ESCC » Topics » BACKGROUND

These excerpts taken from the ESCC 10-K filed Mar 10, 2008.

Background

        A.    Bank extended to Borrower a line of credit facility on April 28, 2006, (the "Loan") in the maximum principal sum of Three Million Dollars ($3,000,000.00) evidenced by that certain Line of Credit Note (the "Note") made by Borrower and delivered to Bank on April 28, 2006. The Loan is to be advanced pursuant to the terms of a Line of Credit Agreement between Bank, Borrower and Guarantor dated April 28, 2006 (the "Original Line of Credit Agreement"). All capitalized terms not specifically defined herein shall have the meanings given such terms as set forth in the Line of Credit Agreement.

        B.    The Parties entered into that certain First Modification Agreement dated July 28, 2006 (the "First Modification"), wherein, among other modifications, the parties agreed to reduce the Maximum Credit Limit to the lesser of (i) One Million One Hundred Thousand Dollars ($1,100,000.00), or (ii) the sum of (a) eighty (80%) percent of the Borrower's Qualified Accounts Receivable and (b) fifty (50%) percent of Borrower's Qualified Inventory.

        C.    The Parties entered into that certain Second Modification Agreement dated March 8, 2007 (the "Second Modification"), wherein, among other modifications, the parties agreed to reduce the financial reporting requirements respecting the Loan to wive the requirement that Borrower provide audited financials and annual tax returns to Bank in recognition that Borrower is a wholly owned subsidiary of Guarantor and Guarantor is a publically traded company that pursuant to the Line of Credit Agreement, has agreed to provide to Bank, within ninety (90) days following the end of Guarantor's fiscal year and each fiscal quarter, respectively, in each year, Guarantor=s Annual Report on Form 10-K and quarterly report on Form 10-Q.

        D.    The Original Line of Credit Agreement, as amended by the First Modification and the Second Modification (collectively the "Line of Credit Agreement"), defines the Maximum Credit Limit to be the lesser of (i) One Million One Hundred Thousand Dollars ($1,100,000.00), or (ii) the sum of (a) eighty (80%) percent of the Borrower's Qualified Accounts Receivable and (b) fifty (50%) percent of Borrower's Qualified Inventory.

        E.    Borrower and Guarantor have requested that Bank waive the condition that the Maximum Credit Limit be limited to the sum of (a) eighty (80%) percent of the Borrower's Qualified Accounts Receivable and (b) fifty (50%) percent of Borrower's Qualified Inventory, and be limited only to the sum of One Million One Hundred Thousand Dollars ($1,100,000.00).

 
   


JONES, STROHM & GUTHRIE
A Professional Corporation
Attorneys At Law

 

10 Beatty Road
Media, Pennsylvania 19063
Telephone (610) 565-7100
Fax (610) 565-7180

        F.     The Loan matured June 30, 2007.

        G.    Borrower and Guarantor have requested that Bank continue to make available the line of credit facility evidenced by the Note and Line of Credit Agreement.

        H.    As of the date hereof the outstanding principal balance of the Loan is zero dollars ($0.00).

        I.     Bank has no obligation to modify the terms of the Loan. Bank is willing to grant Borrower's aforementioned requests on the terms and conditions set forth in this Agreement.

Background



        SIZE=2>A.    Bank extended to Borrower a line of credit facility on April 28, 2006, (the "Loan") in the maximum principal sum of Three Million Dollars ($3,000,000.00)
evidenced by that certain Line of Credit Note (the "Note") made by Borrower and delivered to Bank on
April 28, 2006. The Loan is to be advanced pursuant to the terms of a Line of Credit Agreement between Bank, Borrower and Guarantor dated April 28, 2006 (the "Original Line of Credit
Agreement"). All capitalized terms not specifically defined herein shall have the meanings given such terms as set forth in the Line of Credit Agreement.



        SIZE=2>B.    The Parties entered into that certain First Modification Agreement dated July 28, 2006 (the "First Modification"),
wherein, among other modifications, the parties agreed to reduce the Maximum Credit Limit to the lesser of (i) 
One Million One Hundred Thousand Dollars
($1,100,000.00),
or (ii) the sum of (a) eighty (80%) percent of the Borrower's Qualified Accounts Receivable and (b) fifty (50%) percent of Borrower's
Qualified Inventory.



        SIZE=2>C.    The Parties entered into that certain Second Modification Agreement dated March 8, 2007 (the "Second
Modification"), wherein, among other modifications, the parties agreed to reduce the financial reporting requirements respecting the Loan to wive the requirement that Borrower provide audited
financials and annual tax returns to Bank in recognition that Borrower is a wholly owned subsidiary of Guarantor and Guarantor is a publically traded company that pursuant to the Line of Credit
Agreement, has agreed to provide to Bank, within ninety (90) days following the end of Guarantor's fiscal year and each fiscal quarter, respectively, in each year, Guarantor=s Annual Report on
Form 10-K and quarterly report on Form 10-Q.



        SIZE=2>D.    The Original Line of Credit Agreement, as amended by the First Modification and the Second Modification (collectively the
"Line of Credit Agreement"), defines the Maximum Credit Limit to be the lesser of (i) 
One Million One Hundred Thousand Dollars ($1,100,000.00),
or (ii) the sum of (a) eighty (80%) percent of the Borrower's Qualified Accounts Receivable and (b) fifty (50%) percent of Borrower's Qualified Inventory.




        SIZE=2>E.    Borrower and Guarantor have requested that Bank waive the condition that the Maximum Credit Limit be limited to the sum of
(a) eighty (80%) percent of the Borrower's Qualified Accounts Receivable and (b) fifty (50%) percent of Borrower's Qualified Inventory, and be limited only to the sum of
One Million One Hundred Thousand Dollars
($1,100,000.00)
.


















 
  



JONES, STROHM & GUTHRIE

A Professional Corporation

Attorneys At Law

 


10 Beatty Road

Media, Pennsylvania 19063

Telephone (610) 565-7100

Fax (610) 565-7180









        SIZE=2>F.     The Loan matured June 30, 2007.



        SIZE=2>G.    Borrower and Guarantor have requested that Bank continue to make available the line of credit facility evidenced by the
Note and Line of Credit Agreement.



        SIZE=2>H.    As of the date hereof the outstanding principal balance of the Loan is zero dollars
($0.00)
.



        SIZE=2>I.     Bank has no obligation to modify the terms of the Loan. Bank is willing to grant Borrower's aforementioned requests on the
terms and conditions set forth in this Agreement.



This excerpt taken from the ESCC 8-K filed Feb 9, 2006.

BACKGROUND

 

WHEREAS, Transnational owns all of the shares of the issued and outstanding stock of Spitz (“Spitz Stock”).

 

WHEREAS, E&S is a corporation whose stock is quoted on the NASDAQ, that desires to acquire all of the issued and outstanding Spitz Stock.

 

WHEREAS, Transnational desires to sell to E&S, and E&S desires to purchase, the Spitz Stock from Transnational in exchange for shares of E&S’s common stock, pursuant to the terms and conditions set forth in this Agreement.

 

WHEREAS, Spitz joins in the execution of this Agreement in consideration of the anticipated benefit to be provided by its affiliation with E&S.

 

NOW THEREFORE, In consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:

 

This excerpt taken from the ESCC DEFA14A filed Feb 9, 2006.

BACKGROUND

 

WHEREAS, Transnational owns all of the shares of the issued and outstanding stock of Spitz (“Spitz Stock”).

 

WHEREAS, E&S is a corporation whose stock is quoted on the NASDAQ, that desires to acquire all of the issued and outstanding Spitz Stock.

 

WHEREAS, Transnational desires to sell to E&S, and E&S desires to purchase, the Spitz Stock from Transnational in exchange for shares of E&S’s common stock, pursuant to the terms and conditions set forth in this Agreement.

 

WHEREAS, Spitz joins in the execution of this Agreement in consideration of the anticipated benefit to be provided by its affiliation with E&S.

 

NOW THEREFORE, In consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:

 

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