Document:

EX-10.1

 Exhibit 10.1 

REVOLVING CREDIT INCREASE 

AND JOINDER AGREEMENT 

This REVOLVING CREDIT INCREASE AND JOINDER AGREEMENT dated as of April 10, 2020 (this “Agreement”) is by and
among WATSCO, INC., a Florida corporation (the “Company”), WATSCO CANADA, INC., a New Brunswick corporation (the “Canadian Borrower”), CARRIER ENTERPRISE MEXICO, S. DE R.L. DE C.V., a
limited liability corporation organized under the laws of Mexico (the “Mexican Borrower”), BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (in such capacity, the “Administrative
Agent”), REGIONS BANK (“Regions”), and PNC BANK, NATIONAL ASSOCIATION, as a joining Lender (the “New Lender”). Reference is made to the Credit Agreement dated as of December 5, 2018 (as
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Company, the Canadian Borrower, the Mexican Borrower, the Subsidiaries of the Company party thereto pursuant to
Section 2.14 thereof (such Subsidiaries, together with the Canadian Borrower and the Mexican Borrower, the “Designated Borrowers” and, each a “Designated Borrower” and, together with the
Company, the “Borrowers” and, each a “Borrower”) the Lenders party thereto from time to time and the Administrative Agent. Capitalized terms used by not defined herein have the meanings ascribed thereto in the
Credit Agreement. 
 Statement of Purpose 

In March 2020, the Company gave written notice to the Administrative Agent requesting that the Aggregate (USD/MC) Commitments be increased in
the aggregate principal amount of $60,000,000 (the “Accordion Request”), in accordance with the terms and conditions of Section 2.15 of the Credit Agreement. Pursuant to such request, the aggregate
principal amount of the Aggregate (USD/MC) Commitments has been increased by $60,000,000, with a $10,000,000 increase provided by Regions. 

In order to provide the Borrowers with the full amount of the Accordion Request, the New Lender is willing to provide new USD/MC Commitments
in the principal amount of $50,000,000 (the “Revolving Commitment Increase”). 
 The New Lender is also willing to join the
Credit Agreement and the other Loan Documents, as set forth herein. 
 NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
 1.    New Lender Joinder. By
its execution of this Agreement, the New Lender hereby acknowledges, agrees and confirms that, on and after the Agreement Effective Date (defined below): 

(a)    it shall be deemed to be a party to the Credit Agreement as a “Lender”, and a
“Committed (USD/MC) Lender”, as applicable, for all purposes of the Credit Agreement 

  
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and the other Loan Documents, and shall have all of the obligations of, and shall be entitled to the benefits of, a Lender and a Committed (USD/MC) Lender, as applicable, under the Credit
Agreement and the other Loan Documents as if it had executed the Credit Agreement; it shall be bound by all of the terms, provisions and conditions contained in the Credit Agreement and the other Loan Documents; 

(b)    it has received a copy of the Credit Agreement and such other documents and information as it deems
appropriate and has, independently and without reliance upon the Administrative Agent, any Arranger, any other Lender or any of their respective Affiliates, made its own credit analysis and decision to enter into this Agreement and to become a
Lender and a Committed (USD/MC) Lender, as applicable, under the Credit Agreement; 
 (c)    it will,
independently and without reliance upon the Administrative Agent, any Arranger, any other Lender or any of their respective Affiliates and based on such documents and information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon the Credit Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder; 

(d)    it shall perform in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender or a Committed (USD/MC) Lender, as applicable; 

(e)    it shall provide any additional documentation to evidence its status as a Lender and a Committed
(USD/MC) Lender, as applicable, as of the Agreement Effective Date or as required to be delivered by it pursuant to the terms of the Credit Agreement; and 

(f)    the Administrative Agent may file this Agreement in the Register under
Section 10.06(c) of the Credit Agreement. 
 2.    Upon the Agreement Effective Date,
Schedule 2.01 of the Credit Agreement shall be amended and restated in the form attached hereto as Exhibit A. 

3.    By its execution of this Agreement, Regions hereby acknowledges, agrees and confirms that, on and after the
Agreement Effective Date (defined below), its USD/MC Commitment shall be increased as set forth on Exhibit A attached hereto. 

4.    Representations and Warranties.    In order to induce the Administrative Agent, the L/C
Issuer, Regions and the New Lender to enter into this Agreement, the Borrowers represent and warrant to the Administrative Agent and the Lenders as follows: 

(a)    The representations and warranties of the Borrowers and each other Loan Party contained in
Article V of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, after giving effect to this Agreement, are true and correct in all
material respects (or, to the extent any such representation and warranty is subject to a materiality or Material Adverse Effect qualification, in all respects) on and as of the date hereof, except 

  
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to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (or, to the extent any such
representation and warranty is subject to a materiality or Material Adverse Effect qualification, in all respects) as of such earlier date, and except that for purposes of this Section 4, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01 of the Credit Agreement. 
 (b)    After giving effect to this
Agreement, no Default or Event of Default has occurred and is continuing or would result from the proposed Credit Extension of the application of the proceeds thereof. 

5.    Conditions to Effectiveness. Upon the satisfaction of each of the following conditions, this Agreement shall
be deemed to be effective (the date of such satisfaction, the “Agreement Effective Date”): 

(a)    the Administrative Agent shall have received counterparts of this Agreement executed by the
Administrative Agent, Regions, the New Lender, the Company, the Canadian Borrower and the Mexican Borrower; 

(b)    no Default or Event of Default shall exist as of the Agreement Effective Date immediately prior to
or after giving effect to the Revolving Commitment Increase; 
 (c)    the Administrative Agent shall
have received a certificate of each Loan Party dated as of the Agreement Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (x) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such increase (which, with respect to any such Loan Party, may, if applicable, be the resolutions entered into by such Loan Party in connection with the incurrence of the Obligations on the Closing Date), and
(y) in the case of the Company, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article V of the Credit Agreement and the other Loan Documents are true and
correct in all material respects (or, to the extent any such representation and warranty is subject to a materiality or Material Adverse Effect qualification, in all respects) on and as of the Agreement Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (or, to the extent any such representation and warranty is subject to a materiality or Material Adverse Effect
qualification, in all respects) as of such earlier date, and except that the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be
deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01 of the Credit Agreement, (B) no Default or Event of Default exists
and (C) the Company and its Restricted Subsidiaries are in compliance with each financial covenant set forth in Section 7.11 of the Credit Agreement, calculated on a Pro Forma Basis pursuant to
Section 1.03(c) of the Credit Agreement; and 
 (d)    the Borrowers shall have
paid any fees required to be paid on or before the Agreement Effective Date. 

  
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 6.    Execution in Counterparts. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of a signature page of
this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of an original executed counterpart hereof. 

7.    Governing Law. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR
TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 

8.    Entire Agreement. This Agreement is the entire agreement, and supersedes any prior agreements and
contemporaneous oral agreements, of the parties concerning its subject matter. 
 9.    Successors and Assigns.
This Agreement shall be binding on and inure to the benefit of the parties and their heirs, beneficiaries, successors and permitted assigns. 

[Signature Pages Follow] 

  
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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
duly authorized officers, all as of the day and year first written above. 
  

							
	COMPANY:	 		 	WATSCO, INC.
				
		 		 	By:	 	/s/ Ana M. Menendez
		 		 	Name:	 	Ana M. Menendez
		 		 	Title:	 	Chief Financial Officer and Treasurer
			
	CANADIAN BORROWER:	 		 	WATSCO CANADA, INC.
				
		 		 	By:	 	/s/ Ana M. Menendez
		 		 	Name:	 	Ana M. Menendez
		 		 	Title:	 	Vice President and Treasurer
			
	MEXICAN BORROWER:	 		 	CARRIER ENTERPRISE MEXICO, S. DE R.L. DE C.V.
				
		 		 	By:	 	/s/ Ana Menendez
		 		 	Name:	 	Ana M. Menendez
		 		 	Title:	 	Secretary

 Watsco, Inc. 

REVOLVING CREDIT INCREASE AND JOINDER AGREEMENT 

Signature Page 

							
	ADMINISTRATIVE AGENT:	 		 	BANK OF AMERICA, N.A.
				
		 		 	By:	 	/s/ Gavin Shak
		 		 	Name:	 	Gavin Shak
		 		 	Title:	 	Assistant Vice President

  
 Watsco, Inc. 

REVOLVING CREDIT INCREASE AND JOINDER AGREEMENT 

Signature Page 

							
	SWING LINE LENDER AND L/C ISSUER:	 		 	BANK OF AMERICA, N.A.
				
		 		 	 By:
	 	 /s/ Julia Rocawich

		 		 	 Name:
	 	 Julia Rocawich

		 		 	 Title:
	 	 Senior Vice President

  
 Watsco, Inc. 

REVOLVING CREDIT INCREASE AND JOINDER AGREEMENT 

Signature Page 

 
			
	REGIONS BANK, as a Lender
		
	By:	 	/s/ Cheryl L. Shelhart
	Name:	 	Cheryl L. Shelhart
	Title:	 	Director

  
 Watsco, Inc. 

REVOLVING CREDIT INCREASE AND JOINDER AGREEMENT 

Signature Page 

 
			
	PNC BANK, NATIONAL ASSOCIATION, as a new Lender
		
	By:	 	/s/ Ryan Garr
	Name:	 	Ryan Garr
	Title:	 	Vice President

  
 Watsco, Inc. 

REVOLVING CREDIT INCREASE AND JOINDER AGREEMENT 

Signature Pagebsqr-ex101_9.htm

DocuSign Envelope ID: BD799E56-29C5-488B-936A-C5CA65CAE78A
 
Exhibit 10.1

 

 

 

 

 

 

NOTE

 

		
	
Date
	
4/7/2020

	
Note Amount
	
$ 1572458

	
Borrower
	
Bsquare Corporation

	
Lender
	
JPMorgan Chase Bank, N.A.

 

 

1.PROMISE TO PAY.

 

Borrower promises to pay to the order of Lender the Note Amount, plus interest on the unpaid principal balance at the Note Rate, and all other amounts required by this Note.

 

 

2.DEFINITIONS.

 

"CARES Act" means the Coronavirus Aid, Relief, and Economic Security Act.

 

"Deferral Period" means the six month period beginning on the date of this Note. "Loan" means the loan evidenced by this Note.

"Maturity Date" means twenty-four (24) months from the date of this Note.

 

"Note Rate" means an interest rate of 0.98% Per Annum and interest shall accrue on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days.

 

"Per Annum" means for a year deemed to be comprised of 360 days.

 

"SBA" means the Small Business Administration, an Agency of the United States of America.

 

 

3.CONDITIONS PRECEDENT TO FUNDING OF LOAN.

 

Before the funding of the Loan, the following conditions must be satisfied:

 

A.Lender has approved the request for the Loan.

 

B.Lender has received approval from SBA to fund the Loan.

 

 

4.PAYMENT TERMS.

 

Borrower will pay this Note as follows:

 

A.No Payments During Deferral Period. There shall be no payments due by Borrower during the Deferral Period.

 

B.Principal and Interest Payment s. Commencing one month after the expiration of the Deferral Period, and continuing on the same day of each month thereafter until the Maturity Date, Borrower shall pay to Lender monthly payments of principal and interest, each in such equal amount required to fully amortize the principal amount outstanding on the Note on the last day of the Deferral Period by the Maturity Date.

DocuSign Envelope ID: BD799E56-29C5-488B-936A-C5CA65CAE78A
 
 

C.Maturity Date. On the Maturity Date, Borrower shall pay to Lender any and all unpaid principal plus accrued and unpaid interest plus interest accrued during the Deferral Period. This Note will mature on the Maturity Date.

 

D.If any payment is due on a date for which there is no numerical equivalent in a particular calendar month then it shall be due on the last day of such month.  If any payment is due on a day that is not a Business Day, the payment will be made on the next Business Day. The term "Business Day" means a day other than a Saturday, Sunday or any other day on which national banking associations are authorized to be closed.

 

E.Payments shall be allocated among principal and interest at the discretion of Lender unless otherwise agreed or required by applicable law. Notwithstanding, in the event the Loan, or any portion thereof, is forgiven pursuant to the Paycheck Protection Program under the federal CARES Act, the amount so forgiven shall be applied to principal.

 

F.Borrower may prepay this Note at any time without payment of any premium.

 

 

5.CERTIFICATIONS.

 

Borrower certifies as follows:

 

A.Current economic uncertainty makes this Loan necessary to support the ongoing operations of Borrower.

 

B.Loan funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments.

 

C.During the period beginning on February 15, 2020 and ending on December 31, 2020, Borrower has not and will not receive another loan under this program.

 

D.Borrower was in operation on February 15, 2020 and (i) had employees for whom it paid salaries and payroll taxes, or (ii) paid independent contractors as reported on a 1099-Misc.

 

 

6.AGREEMENTS.

 

Borrower understands and agrees, and waives and releases Lender, as follows:

 

A.The Loan would be made under the SBA's Paycheck Protection Program. Accordingly, it must be submitted to and approved by the SBA. There is limited funding available under the Paycheck Protection Program and so all applications submitted will not be approved by the SBA.

 

B.Lender is participating in the Payroll Protection Program to help businesses impacted by the economic impact from COVID-19. However, Lender anticipates high volume and there may be processing delays and system failures along with other issues that interfere with submission of your application to SBA. Lender does not represent or guarantee that it will submit the application before SBA funding is no longer available or at all. You agree that Lender is not responsible or liable to you (i) if the application is not submitted to the SBA until after SBA stops approving applications, for any reason or (ii) if the application is not processed. You forever release and waive any claims against Lender concerning failure to obtain the Loan. This release and waiver applies to but is not limited to any claims concerning Lender's (i) pace, manner or systems for processing or prioritizing applications, or (ii) representations by Lender regarding the application process, the Paycheck Protection Program, or availability of funding. This agreed to release and waiver supersedes any prior communications, understandings, agreements or communications on the issues set forth herein.

 

C.Forgiveness of the Loan is only available for principal that is used for the limited purposes that qualify for forgiveness under SBA requirements, and that to obtain forgiveness, Borrower must request it and must provide documentation in accordance with the SBA requirements, and certify that the amounts Borrower is requesting to be forgiven qualify under those requirements. Borrower also understand that Borrower shall remain responsible under the Loan for any amounts not forgiven, and that interest payable under the Loan will not be forgiven but that the SBA may pay the Loan interest on forgiven amounts.

 

D.Forgiveness is not automatic and Borrower must request it. Borrower is not relying on Lender for its understanding of the requirements for forgiveness such as eligible expenditures, necessary records/documentation, or possible reductions due to changes in number of employees or compensation. Rather Borrower will consult the SBA's program materials.

 

E.The application for this Loan is subject to review and that Borrower may not receive the Loan. The Loan also remains subject to availability of funds under the SBA's Payment Protection Program, and to the SBA issuing an SBA loan number.

DocuSign Envelope ID: BD799E56-29C5-488B-936A-C5CA65CAE78A
 
 

 

 

 

7.DEFAULT.

 

Borrower is in default under this Note if Borrower:

 

A.Fails to make a payment when due under the Note or otherwise fails to comply with any provision of this Note.

 

B.Does not disclose, or anyone acting on its behalf does not disclose, any material fact to Lender or SBA.

 

C.Makes, or anyone acting on its behalf makes, a materially false or misleading representation, attestation or certification to Lender or SBA in connection with Borrower's request for this Loan under the CARES Act, or makes a false certification under paragraph 5 of this Note.

 

D.Fails to comply with all of the provisions of this Note.

 

E.Becomes the subject of a proceeding under any bankruptcy or insolvency law, has a receiver or liquidator appointed for any part of its business or property, or makes an assignment for the benefit of creditors.

 

F.Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender 's prior written consent.

 

G.Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay this Note.

 

 

8.LENDER'S RIGHTS IF THERE IS A DEFAULT.

 

Without notice or demand and without giving up any of its rights, Lender may:

 

A.Require immediate payment of all amounts owing under this Note.

 

B.Collect all amounts owing from Borrower.

 

C.File suit and obtain judgment.

 

 

9.LENDER'S GENERAL POWERS.

 

Without notice or Borrower's consent, Lender may incur expenses to collect amounts due under this Note and enforce the terms of this Note. Among other things, the expenses may include reasonable attorney's fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

 

 

10.GOVERNING LAW AND VENUE; WHEN FEDERAL LAW APPLIES.

 

When SBA is the holder, this Note shall be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

If the SBA is not the holder, this Note shall be governed by and construed in accordance with the laws of the State of Ohio where the main office of Lender is located. MATTERS REGARDING INTEREST TO BE CHARGED BY LENDER AND THE EXPORTATION OF INTEREST SHALL BE GOVERNED BY FEDERAL LAW (INCLUDING WITHOUT LIMITATION 12 U.S.C. SECTIONS 85 AND 1831u) AND THE LAW OF THE STATE OF OHIO. Borrower agrees that any legal action or proceeding with respect to any of its obligations under this Note may be brought by Lender in any state or federal court located in the State of Ohio, as Lender in its sole discretion may elect. Borrower submits to and accepts in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of those courts. Borrower waives any claim that the State of Ohio is not a convenient forum or the proper venue for any such suit, action or proceeding. The extension of credit that is the subject of this Note is being made by Lender in Ohio.

 

 

DocuSign Envelope ID: BD799E56-29C5-488B-936A-C5CA65CAE78A
 
11.SUCCESSORS AND ASSIGNS.

 

Under this Note, Borrower includes its successors, and Lender includes its successors and assigns.

 

12.GENERAL PROVISIONS.

 

A.Borrower must sign all documents necessary at any time to comply with the Loan.

 

B.Borrower's execution of this Note has been duly authorized by all necessary actions of its governing body. The person signing this Note is duly authorized to do so on behalf of Borrower.

 

C.This Note shall not be governed by any existing or future credit agreement or loan agreement with Lender. The liabilities guaranteed pursuant to any existing or future guaranty in favor of Lender shall not include this Note. The liabilities secured by any existing or future security instrument in favor Lender shall not include this Note.

 

D.Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

 

E.Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

 

F.If any part of this Note is unenforceable, all other parts remain in effect.

 

G.To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor.

 

H.Borrower's liability under this Note will continue with respect to any amounts SBA may pay Bank based on an SBA guarantee of this Note. Any agreement with Bank under which SBA may guarantee this Note does not create any third party rights or benefits for Borrower and, if SBA pays Bank under such an agreement, SBA or Bank may then seek recovery from Borrower of amounts paid by SBA.

 

I.Lender reserves the right to modify the Note Amount based on documentation received from Borrower.

 

 

13.ELECTRONIC SIGNATURES.

 

Borrower's electronic signature shall have the same force and effect as an original signature and shall be deemed (i) to be "written" or "in writing" or an "electronic record", (ii) to have been signed and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. Such paper copies or "printouts," if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form.

 

 

14.BORROWER'S NAME AND SIGNATURE:

Borrower:

 

Bsquare Corporation

By:__________________________               

 

Printed Name:Chris Wheaton

 

Title: _Chief Financial Officer_____

 

Date Signed: _4/7/2020_________

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