Exhibit 10.1
SECOND AMENDMENT TO LOAN
AGREEMENT
THIS SECOND AMENDMENT TO LOAN
AGREEMENT (the “ Amendment ”) is made and
entered into effective as of June 30, 2009, by and between
AMERICAN ELECTIC TECHNOLOGIES, INC. , a Florida corporation
(“ Borrower ”), and JPMORGAN CHASE BANK,
N.A. , a national association (“ Lender
”).
R
E C I
T A L S :
WHEREAS, Borrower and Lender entered
into a Letter Loan Agreement dated October 31, 2007 (which as
the same may have been or may hereafter be amended from time to
time is herein called the “ Loan Agreement ”;
the terms defined therein being used herein as therein defined
unless otherwise defined herein); and
WHEREAS, Borrower and Lender desire
to amend the Loan Agreement to extend the Maturity Date and amend
certain terms and provisions of the Loan Agreement.
A
G R E
E M E N T :
1. Amendments to the Loan
Agreement . The Loan Agreement is, effective the date hereof,
and subject to the satisfaction of the conditions precedent set
forth in Section 2 hereof, hereby amended as
follows:
(a) Section 1 of the Loan
Agreement is hereby amended in its entirety to read as
follows:
“(a) Commitment .
Subject to the terms and conditions set forth herein, Lender agrees
to make loans (each of which is a “ Loan ”, and
collectively the “ Loans ”) to Borrower, on a
revolving basis (the “ Borrowing Base Facility
”) from time to time during the period commencing on the date
hereof and continuing through July 1, 2011 (the “
Maturity Date ”), the maturity date of the promissory
note evidencing the Borrowing Base Facility, such amounts as
Borrower may request hereunder; provided, however, the total
principal amount (the “ Borrower’s Loan Limit
”) outstanding at any time shall not exceed the lesser of
(i) an amount equal to the Borrowing Base and
(ii) $10,000,000 minus the aggregate face amount of any
Letters of Credit. Subject to the terms and conditions hereof,
Borrower may borrow, repay and reborrow hereunder. If at any time
the outstanding advances under the Borrowing Base Facility exceed
the Borrower’s Loan Limit as shown on any reports delivered
to Lender under Section 6(d)(ii) or as indicated by
Lender’s own records, Borrower shall, on the date of the
delivery of such report to Lender or on the date of notice from
Lender as to Lender’s records, prepay on the Borrowing Base
Facility such amount as may be necessary to eliminate such excess,
plus all accrued but unpaid interest thereon. The sums advanced
under the Borrowing Base Facility shall be used for general
corporate purposes and working capital. As used in this Agreement,
the term “Borrowing Base” shall have the meaning set
forth in Exhibit A attached hereto.
(b) Interest Rates . The
Advance(s) evidenced by this Agreement may be drawn down and remain
outstanding as up to five (5) LIBOR Rate Advances
Second Amendment to Loan Agreement – Page
1
and/or a CB Floating Rate Advance.
Borrower shall pay interest to Lender on the outstanding and unpaid
principal amount of each CB Floating Rate Advance at the CB
Floating Rate plus the Applicable Margin and each LIBOR Rate
Advance at the Adjusted LIBOR Rate. Interest shall be calculated on
the basis of the actual number of days elapsed in a year of 360
days, unless that calculation would result in a usurious interest
rate, in which case interest will be calculated on the basis of a
365 or 366 day year, as the case may be. In no event shall the
interest rate applicable to any Advance exceed the maximum rate
allowed by law. Any interest payment which would for any reason be
deemed unlawful under applicable law shall be applied to
principal.
(c) Notice and Manner of Electing
Interest Rates on Advances . Borrower shall give Lender written
notice (effective upon receipt) of Borrower’s intent to draw
down an Advance under this Agreement no later than 2:00 p.m.
Central time, on the date of disbursement, if the full amount of
the drawn Advance is to be disbursed as a CB Floating Rate Advance
and no later than 11:00 a.m. Central time three (3) Business
Days before disbursement, if any part of such Advance is to be
disbursed as a LIBOR Rate Advance. Borrower’s notice must
specify: (i) the disbursement date, (ii) the amount of
each Advance, (iii) the type of each Advance (CB Floating Rate
Advance or LIBOR Rate Advance), and (iv) for each LIBOR Rate
Advance, the duration of the applicable Interest Period; provided,
however, that Borrower may not elect an Interest Period ending
after the Maturity Date. Each LIBOR Rate Advance shall be in a
minimum amount of $100,000. All notices under this subparagraph are
irrevocable. By Lender’s close of business on the
disbursement date and upon fulfillment of the conditions set forth
herein and in any other of the Loan Documents, Lender shall
disburse the requested Advances in immediately available funds by
crediting the amount of such Advances to Borrower’s account
with Lender.
(d) Conversion and Renewals .
Borrower may elect from time to time to convert one type of Advance
into another or to renew any Advance by giving Lender written
notice no later than 2:00 p.m. Central time, on the date of the
conversion into or renewal of a CB Floating Rate Advance and 11
a.m. Central time three (3) Business Days before conversion
into or renewal of a LIBOR Rate Advance, specifying: (i) the
renewal or conversion date, (ii) the amount of the Advance to
be converted or renewed, (iii) in the case of conversion, the
type of Advance to be converted into (CB Floating Rate Advance or
LIBOR Rate Advance), and (iv) in the case of renewals of or
conversion into a LIBOR Rate Advance, the applicable Interest
Period, provided that (1) the minimum principal amount of each
LIBOR Rate Advance outstanding after a renewal or conversion shall
be $100,000; (2) a LIBOR Rate Advance can only be converted on
the last day of the Interest Period for the Advance; and
(3) Borrower may not elect an Interest Period ending after the
Maturity Date. All notices given under this subparagraph are
irrevocable. If Borrower fails to give Lender the notice specified
above for the renewal or conversion of a LIBOR Rate Advance by
11:00 a.m. Central time three (3) Business Days before the end
of the Interest Period for that Advance, the Advance shall
automatically be converted to a CB Floating Rate Advance on the
last day of the Interest Period for the Advance.
Second Amendment to Loan Agreement – Page
2
(e) Interest Payments .
Interest on the Advances shall be paid as follows:
(i) For each CB Floating Rate
Advance, on the last day of each month beginning with the first
month following disbursement of the Advance or following conversion
of an Advance into a CB Floating Rate Advance, and at the maturity
or conversion of the Advance into a LIBOR Rate Advance;
and
(ii) For each LIBOR Rate Advance, on
the last day of the Interest Period for the Advance and, if the
Interest Period is longer than three (3) months, at
three-month intervals beginning with the day three (3) months
from the date the Advance is disbursed.
(f) Prepayments and Funding Loss
Indemnification . Borrower may prepay all or any part of any CB
Floating Rate Advance at any time without premium or penalty.
Borrower shall pay Lender amounts sufficient (in Lender’s
reasonable opinion) to compensate Lender for any loss, cost, or
expense incurred as a result of:
(i) Any payment of a LIBOR Rate
Advance on a date other than the last day of the Interest Period
for the Advance, including, without limitation, acceleration of the
Advances by Lender pursuant to this Agreement or the other Loan
Documents; or
(ii) Any failure by Borrower to
borrow or renew a LIBOR Rate Advance on the date specified in the
relevant notice from Borrower to Lender.
(g) Principal Payments .
Borrower promises to pay all Advances then outstanding on the
Maturity Date.
(h) Default Rate of Interest
. After an Event of Default has occurred, whether or not Lender
elects to accelerate the maturity of the Note because of such Event
of Default, all Advances outstanding under this Agreement shall
bear interest at a per annum rate equal to the interest rate being
charged on the Advance plus 3% (the “ Default Rate
”) from the date Lender elects to impose such rate.
Imposition of such rate shall not affect any limitations contained
in this Agreement on Borrower’s right to repay principal on
any LIBOR Rate Advance before the expiration of the Interest Period
for that Advance.
(i) Additional Costs . If any
applicable domestic or foreign law, treaty, government rule or
regulation now or later in effect (whether or not it now applies to
Lender) or the interpretation or administration thereof by a
governmental authority charged with such interpretation or
administration, or compliance by Lender with any guideline, request
or directive of such an authority (whether or not having the force
of law), shall (1) affect the basis of taxation of payments to
Lender of any amounts payable by Borrower under this Agreement or
the other Loan Documents (other than taxes imposed on the overall
net income of Lender
Second Amendment to Loan Agreement – Page
3
by the jurisdiction or by any
political subdivision or taxing authority of the jurisdiction in
which Lender has its principal office), or (2) impose, modify
or deem applicable any reserve, special deposit or similar
requirement (including, without limitation, Federal Deposit
Insurance Corporation deposit insurance premiums or assessments)
against assets of, deposits with or for the account of, or credit
extended by Lender, or (3) impose any other condition with
respect to this Agreement or the other Loan Documents and the
result of any of the foregoing is to increase the cost to Lender of
extending, maintaining or funding any Advance or to reduce the
amount of any sum receivable by Lender on any Advance, or
(4) affect the amount of capital required or expected to be
maintained by Lender (or any corporation controlling Lender) and
Lender determines that the amount of such capital is increased by
or based upon the existence of Lender’s obligations under
this Agreement or the other Loan Documents and the increase has the
effect of reducing the rate of return on Lender’s (or its
controlling corporation’s) capital as a consequence of the
obligations under this Agreement or the other Loan Documents to a
level below that which Lender (or its controlling corporation)
could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by Lender to be material, then Borrower shall pay to
Lender, from time to time, upon request by Lender, additional
amounts sufficient to compensate Lender for the increased cost or
reduced sum receivable. Whenever Lender shall learn of
circumstances described in this section which are likely to result
in additional costs to Borrower, Lender shall give prompt written
notice to Borrower of the basis for and the estimated amount of any
such anticipated additional costs. A statement as to the amount of
the increased cost or reduced sum receivable, prepared in good
faith and in reasonable detail by Lender and submitted by Lender to
Borrower, shall be conclusive and binding for all purposes absent
manifest error in computation.
(j) Illegality . If any
applicable domestic or foreign law, treaty, rule or regulation now
or later in effect (whether or not it now applies to Lender) or the
interpretation or administration thereof by a governmental
authority charged with such interpretation or administration, or
compliance by Lender with any guideline, request or directive of
such an authority (whether or not having the force of law), shall
make it unlawful or impossible for Lender to maintain or fund the
LIBOR Rate Advances, then, upon notice to Borrower by Lender, the
outstanding principal amount of the LIBOR Rate Advances, together
with accrued interest and any other amounts payable to Lender under
this Agreement or the other Loan Documents on account of the LIBOR
Rate Advances shall be repaid (i) immediately upon
Lender’s demand if such change or compliance with such
requests, in Lender’s judgment, requires immediate repayment,
or (ii) at the expiration of the last Interest Period to
expire before the effective date of any such change or request
provided, however, that subject to the terms and conditions of this
Agreement and the other Loan Documents Borrower shall be entitled
to simultaneously replace the entire outstanding balance of any
LIBOR Rate Advance repaid in accordance with this section with a CB
Floating Rate Advance in the same amount.
Second Amendment to Loan Agreement – Page
4
(k) Inability to Determine
Interest Rate . If Lender determines that (i) quotations
of interest rates for the relevant deposits referred to in the
definition of Adjusted LIBOR Rate are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining the interest rate on a LIBOR Rate Advance as provided
in this Agreement, or (ii) the relevant interest rates
referred to in the definition of Adjusted LIBOR Rate do not
accurately cover the cost to Lender of making, funding or
maintaining LIBOR Rate Advances, then Lender shall, at
Lender’s option, give notice of such circumstances to
Borrower, whereupon (1) the obligation of Lender to make LIBOR
Rate Advances shall be suspended until Lender notifies Borrower
that the circumstances giving rise to the suspension no longer
exists and (2) Borrower shall repay in full the then
outstanding principal amount of each LIBOR Rate Advance, together
with accrued interest, on the last day of the then current Interest
Period applicable to the LIBOR Rate Advance; provided, however,
that, subject to the terms and conditions of this Agreement and the
other Loan Documents, Borrower shall be entitled to simultaneously
replace the entire outstanding balance of any LIBOR Rate Advance
repaid in accordance with this section with an Advance bearing
interest at the CB Floating Rate plus the Applicable Margin for CB
Floating Rate Advances in the same amount. If the Lender determines
on any day that quotations of interest rates for the relevant
deposits referred to in the definition of Adjusted One Month LIBOR
Rate are not being provided for purposes of determining the
interest rate on any CB Floating Rate Advance on any day, then each
CB Floating Rate Advance shall hear interest at the Prime Rate plus
the Applicable Margin for CB Floating Rate Advances until Lender
determines that quotations of interest rates for the relevant
deposits referred to in the definition of Adjusted One Month LIBOR
Rate are being provided.
(l) Obligations Due on
Non-Business Day . Whenever any payment under this Agreement
becomes due and payable on a day that is not a Business Day, if no
Event of Default then exists, the maturity of the payment shall be
extended to the next succeeding Business Day, except, in the case
of a LIBOR Rate Advance, if the result of the extension would be to
extend the payment into another calendar month, the payment must be
made on the immediately preceding Business Day.
(m) Application of Payments .
Payments shall be allocated among principal, interest and fees at
the discretion of Lender unless otherwise agreed or required by
applicable law. Acceptance by Lender of any payment which is less
than the payment due at the time shall not constitute a waiver of
Lender’s right to receive payment in full at that time or any
other time.
(n) Commitment Fee . In
consideration of Lender’s commitment to make Advances,
Borrower will pay to Lender a commitment fee (the “
Commitment Fee ”) determined on a daily basis by
applying 0.30% per annum to the unused portion of the
Borrower’s Loan Limit on each day during the term of the
Borrowing Base Facility, determined for each such day by deducting
from the amount of the Borrower’s Loan Limit at the end of
such day the Facility Usage. For the purposes of this subparagraph
(n), the term “ Facility Usage ” mean
the
Second Amendment to Loan Agreement – Page
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aggregate amount of outstanding
Advances under the Borrowing Base Facility. The Commitment Fee
shall be due and payable quarterly in arrears on the last day of
each March, June, September and December, commencing on
June 30, 2009, and at the Maturity Date.”
(b) The definition of
“Consolidated Tangible Net Worth” in Section 8(a)
of the Loan Agreement is hereby amended in its entirety to read as
follows:
“ Consolidated Tangible Net
Worth ” means all of Borrower’s and its
Subsidiaries’ assets less the sum of (i) the aggregate
book value of Co
