledges and agrees that
the fees and expenses of Bank incurred in connection with this
Amendment, all documents executed and delivered in connection with this
Amendment and the consummation of the transactions contemplated hereby,
including, without limitation, reasonable attorneys' and paralegals'
fees and disbursements (which amounts shall not exceed $2,000), will be
payable by Borrower to Bank, or as Bank may otherwise direct, on the
date of this Amendment, and are additional Obligations under the Loan
Agreement secured by the Collateral pursuant to the Loan Agreement.
10. APPLICABLE LAW. This Amendment shall be deemed to be a contract
under the laws of the State of Ohio and for all purposes shall be construed in
accordance with the laws of such state.
11. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties hereto may execute this Amendment by
signing any such counterpart.
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IN WITNESS WHEREOF, the parties have executed this Amendment by their duly
authorized officers effective as of the 31st day of July, 1996
THE PROVIDENT BANK UNIVERSAL ELECTRONICS INC.
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxx
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Vice President Treasurer
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SCHEDULE 4.8
TO THE FIRST AMENDMENT TO THE
LOAN AND SECURITY AGREEMENT
BETWEEN
THE PROVIDENT BANK
AND
UNIVERSAL ELECTRONICS INC.
LITIGATION
PHILIPS ELECTRONICS CORPORATION OF NORTH AMERICA V. UNIVERSAL ELECTRONICS INC.,
APPEAL NO.: 96-1475 IN THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL
CIRCUIT. Appeal by Philips from the order of the U.S. District Court for the
District of Delaware (Judge XxXxxxxx) (Civil Action No. CA 94-392-RPM) ruling in
favor of Borrower in a patent infringement matter in which Philips claimed
Borrower infringed Philips' United States patent number 4,703,359.
UNIVERSAL ELECTRONICS INC. V. XXX XXXXXX XXXXXX, 00-0000 IN THE UNITED STATES
COURT OF APPEALS FOR THE FEDERAL CIRCUIT. Appeal by Borrower from the order of
the United States Court of International Trade (Judge Xxxxxxxx) (Consolidated
Court No. 93-11-00740) ruling in favor of the Government's classification of
universal infrared remote controls (Slip Opinion 96-48).
UNIVERSAL ELECTRONICS INC. Prior Disclosure Administrative Matter brought to the
attention of US Customs by Borrower regarding incorrect classification of
earlier entries. Action reactivated due to recent decision by United States
Court of international Trade in United States v. Snuggles, Inc. (Slip Opinion
96-141) decided on August 20, 1996.
XXXXXX X. XXXXXX V. UNIVERSAL ELECTRONICS INC, APPEAL CASE NO.: 18071 IN THE
NINTH DISTRICT COURT OF APPEAL, SUMMIT COUNTY, OHIO. Appeal by Xxxxxx (an
ex-employee of Borrower), from order of the Court of Common Please, Summit
County, Ohio (Judge Xxxxxxxx) granting Borrower's motion for summary judgment
(entered on August 6, 1996) in Xxxxxx'x claims against Borrower and Messrs.
Xxxxxxxxxx and Xxxxxxx (Case No. CV 95 07 2602 in the Court of Common Pleas,
Summit County, Ohio) alleging unlawful employment discrimination and wrongful
discharge because of age and acts of conspiracy against Xx. Xxxxxx. Xxxxxx had
earlier dismissed, with prejudice, his claims against Messrs. Xxxxxxxxxx and
Xxxxxxx.
JASCO PRODUCTS CO., INC. V. UNIVERSAL ELECTRONICS INC. CIV-95-1988T IN THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA (CONSOLIDATED
WITH UNIVERSAL ELECTRONICS INC. V. JASCO PRODUCTS CO., INC. CASE NO. 5:96CV0029
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO). Action
by Jasco against Borrower alleging breach of contract, generally, and
counterclaim by Borrower against Jasco also alleging breach of contract,
generally.
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SCHEDULE 4.8
TO THE FIRST AMENDMENT TO THE
LOAN AND SECURITY AGREEMENT
BETWEEN
THE PROVIDENT BANK
AND
UNIVERSAL ELECTRONICS INC.
LITIGATION
(CONTINUED)
SENTRY SWITCH INC. V. UNIVERSAL ELECTRONICS INC. A-96-04394 IN THE COURT OF
COMMON PLEAS, XXXXXXXX COUNTY, OHIO. Claim by Sentry Switch against Borrower
alleging breach of contract, generally.
Various other administrative claims for workers' compensation and unemployment.
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SCHEDULE 4.9
TO THE FIRST AMENDMENT TO THE
LOAN AND SECURITY AGREEMENT
BETWEEN
THE PROVIDENT BANK
AND
UNIVERSAL ELECTRONICS INC.
COMPLIANCE WITH LAWS
In the event that Borrower is found liable under any of the litigation matters
to which Borrower is a party (see Schedule 4.8 - Litigation attached to the
First Amendment to the Loan and Security Agreement), Borrower would be deemed to
have violated the applicable laws related to the claims made in connection with
such matters.
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SCHEDULE 4.10
TO THE FIRST AMENDMENT TO THE
LOAN AND SECURITY AGREEMENT
BETWEEN
THE PROVIDENT BANK
AND
UNIVERSAL ELECTRONICS INC.
NO DEFAULT
In the event that Borrower is found liable under any of the litigation matters
to which Borrower is a party (see Schedule 4.8 - Litigation attached to the
First Amendment to the Loan and Security Agreement), Borrower would be deemed to
be in default of the various contracts related to the claims made in connection
with such matters.
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SCHEDULE 4.13
TO THE FIRST AMENDMENT TO THE
LOAN AND SECURITY AGREEMENT
BETWEEN
THE PROVIDENT BANK
AND
UNIVERSAL ELECTRONICS INC.
RIGHTS OF BORROWER TO ACCOUNTS
In the event that Jasco prevails in its claims against Borrower in the
litigation between them (see Schedule 4.8 - Litigation attached to the First
Amendment to the Loan and Security Agreement), Jasco may be allowed to offset
amounts to which it has been awarded in such litigation against amounts due
Borrower as reflected as an Account in Borrower's books and records.
