EXHIBIT 1
LOAN AND COLLATERAL ACCOUNT AGREEMENT
DEMAND LOAN
THIS LOAN AND COLLATERAL ACCOUNT AGREEMENT ("this Agreement"),
dated as of the date of the Lender's acceptance set forth in the signature area
below, among Xxxxxxx Xxxxx International Private Finance Limited, a Delaware
corporation (the "Lender"), the Borrower or Borrowers identified in the
signature area below and, if applicable, the Guarantor or Guarantors and the
Pledgor or Pledgors identified in the signature area below, establishes the
terms and conditions that will govern the demand loan facility from the Lender
to the Borrower. The Borrower, any Guarantor and any Pledgor are sometimes
referred to in this Agreement as a "Loan Party" and collectively as the "Loan
Parties". The Loan is secured by a pledge of assets held in a special securities
account established and maintained with Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("MLPF&S") in accordance with this Agreement and MLPF&S is a party
to this Agreement only to the extent, and for the purposes, set forth in this
Agreement. Each Pledgor is a party to this Agreement only for the purpose of
granting a security interest in the Securities Account (as such term is
hereinafter defined) and for the other related purposes stated herein.
I . DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings indicated. Unless the context otherwise requires, any of the following
terms may be used in the singular or the plural, depending on the reference:
"Advance" means an advance made by the Lender to the Borrower under
this Agreement or, as the case may be, the outstanding principal balance of any
such advance.
"Advance Requirement" means, at any date, a percentage of the Value of
the Collateral as the Lender may specify, expressed as a Dollar amount and
determined by the Lender in its discretion. The Lender reserves the right to
modify in its discretion from time to time the percentage of Value to be used in
determining the Advance Requirement and/or the type of Collateral which may be
included by the Lender in determining the Advance Requirement.
"Alternate Rate" means the floating rate of interest advised by the
Lender based on the United States federal funds rate, as determined by the
Lender in its discretion, plus an additional percentage rate deemed adequate by
the Lender to compensate it for funding the relevant Advance or other amount and
for the Lender's profit. The Alternate Rate shall change when and as the federal
funds rate changes. A written statement by the Lender of the Alternate Rate
shall be conclusive evidence of such rate.
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"Borrower" means, individually and collectively, the one or more
Persons signing below as Borrower.
"Business Day" means a day on which most banks are open in New York
City and the Lender is open for business.
"Collateral" has the meaning given to that term in Section 3.2 of this
Agreement.
"Dollar(s)" means the lawful currency of the United States of America.
"Facility" has the meaning given to that term in Section 2.1 of this
Agreement.
"Facility Fee" has the meaning given to that term in Section 2.8.
"Facility Fee Percentage" means the percentage designated in the
signature area below as the Facility Fee Percentage.
"Guarantor" means, individually and collectively, the one or more
Persons, if any, signing below as Guarantor (or signing any other document
identifying the Person(s) as Guarantor and delivering that document to the
Lender) and guaranteeing the Obligations.
"Interest Period" means a period by reference to which interest is
calculated on an Advance.
"Interest Rate" means a per annum rate equal to LIBOR plus the Spread.
In no event shall the Interest Rate be in excess of the maximum interest rate
permitted by New York law.
"Letter" means the Lender's cover letter to this Agreement and includes
any renewal and/or amendment letter signed by the Lender. The Letter is deemed
to be part of this Agreement.
"LIBOR" means, with regard to a particular Advance and Interest Period,
the rate per annum equal to the rate (as determined by the Lender on the date of
that Advance) at which deposits in Dollars are offered by MLIB to leading banks
in the London Interbank Market in an amount comparable to that Advance and for
that Interest Period, it being understood and agreed that a written statement by
the Lender of LIBOR shall be conclusive evidence of such rate.
"LIBOR Business Day" means a day on which deposits in Dollars and any
other relevant currency may be dealt in on the London Interbank Market and most
banks in London, England and the Lender are open for business.
"Loan Party" and "Loan Parties" have the respective meanings given to
those terms in the introductory paragraph of this Agreement.
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"Maintenance Requirement" means the Value of Collateral which must be
maintained in the Securities Account, as determined by the Lender from time to
time in its discretion.
"Maximum Amount" means the amount designated in the signature area
below as the Maximum Amount.
"Xxxxxxx Xxxxx Group" means Xxxxxxx Xxxxx & Co., Inc. ("MLC"), together
with any company (whether now existing or hereafter formed) of which MLC is or
becomes a Subsidiary and all companies (whether now existing or hereafter formed
or acquired) including, but not limited to, MLPF&S, and any partnership,
association, firm or other organization (whether now existing or hereafter
formed or acquired) during the period it is directly or indirectly owned or
controlled by MLC and/or any such company and/or one or more of their
Subsidiaries.
"Minimum Advance Amount" means the amount designated in the signature
area below as the Minimum Advance Amount.
"MLIB" means Xxxxxxx Xxxxx International Bank Limited, a bank organized
under the laws of England.
"MLPF&S" has the meaning given to that term in the introductory
paragraph of this Agreement.
"Obligations" means collectively, all of the indebtedness, liabilities
and obligations of the Borrower, whether now existing or hereafter arising and
whether or not currently contemplated, to the Lender, including, without
limitation, the indebtedness, liabilities, and obligations arising under this
Agreement (as amended, modified and renewed from time to time) and the
transactions contemplated hereby, including, without limitation, any Advances,
interest, Facility Fees, and other fees, costs and expenses now or hereafter
payable by the Borrower to the Lender.
"Person" means any individual, company, corporation, firm, partnership,
joint venture, association, organization, trust, state or agency of a state (in
each case, whether or not having separate legal personality).
"Pledgor" means individually and collectively, the one or more Persons,
if any, signing below as Pledgor (or signing any other document identifying the
Person(s) as Pledgor).
"Remedy Event" has the meaning given to that term in Section 8.1 of
this Agreement.
"Securities" has the meaning given to that term in Section 3.2 of this
Agreement.
"Securities Account" means, individually and collectively, the one or
more securities accounts established pursuant to Section 3.1 of this Agreement.
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"Security Interest" has the meaning given to that term in Section 3.2
of this Agreement.
"Spread" means the percentage amount indicated in the signature page
area below.
"Subsidiary" means, at any time, in relation to a company, any other
company which is directly or indirectly controlled, or more than 50% of whose
issued or outstanding shares or stock having general voting power in ordinary
circumstances is beneficially owned, directly or indirectly, by that first
company.
"Value" means the value assigned to the Collateral by the Lender from
time to time in the Lender's discretion.
2. THE FACILITY
2.1. Advances. The Lender agrees, upon the terms and subject to the
conditions set forth in this Agreement, to make available to the Borrower an
uncommitted facility (the "Facility") in an amount up to the Maximum Amount. The
Borrower acknowledges that the Lender has no obligation to make any Advances to
the Borrower. All Advances which the Lender in its discretion agrees to make to
the Borrower shall be in an amount not less than the Minimum Amount indicated in
the signature area below and in integral multiples of $100,000.00 in excess
thereof. Any Advances which the Lender makes to the Borrower and which the
Borrower repays may be re-borrowed up to the foregoing Maximum Amount, subject
to the Lender's discretion. The Borrower agrees to provide prior written notice
to the Lender if the purpose of any Advance differs from that previously
disclosed in writing to the Lender.
(b) The Borrower shall request an Advance from the Lender as
provided in Section 10.15, which request must be received not later than 11:00
a.m. (New York City time) three LIBOR Business Days prior to the date of such
Advance and shall specify: (i) the date of such Advance; (ii) the amount of such
Advance (which shall not be less than the Minimum Amount and in integral
multiples of $100,000.00 in excess thereof); and (iii) the duration of the
Interest Period to be applicable to such Advance. All requests made under this
Section 2. 1 (b) shall be irrevocable.
2.2. Interest. (a) Interest shall be calculated and payable on each
Advance by reference to successive Interest Periods. In the case of each
Advance, its first Interest Period shall begin on the proposed date of that
Advance and each subsequent Interest Period shall begin on the last day of the
previous Interest Period. The Borrower may select an Interest Period of 1, 3, 6
or 12 months duration (or such other period as the Lender may agree to) in the
notice provided by the Borrower to the Lender pursuant to Section 2.1 (b) or
Section 2.2(b); provided, however, that the Borrower may select an Interest
Period of 12 months or longer only if the Lender (in its discretion) agrees.
(b) Subject to the Lender's discretion, the Borrower may elect
from time to time to renew the Interest Period for all or part of an outstanding
Advance by requesting such
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renewal from the Lender as provided in Section 10.15, which request must be
received not later than 11:00 a.m. (New York city time) three LIBOR Business
Days prior to the last day of the Interest Period for such Advance and shall
specify: (i) the renewal date for such Advance (which shall be the last day of
the Interest Period for such Advance); (ii) the amount of the Advance to be
renewed (which shall not be less than the Minimum Amount and integral multiples
of $100,000.00 in excess thereof); and (iii) the duration of the Interest Period
to be applicable thereto. All requests made under this Section 2.2(b) shall be
irrevocable. If the Borrower shall fail to request the renewal of any Interest
Period for any Advance by the required time, the Interest Period for such
Advance shall be renewed after the last day of the Interest Period for such
Advance for successive 30 day Interest Periods or such other Interest Periods as
the Lender deems appropriate, subject to the Lender's right to demand payment at
any time, and interest shall accrue and be payable on such Advance at the
Interest Rate determined by the Lender for such Interest Periods for amounts
comparable to the unpaid balance of such Advance, subject to the provisions of
this Agreement.
(c) Interest shall be due and payable on the last day of each
Interest Period in an amount equal to the unpaid interest accrued during that
Interest Period on the Advance to which it relates at the Interest Rate
applicable for that Interest Period. In the case of an Interest Period of 12
months or more, interest shall be due and payable every six months from the date
of the relevant Advance. If the Alternate Rate shall be applicable to any
Advance at any time, interest accrued thereon shall be due and payable on the
last Business Day of each month. In addition, accrued interest shall be due and
payable in full at any time upon demand.
(d) If the Lender determines that for any reason deposits in
Dollars are not offered by MLIB to leading banks in the London Interbank Market
in an amount comparable to a proposed Advance or an unpaid advance for which
renewal of the Interest Period has been requested and for a period equal to the
requested Interest Period for such Advance, or that LIBOR applicable for any
requested Interest Period with respect to a proposed Advance does not adequately
and fairly reflect the cost to the Lender of funding such Advance, the Lender
shall so notify the Borrower and the requested Advance shall not be made or
renewed, as the case may be. Upon receipt of such notice, the Borrower may: (i)
revoke any notice given to the Lender pursuant to Section 2.1(b) with respect to
a new Advance; or (ii) revoke any notice given to the Lender pursuant to Section
2.2(b) with respect to an unpaid Advance, which Advance shall remain outstanding
after the last day of the Interest Period for such Advance, subject to the
Lender's right to demand payment at any time, and interest shall accrue and be
payable on such Advance at the Alternate Rate, subject to the provisions of this
Agreement. If, after receipt of such notice from the Lender, the Borrower does
not revoke any notice given to the Lender pursuant to: (i) Section 2. 1(b) with
respect to a new Advance, such Advance shall not be made; or (ii) Section 2.2(b)
with respect to an unpaid Advance, the Advance shall remain outstanding after
the last day of the Interest Period for such Advance, subject to the Lender's
right to demand payment at any time, and shall accrue and be payable on such
Advance at the Alternate Rate, subject to the provisions of this Agreement.
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(e) If the Lender (in its discretion) so determines, any due
but unpaid interest may be added to the amount of the Advance to which it
relates (or, at the Lender's option, may be treated as a separate Advance) and
interest calculated as provided for above shall thereafter be paid thereon.
(f) Interest shall be calculated on the basis of actual days
elapsed over a year of 360 days. Interest shall accrue on the principal of each
Advance from and including the date of the Advance to but excluding the date of
the principal's payment.
2.3. Payments; Prepayments. (A) For value received, the Borrower
jointly and severally, if more than one) hereby promises to pay to the Lender or
the Lender's order, upon demand, an amount equal to the aggregate unpaid
principal amount of all Advances made by the Lender to the Borrower together
with interest calculated pursuant to Section 2.2 and all other Obligations
outstanding under this Agreement.
(b) Upon at least three LIBOR Business Days' prior written
notice to the Lender, the Borrower shall have the right, from time to time on
the last day of any Interest Period for a particular Advance, to pay the
outstanding principal amount of that Advance, in whole or in part, in an amount
of not less than $ 100,000.00 plus the amount of any accrued but unpaid interest
to the date of such payment on the principal amount paid. Each notice of payment
shall specify the payment date, the principal amount of the Advance to be paid,
shall be irrevocable and shall commit the Borrower to pay the Advance in the
amount and on the date stated therein.
(c) Upon at least three LIBOR Business Days' prior written
notice to the Lender and subject to the indemnification provisions of Section
2.3(d), the Borrower shall have the right, from time to time on any LIBOR
Business Day other than the last day of any Interest Period for a particular
Advance, to pay the outstanding principal amount of that Advance, in whole or in
part, in an amount of not less than $ 100,000.00 plus the amount of any accrued
but unpaid interest to the date of such payment on the principal amount so paid
and any Interest Differential (as such term is hereinafter defined). Each such
notice of payment shall specify the payment date, the principal amount of the
Advance to be paid, shall be irrevocable and shall commit the Borrower to pay
the Advance in the amount and on the date stated therein.
(d) The Borrower shall pay to the Lender, upon the request of
the Lender, such amount as the Lender shall determine-nine will compensate it
for any loss (including loss of profit), cost or expense incurred by the Lender
(as reasonably determined by the Lender) as a result of any payment of Advance,
in whole or in part, on a date other than the last day of the Interest Period
for such Advance, whether such payment is made by the Borrower pursuant to
Section 2.3(c) or is effected by the Lender liquidating all or a portion of
Securities Account upon the occurrence of a Remedy Event. Notice by the Lender
to the Borrower of the amount of any such- compensation to be paid by the
Borrower shall be conclusive. The foregoing liability of the Borrower, if any,
shall constitute an Obligation and shall be secured by the Collateral.
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(e) For purposes of determining the last day of an Interest
Period, each Interest Period which would otherwise end on a day which is not a
LIBOR Business Day shall end on the next succeeding LIBOR Business Day, except
that, if the next succeeding LIBOR Business Day falls in the next succeeding
calendar month, the Interest Period shall end on the next preceding LIBOR
Business Day.
2.4. Default Interest. In the event the Borrower does not make any
payment of principal or interest to the Lender when due, the Interest Rate
payable with respect to all Advances (both before and after judgment) will
increase, effective as of the date when such payment was due, by two percent
(2.00%) until all payments due hereunder (including any late payments and any
amounts accelerated) are paid to the Lender in full. Any default interest
payable hereunder: (i) which is not paid when due may be added to the overdue
sum and itself bear interest accordingly; and (ii) shall constitute an
Obligation and be secured by the Collateral.
2.5. Manner of Payments. All payments due from the Borrower hereunder
may be debited by the Lender at its discretion from the Borrower's or any
Guarantor's Securities Account or from any other account maintained by the
Borrower or any Guarantor with MLPF&S or any member of the Xxxxxxx Xxxxx Group.
The Borrower and each Guarantor hereby authorize the Lender and each other
member of the Xxxxxxx Xxxxx Group to initiate debit entries and, if necessary,
credit entries, to any such account. All members of the Xxxxxxx Xxxxx Group
shall be fully protected in relying on this authorization. In the event the
Borrower or any Guarantor fails to maintain sufficient funds or credit
availability in any such account, the Borrower shall make such payments on the
date when due without offset or counterclaim in Dollars in federal or other
immediately available funds to the account cf the Lender in accordance with the
wire transfer instructions provided by the Lender from time to time. Any such
payment received after 11:00 a.m. New York City time on a particular day shall
be deemed received on the following Business Day.
2.6. Taxes. All payments by the Borrower and any Guarantor under this
Agreement shall be made free and clear of any restrictions or conditions,
without set off or counterclaim, and free and clear of, and (subject as
hereinafter provided) without any deduction or withholding whether for or on
account of tax or otherwise. If any such deduction or withholding is required by
law to be made by the Borrower, any Guarantor or any other Person (whether or
not a party to, or on behalf of a party to, this Agreement) from any sum paid or
payable by, or received or receivable from, the Borrower or any Guarantor, the
Borrower or, as the case may be, such Guarantor shall pay in the same manner and
at the same time such additional amounts as will result in the Lender's
receiving and retaining (free from any liability other than tax on its overall
net income) such net amount as would have been received by it had no such
deduction or withholding been required to be made.
2.7. Purpose. The Borrower shall use the proceeds of any Advance made
hereunder to finance the purchase of securities or for such other lawful
purposes as have been disclosed to the Lender in writing.
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2.8. Facility Fee. The Borrower shall pay an arrangement fee (the
"Facility Fee"):
(a) prior to each Advance, in an amount equal to the product
determined by multiplying (i) the Facility Fee Percentage, by (ii) the amount of
such Advance and by (iii) a fraction equal to the quotient determined by
dividing the number of days between the date of such Advance and the next annual
anniversary date of this Agreement by 365; and
(b) on the annual anniversary date of this Agreement during
each year this Agreement is in effect, in an amount equal to the product
determined by multiplying (i) the Facility Fee Percentage, by (ii) the aggregate
unpaid principal amount of all Advances outstanding on such anniversary date.
Notwithstanding the foregoing, the total amount of all Facility Fees payable
during any 12-month period after the date of this Agreement shall not exceed an
amount equal to the product determined by multiplying (a) the Facility Fee
Percentage by (b) the Maximum Amount.
3. ESTABLISHMENT OF SECURITIES ACCOUNT; PLEDGE OF COLLATERAL; BORROWING
OF SECURITIES
3.1. Establishment of the Securities Account. Each Loan Party hereby
directs MLPF&S, and MLPF&S hereby agrees, to establish the Securities Account,
which shall be known as the "Xxxxxxx Xxxxx International Private Finance, (Name
of Borrower) Pledged Collateral Account" or such other title (including
abbreviations) acceptable to the Lender to reflect the Lender's interest
therein. Each. of the Loan Parties, as a condition to the Lender's considering
making any Advances, agrees to place the Collateral in the Securities Account.
Each Borrower and each Guarantor jointly and severally agree at all times to
maintain Collateral in the Securities Account with an aggregate Value sufficient
to satisfy the Maintenance Requirement, until the Obligations under this
Agreement have been paid indefeasibly in full and this Agreement has been
terminated. Each of the Loan Parties acknowledges that in establishing and
maintaining the Securities Account, MLPF&S is acting as the Lender's agent for
purposes of perfecting the Lender's Security Interest.
3.2. Grant of Security Interest. (a) As security for the full payment
and performance of the Obligations, and the obligations, whether now existing or
hereafter arising, of each Guarantor pursuant to Section 9, each Loan Party
hereby assigns, pledges, grants and conveys to the Lender a continuing first
priority lien and security interest (the "Security Interest") on and in the
following (collectively, the "Collateral"):
(i) the Securities Account and all stocks, bonds,
securities entitlements, financial assets or other securities or property now or
hereafter in the Securities Account (the "Securities");
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(ii) all credit balances, accounts, contract rights,
general intangibles, instruments, documents, money, certificates of deposit and
all other property of whatever kind or description now or hereafter held in the
Securities Account;
(iii) any securities described in confirmations and
other reports delivered by MLPF&S to any Loan Party or the Lender in connection
with the Securities Account, which securities are deemed to be Securities in the
Securities Account for purposes of this Agreement (for purposes of this
Agreement, "securities" shall include options, including call option contracts);
(iv) all dividends, interest and proceeds of any of
the property described in clauses (a), (b) or (c) above, including without
limitation, proceeds of proceeds; and
(v) all of its right, title and interest in and to
all monies, debts, claims, securities and other property deposited with or owed
or owing by the Lender and/or any other member of the Xxxxxxx Xxxxx Group.
(b) Each Loan Party shall take all action which the Lender
requests or which is reasonably necessary to ensure that the Lender has a
continuing perfected first priority Security Interest while this Agreement is in
effect. Upon the Lender's request, each Loan Party shall execute and deliver to
the Lender a financing statement conforming to the Uniform Commercial Code in
effect in any state or jurisdiction deemed appropriate by the Lender, and such
other documents as may be required in the Lender's judgment, in order to perfect
or maintain the perfection of the Security Interest, all in a form the Lender
considers acceptable. Upon the Lender's request, each Loan Party shall also
execute and deliver a continuation statement conforming to the Uniform
Commercial Code in effect in any state or jurisdiction deemed appropriate by the
Lender and in a form the Lender deems to be acceptable. If any Loan Party fails
to deliver to the Lender financing statements, continuation statements or other
documents the Lender requests, the Lender may, to the extent permitted by law
and without limiting its other rights under this Agreement, execute and file in
such Loan Party's name, as such Loan Party's attorney-in-fact, such documents.
Upon the Lender's request, each Loan Party shall execute and deliver to the
Lender such documents and shall take such other action as the Lender may request
in order to continue or maintain the Security Interest under any amendments to
the Uniform Commercial Code in effect in any state or jurisdiction deemed
appropriate by the Lender from time to time after the date of this Agreement.
(c) The location of each Loan Party's primary residence, if
such Loan Party is an individual (natural person), or, if such Loan Party is not
an individual (natural person), such Loan Party's chief executive office and, if
different, the location of such Loan Party's principal place of business are set
forth in the signature area below, and each Loan Party agrees to provide the
Lender with not less than 30 days' prior written notice of any change of those
locations.
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3.3. Certain Lender Rights in the Securities Account. The Lender may
give instructions of any kind or character to MLPF&S in regard to the Securities
Account, either oral or written. The Lender's instructions may include
instructions to liquidate Collateral and other property in the Securities
Account, to pay credit balances from the Securities Account to the Lender or its
designees, or to move the Collateral from the Securities Account to the Lender
or into an account in the Lender's name or the name of its designees. MLPF&S
shall comply with the Lender's entitlement orders and other instructions in
regard to the Securities Account without further consent by any Loan Party. In
following the Lender's instructions, MLPF&S is under no duty to any Loan Party
to determine whether a Remedy Event has occurred or is continuing. MLPF&S shall
neither accept nor comply with any instructions from any Loan Party in regard to
the Securities Account. The Lender is entitled to receive directly from MLPF&S,
and the Borrower and each other Loan Party each irrevocably authorizes MLPF&S to
provide to the Lender, duplicates of any and all notices, confirmations and
statements of account that the Borrower or such other Loan Party is entitled to
receive with respect to the Securities Account. MLPF&S is authorized to provide
the Lender with any and all information in its possession or control relating to
the Securities Account, and to provide the Lender with on-line access to MLPF&S
systems relating to the Securities Account.
3.4. Transactions in the Securities Account. A Loan Party may ask the
Lender to request that MLPF&S release Collateral from the Securities Account if
(but only if) the Lender consents (in its discretion) and the Value of the
Collateral remaining in the Securities Account after such withdrawal continues
to satisfy the Maintenance Requirement. Each Loan Party understands that (i)
releases of Collateral from the Securities Account will not be considered by the
Lender if, following such transaction, the Value of the Collateral in the
Securities Account would not satisfy the Maintenance Requirement and (ii)
transactions made in the Securities Account may be reversed by the Lender if the
transaction would result in a breach of this Agreement.
(b) In addition, each Loan Party may ask the Lender to
consent, in its discretion, to, and request that MLPF&S arrange for, the sale of
call options with respect to Securities in the Securities Account and the
purchase of call options in order to close out short call option positions in
the Securities Account. Each Loan Party agrees that all such call option
contracts will be purchased or sold over-the-counter or on or through an
exchange or clearing house and will be executed pursuant to the terms of
MLPF&S's Standard Option Agreement(s). Each Loan Party acknowledges that all
such call option contracts are considered "securities" for purposes of the
definition of "Collateral" contained in this Agreement. In the event of the
exercise of any call option in the Securities Account (or any other event
resulting in "cash" proceeds being paid into the Securities Account), each Loan
Party acknowledges and agrees that the "cash" proceeds paid with respect to such
call option (or otherwise paid into the Securities Account) will be applied by
the Lender against the Obligations on the fifteenth Business Day following such
exercise (or, if earlier, the receipt of the "cash" proceeds in the Securities
Account), unless prior to such fifteenth Business Day such Loan Party has
replaced such proceeds in the Securities Account with Securities acceptable to
the Lender (in the Lender's discretion).
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(c) Without limiting any other right or remedy available to
the Lender under this Agreement or at law or in equity, including, without
limitation, the rights and remedies contemplated by Section 8.2 of this
Agreement, the Lender may (i) buy or sell any or all Securities or other
property which may be short in the Securities Account; (ii) cancel any open
orders; and (iii) exercise or refrain from exercising, terminate, liquidate or
close, modify, extend, obtain or reestablish, any or all outstanding contracts
or options and any or all xxxxxx, related or associated positions, securities or
transactions.
(d) Each Loan Party acknowledges and agrees that,
notwithstanding any other provision of this Agreement or any agreement between
any Loan Party and MLPF&S, only the Lender will be entitled to give entitlement
orders, instructions or directions to MLPFS&S with respect to the Securities
Account and no Loan Party will be entitled to give entitlement orders,
instructions or directions to MLPF&S with respect to the Securities Account at
any time.
3.5. Other Account Provisions. Each Loan Party acknowledges that no
trading, VISA card, funds transfer services or wire transfer, check-writing or
margin capabilities exist or will be permitted with respect to the Securities
Account. This Agreement does not create any obligations or duties on MLPF&S to
any Loan Party greater than or in addition to the customary and usual
obligations and duties which MLPF&S has as a stockbroker and custodian of
securities, except to the extent expressly provided in this Agreement. All
transactions in the Securities Account are subject to the constitution, rules,
regulations, customs and usages of the exchange or market and its clearing
house, if any, on which MLPF&S or its agents (including MLPF&S' subsidiaries and
affiliates) execute such transactions. Each Loan Party agrees to pay customary
brokerage fees in connection with any transactions in a Securities Account made
in accordance with this Agreement.
3.6. Borrowing of Securities. Each Loan Party hereby authorizes the
Lender from time to time to lend to itself, as principal or otherwise, or to
others, any securities in the Securities Account irrespective of the Obligations
outstanding at the relevant time. Each Loan Party agrees to execute and deliver
to the Lender such agreements and other documents as the Lender may reasonably
request in order to give effect to this Section 3.7.
3.7. Authorization. Each Loan Party authorizes MLPF&S and/or the
Lender, as appropriate, to (a) deduct from and transfer to the Lender any free
credit balance in the Securities Account (which amount is due to such Loan
Party) in order to make payment of any amount then due to the Lender in
connection with the Loan and (b) liquidate any Securities in the Securities
Account in order to make payment of any amount then due to the Lender in
connection with the Obligations.
4. REPRESENTATIONS AND WARRANTIES
On a continuing basis, each Loan Party represents, warrants and
covenants to the Lender that:
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4.1. Collateral. Except for the Lender's rights established under this
Agreement and the security interest of MLPF&S in any call option contract
contemplated by Section 3.4(b), such Loan Party, to the extent of its rights in
the Collateral, owns the Collateral free of any security interest, lien or other
encumbrance in favor of any Person (other than any subordinated interest which
MLPF&S may have in the Securities Account). The Security Interest is and shall
remain a perfected and valid first priority lien on and security interest in the
Collateral.
4.2. Due Organization. If such Loan Party is a legal Person, such Loan
Party is duly organized and validly existing under the jurisdiction of its
organization and has the power and authority to own its assets and to conduct
the business which it conducts; such Loan Party is in good standing under the
laws of the jurisdiction of its organization or formation and is duly qualified
to do business in all jurisdictions in which the nature of its activities
requires such qualification.
4.3. Power and Authority; Binding Agreements. Such Loan Party has the
full right, power and authority to make, execute, deliver, and perform its
obligations under, this Agreement and the execution, delivery and performance of
the documents contemplated by this Agreement and consummation of the
transactions contemplated by this Agreement have been duly authorized by all
necessary action on its part. This Agreement constitutes the legal, valid and
binding obligation of such Loan Party, enforceable in accordance with its terms.
4.4. No Violation. The execution, delivery or performance by them of
this Agreement and the related documents, the consummation of the transactions
contemplated by this Agreement, and compliance with the provisions of this
Agreement will not (i) violate any law, regulation, order, judgment or decree
binding on such Loan Party, (ii) if such Loan Party is a legal person, violate
or conflict with, as applicable, its articles or certificate of incorporation,
by-laws, or other organizational or governing agreements or documents, or (iii)
conflict with, cause a breach of, constitute a default under, be cause for the
acceleration of the maturity of, or create or result in the creation or
imposition of any lien, charge or encumbrance (other than in favor of the
Lender) on any of its property under, any agreement, notice, indenture,
instrument or other undertaking to which it is a party.
4.5. No Consents. No order, consent, license, authorization, recording
or registration is required to authorize or is required in connection with the
execution, delivery and performance or the legality, validity, binding effect or
enforceability of this Agreement, any documents executed in connection with this
Agreement or any transactions contemplated by this Agreement.
4.6. No Litigation. There are no actions, suits, litigation,
arbitration, administrative proceedings or investigations, pending or
threatened, against such Loan Party or any of the Collateral in which such Loan
Party has rights that could (i) have a material adverse effect on the business
or affairs, condition (financial or otherwise), obligations, operations,
performance, properties or prospects of such Loan Party or (ii) affect its
ability to enter into and perform its obligations under this Agreement or any of
the transactions contemplated by this Agreement.
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4.7. Compliance with Laws. The activities and operations of such Loan
Party are and have been in compliance in all respects with all applicable
federal, state, local and foreign laws and regulations, including, without
limitation, tax, environmental and health and safety laws and regulations.
4.8. No Material Adverse Change. Since the date of their most recent
financial statements or representations delivered to the Lender, there has been
no material adverse change in the business, condition (financial or otherwise),
obligations, operations, performance, properties or prospects of such Loan
Party.
4.9. Solvency. After giving effect to each Advance made from time to
time and such Loan Party's obligations (including contingent obligations) under
this Agreement, (i) the present fair value of its assets exceeds the total
amount of its liabilities (including, without limitation, contingent
liabilities), (ii) it has capital and assets sufficient to carry on its
business, (iii) it is not engaged and is not about to engage in a business or a
transaction for which its remaining assets are unreasonably small in relation to
such business or transaction and (iv) it does not intend to incur, or believe
that it will incur, debts beyond its ability to pay as they become due. Such
Loan Party will not be rendered insolvent by the execution, delivery and
performance of documents relating to this Agreement or by the consummation of
the transactions contemplated under this Agreement.
4.10. Place of Business. The location of such Loan Party's primary
residence, if such Loan Party is a natural person, or, if such Loan Party is not
a natural person, such Loan Party's chief executive office and, if different,
the location of such Loan Party's principal place of business are accurately set
forth in the signature area below.
4.11. No Default. Such Loan Party is not in default under any agreement
to which it is a party or by which it or its assets may be bound, which default
is material in the context of this Agreement.
4.12. Full Disclosure. All information disclosed to the Lender in
connection with this Agreement and the making of each Advance hereunder is true,
complete and accurate in all respects and does not omit any material facts or
circumstances which could make any of such information misleading in any
respect.
Each of the representations and warranties in this Agreement shall be
correct and complied with at all times and in all respects during the
continuance of this Agreement, and until all Obligations have been indefeasibly
paid in full, as if repeated then by reference to the then existing
circumstances.
5. AFFIRMATIVE COVENANTS
Until this Agreement has terminated and all sums and obligations
outstanding hereunder, or under any other documents executed in connection
therewith, have been
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indefeasibly paid in full, each Loan Party (except as otherwise provided with
respect to a Pledgor) shall:
5.1. Maintenance of Existence. Preserve and maintain its existence,
rights and franchises, if it is a legal Person.
5.2. Compliance with Laws. Comply in all material respects, with all
applicable laws, statutes, codes, ordinances, regulations, rules, orders,
awards, judgments, decrees, injunctions, approvals and permits applicable to it.
5.3. Payment of Taxes. Pay all taxes, assessments and governmental
charges imposed upon it or upon its property and all claims (including, without
limitation, claims for labor, materials, supplies or services) which might, if
unpaid, become a lien upon its property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate proceedings and
such Loan Party has maintained adequate reserves with respect thereto.
5.4. Books and Records. Keep proper books of record and account,
containing complete and accurate entries of all financial and business
transactions.
5.5. Audit Rights. Permit any representative of the Lender to examine
its books and records and to make copies and take extracts therefrom, and to
discuss its affairs, finances and accounts with its officers, partners and
employees and its independent accountants, all at such places in the United
States and at such reasonable times and as often as the Lender may reasonably
request, provided that such actions do not unreasonably interfere with its
day-to-day business and operations.
5.6. Maintenance of Collateral (the first sentence of this Section 5.6
shall not apply to any Pledgor). Maintain the Collateral in the Securities
Account as the Lender may require from time to time in accordance with the
Maintenance Requirement. Each Loan Party shall, within 48 hours after demand,
duly pay all calls, subscription monies and/or other monies payable on or with
respect to any of the Securities included in the Collateral provided by it or,
if the Lender pays the same (which it shall not be obliged to do), shall on
demand indemnify the Lender against such payment. If at any time the Value of
the Collateral is less than the Maintenance Requirement and no Loan Party has
within 48 hours after demand reduced the outstanding principal balance of the
Obligations or deposited in the Securities Account additional funds and/or
securities acceptable to the Lender to be held as Collateral with a Value
sufficient to increase the Value of the Collateral to at least 105% of the
Maintenance Requirement, then the Lender may, at its option from time to time,
and without any obligation on its part to give notice, (i) instruct MLPF&S to
cancel any open orders and close any or all outstanding contracts, liquidate any
or all Collateral, withdraw and/or sell any or all Collateral and reduce in
whole or in part the Obligations and (ii) take any other actions to which it is
entitled, (iv) either pursuant to Section 8.2 or otherwise. Notwithstanding the
provisions of this
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Section 5.6, the Lender may at any time pursuant to Section 8.3 demand payment
of the aggregate unpaid principal amount of the Advances and all other
Obligations.
5.7. Bankruptcy. Notify the Lender in writing before filing any
petition seeking the protection of any bankruptcy, insolvency or any similar
statutes. In addition, no Loan Party shall take any action (or fail to take any
necessary action) which may cause a petition in bankruptcy, insolvency or any
similar law or procedure to be filed against such Loan Party.
5.8. Financial and Credit Information. (a) Notify the Lender
immediately, in writing, of any change in its financial condition or prospects
which would adversely affect its ability to repay or perform any obligations) to
the Lender according to the terms of this Agreement.
(b) Supply to the Lender such current financial
information-nation or other information as the Lender may reasonably request
from time to time.
(c) Permit the Lender and MLPF&S to share with one another and
any affiliated companies, or any person authorized by any of them, for
legitimate business purposes, any information about it which each may currently
possess or obtain in the future, unless such Loan Party has notified the Lender
at the time of application for the Facility that such Loan Party objects to the
sharing of such information.
(d) Permit the Lender, or anyone authorized by it, to obtain
third party credit or investigative reports with respect to such Loan Party, and
to answer any questions about its credit experience with such Loan Party.
(e) Comply with any requests from the Lender for additional
documentation required to be filed or executed by such Loan Party from time to
time by applicable law or the policies and procedures of MLPF&S or the Lender.
6. NEGATIVE COVENANTS
Until this Agreement has terminated and all of the Obligations
outstanding hereunder or any other documents executed in connection therewith,
have been indefeasibly paid in full, no Loan Party will create, incur, assume or
suffer to exist any security interest lien or other encumbrance on the
Collateral, other than security interests, liens and other encumbrances created
in favor of the Lender.
7. CONDITIONS PRECEDENT
7.1. Conditions Precedent to the Initial Advance. It shall be a
condition precedent to the Lender's considering making the initial Advance that
the Lender shall have received:
(a) evidence that a Securities Account has been established
and that the Value of the Collateral meets the Advance Requirement; and
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(b) such other documents, opinions, certificates and other
items as the Lender may reasonably request.
7.2. Conditions Precedent to All Advances. It shall be a condition
precedent to the Lender's considering making any Advance or renewing any
Interest Period that on the date of each such Advance or the renewal of such
Interest Period, as the case may be, the following statements shall be true (and
each request for an Advance shall constitute a representation and warranty by
the Borrower that on the date of making or renewing such Advance such statements
are true):
(a) The Borrower has paid the Facility Fee payable in
connection with this Agreement;
(b) The representations and warranties contained in Section 4
are true and correct on and as of the date of such Advance;
(c) No event has occurred or is continuing or would result
from the making of such Advance which would constitute a Remedy Event or an
event, act or condition which with the passage of time or notice, or both, would
constitute a Remedy Event; and
(d) The Borrower has made a request in accordance with, and
has otherwise complied with other provisions of, Section 2. (b) or 2.2(b), as
the case may be.
8. REMEDY EVENTS; REMEDIES
8.1. Remedy Events. If any of the following events (each, a "Remedy
Event") shall occur, the Lender, in its discretion, may take any or all of the
actions outlined in Section 8.2.:
(a) the Borrower fails to make any payment when it is due as
required by this Agreement;
(b) a Loan Party breaches any provision of this Agreement;
(c) the Value of the Collateral in the Securities Account
falls below the applicable Maintenance Requirement, and no Loan Party has
deposited additional Collateral or reduced the outstanding principal balance of
the Obligations as required under Section 5.6;
(d) a Loan Party makes, or the Lender discovers that a Loan
Party has made, a material misrepresentation in connection with this Agreement
or any Advance;
(e) any step is taken or legal proceeding started by any
Person in the Bankruptcy of any Loan Party or for the appointment of a receiver,
administrator, trustee or similar officer of any Loan Party or of any or all of
the revenues and assets of the any Loan Party or the winding-up, administration,
dissolution or reorganization of any Loan Party;
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(f) any Loan Party is insolvent, is unable to pay its debts as
they fall due, stops, suspends or threatens to stop or suspend payment of all or
a material part of its debts, begins negotiations or takes any proceeding or
other step with a view to readjustment, rescheduling or deferral of all of its
indebtedness or any part of its indebtedness which it would or might otherwise
be unable to pay when due or proposes or makes a general assignment or an
arrangement or composition with or for the benefit of the creditors of such Loan
Party;
(g) an attachment or garnishment writ or the like is levied
against all or any portion of the Securities Account or the Collateral;
(h) any indebtedness of a Loan Party to any member of the
Xxxxxxx Xxxxx Group or any other Person(s) in respect of monies borrowed or
raised (1) is not paid when due nor within any applicable grace period in any
agreement relating to such indebtedness, or (2) becomes due and payable before
its normal maturity by reason of a default or event of default, however,
described;
(i) final judgment for the payment of money is rendered
against any Loan Party and within thirty (30) days from the entry of judgment
has not been discharged or stayed pending appeal or has not been discharged
within thirty (30) days from the entry of a final order of affirmance on appeal;
(j) if a Loan Party is acting in the capacity of trustee of a
trust for the purposes hereof, it or they cease to be appropriately authorized
or such trust comes or is brought to an end;
(k) if a Loan Party is a natural Person, such Loan Party dies
or becomes or is declared (by appropriate authority) incompetent or of unsound
mind; or
(1) the Lender otherwise deems itself or its security interest
in any of the Collateral insecure or the Lender believes in good faith that the
prospect of payment or other performance by any Loan Party is impaired.
8.2. Remedies. (a) Upon the occurrence of a Remedy Event, the Lender
may, at its option: (i) instruct MLPF&S to cancel any open orders and close any
and all outstanding contracts; (ii) liquidate any or all of the Collateral;
(iii) withdraw and/or sell any or all of the Collateral; and (iv) apply any or
all of the Collateral as well as the proceeds of any such Collateral to the
Obligations. The Borrower and each Guarantor shall be responsible for any
decrease in the Value of the Collateral occurring prior to or during
liquidation. Upon the occurrence of a Remedy Event, the Lender may also set-off
any or all of the Obligations against any securities, cash or other property of
such Borrower or Guarantor in the possession of the Lender (directly or through
MLPF&S as the Lender's agent) or any other member of the Xxxxxxx Xxxxx Group and
against any obligations owed to the Borrower or any Guarantor by the Lender or
any other member of the Xxxxxxx Xxxxx Group.
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(b) The Lender may exercise any or all of its rights under
this Section without further demand for additional Collateral, or notice of sale
or purchase, or other notice or advertisement. Any sales or purchases made
pursuant to this Section may be made at the Lender's discretion on any exchange
or other market where such business is usually transacted, or at public auction
or private sale, and the Lender or its agent may be the purchaser for the Lender
or its agent's own account. It is understood that the giving of any prior demand
or call or prior notice of the time and place of such sale or purchase by the
Lender or its agent will not be considered a waiver of the Lender's right to
sell or buy without any such demand, call or notice as provided in this
Agreement.
(c) In addition to the Lender's rights and remedies described
in this Agreement, the Lender has the right to exercise any one or more of the
rights and remedies of a secured creditor under the Uniform Commercial Code as
now or hereafter in effect in the State of New York. All the rights and remedies
which are available to the Lender under this Agreement are cumulative and are in
addition to any and all other rights and remedies which are otherwise available
to the Lender either at law, equity or otherwise. The Lender may exercise any
one or more of such rights and remedies simultaneously or successively.
8.3. Demand. Each of the Loan Parties hereby acknowledges that the
principal amount of the Advances and all other Obligations are payable on the
Lender's demand by the Lender and that the Lender may make demand on the
Borrower and/or any Guarantor regardless of whether or not a Remedy Event has
occurred. In the event the Lender makes such demand and the Obligations are not
paid in full, the Lender shall have the right, at its option, to exercise any or
all of the remedies described in Section 8.2.
9. ADDITIONAL GUARANTOR/PLEDGOR COVENANTS
9.1. Guarantor Covenants. Each and any Guarantor hereby unconditionally
and irrevocably agrees with the Lender (for itself and as trustee of the benefit
of these agreements for each other member of the Xxxxxxx Xxxxx Group) as
follows:
(a) Each Guarantor hereby irrevocably, unconditionally and
absolutely guarantees, jointly and severally with each of the other Guarantors,
to the Lender the full and punctual payment of the Obligations in accordance
with this Agreement. The foregoing guaranty is a guaranty of payment and not of
collection, and is the primary obligation of such Guarantor.
(b) As between such Guarantor and the Lender but without
affecting the Borrower's obligations, such Guarantor shall be liable under (a)
above as if it were the sole principal debtor and not merely a guarantor.
Accordingly, it shall not be discharged, nor shall its liability be affected, by
reason of:
(i) any time, indulgence, waiver or consent at any
time given to any Loan Party or any other Person;
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(ii) any amendment to any other provision of this
Agreement or to any security or other agreement, guaranty or indemnity;
(iii) the making or absence of, or delay in, any
demand on any Loan Party or any other Person for payment;
(iv) the enforcement or the absence of, or delay in,
enforcement of this Agreement or of any security or other agreement, guaranty or
indemnity or any failure to perfect the Security Interest in any Collateral;
(v) the release of any such agreement, security,
guaranty or indemnity;
(vi) the death, incapacity, bankruptcy, insolvency,
winding-up, liquidation, dissolution, merger, reorganization or similar event of
or with respect to any Loan Party or any other Person;
(vii) the illegality, invalidity or unenforceability
of or any defect in any provision of this Agreement or any other agreement or
any of the obligations or of any other obligations of any Loan Party to the
Lender or any other circumstance which might otherwise constitute a legal or
equitable discharge of or defense to it; or
(viii) the disallowance of all or a portion of the
Lender's claim for repayment of any obligation of the Borrower or any Guarantor
hereunder under any provision of the United States Bankruptcy Code, any
successor statute, or any other law, rule or regulation.
(c) The obligations of each Guarantor under (a) above are and
shall remain in full force and effect by way of continuing security until this
Agreement has terminated and the Obligations have been indefeasibly paid in
full. Furthermore, those obligations are additional to, and not instead of, any
security or other agreement, guaranty or indemnity at anytime existing in favor
of the Lender, whether from the Borrower, a Guarantor or otherwise. Each
Guarantor irrevocably waives all notices and demands whatsoever.
9.2. Additional Provisions.
(a) Each Guarantor unconditionally and irrevocably further
agrees as follows:
(i) any sum expressed to be payable by the Borrower
under this Agreement which is for any reason (whether or not now existing and
whether or not now known or becoming known to any party to this Agreement) not
recoverable from such Guarantor shall nevertheless be recoverable from it as if
it were the sole principal debtor and shall be paid by it to the Lender on
demand (such Guarantor's liability under this Agreement being liability for
payment, and not collection); and
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(ii) as a primary obligation to indemnify the Lender
against any loss suffered by it as a result of any Obligation not being paid by
the time and on the date specified in this Agreement and otherwise in the manner
specified in this Agreement or any Obligation being or becoming void, voidable
or unenforceable for any reason (whether or not now existing and whether or not
now known or becoming known to any party to this Agreement), the amount of that
loss being the amount of the Obligation not paid.
(b) Each Guarantor acknowledges that the Lender is entering
into this Agreement, and that all transactions by the Lender under this
Agreement are done, in reliance on the guaranty, indemnities and other
undertakings on the part of such Guarantor in this Agreement, and that the
Lender would not, in the absence of such guaranty, indemnities and other
undertakings on the part of such Guarantor in this Agreement, enter into this
Agreement with the Borrower or do any transactions with or for the Borrower
under this Agreement.
(c) The Lender hereby gives notice to each Guarantor:
(i) that by becoming party to the Agreement as a
Guarantor, and in particular by giving the guaranty and indemnities in this
Section 9 and/or by providing Collateral, such Guarantor may become liable
instead of or as well as the Borrower;
(ii) that such Guarantor's obligations, and in
particular its obligations under such guaranty and indemnities and in respect of
such Collateral, will be unlimited as to amount; and
(iii) that such Guarantor should in its own interests
seek independent
legal advice before signing this Agreement as a Guarantor.
9.3. Pledgor. Each Pledgor hereby unconditionally and irrevocably
agrees:
(a) The assignment of, and the grant of a security interest
in, the Collateral shall not be affected by reason of:
(i) any time, indulgence, waiver or consent at any
time given to any Loan Party or any other Person;
(ii) any amendment to any other provision of this
Agreement or any security or other agreement, guaranty or indemnity;
(iii) the making or absence of, or delay in, any
demand on any Loan Party or any other Person for payment;
(iv) the enforcement or the absence of, or delay in,
enforcement of this Agreement or of any security or other agreement, guaranty or
indemnity or any failure to perfect the Security Interest in any Collateral;
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(v) the release of any such agreement, security,
guaranty or indemnity;
(vi) the death, incapacity, Bankruptcy, insolvency,
winding-up, liquidation, dissolution, merger, reorganization or other similar
event of or with respect to any Loan Party or any other Person;
(vii) the illegality, invalidity or unenforceability
of or any defect in any provision of this Agreement or any other agreement or
any of the Obligations or any other obligations of any Loan Party or any other
circumstance which might otherwise constitute a legal or equitable discharge of
or defense to any Person; or
(viii) the disallowance of all or a portion of the
Lender's claim for repayment of any Obligation of the Borrower or any obligation
of any Guarantor hereunder under any provision of the United States Bankruptcy
Code, any successor statute, or any other law, rule or regulation.
(b) The Security Interest in the Collateral is and shall
remain in full force and effect by way of continuing security until this
Agreement has terminated and the Obligations have been indefeasibly paid in
full. Furthermore, the Obligations are in addition to, and not instead of, any
security or other agreement, guaranty or indemnity at any time existing in favor
of the Lender, whether from the Borrower, any Loan Party or otherwise. Each
Pledgor irrevocably waives all notices and demands whatsoever.
(c) Each Pledgor acknowledges that the Lender is entering into
this Agreement, and that all transactions by the Lender under this Agreement are
done, in reliance on the agreements of the Pledgor in this Agreement, and that
the Lender would not, in the absence of such agreements, enter into this
Agreement with the Borrower or do any transactions with or for the Borrower
under this Agreement.
(d) The Lender hereby gives notice to each Pledgor:
(i) That the Obligations under this Agreement are
unlimited and, accordingly, an unlimited amount of the Collateral may be applied
in respect of such Obligations; and
(ii) That such Pledgor should in its own interest
seek independent legal advice before signing this Agreement as a Pledgor.
10. MISCELLANEOUS
10.1. Cost of Collection. If the Borrower or any Guarantor fails to
make any payment under this Agreement as and when required, the Borrower and
each Guarantor must pay, jointly and severally and to the extent permitted by
applicable law, the Lender's court and collection
21
costs, including reasonable legal fees (at all levels and in any Bankruptcy
proceeding), any cost incurred in the disposition of the Collateral, including
reasonable legal fees, and, if the Obligations are referred for collection to
any attorney who is not an employee of the Lender or one of its affiliates, the
Lender's reasonable legal fees (at all levels and in any Bankruptcy proceeding).
10.2. Delay in Enforcement; No Waiver. The Lender can choose to delay
or not to enforce any of its rights under this Agreement without losing such
rights. If the Lender chooses not to exercise or enforce any of its rights, each
Loan Party, agrees that the Lender is not waiving the right to enforce such
rights at a later time or any of its other rights. Any waiver of the Lender's
rights under this Agreement must be in writing.
10.3. Waivers. To the extent permitted by applicable law, each Loan
Party waives its rights to require the Lender (a) to demand payments of amounts
due (known as "presentment"); (b) to give notice that amounts due have not been
paid (known as "notice of dishonor"); and (c) to obtain an official
certification of non-payment (known as "protest").
10.4. Miscellaneous Indemnities. The Borrower and each Guarantor shall
on demand jointly and severally indemnify the Lender against:
(a) any cost or increased cost in maintaining the Facility,
the Securities Account, the Obligations, all or any part of any Advance, or any
other amount outstanding under this Agreement or any reduction in the effective
return to the Lender under this Agreement or in the rate of overall return on
its capital below that which it would have been able to achieve but for its
entering into or giving effect to this Agreement, in each case, which, in the
Lender's determination, is sustained or incurred directly or indirectly as a
consequence of, or of compliance with, any present or future law or regulation
or any directive or the like (whether or not having the force of law) of any
governmental or other regulatory body or authority including any law,
regulation, directive or the like relating to reserve assets, liquidity or
monetary control or affecting the manner in which the Lender allocates capital
resources to its obligations under this Agreement;
(b) any funding and any other cost, expense or liability
(including loss of profit, reasonable legal fees (at all levels and in any
Bankruptcy proceeding) and taxes) sustained or incurred by the Lender (1) to
render this Agreement (including the Security Interest) enforceable and
admissible in evidence in any enforcement proceedings commenced by the Lender in
connection with this Agreement, (2) in connection with the administration of, or
in protecting or enforcing the Lender's rights under, this Agreement and/or any
amendment thereto, including any Bankruptcy proceeding, (3) as a result of the
occurrence or continuance of any Remedy Event (whether in connection with any
act or thing done as set out in Section 8 or otherwise), or (4) as a result of
the receipt or recovery by the Lender of all or any part of an Advance (other
than an Advance interest on which is calculated by reference to Alternate Rate)
or an overdue sum otherwise than on the last day of an Interest Period
applicable to an Advance or, as the case may be, a period selected by the Lender
and applicable to that overdue sum; and
22
(c) any stamp, documentary, registration or similar tax
payable in connection with this Agreement, any Advance or the entry into,
registration, performance, enforcement or admissibility in evidence of this
Agreement and/or any such amendment, supplement or waiver, promptly and in any
event before any interest or penalty becomes payable, together with any
liability with respect to or resulting from any delay in paying or omission to
pay any such tax.
10.5. Interpretation, etc. Whenever it appears herein, the phrase "in
the Lender's discretion" or "in its discretion" shall be read as "in the
Lender's sole and absolute discretion". Whenever the context may require, the
terms used in this agreement shall include the singular or the plural and the
feminine, masculine or neuter gender shall include each other gender.
10.6. Successors and Assigns. (a) This Agreement shall be binding upon
and inure to the benefit of the heirs, successors and assigns of all the parties
to this Agreement. The Lender may assign at its sole option all or part of its
rights, obligations and remedies under this Agreement. Any assignee of Lender's
rights and obligations shall be entitled to the full benefit of this Agreement
to the same extent as if it were an original party in respect of the rights or
obligations assigned or transferred to it. No Loan Party may assign its rights
or obligations under this Agreement.
(b) The Lender may at any time change the office through which
it is acting for the purpose of this Agreement and may at any time act for this
purpose through more than one office.
(c) The Lender may disclose to a potential assignee or
transferee or any other Person who has entered or proposes to enter into
contractual arrangements with the Lender in relation to or concerning this
Agreement such information about any Loan Party and this Agreement as it may
deem appropriate.
10.7. Amendments. No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
the Lender and the Borrower; provided, however, any amendment to the provisions
of Section 9 of this Agreement requires the signature of the Guarantors or the
Pledgors, as the case may be. Any waiver shall be effective only in the specific
instance and for the specific purpose for which given.
10.8. Headings. The heading of each provision of this Agreement is for
descriptive purposes only and shall not be deemed to modify or qualify any of
the rights or obligations described in each such provision.
10.9. Joint and Several Liability. If the Borrower consists of more
than one Person (each a "Co-Borrower"), references herein to "the Borrower"
shall be read as "each Co- Borrower", "all Co-Borrowers", or "any or all
Co-Borrowers", jointly and severally, whichever reading maximizes the Lender's
rights and the Co-Borrowers' obligations under this Agreement. All Co-Borrowers'
and, if more than one, all Guarantors' Obligations hereunder shall be joint and
several.
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10.10. Severability. If any provision of this Agreement is held to be
invalid, illegal, void or unenforceable, by reason of any law, rule,
administrative order or judicial or arbitral decision, such determination shall
not affect the validity of the remaining provisions of this Agreement.
10.11 Entire Agreement. This Agreement constitutes the entire agreement
among the Loan Parties, the Lender and MLPF&S regarding the matters contemplated
by this Agreement, and supersedes any and all prior agreements (whether written
or oral).
10.12. Acknowledgment Regarding Perfection. MLPF&S, by its signature
below, acknowledges the Security Interest of the Lender in the Securities
Account and agrees to take any action required to maintain the Security Interest
and perfection thereof.
10.13. Returned Payment. To the extent the Lender or MLPF&S receives
any payment with respect to the Obligations, the Facility or this Agreement, and
all or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by the Lender or
MLPF&S or paid over to a trustee, receiver or any other entity, whether under
any Bankruptcy law or otherwise (any such payment is hereinafter, referred to as
a "Returned Payment"), then this Agreement shall continue to be effective or
shall be reinstated, as the case may be, to the extent of such payment or
repayment by the Lender or MLPF&S, and, the indebtedness or part thereof
intended to be satisfied by such Returned Payment shall be revived and continued
in full force and effect as if said Returned Payment had not been made.
10.14. Effectiveness Upon Acceptance by Lender and MLPF&S. This
Agreement will become effective only after each Loan Party has signed this
Agreement in the space provided below and the Lender and MLPF&S have signed this
Agreement in the spaces provided below indicating their acceptance of this
Agreement.
10.15. Notices. Except as otherwise provided in this Section 10. 15,
all communications hereunder shall be in writing and delivered or mailed by
registered or certified mail or overnight carrier or by telecopy. Statements,
notices and all other communications to the Borrower or other Guarantor will be
sent to the address set forth on the signature page below or to such other
address as may be designated in a written notice delivered in the manner
provided herein. Each Loan Party, agrees to send correspondence to the Lender at
such address as is provided by the Lender from time to time. Unless the Lender
shall require requests under Section 2. 1 (b) or 2.2(b) to be in writing, such
requests shall be given by the Borrower to the Lender verbally. The Lender shall
send to the Borrower written confirmation of any such notice. If the Bank has
not received written notice from the Borrower of any exception or objection to
any such confirmation within fifteen (15) days of the Borrower's receipt of such
confirmation, the Borrower shall be deemed to have approved such confirmation
and such confirmation shall be presumed conclusively to be correct with respect
to all matters set forth therein.
24
10.16. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
10.17. Arbitration with MLPF&S.
EACH LOAN PARTY UNDERSTANDS AND EACH LOAN PARTY AND MLPF&S AGREE THAT:
(A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
(B) EACH LOAN PARTY, EACH PLEDGOR AND MLPF&S ARE WAIVING THEIR RIGHT TO
SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY TRIAL.
(C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND
DIFFERENT FROM COURT PROCEEDINGS.
(D) THE ARBITRATOR'S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS
OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF
RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
(E) THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
EACH LOAN PARTY HEREBY AGREES TO HOLD HARMLESS MLPF&S, ITS AFFILIATES
(EXCLUDING THE LENDER), AND ITS EMPLOYEES FROM ANY AND ALL CLAIMS, LIABILITIES,
AND/OR DAMAGES, IN ANY WAY RELATED TO, OR ARISING OUT OF, OR IN CONNECTION WITH,
EACH LOAN PARTY'S AND EACH PLEDGOR'S GRANTING OF THE SECURITY INTEREST OR THE
LENDER'S EXERCISE OF RIGHTS UNDER THIS AGREEMENT, INCLUDING ANY ACTION OR
INACTION BY MLPF&S IN FOLLOWING THE LENDER'S INSTRUCTIONS REGARDING THE
SECURITIES ACCOUNT IN ACCORDANCE WITH THIS AGREEMENT.
EACH LOAN PARTY AGREES THAT ALL CONTROVERSIES WHICH MAY ARISE BETWEEN
MLPF&S AND SUCH LOAN PARTY CONCERNING THE SECURITIES ACCOUNT, INCLUDING BUT NOT
LIMITED TO THOSE INVOLVING ANY TRANSACTION OR THE CONSTRUCTION, PERFORMANCE, OR
BREACH OF THIS AGREEMENT OR ANY OTHER AGREEMENT BETWEEN MLPF&S AND SUCH LOAN
PARTY WHETHER ENTERED INTO PRIOR TO, ON
25
OR SUBSEQUENT TO THE DATE HEREOF SHALL BE DETERMINED BY ARBITRATION. ANY
ARBITRATION UNDER THIS AGREEMENT SHALL BE CONDUCTED ONLY BEFORE THE NEW YORK
STOCK EXCHANGE INC., THE AMERICAN STOCK EXCHANGE, INC., OR AN ARBITRATION
FACILITY PROVIDED BY ANY OTHER EXCHANGE, THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC., OR THE MUNICIPAL SECURITIES RULEMAKING BOARD, AND IN ACCORDANCE
WITH ITS ARBITRATION RULES THEN IN FORCE. EACH LOAN PARTY MAY ELECT IN THE FIRST
INSTANCE WHETHER ARBITRATION SHALL BE CONDUCTED BEFORE THE NEW YORK STOCK
EXCHANGE, INC., THE AMERICAN STOCK EXCHANGE, INC., OTHER EXCHANGES, THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC., OR THE MUNICIPAL SECURITIES RULEMAKING
BOARD, BUT IF SUCH LOAN PARTY FAILS TO MAKE SUCH ELECTION, BY REGISTERED LETTER
OR TELEGRAM ADDRESSED TO MLPF&S IN CARE OF THE LENDER, BEFORE THE EXPIRATION OF
FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM MLPF&S TO MAKE SUCH ELECTION,
THEN MLPF&S MAY MAKE SUCH ELECTION. JUDGMENT UPON THE AWARD OF THE ARBITRATORS
MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION.
NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO
ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT AGAINST
ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION; OR WHO IS A
MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO
ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL:
(I) THE CLASS CERTIFICATION IS DENIED;
(II) THE CLASS IS DECERTIFIED; OR
(III) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT.
SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT
CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT
STATED HEREIN.
EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS SECTION 10.17 APPLIES
SOLELY TO TRANSACTIONS BETWEEN MLPF&S AND THE LOAN PARTIES IN CONNECTION WITH
THE SECURITIES ACCOUNT AND THAT THIS SECTION 10.17 DOES NOT OTHERWISE PERTAIN TO
THE FACILITY, THE LOAN OR THE ADVANCES MADE HEREUNDER.
26
10.18. GOVERNING LAW. THIS AGREEMENT IN ALL RESPECTS
SHALL BE GOVERNED BY AND INTERPRETED UNDER THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE
WITHOUT REGARD TO ANY CONFLICT OF LAW PROVISION THEREOF THAT MIGHT PREVENT THE
OPERATION OF THIS SECTION 10.18.
10.19. WAIVER OF JURY TRIAL. EXCEPT TO THE EXTENT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH LOAN PARTY HEREBY WAIVES AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER, ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH LOAN PARTY
ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE LENDER THAT THE PROVISIONS OF THIS
SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE LENDER HAS RELIED, IS
RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND ANY DOCUMENT RELATED
THERETO. THE LENDER MAY FILE AN ORIGINAL COUNTERPART OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY LOAN PARTY, AS THE CASE MAY BE,
TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
10.20. SUBMISSION TO JURISDICTION. EACH LOAN PARTY (EACH, A "SUBMITTING
PARTY") HEREBY IRREVOCABLY SUBMITS ITSELF TO THE JURISDICTION OF THE STATE
COURTS OF THE STATE OF NEW YORK IN NEW YORK COUNTY AND TO THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE LENDER OR ITS
SUCCESSORS OR ASSIGNS. EACH SUBMITTING PARTY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, (A) HEREBY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS
A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT
IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT
ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE
SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (B) HEREBY WAIVES THE
RIGHT TO ASSERT IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY OFFSET OR
COUNTERCLAIM, EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY. EACH SUBMITTING
27
PARTY HEREBY CONSENTS TO THE SERVICE OF PROCESS BY MAIL AT THE ADDRESS OF SUCH
PARTY SET FORTH IN THE SIGNATURE AREA BELOW CONTEMPLATED BY THIS AGREEMENT. EACH
SUBMITTING PARTY AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO
SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE LENDER. FINAL
JUDGMENT AGAINST A SUBMITTING PARTY IN ANY SUCH SUIT, ACTION OR PROCEEDING SHALL
BE CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (X) BY SUIT, ACTION
OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE
CONCLUSIVE EVIDENCE OF THE FACT AND OF THE AMOUNT OF THE INDEBTEDNESS OR
LIABILITY OF SUCH SUBMITTING PARTY OR (Y) IN ANY OTHER MANNER PROVIDED BY OR
PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE
LENDER MAY AT ITS OPTION BRING SUIT OR INSTITUTE OTHER JUDICIAL PROCEEDINGS
AGAINST A SUBMITTING PARTY OR ANY OF ITS ASSETS IN ANY XXXXX XX XXXXXXX XXXXX XX
XXX XXXXXX XXXXXX OR OF ANY COUNTRY OR PLACE WHERE SUCH SUBMITTING PARTY OR SUCH
ASSETS MAY BE FOUND.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
This Agreement contains a pre-dispute arbitration provision regarding
disputes with MLPF&S in Section 10.17, hereof.
MAXIMUM AMOUNT $2,000,000
MINIMUM ADVANCE AMOUNT: $1,250,000
FACILITY FEE PERCENTAGE N/A.
SPREAD: LIBOR +.50%
[Remainder of page intentionally left blank.]
28
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
This Agreement contains a pre-dispute arbitration provision regarding
disputes with MLPF&S in Section 10.17, hereof.
MAXIMUM AMOUNT $13,000,000
MINIMUM ADVANCE AMOUNT: $ 1,250,000
FACILITY FEE PERCENTAGE 0%
SPREAD: LIBOR +.50%
[Remainder of page intentionally left blank.]
29
Borrower:
a. Name (if entity, please provide legal name as it appears in
organizational documents; e.g., certificate of incorporation, partnership
agreement): Xxxxxx X. Xxxxx III
b. Trade name (if different): _______________________________________
c. Print address of primary residence (if individual), or principal
place of business and, if different, chief executive offices (if entity):
d. Signature: /s/ Xxxxxx X. Xxxxx III Date: July 9, 1998
Witness: /s/ Xxxxxx X. Xxxxxx
Print Name: Xxxxxx X. Xxxxxx
Date: July 9, 1998
Borrower:
a. Name (if entity, please provide legal name as it appears in
organizational documents; e.g., certificate of incorporation, partnership
agreement):
b. Trade name (if different): _________________________________________
c. Print address of primary residence (if individual), or principal
place of business and, if different, chief executive offices (if entity):
d. Signature ___________________________ Date: _____________________
Witness:
Print Name:
Date:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------
Title: Administrative Manager, Vice President
Address:
30
XXXXXXX XXXXX INTERNATIONAL PRIVATE
FINANCE LIMITED
By: /s/ Xxxxx X. Xxxxx Date: July 17, 1998
---------------------
Xxxxx X. Xxxxx
Title: Vice President
Address: 00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
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