Exhibit 10(a)
BANK OF SCOTLAND
Corporate Banking (Scotland)
New Uberior House
00 Xxxx Xxxx Xxxxxx
Xxxxxxxxx
XX0 0XX
Techdyne, Inc. DIRECT LINE: 0131 659 0807
Commission File No: 0-14659 FAX: 0000 000 0000
0000 Xxxx 00xx Xxxxxx
Xxxxxxx
Xxxxxxx, 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Date: 2nd October 2001
Dear Sirs
TERM LOAN OF US$7,000,000
We are pleased to offer Techdyne Inc. (the BORROWER) a term loan of US$7,000,000
in aggregate (the TERM LOAN FACILITY). This offer is open for acceptance by the
Borrower until 1st November 2001, when it will lapse. If accepted, this letter
and its schedules will form the agreement between the Borrower and BoS for the
Term Loan.
Definitions are given in Clause 18 below.
1. CONDITIONS PRECEDENT
The Term Loan will not be available until BoS has received, in form and
substance satisfactory to it, the documents and evidence detailed in
Schedule 1.
2. THE TERM LOAN
2.1 PURPOSE
The Borrower may only use the Term Loan to refinance the
Existing Facilities in full.
2.2 DRAWDOWN
The Borrower may draw the Term Loan in one amount before 1st
December 2001 by giving a Notice of Drawdown no later than 11
am (London time) on the proposed date of drawdown (which must
be a Business Day).
2.3 REPAYMENT
The Term Loan shall (subject to the other provisions of this
letter) be repaid by twenty eight equal quarterly instalments
of US$250,000 each, with the first such instalment to be paid
on the date three months after the Drawdown Date.
2.4 INTEREST
2.4.1 The period for which the Term Loan is outstanding
shall be divided into successive periods each of
which will start on the expiry of the previous period
or, in the case of the first Interest Period, on
drawdown.
2.4.2 The Borrower will pay interest on the Term Loan for
each Interest Period at the annual rate which is the
sum of (1) the Margin and (2) LIBOR.
2.4.3 Interest will be paid in arrears on each Interest
Payment Date.
2.4.4 The Borrower may select Interest Periods of one,
three or six months (subject to 2.4.6 below and/or as
otherwise agreed by BoS).
2.4.5 If the Borrower does not select an Interest Period by
11 am (London time) on the Business Day preceding its
commencement then subject to 2.4.6 below, that
Interest Period will be three months.
2.4.6 The end of each Interest Period will coincide with
one of the repayment dates set out in Clause 2.3
above. No Interest Period may extend beyond the Final
Repayment Date.
2.4.7 If there is a repayment, prepayment or recovery of
the Term Loan other than on the last day of an
Interest Period, then the Borrower will pay BoS an
amount (1) equal to the amount (if any) by which (2)
interest which would have been payable on the amount
received at the end of that Interest Period exceeds
interest which, in the opinion of BoS, would have
been payable on a deposit of equal amount placed with
a prime bank in London for a period from the first
Business Day after the early payment or recovery
until the end of that Interest Period and the
Borrower indemnifies BoS against any other costs,
liabilities or expenses incurred by BoS because of
that early payment or recovery.
2.5 PREPAYMENT
The Borrower may prepay all or part of the Term Loan provided
that:-
2.5.1 the Borrower has given BoS at least 2 Business Days'
notice in writing of the intention to prepay;
2.5.2 the prepayment is made on the last day of an Interest
Period, or the Borrower has met its obligations under
2.4.7 above;
2.5.3 amounts prepaid may not be redrawn;
2.5.4 any prepayment is at least US$250,000 and is
accompanied by accrued interest on the amount
prepaid;
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2.5.5 any amount prepaid is applied against instalments due
in the inverse order in which they are otherwise
payable; and
2.5.6 BoS is paid, by way of compensation for early
repayment, an amount equal to 1% of the amount
prepaid should the reason for prepayment be a
refinancing of all or any part of the Term Loan by a
third party within three years of the Drawdown Date.
3. HEDGING
The Borrower, after consultation with BoS, shall enter into such
interest rate protection agreements (with BoS Group) regarding exposure
to interest rates as the Borrower and BoS may agree from time to time.
Any fee or premium payable to BoS or to any other person in connection
with such agreements shall be payable by the Borrower on demand and the
Borrower hereby indemnifies BoS (and any of its subsidiaries) against
all and any liabilities, losses, damages, costs and other amounts which
may arise out of or in connection with such arrangements (including,
without limitation, the termination of such arrangements) save as a
result of the gross negligence or wilful default of BoS.
4. DEFAULT INTEREST
4.1 If any Borrower fails to pay any sum under or in relation to the Term
Loan on its due date then the Borrower will pay interest on it until it
is paid at the Default Rate.
4.2 Default interest payable must be paid monthly in arrears and if not
paid will itself bear interest.
5. SECURITY
5.1 As security for the Term Loan and any other money owing or incurred to
BoS by any Group Company (including contingent liabilities and all
amounts due to BoS in respect of payment commitments entered into by
BoS on behalf of any Group Company but not yet debited to that
company's account) the Borrower will deliver or procure delivery of the
security detailed in Schedule 1.
5.2 The Borrower will grant such further security to BoS as it may require
from time to time and procure that any subsidiary undertaking which is
created or is acquired by any Group Company after the date of this
letter will grant such security to BoS as it shall notify to the
Borrower from time to time; all such further security will secure the
Term Loan and any other money owing or incurred to BoS by any Group
Company (including contingent liabilities).
6. REPRESENTATIONS AND WARRANTIES
The Borrower by signing this letter makes the representations and
warranties set out in Schedule 2 and repeats each of them on each
Interest Payment Date.
7. COVENANTS
The Borrower covenants with BoS that from the date of its acceptance of
this letter until all the Borrower's obligations under it have been
discharged:-
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7.1 GENERAL COVENANTS
The Borrower will at all times comply and procure compliance
by each Group Company with the general covenants set out in
Schedule 3.
7.2 FINANCIAL COVENANTS
The Borrower will at all times comply with the financial
covenants set out in Schedule 4.
7.3 FINANCIAL INFORMATION COVENANTS
The Borrower will at all times comply with the financial
information covenants set out in Schedule 5.
8. DEFAULT AND INDEMNITY
8.1 If any of the events set out in Schedule 6 occurs, BoS may elect to
treat the occurrence of that event (while the same is continuing
unwaived) as an Event of Default and may by notice in writing to the
Borrower:-
8.1.1 cancel any part of the Term Loan then undrawn; and/or
8.1.2 require repayment (immediately or otherwise as BoS may
require) of the Term Loan together with accrued interest;
and/or
8.1.3 require that interest is payable on the Term Loan at the
Default Rate; and/or
8.1.4 charge an administration fee to compensate for the additional
time spent in administering the Term Loan.
8.2 The Borrower will indemnify (and keep indemnified) BoS on written
demand against any loss or expense, including legal fees, which BoS
sustains or incurs:-
8.2.1 because of a default by any Group Company of any
obligation assumed by it under any BOS Document; or
8.2.2 as a consequence of any Event of Default.
9. TAXES AND INCREASED COST
9.1 (a) All payments by the Borrower to BoS under this letter
shall be free and without deduction of tax unless the Borrower
is required by law to make a payment subject to deduction or
withholding of tax, in which case the amount payable by the
Borrower will be sufficiently increased to ensure that BoS
receives and retains a net sum equal to that which it would
have received and retained were no deduction or withholding
made. If BoS subsequently receives a tax credit which enhances
its position beyond that, then it will reimburse the Borrower
sufficient to redress the position up to the amount received
so long as by so doing it does not prejudice receipt or
retention of the tax credit.
(b) BoS or any other lender or issuing bank that is not created or
organized under the laws of the United States or a political
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subdivision thereof shall deliver to the Borrower on the date
such lender becomes a lender or such issuing bank becomes an
issuing bank a true and accurate certificate in the Form of
IRS Form W-8 BEN (Certificate of Foreign Status of Beneficial
Owner for United States Tax Withholding) executed in duplicate
by a duly authorized officer of such lender or issuing bank to
the effect that such lender or issuing bank is eligible to
receive payments hereunder and under the Notes without
deduction or withholding (or with reduced deduction or
withholding) of United States federal income tax under the
provisions of an applicable tax treaty concluded by the United
States.
9.2 If BoS incurs an Increased Cost, then the Borrower will indemnify it
and will promptly pay to it the amount BoS certifies as payable. BoS
will disclose, in reasonable detail, the basis of its calculation but
not any matter which it considers confidential.
10. PAYMENT, SET OFF AND INTEREST CALCULATIONS
10.1 All payments of principal, interest or commission will be paid to BoS
at the Borrower's branch unless BoS otherwise directs and shall be in
cleared US Dollar funds free of set-off or counterclaim.
10.2 All sums of interest or commission will be calculated on the basis of a
year of 360 days and for the actual number of days elapsed following
decree or judgement as well as before it.
10.3 Any determination by BoS of any amount of principal, interest,
commission or charges or an applicable interest rate shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
10.4 Where the due date for payment of any sum under any BoS Document is not
a Business Day then (without affecting subsequent payment dates) actual
payment will be required on the next Business Day unless that day falls
in the next calendar month, in which case payment will be on the
preceding Business Day.
10.5 The Borrower agrees that any monies from time to time standing to their
credit on any account with BoS may be retained as cover for and at any
time without notice to the Borrower applied by BoS in or towards
payment or satisfaction of any monies or liabilities now or from time
to time due, owing or incurred by the Borrower to BoS in whatsoever
manner, whether presently payable or not, whether actually or
contingently, whether solely or jointly with any other person and
whether as principal or surety.
10.6 If BoS exercises any right of set-off in respect of any liability of
the Borrower and that liability or any part of it is in a different
currency from any credit balance against which BoS seeks to set it off,
BoS may use the currency of the credit balance to purchase an amount in
the currency of the liability at the then prevailing spot rate of
exchange and to pay out of the credit balance all costs, charges and
expenses incurred by BoS in connection with that purchase.
10.7 In the event that any currency in which any of the obligations under
the BoS Documents are denominated from time to time is changed or
replaced at any time after the date of this letter (whether as a result
of the introduction of, changeover to or operation of a single or
unified European currency or otherwise), the BoS Documents will be
amended to the extent that BoS (acting reasonably) considers to be
required in order to reflect those circumstances.
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11. ILLEGALITY
If, in the opinion of BoS, the introduction of any law or regulation or
change in its interpretation, makes it unlawful for BoS to maintain any
part of the Term Loan or carry out any of its obligations in relation
to it then BoS will serve notice to that effect on the Borrower and
that notice will release BoS from those obligations. The Borrower will
then repay BoS on its demand or on whatever later date BoS reasonably
specifies the Term Loan together with any other sums payable to BoS
under this letter.
12. Assignment and Transfer
12.1 This letter is for the benefit of the Borrower and XxX and their
successors and assignees and transferees of BoS.
12.2 The Borrower may not assign or transfer all or any part of its rights,
obligations or benefits under this letter.
12.3 BoS will be entitled (after consultation with the Borrower) to (i)
assign, novate or transfer and (ii) permit a participation in all or
any part of its rights and obligations under this letter to or by any
other Qualifying Bank or Banks. The Borrower undertakes to execute and
to procure that each Group Company will execute all documents BoS may
reasonably require to give effect to an assignation, novation or
transfer. If BoS does enter into a participation arrangement, the
Borrower will continue to deal directly with XxX as agent.
12.4 BoS will be entitled to disclose to any prospective or actual assignee,
transferee or participant or any other member of the BoS Group
confidential information concerning each Group Company and its
financial condition and any other information which may be given to BoS
in relation to this letter so long as any of the same shall also be
handled in confidential manner.
13. NOTICES
Unless otherwise provided in this letter, all notices or other
communications to or between the parties will be in writing and:-
13.1 will be by fax transmission, authenticated to the satisfaction
of BoS and will be deemed to have been received when sent
(provided a transmission report is received) unless hand
delivered and then at the time of delivery;
13.2 in order to prove that a notice or demand has been made, BoS
need only establish that the notice or demand was properly
addressed and posted or transmitted;
13.3 if given to BoS, it will be given at the address at the head
of this letter or at any other address in the UK which BoS may
designate at any time by notice to the Borrower;
13.4 if given to the Borrower, it will be deemed to be duly given
if given at the address of the Borrower shown above or at any
other UK or USA address the Borrower designates by notice to
BoS;
13.5 BoS may rely upon any communication by telephone or fax or
purporting to be on behalf of the Borrower by anyone notified
to BoS as being authorised without enquiry by XxX as to
authority or identity. The Borrower agrees to indemnify BoS
against any liability incurred or sustained by BoS as a
result.
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14. PRESS RELEASE
The Borrower and BoS shall agree the terms of any public announcement
or press release concerning the terms of this letter.
15. WAIVERS AND SEVERABILITY
15.1 No failure or delay by BoS in exercising any right or remedy under any
BoS Document shall operate as a waiver, and no single or partial
exercise shall prevent further exercise, of any right or remedy.
15.2 If any part of this letter is not valid or enforceable then that shall
not affect any other part.
15.3 The Schedules referred to in this letter shall form part of this
letter.
16. BANKING ARRANGEMENTS
The Borrower will procure that where the aggregate of cash or cash
balances held by the Group exceeds US$1,000,000 (or the equivalent in
any other currency), any such excess shall immediately be remitted to
an account of the Borrower with BoS.
17. FEES AND EXPENSES
17.1 The Borrower will pay to BoS an arrangement fee of US$25,000 payable on
drawdown of the Term Loan and which shall be debited to the current
account of the Borrower with BoS;
17.2 The Borrower will pay or reimburse to BoS (on a full indemnity basis)
all reasonable legal, accountancy, valuation, due diligence and other
fees, costs and expenses or tax charged to or incurred by BoS in
connection with BoS Documents (including the amendment, waiver,
enforcement or preservation of the BoS rights) on demand.
18. INTERPRETATION AND DEFINITIONS
The definitions given in Schedules 4 and 8 shall apply to this letter.
19. LAW
This letter will be governed by and construed according to Scots law
and the Borrower submits to the jurisdiction of the Scottish Courts.
Yours faithfully
........................
for and on behalf of
THE GOVERNOR AND COMPANY
OF THE BANK OF SCOTLAND
Xxxxxx and accepted on behalf of TECHDYNE, INC.
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.................................
Director
...................................
Director/Secretary
Date:
IMPORTANT NOTICE: AS WITH ANY LEGALLY BINDING AGREEMENT, WE RECOMMEND THAT YOU
CONSULT YOUR SOLICITOR OR OTHER INDEPENDENT LEGAL ADVISER BEFORE ACCEPTING THIS
LETTER.
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THIS IS THE SCHEDULE 1 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 1
CONDITIONS PRECEDENT
1. DRAWDOWN
A Notice of Drawdown.
2. SECURITY
2.1 A general security agreement between the Borrower, Lytton Inc.
("Lytton") and BoS securing the Borrower's obligations to BoS.
2.2 A pledge agreement between the Borrower, Lytton and BoS securing the
Borrower's obligations to BoS.
2.3 A guarantee by Xxxxxx in favour of BoS guaranteeing the Borrower's
obligations to BoS.
3. FINANCIAL INFORMATION
3.1 The most recent Financial Statements of each Group Company.
3.2 The management accounts of the Borrower for the period to June 2001.
3.3 Whatever information regarding the trading and financial position of
each Group Company that BoS may reasonably require.
4. ACQUISITION AGREEMENT
A certified copy of the Acquisition Agreement.
5. CONSTITUTIONAL DOCUMENTS
5.1 Certified Copies of constitutional documents of the Borrower.
5.2 Certified Copies of good standing certificates in relation to the
Borrower.
6. REFINANCING
6.1 Evidence that all Security Rights, guarantees and indemnities granted
by any Group Company in respect of the Existing Facilities have been or
will be discharged at or before drawdown.
6.2 Details of all bonds, indemnities and guarantees issued by any bank or
other person on behalf of any Group Company.
6.3 Evidence that all Borrowings of the Group other than the Permitted
Borrowings have been repaid or will at drawdown of the Term Loan be
repaid.
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7. ADMINISTRATIVE/SECRETARIAL
7.1 A Director's Certificate.
7.2 Account mandates in respect of the Borrower.
8. TAXATION
If possible, evidence that all taxation documentation necessary to
enable the Borrower to make payments free and without deduction of tax
have been entered into.
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THIS IS THE SCHEDULE 2 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 2
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:-
1. each Group Company is duly organised or incorporated, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation;
2. no Group Company has any Borrowings (other than Permitted Borrowings)
and no Security Right (other than a Permitted Security Right) exists
over the property or assets of any of them;
3. no Event of Default nor Potential Event of Default has occurred and is
continuing unwaived;
4. each Group Company has power to enter into and comply with its
obligations in terms of the BoS Documents;
5. each Group Company is licenced or qualified as a foreign corporation in
all jurisdictions where it is required to be so licenced or qualified
except where the failure to be so licenced, or qualified or in good
standing could not have a Material Adverse Effect.
6. everything has been done (including obtaining any necessary consents)
in order (1) for each Group Company to comply with its obligations
under the BoS Documents and (2) to ensure that those obligations are
legally binding;
7. execution of and compliance with the BoS Documents does not cause any
Group Company to breach:-
7.1 any law, regulation, judicial or official order to which it is
subject;
7.2 its memorandum or articles of association (or equivalent
constitutional documents); or
7.3 any letter, undertaking or restriction to which it is a party or
subject;
and will not result in the imposition of any Security Right (other than
under a BoS Document) on any of its assets;
8. no Material Litigation is current, pending or threatened against any
Group Company or its assets (other than as disclosed in writing to BoS
on or before the date of this letter);
9. the copies of all Certified Copy documents and other documents
delivered to BoS are true, accurate and complete in all material
respects;
10. the most recent Financial Statements of the Group were prepared in
accordance with Applicable Accounting Principles and reconciled with
GAAP and give a true and fair view of the financial condition of the
Group at the end of the relevant period and there has been no material
adverse effect in the financial condition of the Group since those
statements;
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11. the most recent management accounts of the Group have been prepared
with due care and attention and accurately reflect the financial
position of the Group in all material aspects as at their date and
there has been no material adverse effect in the financial condition of
the Group since those accounts;
12. the Borrower is the beneficial owner of the issued share capital of
each other Group Company free from any Security Right (other than a
Permitted Security Right);
13. each Group Company holds all licences and consents (including
Environmental Licences) necessary for the ownership of its property and
which allow it to comply with the terms of the BoS Documents and to
conduct its business and has complied in all material respects with
those licences and consents and with Environmental Law;
14. no Dangerous Substance has been used, disposed of or released at or
from any property owned or occupied by a Group Company or (to the best
of the Borrower's knowledge) from any adjoining property, which, in
either case, is likely to result in a liability which, in the opinion
of BoS, would have a Material Adverse Effect;
15. each Group Company is either owner or licensee of all Intellectual
Property Rights used in its business and use of them does not infringe
any third party rights;
16. it is not required or entitled at the date of this letter to make any
deduction or withholding or set-off from any payment it may make under
any of the BoS Documents;
17. each Group Company is resident in its jurisdiction of incorporation for
tax purposes and each Group Company is in compliance with all material
taxation laws in the jurisdiction of its incorporation;
18. other than as disclosed in writing to BoS on or before the date of this
letter none of the Group Companies or any of their ERISA Affiliates has
ever established, maintained, sponsored or contributed to any employee
pension benefit plan (as such term is defined in Section 3(2) of ERISA)
which is subject to Title IV of ERISA or has any material liability or
potential material liability with respect to any such plan;
19. each Plan is, and has in the past been, maintained, funded and
administered in compliance in all material respects with all applicable
provisions of ERISA, the Code and other applicable laws and
regulations;
20. each of the Plans which is an employee pension benefit plan (within the
meaning of Section 3(2) of ERISA) and which is intended to qualify
under Section 401(a) of the Code has received from the US Internal
Revenue Service a determination letter to the effect that such Plan is
so qualified. Nothing has occurred since the date of such determination
that could reasonably be expected to adversely affect the qualification
of such Plan;
21. each Group Company and each of their ERISA Affiliates has administered
and operated each plan maintained, sponsored or contributed to by any
of them which is a group health plan (as defined in Section 5000(b)(1)
of the Code) in all material respects in compliance with the applicable
requirements of Part 6 of Subtitle B of Title 1 of ERISA. Section 4980B
of the Code, and similar applicable state laws;
22. no Pension Plan has incurred any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code) whether or
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not waived. None of the Group Companies or any ERISA Affiliate has
incurred or could incur any liability to the PBGC or otherwise under
Title IV of ERISA;
23. there are no material actions, suits or claims existing or pending
against any Plan (other than routine claims for benefits) which could
reasonably be expected to result in material liability to any Group
Company;
24. no prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) has occurred with respect to any Plan
which could subject any such Plan (or its related trust) or any Group
Company or any officer, director or employee of any of the foregoing to
a material penalty or tax;
25. no civil or criminal action brought pursuant to the provisions of Title
I, Subtitle B, Part 5 of ERISA is pending or, to the best of the
knowledge of the Group Companies, threatened against any fiduciary or
any Plan and none of the Plans (or any fiduciary thereof in such
capacity) has been the direct or indirect subject of any audit,
investigation or examination by any governmental or quasi-governmental
agency;
26. no payment by a Group Company will not be deductible as a result of the
application of Section 280G of the Code in consequence of the
completion of the transactions referred to in the BoS Documents, and
none of the Group Companies will be obligated to pay any separation,
severance, termination or similar benefits solely as a result of the
completion of the transactions referred to in the BoS Documents;
27. none of the Group Companies or any of their ERISA Affiliates has ever
contributed to or been obligated to contribute to any Multiemployer
Plan or has any material liability or potential liability with respect
of any Multiemployer Plan;
28. there are no Group Companies other than Techdyne, Inc., Lytton Inc.,
Techdyne (Europe) Limited and Techdyne (Xxxxxxxxxx) Limited.
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THIS IS THE SCHEDULE 3 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 3
GENERAL COVENANTS
1. The Borrower shall, save with the prior written consent of BoS:-
1.1 ensure that its obligations in respect of the Term Loan and
the obligations of itself and each other Group Company under
the Security Documents at all times rank ahead of all other
Borrowings of each Group Company unless statutorily preferred;
1.2 notify BoS of any Event of Default or Potential Event of
Default immediately upon becoming aware of it, at the same
time describing the steps (if any) being taken to nullify or
mitigate its effects.
2. The Borrower shall, and shall procure that each other Group Company
shall, unless it has a prior written waiver from BoS:-
2.1 effect and maintain (with BoS interest noted on them)
sufficient and appropriate policies of insurance of its
business and assets and supply copies or evidence of them on
written demand by BoS;
2.2 advise BoS promptly of Material Litigation;
2.3 take whatever steps and execute whatever documents BoS may
reasonably require in order to give effect to the Security
Documents;
2.4 have and maintain all licences and authorisations necessary
under any law or regulation affecting the conduct of its
business;
2.5 comply with all Statutory Controls and promptly give to BoS a
copy of any notice concerning compliance with them;
2.6 preserve its Intellectual Property Rights and observe all
covenants and stipulations affecting them;
2.7 at the Borrower's expense, permit BoS to obtain valuations of
whatever Group assets which BoS may, at any time, reasonably
require;
2.8 on receiving the same, notify BoS of any actual or threatened
claim against any Group Company in respect of an alleged
breach of Environmental Law or remedial obligation or
liability under such law which could, if well-founded, have a
Material Adverse Effect;
2.9 indemnify BoS, any receiver appointed by XxX and their
respective officers, employees and agents against all costs
and expenses suffered or incurred by them which arise as a
result of (1) any actual or threatened breach of Environmental
Law, (2) any actual or threatened release of or exposure to a
Dangerous Substance on, at or from the premises or operations
of any Group Company or (3) any actual or threatened claim
referred to in 2.8 above whether such claim has a Material
Adverse Effect or not;
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2.10 where environmental harm in terms of the Environmental Law has
been caused to any property belonging to any Group Company
over which BoS has or will have a security interest pursuant
to a Security Document, ensure that none of the Group
Companies is the person responsible for that harm in terms of
the relevant Environmental Law and in particular, has not
caused or knowingly permitted that harm to occur, and be aware
both of the identity of the person responsible under the
relevant Environmental Law and that person's current financial
condition;
2.11 promptly on becoming aware of the same, notify BoS of any
circumstances which have given rise to (i) a material and
adverse change in relation to the financial condition of any
Plan or Pension Plan, (ii) an increase in the benefits of any
existing Plan or Pension Plan, the establishment of any new
Plan or Pension Plan or the commencement of contributions to
any Plan or Pension Plan or (iii) the occurrence of any ERISA
Event;
2.12 promptly on becoming aware of the same, notify BoS of any
event or condition which will (or is likely to) constitute
grounds for the termination or (or the appointment by PBGC of
a trustee to administer) any Pension Plan pursuant to Section
4042 of ERISA;
2.13 procure that each Group Company shall pay all Taxation which
is due for payment (subject to any grace periods) other than
Taxation which is being contested in good faith and by
appropriate means.
2.14 ensure that neither it nor any ERISA Affiliate shall agree to
contribute, or assume any obligation to contribute, to any
Pension Plan or Multiemployer Plan;
2.15 acquire or otherwise affiliate with any new ERISA Affiliate
that maintains or has an obligation to contribute to an
employee pension benefit plan (as such term is defined in
Section 3(2) of ERISA) that has an "accumulated funding
deficiency" (as defined in Section 302 of ERISA);
2.16 ensure that no Pension Plan is terminated under Section 4041
of ERISA unless such termination would not be reasonably
likely to have a Material Adverse Effect;
2.17 ensure that neither it nor any of its ERISA Affiliates shall
adopt an amendment to a Plan or Pension Plan requiring the
provision of security under Section 307 of ERISA or Section
401(a)(29) of the Code;
2.18 use the proceeds of the Facility without violating Regulations
G, T, U and X of the Regulations of the Board of Governors of
the Federal Reserve System of the United States of America (or
any entity succeeding to all or any of its functions); and
2.19 make and renew all UCC filings in relation to any of the BoS
Documents which are requested by XxX and will make payment (or
will reimburse BoS in respect of) all applicable fees in
relation to such filings.
2.20 ensure that neither it nor any of its ERISA Affiliates shall:
engage in any prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code: (ii) permit to exist any
accumulated funding deficiency (as defined in Section 302 of
15
ERISA and Section 412 of the Code), whether or not waived;
(iii) fail to pay timely required contributions or annual
instalments due with respect to any waived funding deficiency
to any Pension Plan; (iv) fail to make any contribution or
payment to any Multiemployer which it or any of its ERISA
Affiliates may be required to make under any agreement
relating to such Multiemployer Plan or any law pertaining
thereto: or (vi) fail to pay any required instalment or any
other payment required under Section 412 of the Code on or
before the due date for such instalment or other payment;
3. The Borrower shall not, and shall procure that each other Group Company
shall not, save with the prior written consent of BoS:-
3.1 grant or permit to subsist any Security Right other than a
Permitted Security Right;
3.2 incur or contract to incur or permit to subsist any Borrowings
other than Permitted Borrowings;
3.3 dispose of or part with control of (whether by a single transaction
or a series of transactions) any asset or undertaking (other than a
Permitted Disposal);
3.4 carry on any business other than that undertaken at the date of
acceptance of this letter or any business related to the existing
businesses;
3.5 lend or give credit to or indemnify or guarantee any other
person(s) unless it is (1) to or on account of the obligations of
another Group Company which has granted Full Group Security, (2) in
the ordinary course of business on normal trade terms;
3.6 join any partnership or joint venture with any other person or
amalgamate with any other person (other than as part of a solvent
reconstruction with the prior written consent of BoS);
3.7 in any financial year incur any capital expenditure (actually or
contingently) in excess of US$1,000,000 of the relevant estimates
given in the budget in aggregate for the Group delivered to and
approved by BoS;
3.8 acquire or incorporate any company or business (or any shares in
any company);
3.9 alter the accounting principles and practices applied in its
Financial Statements (unless to comply with GAAP or on the advice
of its auditors);
3.10 alter its accounting reference date;
3.11 enter an arrangement for finance not shown in its balance sheet as
Borrowings;
3.12 factor or discount its debts;
3.13 agree to amend or waive or permit the amendment or waiver of any
of its constitutional documents in any way which, in the opinion
of BoS, is likely to have an adverse effect upon the interests of
BoS under the BoS Documents;
3.14 declare or make any Distribution other than a Permitted
Distribution;
3.16 allow any dormant company to undertake any significant accounting
transaction or otherwise commence trading or to acquire or assume
any rights or liabilities without first having granted Full Group
Security; or
3.17 change its place of residence for tax purposes.
16
THIS IS THE SCHEDULE 4 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 4
FINANCIAL COVENANTS
1. The Borrower and Lytton Inc. covenant with BoS on a consolidated basis
as follows:-
1.1 NET WORTH
Net Worth shall not at any time be less than:-
1.1.1 US$8,000,000, during the period from the date of
drawdown to 31 December 2001;
1.1.2 US$9,000,000, during the period from 1 January 2002
to 31 December 2002; and
1.1.3 US$11,000,000 thereafter.
1.2 ASSET COVER
1.2.1 The ratio of Current Assets of the Group to the Net
Borrowings shall not be less than 1.5:1 at all times
from the Drawdown Date until 30th June 2002 and shall
not be less than 1.75:1 at all times thereafter.
1.2.2 The ratio of the Trade Debtors of the Group to the
Net Borrowings shall not be less than 0.50:1 at all
times from the Drawdown Date until 30th June 2002 and
shall not be less than 0.75:1 at all times
thereafter.
1.3 TOTAL INTEREST COVER
The ratio of PBIT to Total Interest shall not be less than
2.0:1 at all times.
2. The financial covenants shall be tested as follows:-
2.1 the Net Worth covenant shall be tested on a quarterly basis;
2.2 the Asset Cover covenant shall be tested on a quarterly basis;
2.3 the Total Interest Cover covenant shall be tested from the
Drawdown Date to 31st December 2001 by reference to the
cumulative position and thereafter, on a quarterly basis by
reference to the cumulative position for the relevant
financial year;
in each case by reference to the latest Financial Statements of the
Borrower or, if more recent, to the latest management accounts of the
Group, provided that, where any financial covenant is tested by
reference to management accounts it shall be tested again by reference
to Financial Statements when the relevant Financial Statements become
available.
17
3. For the purposes of this Schedule 4:-
CURRENT ASSETS means from time to time, the aggregate value (calculated
from time to time to accord with GAAP) of all Trade Debtors and the Net
Security Value of Stock of each Group Company.
NET BORROWINGS means total Borrowings of each Group Company less sums
standing at credit of all accounts of the Group with BoS from time to
time in respect of which BoS has valid and enforceable rights of
set-off.
NET SECURITY VALUE OF STOCK means all Stock valued in accordance with
GAAP.
NET WORTH means the aggregate of the amount paid up on the issued share
capital of the Group and the amount standing to the credit of its
capital and revenue reserves (including any share premium account or
capital redemption reserve but excluding any revaluation reserve and/or
intangible assets), plus or minus the amount standing to the credit or
debit (as the case may be) of the profit and loss account of the Group.
PBIT means, for any specified period, the trading profit of the Group
before deduction of interest and taxation and before the deduction of
extraordinary and exceptional items.
STOCK means all marketable stock in trade and all raw materials, work
in progress, goods in process, finished goods, materials and supplies
of every nature and description (less provision for obsolete or slow
moving stock) of each Group Company all as may be properly included as
stock in accordance with GAAP (but excluding any of the above held in
trust or subject to any reservation of title claim).
TOTAL INTEREST means, in relation to any specified period, the
aggregate amount of interest, commission and other recurrent financial
expenses attributable to the total Borrowings of the Group charged,
accrued or capitalised for such period.
TRADE DEBTORS means debts due to each Group Company in the ordinary
course of business outstanding for not more than 90 days from date of
invoice (or such other period agreed with BoS) and which are not bad or
doubtful (or determined by BoS to be bad or doubtful) but excluding:-
1. any debt owed by another Group Company;
2. any debt owed by any person who is also a creditor of a Group
Company to the extent of the amount owed by that Group Company
to that creditor;
3. any debt which has been assigned or charged to or is held in
trust for any third party or is subject to any factoring or
invoice discounting or similar letter; and
4. with any adjustments BoS may from time to time consider to be
appropriate in the context of the business of each Group
Company and the Term Loan.
4. If the Borrower breaches the terms of any of the financial covenants
specified above, without prejudice to any of its other rights or
remedies, BoS shall be entitled to:-
4.1 initiate an investigation and instruct any report (accounting,
legal and valuation or otherwise) on the business and affairs
of the Borrower or any other Group Company
18
which BoS deems necessary to ascertain the financial
position of the Group, all costs incurred by BoS in so doing
being payable by the Borrower; and/or
4.2 increase the Margin to three per cent (3%).
THIS IS THE SCHEDULE 5 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 5
FINANCIAL INFORMATION COVENANTS
The Borrower covenants that it will supply to BoS:-
1. within 150 days after the end of each financial year of the Borrower
two copies of the Financial Statements;
2. within 14 days before the commencement of each financial year of the
Borrower, its annual budget (including profit and loss account, balance
sheet and cash flow forecasts) for the next financial year and a
consolidated annual budget for the Group;
3. within 45 days after the end of each quarter in each financial year of
the Borrower, management accounts (including profit and loss account,
balance sheet and cash flow statement on a consolidated basis for the
Group) and showing a comparison with budget together with commentary by
the chief financial officer on all material aspects of those management
accounts;
4. at the same time as it delivers the Financial Statements or the
management accounts referred to above, a certificate of compliance with
the financial covenants set out in Schedule 4 signed by the chief
financial officer of the Borrower, setting out in reasonable detail
supporting computations and in form and content acceptable to BoS;
5. as soon as the same becomes available, but in any event within 10 days
after the issue thereof, all documents filed by any Group Company with
the US Securities and Exchange Commission under the US Securities Act
of 1933 or the US Securities Exchange Act of 1934 (other than on Form
S-8 or 8-A or similar forms);
6. promptly after their filing with the US Internal Revenue Service,
copies of each Schedule B (Actuarial Information) (if any) to the
Annual Report (IRS Form 5500 Series) with respect to each Pension Plan;
7. promptly on becoming aware of the same, copies of any notice from the
PBGC stating its intention to terminate any Pension Plan or
Multiemployer Plan or to have a trustee appointed to administer any
Pension Plan or Multiemployer Plan;
8. from time to time on request by XxX, such information about any Plan,
Pension Plan or Multiemployer Plan as BoS may reasonably require; and
9. such further financial information as BoS may from time to time
reasonably require.
The Borrower also covenants that it will identify from any consolidated accounts
prepared for itself and its subsidiaries the financial performance of any
undertaking included in those accounts as a subsidiary undertaking and will
provide details of all financing agreements and arrangements to which any Group
Company is a party which need not be shown in the Financial Statements of the
Borrower.
19
THIS IS THE SCHEDULE 6 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 6
EVENTS OF DEFAULT
1. The Borrower fails to pay any sum due under a BoS Document on its due
date other than as a result of the failure of the appropriate payment
transmission system which is outwith the Borrower's control;
2. any written information or projection given or any representation,
warranty or statement made or repeated by or on behalf of any Group
Company under the BoS Documents (whether before or after the date of
this Letter) is incorrect, inaccurate, incomplete or, in the opinion of
BoS, misleading in any respect which, if capable of remedy, is not
remedied within seven days;
3. any Borrowings of any Group Company in excess of US$150,000 are not
paid when due for payment (whether because of acceleration or
otherwise) or within any originally permitted period of grace;
4. the Borrower fails to comply with the terms of Schedule 4 or any Group
Company fails to comply with the terms of Schedule 3;
5. any Group Company fails to comply with any other covenant, undertaking
or obligation given or owed by it under a BoS Document which is not
remedied to the satisfaction of BoS within 14 days after the first of
(1) a Group Company being aware of the failure or (2) notice by BoS
calling for its remedy (should BoS reasonably consider it to be
remediable);
6. any Group Company ceases or threatens to cease to carry on its business
or a significant part of it (unless as part of a solvent reconstruction
approved by BoS) or suspends or threatens to suspend payment of its
debts or is unable or is deemed to be unable to pay its debts within
the meaning of Section 123 (1) of the Insolvency Act 1986;
7. a proposal is made or a nominee or supervisor is appointed for any
Group Company for a composition in satisfaction of its debt or for a
scheme of arrangement of its affairs or other arrangement or any
proceedings for the benefit of its creditors are commenced under any
law, regulation or procedure relating to the reconstruction or
readjustment of debt;
8. a petition is made for an administration order under the Insolvency Act
1986 with respect to any Group Company;
9. any steps are taken by a Group Company (without BoS prior written
consent) or any other person to wind up or dissolve any Group Company
or to appoint a liquidator, trustee, receiver, administrative receiver
or similar officer to any Group Company or any part of its undertaking
or assets;
10. any legal process (not being reasonably considered by BoS to be
defensible or vexatious, in good faith) is levied, enforced or sued
against a Group Company or its assets or any person validly takes
possession of any of the property or assets of a Group Company or steps
are taken by any person to enforce any Security Right against any of
the property or assets of a Group Company;
20
11. any Group Company shall:-
11.1 apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or
the like of itself or of all or a substantial part of its
property or assets;
11.2 make a general assignment for the benefit of its creditors;
11.3 commence a voluntary case under the US Bankruptcy Code;
11.4 file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganisation, winding up
or composition or re-adjustment of debts;
11.5 acquiesce in writing to any petition filed against it under
the US Bankruptcy Code; or
11.6 take any corporate action for the purpose of effecting any of
the foregoing with respect to itself;
12. a proceeding or case shall be commenced (without the application or
consent of any Group Company) in any court of competent jurisdiction
seeking:-
12.1 its reorganisation, liquidation, dissolution or winding up or
the composition or readjustment of its debts;
12.2 the appointment of a receiver, custodian, trustee or
liquidator or the like of it or of all or any substantial part
of its property or assets; or
12.3 similar relief in respect of the relevant Group Company under
any law relating to bankruptcy, insolvency, reorganisation,
winding up or composition or adjustment of debts,
or an order for relief against any Group Company shall be entered
in an involuntary case under the US Bankruptcy Code;
13. any event occurs or proceedings are taken in respect of a Group Company
in any jurisdiction to which it is subject which has an effect
equivalent or similar to any of the events mentioned in paragraphs 6 to
12 above (inclusive);
14. any part of a BoS Document ceases to be legal or effective (or a Group
Company so alleges) or any consent required to enable a Group Company
to perform its obligations under a BoS Document ceases to have effect
or (subject to Permitted Security Rights) any Security Rights created
by any of the Security Documents cease to be first priority Security
Rights;
15. notice of withdrawal or discontinuance of any guarantee or security
provided by any third party (including any Group Company) is served on
BoS and a replacement guarantor suitable to BoS cannot be found within
seven days;
16. control of any Group Company passes to any person or persons (whether
acting individually or in concert) who is or are not a shareholder in
it immediately after the date of this letter without the prior written
consent of BoS;
17. there is any change in any of its constitutional documents which in the
opinion of BoS, will have a Material Adverse Effect on its position
under the BoS Documents;
18. any licence, authority, permit, consent, agreement or contract which is
material to the business from time to time of any Group Company is
terminated, withheld or modified which in the opinion of BoS, will have
a Material Adverse Effect;
21
19. in the reasonable opinion of XxX at any time after the date of this
letter:-
19.1 there is a risk of material liability to BoS under
Environmental Law or because it has taken security (direct or
third party) for the Term Loan;
19.2 the value of any asset of any Group Company may be diminished
in any material way because of Environmental Law; or
19.3 any Group Company does not comply with regulations or the law
applicable to its business or with Environmental Law or
Licence(s) which failure to comply will have a Material
Adverse Effect;
20. any ERISA Event shall occur or any Group Company or any ERISA Affiliate
shall fail to pay the full amount of any instalment due under Section
412(m) of the Code and as a result either (a) such occurrence or
failure to pay would have, or would be reasonably likely to have, a
Material Adverse Effect or (b) BoS would, or would be reasonably likely
to, become liable to pay any amount following such ERISA Event or
failure to pay;
21. any other circumstance or event occurs or arises which will have a
Material Adverse Effect.
22
THIS IS THE SCHEDULE 7 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 7
DIRECTOR'S CERTIFICATE
TECHDYNE, INC.
I, Xxx Xxxxx, a Director of Techdyne, Inc., a Florida
corporation (the "Corporation"), pursuant to that certain Facility Letter, dated
as of 2nd October, 2001 (as may be amended, modified, extended or restated from
time to time the "Facility Letter"; all capitalized terms which are used herein
but not otherwise defined herein shall have the meanings respectively assigned
to them under the Facility Letter), by and among Techdyne, Inc. as Borrower and
The Governor and Company of the Bank of Scotland, do hereby certify the
following:
1. Attached hereto as Exhibit A is a true, correct and complete
copy of the Certificate of Incorporation of the Corporation as
filed with the Florida Secretary of State, together with all
amendments thereto adopted through the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete
copy of the Certificate of Good Standing of the Corporation
dated _______ from the Secretary of State of the State of
Florida.
3. Attached hereto as Exhibit C are true and complete copies of
the resolutions adopted by the Board of Directors of the
Corporation by written consent, which resolutions authorize
and approve, among other things, the execution, delivery and
performance of the Facility Letter and the other financing
documents to which the Corporation is a party and all other
instruments and documents to be executed and delivered on
behalf of the Corporation pursuant to the Facility Letter and
such other financing documents, none of which resolutions have
been amended, modified or revoked and all of which are in full
force and effect on the date hereof.
4. Attached hereto as Exhibit D is a true, correct and complete
copy of the By-laws of the Corporation. Such By-laws have not
been amended, modified, supplemented or rescinded and are in
full force and effect on and as of the date hereof.
5. The persons named below have been duly elected and have duly
qualified as, and on this day are, officers of the Corporation
and hold the offices set forth opposite their names below, and
the signatures set forth opposite their names below are their
genuine signatures:
NAME TITLE SIGNATURE
Xxx Xxxxx Director _____________________
23
IN WITNESS WHEREOF, I have signed this Certificate this ____ day of
October, 2001.
TECHDYNE, INC.
By: _____________________________
Name: Xxx Xxxxx
Title: Director
I, Xxxxxx Xxxxxxx, the Chief Executive Officer of the Corporation, do
hereby certify that Xxx Xxxxx has been duly elected and has duly qualified as,
and on this day is, a Director of the Corporation and the signature above is his
genuine signature.
IN WITNESS WHEREOF, I have signed this Certificate this ____ day of
October, 2001.
TECHDYNE, INC.
By: _____________________________
Name: Xxxxxx Xxxxxxx
Title: [Officer]
24
THIS IS THE SCHEDULE 8 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001.
SCHEDULE 8
DEFINITIONS AND INTERPRETATION
'ACQUISITION AGREEMENT means the sale and purchase agreement relative to the
purchase by Simclar International Limited of a majority shareholding in Techdyne
Inc.
APPLICABLE ACCOUNTING PRINCIPLES means in relation to any audited or monthly
financial statements in respect of any Group Company, the accounting principles
generally accepted in the Relevant Jurisdiction of such Group Company in effect
from time to time, consistently applied.
ARTICLES OF ASSOCIATION means the articles of association (or equivalent
constitutional documents) of the Borrower.
BORROWINGS means (without double counting):-
1. money borrowed or raised and includes capitalised interest;
2. any liability under any bond, note, debenture, loan stock, redeemable
preference share capital or other instrument or security;
3. any liability for acceptance or documentary credits or discounted
instruments;
4. any liability for the acquisition cost of assets or services payable on
deferred payment terms where the period of deferment is more than 60
days;
5. any liability under debt purchase, factoring and similar agreements and
capital amounts owing under finance leases, hire purchase or
conditional sale agreements or arrangements; and
6. any liability under any guarantee or indemnity (except product
warranties).
BOS means The Governor and Company of the Bank of Scotland and its successors,
assignees and transferees.
BOS DOCUMENT(S) means this letter, the Security Documents, any agreement for
Working Capital and all documents supplemental to any of them.
BOS GROUP means BOS, any Subsidiary of it, any holding company of it and any
Subsidiary of its holding company.
BUSINESS DAY means a day on which banks are open for general business in
Edinburgh and New York.
CERTIFIED COPY means a copy certified as true, complete and up to date by the
specified person or, if no-one is specified, by either the secretary of the
relevant Group Company or the Borrower's solicitors or, in relation to the
certificate of incorporation, articles of incorporation and the good standing
certificate of any Group Company incorporated in the U.S., certified by the
Secretary of State of the relevant jurisdiction.
25
CODE means the US Internal Revenue Code of 1986 as amended from time to time and
the regulations promulgated and rulings issued thereunder.
DANGEROUS SUBSTANCES means any substances capable of causing harm to man or any
other living organism or damaging the environment.
DEFAULT RATE means the rate which is one and a half per cent (1.5%) per annum
over the rate at which interest is paid on the Term Loan under Clause 2.4 of the
preceding facility letter.
DIRECTOR'S CERTIFICATE means the certificate executed by the Director of the
Borrower in the BoS form of Schedule 7 hereto.
DISTRIBUTION means any dividend, redemption or distribution of assets by a
company to its members whether in cash or otherwise on account of capital or
income.
DOLLAR and the figure US$ shall mean the lawful currency of the United States of
America from time to time.
DRAWDOWN DATE means the date, being a Business Day falling no later than one
month after the date hereof on which the Term Loan shall be drawndown in one
amount.
ENVIRONMENTAL LAW means all laws, regulations, directives, codes of practice,
circulars, guidance notices and court decisions (whether in the UK or elsewhere)
concerning the protection of human health or welfare or the environment or the
conditions of the work place or the generation, transportation, storage,
treatment or disposal of Dangerous Substances.
ENVIRONMENTAL LICENCE means any licence, authorisation or approval required by
Environmental Law.
ERISA means the US Employee Retirement Income Security Act of 1974 as amended
from time to time and all regulations promulgated and rulings issued thereunder.
ERISA AFFILIATE means any entity which is considered as a single employer with
any Group Company within the meaning of Section 414 of the Code.
ERISA EVENT means:-
(i) the occurrence of a "reportable event" (as defined in Section 4043 of
ERISA) with respect to a Plan or Pension Plan;
(ii) the institution of proceedings under Section 4042 of ERISA by the PBGC
or the termination of, or the appointment of a trustee to administer,
any Pension Plan or the occurrence of any event or condition described
in Section 4042 of ERISA that could reasonably be expected to
constitute grounds for the termination of, or the appointment of a
trustee to administer, such Pension Plan;
(iii) the failure by any Group Company or any of its ERISA Affiliates to make
a required contribution to any Pension Plan that would result in the
imposition of a lien under Section 412 of the Code or Section 302 of
ERISA:
(iv) the filing under Section 4041(c) of ERISA of a notice of intent to
terminate any Pension Plan or the termination of any Pension Plan under
Section 4041(c) of ERISA;
26
(v) the withdrawal (whether partial or complete) of any Group Company or
any of its ERISA Affiliates from a Multiemployer Plan or from a Pension
Plan during a plan year in which the Group Company or any ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA with respect to such Pension Plan, or the termination of a
Multiemployer Plan or the reorganisation or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA;
(vi) the adoption of an amendment to a Plan or a Pension Plan requiring the
provision of security to such Plan or Pension Plan pursuant to Section
30 of ERISA or Section 401(a)(29) of the Code.
EVENT OF DEFAULT means an event set out in Schedule 6 which BoS elects to treat
as such.
EXISTING FACILITIES means all Borrowings of the Borrower with Provident Bank
including (without prejudice to the foregoing generality) (i) the term loan of
up to US$1,000,000 and revolving credit facility of up to US$4,500,000 provided
by Provident Bank to Techdyne Inc. pursuant to an asset based loan and security
agreement dated 9th February 2000 and (ii) the Borrowings of Lytton Inc.
pursuant to an asset based loan and security agreement dated 14th April 1995 (as
amended).
FINAL REPAYMENT DATE means the date 7 years after the Drawdown Date.
FINANCIAL STATEMENTS means the audited annual profit and loss account and
balance sheet of the relevant company for each of its financial years
(consolidated for each financial year during which that company has a
subsidiary) together with related directors' and auditors' reports.
FULL GROUP SECURITY means guarantees in favour of BoS from each Group Company on
account of the obligations of each other Group Company and any other security
(fixed or floating) which BoS may require.
GAAP means generally accepted accounting principles in the U.S.
GROUP means the Borrower and any subsidiary of it which is not dormant (other
than Techdyne (Europe) Limited) and shall for the avoidance of doubt include
Techdyne Inc. and Lytton Inc., and GROUP COMPANY is construed accordingly.
Increased Cost means:-
1. an additional or increased cost incurred by BoS as a result of it
having entered into, or performing, maintaining or funding its
obligations under this letter; or
2. that portion of an additional or increased cost incurred by BoS in
making, funding or maintaining all or any advances comprised in a class
of advances formed by or including the Term Loan; or
3. a reduction in any amount payable to BoS or in the effective return to
BoS under the Term Loan or on its capital; or
4. the foregone amount of any payment made or interest or other return on
or calculated by reference to any amount received or receivable by BoS
under the Term Loan;
in each case arising as a result of any change, introduction, interpretation or
administration of any law or regulation after the date of this letter or any
27
compliance after the date of this letter with any law or regulation relating to
reserve assets, special deposits, cash ratios, liquidity or capital adequacy
requirements or any other form of banking or monetary control or the
introduction of changeover to or operation of a single European currency but
excluding (1) payments in respect of tax under Clause 9.1 of the Term Loan and
Clause 10.1 of the Working Capital or (2) costs not generally applicable to U.K.
banks.
INTELLECTUAL PROPERTY RIGHTS means patents, patent applications, trade marks,
community trade marks, service marks, trade names, brand names, registered
designs, copyright and all other industrial and intellectual property rights.
INTEREST PAYMENT DATE means the last Business Day of each Interest Period unless
its duration is more than three months in which case it will be the last
Business Day of each consecutive three month period.
INTEREST PERIOD means the period selected under Clause 2.4 and to which a rate
of interest calculated by reference to that clause applies.
LIBOR means the rate (expressed as an annual percentage rate) at which deposits
in the relevant currency in an amount equal to the Term Loan are offered to BoS
in the London Inter Bank Market by prime banks, selected by BoS, at or about 11
am (London time) on the first Business Day of an Interest Period for the same
period and amount in the relevant currency.
MARGIN means one and a half per cent (1.5%).
MARGIN STOCK means "margin stock" or "margin security" within the meaning of
Regulation G, T, U and X of the Board of Governors of the Federal Reserve System
of the United States of America (or any entity succeeding to all or any of its
functions).
MATERIAL ADVERSE EFFECT means any effect which, in the reasonable opinion of
BoS, might:-
1. affect the ability of any Group Company to comply with its obligations
under a BoS Document;
2. give rise to a breach of the financial covenants set out in Schedule 4;
3. adversely affect the business, assets or financial condition of the
Group as a whole; or
4. (where the context so admits) result in any of the Security Documents
not being legal, valid and binding on, and enforceable substantially in
accordance with its terms against any party to that Security Document
or not providing BoS with enforceable security over the assets to be
covered by it.
MATERIAL LITIGATION means any litigation, arbitration or administrative
proceeding raised or threatened against, or defended by or judgement outstanding
in relation to any Group Company, which involves, or if an adverse finding were
made would involve, a total liability (whether actual or contingent) in excess
of US$150,000 and which is to be reported in detail by the Borrower to BoS.
MULTIEMPLOYER PLAN means a "multiemployer plan" as defined in Section 4001(a)(3)
of ERISA.
NOTICE OF DRAWDOWN means a written notice by the Borrower substantially in the
form set out in Schedule 9 hereto requesting drawdown of the Term Loan.
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PBGC means the US Pension Benefit Guaranty Corporation or any entity succeeding
to all or any of its functions under ERISA.
PENSION PLAN means any employee pension benefit plan a defined in Section 3(3)
of ERISA which is subject to Title IV of ERISA and which is maintained,
sponsored or contributed to by a Group Company or an ERISA Affiliate or with
respect to which a Group Company or an ERISA Affiliate has any liability or
potential liability.
PLAN means an "employee benefit plan" as defined in Section 3(3) of ERISA which
is maintained, sponsored or contributed to by a Group Company or with respect to
which any Group Company has any liability or potential liability other than any
Multiemployer Plan.
PERMITTED BORROWINGS MEANS:-
1. the Term Loan and amounts due in respect of it;
2. Working Capital and amounts due in respect of it;
3. Borrowings between Group Companies where each have granted Full Group
Security; and
4. commitments of members of the Group under finance (or capital) lease,
hire purchase or conditional sale agreements or arrangements which do
not at any time exceed US$250,000 in aggregate.
PERMITTED DISPOSALS MEANS:-
1. the disposal of assets on an arm's length basis in the ordinary and
usual course of trading including the use of cash for any such purpose;
2. disposals between Group Companies where the transferee has granted Full
Group Security;
3. disposals made other than in the ordinary and usual course of trading
but on an arm's length basis and only if the value of the assets
disposed of (whether by a single or several transaction) when taken
together with all similar disposals made by the Group in any fiscal
year is not in total more than US$250,000;
4. disposals where the proceeds are applied towards the acquisition of a
replacement within ten days of the disposal.
PERMITTED DISTRIBUTION means any Distribution which either:-
1. the Borrower is obliged to declare or pay by the Articles of
Association; or
2. is to a Group Company which has granted Full Group Security;
in each case at any time when no Event of Default or Potential Event of Default
is continuing and the declaration, payment or making of which will not cause,
directly or indirectly, an Event of Default or Potential Event of Default to
occur.
PERMITTED SECURITY RIGHTS means (1) liens and rights of set-off securing
obligations which are not overdue beyond their standard payment dates, arising
by operation of law in the ordinary and usual course of trading; (2) Security
Rights arising out of title retention provisions in a supplier's standard
conditions of supply of goods acquired in the ordinary and usual course of
trading; (3) Security Rights granted in terms of the BoS Documents or with the
29
prior written approval of BoS; and (4) any other Security Rights permitted
pursuant to the Security Documents.
PBGC means the US Pension Benefit Guaranty Corporation or any entity succeeding
to all or any of its functions under ERISA.
PLAN means an "employee benefit plan" as defined in Section 3(3) of ERISA
established, sponsored or maintained for, or under which contributions are made
on behalf of, employees of any Group Company or any ERISA Affiliate, other than
any Multiemployer Plan.
POTENTIAL EVENT OF DEFAULT means any event, act or condition which, with the
giving of notice and/or lapse of time, and/or any other event, act or condition
which, in the reasonable opinion of BoS, will or is likely to constitute an
Event of Default.
RELEVANT JURISDICTION means, in respect of any Group Company, the country in
which such company is incorporated and, if different, where it is resident or
domiciled for Taxation purposes, or has its principal place of business or its
place of management and control.
QUALIFYING BANK means a bank for the purposes of Section 349 of the Income and
Corporation Taxes Act 1988 which is within the charge to UK corporation tax as
regards any interest payable to it under or in connection with this letter
and/or any other BoS Document at the time when such interest is paid.
SALE means any transaction pursuant to which a person (or persons acting in
concert) obtain control of the Borrower (other than those persons having control
of the Borrower immediately after the Drawdown Date) or in terms of which all or
substantially all of the assets of the Borrower or of the Group are sold to any
person (other than a member of the Group).
SECURITY DOCUMENTS means the documents listed under the heading of Security in
Schedule 1 and any other security granted to BoS.
SECURITY RIGHT means any mortgage, charge, security, pledge, lien, right of
set-off, right to retention of title or other encumbrance, whether fixed or
floating, over any present or future property, assets or undertaking.
STATUTORY CONTROL means each of the following which affects any Group Company or
any of its assets from time to time:-
1. any legislation (including delegated legislation);
2. any consent made or given under any legislation; and
3. any notice, order or correspondence related to paragraphs 1. or 2.
above and having the force of law.
TAXATION includes all present and future taxes, levies, imposts, deductions,
charges, compulsory loans and withholdings whatsoever together with any interest
thereon and penalties in respect thereof.
TERM LOAN means the term loan given under this letter and the amount of it
outstanding at any time and the terms attaching to it as these may be varied by
further agreement between the Borrower and BoS.
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US BANKRUPTCY CODE means Title 11 of the US Code, 11 U.S.C. Section 101 et
seq., as amended from time to time.
WORKING CAPITAL means a loan for working capital purposes at any time given to a
Group Company by BoS and the amount of it outstanding at any time and the
agreement evidencing it.
INTERPRETATION
Any reference in this letter to:-
(1) an Act of Parliament is to the Act as amended, substituted, modified or
re-enacted from time to time;
(2) control of any company shall be interpreted in accordance with Section
840 of the Income and Corporation Taxes Act 1988;
(3) including shall not be construed as limiting the generality of the
words preceding it;
(4) a Schedule shall be construed as a reference to the schedules to this
letter.
Any term or phrase defined in the Companies Act 1985 (as amended from time to
time) shall bear the same meaning in this letter.
Any reference in this letter to words importing the singular shall include the
plural and vice versa and words denoting any gender shall include all genders.
References to this letter and to any provisions of it or to any other document
referred to in this letter shall be construed as references to it in force for
the time being and as amended, varied, supplemented, restated, substituted or
novated from time to time.
References to statutes, statutory provisions and other legislation shall include
all amendments, modifications and re-enactments for the time being in force.
Words importing the singular are to include the plural and vice versa.
References to a person are to be construed to include references to a
corporation, firm, company, partnership, joint venture, unincorporated body of
persons, individual or any state or any agency of a state, whether or not a
separate legal entity.
References to any person are to be construed to include that person's assignees
or transferees or successors in title, whether direct or indirect.
Clause headings are for ease of reference only and are not to affect the
interpretation of this letter.
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THIS IS THE SCHEDULE 9 REFERRED TO IN THE PRECEDING FACILITY LETTER BETWEEN BOS
AND TECHDYNE, INC. DATED 2ND OCTOBER 2001
SCHEDULE 9
BoS Style Notice of Term Loan Drawdown
[Techdyne, Inc. Headed Paper]
To: Bank of Scotland
Corporate Banking
4th Floor
New Uberior House
00 Xxxx Xxxx Xxxxxx
Xxxxxxxxx XX0 0XX
Date:
As required under Clause 1 of the facility letter dated 2nd October (the
"Letter") between the Bank, ourselves as borrower in respect of inter alia a
term loan facility of $7,000,000 (the "Facility"), we now give you notice of our
intention to drawdown under the Term Loan as follows:
1. Date of Drawdown: .
2. Amount:(pound).
3. The duration of the first Interest Period : months.
4. Payment instructions:
We confirm that:-
4.1 the matters represented by us and set out in Schedule 2 of the
Letter are true and accurate on the date of this notice as if
made on that date;
4.2 no Event of Default has occurred and is continuing or would
result from the proposed drawdown; and
4.3 the amount specified in 2. above should be credited to
[details required]
Words and expressions in this notice shall bear the same meaning as in the
Letter.
...................
Director
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