Document:

waiveragreement.htm

EXHIBIT 10.1

 

 

August 3, 2011

 

 

Brian Lawrence

CFO & Senior VP

Winland Electronics, Inc.

1950 Excel Drive

Mankato, MN  56001

	
  

	
Re:

	
Acknowlegment of Default

	
  

	
Agreement to Waiver of Default

To Whom It May Concern:

Reference is made to that certain Term Loan Agreement dated as of September 30, 2004 and Addendum to Term Loan Agreement and Note dated September 30, 2004 by and between Windland Electronics, Inc  ( “Borrower”) and U.S. Bank National Association (“Bank”) both dated September 30, 2004 (as the same may have been amended, restated or otherwise modified from time to time, the “Loan Agreement”) under the terms of which Bank extened a term loan to Borrower (the “Loan”).   The Loan and Borrowers obligations under the Loan Agreement and to repay the Loan are secured by that certain Mortgage, Security Agreement and Assignment of Rents and Leases dated Sept 30, 2004 executed by Borrower and recorded on October 5, 2004 as Document No. T84022 with the Register of Titles in and for Blue Earth County, Minnesota (the “Mortgage”).  The property described in the Mortgage is referred to in this letter/agreement as the “Property”.   Capitalized terms used but not otherwise defined in this letter/agreement (this “Letter Agreement”) shall have the meanings assigned to them in the Loan Agreement, unless the context shall otherwise require.

 

The Loan Agreement requires Borrower to maintain a Cash Flow Coverage Ratio of at least 1.25 to 1.00 as of the end of each fiscal year of Borrower.  Borrower’s fiscal year end is December 31.   As of December 31, 2010, Borrower’s Cash Flow Coverage Ratio was -4.45 to 1 which is less than required, resulting in a default under the Loan Agreement (the “Existing Default”).

 

Borrower acknowledges that Borrower is in violation of  its Cash Flow Coverage Ratio requirement  for December 31, 2010, the Existing Default exists and Bank has the right to accelerate Borrower’s obligations to Bank.  Borrower requests that Bank waive the Existing Default and not exercise Bank’s remedies as the result of the Existing Default.

 

  

  

  

Winland Electronics Inc.

August 3, 2011

Page 2

 

Bank is willing to waive the Existing Default provided  Borrower comply with the following conditions to waiver (collectively, the “Conditions to Waiver”);

 

a.           On or before August 1, 2011, Borrower shall offer Property to Nortech Systems (“Nortech”) under the terms of Nortech’s lease or agreement requiring Borrower to offer the Property and obtain confirmation from Nortech that Nortech will exercise or waive Nortech’s option to purchase the Building and provide a copy/confirmation of the same to Bank upon request;

b.           On or before August 15, 2011, if Nortech has declined to purchase the Property, Borrower shall have identified and engaged a reputable broker experienced in marketing and selling properties similar to the Property (the “Broker”) to list the Property, advise Bank of the identity of Broker and provide a copy of any listing/sales agreement upon request;

c.           On or before September 1, 2011, Borrower shall have the Property actively listed for sale and on the market with/through Broker and provide evidence of the same to Bank by September 1, 2011;

d.           No other event of default occurs or exists under Loan Agreement, Mortgage or any other document or agreement evidencing or supporting the Loan as of Effective Date, as hereinafter defined, and

e.           Borrower shall have delivered a copy of the this letter/agreement properly executed by Borrower and bearing Borrower’s original signature acknowledging Borrowers understanding and agreement with the term of this letter/agreement and  certifying that all of the Conditions to Effectiveness have been fully and timely complied with.

Provided that Borrower is in full compliance with all of the Conditions to Waiver, no later than September 2, 2011 (the “Effective Date”), Bank hereby waives the Existing Default as of the Effective Date (the “Limited Waiver”) without further notice to Borrower.

Borrower agrees that the Limited Waiver shall be limited to the precise meaning of the words as written herein and shall not be deemed (i) to be a consent to any waiver or modification of any other term or condition of the Loan Agreement or (ii) to prejudice any right or remedy that Bank may now have or may in the future have under or in connection with the Loan Agreement, Mortgage or any other document or agreement executed in connection with the Loan (collectively the “Loan Documents”) or with respect to other defaults or events of default.  Borrower acknowledges and agrees that the Limited Waiver is provided by the Bank as a financial accommodation to Borrower.  Except as expressly set forth in this Letter Agreement, the Limited Waiver shall not alter, affect, release or prejudice in any way any of Borrower’s obligations under the Loan Documents.  The Limited Waiver shall not constitute a waiver by Bank of any other default or event of default, if any, under the Loan Documents and shall not be and shall not be deemed to be a course of action with respect thereto upon which Borrower may rely in the future and Borrower hereby expressly waives any claim to such effect.

Bank and Borrower each acknowledge and affirm that this Letter Agreement is hereby ratified and confirmed in all respects and all terms, conditions and provisions of the Loan Docuemnts, except for Borrower’s obligation to be in compliance with the covenant the created the Existing Default, shall remain unmodified and in full force and effect.  This Letter Agreement shall be binding upon and inure to the benefit of Borrower and Bank and their respective successors and assigns, The validity, construction and enforceability of this Letter Agreement shall be governed by the internal law of the State of Minnesota without regard to conflict of law principles.  Any amendment, modification or waiver of any provision of this Letter Agreement shall not be effective unless the same shall be in a writing and signed by Bank and Borrower.  This Letter Agreement may be executed by the parties hereto in any number of counterparts, all of which taken together shall constitute one and the same instrument and either of the parties hereto may execute this Letter Agreement by signing any such counterpart.   The agreements of the Bank set forth in this Letter Agreement shall only become effective upon delivery to the Bank of an executed counterpart of this Letter Agreement by Borrower.

 

Borrower hereby represents that on and as of the Effective Date and after giving effect to this Letter Agreement (a) all of the representations and warranties contained in the Loan Agreement are true, correct and complete in all respects as of the date hereof as though made on and as of such date, except for changes permitted by the terms of the Loan Agreement, and (b) there will exist no default or event of default under any of the Loan Documents as of the Effective Date other than the Existing Default which is the subject of the Specific Wiaver.

 

Please confirm the Borrower’s agreement with the foregoing by executing and dating this letter in the space provided below.

 

Very truly yours,

U.S. BANK NATIONAL ASSOCIATION

By: /s/ Craig L. Smith

       Craig L. Smith

Its:  Vice President

 

  

Winland Electronics Inc.

August 3, 2011

Page 3

Accepted and Agreed:

 

The terms and conditions of this Letter Agreement are acknowledged, agreed to and excepted and Borrower represents and warrants that Borrower is in full compliance with Conditions to Waiver as of the Effective Date.

 

Windland Electronics, Inc.

(a Minnesota corporation)

 

By: /s/  Brian D. Lawrence                                                                                     Dated:  August 30, 2011

      Brian D. Lawrence

Its: CFO & Senior VPRelocation Letter Agreement

Exhibit 10.20

September 7, 2011

Mr. Byron Boston
XXX Summerwood Drive
Henrico, Virginia 23233

Dear Byron:

Dynex Capital, Inc. (the “Company”) is providing assistance to you in connection with your relocation from Jacksonville to Richmond.  The Company has engaged Plus Relocation Services, Inc. (“PLUS”) to assist you in the relocation.  Additionally, the Company will provide you with the below additional benefits subject to the terms and conditions herein and your execution of this relocation addendum setting forth our related understanding ( “Relocation Addendum”). The parties acknowledge that this Relocation Addendum is intended to supplement your July 31, 2009 employment agreement (“Employment Agreement”) with the Company only to the limited extent specified herein and that all other terms of your Employment Agreement shall remain in full force and effect.  

1.You relocated to Richmond, Virginia in August 2011.  All obligations of the Company under this Relocation Addendum are conditioned upon your timely relocation.   

2.The Company agrees to reimburse you for all reasonable costs related to shipping of your household goods from Jacksonville, Florida, to Richmond, Virginia, including temporary storage of household goods as may be required, and transportation of vehicles from Jacksonville, Florida, to Richmond, Virginia.

3.The Company agrees to reimburse you for your reasonable living expenses in Richmond, Virginia until the earlier of September 30, 2011, or your house at XXX Shipwatch Drive East, Jacksonville, Florida 32225 (“Jacksonville Residence”) is sold.

4.The Company agrees to provide you with reimbursements for three house hunting trips, a miscellaneous expense allowance (to cover incidental items related to the relocation) and reimburse you for reasonable in-route expenses at the time of the actual move to Richmond, Virginia, as mutually agreed to by both parties.  The aggregate amount to be reimbursed and provided by allowance to you pursuant to this Section 4 in calendar year 2011 shall not exceed $21,000.

5.If you are entitled to be paid or reimbursed for any expenses under Sections 2, 3 and 4 of this Relocation Addendum, and such payments or reimbursements are includible in your federal gross taxable income, the amount of such expenses reimbursable or payable in one calendar year shall not affect the amount reimbursable or payable in any other calendar year, and the reimbursement or payment of an eligible expense shall be paid promptly after you provide the Company with documentation of such expense reasonably acceptable to the Company, but in no event will payment be made later than December 31 of the year after the year in which the expense was incurred.  The Company will not be obligated to reimburse you for any such expenses or make any payments to you under Sections 2, 3 and 4 of this Relocation Addendum unless you are employed by the Company on the date that the expenses are incurred.  Your right to payment and your right to reimbursement of expenses under Sections 2, 3, or 4 of this Relocation Addendum shall expire at the end of one year after the date hereof (and this Relocation Addendum shall only apply to expenses incurred prior to such expiration) unless an earlier expiration is set forth in Sections 2, 3, or 4 of this Relocation Addendum.   

6.Subject to the maximum below, the Company agrees to reimburse you for actual costs incurred by you in connection with the sale of the Jacksonville Residence.  Subject to the maximum below, the Company also agrees to reimburse you for the closing costs on the purchase of a house in Richmond, Virginia (other than costs related to your financing of such purchase).  The amount to be reimbursed for closings costs in this Section 6 shall not exceed $90,000.  All reimbursements pursuant to this Section 6 are conditioned on your being employed with the Company at the time that the expense is incurred and on your providing substantiation of such costs to the Company's reasonable satisfaction by no later than December 31, 

2011.  The Company shall pay such reimbursements to you within 10 days following proper substantiation.

7. In order to compensate you for your agreement to relocate to Richmond, Virginia, subject to formal grant by the Compensation Committee, on or before September 30, 2011, the Company agrees to issue you shares of restricted stock with a fair market value on the date of grant equal to $300,000.  The restricted stock will vest to you at a rate of 8.33% on each three month anniversary of the grant until such time that the restricted stock is fully vested which is anticipated to be on the third anniversary of such grant.  In the event that your employment with the Company should be terminated for Good Reason or without Cause as those terms are defined in your Employment Agreement, then any unvested restricted stock shares granted under this Section 7 shall immediately become fully (100%) vested on your employment termination date consistent with Section 7(d)(1)(E) of your Employment Agreement. If, however, you should terminate your employment with the Company without Good Reason or the Company should terminate your employment for Cause as those terms are defined in your Employment Agreement prior to full vesting, then you will forfeit any then unvested shares of restricted stock.  You and the Company will enter into a separate restricted stock agreement to evidence the grant of the above shares.  The restricted stock agreement will provide that any dividends on such shares of restricted stock will be deferred and paid upon their vesting.  Further, you will be entitled to vote the shares of restricted stock prior to vesting.

8.The Company agrees to pay, on a fully grossed up basis, the incremental Federal, State, and Local income tax costs incurred by you as a result of the reimbursements and payments described in Sections 2, 3, 4, and 6 above and the restricted stock described in Section 7 above.  All such tax liabilities must be documented to the satisfaction of the Company.  Any such tax gross-up payment under this Relocation Addendum shall be paid by the Company to you at the time you incur the tax liability, but in no event later than December 31 of the year after the year in which the related taxes are remitted to the applicable taxing authorities.  

9.You agree to list the Jacksonville Residence for sale in Jacksonville, Florida at a sales price in the range of $969,000 to $1,059,000.  You agree to list the house with a 6.5% listing commission split 3.5% to buyer's agent and 3.0% to listing agent unless the listing agent also represents the buyer, in which case the listing commission will be 5.5% in total.

10.Based on the average of two independent appraisals of the Jacksonville Residence arranged by the Company and you, the current appraised value of the Jacksonville Residence is at least $985,000.  If a valid binding contract to sell the Jacksonville Residence is not entered into by October 31, 2011, the Company agrees to purchase the Jacksonville Residence free-and-clear for $811,000 with any additional amount to be paid to you regarding the Jacksonville Residence contingent upon on the ultimate sales price received by the Company in the subsequent sale of the Jacksonville Residence.  Subsequent to its purchase by the Company, if the Company sells the Jacksonville Residence to a third party for an amount up to or exceeding $985,000, then the Company will pay you an additional $174,000.  If the house sells for greater than $811,000 but less than $985,000, the Company will pay you the excess of the sales price over $811,000.  If the sales price is less than $811,000, the Company will not pay you any additional amounts. You will continue to incur all of the costs of owning and maintaining your home, including but not limited to, mortgage debt payments, insurance and taxes, until such time that it is purchased by the Company.  The Company may designate PLUS to purchase the Jacksonville Residence on its behalf.  You agree to cooperate with PLUS and enter into any agreements that the Company or PLUS may require in order to effectuate the purchase of the house by the Company or PLUS.  If you terminate your employment before December 31, 2011, without Good Reason as per your Employment Agreement, you agree to repurchase the Jacksonville Residence at the price paid by the Company plus any reasonable expenses for repaid of the Jacksonville Residence if it has not been sold by the Company by the date of your termination.

11.The intent of the parties to this Relocation Addendum is that payments and benefits under this Relocation Addendum comply with Internal Revenue Code Section 409A and applicable guidance issued thereunder (“Code Section 409A”) or comply with an exemption from the application of Code Section 409A and, accordingly, all provisions of this Relocation Addendum shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A.  Notwithstanding any of the provisions of this Relocation Addendum, the Company shall not be liable to you for any excise taxes or interest if any payment or benefit which is to be provided pursuant to this Relocation Addendum and which is considered deferred compensation subject to Code Section 409A otherwise fails to comply with, or be exempt from, the requirements of Code Section 409A.  The gross-up payments set forth in Section 8 above shall not include any excise taxes or other amounts due solely because of a violation of Code Section 409A.

12.This Relocation Addendum sets forth the understanding between the Company and you related to your relocation and all prior agreements and understandings between the Company and you with respect to payments or reimbursements to be made in connection with your relocation are hereby superseded and terminated.  This Relocation Addendum will be construed and enforced in accordance with the laws of the Commonwealth of Virginia, without reference to the choice of 

laws provisions thereof.  The invalidity or unenforceability of any provision of this Relocation Addendum will not affect the validity or enforceability of any other provision of this Relocation Addendum.  This Relocation Addendum is not a contract of employment.

Please acknowledge your approval and acceptance of this Relocation Addendum by executing and returning to me one of the enclosed copies hereof.  This Relocation Addendum, when executed by you and returned to me, will constitute a binding agreement between the Company and you that will be enforceable in accordance with its terms and that cannot be modified or amended or, except as provided herein, terminated other than by a written agreement executed by the Company and you. 
Sincerely yours,

/s/ Thomas B. Akin     
Thomas B. Akin
Dynex Capital, Inc.
Chairman and Chief Executive Officer

I hereby acknowledge my approval and acceptance of the foregoing Relocation Addendum between Dynex Capital, Inc. and me.
Date:  September 7, 2011
/s/ Byron L. Boston    
Byron L. Boston

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