<PAGE>
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 2, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to _____________________
Commission file number 0-25848
CHICAGO MINIATURE LAMP, INC.
(Exact name of registrant as specified in its charter)
OKLAHOMA 73-1412000
(State of Incorporation) (IRS Employer Identification No.)
500 CHAPMAN STREET, CANTON, MASSACHUSETTS 02021
(Address of principal executive offices)
(617) 828-2948
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 13(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- ______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the last practicable date.
As of July 7, 1996, 10,582,804 shares of Registrant's Common Stock, $0.01 par
value, were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1.- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CHICAGO MINIATURE LAMP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 2, December 3,
1996 1995
---------------- ----------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 7,831 $ 4,005
Investments -- 2,102
Accounts receivable, net 17,644 10,249
Income tax receivable -- 109
Inventories 16,573 8,018
Prepaid expenses and other current assets 1,043 661
---------------- ----------------
Total current assets 43,091 25,144
---------------- ----------------
PROPERTY, PLANT AND EQUIPMENT, AT COST: 53,721 26,242
Less - Accumulated depreciation 4,248 3,189
---------------- ----------------
49,473 23,053
---------------- ----------------
Other Assets:
Goodwill, net of accumulated amortization 4,253 4,257
Other intangible assets, net of accumulated amortization 6,444 6,903
Other Assets 152 173
---------------- ----------------
Total other assets 10,849 11,333
---------------- ----------------
Total assets $ 103,413 $ 59,530
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term notes payable $ 26,894 $ --
Current portion of long-term debt 291 65
Accounts payable 8,831 7,488
Accrued income taxes payable 2,661 2,547
Other accrued expenses 8,632 5,121
---------------- ----------------
Total current liabilities 47,309 15,221
---------------- ----------------
LONG-TERM DEBT, LESS CURRENT PORTION 3,354 3,147
---------------- ----------------
OTHER LIABILITIES:
Deferred income taxes 4,619 4,798
Other long-term liabilities 4,468 1,443
Minority interests 74 --
---------------- ----------------
Total other liabilities 9,161 6,241
---------------- ----------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value
Authorized -- 20,000,000 shares
Issued and outstanding -- 10,469,938 and 10,569,938
shares at December 3, 1995 and June 2, 1996 respectively 106 105
Additional paid-in capital 27,077 23,883
Foreign currency translation adjustment 138 39
Retained earnings 16,268 10,894
---------------- ----------------
Total stockholders' equity 43,589 34,921
---------------- ----------------
Total liabilities and stockholders' equity $ 103,413 $ 59,530
================ ================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
CHICAGO MINIATURE LAMP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
---------------------
June 2, May 28,
1996 1995
--------- ---------
(Unaudited)
<S> <C> <C>
Net sales $ 22,125 $ 13,422
Cost of products sold 14,361 8,832
--------- ---------
Gross margin 7,764 4,590
Selling, general and administrative
expenses 3,308 1,986
--------- ---------
Operating income 4,456 2,604
Other (income) expense
Interest expense, net 240 442
Other, net (34) 7
--------- ---------
Income before provision for
income taxes 4,250 2,155
Provision for income taxes 1,347 797
--------- ---------
Net income $ 2,903 $ 1,358
========= =========
Earnings per common share $ 0.28 $ 0.16
========= =========
Weighted average shares outstanding 10,474 8,340
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CHICAGO MINIATURE LAMP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Six Months Ended
---------------------
June 2, May 28,
1996 1995
--------- ---------
(Unaudited)
Net sales $ 41,527 $ 24,402
Cost of products sold 27,243 15,790
--------- ---------
Gross margin 14,284 8,612
Selling, general and administrative
expenses 6,109 3,913
--------- ---------
Operating income 8,175 4,699
Other (income) expense
Interest expense, net 323 803
Other, net (16) 8
--------- ---------
Income before provision for
income taxes 7,868 3,888
Provision for income taxes 2,494 1,438
--------- ---------
Net income $ 5,374 $ 2,450
========= =========
Earnings per common share $ 0.51 $ 0.29
========= =========
Weighted average shares outstanding 10,472 8,340
========= =========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CHICAGO MINIATURE LAMP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
----------------------------
June 2, May 28,
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 5,374 $ 2,450
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,576 800
Deferred income taxes (179) 1
Minority interest 10 -
Changes in operating assets and liabilities:
Accounts receivable (4,222) 248
Inventories (5,260) 70
Prepaid expenses and other (105) (104)
Accounts payable (1,051) (303)
Accrued expenses (32) (726)
Accrued and prepaid income taxes (1,644) 865
Payable to stockholder - (1,079)
Other long-term liabilities 38 (46)
Other 120 87
------------ ------------
Net cash provided by (used in) operating activities (5,375) 2,263
------------ ------------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (4,478) (1,358)
Acquisitions, net of cash acquired (10,899) (3,441)
Decrease in short-term investments 2,102 -
------------ ------------
Net cash used in investing activities (13,275) (4,799)
------------ ------------
FINANCING ACTIVITIES
Net borrowings (repayments) of line of credit 22,496 1,390
Payments of long-term debt (20) (975)
Capitalization of offering costs - (674)
------------ ------------
Net cash provided by (used in) financing activities 22,476 (259)
------------ ------------
Net increase (decrease) in cash and cash equivalents 3,826 (2,795)
Cash and cash equivalents, beginning of period 4,005 4,558
------------ ------------
Cash and cash equivalents, end of period $ 7,831 $ 1,763
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest $ 170 $ 411
============ ============
Income taxes $ 2,992 $ -
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
CHICAGO MINIATURE LAMP, INC. AND SUBSIDIARIES
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL
The interim consolidated financial statements presented have been
prepared by Chicago Miniature Lamp, Inc. (The Company) without audit and, in the
opinion of the management, reflect all adjustments of a normal recurring nature
necessary for a fair statement of (a) the results of operations for the three
and six month periods ended June 2, 1996 and May 28, 1995, (b) the financial
position at June 2, 1996, and (c) the cash flows for the six-month period ended
June 2, 1996 and May 28, 1995. Interim results are not necessarily indicative of
results for a full year.
The consolidated balance sheet presented as of December 3, 1995 has been
derived from the consolidated financial statements that have been audited by
the Company's independent public accountants. The consolidated financial
statements and notes are condensed as permitted by form 10-Q and do not
contain certain information included in the annual financial statements and
notes of the Company. The consolidated financial statements and notes included
herein should be read in conjunction with the financial statements and notes
included in the Company's Form 10-K filed with the Securities and Exchange
Commission and dated February 28, 1996.
NOTE 2--INVENTORIES
Inventories are stated at the lower of cost or market and include
materials, labor and overhead. Cost is determined by the first-in,
first-out (FIFO) method. Inventories consist of the following at June 2, 1996
and December 3, 1995 (dollars in thousands):
June 2 December 3
1996 1995
------ ----------
Raw materials $5,823 $3,320
Work in progress 4,049 1,115
Finished goods 6,701 3,583
------- ------
Inventory $16,573 $8,018
======= ======
6
<PAGE>
NOTE 3--ACQUISITIONS
On March 30, 1995, the Company, through its wholly owned subsidiary
Industrial Devices, Inc. ("IDI") acquired all of the capital stock of Plastomer
Inc., a Canadian company, for $5,000,000 Canadian in cash. The foreign currency
exchange rate as of March 30, 1995 was 0.713 US dollars to one Canadian dollar.
In August 1995, IDI acquired all of the capital stock of Fredon
Development Industries, Inc. (Fredon) for $2,245,000 in cash.
On November 10, 1995, the Company, through its wholly owned subsidiary
Badalex Limited (Badalex), acquired substantially all of the assets of STT
Badalex Limited, STI Lighting Limited, PRT Shipping Limited, and STT Holdings
Limited, all companies formed under the laws of England. Total consideration
for the acquisition was approximately $7,200,000.
On December 1, 1995, the Company acquired all of the outstanding stock
of Electro Fiberoptics, Inc. for $1,600,000 in cash. This acquisition was made
through the Company's wholly owned subsidiary, CML Fiberoptics, Inc.
In December 1995, the Company acquired certain assets of Phoenix
Lighting (UK) Limited for approximately $2,400,000 in cash.
Effective May 1, 1996, the Company acquired all the outstanding equity
of W. Albrecht GmbH u. Co. KG (Germany) and Alba Lamps, Inc. (USA) and certain
of their affiliates for approximately $8,500,000 in cash, 100,000 shares of
common stock of the Company, and the assumption of approximately $4.9 million of
bank debt.
For financial reporting purposes, each acquisition was accounted for as
a purchase, and the purchase price was allocated to assets acquired and
liabilities assumed based on the estimated fair market value existing at the
date of acquisition. The allocations of purchase price for the acquisitions
other than Plastomer Inc. are preliminary and subject to change as further data
and appraisals become available.
Based on unaudited data, the following table presents the Company and
its subsidiaries' selected financial information on a pro forma basis, assuming
the companies had been combined since November 28, 1994 (dollars in thousands,
except earnings per share):
Six months ended Six months ended
June 2, 1996 May 28, 1995
---------------- ----------------
Net sales $52,195 $48,248
Net income $5,292 $2,243
Net income per share $0.51 $0.24
The pro forma results are not necessarily indicative of future
operations or the actual results that would have occurred had the acquisition
been made as of November 28, 1994.
7
<PAGE>
PART I
Item 2
CHICAGO MINIATURE LAMP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations for the three
months and six months ended June 2, 1996 should be read in conjunction with the
Consolidated Financial Statements of the Company with accompanying notes.
RESULTS OF OPERATIONS
Three months ended May 28, 1995 compared to the three months ended June 2, 1996.
Net sales increased from $13,422,000 for the three months ended May 28,
1995, to $22,125,000 for the three months ended June 2, 1996. This increase in
sales volume was due primarily to growth of market share and customer
development as enhanced by the prior year acquisitions of Plastomer, Inc. and
Fredon Development Industries; and current year acquisitions (for sales
purposes) of Badalex, Electro FiberOptics (CML-Fiberoptics), Phoenix Lighting
(UK) Limited (CML-Europe) and W. Albrecht GmbH u. Co. KG (CML-Alba). (Reference
Note 3 - Acquisitions of the Consolidated Financial Statements).
The growth in sales resulting from the successful integration of
acquisitions into the core entity, and the combined entity's ability to generate
increased internal growth, is reflected by the Company's 64.8% growth in
revenues as compared to the three months ended May 28, 1995. Identifiable net
sales from current year acquisitions in the three months ended June 2, 1996
totaled $6,165,000.
Gross margin increased from $4,590,000 for the three months ended May
28, 1995 to $7,764,000 for the three months ended June 2, 1996 due to the
increase in sales volume. As a percentage of net sales, gross margin increased
from 34.2% for the three months ended May 28, 1995, to 35.1% for the three
months ended June 2, 1996 due to a change in product mix somewhat impacted by
the acquired business. Gross margins of the acquired business are expected to
improve by the end of fiscal 1996 as post-acquisition operational changes take
effect.
Selling, general and administrative expenses increased from $1,986,000
for the three months ended May 28, 1995 to $3,308,000 for the three months ended
June 2, 1996. This increase is largely due to the integration of the
acquisitions described in Note 3 to the Consolidated Financial Statements. As a
percentage of net sales, selling, general and
8
<PAGE>
administrative expenses remained at approximately 15% for the three months ended
May 28, 1995 and the three months June 2, 1996. During fiscal 1996, the
continued integration of the new acquisitions into the Company's structure of
centralized selling, general and administrative expense is expected to have a
positive effect.
Interest expense, net, decreased from $442,000 for the three months
ended May 28, 1995 to $240,000 for the three months ended June 2, 1996, as a
result of the paydown in debt in June 1995, with the proceeds from the initial
public offering and increased cash flows somewhat offset by debt incurred to
finance acquisitions.
As a result of the above, income before provision for income taxes
increased from a $2,155,000 profit for the three months ended May 28, 1995, to a
profit of $4,250,000 for the three months ended June 2, 1996. As a percentage of
net sales, income before provision for income taxes, increased from 16.1% for
the three months ended May 28, 1995 to 19.2% for the three months ended June 2,
1996. This increase is due primarily to the effects of the corporate, strategic
plan of synergistic acquisitions, vertical integration, and industry
consolidation. This plan has increased sales and improved the overall operating
efficiencies of the Company.
For the three months ended June 2, 1996, the Company recorded a tax
provision of $1,347,000 on pre-tax income of $4,250,000 for an effective rate
of 32% compared to 37% in the three month period ended May 28, 1995. The lower
tax rate is primarily due to the establishment of foreign operations and the
resulting impact of lower effective income taxes in those countries.
SIX MONTHS ENDED MAY 28, 1995, COMPARED TO SIX MONTHS ENDED JUNE 2, 1996.
The Company's net sales increased from $24,402,000 for the six months
ended May 28, 1995, to $41,527,000 for the six months ended June 2, 1996. This
increase in sales volume was due primarily to growth of market share and
customer development as enhanced by the prior year acquisitions of Plastomer and
Fredon Development Industries; and current year acquisitions (for sales
purposes) of Badalex, Electro FiberOptics (CML-Fiberoptics), Phoenix Lighting
(U.K.) Limited (CML-Europe) and W. Albrecht GmbH u. Co. KG (CML-Alba).
(Reference Note 3 -- Acquisitions of the Consolidated Financial Statements.
The growth in sales resulting from the successful integration of
acquisitions into the core entity, and the combined entity's ability to generate
increased internal growth, is reflected by the Company's 70.2% growth in
revenues as compared to the six months ended May 28, 1995. Identifiable net
sales from current year acquisitions in the six months ended June 2, 1996
totaled $11,200,000.
Gross margin, as a percentage of net sales, decreased from 35.3% of net
sales for the six months ended May 28, 1995, to 34.4% for the six months ended
June 2, 1996, primarily as a result of a change in product mix, somewhat
impacted by the acquired business. Gross margins of the acquired business
are expected to improve by the end of fiscal year 1996 as post-
acquisition operational changes take effect.
9
<PAGE>
Selling, general and administrative expenses increased from $3,913,000
for the six months ended May 28, 1995, to $6,109,000 for the six months ended
June 2, 1996. This increase is largely due to the integration of acquisitions
(reference Note 3 -- Acquisitions of the Consolidated Financial Statements). As
a percentage of net sales, selling, general and administrative expenses
decreased from 16.0% for the six months ended May 28, 1995, to 14.7% for the
six months ended June 2, 1996. During fiscal 1996, the continued integration of
the acquisitions into the Company's structure of centralized selling, general
and administrative expense is expected to have a positive effect.
Interest expense, net, decreased from $803,000 for the six months ended
May 28, 1995, to $323,000 for the six months ended June 2, 1996, as a result of
the paydown in debt in June 1995, with the proceeds from the initial public
offering and increased cash flows, somewhat offset by debt incurred to finance
acquisitions.
For the six months ended June 2, 1996, the Company recorded a tax
provision of $2,494,000 on pre-tax income of $7,868,000 for an effective rate of
32% compared to 37% in the six month period ended May 28, 1995. The lower tax
rate is primarily due to the establishment of foreign operations and the
resulting impact of lower effective income taxes in those countries.
As a result of the above, income before provision for income taxes,
increased from a $3,888,000 profit for the six months ended May 28, 1995, to a
profit of $7,868,000 for the six months ended June 2, 1996. As a percentage of
net sales, income before provision for income taxes, increased from 15.9% for
the six months ended May 28, 1995, to 18.9% for the six months ended June 2,
1996. This increase is due primarily to the effects of the corporate, strategic
plan of synergistic acquisitions, vertical integration and industry
consolidation. This plan has increased sales and improved the overall operating
efficiencies of the Company.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $5,375,000 during the six
months ended June 2, 1996. The Company's investing activities, totaling
$13,275,000, included acquisitions in connection with which the Company paid an
aggregate purchase price of $10,899,000, capital expenditures of $4,478,000 and
the decrease in short-term investments of $2,100,000. Net cash provided by
financing activities aggregated $22,476,000.
The Company, in fiscal 1995, entered into a new bank financing
agreement. The loan agreement, as further amended in February 1996 and April
1996, provides a $5,000,000 operating line of credit a $6,000,000 letter of
credit facility, and a $30,000,000 loan facility for acquisitions of other
companies and for equipment purchases by the Company, subject to a defined
borrowing base. The loans mature December 30, 1996 and interest accrues at the
prime rate. As of June 2, 1996, the Company had available borrowings of
approximately $13,383,000 under the loan agreements, and had outstanding
borrowings of approximately $21,559,000. Additionally, the Company has
outstanding borrowings of $5,335,000 under separate lines of credit.
The Company believes that cash from operations and borrowings available
under the Company's credit facilities, will be sufficient to meet the Company's
working capital and capital expenditure needs for at least the next 12 months.
10
<PAGE>
PART II - OTHER INFORMATION.
Item 5. Other information.
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
--------
10.32 Copy of Amended and Restated Employment Agreement with
Frank M. Ward, dated as of December 3, 1995*
10.33 Copy of Third Amendment to Third Amended and Restated
Credit Agreement with BANK IV Oklahoma, N.A., dated April
26, 1996*
10.34 Copy of letter agreement dated May 1, 1996, from The First
National Bank of Boston, London Branch, establishing a
(Pounds)2,600,000 line of credit in favor of Badalex
Limited and Chicago Miniature Lamp Europe Limited ("Bank
of Boston Line of Credit")*
10.35 Copy of Limited Guaranty, dated May 3, 1996, by Chicago
Miniature Lamp, Inc. in favor of The First National Bank
of Boston guaranteeing the payment and performance of the
Bank of Boston Line of Credit*
---------------------
*Filed herewith.
(b) Reports on Form 8-K.
-------------------
Report on Form 8-K, reporting the May 30, 1996 acquisition of
the AlbaAlbrecht Group of companies and partnership interests by
the Registrant and its subsidiary, filed with the Commission on
June 14, 1996.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Chicago Miniature Lamp, Inc.
Date: July 16, 1996 By: /s/ Ronald S. Goldstein
-------------------------------------------
Ronald S. Goldstein
Chief Financial Officer
Date: July 16, 1996 By: /s/ Frank M. Ward
------------------------------------------
Frank M. Ward
President & CEO
12
<PAGE>
EXHIBIT 10.32
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
---------------------------------------------------
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT is entered into
as of the 4th day of December, 1995 (the "Agreement"), by and between Frank M.
Ward ("Ward") and CHICAGO MINIATURE LAMP, INC., an Oklahoma corporation (the
"Company").
WITNESSETH:
WHEREAS, the parties hereto are parties to that certain Employment
Agreement, dated December 1, 1994, whereby the Company agreed to employ Ward in
the capacity of President and Chief Executive Officer and Ward agreed to be so
employed (the "Employment Agreement");
WHEREAS, Ward and the Company desire to amend and restate the Employment
Agreement effective December 4, 1995; and
WHEREAS, the terms, conditions and undertakings of this Agreement have
been submitted to, and duly approved and authorized by, the Company's Board of
Directors.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Executive Employment. The Company agrees to employ Ward, and Ward
--------------------
agrees to be so employed, in the capacity of President and Chief Executive
Officer. Employment shall be for a term of three (3) years effective as of
December 1, 1994 and terminating November 30, 1997 (the "Executive Employment").
2. Duties. During the period of Executive Employment, Ward shall devote
------
full time to such employment. Ward shall perform duties customarily incident to
the office of President and Chief Executive Officer and all other duties the
Board of Directors may from time to time assign to him. Ward shall be entitled
to annual vacations in a manner commensurate with his status as a principal
executive, which shall not be less than the annual vacation period to which he
is presently entitled.
3. Compensation.
------------
a. First year. During the Company's fiscal year commencing December 1,
1994, the Company shall pay to Ward as compensation for his services the sum of
$360,000. This amount shall be paid in equal monthly installments.
b. Second year. During the Company's fiscal year commencing December 4,
1995, the Company shall pay to Ward as compensation for his services the sum of
$250,000. This amount shall be paid in equal monthly installments.
c. Third year. During the Company's fiscal year commencing December 1,
1996, the Company shall pay to Ward as compensation for his services the sum of
$250,000. This amount shall be paid in equal monthly installments.
<PAGE>
4. Expenses.
--------
a. Reimbursement. The Company shall reimburse Ward for all reasonable
and necessary expenses incurred in carrying out his duties under this Agreement.
Ward shall present to the Company from time to time an itemized account of such
expenses in any form required by the Company.
b. Automobile. The Company recognizes Ward's need for an automobile for
business purposes and, therefore, the Company shall provide Ward with an
automobile, including all related maintenance, repairs, insurance, and other
costs. The automobile and related costs shall be comparable to those which the
Company presently provides Ward.
5. Disability. If Ward becomes disabled during the period of his
----------
Executive Employment, his compensation shall continue at the same rate that it
was on the date of such disability. If such disability continues for a
continuous period of one (1) year, the Company, at its option, may thereafter,
upon written notice to Ward or his personal representative, terminate his
Executive Employment. For the purpose of this Agreement, disability shall mean
mental or physical illness or condition rendering Ward incapable of performing
his normal duties with the Company.
6. Employee benefits. This Agreement shall not be in lieu of any
-----------------
rights, benefits and privileges to which Ward may be entitled as an employee of
the Company under any retirement, pension, profit-sharing, insurance, hospital
or other plans which may now be in effect or which may hereafter be adopted.
Ward shall have the same rights and privileges to participate in such plans and
benefits as any other employee during his Executive Employment.
7. Notices. All notices required to be given hereunder shall be given
-------
in writing and delivered, personally or by certified mail, return receipt
requested, postage pre-paid, addressed to the parties as follows:
Chicago Miniature Lamp, Inc.
500 Chapman Street
Canton, Massachusetts 02021
Frank M. Ward
500 Chapman Street
Canton, Massachusetts 02021
8. Governing law. This Agreement shall be governed by and construed,
-------------
interpreted and enforced in accordance with the laws of the State of Oklahoma.
In the event of a breach of this Agreement, venue for any legal proceedings
shall be proper in the state or federal court in Tulsa County, Oklahoma.
9. Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties hereto and supersedes all agreements previously made between
the parties relating to the subject matter of this Agreement.
-2-
<PAGE>
10. Modification. This Agreement may be modified only by a written
------------
instrument executed by the parties hereto.
11. Severability. If any provision of this Agreement is determined to be
------------
invalid and/or unenforceable by a final decision of a court of competent
jurisdiction, the offending provision shall be severed and the remainder of the
Agreement shall survive and remain in full force and effect.
12. Non-waiver. No delay or failure by either party to exercise any
----------
right under this Agreement shall constitute a wavier of that or any other right.
13. Binding effect. This Agreement shall inure to the benefit of, and be
--------------
binding upon, the Company, its affiliates, subsidiaries, successors and assigns.
In addition, this Agreement shall inure to the benefit of, and be binding upon
Ward, his heirs, personal representatives, successors and assigns.
14. Headings. Headings used in this Agreement are for convenience only
--------
and shall not be used to interpret or construe its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
CHICAGO MINIATURE LAMP, INC.
By /s/ Frank M. Ward
-----------------------------
Frank M. Ward, President
"Company"
/s/ Frank M. Ward
-------------------------------
Frank M. Ward
"Ward"
-3-
<PAGE>
EXHIBIT 10.33
THIRD AMENDMENT AND MODIFICATION AGREEMENT
------------------------------------------
TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
----------------------------------------------
This THIRD AMENDMENT AND MODIFICATION AGREEMENT TO THIRD AMENDED AND
RESTATED CREDIT AGREEMENT (the "Agreement") is dated as of the 26th day of
April, 1996, in Tulsa, Oklahoma, by and between CHICAGO MINIATURE LAMP, INC., an
Oklahoma corporation ("CML") and INDUSTRIAL DEVICES, INC., a New Jersey
corporation ("IDI") (CML and IDI being collectively referred to herein as the
"Borrowers"), and BANK IV OKLAHOMA, N.A., a national banking association (the
"Bank").
R E C I T A L S
- - - - - - - -
A. Borrowers and the Bank made, executed and entered into that certain
Third Amended and Restated Credit Agreement dated as of June 30, 1995 (the
"Original Credit Agreement") as amended by that certain First Amendment and
Modification Agreement (the "First Amendment") dated as of December 6, 1995 and
that certain Second Amendment and Modification Agreement (the "Second
Amendment") dated as of February 23, 1996 (the Original Credit Agreement as
amended by the First Amendment and Second Amendment thereto being collectively
referred to herein as the "Credit Agreement") whereby Borrowers have been
entitled to borrow and the Bank has agreed to lend, subject to the terms of the
Credit Agreement:
(i) up to the original principal amount of $5,000,000.00 in the form
of a revolving loan as evidenced by that certain Revolving Credit Note
dated June 30, 1995 made, executed and delivered by Borrowers to the Bank
in the original principal amount of $5,000,000.00;
(ii) up to the original principal amount of $6,000,000.00 in the form
of an LC Revolving Loan to support Letters of Credit as evidenced by that
certain LC Revolving Credit Note dated February 23, 1996 made, executed and
delivered by Borrowers to the Bank in the original principal amount of
$6,000,000.00; and
(iii) up to the original principal amount of $30,000,000.00 in the
form of a non-revolving Acquisition Loan not to exceed the original
principal amount of $30,000,000.00. In connection with the Acquisition
Loan, the Borrowers have made, executed and delivered to the Bank (a) that
certain Acquisition Note ("Acquisition Note #1") dated December 6, 1995, in
the original principal amount of $5,000,000.00 and (b) that certain
Acquisition Note ("Acquisition Note #2) in the original principal amount of
$9,000,000.00.
Except as specifically defined herein, all capitalized terms shall have the same
meaning as set forth in the Credit Agreement.
<PAGE>
B. As of the date hereof there is currently outstanding under the
Revolving Credit Note the principal amount of $2,975,373.90. Further, the
following is a summary of the Letters of Credit outstanding as of the date
hereof under the LC Revolving Credit Loan:
<TABLE>
<CAPTION>
EXPIRES L/C NO. BENEFICIARY AMOUNT
<C> <S> <C> <C>
5/21/96 T5660 Taiwan Prosperity Elec $ 9,163.29
6/21/96 T6335 Royal Electronic $ 16,715.00
6/21/96 T6453 Se II Corp. $ 19,284.00
6/30/96 S5514 National Westminster Bank $673,200.00
12/15/96 S5527 US Trust $500,000.00
11/30/96 S5528 Barclays Bank PLC $765,000.00
11/30/96 S5545 Barclays Bank PLC $382,500.00
11/30/96 S5546 Barclays Bank PLC $765,000.00
11/30/97 SB 6462 Barclays Bank PLC $764,000.00
7/21/96 T6490 Sung Jim Energy Co Ltd. $ 30,000.00
===========================================================
</TABLE>
The principal amount of $4,823,586.82 is outstanding under Acquisition Note #1
and no principal has been advanced under Acquisition Note #2 as of the date
hereof.
C. CML has entered into that certain agreement as of April 26, 1996 (the
"Deutschemarks Contract") with the Bank whereby CML shall acquire 6,102,400
Deutschemarks on May 3, 1996 for a total amount of $4,000,000.00 (U.S. Dollars)
for the purpose of funding a portion of CML's acquisition of the outstanding
common stock of (i) ALBA Speziallampen GmbH, Bamberg, Germany, (ii) W. Albrecht
CmbH u.Co KG, Bamberg, Germany, (iii) W. Albrecht Grundstucksgeselleschaft, GbR,
Bamberg, Germany, (iv) ALBA Light Design BmbH, Bamberg, Germany, (v) Arnold
GmbH, Bamberg Germany, (vi) BSC Arnold GmbH & Co., KG, Bamberg, Germany, (vii)
A&S Electric, S.R.L., Czech Republic, (vii) ALBA Lamps, Inc., an Illinois
corporation, and (viii) ALBA Technology (M) Sdn. Bhd, a Malaysia corporation
(collectively the "German Acquisition"), said acquisition of Deutschemarks
pursuant to the Deutschemarks Contract to be funded by the Bank as an advance
under Acquisition Note #2.
D. CML has also entered into that certain agreement as of April 26, 1996
(the "Yen Contract") with whereby CML has committed to sell 837,440,000.00
Japanese Yen on October 30, 1996 at 104.68 for a total amount of $8,000,000.00
(U.S. Dollars); provided however, except for the Bank's reduction of the
Collateral Borrowing Base by an amount equal to twenty percent (20%) of such
agreement as provided below, such Yen Contract is a separate and
2
<PAGE>
independent obligation of CML and is in no way to be construed as part of the
Bank's Commitment under the Credit Agreement.
E. Repayment of the Notes, along with any and all other Indebtedness of
Borrowers to the Bank, is secured by a first priority security interest in and
to Borrowers' Collateral as defined in the Credit Agreement and Security
Instruments.
F. Repayment of the Notes, along with repayment of any and all other
Indebtedness of Borrowers to the Bank, is also unconditionally guaranteed by
Plastomer, Inc., an Ontario corporation ("Plastomer") pursuant to that certain
Guarantee dated as of June 30, 1995 made, executed and delivered by Plastomer to
the Bank. Further, performance by Plastomer under the Guaranty is secured by a
first priority security interest in and to certain personal property of
Plastomer as defined and set forth in the Plastomer Security Agreement.
G. Borrowers have requested that an advance be made under the Acquisition
Loan in the form of Japanese Yen for the purpose of funding a portion of CML's
German Acquisition, and the Bank has agreed to do so, subject to the terms and
conditions hereof and in connection therewith, the parties desire to amend and
modify the Credit Agreement and other Loan Documents as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the conditions,
covenants, representations and warranties set forth herein, and for other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereby mutually agree as follows:
1. Additional Definitions.
-----------------------
a. "Acquisition Note #3" shall mean the Acquisition Note issued by
---------------------
the Bank under the Acquisition Loan in the form as shown in Exhibit "A"
-----------
attached hereto and made a part hereof, to be delivered to the Bank
pursuant to Paragraph 4(a) below, together with all extensions, renewals,
modifications, substitutions and changes in form thereof which may be from
time to time and for any term or terms effected.
b. "Applicable Reserve Cost" shall mean the Bank's applicable reserve
-------------------------
costs, liabilities, expenses and assessments pursuant to requirements of
applicable law or any applicable governmental or quasi-governmental rule,
regulation, policy, guideline or directive regarding the making, funding or
maintaining of the Eurocurrency Advance under Acquisition Note #3
(including without limitation any reserve requirements of Regulation D)
which during the term of this Agreement shall be fixed at one and one-half
percent (1.5%) per annum.
c. "Current Dollar Equivalent" shall mean at any date the amount of
---------------------------
Dollars into which the outstanding principal amount of Acquisition Note #3
as of such date may be converted at the spot rate at which Dollars are
offered to the Bank for the Permitted
3
<PAGE>
Currency in an amount comparable to such principal amount outstanding under
the Acquisition Note #3 at approximately 10:00 a.m. (Tulsa Time) on the
second Business Day prior to such date.
d. "Dollar" or "$" shall mean lawful money of the United State of
-------- ---
America.
e. "Eurocurrency Advance" shall mean the advance under Acquisition
----------------------
Note #3 in the Permitted Currency which bears interest at the Eurocurrency
Rate.
f. "Eurocurrency Base Rate" the rate of interest per annum
-------------------------
determined by the Bank in its discretion to be the rate at which deposits
are offered in the Permitted Currency two Business Days prior to the first
day of such Eurocurrency Interest Period for delivery on such day.
g. "Eurocurrency Interest Period" means a period of six months from
------------------------------
the date of funding of the Eurocurrency Advance by the Bank. Such interest
period shall end on (but exclude) the day which corresponds numerically to
such date six months thereafter; provided that if there is no such
numerically corresponding day in such next sixth succeeding month, such
Interest Period shall end on the last Business Day of such next sixth
succeeding month. If an interest period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
succeeding Business Day; provided however that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end
on the immediately preceding Business Day.
h. "Eurocurrency Rate" means with respect to the Eurocurrency
-------------------
Interest Period, a rate per annum equal to the sum of (i) the Eurocurrency
Base Rate plus (ii) one percent (1%) plus (iii) the Applicable Reserve
---- ----
Costs.
i. "Fiberoptics Facility" means Electro Fiberoptics manufacturing
----------------------
facility located in Marlborough, Massachusetts, including but not limited
to the real property together with all improvements and appurtenances
thereto.
j. "Fiberoptics Mortgage & Assignment" shall mean that certain
-----------------------------------
Mortgage and Security Agreement and that certain Collateral Assignment of
Leases and Rents to be made, executed and delivered by Electro Fiberoptics
to the Bank pursuant to Paragraph 5.b. hereof in such form as may be
acceptable to the Bank.
k. "Permitted Currency" shall mean Japanese yen.
--------------------
l. "Regulation D" shall mean Regulation D of the Board of Governors
--------------
of the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of said
Board of Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.
4
<PAGE>
m. "Reserve Requirements" means with respect to an Interest Period,
----------------------
the maximum aggregate reserve requirements (including all basic,
supplemental, marginal and other reserves) of general application which is
imposed under Regulation D on Eurocurrency liabilities.
2. Deutschemarks Acquisition. Pursuant to the Deutschemarks Contract,
--------------------------
the Borrowers have requested the Bank to reduce and the Bank has reduced the
Collateral Borrowing Base by the amount of $800,000.00 from and after the date
hereof until the Bank has been notified of the completion of the Deutschemarks
Contract. In connection therewith, as of May 3, 1996, the Bank shall advance
the amount of $4,000,000.00 under Acquisition Note #2 for the purpose of funding
CML's acquisition of the Deutschemarks pursuant to the Deutschemarks Contract.
Borrowers agree that such Deutschemarks shall be used solely for funding a
portion of the German Acquisition.
3. Yen Acquisition. Pursuant to the Yen Contract, the Borrowers hereby
----------------
request the Bank to reduce and the Bank has agreed to reduce the Collateral
Borrowing Base by the amount of $1,600,000.00 from and after the date hereof
until the Bank has been notified that CML has completed such Yen Contract;
provided however, Borrowers hereby acknowledge that the acquisition of such Yen
is not and shall in no way be construed as an obligation of the Bank or as part
of the Commitment of the Bank under the Credit Agreement, but instead
constitutes a completely separate agreement and undertaking of the Borrowers.
Further, the foregoing shall in no way be construed as an obligation or
commitment on the part of the Bank to utilize the Collateral Borrowing Base as
collateral for future foreign currency contracts of the Borrowers, if any.
4. Euro-Yen Loan under Acquisition Note #3.
----------------------------------------
a. Concurrently with the execution hereof, Borrowers shall execute and
deliver to the Bank the Acquisition Note #3 whereby Borrowers shall borrow and
the Bank shall lend to Borrowers an amount of the Permitted Currency, for which
the Current Dollar Equivalent is equal to $8,000,000.00. The Acquisition Note
#3 shall be dated as of the date hereof, and shall bear interest at the
Eurocurrency Rate payable at maturity. Interest shall be calculated on the
basis of a year of 360 days but assessed for the actual number of days elapsed
in each accrual period. Borrowers acknowledge that the Bank shall be under no
duty or obligation to make any additional or further loans or advances under the
Acquisition Loan or otherwise under the Credit Agreement in the form of the
Permitted Currency or any other foreign currency.
b. The proceeds of Acquisition Note #3 shall be used by Borrowers solely
to acquire additional Deutschemarks necessary for the German Acquisition and for
no other purposes without the prior consent of the Bank, such Deutschemarks to
be acquired not later than two days prior to the closing of the German
Acquisition.
c. Except as otherwise prohibited hereby or in the Credit Agreement,
Borrowers may from time to time make prepayments of principal under Acquisition
Note #3, subject however
5
<PAGE>
to Paragraph 3(g) below. All advances made by the Bank on Acquisition Note #3
and all payments or prepayments of principal and interest thereon made by
Borrowers shall be recorded by the Bank in its records, and the aggregate unpaid
principal amount so recorded shall be conclusive evidence of the principal
amount owing and unpaid on the Acquisition Note #3. The failure to so record
shall not, however, limit or otherwise affect the obligations of Borrowers
hereunder or under the Acquisition Note #3 to repay the principal amount thereof
together with all interest accrued thereon. All payments and prepayments of
principal and interest under Acquisition Note #3 shall be made in the Permitted
Currency. Any payments or prepayments on Acquisition Note #3 received by the
Bank after 2:00 o'clock P.M. (applicable current time in Tulsa, Oklahoma) shall
be deemed to have been made on the next succeeding Business Day. All
outstanding principal of and accrued interest on Acquisition Note #3 not
previously paid shall be due and payable at maturity on October 30, 1996.
d. Notwithstanding anything herein or in the Credit Agreement to the
contrary, the advance made under Acquisition Note #3 may be continued as a
Eurocurrency Advance when an Event of Default or Default has occurred and is
continuing. During the continuance of a Default, the Bank may, at its option,
by notice to the Borrowers, declare that the outstanding principal amount of
Acquisition Note #3 shall bear interest for the remainder of the Interest Period
and continuing until paid in full at the Default Rate based upon the Current
Dollar Equivalent of Acquisition Note #3 determined on a daily basis.
e. For purposes of calculating the Collateral Borrowing Base, the
outstanding principal amount of Acquisition Note #3 shall be shown at the
Equivalent Dollar Value thereof as of the date of such calculation.
f. All sums payable by Borrowers or any Guarantors, whether in respect to
principal, interest, fees or otherwise, under Acquisition Note #3 shall be paid
without deduction for any present and future taxes, levies, impost, charges or
withholdings imposed by any country, any state or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government (a "Governmental
Authority") thereof or therein, any jurisdiction from which any or all of such
payments are made and any political subdivision or taxing authority thereof or
therein.
g. If any payment under Acquisition Note #3 occurs on a date which is not
the last day of the Interest Period, whether because of acceleration,
prepayment, subsequent to an Event of Default or otherwise, Borrowers hereby
indemnify Bank and hold the Bank harmless from and against any loss or cost
incurred by the Bank resulting therefrom, including, but not limited to, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
such Eurocurrency Advance and the cost of acquiring any Permitted Currency which
the Bank must acquire to satisfy any forward contract in which the Bank has
entered for disposition of the Permitted Currency upon the prepayment of
Acquisition Note #3, and the obligation of Borrowers hereunder shall be part and
parcel of the Indebtedness of Borrowers to the Bank.
6
<PAGE>
h. Effective as of the date hereof, if any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) of general application which is enacted or imposed
after the date of this Agreement or any interpretation thereof or the compliance
of the Bank therewith (i) subject the Bank to any tax, duty, charge or
withholding on or from payments due from the Borrower (excluding federal, state
or local taxation of the overall net income of the Bank) or changes the basis of
taxation of payment to the Bank in respect to its loans or other amounts due it
hereunder, or (ii) imposes or increases or deems applicable any reserve,
assessment, insurance, charge, special deposit or a similar requirement against
assets of deposits with or for the account of or credit extended by the Bank, or
(iii) imposes any other condition, the result of which is to increase the cost
to the Bank of maintaining loans or reduces any amount received by the Bank in
connection with the loans or requires the Bank to make any payment calculated by
reference to the amount of the loans held or interest received by it by an
amount deemed material by such Bank, then within 15 days of demand by the Bank,
the Borrowers shall pay the Bank that portion of such increased expense incurred
or reduction in an amount received which the Bank determines is attributable to
making, funding and maintaining its Loans.
5. Condition Precedent - Guarantors. Concurrently with the execution
---------------------------------
hereof, Borrowers shall cause each of (i) CML Fiberoptics, Inc., a Massachusetts
corporation ("CML Fiberoptics") being the wholly owned subsidiary of CML, (ii)
Electro Fiberoptics Corp., a Massachusetts corporation ("Electro Fiberoptics")
being the wholly owned subsidiary of CML Fiberoptics and (iii) Fredon
Development Industries, Inc., a New Jersey Corporation ("Fredon") being the
wholly owned subsidiary of IDI, to make, execute and deliver to the Bank their
respective unconditional guaranties of all Indebtedness to the Bank pursuant to
the terms and conditions of a Guaranty Agreement (the "Guaranty") substantially
in the form of which is attached hereto and made a part hereof as Exhibit "B".
-----------
All references in the Loan Agreement and all other Loan Documents to the term
Guarantor shall be amended throughout to include CML Fiberoptics, Fredon and
Fiberoptics, in addition to those parties named as Guarantors therein.
a. Further, to secure the performance by each of the Guarantors under its
Guaranty, Borrowers shall cause each Guarantor to make, execute and deliver to
the Bank a Security Agreement (the "Guarantor Security Agreement") of even date
herewith in the form as shown in Exhibit "C" attached hereto and made a part
-----------
hereof, whereby each of the Guarantors shall grant to the Bank a first lien and
security interest in and to all accounts and inventory of such Guarantor and all
other property as described therein.
b. Notwithstanding the above, the Collateral Borrowing Base shall not be
increased to include the Fiberoptics Facility or the equipment of Fiberoptics
until such time as the Bank shall have received the following, at Buyer's cost
and expense:
(i) the Fiberoptics Mortgage and Assignment duly executed by
Fiberoptics thereby granting to the Bank a second mortgage lien and
security interest in
7
<PAGE>
and to Fiberoptics Facility, subject only to that certain lien in favor of
the Town of Northborough, Massachusetts and duly recorded in the
appropriate land records;
(ii) an environmental report and certificate on the Fiberoptics
Facility, in form and substance satisfactory to the Bank, prepared by an
engineer or other expert satisfactory to the Bank stating that the
Fiberoptics Facility complies with all applicable environmental laws, reles
and regulations;
(iii) a current "as built" survey covering the Fiberoptics
Facility showing all improvements thereon, fences, easements, rights-of-
way, building lines, roads and alleys and showing no encroachments upon the
Fiberoptics Facility and no encroachments by any improvements located on
the Fiberoptics Facility onto adjacent property or onto recorded rights-of-
way or easements, said survey to be prepared by a registered land surveyor
acceptable to the Bank and shall contain a certification in favor of the
Bank that the survey is correct and accurate and the Fiberoptics Facility
is free from encroachments, the form and content of which certification
shall in any event be approved by the Bank;
(iv) An ALTA Lender's extended coverage policy of title insurance
covering the Fiberoptics Facility with such endorsements as the Bank may
require, issued by a title insurance company acceptable to the Bank and in
a form, amount and content satisfactory to the Bank, insuring or agreeing
to insure that the Fiberoptics Mortgage on the Fiberoptics Facility is or
will be upon recordation a valid second lien, free and clear of all other
defects, liens, encumbrances, and exceptions except those as specifically
accepted by the Bank in writing. Such title policy shall specifically
include a pending disbursement clause and affirmative coverage as to
material and mechanics liens;
(v) a Facility Appraisal with respect to the Fiberoptics
Facility,
(vi) an Equipment Appraisal with respect to any equipment;
(vii) such other information as the Bank may need to establish
the value of such assets for purposes of the Collateral Borrowing Base as
contemplated by Section 2.24 of the Credit Agreement.
All references in the Credit Agreement and all other Loan Documents to the
term "Collateral Borrowing Base" shall be amended throughout to include the
Eligible Accounts and Eligible Inventory of each of the Guarantors based
upon the formula therefor as provided in the Credit Agreement and provided
the Bank's lien therein is a first lien subject to no other liens, claims
or encumbrances.
b. On or before the forty-fifth (45th) day following each fiscal quarter,
Borrowers will cause each Guarantor to deliver to the Bank schedules (certified
to be true and correct by the President or chief financial officer of such
Guarantor, respectively) showing, as of the close of business on the last day of
the immediately preceding fiscal quarter, (i) the name of such
8
<PAGE>
Guarantor's Account Debtors and others with like obligations payable to such
Guarantor, (ii) the amounts due and owing to each of such Guarantors from each
Account Debtor thereof, (iii) "aging" of each Account dating from the Invoice
Date and shown by categories, as follows:
one day to and including 30 days,
31 days to and including 60 days,
61 days to and including 90 days, and
Over 90 days,
(iv) any modification of the customary due date of any Account, (v) the amount
of all obligations of each such Guarantor and to whom such obligations are owed
(excluding obligations to the Bank), and (vi) "aging" of each such obligation as
set forth in (iii) above.
c. On or before the forty-fifth (45th) day following the close of each
fiscal quarter, Borrowers shall cause each Guarantor to deliver to the Bank
schedules of Inventory (itemized per such Guarantor's monthly statements) shown
by categories of "raw materials", "work in process" and "finished goods" and
indicating the value at which such Inventory is carried on the books and records
of such Guarantor, which value shall be the lesser of (i) the cost of such
Inventory to such Guarantor, exclusive of any transportation, handling or other
charges incurred in acquiring such Inventory, and (ii) the present fair market
value of such Inventory, and, additionally, Borrowers will cause each Guarantor
to promptly notify the Bank of any material reduction in the market value of any
of such Inventory.
6. Conditions Precedent. The obligation of the Bank to make the
---------------------
Eurocurrency Advance as contemplated herein is subject to the satisfaction of
all of the following conditions (in addition to the other terms and conditions
set forth herein):
a. There shall exist no Event of Default or Default, under the Credit
Agreement or any other Loan Documents, as amended hereby.
b. The representations, warranties and covenants set forth in the
Credit Agreement, as amended herein, shall be true and correct on and as of
the closing of the transaction contemplated herein.
c. Borrowers each shall have delivered to the Bank a Certificate,
dated as of the Closing Date, and signed by the President or Vice President
and the Secretary of such Borrower substantially in the form as shown in
Exhibit "D" attached hereto and made a part hereof. The Bank may
-----------
conclusively rely on such Certificates until it receives notice in writing
to the contrary.
d. All corporate proceedings of each of Borrowers or Guarantors shall
be taken in connection with the transactions contemplated by this Agreement
and all other Loan Documents and shall be satisfactory in form and
substance to the Bank and its counsel; and the Bank shall have received
certified copies, in form and substance
9
<PAGE>
satisfactory to the Bank and its counsel, of the Articles or Certificate of
Incorporation and By-Laws of each of Borrowers and Guarantors and the
resolutions of the Board of Directors of each of Borrowers and Guarantors
as adopted, authorizing the execution and delivery of this Agreement,
Acquisition Note #3, and all other the Loan Documents, as applicable, the
borrowings under this Agreement, and the granting of the security interests
and mortgage liens in, and assignment and pledge of, the Collateral
pursuant to the Security Instruments, to secure the payment of the
Indebtedness.
e. Borrowers shall have delivered the Acquisition Note #3 to the
Bank, appropriately executed.
f. Borrowers and the Guarantors, as the case may be, shall have
delivered to the Bank all Security Instruments and all other Loan Documents
contemplated hereby.
g. The Bank shall have received such other information, documents and
assurances as shall be reasonably requested by the Bank.
7. Ratification of Security Interests. Borrowers hereby ratify, confirm
----------------------------------
and reaffirm all security interests, liens and other encumbrances created under
the Credit Agreement, the Security Instruments, as amended consistent herewith,
this Agreement, and all other Loan Documents as security for repayment of
Borrowers' Indebtedness and all other unreleased security agreements, mortgages
and deeds of trust in favor of the Bank, all of which shall continue in full
force and effect and with the same priority as security for repayment and
satisfaction of the Indebtedness and all extensions, modifications and renewals
thereof, including but not limited to the Notes.
8. Ratification of Guaranty and Plastomer Security Agreement. As a
----------------------------------------------------------
condition precedent to the execution hereof by the Bank, Borrowers shall cause
Plastomer to make, execute and deliver to the Bank a ratification of its
Guaranty and the Plastomer Security Agreement in substantially the form as set
forth on Exhibit "E" attached hereto and made a part hereof.
-----------
9. Modification, Ratification, Representations and Warranties. The terms
----------------------------------------------------------
and provisions of the Credit Agreement and all other Loan Documents executed in
connection therewith shall be deemed amended, modified, and changed through so
as to reflect consistently the matters provided herein. As extended, amended,
modified, renewed or changed consistent herewith, the terms and provisions of
the Credit Agreement and all other Loan Documents shall remain in full force and
effect and the Borrowers hereby ratify, reaffirm and reassert as of the date
--------------
hereof all covenants, representations, warranties, agreements and statements
- ------
contained therein. Further, and in addition to the representations, warranties
and covenants hereby ratified and reaffirmed, Borrowers each certify, covenant,
represent, and warrant to and with the Bank as follows:
10
<PAGE>
a. The Borrowers and each Subsidiary are duly organized, validly
existing and in good standing under and by virtue of the Laws of its
respective jurisdiction of incorporation, and are duly licensed and in good
standing as a foreign corporation in each jurisdiction in which the nature
of the business transacted or the property owned is such as to require
licensing or qualification as such.
b. The existence of each Borrower and their amenability to service of
process in courts of the State of Oklahoma and all of their rights,
franchises, privileges, permits, and licenses necessary for their
respective businesses or for the ownership, location and/or operation of
their respective property and assets, including, but not limited to, the
Collateral shall at all times be preserved and maintained, and Borrowers
shall conduct and maintain their respective businesses in an orderly,
efficient and regular manner and in compliance with all applicable laws.
c. The execution and delivery of this Agreement and all other
documents to be executed and delivered by each of the Borrowers to the Bank
pursuant hereto, and the due observance and performance by each of the
Borrowers of its terms, provisions and covenants are within Borrowers'
respective powers, have been duly authorized, will not contravene or
violate any law or term or provision of Borrowers' Articles of
Incorporation or By-laws or any corporate resolution of its respective
shareholders or directors and will not contravene, violate or constitute a
default under any contract, indenture, agreement or undertaking to which
either of Borrowers is a party or by the terms of which either of Borrowers
or any of their respective property or assets is bound.
d. Borrowers' financial statements heretofore furnished to the Bank,
have been prepared in conformity with GAAP, show all material liabilities,
direct and contingent, and fairly present the financial condition of the
Borrowers and any of their Subsidiaries as of such date and the results of
its operations for the period then ended, and since such date there has
been no material adverse change in the business, financial condition or
operations of the Borrowers.
e. Attached hereto and made a part hereof as Exhibit "F" is a true a
-----------
correct listing of all Subsidiaries of Borrowers. Except as set forth on
the attached Exhibit "F" neither Borrowers or any of their existing
-----------
Subsidiaries owns any other Subsidiaries as of the date hereof.
f. Attached hereto and made a part hereof as Exhibit "G" and Exhibit
----------- -------
"H", respectively, is a true and correct Borrowing Base Certificate as well
---
as a Compliance Certificate, both dated and effective as of the date
hereof.
10. Obligations Unaffected. Except as otherwise specified herein, the
----------------------
terms and conditions hereof shall in no manner impair, limit, restrict or
otherwise affect the obligations of the Borrowers to the Bank pursuant to and as
evidenced by the Credit Agreement and other
11
<PAGE>
Loan Documents. As a material inducement to the Bank to execute and deliver
this Agreement, Borrowers hereby acknowledge that there are no claims or offsets
against, or defenses or counterclaims to, the terms or provisions of the
obligations created or evidenced by the Loan Documents, including but not
limited to the Notes. In the event of a conflict between the terms and
conditions of this Agreement and the terms and conditions of the other Loan
Documents, the terms and conditions of this Agreement shall control.
11. "Loan Documents" and "Credit Agreement". The term "Loan Documents" as
---------------------------------------
used in the Credit Agreement shall be interpreted to include this Agreement, and
all of the other documents heretofore or hereafter creating, evidencing,
securing and/or relating to Indebtedness and obligations of the Borrowers to the
Bank as contemplated or referenced herein. The term "Credit Agreement" or "Loan
Agreement" as may be used in any of the Loan Documents shall be interpreted to
mean the Credit Agreement, together with and as modified by this Agreement.
12. Bank's legal Fees, Costs and Expenses. In consideration of and as a
-------------------------------------
condition precedent to the Bank's agreement to the execution, amendments and
modifications described herein, Borrowers agree to and shall pay promptly all
fees, including but not limited to the Bank's attorneys' fees, expenses and
charges with respect to and in connection with this Agreement and all other
documents contemplated hereby, including but not limited to, recording and
filing fees, and fees and expenses of counsel employed by the Bank in connection
with the documentation and closing of the transactions, amendments and
modifications contemplated hereby, and the Borrowers hereby agree to pay
promptly all hereafter incurred fees, including but not limited to attorneys'
fees, expenses and charges of the Bank which are incidental to the enforcement,
defense, amendment, modification, extension, renewal or change of the Credit
Agreement, this Agreement or any other Loan Documents.
13. Separability. If any provision of this Agreement and the other Loan
------------
Documents is held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the other provisions hereof, and this
Agreement and the other Loan Documents shall be construed and enforced as if
such provision had not been included herein.
14. Binding Effect. Except as otherwise expressly provided herein, this
--------------
Agreement will remain in effect until all of Borrowers' obligations to Bank
under this Agreement have been fully discharged. This Agreement shall be
binding upon Borrowers their respective successors and assigns, as applicable,
and shall inure to the benefit of the Bank, its successors and assigns.
15. Headings. The headings used herein are for convenience and
--------
administrative purposes only and do not constitute substantive matters to be
considered in construing the terms and provisions of this Agreement.
16. Governing Law and Jurisdiction. This Agreement shall be deemed to
------------------------------
have been made or incurred under the Laws of the State of Oklahoma and shall be
construed and enforced in accordance with and governed by the Laws of Oklahoma.
For purposes of enforcing and/or interpreting the provisions of this Agreement
and all other Loan Documents, the Borrowers
12
<PAGE>
hereby submit themselves to the jurisdiction of the Courts of the State of
Oklahoma, and each of the Borrowers waives all objections to service of process
therefrom.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as
of the day and year first above written.
CHICAGO MINIATURE LAMP, INC.
an Oklahoma corporation
By: /s/ Frank M. Ward
--------------------------------------------
Frank M. Ward, President
INDUSTRIAL DEVICES, INC.
a New Jersey corporation
By: /s/ Frank M. Ward
--------------------------------------------
Frank M. Ward, President
"BORROWERS"
BANK IV Oklahoma, N.A.
By: /s/ John D. Pixley
--------------------------------------------
John D. Pixley, Senior Vice President
"BANK"
114889.4
13
<PAGE>
EXHIBIT 10.34
BANK OF BOSTON
1 May 1996
Badalex Limited and/or
Chicago Miniature Lamp Europe Limited
Samson Road
Hermitage Industrial Estate
Colville
LE67 3FP
Dear Sirs
RE: DEMAND DISCRETIONARY LINE OF CREDIT
- ---------------------------------------
We refer to our recent discussions with you and have pleasure in placing at your
disposal a revolving credit facility on the following terms and conditions:
1. Amount
------
The aggregate amount of all principal outstanding under the facility is not
at any time to exceed (Pounds)2,600,000 (pounds sterling two million six
hundred thousand) or subject to the terms hereof, the equivalent in
alternative currencies, as conclusively determined by us.
2. Term
----
This facility is placed at your disposal until further notice from us that
no further drawings may be made. However, under no circumstances will the
facility be available for drawing later than 90 days prior to the
expiration of the standby letter of credit (see Clause 7).
3. Utilisation
-----------
You are entitled to utilise this facility in whole or in part in the form
of:
a. an overdraft on your sterling accounts with us, repayable on demand,
and limited to (Pounds)2,000,000 (two million pounds) in aggregate, or
b. short-term advances with mutually agreed maturities of up to 6 months
repayable, except as otherwise provided herein, at maturity
c. guarantees issued by us on your behalf in form and substance
satisfactory to us, subject to our receipt of a duly executed counter-
indemnity.
<PAGE>
The availability of currencies other than pounds sterling will be
subject always to our determination of the availability to us of funds
of the relevant currency.
4. Interest
--------
a. Overdrafts shall incur interest on the day to day debit balance at a
rate per annum equal to 1.5% (one and one half per cent) over our
Sterling Base Rate in effect from time to time, debited to your
current account monthly in arrears.
b. Interest will be payable on each short term advance in the currency of
such advance at 1.25% (one and one quarter per cent) per annum above
the rate at which we, in accordance with our normal practice, are able
to obtain like deposits in the required currency in the London
Interbank Market for such periods.
Where applicable, the interest rate will be increased to cover our
Cost of Reserve Assets (as conclusively determined by us) rounded
upwards to the nearest one sixteenth of one per cent per annum. Cost
of Reserve Assets means the cost to us of special deposits or
liquidity ratios or other similar requirements currently in force and
imposed from time to time by the Bank of England or any other
governmental body or agency, whether or not having the force of law.
Interest will be payable quarterly from the date of drawdown of each
short term advance and at maturity.
5. Fees and Commissions
--------------------
The rate of commission for issuing guarantees will be payable on the amount
of our actual and contingent liabilities under the relevant guarantee and
will be payable annually in advance on the date of issue of the relevant
guarantee and on each anniversary of such date at 1.25% (one and one
quarter per cent) per annum subject to a minimum annual fee of (Pounds)150.
6. Payments
--------
Should you not place us in funds as required under this facility you shall
pay us interest on the overdue amount in the currency thereof from the due
date up to the date of actual payment (as well after as before judgement),
compounded quarterly, at a rate per annum 2% (two per cent) above the rate
at which we, in accordance with our normal practice, are able to obtain
deposits in a sum equal to and in the currency of the amount in default in
the London Interbank Market on a day to day basis.
Payment of interest and commissions shall accrue from day to day and be
computed on the basis of the actual number of days
<PAGE>
elapsed on a 365 day year for amounts in Sterling and a 360 day year for
other currencies.
7. Conditions Precedent
--------------------
Prior to the date of first utilisation of the facility, we shall have
received the following in form and substance satisfactory to us:
a. The enclosed copy of this letter duly signed on your behalf.
b. A guarantee for all obligations owed to us by you hereunder duly
executed by Chicago Miniature Lamp, Inc. of Canton, Massachusetts (the
"Guarantor") and unconditionally delivered by the Guarantor.
c. A standby letter of credit in our favour issued by Boatman's National
Bank of St. Louis, Missouri, or other institution acceptable to us,
for the amount of this facility.
d. Certified copies of the Resolutions of both your and the Guarantor's
Board of Directors respectively authorising the acceptance of this
facility on the terms and conditions of this letter and the issuing of
the guarantee, designating those persons authorised to sign, together
with specimens of their signatures.
e. Certified copies of both your and the Guarantor's Certificate of
Incorporation and Memorandum and Articles of Association (or
equivalent).
f. Mandates from each of you designating those persons authorised to
operate this facility together with specimens of their signatures.
8. Repayment
---------
a. Notwithstanding anything else herein contained, we may at any time
give notice to terminate this facility whereupon no further drawings
may be made. Also we may at any time declare that all short-term
advances outstanding are repayable on demand and require full cash
cover for all guarantees outstanding whereupon all such amounts will
become payable by you on our first written demand.
b. All payments to be made hereunder shall be made without set-off or
counterclaim and free from, and without deduction of any taxes or any
other charges.
9. Information
-----------
You hereby undertake to provide us with copies of your audited accounts no
later than 6 months after your financial year-end and the Guarantor's
audited accounts no later than 3 months
<PAGE>
after its year-end. In addition you agree to supply us with quarterly
management accounts within 45 days of the relevant quarter end, together
with such additional information as we may from time to time require.
10. Costs
-----
a. You hereby agree to reimburse us on demand for all expenses (including
legal fees) inclusive of VAT incurred by us in connection with this
facility or in contemplation of or otherwise in connection with the
enforcement, preservation or protection of any of our rights in
respect thereof.
b. You agree to indemnify us on demand for any loss or damage incurred or
to be incurred by us as a consequence of payment of any amount other
than on the due date thereof or as a result of the payment of any
amount in respect of a short term advance other than on the maturity
date for that advance.
11. Law
---
Our respective rights and obligations shall be governed by and construed in
accordance with English Law.
Please confirm your acceptance of the terms and conditions of this facility by
signing and returning to us the enclosed copy of this letter. This offer is
available for your acceptance for a period of thirty days from the date hereof,
and shall automatically become null and void if not accepted and returned to us
within such period.
Yours faithfully
The First National Bank of Boston
London Branch
/s/ Michael J. Rowe /s/ Robert S. White
Michael J Rowe Robert S White
Vice President Vice President
We hereby agree to and accept the terms and conditions contained in the
foregoing letter and confirm that you may but shall not be obliged to rely upon
and act in accordance with any communication (whether a request for a drawing
under the facility or any other notice, request, instruction or other
communication whatsoever) which may be or purport to be given by telephone or
telex or telefax transmission on our behalf by any person notified to you by us
as being authorised to give such communication without enquiry by you as to the
authority or identity of the person making or purporting to make such
communication. In consideration of your acting in accordance with the foregoing
we hereby indemnify you and
<PAGE>
agree to keep you indemnified against all losses, claims, actions, proceedings,
damages, costs and expenses incurred or sustained by you as a result thereof or
in connection therewith.
The persons authorised to give communications on our behalf are the persons for
the time being named on the mandate delivered to you.
Yours faithfully
For and on behalf of
Badalex Limited Chicago Miniature Lamp
Europe Limited
by: /s/ Mark Bigam by: /s/ Mark Bigam
dated: 2nd May 1996 dated: 2nd May 1996
<PAGE>
EXHIBIT 10.35
LIMITED GUARANTY
GUARANTY, dated as of May 3, 1996 by Chicago Miniature Lamp, Inc. (the
"Guarantor"), in favor of THE FIRST NATIONAL BANK OF BOSTON, a national banking
association, with its head office at 100 Federal Street, Boston, Massachusetts
02110, its foreign and domestic branches and Affiliates (the "Bank"). In
consideration of the Bank's giving, in its discretion, time, credit or banking
facilities or accommodations to the Customer, the Guarantor agrees as follows:
1. DEFINITIONS. As used in this Guaranty:
"Affiliate" means any entity controlling, controlled by or under common
control with the Bank.
"Business Day" means a day on which banks are open for the transaction of
banking business in Boston, Massachusetts.
"Customer" means, collectively, Badalex, Ltd. and Chicago Miniature Lamp
Europe, Ltd. and includes their respective successors.
"Guaranty" means this instrument as originally executed and includes all
amendments and supplements hereto.
"Obligations" means all liabilities, agreements and other obligations of
the Customer to the Bank, whether direct or indirect, absolute or contingent,
due or to become due, secured or unsecured, now existing or hereafter arising or
acquired (whether by way of discount, letter of credit, lease, loan, overdraft
or otherwise).
"Obligation Agreement" means any bill of exchange, draft, promissory note,
agreement or other writing evidencing, securing or otherwise executed in
connection with any Obligation.
"Obligation Currency" means the currency in which an Obligation is to be
paid.
2. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees
to the Bank the full and punctual payment when due (whether at maturity, by
acceleration or otherwise) at the place specified therefor or, if no place of
payment is specified, at the office designated by the Bank, and the performance,
of each Obligation of the Customer to the Bank. This Guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual payment and
performance of the Obligations and not of their collectibility only and is in no
way conditioned upon any requirement that the Bank first attempt to collect any
of the Obligations from the Customer or resort to any security or other means of
obtaining their payment. Should the Customer default in the payment or
performance of any of the Obligations, the obligations of the Guarantor
hereunder shall become immediately due and payable to the Bank, without demand
or notice of any nature,
<PAGE>
all of which are expressly waived by the Guarantor. Payments by the Guarantor
hereunder may be required by the Bank on any number of occasions.
3. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further agrees, as the
principal obligor and not as a guarantor only, to pay to the Bank, on demand, in
funds immediately available to the Bank,
(a) the amount of each Obligation which has not been paid when due, in
the Obligation Currency and at the place of payment specified therefor, or
if no place of payment is specified, at the office designated by the Bank;
or
(b) at the option of the Bank (expressed in its demand for payment
hereunder) and in lieu of payment in the Obligation Currency, in United
States currency and at the head office of the Bank, an amount equal to the
cost in United States currency of the amount of the Obligation Currency
needed to pay in full and discharge such Obligation, determined at the
Bank's spot rate of exchange in Boston, Massachusetts for the purchase of
such Obligation Currency with United States currency at the close of
business on the Business Day next preceding the date of payment of such
Obligation (or if there is no such rate on such date, such rate on the next
preceding date for which there is such a rate); and
(c) in United States currency and at the head office of the Bank, all
costs and expenses (including court costs and legal expenses) incurred or
expended by the Bank in connection with the Obligations, this Guaranty and
the enforcement thereof, together with interest on amounts recoverable
under this Guaranty from the time such amounts become due until payment, at
the rate per annum equal to 18% or, if higher, the rate of interest
announced by The First National Bank of Boston from time to time at its
head office as its Base Rate, plus 4%; provided that if such interest
exceeds the maximum amount permitted to be paid under applicable law, then
such interest shall be reduced to such maximum permitted amount.
4. LIMITED GUARANTY. The liability of the Guarantor hereunder shall be
the sum of (i) all Obligations (exclusive of accruals in respect of interest
thereon, and banking charges, commissions, costs and expenses chargeable to the
Customer in respect thereof) up to but not exceeding Two Million Six Hundred
Thousand Pounds Sterling ((Pounds)2,600,000) in the aggregate plus, without
limitation as to the amounts thereof, (ii) all interest, banking charges,
commissions, costs and expenses chargeable to the Customer in respect of such
Obligations, and (iii) all interest and other costs and expenses payable by the
Guarantor pursuant to Section 3 hereof. Each payment made by the Guarantor
hereunder which is applied against the Obligations referred to in clause (i)
above shall reduce such liability by a like amount. The Bank's dealings with
the Customer need not be limited to any particular
-2-
<PAGE>
sum notwithstanding any limitation herein upon the liability of the Guarantor.
5. WAIVERS BY GUARANTOR; BANK'S FREEDOM TO ACT. The Guarantor agrees
that the Obligations will be paid and performed strictly in accordance with
their respective terms and if there is an Obligation Agreement, strictly in
accordance with the terms thereof, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Bank with respect thereto. The Guarantor waives presentment,
demand, protest, notice of acceptance, notice of Obligations incurred and all
other notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of the Customer, and all
suretyship defenses generally. Without limiting the generality of the
foregoing, the Guarantor agrees to the provisions of any Obligation Agreement
and agrees that the obligations of the Guarantor hereunder shall not be released
or discharged, in whole or in part, or otherwise affected by (i) the failure of
the Bank to assert any claim or demand or to enforce any right or remedy against
the Customer; (ii) any extensions or renewals of any Obligation; (iii) any
rescissions, waivers, amendments or modifications of any of the terms or
provisions of any Obligation Agreement; (iv) the substitution or release of any
entity primarily or secondarily liable for any Obligation; (v) the adequacy of
any rights the Bank may have against any collateral or other means of obtaining
repayment of the Obligations; (vi) the impairment of any collateral securing the
Obligations, including without limitation the failure to perfect or preserve any
rights the Bank might have in such collateral or the substitution, exchange,
surrender, release, loss or destruction of any such collateral; or (vii) any
other act or omission which might in any manner or to any extent vary the risk
of the Guarantor or otherwise operate as a release or discharge of the
Guarantor, all of which may be done without notice to the Guarantor.
6. UNENFORCEABILITY OF OBLIGATIONS AGAINST CUSTOMER. If for any reason
the Customer has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable
from the Customer by operation of law or for any other reason, this Guaranty
shall nevertheless be binding on the Guarantor to the same extent as if the
Guarantor at all times had been the principal obligor on all such Obligations.
In the event that acceleration of the time for payment of the Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Customer, or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of any Obligation Agreement shall be immediately due and payable by the
Guarantor.
7. SUBROGATION; SUBORDINATION. Until the payment and performance in full
of all Obligations, the Guarantor shall not exercise any rights against the
Customer arising as a result of payment by the Guarantor hereunder, by way of
subrogation or
-3-
<PAGE>
otherwise, and will not prove any claim in competition with the Bank or its
Affiliates in respect of any payment hereunder in bankruptcy or insolvency
proceedings of any nature: the Guarantor will not claim any set-off or
counterclaim against the Customer in respect of any liability of the Guarantor
to the Customer; and the Guarantor waives any benefit of and any right to
participate in any collateral which may be held by the Bank or any such
Affiliate. The payment of any amounts due with respect to any indebtedness of
the Customer now or hereafter held by the Guarantor is hereby subordinated to
the prior payment in full of the Obligations. The Guarantor agrees that after
the occurrence of any default in the payment or performance of the Obligations,
the Guarantor will not demand, sue for or otherwise attempt to collect any such
indebtedness of the Customer to the Guarantor until the Obligations shall have
been paid in full. If, notwithstanding the foregoing sentence, the Guarantor
shall collect, enforce or receive any amounts in respect of such indebtedness,
such amounts shall be collected, enforced and received by the Guarantor as
trustee for the Bank and be paid over to the Bank on account of the Obligations
without affecting in any manner the liability of the Guarantor under the other
provisions of this Guaranty.
8. SECURITY; SET-OFF. The Guarantor grants to the Bank, as security for
the full and punctual payment and performance of the Guarantor's obligations
hereunder, a continuing lien on and security interest in all securities or other
property belonging to the Guarantor now or hereafter held by the Bank and in all
deposits (general or special, time or demand, provisional or final) and other
sums credited by or due from the Bank to the Guarantor or subject to withdrawal
by the Guarantor; and regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, the Bank is hereby authorized
at any time and from time to time, without notice to the Guarantor (any such
notice being expressly waived by the Guarantor) and to the fullest extent
permitted by law, to set off and apply such deposits and other sums against the
obligations of the Guarantor under this Guaranty, whether or not the Bank shall
have made any demand under this Guaranty and although such obligations may be
contingent or unmatured.
9. FURTHER ASSURANCES. The Guarantor agrees that it will, from time to
time at the request of the Bank, provide to the Bank its most recent audited and
unaudited balance sheets and related statements of income and changes in
financial condition (prepared on a consolidated basis with the Guarantor's
subsidiaries, if any) and such other information relating to the business and
affairs of the Guarantor as the Bank may reasonably request. The Guarantor also
agrees, upon demand after any change in the condition or affairs (financial or
otherwise) of the Guarantor deemed by the Bank to be adverse and material to
secure the payment and performance of its obligations hereunder by delivering,
assigning or transferring to the Bank or granting the Bank a security interest
in additional collateral of a value and character satisfactory to the Bank, and
authorizes the Bank to file any financing statement deemed by the Bank to be
necessary or desirable
-4-
<PAGE>
to perfect any security interest granted by the Guarantor to the Bank, and as
agent for the Guarantor, to sign the name of the Guarantor thereto. The
Guarantor also agrees to do all such things and execute all such documents,
including financing statements, as the Bank may consider necessary or desirable
to give full effect to this Guaranty and to perfect and preserve the rights and
powers of the Bank hereunder.
10. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full force
and effect until the Bank is given written notice of the Guarantor's intention
to discontinue this Guaranty, notwithstanding any intermediate or temporary
payment or settlement of the whole or any part of the Obligations. No such
notice shall be effective unless received and acknowledged by an officer of the
Bank at its head office or at the branch of the Bank where this Guaranty is
given. No such notice shall affect any rights of the Bank or of any Affiliate
hereunder including, without limitation, the rights set forth in Sections 5 and
7, with respect to Obligations incurred prior to the receipt of such notice or
Obligations incurred pursuant to any contract or commitment in existence prior
to such receipt, and all checks, drafts, notes, instruments (negotiable or
otherwise) and writings made by or for the account of the Customer and drawn on
the Bank or any of its agents purporting to be dated on or before the date of
receipt of such notice, although presented to and paid or accepted by the Bank
after that date, shall form part of the Obligations. This Guaranty shall
continue to be effective or be reinstated, notwithstanding any such notice, if
at any time any payment made or value received with respect to an Obligation is
rescinded or must otherwise be returned by the Bank upon the insolvency,
bankruptcy or reorganization of the Customer, or otherwise, all as though such
payment had not been made or value received.
11. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Bank and its successors, transferees and assigns. Without
limiting the generality of the foregoing sentence, the Bank may assign or
otherwise transfer any Obligation Agreement or any note held by it evidencing
the Obligations, or sell participations in any interest therein, to any other
person or entity, and such other person or entity shall thereupon become vested,
to the extent set forth in the agreement evidencing such assignment, transfer or
participation, with all the rights in respect thereof granted to the Bank
herein.
12. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Bank. No
failure on the part of the Bank to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.
-5-
<PAGE>
13. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or mailed
first class mail postage prepaid or, in the case of telegraphic or telexed
notice, when transmitted, answer back received, addressed as follows: if to the
Guarantor, at the address set forth beneath its signature hereto, and if to the
Bank, at 100 Federal Street, Boston, Massachusetts 02110, Telex: 940581 BOSTONBK
BSN Attention: Timothy G. Clifford, Vice President, or at such other address as
either party may designate in writing.
14. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts. The Guarantor
agrees that any suit for the enforcement of this Guaranty may be brought in the
courts of The Commonwealth of Massachusetts or any Federal Court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Guarantor by mail at the address
specified in Section 13 hereof. The Guarantor hereby waives any objection that
it may now or hereafter have to the venue of any such suit or any such court or
that such suit was brought in an inconvenient court.
15. JUDGMENT CURRENCY. If for the purpose of obtaining judgment in any
court or enforcing any such judgment it is necessary to convert any amount due
in any Obligation Currency into any other currency, the rate of exchange used
shall be the Bank's spot rate of exchange for the purchase of the Obligation
Currency with such other currency at the close of business on the Business Day
preceding the date on which judgment is given or any order for payment is made.
The obligation of the Guarantor in respect of any amount due from it hereunder
shall, notwithstanding any judgment or order for a liquidated sum or sums in
respect of amounts due hereunder or under any judgment or order in any other
currency or otherwise, be discharged only to the extent that on the Business Day
following receipt by the Bank of any payment in a currency other than the
Obligation Currency the Bank is able (in accordance with normal banking
procedures) to purchase the Obligation Currency with such other currency. If
the amount of the Obligation Currency that the Bank is able to purchase with
such other currency is less than the amount due in the Obligation Currency,
notwithstanding any judgment or order, the Guarantor shall indemnify the Bank
for the shortfall.
16. SUBSTITUTE CONVERSION RATE. If on any conversion date provided for in
this Guaranty the Bank is not quoting a spot rate of exchange in Boston,
Massachusetts for the purchase of an Obligation Currency with United States
currency, the rate of exchange to be applied in lieu thereof shall be the
official rate of exchange for the purchase of United States currency with the
relevant Obligation Currency established by the country in which the Obligation
Currency is legal tender as made available by such country to the International
Monetary Fund and as reported by the
-6-
<PAGE>
International Monetary Fund at its headquarters in Washington, D.C. to be in
effect on such date.
17. OBLIGATIONS ABSOLUTE. The Guarantor agrees that its obligations
hereunder shall not be affected by (i) any law, regulation, order, decree or
directive (whether or not having the force of law) or any interpretation
thereof, now or hereafter in effect in any jurisdiction, that purports to modify
any of the terms of or rights of the Bank with respect to any Obligation or
under any Obligation Agreement or this Guaranty, including without limitation
any law, regulation, order, decree or directive or interpretation thereof that
purports to require or permit the satisfaction of any Obligation other than
strictly in accordance with the terms of such Obligation and any related
Obligation Agreement (such as by the tender of a currency other than the
Obligation Currency) or that restricts the procurement of the Obligation
Currency by the Customer or the Guarantor; or (ii) any agreement, whether or not
signed by or on behalf of the Bank, in connection with the restructuring or
rescheduling of public or private obligations in the Customer's country, whether
or not such agreement is stated to cause or permit the discharge of the
Obligations prior to the final payment in full of the Obligations in the
Obligation Currency in strict accordance with any Obligation Agreement.
18. SPECIAL AGREEMENT WITH RESPECT TO DEBT RESTRUCTURING. Notwithstanding
any limitation on liability set forth in Section 4 to the contrary, if an
Obligation shall be made subject to a debt restructuring arrangement between a
country and its creditors or creditors of persons or entities of such country,
and as a result thereof the Bank, as holder of such Obligation and other credit
facilities to such country, persons or entities of such country, shall agree to
provide any new credit facilities, the Guarantor shall fund (and be the
beneficial owner of) that amount of such new credit facilities which is
calculated by (i) dividing the face value of such Obligation by the aggregate
amount of the Bank's credit facilities made part of the restructuring
arrangement and (ii) multiplying the result by the amount of such new credit
facilities. The Guarantor agrees to execute and deliver such documents and take
such actions as may be requested by the Bank to effect the purposes of this
Section 18. The Bank agrees to provide the Guarantor with copies of the
relevant documents governing its participation in the restructuring arrangement
and new credit facilities and shall provide the Guarantor with the basis on
which it has calculated the Guarantor's portion of such new credit facilities,
which calculations shall be conclusive absent manifest error.
19. MISCELLANEOUS. This Guaranty constitutes the entire agreement of
the Guarantor with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of the Obligations. The invalidity or unenforceability of
any one or more sections of this Guaranty shall not affect the
-7-
<PAGE>
validity or enforceability of its remaining provisions. Captions are for the
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty shall be
equally applicable to the singular and plural forms of the terms defined.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
and delivered by its duly authorized officer as of the date appearing on page
one.
CHICAGO MINIATURE LAMP, INC.
By: /s/ Frank M. Ward
-----------------------------
Title: President
Address: 500 Chapman Street
Canton, MA 02021
Telex: ________________________
Note - A separate guaranty must be signed by each guarantor.
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