AMENDED AND RESTATED LOAN AGREEMENT
Exhibit
10.1
This
Amended and Restated Loan Agreement ("Agreement") is made and entered into
as of
December ___, 2007, by and between WACHOVIA BANK, NATIONAL
ASSOCIATION, ("LENDER") and TECHNOLOGY RESEARCH
CORPORATION
("BORROWER"), and amends and restates that certain Amended and Restated
Loan Agreement dated December 22, 2005, as modified.
BORROWER
requested LENDER to modify the $6,000,000.00 credit facility originally extended
to Borrower and to TECHNOLOGY
RESEARCH CORPORATION/HONDURAS, S.A. DE C.V. ("Honduras") and to eliminate
Honduras as a co-borrower on the Loan (the "Loan"). LENDER agreed to
so modify the Loan provided that the parties enter into this
Agreement.
This
Agreement shall govern the Loan which is now evidenced by a Promissory Note
dated as of even date herewith from BORROWER in favor of LENDER in the stated
principal amount of $6,000,000.00 ("Note").
Relying
upon the representations, warranties, agreements, and covenants herein
contained, LENDER is willing to modify the Loan upon the terms and subject
to
the conditions hereinbefore and hereinafter set forth:
1. REPRESENTATIONS
AND
WARRANTIES: Each BORROWER represents and warrants that:
a. Financial
Condition: All financial statements and all other information
heretofore furnished to LENDER are true and correct in all material respects,
and fairly reflect the financial condition of BORROWER as of the dates
thereof. The financial statements disclose all contingent liabilities
of each and every type and nature of BORROWER. The financial
condition as stated in said financial statements has not changed materially
or
adversely since the dates of the financial statements.
b. Capacity
and
Standing: The execution of this Agreement and Loan Documents,
as that term is defined in the Note when executed, shall constitute the valid
and binding obligations of BORROWER.
c. Violation
of Other
Agreements: The execution of the Loan Documents and the
performance by BORROWER of its obligations thereunder, do not and will not
violate any provision of law, or any agreement, indenture, note or other
instrument binding upon BORROWER or give cause for the acceleration of any
obligations of BORROWER.
d. Insurance: BORROWER
shall maintain adequate insurance coverage on its businesses and
properties.
e. Authority: BORROWER
has received all required consents, authorizations, and approvals from and
by
any and all governmental bodies, commissions or agencies, state or federal,
necessary to the making, validity, and enforceability of the Loan
Documents.
f. Asset
Ownership: BORROWER has good title to all of the assets
reflected on its financial statements. All such assets are free and clear of
mortgages, security deeds, pledges, liens, charges, and all other encumbrances,
except as otherwise disclosed by the balance sheets and financial statements
or
in any title work provided to LENDER.
g. Discharge
of Liens and
Taxes: BORROWER has duly filed all tax returns required to be
filed and has paid and discharged all taxes and assessments payable which have
become due except to the extent that: (i) such items are being
appropriately contested in good faith and an adequate reserve for the payment
thereof is being maintained; and (ii) such items are not yet due and
payable.
h. Regulation
U: None
of the proceeds of the Loan shall be used directly or indirectly for the purpose
of purchasing or carrying any stock in violation of any of the provisions of
Regulation U of the Board of Governors of the Federal Reserve
System.
i. ERISA: Each
employee benefit plan, as defined in the Employee Retirement Income Security
Act
of 1974 ("ERISA"), maintained by BORROWER, if any, meets, as of the date hereof,
the minimum funding standards of Section 302 of ERISA, all applicable
requirements of ERISA and of the Internal Revenue Code of 1986, as amended,
and
no "Reportable Event" (as defined by ERISA) has occurred with respect to any
such plan.
2. AFFIRMATIVE
COVENANTS: Unless LENDER shall otherwise consent in writing,
BORROWER covenants and agrees that from the date hereof and until satisfaction
in full of each and every one of its obligations under the Loan Documents,
that
it shall:
a. Deposit
Relationship: Maintain its primary deposit relationship with
LENDER.
b. Business
Continuity: Conduct its business in substantially the same
manner and in substantially the same lines of business as such business is
now
and has heretofore been carried on and conducted.
c. Regulations
and
Properties: Materially comply with all applicable statutes,
laws and regulations, maintain its existence in good standing and maintain,
preserve and keep its properties and assets in good repair, working order and
condition.
d. Access
to Books and
Records: After reasonable notice by LENDER, allow LENDER, or
its agents, during normal business hours, to have access to books, records
and
such other documents as LENDER shall reasonably require, and allow LENDER to
make copies thereof at LENDER'S expense.
e. Compliance
with Other
Agreements: Comply with all covenants, terms and conditions
contained in the Loan Documents.
3. NEGATIVE
COVENANTS: Unless LENDER shall otherwise consent in writing,
BORROWER covenants and agrees that from the date hereof and until satisfaction
in full of each and every one of its obligations under the Loan Documents,
that
it shall not:
a. Change
in Fiscal Year
End: Change its fiscal year end.
b. Encumbrances/Debt: Create,
assume, or permit to exist any mortgage, security deed, deed of trust, pledge,
lien, charge or other encumbrance on any of its assets other
than: (i) security interests required by the Loan Documents; (ii)
liens for taxes contested in good faith; (iii) liens accruing by law for
employee benefits; (iv) or liens otherwise permitted by LENDER in writing or
incur any additional debt.
c. Guarantees: Guarantee
or otherwise become responsible for the obligations of any other person or
entity who is not a guarantor of the Loan.
d. Judgment
Entered: Permit the entry of any monetary judgment or the
assessment against, the filing or any tax lien against, or the issuance of
any
writ of garnishment or attachment against any property of or debts
due.
e. Investments: Shall
not purchase any stock, securities, or evidence of indebtedness of any other
person or entity except investments in direct obligations of the United States
Government and certificates of deposit of United States commercial banks having
a tier 1 capital ratio of not less than 6% and then in an amount not exceeding
10% of the issuing bank's unimpaired capital and surplus.
f. Loans
and
Advances: During any fiscal year, make loans or advances to
any related person or related entity.
g. Limitation
on
Debt: Directly or indirectly, create, assume or become liable
for any debt, contingent or direct, other than obligations to LENDER or approved
seller financing, other than purchase money debt.
4. FINANCIAL
COVENANTS:
a. Annual
Financial
Statements: Deliver to LENDER within 120 days after the close
of each fiscal year, audited financial statements reflecting its operations
during such fiscal year, including without limitation, a balance sheet, profit
and loss statement and statement of cash flows, with supporting schedules,
all
in reasonable detail. The statements shall be audited by a certified
public accountant selected by BORROWER and acceptable to LENDER. Any
qualification placed upon the audit may render the financial statement
unacceptable to LENDER.
b. Periodic
Financial
Statements. Deliver to LENDER within 45 days after the close
of each fiscal quarter, management prepared financial statements reflecting
its
operations during such fiscal quarter, including without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules, all in reasonable detail. Said statements shall be
certified to LENDER in writing as being true, correct, and complete by the
chief
financial officer of BORROWER.
c. Total
Liabilities to Tangible Net
Worth Ratio: Shall at all times maintain an a
consolidated basis a Total Liabilities to Tangible Net Worth Ratio, of not
more
that 1.00 to 1.00, measured quarterly. For purposes of this
computation, "Total Liabilities" shall mean all liabilities of Borrower
including capitalized leases and all reserves for deferred taxes and other
deferred sums appearing on the liabilities side of a balance sheet of Borrower,
in accordance with generally accepted accounting principles applied on a
consistent basis. "Tangible Net Worth" shall mean total assets minus
total liabilities. For purposes of this computation, the aggregate
amount of any intangible assets including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, and brand names, and any loans or advances to affiliates, officers or
shareholders shall be subtracted from total assets, and total liabilities shall
include debt fully subordinated to LENDER on terms and conditions acceptable
to
Bank.
d. Fixed
Charge Coverage
Ratio: Maintain on a consolidated basis, a minimum Fixed
Charge Coverage Ratio of 1.50 to 1.00, measured quarterly, on a rolling
four-quarter basis. For purposes of this computation, "Fixed Charge
Coverage Ratio" means the sum of after-tax income plus depreciation and
amortization plus lease expense plus interest expense less dividends and
non-cash income, divided by the sum of lease expense plus interest expense
plus
current maturities of long-term debt.
e. Accounts
Receivable
Aging: Shall furnish to LENDER, within 120 days after the end
of each fiscal year, a detailed and accurate listing and aging of all of
BORROWER'S accounts receivable by total, as of the last day of the year, and
a
summary aging of accounts by customer and customer address, and a reconciliation
statement. Said aging shall also include the original date of
invoice.
f. Inventory
Reports: Shall furnish to LENDER within 120 days after the end
of each fiscal year, an inventory report showing individual values for raw
materials, work-in-progress, goods, and finished products and any inventory
obsolescence.
g. SEC
Filing: Shall
furnish to LENDER within 10 days of filing, copies of all filings with the
Securities and Exchange Commission, including but not limited to 10-Q and 10-K
reports, in the same manner and time frame as required by the Securities and
Exchange Commission.
h. Other
Financial
Information: Deliver, promptly, such other information
regarding its operation and business affairs and its financial condition which
LENDER may reasonably request. BORROWER shall at all times maintain
books and records reflecting its financial condition including, but not limited
to the operation of its businesses.
5. LETTERS
OF
CREDIT. Upon the request of BORROWER, LENDER shall issue
commercial Letters of Credit and standby Letters of Credit, provided, the
aggregate amount available to be drawn under all commercial Letters of Credit
plus the aggregate amount of unreimbursed drawings under all commercial Letters
of Credit at any one time does not exceed $6,000,000.00, and the aggregate
amount available to be drawn under all standby Letter of Credit plus the
aggregate amount of unreimbursed drawings under all standby Letters of Credit
at
any one time does not exceed $6,000,000.00, and further provided, no commercial
Letter of Credit shall expire more than 180 days after the date it is issued
and
no standby Letter of Credit shall expire more than 365 days after the date
it is
issued. Notwithstanding anything to the contrary contained herein,
the aggregate outstanding principal balance of Advances (as defined in the
line
of credit Promissory Note in the amount of $6,000,000.00, dated as of even
date
herewith) plus the aggregate amount available to be drawn under all Letters
of
Credit plus the aggregate amount of unreimbursed drawings under all Letters
of
Credit at any one time shall note exceed $6,000,000.00. LENDER'S
obligation to issue Letters of Credit shall terminate if Borrower is in default
(however denominated) under the Note or the other Loan Documents, or in any
case, if not sooner terminated, on September 30, 2008 unless renewed or extended
by LENDER in writing upon such terms then satisfactory to LENDER.
6. LETTER
OF CREDIT
FEES. BORROWER shall pay to LENDER, at such times as LENDER
shall require, LENDER'S standard fees in connection with Letters of Credit,
as
in effect from time to time, and with respect to standby Letters of Credit,
an
additional fee equal to 1.00% per annum on the face amount of each standby
Letter of Credit, payable annually, in advance, for so long as such Letter
of
Credit is outstanding.
7. CONDITIONS
PRECEDENT: The obligations of LENDER to make the Loan and
advances pursuant to this Agreement are subject to the following conditions
precedent (unless the documents required have been previously privileged) as
well as those set forth in any commitment letter or term sheet governing the
Loans:
a. Resolution: Certified
copies of resolutions of BORROWER authorizing the
execution, delivery and performance of the Loan Documents.
b. Charter
Documents: Receipt of a copy of the organizational documents
of BORROWER.
c. Additional
Documents: Receipt by LENDER of such additional supporting
documents as LENDER or its counsel may reasonably request.
d. Non-Default: At
the
time of any borrowings hereunder, BORROWER shall be in compliance with the
Loan
Documents, and no event of default as specified in the Loan Documents or any
event which upon notice or lapse of time or both would constitute such an event
of default shall have occurred and be continuing at the time of such
borrowing.
8. SECURITY: The
obligations of BORROWER pursuant to the Loan Documents are secured by all
business (non-real estate) assets of BORROWER, including but not limited to
100%
of the non-voting stock and 65% of the voting stock of TECHNOLOGY RESEARCH CORPORATION
/
HONDURAS, S.A. DE C.V.
a. Perfection: LENDER'S
security interest as above described must be properly perfected, and BORROWER
agrees to execute all documents necessary to effectuate such perfection,
including but not limited to financing statements and to reimburse LENDER for
all expenses incurred in the perfection of such security interest.
9. EVENTS
OF
DEFAULT: The occurrence of any breach of any representation,
warranty or covenant contained herein shall, in addition to the events of
default in the Note, and all of the other Loan Documents, constitute an event
of
default hereunder.
10. REMEDIES
UPON
DEFAULT: In the event of the occurrence of any events of
default, then LENDER may at any time thereafter, at its option, shall have
all
the remedies afforded to it pursuant to the Note and all of the other Loan
Documents.
11. MISCELLANEOUS
PROVISIONS:
a. Indirect
Means: Any
act which BORROWER is prohibited from doing shall not be done indirectly through
a subsidiary or by any other indirect means.
b. Non-Impairment: If
any one or more provisions contained in the Loan Documents shall be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in the Loan Documents,
shall not in any way be affected or impaired thereby and the Loan Documents
shall otherwise remain in full force and effect.
c. Applicable
Law: The
Loan Documents shall be construed in accordance with and governed by the laws
of
the State of Florida.
d. Waiver: Neither
the
failure nor any delay on the part of LENDER in exercising any right, power,
or
privilege granted pursuant to the Loan Documents, shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
or
further exercise or the exercise of any other right, power or
privilege.
e. Modification: No
modification, amendment, or waiver of any provision of the Loan Documents shall
be effective unless in writing and signed by LENDER, it being acknowledged
by
the parties hereto that all terms, conditions and covenants therein and herein
contained are deemed to be material and relied upon by LENDER.
f. Stamps
and
Fees: BORROWER shall pay all federal or state stamps or taxes,
or other fees and charges, if any, payable or determined to be payable by reason
of the execution, delivery or issuance of the Loan Documents; whether they
be
payable upon execution or recurring from time to time, and BORROWER agrees
to
indemnify and hold LENDER harmless against any and all liability in respect
therefor.
g. Attorney's
Fees: In
connection with any litigation or arbitration pertaining to this Agreement
the
prevailing party shall be entitled to recover from the non-prevailing party
all
of the prevailing party's reasonable fees and costs, including without
limitation, reasonable arbitration, paralegals', attorneys' and experts' fees
and expenses, whether incurred without the commencement of a suit, in any suit,
arbitration, or administrative proceeding, or in any appellate or bankruptcy
proceeding.
h. Interest: Notwithstanding
anything contained in the Loan Documents to the contrary, if for any reason
the
effective rate of interest on any advances shall exceed the maximum lawful
rate
of interest, the effective rate of interest shall be deemed reduced to and
shall
be such maximum lawful rate, and any sums of interest which have been collected
in excess of such maximum lawful rate shall be applied by LENDER as a credit
against the unpaid principal amount due thereunder.
i. Assignment: This
Agreement shall be binding upon the parties and their respective successors
and
assigns however, nothing contained herein shall be construed as allowing
BORROWER the right to assign its obligations under the Loan
Documents. LENDER'S interest in the Loan Documents, the Loan, and
Property, and its rights hereunder are freely assignable, in whole or in
part.
j. Notices: Any
notices or other communications required or permitted to be given hereunder
must
be given in writing and personally delivered or mailed by prepaid certified
or
registered mail to the addresses first set forth above. Any such
notice or other communication shall be deemed to have been given (whether
actually received or not) on the third business day after it has been put into
the United States Mail with appropriate postage affixed thereon or on the day
it
is personally delivered as aforesaid, or, if transmitted by telecopier, on
the
day that such notice is transmitted as aforesaid; provided, however, that any
notice sent by telecopier after 5:00 p.m. shall be deemed received on the next
succeeding day. Any party may change its address for purposes of this
Agreement by giving notice of such change in writing to the other party pursuant
to this provision.
BORROWER
AND LENDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
TO
BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LENDER'S ACCEPTANCE OF THIS AGREEMENT
FROM BORROWERS.
BORROWER
and LENDER agree that they shall not have a remedy of punitive or exemplary
damages against the other and hereby waive any right or claim to punitive or
exemplary damages they have now or which may arise in the future.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
all
as of the day and year first above written.
|
WACHOVIA
BANK, NATIONAL
ASSOCIATION
By:______________________________
Xxxx Xxxxxx,
As
a Senior Vice President
|
TECHNOLOGY
RESEARCH CORPORATION,
A
Florida Corporation
By:
_______________________________
Xxxx
Xxxxxx,
As
its President
|
