LOAN AND SECURITY AGREEMENT
Re: CIRCUIT SYSTEMS OF TENNESSEE, L.P.
THIS AGREEMENT ("Agreement") is made as of this 24th day of July,
1997, by and among CIRCUIT SYSTEMS OF TENNESSEE, L.P., a Tennessee
limited partnership ("Borrower"), CIRCUIT SYSTEMS OF TENNESSEE, INC., a
Tennessee corporation ("General Partner"), CIRCUIT SYSTEMS, INC., an
Illinois corporation ("CSI"; CSI and General Partner are sometimes
referred to individually as a "Guarantor'' and are collectively referred
to as "Guarantors") and AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO, a national banking association ("Lender").
R E C I T A L S:
CSI and Lender, as assignee of NBD Bank, are parties to that certain
Secured Revolving Credit Agreement dated as of April 30, 1993 (the
"Original CSI Loan Agreement"), as amended April 29, 1994, August 23,
1994, August 31, 1995, November 27, 1995, April 30, 1996 and August 30,
1996 (as amended hereinafter referred to as the "CSI Loan Agreement"),
pursuant to which Lender has made certain credit facilities available to
CSI (hereinafter the "Existing Circuit Systems Loan").
CSI is the sole limited partner of Borrower, and the sole
shareholder of General Partner, the sole general partner of Borrower.
Borrower and Guarantors have requested that Lender loan or advance
monies, extend credit, and/or extend other financial accommodations to or
for the benefit of Borrower.
Lender has agreed to provide a $2,270,000.00 secured term loan (the
"60-Month Term Loan"), a $2,800,000.00 secured term loan (the "12- Month
Term Loan"), and a $4,930,000.00 commitment to provide equipment lease
financing (the "Lease Financing Loan") to Borrower upon and subject to
the terms and conditions set forth herein.
ACCORDINGLY, in consideration of the foregoing, the mutual covenants
and agreements and of any extension of credit heretofore now or hereafter
made by Lender to Borrower, and subject to the terms and conditions
hereof, the parties agree as follows:
1. DEFINITIONS. When used herein, the following terms shall
have the following meanings:
1.1 Account(s). All of Borrower's now existing or hereafter
arising or acquired accounts, accounts receivable, and any other rights
to payment, however created, including, without limitation, any right to
payment for goods sold or leased, or for services rendered, whether
arising out of the sale of inventory or otherwise and whether or not it
has been earned by performance, and any and all notes, drafts,
acceptances, chattel paper, general intangibles and other obligations
arising out of or representing a right to payment, however created.
1.2 Account Debtor. Any person and/or entity obligated on an
Account.
1.3 Affiliate. Any Person (a) directly or indirectly
controlling, controlled by or under common control with, Borrower, (b)
directly or indirectly owning or holding five percent (5%) or more of any
equity interest in Borrower or any general partner of Borrower, (c) five
percent (5%) or more of whose voting stock or other equity interest is
owned directly or indirectly or is held by Borrower or any partner of
Borrower. For the purpose of this definition, "control" means the
possession, directly or indirectly, of the power to direct or to cause
the direction of management and policies, whether through the ownership
of voting securities, by contract or otherwise.
1.4 Base Rate. The rate of interest announced or published
publicly from time to time by Lender as its prime or base rate of
interest.
1.5 Borrower's Liabilities. All obligations and liabilities
of Borrower to Lender (including, without limitation, all debts, claims,
and indebtedness under Article 3 hereof) under the Notes or under the
Master Lease, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter owing, due
or payable, however evidenced, created, incurred, acquired or owing and
however arising, whether under this Agreement or the other Loan Documents
or by operation of law or otherwise.
1.6 Business Day. Any day of the year on which Lender is open
for business at its principal office in Chicago, Illinois.
1.7 Charges. All national, federal, state, county, city,
municipal and/or other governmental (or any instrumentality, division,
agency, body or department thereof, including without limitation the
Pension Benefit Guaranty Corporation) taxes, levies, assessments,
charges, liens, claims or encumbrances upon and/or relating to the
"Collateral"(as hereinafter defined), Borrower's Liabilities, Borrower's
business, Borrower's ownership and/or use of any of its assets, and/or
Borrower's income and/or gross receipts.
1.8 Closing. The date that the closing of the Loan shall
occur, whether or not any disbursement of the proceeds of the Loan shall
occur.
1.9 Collateral. Shall have the meaning set forth in Article 5.
1.10 Debt. Any and all contingent and non-contingent
Indebtedness howsoever evidenced and/or arising and of any nature
whatsoever.
1.11 Default Rate. See Paragraph 3.4.
1.12 Equipment. Collectively, equipment (as defined in the
UCC) now owned or hereafter acquired by Borrower, including, without
limitation, all machinery, motor vehicles, trucks, trailers, vessels,
aircraft, rolling stock and all other tangible personal property (except
Inventory) and all parts thereof, and all additions and accessories
thereto and replacements thereof, including, without limitation, the
Equipment listed on Schedule 1.1(c) to the Philips Real Estate and Asset
Purchase and Sale Agreement. Said Equipment listed on said Agreement is
herein referred to as the "Philips Equipment."
1.13 ERISA. The Employee Retirement Income Security Act of
1974, as amended.
1.14 Event of Default. Any of the events described as an event
of default in Article 10 hereof or in the 12-Month Term Note, the 60-
Month Term Note, the Master Lease or any of the other Loan Documents.
1.15 Existing Litigation. The litigation disclosed by Borrower
on Exhibit A attached hereto.
1.16 General Intangibles. All choses in action, causes of
action, and other intangible property of Borrower of every kind and
nature now owned or hereafter acquired by Borrower, including, without
limitation, memberships, membership interests, corporate and other
business records, deposit accounts, inventions, designs, patents, patent
and trademark registrations and applications, trademarks, tradenames,
trade secrets, goodwill, copyrights, registrations, licenses, franchises,
deferred tax benefits, tax refund claims, prepaid expenses, computer
programs, covenants not to compete, customer lists and mailing lists,
membership lists, contract rights, indemnification rights, letters of
credit, guaranty claims, security interests, or other security held by or
granted to Borrower.
1.17 Guarantors. Circuit Systems, Inc., an Illinois
corporation, and Circuit Systems of Tennessee, Inc., a Tennessee
corporation.
1.18 Indebtedness. All liabilities, obligations, and
indebtedness of any and every kind and nature, including, without
limitation, the Liabilities and all obligations to trade creditors,
whether heretofore, now or hereafter owing, arising, due, or payable from
Borrower to any Person and howsoever evidenced, created, incurred,
acquired, or owing, whether primary, secondary, direct, contingent,
fixed, or others. Without in any way limiting the generality of the
foregoing, Indebtedness specifically includes (i) all obligations or
liabilities of any Person that are secured by any lien, claim,
encumbrance, or security interest upon property owned by any Borrower,
even though such Borrower has not assumed or become liable for the
payment thereof; (ii) all obligations or liabilities created or arising
under any lease of real or personal property or conditional sale or other
title retention agreement with respect to property used or acquired by
Borrower, even though the rights and remedies of the lessor, seller or
lender thereunder are limited to repossession of such property; (iii)
obligations under direct or indirect guarantees in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses
(i) or (ii) above; (iv) all unfunded pension fund obligations and
liabilities; and (v) deferred taxes.
1.19 Interest Period. With respect to any LIBOR Rate Loan, a
period of one, two, three or six months commencing on a LIBOR Business
Day selected by Borrower pursuant to subsection 3.2 hereof. Each
Interest Period shall end on the day in the first, second, third or (if
applicable) sixth succeeding calendar month (as applicable) which
corresponds numerically to the beginning day of such Interest Period;
provided, however, that if there is no such numerically corresponding day
in such succeeding month, such Interest Period shall end on the last
LIBOR Business Day of such succeeding month. If an Interest Period would
otherwise end on a day which is not a LIBOR Business Day, such Interest
Period shall end on the next succeeding LIBOR Business Day, provided that
if such next succeeding LIBOR Business Day falls in a new month, then
such Interest Period shall end on the last LIBOR Business Day of the
month in which such Interest Period was scheduled to end.
1.20 Interest Rate. See Article 3.
1.21 Interest Rate Determination Date. The date on which
Lender determines the interest rate applicable to any LIBOR Rate Loan
pursuant to subsection 3.2 hereof which shall be the second LIBOR
Business Day prior to the first day of the Interest Period applicable to
such LIBOR Rate Loan.
1.22 Inventory. Any inventory, stock, materials or supplies of
any nature whatsoever, whether raw, finished or partially finished, and
possessed, held or owned by Borrower.
1.23 Lease Financing Loan. That certain loan not to exceed
Four Million Nine Hundred Thirty Thousand Dollars ($4,930,000.00), made
by Lender to Borrower hereunder, and as further described in Article 2.
1.24 Lease Financing Loan Maturity Date. The earlier of (i)
the fifth anniversary of the Loan Opening Date, or (ii) the date upon
which Lender shall accelerate the due date of the Rent due under the
Master Lease, whether as a result of the occurrence of an Event of
Default or as otherwise permitted hereunder or in the Master Lease. On
the Lease Financing Loan Maturity Date, the Casualty Value of the
Equipment and any unpaid Rent, together with all unpaid costs, fees and
interests under the Master Lease, shall be due and payable in full.
1.25 Liabilities. Collectively, any and all obligations under
or in connection with this Agreement, the 60-Month Term Note, the 12-
Month Term Note, the Master Lease and the Loan Documents.
1.26 LIBOR Business Day. A day which is a Business Day and on
which dealings in United States dollar deposits may be carried out in the
London interbank market.
1.27 LIBOR Rate. For each Interest Period, a rate of interest
equal to
(a) the LIBOR Index Rate on the date which is two (2) LIBOR
Business Days prior to the first day of the Interest Period, as
published in The Wall Street Journal, if such rate is
available, and if the LIBOR Index Rate cannot be determined by
the method stated in (a), then (b) the rate of interest at
which deposits in U.S. Dollars in immediately available funds
are offered to Lender for the relevant Interest Period by major
banks in the interbank Eurodollar market from time to time in
the amount of the relevant LIBOR Rate Loan at 11:00 a.m.
(London time) on the day which is two (2) LIBOR Business Days
prior to the first day of such Interest Period,
divided by
(c) a number equal to 1.00 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on the day which is two (2)
LIBOR Business Days prior to the beginning of such Interest
Period (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect
thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) which are required
to be maintained by a member bank of the Federal Reserve
System.
(such rate to be adjusted to the nearest one-sixteenth of one percent
(1/16 of 1%) or, if there is no nearest one-sixteenth of one percent
(1/16 of 1%), to the next higher one-sixteenth of one percent (1/16 of 1%).
1.28 Loan. Collectively, the lending under the 60-Month Term
Loan, the 12-Month Term Loan and the Lease Financing Loan.
1.29 Loan Documents. All agreements, instruments and
documents, including, without limitation, notes, guarantees, mortgages,
deeds of trusts, chattel mortgages, pledges, powers of attorney,
consents, assignments, contracts, notices, security agreements, leases,
financing statements, subordination agreements, trust account agreements,
and all other written matter whether heretofore, now, or hereafter
executed by or on behalf of Borrower or delivered to Lender with respect
to this Agreement, including, without limitation, the Notes and the
Master Lease.
1.30 Loan Expenses. As defined in Article 3.
1.31 Intentionally Deleted.
1.32 Loan Opening Date. The date on which the first
disbursement of all or any portion of the Loan is made by Lender to
Borrower.
1.33 Master Lease. The Master Lease in the form attached
hereto and made a part hereof as Exhibit B pursuant to which Lender shall
acquire the Philips Equipment, which Philips Equipment shall be listed on
the Schedule attached thereto, and for which Borrower shall pay the rent
for the term, and upon and subject to the terms and conditions, contained
therein.
1.34 Maturity Date. The 60-Month Term Loan Maturity Date, the
Lease Financing Maturity Date or the 12-Month Term Loan Maturity Date, as
applicable.
1.35 Net Operating Income. As of any date, the amount of net
operating income of Borrower determined in accordance with generally
accepted accounting principles.
1.36 Notes. Collectively, the 60-Month Term Note and the
12-Month Term Note.
1.37 Other Agreements. All agreements, instruments and
documents, including, without limitation, guaranties, mortgages, deeds of
trust, notes, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, leases, subordination
agreements, financing statements and all other written matter heretofore,
now and/or from time to time hereafter executed by and/or on behalf of
Borrower and delivered to Bank.
1.38 Permitted Indebtedness. See Paragraph 7.2(b) and
Exhibit C attached hereto.
1.39 Permitted Liens. See Paragraph 6.1(f) and Exhibit D
attached hereto.
1.40 Person. Any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, entity, party or
government (whether national, federal, state, county, city, municipal or
otherwise, including without limitation, any instrumentality, division,
agency, body or department thereof).
1.41 Securities. Any stock, shares, voting trust certificates,
bonds, debentures, options, warrants, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities"
or any certificate of interest, shares or participation in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
1.42 Sigmatron Stock. Shares of common stock of Sigmatron
International, Inc., a Delaware corporation.
1.43 Tangible Net Worth. The value of the total assets of
Borrower as determined in accordance with generally accepted accounting
principles after subtracting therefrom then aggregate amount of any
intangible assets of Borrower as determined in accordance with generally
accepted accounting principles, including ,without limitation, prepaid
expenses, other accounts receivable, goodwill, franchises, licenses,
patents, trademarks, trade names, copyrights and brand names, minus the
aggregate of all contingent and non-contingent liabilities of Borrower.
1.44 Unmatured Event of Default. Any event that has occurred
which with lapse of time or the giving of notice, or both, could
constitute an Event of Default hereunder.
1.45 12-Month Term Loan. That certain loan not to exceed Two
Million Eight Hundred Thousand Dollars ($2,800,000.00) made by Lender to
Borrower hereunder, and as further described in Article 2.
1.46 12-Month Term Loan Maturity Date. The earlier of (i) the
first anniversary of the Loan Opening Date, or (ii) the date upon which
Lender shall accelerate the due date of the 12-Month Term Loan, whether
as a result of the occurrence of an Event of Default or as otherwise
permitted hereunder or in the 12-Month Term Note. On the 12-Month Term
Loan Maturity Date, all of the outstanding principal under the 12-Month
Term Note, together with all unpaid costs, fees and interest thereon,
shall be due and payable in full.
1.47 12-Month Term Loan Note. The promissory note which
evidences the 12-Month Term Loan and which is made by Borrower payable to
the order of Lender in the principal amount of Two Million Eight Hundred
Thousand Dollars ($2,800,000.00) secured by, among other things, the
Collateral and delivered by Borrower to Lender in the form attached
hereto as Exhibit E.
1.48 60-Month Term Loan. That certain loan, not to exceed Two
Million Two Hundred Seventy Thousand Dollars ($2,270,000.00), made by
Lender to Borrower hereunder, and as further described in Article 2.
1.49 60-Month Term Loan Maturity Date. The earlier of (i)
sixty (60) months following the Loan Opening Date, or (ii) the date upon
which Lender shall accelerate the due date of the 60-Month Term Loan,
whether as a result of the occurrence of an Event of Default or as
otherwise permitted hereunder or in the 60-Month Term Loan Note. On the
60-Month Term Loan Maturity Date, all of the outstanding principal under
the 60-Month Term Loan Note, together with all unpaid costs, fees and
interest thereon shall be due and payable in full.
1.50 60-Month Term Loan Note. The promissory note which
evidences the 60-Month Term Loan and which is made by Borrower payable to
the order of Lender in the principal amount of Two Million Two Hundred
Seventy Thousand Dollars ($2,270,000.00), secured by, among other things,
the Collateral and delivered by Borrower to Lender in the form attached
hereto as Exhibit F.
All other terms contained in this Agreement, unless the context
indicates otherwise, shall have the meanings provided for under the
Uniform Commercial Code ("UCC") of the State of Illinois to the extent
the same are used or defined therein. Any accounting terms used in this
Agreement which are not specifically defined shall have the meanings
customarily given them in accordance with generally accepted accounting
principles.
2. LOAN: GENERAL TERMS.
2.1 Philips Acquisition. Pursuant to the terms of that
certain Real Estate and Asset Purchase and Sale Agreement (the "Philips
Real Estate and Asset Purchase and Sale Agreement" ) made and entered
into as of July 24, 1997 by and between Borrower and Philips Electronics
North America Corporation, a Delaware corporation ("Philips"), Borrower
is acquiring certain assets of Philips described therein, including,
without limitation, that certain printed circuit board manufacturing
facility owned by Philips and located at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxxx, consisting of a building containing
approximately 93,000 square feet, located on approximately ten (10) acres
(the "PCB Facility") and certain equipment, machinery, furniture,
furnishings and other tangible personal property owned by Philips and
used in connection with the operations at the PCB Facility, including the
property identified in Schedule 1.1(C) to the Philips Real Estate and
Asset Purchase and Sale Agreement (the "Philips Equipment").
2.2 12-Month Term Loan. Subject to the terms and conditions
hereof, Lender agrees to make the 12-Month Term Loan available to
Borrower on the Loan Opening Date, upon the conditions of disbursement
set forth herein. The proceeds of the 12-Month Term Loan shall be used
by Borrower only for the purchase by Borrower of the Real Property and
Improvements, each as defined in the Philips Real Estate and Asset
Purchase and Sale Agreement.
2.3 60-Month Term Loan. Subject to the terms and conditions
hereof, Lender agrees to make the 60-Month Term Loan available to
Borrower on the Loan Opening Date, upon the conditions of disbursement
set forth herein. The proceeds of the 60-Month Term Loan shall be used
by Borrower only for the acquisition by Borrower of the assets of Philips
described in the Philips Real Estate and Asset Purchase and
Sale Agreement.
2.4 Lease Financing Loan. Subject to the terms and conditions
hereof, Lender agrees to make the Lease Financing Loan available to
Borrower on the Loan Opening Date, upon the conditions of disbursement
set forth herein. The Lease Financing Loan shall be used by Lender to
acquire the Philips Equipment and lease the Philips Equipment to
Borrower, pursuant to the terms and upon the conditions set forth in a
Master Lease Agreement to be entered into between Borrower and Lender on
or prior to the Loan Opening Date, which Master Lease Agreement shall be
in the form attached hereto and made a part hereof as Exhibit B (the
"Master Lease Agreement").
2.5 All Advances to Constitute One Loan. All advances by
Lender to Borrower under the Loan shall constitute one loan and one
general obligation secured by Lender's security interest in all the
Collateral and by all other security interests, liens, claims, and
encumbrances heretofore, now, or at any time hereafter granted by
Borrower and/or any Guarantor to Lender. Borrower agrees that all of
the rights of Lender set forth in this Agreement shall apply to any
modification of or supplement to this Agreement.
2.6 Closing. The closing of the Loan to be made hereunder
shall take place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxx, 0000 Xxxx
Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, at 9:00 a.m. on
July 24, 1997, or such other time or place as the parties may agree in
writing ("Closing") and shall be deemed to have occurred when the Notes
are delivered by Borrower to Lender.
2.7 Representation and Warranty. Each loan or any
disbursement made by Lender to Borrower hereunder shall constitute an
automatic warranty and representation by Borrower to Lender that there
does not then exist an Event of Default or any Unmatured Event of Default
hereunder or under any of the other Loan Documents.
2.8 Duration of Agreement. This Loan Agreement shall be in
effect until all of Borrower's Liabilities have been paid in full and any
and all commitments of Lender to make loans hereunder have terminated.
3. INTEREST/FEES/COSTS. As consideration for Lender's agreement
to make the Loan to Borrower, Borrower shall be obligated to pay to
Lender certain fees, interest, costs and expenses as provided for herein
or in any of the Loan Documents, including, without limitation, the
following:
3.1 Loan Fee. Intentionally Deleted.
3.2 Interest on the 60-Month Term Loan and the 12-Month Term Loan.
(i) So long as no Event of Default or Unmatured Event of Default
has occurred, the 60-Month Term Loan and the 12-Month Term Loan
and all other obligations hereunder shall bear interest from
the date such Loans are made or such other obligations are
incurred until paid in full at a rate per annum (meaning 360
days) at rates (the "Interest Rate") determined by reference
to the Base Rate or the LIBOR Rate, as follows:
(a) the 60-Month Term Loan shall bear interest either (x) at a
floating rate equal to the Base Rate, or (y) at a rate
equal to the applicable LIBOR Rate plus one and three-
quarters percent (1.75%);
(b) the 12-Month Term Loan shall bear interest either (x) at a
floating rate equal to the Base Rate, or (y) at a rate
equal to the applicable LIBOR Rate plus one and three-
quarters percent (1.75%); and
(c) any other obligations hereunder shall bear interest at a
floating rate equal to the Base Rate.
(ii) The basis for determining the interest rate for all or part of
60-Month Term Loan and the 12-Month Term Loan may be changed
from time to time pursuant to this subsection 3.2. If, on any
day any part of the 60-Month Term Loan or the 12-Month Term Loan
is outstanding with respect to which notice has not been timely
received by Lender in accordance with this Agreement specifying
that the LIBOR Rate shall be applicable thereto, then for that day
such Loan (or portion thereof) shall bear interest at the applic-
able rate specified in subsection 3.2(i) determined by reference
to the Base Rate. Loans bearing interest at rates determined by
reference to the Base Rate are herein sometimes referred to as
"Prime Rate Loans" and Loans bearing interest at rates determined
by reference to the LIBOR Rate are herein sometimes referred to as
LIBOR Rate Loans.
(iii) Borrower may elect from time to time to convert all or
part of the outstanding principal balance of any Loan from a
Prime Rate Loan to a LIBOR Rate Loan by giving Lender at least
three (3) LIBOR Business Days' prior irrevocable notice of such
an election; provided that no Loan may be converted to a LIBOR
Rate Loan while an Unmatured Event of Default or an Event of
Default has occurred and is continuing. Borrower may also
elect from time to time to continue any outstanding LIBOR Rate
Loan (whether for a similar or a different Interest Period)
upon the expiration of the Interest Period then applicable
thereto by giving Lender at least three (3) LIBOR Business
Days' prior irrevocable notice of such continuation of such
LIBOR Rate Loan; provided that no Loan may be continued as a
LIBOR Rate Loan while an Unmatured Event of Default or an Event
of Default has occurred and is continuing.
(iv) Each notice of election to convert to a LIBOR Rate Loan or to
continue a LIBOR Rate Loan shall be signed by the Chief
Financial Officer of the General Partner and shall specify
(a) the proposed conversion or continuation date; (b) the
amount of the Loan to be converted or continued; (c) the nature
of the proposed conversion or continuation; and (d) the
requested Interest Period, which shall be one (1), two (2) or three
(3) months, or, if then available, six (6) months. Each such
notice shall also certify that no Unmatured Event of Default or
Event of Default has occurred and is then continuing.
(v) On the date upon which each conversion to a LIBOR Rate Loan or
continuation of a LIBOR Rate Loan is being made pursuant to a
notice given in accordance with this Agreement, Lender shall
take such actions as are necessary to effect such conversion or
continuation. Subject to the limitations set forth in this
subsection 3.2 and in the definition of Interest Period, all or
any part of the Loans may be converted into LIBOR Rate Loans or
continued as LIBOR Rate Loans as provided herein, provided that
partial conversions or continuations of any Loan shall be in
the minimum amount of $1,000,000, and, if in excess thereof, in
integral multiples of $1,000,000.
3.3 Lease Financing Payment Factor. Rent payable under the
Master Lease shall be fixed at Closing based upon an amortization not in
excess of seven (7) years and a payment factor determined by Lender.
3.4 Default Rate/Late Charge. From and after such time as an
Event of Default occurs under this Agreement or any of the Loan
Documents, or if either Loan is not paid in full on or prior to its
Maturity Date, the unpaid balance outstanding under the Loan shall bear
interest at an interest rate equal to the applicable Interest Rate, plus
three percent (3%) (the "Default Rate"). Borrower further agrees to pay a
"Late Charge" of five percent (5%) of any amount due hereunder if
such amount is paid more than ten (10) days after the due date thereof,
to cover the extra expense involved in handling delinquent payments.
This provision shall not be deemed to excuse a late payment or be deemed
a waiver of any other rights Lender may have, including the right to
declare the entire principal and interest immediately due and payable.
3.5 Fees and Costs. Borrower shall pay all expenses, charges,
costs and fees of the Loan, including, without limitation, Lender's
reasonable attorneys' fees, in connection with the negotiation,
documentation, administration, servicing and enforcement of the Loan, and
any fees and costs charged by an appraiser, the cost of any and all
credit checks run by Lender, including UCC, tax and judgment lien
searches, all recording fees and charges, all title insurance charges and
premiums, escrow fees, survey costs and the costs of any bonds required
by Title Company, and any and all other costs, expenses, charges, and
fees referred to in or necessitated by the terms of this Agreement
(collectively, the "Loan Expenses"). The Loan Expenses shall be paid by
Borrower promptly upon Lender's demand or, alternatively, may be paid by
Lender at any time by disbursement of proceeds of the Loan. The Loan
Expenses shall be payable by Borrower regardless of whether there shall
be any disbursements of the Loan. If not paid within ten (10) days
following Lender's demand, the Loan Expenses shall bear interest until
the date paid by Borrower at the Default Rate.
3.6 Funding Losses. In the event that Borrower fails to
borrow any LIBOR Rate Loan, or makes any payment on a LIBOR Rate Loan on
a date other than the last day of the applicable Interest Period,
Borrower shall pay Lender, within ten (10) days following Lender's demand
therefor, any resulting loss or expense, including, without limitation,
any amount incurred in obtaining, liquidating or employing deposits from
third parties acquired or arranged to fund such LIBOR Rate Loan.
4. PAYMENTS; APPLICATION; OFFSET.
4.1 Payments. All payments of principal or interest on the
60-Month Term Note and the 12-Month Term Note, all payments of rent under
the Master Lease and all payments of any other fees and costs due
hereunder shall be made in immediately available funds. All such
payments shall be made to Lender at its principal office in Chicago,
Illinois, not later than 2:00 p.m., Chicago time, on the date due, and
funds received after that hour shall be deemed to have been received by
Lender on its next following Business Day.
4.2 Loan Repayment/12-Month Term Loan. The 12-Month Term Loan
shall be payable in monthly payments equal to the sum of (a) principal in
an amount equal to $15,555.56 plus (b) accrued interest at the applicable
Interest Rate, in arrears, due and payable commencing on the first day of
the month following the month in which disbursement of the proceeds of the
12-Month Term Loan shall occur and continuing on the first day of the
each month thereafter, through and including the month in which the 12-
Month Term Loan Maturity Date occurs, at which time the outstanding
principal balance and all the then accrued and unpaid interest on the
principal balance of the 12-Month Term Loan shall be due and payable.
4.3 Loan Repayment/60-Month Term Loan. The 60-Month Term Loan
shall be payable in monthly payments equal to the sum of (a) $37,833.33
of principal, and (b) accrued interest at the applicable Interest Rate,
in arrears, due and payable commencing on the first day of the month
following the month in which the disbursement of the proceeds of the
60-Month Term Loan shall occur, and continuing on the first day of each
month thereafter, through and including the 60-Month Term Loan Maturity
Date, at which time the outstanding principal balance and all then
accrued and unpaid interest on the principal balance of the Loan shall be
due and payable.
4.4 Maturity Dates. The unpaid principal balance of the
12-Month Term Loan and all accrued and unpaid interest thereon and any
fees and costs payable by Borrower hereunder with respect thereto, if not
sooner paid or declared to be due in accordance with the terms hereof,
shall be due and payable in full on the 12-Month Term Loan Maturity Date.
The unpaid principal balance of the 60-Month Term Loan and all accrued
and unpaid interest thereon and any fees and costs payable by Borrower
with respect thereto, if not sooner paid or declared to be due in
accordance with the terms hereof, shall be due and payable in full on the
60-Month Term Loan Maturity Date.
4.5 Statement of Account. Lender shall provide Borrower with
a statement of account relating to the Loan on a monthly basis. Each
such statement of account shall be presumed correct and accurate and
shall, except for Lender's right to reapply payments, constitute an
account stated between Borrower and Lender, unless thereafter waived in
writing by Lender or unless, within thirty (30) days after Borrower's
receipt thereof, Borrower delivers to Lender, by certified mail, written
objection thereto specifying the error or errors contained therein.
4.6 Prepayment. The Borrower may prepay any principal
outstanding under the 60-Month Term Loan or the 12-Month Term Loan, at
any time, and provided Borrower extends one (1) business day's prior
written notice to Lender. Any prepayment of all or any portion of the
outstanding principal balance under the Notes shall include all fees,
costs and interest accrued to the date of such prepayment. Provided that
at the time of any such prepayment, an Event of Default or Unmatured
Event of Default exists hereunder, any prepayment of the Loan may be
applied by Lender at its discretion to either the 12-Month Term Loan
and/or the 60-Month Term Loan. In the event that at any time during the
term of the Loan, Borrower and Lender agree to fix the rate of all or any
portion of the Loan, as a condition of such agreement by Lender, Lender
shall be entitled to charge, and Borrower shall pay, Lender's standard
yield maintenance prepayment premium in connection with the prepayment of
any such fixed rate loan.
4.7 Offset. In addition to and not in limitation of all
rights of offset that Lender or other holder of the Notes may have under
applicable law, Lender or other holder of such Note shall, upon the
occurrence of any Event of Default, or any Unmatured Event of Default,
have the right to appropriate and apply to the payment of the Notes, any
and all balances, credits, deposits, accounts or monies of any of the
Borrower then or thereafter with Lender or other holder.
4.8 Final Release. At such time as Borrower's Liabilities
have been fully paid, Borrower has complied with all requirements of the
Loan Documents, and there is no obligation of Lender to make additional
disbursements of the Loan, then the Notes shall be canceled and returned
to Borrower and all other Loan Documents shall be terminated and any
liens created thereunder shall be released.
4.9 Partial Release. Provided that there is then in existence
no Event of Default or Unmatured Event of Default, Lender agrees to
release the Mortgage and Assignment of Rents at such time as the 12-Month
Term Loan is paid in full. Provided that there is then in existence no
Event of Default or Unmatured Event of Default, Lender agrees to release
its security interest in the Sigmatron Stock at such time as the 60-Month
Term Loan is paid in full.
5. COLLATERAL SECURITY.
5.1 Security for Existing Circuit Systems Loan. Concurrently
with or prior to the making of the initial disbursement of any of the
proceeds of the Loan, Borrower shall have executed, delivered, granted
and/or caused to be executed, delivered and/or granted, as security for
the payment and performance of the Existing Circuit Systems Loan, a
continuing security interest in, and lien on, all of Borrower' right,
title and interest in and to the following:
(a) all Accounts;
(b) all Inventory;
(c) all Equipment except for the Philips Equipment;
(d) General Intangibles; and
(e) to the extent not included in subparagraphs (a), (b), (c),
and (d) of this Paragraph 5.1, all goods, chattels, machinery,
equipment, inventory, accounts, chattel paper, notes, contract
rights, general intangibles, furniture, fixtures and property of
every kind and nature, wherever located, now or hereafter belonging
to Borrower or in which Borrower has an interest and any and all
products and/or proceeds thereof.
To evidence the grant of security interests to Lender, Borrower shall
execute the Seventh Amendment to Secured Revolving Credit Agreement,
substantially in the form attached hereto as Exhibit G and the Continuing
Security Agreement, substantially in the form attached hereto as Exhibit
H, and from time to time, until the Existing Circuit Systems Loan is paid
in full, Borrower shall deliver to Bank such financing statements,
assignments, security agreements, deeds or other documents as may be
reasonably requested by Lender to further evidence, perfect, confirm or
facilitate the enforcement of the above-described security interests.
5.2 Collateral. As collateral for the Loan, Borrower shall
have executed, granted and delivered, or caused to be executed, granted
and delivered to Lender, the following:
(a) first and prior Deed of Trust with respect to the PCB Facility;
(b) first and prior Assignment of Leases and Rents with respect to
the PCB Facility;
(c) first and prior security interest in 400,000 shares of
Sigmatron Stock, represented by Stock Certificate Nos. SI 1991,
SI 1992, SI 1993 and SI 1994;
(d) first and prior security interest in the Process ID License
Agreement and the PCB Purchase Agreement; and
(e) A security interest, junior to the security interest described
in Section 5.1 above, in all of Borrower's property, wherever
located, whether or now or hereafter existing, owned, licensed,
leased (to the extent of Borrower's leasehold interest therein)
consigned (to the extent of Borrower's ownership interest
therein), arising and/or acquired, including, without
limitation all of Borrower's (i) Accounts, chattel paper, tax
refunds, contract rights, leases, leasehold interests, letters
of credit, instruments, documents, documents of title, patents,
copyrights, trademarks, trade names, licenses, goodwill,
beneficial interest in general intangibles; (ii) all goods
whose sale, lease or other disposition by Borrower have given
rise to Accounts and have been returned to or repossessed or
stopped in transit by Borrower; (iii) all investment property,
including but not limited to certificated and uncertificated
Securities; (iv) goods, including without limitation all
consumer goods, machinery, Equipment, farm products, fixtures
and inventory; (v) liens, guaranties, and other rights and
privileges pertaining to any of the Collateral; (vi) monies,
reserves, deposits, deposit accounts and interest or dividends
thereon, cash or cash equivalents; (vii) all property now or at
any time or times hereafter in the possession or under the
control of Lender or its bailee; (viii) all accessions to the
foregoing, all litigation proceeds pertaining to the foregoing
and all substitutions, renewals, improvements and replacements
of and additions to the foregoing; and (ix) all books, records
and computer records in any way relating to the above-described
collateral (all of the above-described property herein referred
to as the "Collateral").
5.3 Deliveries; Further Assurances. The Borrower agrees that
it will, at its sole expense (i) upon request by Lender, within five (5)
days of demand, deliver or cause to be delivered to Lender in due form
for transfer, chattel paper, instruments and documents of title, if any,
at any time representing all or any of the Collateral, (ii) without
request by Lender, cause Lender's security interest under the Loan
Documents to be at all times duly noted on any certificate of title
issuable with respect to any of the Collateral and forthwith deliver or
cause to be delivered to Lender each such certificate of title, and (iii)
upon request of Lender, forthwith execute and deliver or cause to be
executed and delivered to Lender, in due form for filing or recording
(and pay the cost of filing or recording the same in all public offices
deemed necessary by Lender) such assignments, security agreements,
mortgages, deeds of trust, pledge agreements, warehouse receipts, bailee
letters, consents, waivers, financing statements, stock or bond powers,
and other documents, and do such other acts and things, all as Lender may
from time to time reasonably request to establish and maintain to the
reasonable satisfaction of Lender a valid perfected security interest in
all of the Collateral (free of all other liens, claims and rights of
third parties whatsoever except the Permitted Liens) to secure payment of
the Loan. The Borrower irrevocably hereby makes, constitutes and
appoints Lender (and all other persons designated by Lender for that
purpose) as the Borrower's true and lawful attorney (and agent-in-fact)
to sign the name of the Borrower on any such agreements, instruments and
documents referred to in clause (iii) above and to deliver such
agreements, instruments and documents to such persons as Lender in its
sole discretion may elect.
5.4 Verification of Collateral; Inspection; Audit. Any of
Lender's officers, employees or agents shall have the right, at any
reasonable time hereafter, during Borrower's business hours in Lender's
name or in the name of Borrower, to verify the validity, amount or any
other matter relating to any of the Collateral by mail, telephone or
otherwise. Lender (by any of its officers, employees or agents) shall
have the right, at any time during Borrower's usual business hours and
upon not less than three (3) business day's prior notice, to inspect the
Collateral, all records related thereto (and to make extracts from such
records) and the premises upon which any of the Collateral is located,
and the right, at any reasonable time, to discuss Borrower's affairs and
finances and the Collateral with any attorney, accountant, lessee,
Account Debtor or other creditor of Borrower. Costs incurred by Lender
in connection with any audit of the Collateral shall be paid by Lender if
there does not then exist an Event of Default (as defined herein).
Notwithstanding the foregoing, the above restrictions as to reasonable
times during business hours and prior notice shall not apply if an Event
of Default or Unmatured Event of Default has occurred or is continuing.
5.5 Records and Schedules. Borrower shall keep accurate and
complete records of its Accounts, Inventory and other Collateral.
5.6 Proceeds of Collateral. Borrower shall not, without the
prior written notice to Lender, sell, lease, grant a security interest
in, or otherwise dispose of or encumber the Collateral, or any part
thereof excluding individual sales, dispositions, trade-ins or
replacements of Collateral in the ordinary course of business. Upon any
disposition of Collateral described in clauses (a) through (d) inclusive
of paragraph 5.2 above, Borrower shall deliver all the proceeds thereof
to Lender to be applied to the repayment of the Liabilities provided,
however, that Lender may waive its rights hereunder if no Event of
Default or Unmatured Event of Default has occurred or is continuing under
this Agreement, either of the Notes, or the Loan Documents.
6. WARRANTIES AND REPRESENTATIONS.
6.1 Warranties and Representations of the Borrower. To induce
Lender to enter into this Agreement and to make the Loan hereunder,
Borrower and Guarantors each represent and warrant to Lender that:
(a) Organization. The Borrower is a limited partnership duly
organized, validly existing and in good standing under the laws of
the State of Tennessee and qualified or licensed to do business in
good standing in all states in which the laws thereof require
Borrower to be so qualified and/or licensed, except where the
failure to be so qualified could not reasonably be expected to have
a material adverse effect on Borrower, the Collateral or Borrower's
business. The General Partner is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Tennessee and qualified or licensed to do business and in good
standing in all states in which the laws thereof require General
Partner to be so qualified and/or licensed, except where the failure
to be so qualified could not reasonably be expected to have a
material adverse effect on the Borrower, the Collateral, Borrower's
business or General Partner. CSI is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Illinois and qualified or licensed to do business and in good
standing in all states in which the laws thereof require CSI to be
so qualified and/or licensed, except where failure to be so
qualified could not reasonably be expected to have a material
adverse effect on the Borrower, the Collateral, Borrower's business
or CSI. General Partner is the sole general partner of Borrower,
holding a 1% partnership interest therein, and CSI is the sole
limited partner of Borrower, holding a 99% partnership interest
therein. CSI is the sole shareholder of General Partner holding
100% of the Securities in General Partner.
(b) Authorization; No Conflict. The execution and delivery of
this Agreement, the Notes and the Loan Documents, any disbursements
of the Loan hereunder and the performance by the Borrower, General
Partner and CSI of their respective obligations under this
Agreement, the Notes and the Loan Documents are within the each of
their respective powers, have been duly authorized by all necessary
action, and do not and will not contravene or conflict with any
provision of law or of the covenants and provisions of the Agreement
of Limited Partnership establishing Borrower or of any other
agreement binding upon the Borrower, the articles of incorporation
establishing General Partner, its bylaws or any other agreement
binding upon General Partner, or the articles of incorporation
establishing CSI, its bylaws or any other agreement binding upon
CSI.
(c) Validity and Binding Nature. This Agreement is, and the
12-Month Term Note, the 60-Month Term Note, and the Loan Documents,
when duly executed and delivered, will be, legal, valid and binding
obligations of the Borrower, General Partner and CSI, as the case
may be, enforceable against each such party in accordance with their
respective terms. As security for the Liabilities, Lender has a
valid perfected security interest in all Collateral.
(d) Financial Statements. All balance sheets, statements of
operations, consolidated and/or unconsolidated statements, audited
or otherwise, and other financial data (other than forecasts and/or
projections) which have been or shall hereafter be furnished to
Lender for purposes of or in connection with this Agreement and/or
the making of the Loan (collectively, "Financials"), do and will
present fairly the financial condition of the entities involved as
of the date thereof and the results of their operations for the
period(s) covered thereby. The Financials of Borrower and each
Guarantor, copies of which have been furnished to Lender, are
complete in every respect, have been prepared in conformity with
generally accepted accounting principles applied on a basis
consistent with that of the financial statements issued during the
preceding fiscal year of such entity, and accurately present the
financial condition of such entity, and as at such dates, and the
results of its operations for the periods then ended, and since such
dates there has been no material adverse change in any financial
conditions or operations contained therein.
(e) Litigation; Contracts and Contingent Liabilities. Except
as set forth on Exhibit A attached hereto, no litigation (including,
without limitation, derivative actions), arbitration proceedings or
governmental proceedings are pending or threatened against Borrower
or any Guarantor which would, if adversely determined, materially
and adversely affect the financial condition or continued operations
of Borrower or such Guarantor. Borrower and Guarantors each has no
material contingent liabilities not provided for or disclosed in the
Financials and the Borrower is not a party to any agreement or
subject to any charge, restriction or other matter materially and
adversely affecting its business, property, assets, operations or
condition, financial or otherwise, and is not a party to any labor
dispute, and there are no pending or threatened strikes or walkouts
relating to any labor contract.
(f) Liens. Except for the security interests held by Lender
and the Permitted Liens as set forth on Exhibit D hereto, none of
the Collateral, or any of the assets of Borrower is subject to any
mortgage, pledge, title retention lien, or other lien, encumbrance
or security interest, except (i) inchoate liens for current taxes
not delinquent or taxes being contested in good faith and by
appropriate proceedings in which a bond has been posted for the
amount contested; and (ii) liens arising in the ordinary course of
business for sums not due or sums being contested in good faith and
by appropriate proceedings, but not involving any deposits or
advances or borrowed money or the deferred purchase price of
property or services.
(g) Perfection and Priority of Collateral. Except for the
Permitted Liens, no financing statement (other than any which may
have been filed on behalf of Lender) covering any of the Collateral
is on file in any public office; Borrower is and will be the lawful
owner of all of its Collateral, and CSI is and will be the lawful
owner of the Sigmatron Stock, each free and clear of all liens,
claims, and encumbrances whatsoever, except for liens in favor of
Lender; and Lender has or, upon the execution of the Loan Documents,
will have, and will continue to have, as security for the
Liabilities, a valid and perfected lien on, and security interest
in, all of the Collateral, free and clear of all other liens,
claims, encumbrances and rights of third parties whatsoever, except
for the Permitted Liens.
(h) Existing Obligations. To Borrower's knowledge, Borrower
is not in violation of any applicable statute, regulation or
ordinance of any governmental entity, or any agency thereof, in any
respect materially and adversely affecting any of the Collateral or
its business, property, assets, operations or condition, financial
or otherwise, and the Borrower is not in default with respect to any
indenture, loan agreement, mortgage, lease, deed or other similar
agreement relating to borrowing of monies to which it is a party or
by which it is bound. The Borrower has not guaranteed the
obligation of any other person or entity.
(i) Employee Benefit Plans. Any employee benefit plan as to
which Borrower may have any liability, complies in all material
respects with all requirements of applicable law and regulations.
Borrower has met all applicable minimum funding requirements in
respect of its plans, and all required contributions to any pension,
profit-sharing and other employee benefit plan have been made or
accrued. No Reportable Event (as defined in Paragraph 4043(b) of
ERISA) has occurred, and to the best knowledge of the Borrower, is
not threatened or about to occur with respect to any Employee
Benefit Plan (as defined in ERISA), and no notice of termination has
been filed by the plan administrator pursuant to Paragraph 4041 of
ERISA, or issued by the Pension Benefit Guaranty Corporation
("PBGC") pursuant to Section 4042 of ERISA with respect to any
pension plan subject to ERISA. The present value of all benefits
vested under all Employee Benefit Plans maintained for the benefit
of employees of the Borrower does not exceed the value of the assets
of such plans allocable to such vested benefits. The Borrower is
not a party to, bound by or subject to any Multiemployer Plan (as
that term is defined in Section 4001(a) (3) of ERISA). The Borrower
is not (i) engaged in any Prohibited Transaction (as defined in Sec-
tion 406 of ERISA, and Section 4975 of the Internal Revenue Code of
1986, as amended; (ii) a fiduciary for investments with respect to
any plan existing for the benefit of persons other than employees;
or (iii) completely or partially withdrawn from any Multiemployer
pension plan so as to incur liability under the Multiemployer
Pension Plan Amendments Act of 1980.
(j) Various Regulations. Borrower's execution and delivery
of this Agreement and any of the Loan Documents do not directly or
indirectly violate or result in a violation of Section 7 of the
Securities and Exchange Act of 1934, as amended, or any regulations
issued pursuant thereto, including, without limitation Regulations
G, U, T and X of the Board of Governors of the Federal Reserve
System, and Borrower does not own or intend to purchase or carry any
"margin security" as defined in said Regulations.
(k) Principal Place of Business. The chief executive office
and principal place of business of the Borrower, and the offices
where Borrower maintains its books and records including, without
limitation, computer programs, printouts, and other computer
materials and records, concerning any of the Collateral shall be
deemed to be 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
(l) Tax Returns; Reports. Borrower has filed, or will file
pursuant to any applicable extensions duly granted, all federal,
state and local tax returns and other reports it or he, as
applicable, is required by law to file and has paid, to the extent
due and payable, meaning all national, federal, state, county, city,
municipal and/or other governmental (or any instrumentality,
division, agency, body or department thereof, including without
limitation the Pension Benefit Guaranty Corporation) taxes, levies,
assessments, charges, liens, claims or encumbrances upon and/or
relating to the Collateral, the Liabilities, Borrower's employees,
payroll, income and/or gross receipts, Borrower's ownership and/or
use of any of its assets and any other aspect of Borrower's
business.
(m) Names. Borrower has not, during the preceding five (5)
years, been known as or used any other corporate or fictitious name,
except as disclosed herein or as reflected in Borrower's Certificate
of Limited Partnership as filed with the Secretary of State of the
State of Tennessee.
(n) Solvency; Capital. The Borrower now has sufficient
capital to carry on all businesses and transactions in which it now
engages or is about to engage, is now solvent and will continue to
be solvent after the creation of the security interest in the
Collateral by this Agreement, and is able to pay its debts as they
mature, and if requested by Lender, Borrower shall deliver to Lender
an affidavit regarding its solvency and certain related matters in
form reasonably acceptable to Lender's counsel. Each Guarantor now
has sufficient capital to carry on all of its respective businesses
and transactions in which such Guarantor now engages or is about to
engage, is now solvent and will continue to be solvent after the
creation of the security interest in the Collateral by this
Agreement, and each is able to pay its respective debts as they
mature, and if requested by Lender, Guarantors shall each deliver to
Lender an affidavit regarding its solvency and certain related
matters in form reasonably acceptable to Lender's counsel.
(o) Solvency; Personnel. Borrower has sufficient personnel
and possesses adequate assets to continue to conduct its business.
(p) Use of Proceeds. Borrower's use of the proceeds of any
advances and re-advances made by Lender pursuant to this Agreement
are, and shall continue to be, legal and proper partnership uses
duly authorized by the Board of Directors of its general partner and
such uses are consistent with all applicable laws and statutes, as
in effect as of the date hereof.
6.2 Survival of Warranties and Representations. All representations
and warranties of Borrower contained in this Agreement and the Loan
Documents shall survive the execution, delivery and acceptance thereof
by the parties thereto and the closing of the transactions described
therein or related thereto.
7. FINANCIAL COVENANTS.
7.1 Affirmative Covenants. Until all obligations of the
Borrower hereunder, under the Notes, the Master Lease and under the Loan
Documents are paid and performed in full, Borrower and Guarantors agree
that, unless at any time Lender shall otherwise expressly consent in
writing, each of Borrower and Guarantors shall:
(a) Books of Account and Financials. Keep books of account
and prepare financial statements and shall cause to be furnished to
Lender the following (all of the foregoing and following to be kept
and prepared in accordance with generally accepted accounting
principals applied on a consistent basis, unless Borrower's or any
Guarantor's, as the case may be, certified public accountants concur
in any changes therein and such changes are disclosed to Lender and
are consistent with then generally accepted accounting principles)
such data and information (financial and otherwise) as Lender, from
time to time, may reasonably request, bearing upon or related to the
PCB Facility, Borrower's financial condition or results of
operations: (A) as soon as available but not later than ninety (90)
days after the close of each fiscal year of Borrower, financial
statements, which shall include, but not be limited to, balance
sheets, income statements and statements of cash flow of Borrower
prepared in accordance with generally accepted accounting
principles, consistently applied, audited by a firm of independent
certified public accountants selected by Borrower and acceptable to
Lender; (B) as soon as available but not later than thirty (30) days
after the end of each month hereafter, financial statements of
Borrower certified by Borrower to be prepared in accordance with
generally accepted accounting principles fairly present the
financial position and results of operations of Borrower for such
period; (C) schedule of accounts payable and accounts receivable by
the 15th of every month or otherwise as Lender may direct; and (D)
such other data and information (financial and otherwise) as Bank,
from time to time, may request.
(b) Notice of Default, Adverse Information, Litigation.
Forthwith upon learning of the occurrence of any of the following,
furnish to Lender written notice thereof, describing the same, and
the steps being taken by Borrower with respect thereto: (A) the
occurrence of an Event of Default or an Unmatured Event of Default;
(B) the institution of, or any adverse determination in, any litiga-
tion, arbitration proceeding or governmental proceeding, pending or
threatened, which is material to Borrower and/or any Guarantor; or
(C) any other material information relating to any adverse change in
the financial condition or which may materially and adversely affect
the operations, financial condition or business of Borrower, any
Guarantor, or Lender's security interest in the PCB Facility.
(c) Books, Records and Inspections. Maintain complete and
accurate books and records; permit access upon notice by Lender to
such books and records and permit Lender to inspect the properties
and operations of Borrower at its principal place of business set
forth herein upon three (3) business days' prior notice provided,
however, such notice requirements shall not apply if an Event of
Default or Unmatured Event of Default has occurred or is continuing
under this Agreement or any of the Loan Documents.
(d) Tax Returns. As soon as available, but not later than
April 15 of each year, Borrower shall provide Lender with copies of
the federal, state, and local, if any, income tax returns of
Borrower and each Guarantor, in the form said returns are filed,
each certified as true, correct and complete by Borrower and each
Guarantor.
7.2 Negative Covenants. Without Lender's prior written consent,
which Lender may or may not in its sole and absolute discretion give,
each of Borrower and Guarantor covenants that Borrower:
(a) Capital Expenditures. Shall not incur or make any
individual capital expenditure in excess of One Hundred Thousand and
No/100ths Dollars ($100,000.00) or any capital expenditure in excess
of Five Hundred Thousand and No/100ths Dollars ($500,000.00) in the
aggregate during any one calendar year during the term hereof.
(b) Covenants. Borrower shall not, without Lender's prior
written consent thereto: (A) grant a security interest in or assign
any of the Collateral to any Person or permit, grant, or suffer a
lien, claim or encumbrance upon any of the Collateral; (B) sell or
transfer any of the Collateral not in the ordinary course of
business; (C) enter into any transaction not in the ordinary course
of business which materially and adversely affects the Collateral or
Borrower's ability to repay Borrower's Liabilities or Indebtedness;
(D) other than as specifically permitted in or contemplated by this
Agreement, encumber, pledge, mortgage, sell, lease or otherwise
dispose of or transfer, whether by sale, merger, consolidation or
otherwise, any of Borrower's assets; and (E) incur Indebtedness
except: (i) unsecured trade debt in the ordinary course of business;
(ii) renewals or extensions of existing Indebtedness and interest
thereon; (iii) Indebtedness that is unsecured and is to Persons who
execute and deliver to Lender in form and substance acceptable to
Lender and its counsel subordination agreements subordinating their
claims against Borrower therefor to the payment of Borrower's
Liabilities; and (iv) Permitted Indebtedness as set forth on Exhibit C
hereto.
8. GENERAL COVENANTS.
8.1 Affirmative Covenants. Until all the obligations of
Borrower hereunder, under the Notes, and under the Loan Documents are
paid and performed in full, Borrower and Guarantors agree that, unless at
any time Lender shall otherwise expressly consent in writing, each of
Borrower and Guarantors shall:
(a) General Insurance. Maintain such insurance as may be
required by law and such other insurance, to such extent and against
such hazards and liabilities, as is customarily maintained by
companies similarly situated, and provide that all such insurance
shall contain a lender's loss payment clause acceptable to Lender,
naming Lender as lender's loss payee.
(b) Taxes and Liabilities. Pay when due, all Charges.
(c) Agreements. Provide Lender with copies of all agreements
between Borrower or any Affiliate.
(d) Federal Assignment of Claims Act. If any of the
Collateral arises out of a contract with the United States of
America, or any department, agency, subdivision, or instrumentality
thereof, promptly notify Lender thereof in writing and execute any
instruments and take any other action required or requested by
Lender to perfect Lender's security interest in such Collateral
under the provisions of the Federal Assignment of Claims Act.
(e) Maintenance of Collateral. Maintain the Collateral in
good operating condition and repair; make all necessary replacements
thereof so that the value and operating efficiency thereof shall at
all times be substantially maintained and preserved; quarterly
inform Lender of any material additions to or deletions from the
Collateral; take reasonable steps to prevent any such Collateral
from becoming a fixture to real estate or accession to other
personal property and keep the Collateral adequately insured for
full value and liability, noting Lender's interest as secured party
and naming Lender as loss payee thereunder, as more specifically
provided in Paragraph 8.1(h) hereof.
(f) Bank Accounts. Continue to retain Lender as the main bank
of account for Borrower. Lender shall handle all of Borrower's
accounts, receipts, disbursements and related services and Borrower
shall, at a minimum, maintain sufficient balances to cover such
services.
(g) Consents. Provide Lender with any consents of third
parties necessary or appropriate with respect to granting or
perfecting Lender's security interest in the Collateral.
(h) Insurance; Payment of Premiums. Borrower shall keep and
maintain the Collateral insured for its full insurable value against
loss or damage by fire, theft, explosion, and all other hazards and
risks ordinarily insured against by other owners or users of such
properties, assets, and/or accounts in similar businesses and notify
Lender promptly of any occurrence causing a material loss or decline
in value of the Collateral and the estimated (or actual, if available)
amount of such loss or decline. All policies of insurance on the
Collateral shall be in form and with insurers recognized as adequate by
prudent business persons and all such policies shall be in such amounts
as may be reasonably satisfactory to Lender. Prior to Closing, Borrower
shall deliver or cause to be delivered to Lender the original (or
certified copy) of each policy of insurance and evidence of payment of
all premiums therefor. Such policies of insurance shall contain an
endorsement showing loss payable to Lender. Such endorsement shall
provide that the insurance companies will give Lender at least thirty
(30) days prior written notice before any such policy or policies of
insurance shall be canceled for any reason other than for non-payment
of premium, and in the event the policy or policies shall be canceled
for non-payment of premium, Lender will receive ten (10) days prior
written notice before such cancellation takes effect. Furthermore, in
the event an insurer elects not to renew a policy providing coverage
required herein, Lender shall receive ten (10) days' prior written
notice before the expiration of such policy. No act or default of
Borrower or any other person or entity, other than Lender's gross
negligence or willful misconduct, shall affect the right of Lender
to recover under such policy or policies of insurance in case of
loss or damage. Subject to the foregoing, Borrower hereby directs
all insurers under such policies of insurance to pay all proceeds
payable thereunder directly to Lender. Borrower irrevocably makes,
constitutes and appoints Lender (and all officers, employees or
agents designated by Lender) as its true and lawful attorney (and
agent-in-fact) for the purpose of making, settling and adjusting
claims under such policies of insurance, endorsing the name of
Borrower on any check, draft, instrument or other items of payment
for the proceeds of such policies of insurance and for making all
determinations and decisions with respect to such policies of
insurance. In the event Borrower, at any time hereafter, shall fail
to obtain or maintain any of the policies of insurance required
above or to pay any premium in whole or in part relating thereto,
then Lender, without waiving or releasing any obligations or default
by Borrower hereunder, may at any time thereafter (but shall be
under no obligation to) obtain and maintain such policies of
insurance and pay such premium and take any other action with
respect thereto which Lender deems advisable. All sums so disbursed
by Lender, including reasonable attorneys' fees, court costs,
expenses and other charges relating thereto, shall be payable on
demand, provided that Lender accompanies such demand by a
description of all such charges by Borrower to Lender and shall be
additional Liabilities hereunder secured by the Collateral.
(i) Covenants With Respect to Collateral. Until all
obligations of the Borrower hereunder and under the Notes are paid
and performed in full, Borrower shall furnish or cause to be
furnished to Lender, from time to time, and such schedules,
certificates and reports with respect to all or any of the
Collateral then subject to the security interests of Lender
hereunder, and under the Collateral Documents (including, without
limitation, schedules identifying all Collateral), all such
schedules, certificates and reports, to be executed by Borrower and
to be in such form and detail as Lender may from time to time
specify.
(j) Organization and Control. Cause CSI to be the sole
limited partner of Borrower, holding 99% of the partnership interest
therein, cause General Partner to be the sole general partner of
Borrower, holding 1% of the partnership interest therein, and cause
CSI to be the sole shareholder of Borrower, holding 100% of the
issued and outstanding Securities thereof. General Partner shall
also maintain at least one of X.X. Xxxxx or Xxxxx Xxxxx in the
capacity of President, Chief Executive Officer or Vice President of
General Partner.
8.2 Negative Covenants. Without Lender's prior written consent,
which Lender may or may not, in its sole and absolute discretion, give,
each of Borrower and Guarantor covenants that Borrower:
(a) Guaranties, Loans, or Advances. Shall not become or be a
guarantor or surety of, or otherwise become or be responsible, in
any manner (whether by agreement to purchase any obligations, stock,
assets, goods, or services , or to supply or advance any funds,
assets, goods, and services, or otherwise), with respect to any
undertaking of any other person or entity, except for the
endorsement, in the ordinary course of collection of instruments
payable to it or to its order.
(b) Mergers, Consolidations, Sales, and Dividends. Shall not
be a party to any merger or consolidation, or redeem, retire,
purchase, or otherwise acquire, directly or indirectly, all or
substantially all of the assets or any portion of stock of any class
of the Borrower, or any class of stock or partnership or joint
venture interest in, any other person or entity, or, except in the
ordinary course of its business, sell, transfer, convey, or lease
all or any substantial part of its assets, or sell or assign, with
or without recourse, any receivables or make or permit any change in
Borrower's capital structure or in any of its business objectives,
purposes, or operations which might in any way materially and
adversely affect the repayment of the Liabilities, or declare or pay
any dividends upon any of the Borrower's stock in violation of any
and all applicable laws.
(c) Leases. After the date hereof, shall not, without the
prior written consent of Lender, which consent shall not be
unreasonably withheld or delayed, enter into or permit to exist, any
new arrangements for the leasing by it, as lessee of any other real
or personal property (or any interest therein).
(d) Unconditional Purchase Obligations. Shall not enter into
or be a party to any contract for the purchase of materials,
supplies, or other property or services, if such contract requires
that payment be made by it, regardless of whether or not delivery is
ever made of such materials, supplies, or other property or
services.
(e) Accounts Receivable. Shall not sell, assign, pledge, or
otherwise encumber or create or permit to exist any lien on or
security interest in any of the Accounts.
(f) Other Matters. Shall not enter into any transaction which
materially and adversely affects the Collateral or Borrower's
ability to repay the Indebtedness, or permit or agree to any
extension, compromise, or settlement, with Lender's prior written
consent, or make any materially adverse change or modification of
any kind or nature with respect to any agreement relating to the
Collateral or enter into any agreement containing any provision
which would be violated or breached by the performance of its
obligations hereunder or under any Collateral Document.
8.3 Survival of Obligations Upon Termination of Agreement.
Except as otherwise expressly provided for in this Agreement and in any
Loan Document, no termination or cancellation (regardless of cause or
procedure) of this Agreement or any agreements contained in the Loan
Documents shall in any way affect or impair the powers, obligations,
duties, rights, and Liabilities of Borrower or Lender relating to (i) any
transaction or event occurring prior to such termination or cancellation,
or (ii) the Collateral (so long as any Liabilities remain outstanding),
or (iii) any of the undertakings, agreements, covenants, warranties, and
representations of Borrower or Lender contained in this Agreement or in
the Loan Documents. All such undertakings, agreements, covenants,
warranties, and representations shall survive such termination or
cancellation.
9. CONDITIONS PRECEDENT TO LOAN. The obligation of Lender to
disburse the Loan is subject to the following conditions precedent:
9.1 Execution and delivery of all of the following Loan Documents:
(a) 12-Month Term Note. The 12-Month Term Note duly
executed by Borrower.
(b) 60-Month Term Note. The 60-Month Term Note duly
executed by Borrower.
(c) Continuing Security Agreement. Continuing Security
Agreement duly executed by Borrower.
(d) Guaranties. Guaranties duly executed by each Guarantor.
(e) Sigmatron Stock Pledge Agreement. Sigmatron Stock
Pledge Agreement executed by CSI and Assignment
Separate from Certificates in blank.
(f) Financing Statements. Form UCC-1 Financing
Statements for the States of Tennessee and Illinois
executed by Borrower and each Guarantor and Form UCC-2
Financing Statement for Xxxxxx County, Tennessee
executed by Borrower.
(g) Security Agreement/Personal Property. Security
Agreement/ Personal Property executed by Borrower.
(h) Environmental Indemnity Agreement Environmental
Indemnity Agreement executed by Borrower and
each Guarantor.
(i) Deed of Trust. Deed of Trust executed by Borrower
(the "Mortgage").
(j) Assignment of Rents and Leases. Assignment of Rents
and Leases executed by Borrower.
(k) Seventh Amendment to Loan Agreement. Seventh
Amendment to Loan Agreement executed by Borrower,
CSI and General Partner.
(l) Assignment of Process IP License. Assignment of
Process IP License executed by Borrower.
(m) Consent to Assignment of Process IP License. Consent
to Assignment of Process IP License executed by Philips.
(n) Assignment of PCB Purchase Agreement. Assignment of
PCB Purchase Agreement executed by Borrower.
(o) Consent to Assignment of PCB Purchase Agreement.
Consent to Assignment of PCB Purchase Agreement
executed by Philips.
(p) Master Lease and Supporting Schedule. Master Lease
and Supporting Schedule executed by Borrower.
(q) Xxxx of Sale. Xxxx of Sale to Philips Equipment
executed by Borrower conveying such equipment to
Lender free and clear of all liens, claims or
encumbrances.
(r) Resolutions and Certificates. (A) Certified copies
of resolutions of the Board of Directors of General
Partner authorizing or ratifying the execution,
delivery and performance, respectively, of this
Agreement, the 60-Month Term Note, the 12-Month Term
Note, and the Loan Documents, and (B) certified copies
of the Articles of Incorporation and By-Laws and
Certificate of Good Standing recently issued by the
Secretary of State of the State of Tennessee setting
forth that the Borrower and General Partner are each in
good standing and each has full authority to transact
business in Tennessee and in any other jurisdiction in
which Borrower maintains any part of the Collateral.
(s) Consents. Certified copies of all documents evidencing
any necessary corporate action, consents and
governmental approvals, if any, with respect to this
Agreement, the 60-Month Term Note, the 12-Month Term
Note, and the Loan Documents.
(t) Incumbency and Signatures. A certificate of the
Secretary or an Assistant Secretary of the General
Partner and CSI, certifying the names of the officers
and directors of the General Partner and CSI, which
are authorized to execute and deliver this Agreement,
the 12-Month Term Note, the 60-Month Term Note, any of
the Loan Documents, and any other documents provided
for in this Agreement to be executed and delivered by
Borrower, together with a sample of his true signature.
(u) Other Documents. Such other documents, assignments,
certificates and opinions that shall be reasonably
required by Lender or Lender's counsel.
Each of the Loan Documents shall be in form and substance
prescribed by Lender. Without limiting the foregoing, each of the Loan
Documents, where applicable, shall contain a provision stating that the
occurrence of an Event of Default under this Agreement or the occurrence
of a default under any of the other Loan Documents or the occurrence of
an Event of Default under any loan made or participated in by Lender in
which Borrower, an entity affiliated with Borrower or any Guarantor is a
party, including, without limitation, an Event of Default under any
document securing and/or evidencing the existing CSI Loan, shall
constitute an Event of Default under the Loan Document in question and
each of the other Loan Documents.
9.2 Surveys. Three (3) copies of the survey of the PCB
Facility dated not more than 180 days prior to the Loan Opening Date,
prepared by a registered Tennessee Surveyor, certified to Lender and the
Title Insurer showing no encroachments or other matters which are not
acceptable to Lender, in Lender's sole determination. The survey shall
reflect the same legal description as contained in the Title Policy and
certify that the PCB Facility is not in a Flood Hazard Area.
9.3 Evidence of Insurance Coverage. A prepaid liability, loss
of rents and hazard insurance policy or certificate in favor of Lender,
in form and amounts acceptable to Lender, insuring the PCB Facility and
the improvements thereon against loss or damage by fire, lightning or
windstorm; the hazard insurance policy shall specify that it is "without
co-insurance" and shall be in an amount equal to the greater of: (i) the
full replacement cost (without depreciation) of the improvements on the
PCB Facility, or (ii) the full amount of the Loan, and such other
insurance as Lender may reasonably require, in such form, naming Lender
as an additional insured party and loss payee on standard mortgage
clauses as follows:
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, its Successors
and/or Assignees
00 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
and containing a prohibition against cancellation or modification without
giving at least 30 days prior written notice thereof to Lender. Borrower
must furnish a copy of such policy prior to the Loan Opening Date for
final approval and the actual original insurance policy or certificate
must be presented at closing. Borrower shall further provide insurance
that the PCB Facility falls wholly within a Zone C Designated Area
according to the Federal Flood Hazard Maps retained by the Federal Energy
Management Agency.
9.4 Title Insurance. An ALTA loan policy of title insurance
("Title Policy") issued by the Title Company in the full amount of the
Loan covering the PCB Facility and insuring that the Mortgage is a first
lien upon fee simple title to the PCB Facility subject to no liens,
claims, exceptions or encumbrances except those Permitted Encumbrances
which are specifically agreed to, in writing, by Lender and containing
the following endorsements in form and substance acceptable to Lender:
(a) Comprehensive Endorsement No. 1;
(b) Access endorsement;
(c) An ALTA Broad Form 3.1 Zoning Endorsement (with parking);
(d) Location endorsement;
(e) Survey endorsement; and
(f) Such additional endorsements as may be required by Lender.
9.5 UCC, Tax and Judgment Searches. Currently dated Uniform
Commercial Code, Federal, Tennessee and Illinois Tax Lien Searches,
Judgment Searches and Pending Suit searches, covering Borrower and each
Guarantor, disclosing no matters which are objectionable to Lender. Such
searches must be dated within ninety (90) days of the disbursement of the
Loan.
9.6 Utility Availability. Evidence satisfactory to Lender, of
the availability of sufficient storm and sanitary sewer, water,
electricity, gas, and any and all other necessary utility services at the
PCB Facility.
9.7 Zoning/Licenses/Permits. Copies of all applicable zoning
ordinances and all zoning proceedings relating to the PCB Facility, and
such other evidence as Lender requires that the PCB Facility conforms to
all applicable building, zoning and use laws and ordinances or covenants
of record and may be lawfully occupied for its intended purposes.
Borrower shall provide a final, unconditional certificate of occupancy
issued with respect to the PCB Facility, together with such other
applicable licenses, permits, and approvals as Lender may require.
9.8 Flood Plain/Wetlands. Evidence satisfactory to Lender
that no part of the PCB Facility is located (i) in an area designated by
the Federal Emergency Management Administration as a "flood plain",
"flood-way" or having other special flood hazards, (ii) in an area
designated as "wetland" by the United States Army Corps of Engineers, or
(iii) in a Zone A or Zone B "Flood Hazard Area" according to the Federal
Flood Hazard Maps.
9.9 Appraisal. An appraisal of the PCB Facility directed to
Lender, with a value of not less than $4,000,000.00. The Appraisal shall
be satisfactory in all respects to Lender. The cost of the Appraisal
shall be borne by Borrower as a Loan Expense regardless of whether the
disbursement under the Loan is made.
9.10 Attorney's Opinion. An opinion of an attorney acceptable
to Lender to the effect that:
(a) Borrower is a duly formed limited partnership under
the laws of the State of Tennessee and such entity is validly
existing and fully qualified to do business in the State of
Tennessee. General Partner is a duly formed corporation under
the laws of the State of Tennessee and such entity is existing
and fully qualified to do business in the State of Tennessee.
CSI is a duly formed corporation under the laws of the State of
Illinois and such entity is validly existing and fully
qualified to do business in the State of Tennessee;
(b) This Agreement and the Loan Documents have been duly
authorized, executed and delivered by Borrower and each
Guarantor and constitute the legal, valid and binding
obligations of Borrower and each Guarantor, enforceable in
accordance with their respective terms, subject only to
applicable bankruptcy, solvency and other laws effecting
creditor's rights;
(c) The Loan is not usurious under the laws of the States
of Illinois or Tennessee;
(d) The execution and delivery of the Loan Documents or
any of them and the carrying out of the transactions
contemplated thereby will not violate, conflict with, or
constitute a default under any agreement to which Borrower or
any Guarantor is a party or by which any of them may be bound;
(e) There are no actions, suits or proceedings pending
or, to said counsel's knowledge, threatened against Borrower,
any Guarantor, or the PCB Facility, either at law or in equity
or before or by any governmental authority; and there are no
other matters which would substantially impair the ability of
Borrower or any Guarantor to pay when due any amounts which may
become payable under the Loan or otherwise perform the
obligations of Borrower under the Loan Documents; and
(f) Any other matters which Lender may reasonably request.
9.11 Environmental Survey. A Phase I environmental survey of
the PCB Facility and such other evidence or additional studies as Lender
may deem necessary or appropriate to satisfy Lender that the PCB Facility
does not contain any chemical, material or substance exposure to which is
prohibited, general or regulated by any federal, state, county, regional
or local authority or which, even if not so regulated, may or could pose
a hazard to the health and safety of the occupants of the PCB Facility or
the owners of the property adjacent to the PCB Facility ("Environmental
Assessment").
9.12 Warranties and Representations. The warranties and
representations set forth in this Agreement and the Loan Documents are
true and correct.
9.13 No Default. No Event of Default or Unmatured Event of
Default has occurred and is continuing.
9.14 Labor Agreement. Evidence satisfactory to Lender that
Borrower has entered into a labor contract, collective bargaining
agreement of at least two years duration with the International Union of
Electronic, Electrical Salaried, Machine and Furniture Workers AFL-CIO
regarding the provision of labor for the PCB facility, endorsed by Local
796 of such Union and or its officers, in form and substance acceptable
to Lender.
9.15 Xxxxxxxx' Real Estate and Asset Purchase and Sale
Agreement. Closing of the transactions described in the Xxxxxxxx' Real
Estate and Asset Purchase and Sale Agreement, and conveyance of the
assets described therein to Borrower free and clear of all liens, claims
and/or encumbrances.
9.16 Sigmatron Stock. Delivery of original stock certificates
issued in the name of CSI for 400,000 shares of Sigmatron Stock.
10. EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute and "Event of Default" for purposes of this
Agreement:
10.1 Payment. Failure to pay within five (5) days after the
date when due any installment of principal or interest, or failure to
pay, within ten (10) days after written notice from Lender, any other
amount payable pursuant to either Note, this Agreement or any of the
other Loan Documents.
10.2 Performance. Failure by Borrower to promptly perform any
other obligation or observe any other condition, covenant, term,
agreement or provision required to be performed or observed by Borrower
under this Agreement, either Note, or any other Loan Document, after
thirty (30) days notice thereof from Lender.
10.3 Misrepresentation. Any inaccuracy, untruth or failure to
perform in any material respect of any representation, covenant or
warranty contained in this Agreement or any other Loan Documents, or of
any statement or certification as to facts delivered to Lender pursuant
hereto.
10.4 Material Change. A material adverse change in the
financial condition of Borrower or any Guarantor.
10.5 Voluntary Bankruptcy. At any time, Borrower or any
Guarantor files a bankruptcy petition, or is adjudicated a bankrupt or
insolvent, or institutes (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
composition, readjustment, dissolution, liquidation or similar
proceedings under any present or future Federal, state or other statute
or law, or admits in writing his or its inability to pay his or its debts
as they mature, or makes an assignment for the benefit of his or its
creditors, or seeks or consents to the appointment of any receiver,
trustee or similar officer for all or any substantial part of his or its
property.
10.6 Involuntary Bankruptcy. The commencement of any
involuntary petition in bankruptcy against Borrower or any Guarantor, or
the institution against Borrower, Beneficiary or any Guarantor of any
reorganization, arrangement, composition, readjustment, dissolution,
liquidation or similar proceedings under any present or future Federal,
state or other statute or law, or the appointment of a receiver, trustee
or other officer for all or any substantial part of the property of
Borrower or any Guarantor, which shall remain undismissed or undischarged
for a period of sixty (60) days.
10.7 Receiver. The attachment, seizure, levy upon or taking of
possession by any receiver, custodian, or assignee for the benefit of
creditors of a substantial portion of Borrower's or any Guarantor's
property.
10.8 Sale or Transfer. Any sale, transfer, lease, assignment,
conveyance, lien or encumbrance made in violation of the terms hereof.
10.9 Injunction. Failure of Borrower for a period of thirty
(30) days after Lender's demand to procure the dismissal or disposition
to Lender's satisfaction of any proceedings seeking to enjoin or
otherwise prevent or declare invalid or unlawful the occupancy,
maintenance or operation of the PCB Facility, or any portion thereof, as
called for by the terms of this Agreement, or of any proceedings which
could or might affect the validity or priority of the security for the
Loan or which could materially affect Borrower's ability to perform its
obligations under this Agreement.
10.10 Cross Default. The occurrence of a default under any
of the other loans made or participated in by Lender in which Borrower,
or an entity affiliated with Borrower, Beneficiary or any Guarantor is a
party, including, without limitation, the Existing CSI Loan.
10.11 Death of Guarantor. The death or legal incompetence
of any Individual Guarantor.
10.13 Non-Payment of Other Indebtedness for Borrowed Money.
Default in the payment when due (subject to any applicable cure period),
whether by acceleration or otherwise, of any other indebtedness for
borrowed money of, or guaranteed by, Borrower or any guarantor or default
in the performance or observance of any obligation or condition with
respect to any such other indebtedness if the effect of such default is
to accelerate the maturity of any such indebtedness, or to permit the
holder or holders thereof, or any trustee or agent for such holders, to
cause such indebtedness to become due and payable prior to its expressed
maturity date.
10.14 Other Material Obligations. Default in the payment
when due(subject to any applicable cure period), or in the performance or
observance of, any material obligation of, or condition agreed to by
Borrower with respect to any material purchase or lease of goods and
services (except only to the extent that the existence of any such
default is being contested by Borrower in good faith and by appropriate
proceedings).
10.15 Employee Benefit Plans. If a contribution failure
occurs with respect to any pension plan maintained by Borrower or any
corporation, trade or business that is, along with Borrower, a member of
a controlled group of corporations or controlled group of trades or
businesses (as defined in Sections 414(b) and (c) of the Internal Revenue
Code of 1986 or Section 4001 of ERISA) sufficient to give rise to a lien
under Section 302(f) of ERISA.
10.16 Security. If Lender is reasonably insecure.
Upon the occurrence of an Event of Default, all Liabilities
then outstanding shall become immediately due and payable, in full and
all without notice of any kind, but with such adjustments, if any, with
respect to interest or other charges as may be provided for herein or in
the Notes, the Loan Documents, or any other written agreements between
Borrower and Lender; and, in the case of any other Event of Default,
Lender may declare the Notes and all other Liabilities then outstanding
to be due and payable. Lender shall promptly advise Borrower of any such
declaration, but failure to do so shall not impair the effect of such
declaration.
11. REMEDIES.
11.1 Lender's Rights and Remedies. Lender shall have available
to it all rights and remedies available herein and/or under the Loan
Documents, including, without limitation, the following rights and
remedies:
(a) Right to Assign. Lender may assign this Agreement upon
prior written notice to Borrower (but such notice shall not imply
that any consent from Borrower is necessary to effect any such
assignment), and if Lender does assign this Agreement, the assignee
shall be entitled to the performance of all of Borrower's agreements
and obligations under this Agreement, and the assignee shall be
entitled to all the rights and remedies of Lender under this
Agreement, and Borrower expressly agrees that it will assert no
claims or defenses it may have against Lender against the assignee
except those available to it in this Agreement.
(b) Right to Discharge Borrower's Obligations. Lender may, at
its option, discharge taxes, liens or security interests or other
encumbrances at any time levied or placed on the Collateral, may
remedy or cure any default of Borrower under the terms of any lease,
rental agreement, or other document which in any way pertains to or
affects Borrower's title to or interest in any of the Collateral,
may pay for insurance on the Collateral, and may pay for the
maintenance and preservation of the Collateral, and Borrower agrees
to reimburse Lender, on demand, for any payment made or any expense
incurred by Lender, including reasonable attorneys' fees, pursuant
to the foregoing authorization, together with interest at the
Default Rate from the date so paid or incurred by Lender, which
payments, expenses and interest shall be secured by the security
intended to be afforded by this Agreement and/or by the Security
Agreements and the Collateral.
(c) Right of Enforcement. Lender shall have and may exercise
any and all rights of enforcement and remedies before or after
default afforded to a bank under the applicable Uniform Commercial
Code in force (the "Uniform Commercial Code" or the "UCC")
together with any and all other rights and remedies otherwise
provided and available to Lender at law or in equity as of the date
of this Agreement or the date of Borrower's default; and, in
conjunction with, in addition to, or substitution for those rights
and remedies, at Lender's discretion, Lender may:
(i) To the extent permitted by law, enter upon Borrower's
premises to take possession of, assemble and collect the
Collateral or to render it or any portion of the Collateral
unusable; and/or
(ii) Remedy any default in any reasonable manner, without
waiving its rights and remedies upon default and without
waiving any other prior or subsequent default.
(d) Right of Sale.
(i) Borrower agrees that should it fail to make payments
as provided in the Notes, the Master Lease or the other Loan
Documents, or if a default be made on any obligation or promise
of Borrower contained herein or hereby secured or contained in
or secured by the Notes, the Master Lease or the other Loan
Documents, then Lender may, at its option, sell or dispose of
the Collateral at public or private sale without any previous
demand of performance or notice to Borrower of any such sale
whatsoever, except as provided under the Uniform Commercial
Code, and from the proceeds of sale retain: (A) all costs and
charges incurred by Lender in taking and causing the removal
and sale of said property, including such reasonable attorneys'
fees as shall have been incurred by Lender; (B) all sums due
pursuant to the Notes, the Master Lease, the Loan Documents,
and this Agreement, and all accrued interest thereon; and (C)
all monies due from Borrower to Lender under any other
indebtedness or obligation and all accrued interest thereon.
Any surplus of such proceeds remaining shall be paid to
Borrower.
(ii) At any sale or sales made pursuant to this Agreement
or in a suit to foreclose the same, the Collateral may be sold
en masse or separately, at the same or at different times, at
the option of Lender or its assigns. Such sale may be public
or private, with notice as required by the Uniform Commercial
Code, and the Collateral need not be present at the time or
place of sale. At any such sale, Lender or the holder of the
Notes hereby secured may bid for and purchase any of the
property sold, notwithstanding that such sale is conducted by
Lender or its attorneys, agents, or assigns, and no
irregularity in the manner of sale or of giving notice shall
operate to preclude Lender from recovering the Indebtedness.
(iii) If any notification of intended sale or other
disposition of the Collateral or any part thereof is required
under the Uniform Commercial Code or other law, such
notification, if mailed, shall be deemed reasonably and
properly given if mailed to Borrower at least ten (10) days
before such sale or disposition.
(e) Upon an Event of Default, Borrower, immediately upon
demand by Lender, shall assemble the Collateral and make it
available to Lender at a place or places to be designated by Lender
which is reasonably convenient to Lender and Borrower. Borrower
recognizes that in the event Borrower fails to perform, observe or
discharge any of its obligations or liabilities under this Agreement
or the Other Agreements, no remedy of law will provide adequate
relief to Lender, and agrees that Lender shall be entitled to
temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.
(f) Upon an Event of Default, without notice, demand or legal
process of any kind, Lender may take possession of any or all of the
Collateral (in addition to Collateral of which it already has
possession), wherever it may be found, and for that purpose may
pursue the same wherever it may be found, and may enter into any of
Borrower's premises where any of the Collateral may be or is
supposed to be, and search for, take possession of, remove, keep and
store any of the Collateral until the same shall be sold or
otherwise disposed of, and Lender shall have the right to store the
same in any of Borrower's premises without cost to Lender.
(g) Upon an Event of Default, Lender may exercise any remedies
available under the Master Lease.
(h) Upon an Event of Default, Borrower agrees that Lender may,
if Lender deems it reasonable, postpone or adjourn any such sale of
the Collateral from time to time by an announcement at the time and
place of sale or by announcement at the time and place of such
postponed or adjourned sale, without being required to give a new
notice of sale. Borrower agrees that Lender has no obligation to
preserve rights against prior parties to the Collateral. Further,
to the extent permitted by law, Borrower waives and releases any
cause of action and claim against Lender as a result of Lender's
possession, collection or sale of the Collateral, any liability or
penalty for failure of Lender to comply with any requirement imposed
on Lender relating to notice of sale, holding of sale or reporting
of sale of the Collateral, and any right of redemption from such
sale.
(i) Miscellaneous. Lender shall have the right at all times
to enforce the provisions of this Agreement in strict accordance
with the terms hereof, notwithstanding any conduct or custom on the
part of Lender in refraining from so doing at any time or times.
The failure of Lender at any time or times to enforce its rights
under said provisions strictly in accordance with the same shall not
be construed or operate as a waiver of any of the rights and
remedies granted Lender hereunder or as having created a custom in
any way or manner contrary to the specific provisions of this
Agreement or as having in any way or manner modified the same. All
rights and remedies of Lender are cumulative and concurrent, and the
exercise of one right or remedy by Lender shall not be deemed a
waiver or release of any other right or remedy. Except as otherwise
specifically required herein, notice of the exercise of any right,
remedy or power granted to Lender by this Agreement is not required
to be given.
12. MISCELLANEOUS.
12.1 All payments of principal and interest on the Loan shall
be made to Lender in immediately available funds not later than 2 p.m.
Chicago time on the date such payments are to be made.
12.2 If any advances or payments made by Lender pursuant to
this Agreement or any other Loan Document, together with disbursements of
the Loan, shall exceed the face amount of the Note, all such advances and
payments shall constitute additional indebtedness secured by the Loan
Documents, and shall bear interest at the Default Rate from the date
advanced until paid.
12.3 Borrower shall, upon request, execute and deliver such
further instruments and documents and do such further acts and things as
may be required to provide to Lender the evidence of and security for the
Loan contemplated by this Agreement.
12.4 In the event of any inconsistency between any provision of
this Agreement and any provision of any other Loan Document, the
provision of this Agreement shall govern.
12.5 If Borrower fails to perform any obligation of Borrower
under this Agreement or any other Loan Document, or if any Event of
Default shall occur hereunder or under any other Loan Document, Lender
may, but shall not be obligated to, perform such obligation or cure such
default, and all amounts expended in so doing, all Loan Expenses and all
other amounts paid or advanced by Lender pursuant to the Loan Documents,
and all other amounts advanced by Lender in connection with construction
or preserving any security for the Loan, shall constitute additional
advances of the Loan, shall be secured by the Mortgage, and all other
Loan Documents, and shall bear interest at the Default Rate from the date
advanced until paid.
12.6 This Agreement may only be amended, modified or
supplemented by the written agreement of Borrower and Lender. No waiver
of any provision of this Agreement or any other Loan Documents shall be
effective unless set forth in writing signed by Lender, and any such
waiver shall be effective only to the extent therein set forth. Failure
by Lender to insist upon full and prompt performance of any provisions of
this Agreement or any other Loan Documents, or to take action in the
event of any breach of any such provision or Event of Default, shall not
constitute a waiver of any rights of Lender, and Lender may at any time
thereafter while such breach or Event of Default remains uncured exercise
all rights specified herein or provided by applicable law with respect to
such breach or Event of Default.
12.7 Any notice which any party hereto gives to any other party
hereunder shall be in writing and shall be deemed given when delivered in
person to a representative of the party, or two business days after
deposited in the United States certified or registered mail, return
receipt requested, addressed to the party, at the address of such party
set forth below, or at such other address as the party to whom notice is
to be given has specified by notice hereunder to the party seeking to
give such notice:
Borrower c/o Circuit Systems, Inc.
or any 0000 Xxxx Xxxx Xxxxxx
Guarantor: Elk Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxx
Copy to: Xxxxx and Xxxxxx
00 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Lender: American National Bank and Trust
Company of Chicago
00 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Vice President
Copy to: Xxxxxxx, Xxxxxxx & Xxxxxx
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
12.8 The rights, powers and remedies of Lender under this
Agreement shall inure to the benefit of Lender, its successors and
assigns. Lender shall have the absolute right to assign all or any
portion of its rights, powers and remedies under this Agreement.
12.9 This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Illinois, without
regard to the conflicts of laws rules thereof.
12.10 Except as arises out of Lender's gross negligence or
willful misconduct, Borrower agrees to indemnify, defend and hold Lender
harmless from and against any and all liabilities, obligations, losses,
damages, claims, costs and expenses (including reasonable attorneys' fees
and court costs) of whatever kind or nature which may be imposed on,
incurred by or asserted against Lender at any time which relate to or
arise from the making of the Loan by Lender, and/or the ownership, use,
operation or maintenance of the PCB Facility, including without
limitation, any brokerage commissions or finder's fees asserted against
Lender with respect to the making of the Loan and any damages incurred by
Lender by reason of the construction of Borrower and Lender as having the
relationship of joint venturers or partners or Borrower or Lender being
deemed to have acted as agent for the other.
12.11 This Loan Agreement is based primarily on the credit
worthiness and representation of Borrower and Guarantors to whom it is
made. The rights and obligations of Borrower under this Agreement may
not be assigned, assumed nor transferred and any other purported action
by Borrower shall be null and void. It is further understood and agreed
that, except as specifically provided herein, the ownership, stock, or
control of Borrower, or any partnership interest in Borrower, or a
substantial portion of Borrower's assets may not be transferred,
conveyed, or alienated in any form, without the written consent of
Lender.
12.12 The titles and headings of the articles and paragraphs
of this Agreement have been inserted as a matter of convenience of reference
only and shall not control or affect the meaning or construction of any of
the terms or provisions of this Agreement.
12.13 Lender, by executing and performing this Agreement,
does not become a partner or joint venturer with Borrower and all
inspections of the Collateral herein provided for are for the sole
benefit of Lender.
12.14 Time is of the essence of the payment of all amounts
due Lender under this Agreement and performance and observance by
Borrower of each covenant, agreement, provision and term of this
Agreement.
12.15 In the event any one or more of the provisions
contained in this Agreement or in any of the Loan Documents shall for any
reason be held to be invalid, illegal or unenforceable in any respect by
a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall at the option of Lender, not affect any other
provision of this Agreement or any such Loan Document, and this Agreement
and any such Loan Document shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein or therein.
12.16 Should a claim ("Recovery Claim") be made upon
Lender at any time for recovery of any amount received by Lender in
payment of Borrower's Liabilities (whether received from Borrower or
otherwise) and should Lender repay all or part of said amount by reason
any judgment, decree or order of any court or administrative body of (1)
having jurisdiction over Lender or any of its property; or (2) any
settlement or compromise of any such Recovery Claim effected by Lender
with the claimant (including Borrower), this Agreement and the security
interests granted Lender hereunder shall continue in effect with respect
to the amount so repaid to the same extent as if such amount had never
originally been received by Lender, notwithstanding any prior termination
of this Agreement, the return of this Agreement to Borrower, or the
cancellation of any note or other instrument evidencing Borrower's
Liabilities. Borrower may not sell, assign or transfer this Agreement,
or the Other Agreements or any portion thereof.
12.17 Lender's failure to require strict performance by
Borrower of any provision of this Agreement shall not waive, affect or
diminish any right of Lender thereafter to demand strict compliance and
performance therewith. Any suspension or waiver by Lender of an Event of
Default by Borrower under this Agreement or the Other Agreements shall
not suspend, waive or affect any other Event of Default by Borrower under
this Agreement or the Other Agreements, whether the same is prior or
subsequent thereto and whether of the same or of a different type. None
of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or the Other
Agreements and no Event of Default by Borrower under this Agreement or
the Other Agreements shall be deemed to have been suspended or waived by
Lender unless such suspension or waiver is by an instrument in writing
signed by an officer of Lender and directed to Borrower specifying such
suspension or waiver.
12.18 Borrower hereby appoints Lender as Borrower's agent
and attorney-in-fact for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any agreement,
instrument or document which Lender may reasonably deem necessary or
advisable to accomplish the purposes hereof which appointment is
irrevocable and coupled with an interest. All monies paid for the
purposes herein, and all costs, fees and expenses paid or incurred in
connection therewith, shall be part of Borrower's Liabilities, payable by
Borrower to Lender on demand.
12.19 This Agreement, or a carbon, photographic or other
reproduction of this Agreement or of any Uniform Commercial Code
financing statement covering the Collateral or any portion thereof, shall
be sufficient as a Uniform Commercial Code financing statement and may be
filed as such.
12.20 Except as otherwise provided in the Other Agreements,
if any provision contained in this Agreement is in conflict with, or
inconsistent with, any provision in the Other Agreements, the provision
contained in this Agreement shall govern and control.
12.21 Except as otherwise specifically provided in this
Agreement, Borrower waives any and all notice or demand which Borrower
might be entitled to receive by virtue of any applicable statute or law,
and waives presentment, demand and protest and notice of presentment,
protest, default, dishonor, non-payment, maturity, release, compromise,
settlement, extension or renewal of any and all agreements, instruments
or documents at any time held by Lender on which Borrower may in any way
be liable.
12.22 Until Lender is notified by Borrower to the contrary
in writing by registered or certified mail directed to Lender's principal
place of business, the signature upon this Agreement or upon any of the
Other Agreements of any partner, manager, employee or agent of the
Borrower, or of any other Person designated in writing to Lender by any
of the foregoing, shall bind Borrower and be deemed to be the duly
authorized act of Borrower.
12.23 If at any time or times hereafter, whether or not
Borrower's Liabilities are outstanding at such time, Lender: (a) employs
counsel for advice or other representation, (i) with respect to the
Collateral, this Agreement, the Other Agreements or the administration of
Borrower's Liabilities, (ii) to represent Lender in any litigation,
arbitration, contest, dispute, suit or proceeding or to commence, defend
or intervene or to take any other action in or with respect to any
litigation, arbitration, contest, dispute, suit or proceeding (whether
instituted by Lender, Borrower or any other Person) in any way or respect
relating to the Collateral, this Agreement, the Other Agreements, or
Borrower's affairs, or (iii) to enforce any rights of Lender against
Borrower or any other Person which may be obligated to Lender by virtue
of this Agreement or the Other Agreements; (b) takes any action with
respect to administration of Borrower's Liabilities or to protect,
collect, sell, liquidate or otherwise dispose of the Collateral; and/or
(c) attempts to or enforces any of Lender's rights or remedies under this
Agreement or the Other Agreements, including, without limitation,
Lender's rights or remedies with respect to the Collateral, the
reasonable costs and expenses incurred by Lender in any manner or way
with respect to the foregoing, shall be part of Borrower's Liabilities,
payable by Borrower to Lender on demand.
12.24 BORROWER AND EACH GUARANTOR IRREVOCABLY AGREE THAT,
SUBJECT TO LENDER'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR
RELATED TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR THE COLLATERAL SHALL BE
LITIGATED ONLY IN COURTS HAVING SITUS WITHIN EITHER THE CITY OF CHICAGO,
STATE OF ILLINOIS OR THE CITY OF GREENEVILLE, STATE OF TENNESSEE.
BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN SAID CITIES AND STATE. BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF
ANY LITIGATION BROUGHT AGAINST BORROWER BY LENDER IN ACCORDANCE WITH THIS
PARAGRAPH.
12.25 BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR PROCEEDING (I) TO ENFORCE OR
DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE LOAN
DOCUMENTS, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY ARISING IN
CONNECTION WITH OR RELATED TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY
SUCH AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT, AND AGREES THAT ANY
SUCH ACTION, SUIT, COUNTERCLAIM OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
12.26 Notwithstanding anything herein contained to the
contrary, Lender will not be required to make any disbursement or perform
any other act under this Agreement if as a result thereof, Lender will
violate any law, statute, ordinance, rule, regulation or judicial
decision applicable thereto. This Agreement may be executed and
delivered by any party hereto by way of counterpart, which, when taken
together with all executed counterparts hereof shall constitute a single
agreement; provided, however, that any counterpart, when taken separately
from other counterparts shall be fully binding and enforceable as against
the party signatory thereto, without respect to the other counterparts.
Dated: July 24, 1997
LENDER:
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By:/s/ Xxxxx X. Cygan_
Xxxxx X. Xxxxx
Its: Vice President
BORROWER:
CIRCUIT SYSTEMS OF TENNESSEE, L.P.,
a Tennessee limited partnership
By: CIRCUIT SYSTEMS, INC.,
its general partner
By: /s/ Xxxxx X. Xxxx
Its: Vice-President
ATTEST:
By: /s/ Xxxxxx X. Xxxxx
Its: Secretary
GUARANTORS:
CIRCUIT SYSTEMS OF TENNESSEE, INC.,
a Tennessee corporation
By: /s/ Xxxxx X. Xxxx
Its: Vice-President
CIRCUIT SYSTEMS, INC., an Illinois corporation
By: /s/ Xxxxx X. Xxxx
Its: Vice-President
SCHEDULE OF EXHIBITS
Exhibit A Existing Litigation
Exhibit B Master Lease
Exhibit C Permitted Indebtedness
Exhibit D Permitted Liens
Exhibit E 12-Month Term Note
Exhibit F 60-Month Term Note
Exhibit G Seventh Amendment to Secured Revolving
Credit Agreement
Exhibit H Continuing Security Agreement
EXHIBIT A
EXISTING LITIGATION
None.
EXHIBIT B
MASTER LEASE
EXHIBIT C
PERMITTED INDEBTEDNESS
None.
EXHIBIT D
PERMITTED LIENS
None.
EXHIBIT E
12-MONTH TERM NOTE
EXHIBIT F
60-MONTH TERM NOTE
EXHIBIT G
SEVENTH AMENDMENT TO SECURED
REVOLVING CREDIT AGREEMENT
EXHIBIT H
CONTINUING SECURITY AGREEMENT
