Exhibit 10.13
LOAN SALE
AGREEMENT
This Loan Sale Agreement (the
“ Agreement ”) is made as of January 20,
2006, between WELLS FARGO BUSINESS CREDIT, a division of Wells
Fargo Bank, NA (“ Seller ”), and OPTA
CORPORATION, a Delaware corporation, formerly known as LOTUS
PACIFIC, INC. (“ Buyer ”).
RECITALS :
A.
Pursuant to a Credit and Security
Agreement dated as of July 21, 2003, (as thereafter amended,
supplemented or modified, the “ Credit Agreement
”) and a Revolving Note dated July 21, 2003 (as
thereafter amended, supplemented or modified, the “
Note ”), OPTA SYSTEMS, LLC, a Delaware limited
liability company (the “ Borrower ”) is indebted
to Seller for a secured revolving loan (the “ Loan
”) in the original principal amount of Twenty Million Dollars
($20,000,000.00). The Credit Agreement was amended by the First
Amended Forbearance Agreement that was executed by Borrower and
Lender on July 22, 2005, by the Letter Agreement that was
executed by Borrower and Lender on July 26, 2005, the Second
Amended Forbearance Agreement that was executed by Borrower and
Lender on August 25, 2006, the Third Amended Forbearance
Agreement that was executed by Borrower and Lender as of
October 13, 2005, and by the Letter Agreement that was
executed by Borrower and Lender on January 12, 2006
(collectively, the “ Forbearance Agreement
”).
B.
The Loan is secured by a security
interest in substantially all of Borrower’s personal property
(other than intellectual property). The agreements, documents, and
instruments securing the Loan (including the Credit Agreement) are
referred to individually and collectively as the “
Security Documents” . The Loan is guaranteed by Buyer,
(in its capacity as guarantor, the “ Guarantor
”) pursuant to a Guaranty by Corporation, dated July 16,
2003 (the “ Guaranty ”). The Note, the Security
Documents, the Guaranty and all other agreements, documents, and
instruments evidencing, securing, or otherwise relating to the
Loan, are sometimes herein referred to individually as a “
Loan Document ” and collectively as the “
Loan Documents .” Capitalized terms not
otherwise defined herein shall have the same meanings ascribed to
them in the Loan Documents.
C.
Buyer desires to purchase and Seller
desires to sell the Loan.
NOW, THEREFORE, for good and
valuable consideration, Seller and Buyer agree as
follows:
1.
Purchase and Sale
. Subject to the terms and
conditions of this Agreement, Buyer agrees to purchase the Loan
from Seller, and Seller agrees to sell the Loan to Buyer, without
recourse, representation, or warranty of any kind, express or
implied, except as stated in Paragraph 7 hereof.
2.
Purchase Price
. Buyer shall pay the Purchase Price
to Seller for the Loan. The Purchase Price (the “ Purchase
Price ”) shall be equal to all amounts due and owing by
Borrower to Lender pursuant to the Loan Documents, including
Forbearance Fees of $155,000.00 due to Lender pursuant to the
Forbearance Agreement and $8,700.00 in legal and audit fees and
expenses incurred by Seller in connection with the Loan and the
legal fees incurred in the
preparation and negotiation of this
Agreement and the incidental documents hereto, less the amounts due
and owing to Participant pursuant to the Participation Agreement,
dated July , 2005, by and between Seller and
Buyer, as thereafter amended, supplemented or modified (the “
Participation Agreement ”). The amount of the Purchase
Price and the calculation thereof are set forth on
Exhibit A hereto.
3.
Closing . The consummation of the sale and purchase
pursuant to this Agreement (the “ Closing ”) is
contemplated to occur on January 20, 2006, or on such other
date as the parties shall mutually agree (the “ Closing
Date ”). At the Closing, the following payments and
actions shall be made and taken or occur simultaneously, and shall
be concurrent conditions to Closing:
(a)
Lender shall deliver to Wells Fargo
Bank, N.A. (“Bank”), pursuant to the Deposit Account
Control Agreement, dated as of July 26, 2005 (“Control
Agreement”), among Seller, Buyer and Bank, a written notice
to debit the Account (as defined in the Control Agreement) in the
amount of the Purchase Price and to deliver such amount to or upon
the order of Seller. The notice shall further notify the Bank, in
accordance with Section 7 of the Control Agreement, that upon
payment of the Purchase Price to Seller, the Control Agreement and
security interest of Seller in the Account is terminated. The
Account and any funds thereafter remaining shall be under the
exclusive dominion and control of Buyer.
(b)
The Participation Agreement shall be
terminated.
(c)
The contents of the Lockbox,
Remittances and Account Funds (each as defined in the Lockbox and
Collection Account Agreement, dated as of July 21, 2003 among
Borrower, Seller and Bank, shall be directed to Buyer, in
accordance with the Amended and Restated Lockbox and Collection
Account Agreement of even date herewith, and Section 15
below.
(d)
Buyer shall be the successor to
Seller with respect to the right of Lender under the Subordination
Agreements (including the Subordination Agreement dated as of
July 26, 2005 executed in TCL Multimedia Technology Holdings
Limited) and Lender hereby acknowledges that it shall have no
further rights or benefits thereunder.
If the Closing has not occurred by
close of business on the Closing Date, then, unless otherwise
agreed by Buyer and Seller in writing, either party
may terminate this Agreement and each party shall have the
rights and remedies against the other under applicable
law.
4.
Purchase and Sale,
Servicing .
(a)
Effective upon the Closing, and
subject to and conditioned upon the terms, covenants, limitations,
and conditions contained herein, Seller does hereby sell, assign,
transfer and convey to Buyer, its successors and assigns, without
recourse, representation or warranty of any kind, express or
implied except as set forth in Paragraph 7 hereof, all of the
right, title, and interest of Seller in, to and under the Loan, the
Loan Documents, and the Collateral and all
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security for the Loan, and does
hereby grant and delegate to Buyer, its successors and assigns, any
and all duties and obligations of Seller under the Loan Documents
from and after Closing.
(b)
Effective upon Closing, Buyer
assumes all of the obligations and liabilities of Seller under or
in connection with the Loan or the Loan Documents, of every kind or
nature whatsoever.
(c)
With respect to all periods after
the Closing, Buyer shall assume complete responsibility for all
servicing and administration of the Loan previously conducted by
Seller or any other person, including, but not limited to, the
collection of all payments thereunder and Seller shall have no
further servicing administrative or other responsibilities with
respect to the Loan after the Closing ( provided that if
Seller receives any payments with respect to the Loan after the
Closing, Seller will forward those payments to Buyer).
(d)
Promptly after the date of Closing,
Buyer shall notify the obligor(s) of Borrower, to the extent
necessary, of the sale of the Loan to Buyer and direct that all
payments on and communications regarding the Loan be sent to
Buyer.
5.
Seller’s Closing
Documents . At the
Closing, as identified in Section 3(a), Seller shall deliver
to Buyer the following documents (collectively “
Seller’s Closing Documents” ):
(a)
The original Note and copies of all
other Loan Documents, as more particularly described in
Exhibit B attached hereto.
(b)
The Allonge and Endorsement(s) (in
the form attached hereto as Exhibit C ) to the
Note, duly executed by Seller, which Allonge and Endorsement(s)
shall be attached to the original Note.
(c)
An Assignment of Loan Documents in
the form attached hereto as Exhibit D .
(d)
The UCC financing statement
amendment(s) in the form(s) attached hereto as
Exhibit E , assigning to Buyer all rights of Seller as
Secured Party for each Uniform Commercial Code Financing
Statement related to the Loan. Buyer is authorized to file the
assignment(s) following the Closing.
(e)
A written Notice of Assignment of
the Loan duly executed by Seller instructing Borrower to remit all
payments to Buyer or its agents.
(f)
The Consent and Agreement of
Borrower and Guarantor in the form attached hereto as
Exhibit F .
6.
Buyer’s Closing
Documents . At the
Closing, Buyer shall deliver to Seller a fully executed copy of
this Agreement and any incidental documents to which Borrower or
Guarantor is a party.
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7.
Representations and Warranties of
Seller . BUYER
ACKNOWLEDGES AND AGREES THAT THE SALE DESCRIBED HEREIN IS MADE ON
AN AS IS BASIS WITHOUT RECOURSE, REPRESENTATION, OR WARRANTY OF ANY
KIND BY SELLER, WHETHER EXPRESS OR IMPLIED (EXCEPT AS SPECIFICALLY
SET FORTH BELOW), INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION
OR WARRANTY REGARDING THE LOAN, THE COLLECTABILITY OF THE LOAN, THE
EXISTENCE OF ANY DEFAULTS WITH RESPECT TO THE LOAN, THE VALIDITY OR
ENFORCEABILITY OF THE LOAN DOCUMENTS OR ANY SECURITY THEREFOR, OR
ANY OTHER MATTERS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT BUYER
HAS NOT RELIED ON ANY INFORMATION FROM SELLER IN PURCHASING THE
LOAN, AND BUYER HAS MADE ITS OWN CREDIT DECISION WITH RESPECT
THERETO. Notwithstanding the foregoing, however, Seller hereby
represents and warrants to Buyer as follows:
(a)
Seller is a division of Wells Fargo
Bank, NA, a national banking association validly existing under the
laws of the United States of America.
(b)
Seller has, and at all relevant
times has had, the full power and authority to execute, deliver and
perform this Agreement and to enter into and consummate the
transactions contemplated by this Agreement. Seller has duly
authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this
Agreement constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its
terms.
(c)
Except for the participation
interest of Buyer (pursuant to the Participation Agreement), Seller
is the owner and holder of the Loan and the other rights and
interests purported to be transferred pursuant to this Agreement
free and clear of all liens, encumbrances or other rights in favor
of any third party, has full right and authority, subject to no
interest of participation of, or agreement with any other party, to
sell and assign the Loan and such other rights and interests
pursuant to this Agreement, and Seller has not pledged, assigned or
otherwise previously transferred the Loan or any of such other
rights and interests.
(d)
The outstanding principal balance of
the Loan as of January 19, 2006 is $2,189,148.13. To the best
of Seller’s knowledge, information, and belief, Borrower has
no existing defenses, set-offs or offsets against enforcement of
the Loan and the Loan Documents by Seller or any amounts payable
thereunder.
(e)
Seller has not modified or amended
the Loan except as disclosed in the Recitals to this Agreement or
in Exhibit B attached hereto.
(h)
The Loan Documents listed on
Exhibit B attached hereto, are the only documents,
instruments and agreements governing the terms of the
Loan.
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(i)
To the best of Seller’s
knowledge, information, and belief, no event has occurred and
condition exists that constitutes, or that with the giving of
notice of the lapse of time or both, would constitute a default by
Seller under the Loan Documents.
8.
Representations and Warranties of
Buyer . Buyer hereby
represents and warrants to Seller:
(a)
Buyer is a corporation duly
organized and validly existing under the laws of the State of
Delaware.
(b)
Buyer has, and at all relevant times
has had, the full power and authority to execute, deliver and
perform and to enter into and consummate all transactions
contemplated by this Agreement. Buyer has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement
constitutes a legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms.
(c)
Buyer has made such examination,
review and investigation of the Loan Documents and the Loan, and of
any and all facts and circumstances necessary to evaluate the Loan
Documents and the Loan it has deemed necessary or appropriate.
Except for the representations and warranties specifically and
expressly made by Seller in Section 7 above: (a) Buyer
has been and will continue to be solely responsible for
Buyer’s own independent investigations as to all aspects of
the transactions contemplated hereby including, but not limited to:
(i) with respect to Borrower and Guarantor, the authorization,
execution, legality, validity, effectiveness, genuineness,
enforceability, collectability or sufficiency of the Loan and the
Loan Documents; (ii) the adequacy, condition or existence of
any collateral, or the attachment, perfection or priority of any
security interest or lien held by Seller, in connection with the
Loan Documents and the Loan; and (iii) the status, affairs,
financial condition, operations, prospects, business, property,
assets and creditworthiness of Borrower and Guarantor, of any of
the obligations or liabilities of Borrower, and any actions taken
or to be taken under or in connection with the Loan and the Loan
Documents; and (b) Buyer has not relied upon any expressed or
implied, written or oral, representation, warranty or other
statement by or on behalf of Seller concerning any of the foregoing
or otherwise with respect to the Loan or the Loan Documents, except
for such representations and warranties of Seller as are
specifically and expressly provided in this Agreement.
(d)
Buyer is acquiring the Loan and Loan
Documents without any view either to participate in (other than as
described in this Agreement), or to sell the Loan and Loan
Documents in connection with, any public distribution thereof, and
Buyer has no intention of making any distribution of the Loan and
Loan Documents in a manner which would violate applicable
securities laws; provided , however , that nothing in
this Agreement shall restrict or limit in any way
Buyer’s
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ability and right to dispose of all
or part of the Loan and Loan Documents in accordance with such
laws if at some future time Buyer deems it advisable to do so; and,
provided, further, that Buyer and any party acquiring all or any
portion of the Loan and Loan Documents or any proceeds thereof from
Buyer, other than Seller or any successor, must agree in writing to
be bound by (or continue to be bound by) this
Section 8(d).
(e)
Buyer’s performance of its
duties and obligations under this Agreement will not conflict with,
result in a breach of or default under, or be adversely affected
by, any agreements, instruments, decrees, judgments, injunctions,
orders, writs, laws, rules or regulations, or any
determination or awar
