Exhibit 10.4
XXXXXXX XXXXX TERM LOAN AND SECURITY AGREEMENT
TERM LOAN AND SECURITY AGREEMENT DATED AS OF April 4, 2005, between ORBIT
INTERNATIONAL CORP., a corporation organized and existing under the laws of the
State of Delaware having its principal office at 00 Xxxxx Xxxxx, Xxxxxxxxx, XX
00000 ("Customer"), and XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC., a
corporation organized and existing under the laws of the State of Delaware
having its principal office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX 00000
("MLBFS").
In consideration of the mutual covenants of the parties hereto, Customer and
MLBFS hereby agree as follows:
Article I. DEFINITIONS
1.1 Specific Terms. In addition to terms defined elsewhere in this Loan
Agreement, when used herein the following terms shall have the following
meanings:
"Acquisition" shall mean Customer's acquisition of stock of Tulip Development
Laboratory, Inc. and TDL Manufacturing Inc., pursuant to the Acquisition
Documents.
"Acquisition Documents" shall mean that certain Stock Purchase Agreement by and
between Customer, as buyer, and Tulip Development Laboratory, Inc. and TDL
Manufacturing Inc. and the respective Shareholders of Tulip Development
Laboratory, Inc. and TDL Manufacturing Inc., as (jointly and severally) seller,
dated December 13, 2004, and the ancillary agreements described in (or set forth
as) schedules thereto.
"Bankruptcy Event" shall mean any of the following: (i) a proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
liquidation, winding up or receivership law or statute shall be commenced, filed
or consented to by any Credit Party; or (ii) any such proceeding shall be filed
against any Credit Party and shall not be dismissed or withdrawn within sixty
(60) days after filing; or (iii) any Credit Party shall make a general
assignment for the benefit of creditors; or (iv) any Credit Party shall
generally fail to pay or admit in writing its inability to pay its debts as they
become due; or (v) any Credit Party shall be adjudicated a bankrupt or
insolvent; or (vi) any Credit Party shall take advantage of any other law or
procedure for the relief of debtors or shall take any action for the purpose of
or with a view towards effecting any of the foregoing; or (vii) a receiver,
trustee, custodian, fiscal agent or similar official for any Credit Party or for
any substantial part of any of their respective property or assets shall be
sought by such Credit Party or appointed.
"Business Day" shall mean any day other than a Saturday, Sunday, federal holiday
or other day on which the New York Stock Exchange is regularly closed.
"Business Guarantor" shall mean every Guarantor that is not a natural person.
"Certificate of Compliance" shall mean, as applicable, that duly executed
certificate, substantially the same form as Exhibit B attached hereto to the
extent such certificate shall be applicable, of the president, chief financial
officer or chief executive officer of Customer, certifying as to the matters set
forth in such certificate.
"Closing Date" shall mean the date upon which all conditions precedent to MLBFS'
obligation to make the Loan shall have been met to the satisfaction of MLBFS.
"Collateral" shall mean all Accounts, Chattel Paper, Contract Rights, Inventory,
Equipment, Fixtures, General Intangibles, Deposit Accounts, Documents,
Instruments, Investment Property and Financial Assets of Customer, howsoever
arising, whether now owned or existing or hereafter acquired or arising, and
wherever located; together with all parts thereof (including spare parts), all
accessories and accessions thereto, all books and records (including computer
records) directly related thereto, all proceeds thereof (including, without
limitation, proceeds in the form of Accounts and insurance proceeds), and the
additional collateral described in Section 3.6 (b) hereof.
"Commitment Expiration Date" shall mean April 22, 2005.
"Commitment Fee" shall mean a fee of $35,000.00 due to MLBFS in connection with
this Loan Agreement.
"Consolidated Entities" shall mean Customer, Xxxxxxx Electronics, Inc., Orbit
Instrument of California, Inc., Tulip Development Laboratory, Inc., and TDL
Manufacturing, Inc.
"Credit Party" and "Credit Parties" shall mean, individually or collectively,
the Customer, all Guarantors, and all Pledgors.
"Default" shall mean either an "Event of Default" as defined in Section 3.5
hereof, or an event which with the giving of notice, passage of time, or both,
would constitute such an Event of Default.
"Default Rate" shall mean an annual interest rate equal to the lesser of: (i)
two percentage points over the Interest Rate; or (ii) the highest interest rate
allowed by applicable law.
"Event of Loss" shall mean the occurrence whereby any tangible Collateral is
damaged beyond repair, lost, totally destroyed or confiscated.
"GAAP" shall mean the generally accepted accounting principles in effect in the
United States of America from time to time.
"General Funding Conditions" shall mean each of the following conditions to each
loan or advance by MLBFS hereunder: (i) no Default or Event of Default shall
have occurred and be continuing or would result from the making of any such loan
or advance hereunder by MLBFS; (ii) there shall not have occurred and be
continuing any material adverse change in the business or financial condition of
any Credit Party; (iii) all representations and warranties of all of the Credit
Parties herein or in any of the Loan Documents shall then be true and correct in
all material respects; (iv) MLBFS shall have received this Loan Agreement and
all of the other Loan Documents, duly executed and filed or recorded where
applicable, all of which shall be in form and substance satisfactory to MLBFS;
(v) the Commitment Fee shall have been paid in full; (vi) MLBFS shall have
received, as and to the extent applicable, copies of invoices, bills of sale,
loan payoff letters and/or other evidence satisfactory to it that the proceeds
of the Loan will satisfy the Loan Purpose; (vii) MLBFS shall have received
evidence satisfactory to it as to the ownership of the Collateral and the
perfection and priority of MLBFS' liens and security interests thereon, as well
as the ownership of and the perfection and priority of MLBFS' liens and security
interests on any other collateral for the Obligations furnished pursuant to any
of the Loan Documents; (viii) MLBFS shall have received evidence satisfactory to
it of the insurance required hereby or by any of the Loan Documents; and (ix)
any additional conditions specified in the "Term Loan Approval" letter executed
by MLBFS with respect to the transactions contemplated hereby shall have been
met to the satisfaction of MLBFS.
"Guarantor" shall mean each Person obligated under a guaranty, endorsement or
other undertaking by which such Person guarantees or assumes responsibility in
any capacity for the payment or performance of any of the Obligations.
"Loan" shall mean a sixty-month term installment loan in an amount equal to the
lesser of: (A) 100% of the amount required by Customer to satisfy or fulfill the
Loan Purpose, (B) the aggregate amount which Customer shall request be advanced
by MLBFS on account of the Loan Purpose, or (C) $5,000,000.00.
"Loan Agreement" shall mean this agreement as titled in the initial paragraph
hereof and shall specifically include that number to be designated by MLBFS as
the Customer's "Loan No" in reference to this Loan Agreement, and which number
and designation MLBFS shall provide to Customer upon the initial invoice
generated by MLBFS. At all times thereafter, such numerical loan number shall
be included and be deemed to be a part of the title of this Loan Agreement.
"Loan Documents" shall mean this Loan Agreement, any indenture, any guaranty of
any of the Obligations and all other security and other instruments,
assignments, certificates, certifications and agreements of any kind relating to
any of the Obligations, whether obtained, authorized, authenticated, executed,
sent or received concurrently with or subsequent to this Loan Agreement, or
which evidence the creation, guaranty or collateralization of any of the
Obligations or the granting or perfection of liens or security interests upon
any Collateral or any other collateral for the Obligations, including any
modifications, amendments or restatements of the foregoing.
"Loan Purpose" shall mean the purpose for which the proceeds of the Loan will be
used; to wit: to finance the stock acquisition of Tulip Development Laboratory,
Inc. and TDL Manufacturing, Inc
"Location of Tangible Collateral" shall mean the address of Customer set forth
at the beginning of this Loan Agreement, together with any other address or
addresses set forth on an exhibit hereto as being a Location of Tangible
Collateral.
"Obligations" shall mean all liabilities, indebtedness and obligations of
Customer to MLBFS, howsoever created, arising or evidenced, whether now existing
or hereafter arising, whether direct or indirect, absolute or contingent, due or
to become due, primary or secondary or joint or several, and, without limiting
the generality of the foregoing, shall include principal, accrued interest
(including without limitation interest accruing after the filing of any petition
in bankruptcy), all advances made by or on behalf of MLBFS under the Loan
Documents, collection and other costs and expenses incurred by or on behalf of
MLBFS, whether incurred before or after judgment, and all present and future
liabilities, indebtedness and obligations of Customer under the Note and the
Loan Documents.
"Permitted Liens" shall mean with respect to the Collateral: (i) liens for
current taxes not yet due and payable, other non-consensual liens arising in the
ordinary course of business for sums not due, and, if MLBFS' rights to and
interest in the Collateral are not materially and adversely affected thereby,
any such liens for taxes or other non-consensual liens arising in the ordinary
course of business being contested in good faith by appropriate proceedings;
(ii) liens in favor of MLBFS; (iii) liens which will be discharged with the
proceeds of the Loan; and (iv) any other liens expressly permitted in writing by
MLBFS.
"Person" shall mean any natural person and any corporation, partnership
(general, limited or otherwise), limited liability company, trust, association,
joint venture, governmental body or agency or other entity having legal status
of any kind.
"Pledgor" shall mean each Person who at any time provides collateral, or
otherwise now or hereinafter agrees to grants MLBFS a security interest in any
assets as security for Customer's Obligations.
"UCC" shall mean the Uniform Commercial Code of Illinois as in effect in
Illinois from time to time.
1.2 Other Terms. Except as otherwise defined herein, all terms used in this Loan
Agreement which are defined in the UCC shall have the meanings set forth in the
UCC; and (iii) accounting terms not defined herein shall have the meaning
ascribed to them in GAAP.
1.3 UCC Filing. Customer hereby authorizes MLBFS to file a record or records (as
defined or otherwise specified under the UCC), including, without limitation,
financing statements, in all jurisdictions and with all filing offices as MLBFS
may determine, in its sole discretion, are necessary or advisable to perfect the
security interest granted to MLBFS herein. Such financing statements may
describe the Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any
other manner as MLBFS may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the MLBFS herein.
Article II. THE LOAN
2.1 Commitment. Subject to the terms and conditions hereof, MLBFS hereby agrees
to make the Loan to Customer for the Loan Purpose, and Customer agrees to borrow
all amounts borrowed to satisfy the Loan Purpose from MLBFS. The entire proceeds
of the Loan shall be disbursed on the Closing Date either directly to the
applicable third party or parties on account of the Loan Purpose or to reimburse
Customer for amounts directly expended by it; all as directed by Customer in a
Closing Certificate to be executed by Customer and delivered to MLBFS prior to
the Closing Date.
2.2 Note. The Loan will be evidenced by and repayable in accordance with that
certain Collateral Installment Note made by Customer payable to the order of
MLBFS and issued pursuant to this Loan Agreement (the "Note"). The Note is
hereby incorporated as a part hereof as if fully set forth herein.
2.3 Conditions of MLBFS' Obligation. The Closing Date and MLBFS' obligation to
make the Loan on the Closing Date are subject to the prior fulfillment of each
of the following conditions: (a) MLBFS shall have received a written request
from Customer that the Loan be funded in accordance with the terms hereof,
together with a written direction from Customer as to the method of payment and
payee(s) of the proceeds of the Loan, which request and direction shall have
been received by MLBFS not less than two Business Days prior to any requested
funding date; (b) MLBFS shall have received a copy of invoices, bills of sale,
payoff letters or other applicable evidence reasonably satisfactory to it that
the proceeds of the Loan will satisfy or fulfill the Loan Purpose; (c) the
Commitment Expiration Date shall not then have occurred; and (d) each of the
General Funding Conditions shall then have been met or satisfied to the
reasonable satisfaction of MLBFS.
2.4 Use of Loan Proceeds. The proceeds of the Loan shall be used by Customer
solely for a Loan Purpose, or, with the prior written consent of MLBFS, for
other lawful business purposes of Customer not prohibited hereby. Customer
agrees that under no circumstances will the proceeds of the Loan be used: (a)
for personal, family or household purposes of any person whatsoever, or (b) to
purchase, carry or trade in securities, or repay debt incurred to purchase,
carry or trade in securities, or (c) unless otherwise consented to in writing by
MLBFS, to pay any amount to Xxxxxxx Xxxxx and Co., Inc. or any of its
subsidiaries, other xxxx Xxxxxxx Xxxxx Bank USA, Xxxxxxx Xxxxx Bank & Trust Co.
or any subsidiary of either of them (including MLBFS and Xxxxxxx Xxxxx Credit
Corporation).
2.5 Commitment Fee. In consideration of the agreement by MLBFS to extend the
Loan to Customer in accordance with and subject to the terms hereof, Customer
has paid or shall, on or before the Closing Date pay, the Commitment Fee to
MLBFS. Customer acknowledges and agrees that the Commitment Fee has been fully
earned by MLBFS, and that it will not under any circumstances be refundable.
Article III. GENERAL PROVISIONS
3.1 REPRESENTATIONS AND WARRANTIES
Customer represents and warrants to MLBFS that:
(a) Organization and Existence. Customer is a corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware and is
qualified to do business and in good standing in each other state where the
nature of its business or the property owned by it make such qualification
necessary; and, where applicable, each Business Guarantor is duly organized,
validly existing and in good standing under the laws of the state of its
formation and is qualified to do business and in good standing in each other
state where the nature of its business or the property owned by it make such
qualification necessary.
(b) Execution, Delivery and Performance. Each Credit Party has the requisite
power and authority to enter into and perform the Loan Documents. The Customer
holds all necessary permits, licenses, certificates of occupancy and other
governmental authorizations and approvals required in order to own or operate
the Customer's business, except where the, absence of such would not materially
and adversely affect (i) Customer's interest in the Collateral or the liens and
security interests of MLBFS hereunder or under any of the Loan Documents, or
(ii) the financial condition of Customer or its continued operations. The
execution, delivery and performance by Customer of this Loan Agreement and by
each of the other Credit Parties of such of the other Loan Documents to which it
is a party: (i) have been duly authorized by all requisite action, (ii) do not
and will not violate or conflict with any law, order or other governmental
requirement, or any of the agreements, instruments or documents which formed or
govern any of the Credit Parties, and (iii) do not and will not breach or
violate any of the provisions of, and will not result in a default by any of the
Credit Parties under, any other agreement, instrument or document to which it is
a party or is subject.
(c) Notices and Approvals. Except as may have been given or obtained, no notice
to or consent or approval of any governmental body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by any Credit Party of
such of this Loan Agreement, the Note and the other Loan Documents to which it
is a party.
(d) Enforceability. The Loan Documents to which any Credit Party is a party are
the respective legal, valid and binding obligations of such Credit Party,
enforceable against it or them, as the case may be, in accordance with their
respective terms, except as enforceability may be limited by bankruptcy and
other similar laws affecting the rights of creditors generally or by general
principles of equity.
(e) Collateral. Except for priorities afforded to any Permitted Liens: (i)
Customer has good and marketable title to the Collateral, (ii) none of the
Collateral is subject to any lien, encumbrance or security interest, and (iii)
upon the filing of all Uniform Commercial Code financing statements
authenticated or otherwise authorized by Customer with respect to the Collateral
in the appropriate jurisdiction(s) and/or the completion of any other action
required by applicable law to perfect its liens and security interests, MLBFS
will have valid and perfected first liens and security interests upon all of the
Collateral.
(f) Financial Statements. Except as expressly set forth in Customer's or any
Business Guarantor's financial statements, all financial statements of Customer
and each Business Guarantor furnished to MLBFS have been prepared in conformity
with generally accepted accounting principles, consistently applied, are true
and correct in all material respects, and fairly present the financial condition
of it as at such dates and the results of its operations for the periods then
ended (subject, in the case of interim unaudited financial statements, to normal
year-end adjustments); and since the most recent date covered by such financial
statements, there has been no material adverse change in any such financial
condition or operation. All financial statements furnished to MLBFS of any
Guarantor other than a Business Guarantor are true and correct in all material
respects and fairly represent such Guarantor's financial condition as of the
date of such financial statements, and since the most recent date of such
financial statements, there has been no material adverse change in such
financial condition.
(g) Litigation; Compliance With All Laws. No litigation, arbitration,
administrative or governmental proceedings are pending or, to the knowledge of
Customer, threatened against any Credit Party, which would, if adversely
determined, materially and adversely affect (i) such Credit Party's interest in
the Collateral or the liens and security interests of MLBFS hereunder or under
any of the Loan Documents, or (ii) the financial condition of such Credit Party
or its continued operations. Each Credit Party is in compliance in all material
respects with all laws, regulations, requirements and approvals applicable to
such Credit Party.
(h) Tax Returns. All federal, state and local tax returns, reports and
statements required to be filed by any Credit Party have been filed with the
appropriate governmental agencies and all taxes due and payable by any Credit
Party have been timely paid (except to the extent that any such failure to file
or pay will not materially and adversely affect (i) either the liens and
security interests of MLBFS hereunder or under any of the Loan Documents, (ii)
the financial condition of any Credit Party, or (iii) its continued operations).
(i) Collateral Location. All of the tangible Collateral is located at a Location
of Tangible Collateral.
(j) No Default. No "Default" or "Event of Default" (each as defined in this
Loan Agreement or any of the other Loan Documents) has occurred and is
continuing.
(k) No Outside Broker. Except for employees of MLBFS, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated ("MLPF&S") or one of their affiliates, Customer has
not in connection with the transactions contemplated hereby directly or
indirectly engaged or dealt with, and was not introduced or referred to MLBFS
by, any broker or other loan arranger.
(l) Each of the foregoing representations and warranties: (i) has been and will
be relied upon as an inducement to MLBFS to make the Loan, and (ii) is
continuing and shall be deemed remade by Customer on the Closing Date.
3.2 FINANCIAL AND OTHER INFORMATION
(a) Customer shall furnish or cause to be furnished to MLBFS during the term
of this Loan Agreement all of the following:
(i) Certificate of Compliance. Within 45 days after the close of each fiscal
quarter of Customer, a Certificate of Compliance, duly executed by an authorized
officer of Customer, in the form of Exhibit B attached hereto, or such other
form as reasonably required by MLBFS from time to time;
(ii) Interim Financial Statements. Within 45 days after the close of each fiscal
quarter of Customer, a copy of the interim financial statements of the
Consolidated Entities for such fiscal quarter (including in reasonable detail
both a balance sheet as of the close of such fiscal period, and statement of
profit and loss for the applicable fiscal period);
(iii) A/R Agings. Within 15 days after the close of each fiscal month of
Customer, a copy of the Accounts Receivable Aging of the Consolidated Entities
as of the end of such fiscal month;
(iv) Backlog Reports. Within 45 days after the close of each fiscal quarter of
Customer, a copy of the Sales Backlog Report of the Consolidated Entities as of
the end of such fiscal quarter;
(v) SEC Reports. Customer shall furnish or cause to be furnished to MLBFS not
later than 10 days after the date of filing with the Securities and Exchange
Commission ("SEC"), a copy of each 10-K, 10-Q and other report required to be
filed with the SEC during the term hereof by the Consolidated Entities; and
(vi) Other Information. Such other information as MLBFS may from time to time
reasonably request relating to Customer, any Credit Party or the Collateral
(b) General Agreements With Respect to Financial Information. Customer
agrees that except as otherwise specified herein or otherwise agreed to in
writing by MLBFS: (i) all annual financial statements required to be furnished
by Customer to MLBFS hereunder will be prepared by either the current
independent accountants for Customer or other independent accountants reasonably
acceptable to MLBFS, and (ii) all other financial information required to be
furnished by Customer to MLBFS hereunder will be certified as correct in all
material respects by the party who has prepared such information, and, in the
case of internally prepared information with respect to Customer or any Business
Guarantor, certified as correct by their respective chief financial officer.
3.3 OTHER COVENANTS
Customer further agrees during the term of this Loan Agreement that:
(a) Financial Records; Inspection. Each Credit Party (other than any Individual
Guarantor) will: (i) maintain at its principal place of business complete and
accurate books and records, and maintain all of its financial records in a
manner consistent with the financial statements heretofore furnished to MLBFS,
or prepared on such other basis as may be approved in writing by MLBFS; and (ii)
permit MLBFS or its duly authorized representatives, upon reasonable notice and
at reasonable times, to inspect its properties (both real and personal),
operations, books and records.
(b) Taxes. Each Credit Party will pay when due all of its respective taxes,
assessments and other governmental charges, howsoever designated, and all other
liabilities and obligations, except to the extent that any such failure to file
or pay will not materially and adversely affect either the liens and security
interests of MLBFS hereunder or under any of the Loan Documents, the financial
condition of any Credit Party or its continued operations.
(c) Compliance With Laws and Agreements. No Credit Party will violate (i) any
law, regulation or other governmental requirement, any judgment or order of any
court or governmental agency or authority; (ii) any agreement, instrument or
document which is material to its operations or to the operation or use of any
Collateral, in each case as contemplated by the Loan Documents; or (iii) any
agreement, instrument or document to which it is a party or by which it is
bound, if any such violation will materially and adversely affect either the
liens and security interests of MLBFS hereunder or under any of the Loan
Documents , the financial condition of any Credit Party, or its continued
operations.
(d) No Use of Xxxxxxx Xxxxx Name. No Credit Party will directly or indirectly
publish, disclose or otherwise use in any advertising or promotional material,
or press release or interview, the name, logo or any trademark of MLBFS, MLPF&S,
Xxxxxxx Xxxxx and Co., Incorporated or any of their affiliates.
(e) Notification By Customer. Customer shall provide MLBFS with prompt written
notification of: (i) any Default; (ii) any material adverse change in the
business, financial condition or operations of any Credit Party; (iii) any
information which indicates that any financial statements of any Credit Party
fail in any material respect to present fairly the financial condition and
results of operations purported to be presented in such statements; (iv) any
threatened or pending litigation involving any Credit Party; (v) any casualty
loss, attachment, lien, judicial process, encumbrance or claim affecting or
involving $25,000 or more of any Collateral; and (vi) any change in Customer's
outside accountants. Each notification by Customer pursuant hereto shall specify
the event or information causing such notification, and, to the extent
applicable, shall specify the steps being taken to rectify or remedy such event
or information.
(f) Entity Organization. Each Credit Party which is an entity will (i) remain
(A) validly existing and in good standing in the state of its organization and
(B) qualified to do business and in good standing in each other state where the
nature of its business or the property owned by it make such qualification
necessary, and (ii) maintain all governmental permits, licenses and
authorizations. Customer shall give MLBFS not less than 30 days prior written
notice of any change in name (including any fictitious name) or chief executive
office, place of business, or as applicable, the principal residence.
(g) Merger, Change in Business. Except upon the prior written consent of MLBFS,
Customer shall not cause or permit any Credit Party to: (i) be a party to any
merger or consolidation with, or purchase or otherwise acquire all or
substantially all of the assets of, or any material stock, partnership, joint
venture or other equity interest in, any Person, or sell, transfer or lease all
or any substantial part of its assets; (ii) engage in any material business
substantially different from its business in effect as of the date of
application by Customer for credit from MLBFS, or cease operating any such
material business; or (iii) cause or permit any other Person to assume or
succeed to any material business or operations of such Credit Party.
(h) No Change In Management. Customer will maintain experienced and competent
professional senior management, including two of the following three senior
management, Xxxxxx Sunshine, Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxxx.
(i) No New Products, Services Or Ventures. Except upon the prior written consent
of MLBFS, Customer shall not directly or indirectly initiate, create, or acquire
any additional or new product lines or services other than in the ordinary
course of business and, business ventures, companies or divisions.
(j) No Loans/Guarantees To Any Party. Except upon the prior written consent of
MLBFS, Customer shall not directly or indirectly lend any moneys to, or guaranty
the debt of, any person or entity.
(k) Minimum Tangible Net Worth. As of December 31, 2004, the Consolidated
Entities "tangible net worth" shall exceed $6,500,000. After December 31, 2004
and as of the close of each fiscal year of the Consolidated Entities
thereafter, the Consolidated Entities "tangible net worth" shall be not less
than $500,000.00 higher than the tangible net worth of the Consolidated Entities
required hereunder as of the close of the immediately preceding fiscal year of
the Consolidated Entities (so that as of December 31, 2005, such tangible net
worth shall be not less than $7,000,000.00, as of December 31, 2006, such
tangible net worth shall be not less than $7,500,000, etc.). For the purposes
hereof, the term "tangible net worth" shall mean the Consolidated Entities net
worth as shown on the Consolidated Entities regular consolidated financial
statements prepared in a manner consistent with the terms hereof, but excluding
an amount equal to: (i) any assets which are ordinarily classified as
"intangible" in accordance with generally accepted accounting principles, and
(ii) any amounts now or hereafter directly or indirectly owing to the
Consolidated Entities by officers, shareholders or affiliates of the
Consolidated Entities.
(l) Total Debt To EBITDA. For purposes hereof, the Consolidated Entities "Total
Debt to EBITDA Ratio" shall mean the ratio of (a) all debt for borrowed money
including all outstanding and unused availability under any revolving credit
facility, and including debt to MLBFS, to (b) income before interest (including
payments in the nature of interest under capital leases), taxes, depreciation,
amortization, and other non-cash charges; all as determined on a trailing
12-month basis as set forth in the Consolidated Entities' regular quarterly
financial statements prepared in accordance with GAAP. The Consolidated
Entities' Total Debt to EBITDA Ratio shall for each period set forth below not
exceed the ratios set forth below opposite such period:
Period Ratio
December 31, 2004 - December 30, 2005 3.50 : 1.00
December 31, 2005-December 30, 2006 3.00 : 1.00
December 31, 2006 and thereafter 2.50 : 1.00
(m) Fixed Charge Coverage. The Consolidated Entities' "Fixed Charge Coverage
Ratio" shall at all times exceed 1.25 to 1. For purposes hereof, "Fixed Charge
Coverage Ratio" shall mean the ratio of: (a) income before interest (including
payments in the nature of interest under capital leases), taxes, depreciation,
amortization, and other similar non-cash charges, minus any internally financed
capital expenditures, to (b) the sum of (i) any dividends and other
distributions paid or payable to shareholders, any taxes paid in cash, and
interest expense, as determined on a trailing 12-month basis, plus (ii) the
aggregate principal scheduled to be paid or accrued over the next 12 month
period and the aggregate rental under capital leases scheduled to be paid or
accrued over the next 12 month period; all as set forth in the Consolidated
Entities' regular quarterly financial statements prepared in accordance with
GAAP.
(n) Completion of Acquisition. Upon the making of the Loan and the use thereof
for the Loan Purpose, the Acquisition will have been consummated in accordance
with the terms of the Acquisition Documents without any amendments thereto or
waivers by the parties thereunder (except as consented to by MLBFS in writing)
and in compliance with applicable law.
(o) Subsidiaries. Customer does not have any subsidiaries other than the Credit
Parties.
(p) Solvency. Neither Customer nor any Guarantor, is entering into the
transactions contemplated hereby and by the Additional Agreements, or intends to
make any transfer or incur any obligations hereunder or thereunder, with actual
intent to hinder, delay or defraud either present or future creditors. After
giving effect to the making of the Loan pursuant hereto and the application of
the proceeds thereof to the Loan Purpose; (i) each of Customer and each Business
Guarantor expects the cash available to it, after taking into account all other
anticipated uses of the cash of such person (including the payments on or in
respect of "debt" referred to in clause (iii) of this paragraph), will be
sufficient to satisfy all final judgments for money damages which have been
docketed against such person or which may be rendered against such person in any
action in which such person is a defendant (taking into account the reasonably
anticipated maximum amount of any such judgment and the earliest time at which
such judgment might be entered); (ii) the sum of the present fair saleable value
of the assets of the Customer and each Business Guarantor on a consolidated
basis will exceed the probable liability of such person on its "debts"
(including any guaranties made by it or other contingent liabilities); (iii)
neither the Customer nor any Business Guarantor will have incurred or intends
to, or believes that it will, incur debts beyond its ability to pay such "debts"
as such "debts" mature (taking into account the timing and amounts of cash to be
received by such person from any source, and of amounts to be payable on or in
respect of "debts" of such person and the amounts referred to in clause (i));
and (iv) the Customer and each Business Guarantor will have sufficient capital
with which to conduct its present and proposed business and the property of each
such person does not constitute unreasonably small capital with which to conduct
its present or proposed business. For purposes hereof, the term "debt" shall
mean any liability on a claim, and the term "claim" shall mean (a) any right to
payment whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed (other than those
being disputed in good faith), undisputed, legal, equitable, secured or
unsecured, or (b) any right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured.
3.4 COLLATERAL
(a) Pledge of Collateral. To secure payment and performance of the Obligations,
Customer hereby pledges, assigns, transfers and sets over to MLBFS, and grants
to MLBFS first liens and security interests in and upon all of the Collateral,
subject only to priorities afforded to Permitted Liens.
(b) Liens. Except upon the prior written consent of MLBFS, Customer shall not
create or permit to exist any lien, encumbrance or security interest upon or
with respect to any Collateral now owned or hereafter acquired other than
Permitted Liens.
(c) Performance of Obligations. Customer shall perform all of its obligations
owing on account of or with respect to the Collateral; it being understood that
nothing herein, and no action or inaction by MLBFS, under this Loan Agreement or
otherwise, shall be deemed an assumption by MLBFS of any of Customer's said
obligations.
(d) Sales and Collections. Customer shall not sell, transfer or otherwise
dispose of any Collateral, except that so long as no Event of Default shall have
occurred and be continuing, Customer may in the ordinary course of its business:
(i) sell any Inventory normally held by Customer for sale, (ii) use or consume
any materials and supplies normally held by Customer for use or consumption, and
(iii) collect all of its Accounts.
(e) Account Schedules. Upon the request of MLBFS, which may be made from time to
time, Customer shall deliver to MLBFS, in addition to the other information
required hereunder, a schedule identifying, for each Account and all Chattel
Paper subject to MLBFS' security interests hereunder, each account debtor by
name and address and amount, invoice or contract number and date of each invoice
or contract. Customer shall furnish to MLBFS such additional information with
respect to the Collateral, and amounts received by Customer as proceeds of any
of the Collateral, as MLBFS may from time to time reasonably request.
(f) Alterations and Maintenance. Except upon the prior written consent of MLBFS,
Customer shall not make or permit any material alterations to any tangible
Collateral which might materially reduce or impair its market value or utility.
Customer shall at all times (i) keep the tangible Collateral in good condition
and repair, reasonable wear and tear excepted, (ii) protect the Collateral
against loss, damage or destruction and (iii) pay or cause to be paid all
obligations arising from the repair and maintenance of such Collateral, as well
as all obligations with respect to any Location of Tangible Collateral (e.g.,
all obligations under any lease, mortgage or bailment agreement), except for any
such obligations being contested by Customer in good faith by appropriate
proceedings.
(g) Location. Except for movements required in the ordinary course of Customer's
business, Customer shall give MLBFS 30 days' prior written notice of the placing
at or movement of any tangible Collateral to any location other than a Location
of Tangible Collateral. In no event shall Customer cause or permit any material
tangible Collateral to be removed from the United States without the express
prior written consent of MLBFS. Customer will keep its books and records at its
principal office address specified in the first paragraph of this Loan
Agreement. Customer will not change the address where books and records are
kept, or change its name or taxpayer identification number. Customer will place
a legend acceptable to MLBFS on all Chattel Paper that is Collateral in the
possession or control of Customer from time to time indicating that MLBFS has a
security interest therein.
(h) Insurance. Customer shall insure all of the tangible Collateral under a
policy or policies of physical damage insurance for the full replacement value
thereof against such perils as MLBFS shall reasonably require and also providing
that losses will be payable to MLBFS as its interests may appear pursuant to a
lender's or mortgagee's long form loss payable endorsement and containing such
other provisions as may be reasonably required by MLBFS. Customer shall further
provide and maintain a policy or policies of commercial general liability
liability insurance naming MLBFS as an additional party insured. Customer and
each Business Guarantor shall maintain such other insurance as may be required
by law or is customarily maintained by companies in a similar business or
otherwise reasonably required by MLBFS. All such insurance policies shall
provide that MLBFS will receive not less than 10 days prior written notice of
any cancellation, and shall otherwise be in form and amount and with an insurer
or insurers reasonably acceptable to MLBFS. Customer shall furnish MLBFS with a
copy or certificate of each such policy or policies and, prior to any expiration
or cancellation, each renewal or replacement thereof.
(i) Event of Loss. Customer shall at its expense promptly repair all repairable
damage to any tangible Collateral. In the event that there is an Event of Loss
and the affected Collateral had a value prior to such Event of Loss of
$25,000.00 or more, then, on or before the first to occur of (i) 90 days after
the occurrence of such Event of Loss, or (ii) 10 Business Days after the date on
which either Customer or MLBFS shall receive any proceeds of insurance on
account of such Event of Loss, or any underwriter of insurance on such
Collateral shall advise either Customer or MLBFS that it disclaims liability in
respect of such Event of Loss, Customer shall, at Customer's option, either
replace the Collateral subject to such Event of Loss with comparable Collateral
free of all liens other than Permitted Liens (in which event Customer shall be
entitled to utilize the proceeds of insurance on account of such Event of Loss
for such purpose, and may retain any excess proceeds of such insurance), or
permanently prepay the Obligations by an amount equal to the actual cash value
of such Collateral as determined by either the insurance company's payment (plus
any applicable deductible) or, in absence of insurance company payment, as
reasonably determined by MLBFS; it being further understood that any such
permanent prepayment shall cause an immediate permanent reduction in the Loan in
the amount of such prepayment and shall not reduce the amount of any future
reductions in the Loan that may be required hereunder. Notwithstanding the
foregoing, if at the time of occurrence of such Event of Loss or any time
thereafter prior to replacement or line reduction, as aforesaid, an Event of
Default shall have occurred and be continuing hereunder, then MLBFS may at its
sole option, exercisable at any time while such Event of Default shall be
continuing, require Customer to either replace such Collateral or prepay the
Obligations, as aforesaid.
(j) Notice of Certain Events. Customer shall give MLBFS immediate notice of any
attachment, lien, judicial process, encumbrance or claim affecting or involving
$100,000.00 or more of the Collateral.
(k) Indemnification. Customer shall indemnify, defend and save MLBFS harmless
from and against any and all claims, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) of any
nature whatsoever which may be asserted against or incurred by MLBFS arising out
of or in any manner occasioned by (i) the ownership, collection, possession, use
or operation of any Collateral, or (ii) any failure by Customer to perform any
of its obligations hereunder; excluding, however, from said indemnity any such
claims, liabilities, etc. arising directly out of the willful wrongful act or
gross negligence (but not imputed) of MLBFS. This indemnity shall survive the
expiration or termination of this Loan Agreement as to all matters arising or
accruing prior to such expiration or termination.
3.5 EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an "Event of
Default" under this Loan Agreement:
(a) Failure to Pay. Customer shall fail to pay when due any amount owing by
Customer to MLBFS under the Note or this Loan Agreement, or shall fail to pay
when due any other Obligations, and any such failure shall continue for more
than five (5) Business Days after written notice thereof shall have been given
by MLBFS to Customer.
(b) Failure to Perform. Any Credit Party shall default in the performance or
observance of any covenant or agreement on its part to be performed or observed
under this Loan Agreement, the Note or any of the other Loan Documents (not
constituting an Event of Default under any other clause of this Section), and
such default shall continue unremedied for ten (10) Business Days (i) after
written notice thereof shall have been given by MLBFS to Customer, or (ii) from
Customer's receipt of any notice or knowledge of such default from any other
source.
(c) Breach of Warranty. Any representation or warranty made by any Credit Party
contained in this Loan Agreement, the Note or any of the other Loan Documents
shall at any time prove to have been incorrect in any material respect when
made.
(d) Default Under Other ML Agreement. A default or event of default by any
Credit Party shall occur under the terms of any other agreement, instrument or
document with or intended for the benefit of MLBFS, MLPF&S or any of their
affiliates, and any required notice shall have been given and required passage
of time shall have elapsed.
(e) Bankruptcy Event. Any Bankruptcy Event shall occur.
(f) Material Impairment. Any event shall occur which shall reasonably cause
MLBFS to in good faith believe that the prospect of full payment or performance
by the Credit Parties of any of their respective liabilities or obligations
under this Loan Agreement, the Note or any of the other Loan Documents or such
Guarantor is a party has been materially impaired. The existence of such a
material impairment shall be determined in a manner consistent with the intent
of Section 1-208 of the UCC.
(g) Default Under Other Agreements. Any event shall occur which results in any
default of any material agreement involving any Credit Party or any agreement
evidencing any indebtedness of any Credit Party of $100,000.00 or more.
(h) Collateral Impairment. The loss, theft or destruction of any Collateral, the
occurrence of any material deterioration or impairment of any Collateral or any
material decline or depreciation in the value or market price thereof (whether
actual or reasonably anticipated), which causes any Collateral, in the sole
opinion of MLBFS, to become unsatisfactory as to value or character, or any
levy, attachment, seizure or confiscation of the Collateral which is not
released within ten (10) Business Days.
(i) Contested Obligation. (i) Any of the Loan Documents shall for any reason
cease to be, or are asserted by any Credit Party not to be a legal, valid and
binding obligations of any Credit Party, enforceable in accordance with their
terms; or (ii) the validity, perfection or priority of MLBFS' first lien and
security interest on any of the Collateral is contested by any Person; or (iii)
any Credit Party shall or shall attempt to repudiate, revoke, contest or
dispute, in whole or in part, such Credit Party's obligations under any Loan
Document.
(j) Judgments. A judgment shall be entered against any Credit Party in excess of
$100,000 and the judgment is not paid in full and discharged, or stayed and
bonded to the satisfaction of MLBFS.
(k) Change in Control/Change in Management. (i) Any direct or indirect sale,
conveyance, assignment or other transfer of or grant of a security interest in
any ownership interest of any Credit Party which results, or if any rights
related thereto were exercised would result, in any change in the identity of
the individuals or entities previously in control of any Credit Party; or (ii)
the owner(s) of the controlling equity interest of any Credit Party on the date
hereof shall cease to own and control such Credit Party; or (iii) the Person (or
a replacement who is reasonably satisfactory to MLBFS ) who is the chief
executive officer or holds such similar position, or any senior manager of such
Credit Party on the date hereof shall for any reason cease to be the chief
executive officer or senior manager of the Credit Party.
(l) Withdrawal, Death, etc. The incapacity, death, withdrawal, dissolution, or
the filing for dissolution of: (i) any Credit Party; or (ii) any controlling
shareholder, partner, or member of any Credit Party.
3.6 REMEDIES
(a) Remedies Upon Default. Upon the occurrence and during the continuance of any
Event of Default, MLBFS may at its sole option do any one or more or all of the
following, at such time and in such order as MLBFS may in its sole discretion
choose:
(i) Termination. MLBFS may without notice terminate its obligation to extend any
credit to or for the benefit of Customer (it being understood, however, that
upon the occurrence of any Bankruptcy Event all such obligations shall
automatically terminate without any action on the part of MLBFS).
(ii) Acceleration. MLBFS may declare the principal of and interest and any
premium on the Note, and all other Obligations to be forthwith due and payable,
whereupon all such amounts shall be immediately due and payable, without
presentment, demand for payment, protest and notice of protest, notice of
dishonor, notice of acceleration, notice of intent to accelerate or other notice
or formality of any kind, all of which are hereby expressly waived; provided,
however, that upon the occurrence of any Bankruptcy Event all such principal,
interest, premium and other Obligations shall automatically become due and
payable without any action on the part of MLBFS.
(iii) Exercise Other Rights. MLBFS may exercise any or all of the remedies of a
secured party under applicable law and in equity, including, but not limited to,
the UCC, and any or all of its other rights and remedies under the Loan
Documents.
(iv) Possession. MLBFS may require Customer to make the Collateral and the
records pertaining to the Collateral available to MLBFS at a place designated by
MLBFS which is reasonably convenient to Customer, or may take possession of the
Collateral and the records pertaining to the Collateral without the use of any
judicial process and without any prior notice to Customer.
(v) Sale. MLBFS may sell any or all of the Collateral at public or private sale
upon such terms and conditions as MLBFS may reasonably deem proper, whether for
cash, on credit, or for future delivery, in bulk or in lots. MLBFS may purchase
any Collateral at any such sale free of Customer's right of redemption, if any,
which Customer expressly waives to the extent not prohibited by applicable law.
The net proceeds of any such public or private sale and all other amounts
actually collected or received by MLBFS pursuant hereto, after deducting all
costs and expenses incurred at any time in the collection of the Obligations and
in the protection, collection and sale of the Collateral, will be applied to the
payment of the Obligations, with any remaining proceeds paid to Customer or
whoever else may be entitled thereto, and with Customer and each Guarantor
remaining jointly and severally liable for any amount remaining unpaid after
such application.
(vi) Delivery of Cash, Checks, Etc. MLBFS may require Customer to forthwith upon
receipt, transmit and deliver to MLBFS in the form received, all cash, checks,
drafts and other instruments for the payment of money (properly endorsed, where
required, so that such items may be collected by MLBFS) which may be received by
Customer at any time in full or partial payment of any Collateral, and require
that Customer not commingle any such items which may be so received by Customer
with any other of its funds or property but instead hold them separate and apart
and in trust for MLBFS until delivery is made to MLBFS.
(vii) Notification of Account Debtors. MLBFS may notify any account debtor that
its Account or Chattel Paper has been assigned to MLBFS and direct such account
debtor to make payment directly to MLBFS of all amounts due or becoming due with
respect to such Account or Chattel Paper; and MLBFS may enforce payment and
collect, by legal proceedings or otherwise, such Account or Chattel Paper.
(viii) Control of Collateral. MLBFS may otherwise take control in any lawful
manner of any cash or non-cash items of payment or proceeds of Collateral and of
any rejected, returned, stopped in transit or repossessed goods included in the
Collateral and endorse Customer's name on any item of payment on or proceeds of
the Collateral.
(b) Set-Off. MLBFS shall have the further right upon the occurrence and during
the continuance of an Event of Default to set-off, appropriate and apply toward
payment of any of the Obligations, in such order of application as MLBFS may
from time to time and at any time elect, any cash, credit, deposits, accounts,
financial assets, investment property, securities and any other property of
Customer which is in transit to or in the possession, custody or control of
MLBFS, MLPF&S or any agent, bailee, or affiliate of MLBFS or MLPF&S. Customer
hereby collaterally assigns and grants to MLBFS a continuing security interest
in all such property as Collateral and as additional security for the
Obligations. Upon the occurrence and during the continuance of an Event of
Default, MLBFS shall have all rights in such property available to collateral
assignees and secured parties under all applicable laws, including, without
limitation, the UCC.
(c) Power of Attorney. Effective upon the occurrence and during the continuance
of an Event of Default, Customer hereby irrevocably appoints MLBFS as its
attorney-in-fact, with full power of substitution, in its place and stead and in
its name or in the name of MLBFS, to from time to time in MLBFS' sole discretion
take any action and to execute any instrument which MLBFS may deem necessary or
advisable to accomplish the purposes of this Loan Agreement and the other Loan
Documents, including, but not limited to, to receive, endorse and collect all
checks, drafts and other instruments for the payment of money made payable to
Customer included in the Collateral. The powers of attorney granted to MLBFS in
this Loan Agreement are coupled with an interest and are irrevocable until the
Obligations have been indefeasibly paid in full and fully satisfied and all
obligations of MLBFS under this Loan Agreement have been terminated.
(d) Remedies are Severable and Cumulative. All rights and remedies of MLBFS
herein are severable and cumulative and in addition to all other rights and
remedies available in the Note, the other Loan Documents, at law or in equity,
and any one or more of such rights and remedies may be exercised simultaneously
or successively.
(e) No Marshalling. MLBFS shall be under no duty or obligation to (i) preserve,
protect or xxxxxxxx the Collateral; (ii) preserve or protect the rights of any
Credit Party or any other Person claiming an interest in the Collateral; (iii)
realize upon the Collateral in any particular order or manner, (iv) seek
repayment of any Obligations from any particular source; (v) proceed or not
proceed against any Credit Party pursuant to any guaranty or security agreement
or against any Credit Party under the Loan Documents, with or without also
realizing on the Collateral; (vi) permit any substitution or exchange of all or
any part of the Collateral; or (vii) release any part of the Collateral from the
Loan Agreement or any of the other Loan Documents, whether or not such
substitution or release would leave MLBFS adequately secured.
(f) Notices. To the fullest extent permitted by applicable law, Customer hereby
irrevocably waives and releases MLBFS of and from any and all liabilities and
penalties for failure of MLBFS to comply with any statutory or other requirement
imposed upon MLBFS relating to notices of sale, holding of sale or reporting of
any sale, and Customer waives all rights of redemption or reinstatement from any
such sale. Any notices required under applicable law shall be reasonably and
properly given to Customer if given by any of the methods provided herein at
least 5 Business Days prior to taking action. MLBFS shall have the right to
postpone or adjourn any sale or other disposition of Collateral at any time
without giving notice of any such postponed or adjourned date. In the event
MLBFS seeks to take possession of any or all of the Collateral by court process,
Customer further irrevocably waives to the fullest extent permitted by law any
bonds and any surety or security relating thereto required by any statute, court
rule or otherwise as an incident to such possession, and any demand for
possession prior to the commencement of any suit or action.
3.7 MISCELLANEOUS
(a) Non-Waiver. No failure or delay on the part of MLBFS in exercising any
right, power or remedy pursuant to this Loan Agreement, the Note or any of the
other Loan Documents shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. Neither
any waiver of any provision of this Loan Agreement, the Note or any of the other
Loan Documents, nor any consent to any departure by Customer therefrom, shall be
effective unless the same shall be in writing and signed by MLBFS. Any waiver of
any provision of this Loan Agreement, the Note or any of the other Loan
Documents and any consent to any departure by Customer from the terms of this
Loan Agreement, the Note or any of the other Loan Documents shall be effective
only in the specific instance and for the specific purpose for which given.
Except as otherwise expressly provided herein, no notice to or demand on
Customer shall in any case entitle Customer to any other or further notice or
demand in similar or other circumstances.
(b) Disclosure. Customer hereby irrevocably authorizes MLBFS and each of its
affiliates, including without limitation MLPF&S, to at any time (whether or not
an Event of Default shall have occurred) obtain from and disclose to each other,
and to any third party in connection with Section 3.7 (h) herein, any and all
financial and other information about Customer. Customer further irrevocably
authorizes MLBFS to contact, investigate, inquire and obtain consumer reports,
references and other information on Customer from consumer reporting agencies
and other credit reporting services, former or current creditors, and other
persons and sources (including, without limitation, any Affiliate of MLBFS) and
to provide to any references, consumer reporting agencies, credit reporting
services, creditors and other persons and sources (including, without
limitation, Affiliates of MLBFS) all financial, credit and other information
obtained by MLBFS relating to the Customer.
(c) Communications. Delivery of an agreement, instrument or other document may,
at the discretion of MLBFS, be by electronic transmission. Except as required by
law or otherwise provided herein or in a writing executed by the party to be
bound, all notices demands, requests, accountings, listings, statements, advices
or other communications to be given under the Loan Documents shall be in
writing, and shall be served either personally, by deposit with a reputable
overnight courier with charges prepaid, or by deposit in the United States mail
by certified mail return receipt required. Notices may be addressed to Customer
as set forth at its address shown in the preamble hereto, or to any office to
which billing or account statements are sent; to MLBFS at its address shown in
the preamble hereto, or at such other address designated in writing by MLBFS.
Any such communication shall be deemed to have been given upon, in the case of
personal delivery the date of delivery, one Business Day after deposit with an
overnight courier, two (2) Business Days after deposit in the United States by
certified mail (return receipt required), or receipt of electronic transmission
(which shall be presumed to be three hours after the time of transmission unless
an error message is received by the sender), except that any notice of change of
address shall not be effective until actually received.
(d) Fees, Expenses and Taxes. Customer shall upon demand pay or reimburse MLBFS
for: (i) all UCC, real property or other filing, recording and search fees and
expenses incurred by MLBFS in connection with the verification, perfection or
preservation of MLBFS' rights hereunder or in any Collateral or any other
collateral for the Obligations; (ii) any and all stamp, transfer, mortgage,
intangible, document, filing, recording and other taxes and fees payable or
determined to be payable in connection with the borrowings hereunder or the
execution, delivery, filing and/or recording of the Loan Documents and any other
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith; and (iii) all fees and out-of-pocket
expenses (including attorneys' fees and legal expenses) incurred by MLBFS in
connection with the preparation, execution, administration, collection,
enforcement, protection, waiver or amendment of this Loan Agreement, or under
any of the other Loan Documents and such other instruments or documents, and the
rights and remedies of MLBFS thereunder and all other matters in connection
therewith. The obligations of Customer under this paragraph shall survive the
expiration or termination of this Loan Agreement and the discharge of the other
Obligations.
(e) Right to Perform Obligations. If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any of the Loan
Documents, or any representation or warranty on the part of Customer contained
in this Loan Agreement or any of the Loan Documents shall be breached, MLBFS
may, in its sole discretion, after 5 Business Days written notice is sent to
Customer (or such lesser notice, including no notice, as is reasonable under the
circumstances), do the same or cause it to be done or remedy any such breach,
and may expend its funds for such purpose. Any and all reasonable amounts so
expended by MLBFS shall be repayable to MLBFS by Customer upon demand, with
interest at the "Interest Rate" (as that item is defined in the Note) during the
period from and including the date funds are so expended by MLBFS to the date of
repayment, and all such amounts shall be additional Obligations. The payment or
performance by MLBFS of any of Customer's obligations hereunder shall not
relieve Customer of said obligations or of the consequences of having failed to
pay or perform the same, and shall not waive or be deemed a cure of any Default.
(f) Late Charge. Any payment required to be made by Customer pursuant to this
Loan Agreement or any of the Loan Documents not paid within ten (10) days of the
applicable due date shall be subject to a late charge in an amount equal to the
lesser of: (i) 5% of the overdue amount, or (ii) the maximum amount permitted by
applicable law. Such late charge shall be payable on demand.
(g) Further Assurances. Customer agrees to do such further acts and things and
to execute and deliver to MLBFS such additional agreements, instruments and
documents as MLBFS may reasonably require or deem advisable to effectuate the
purposes of this Loan Agreement, the Note or any of the other Loan Documents, or
to establish, perfect and maintain MLBFS' security interests and liens upon the
Collateral, including, but not limited to: (i) executing financing statements or
amendments thereto when and as reasonably requested by MLBFS; and (ii) if in the
reasonable judgment of MLBFS it is required by local law, causing the owners
and/or mortgagees of the real property on which any Collateral may be located to
execute and deliver to MLBFS waivers or subordinations reasonably satisfactory
to MLBFS with respect to any rights in such Collateral.
(h) Binding Effect. This Loan Agreement, the Note and the other Loan Documents
shall be binding upon, and shall inure to the benefit of MLBFS, Customer and
their respective successors and assigns. MLBFS reserves the right, at any time
while the Obligations remain outstanding, to sell, assign, syndicate or
otherwise transfer or dispose of any or all of MLBFS' rights and interests under
the Loan Documents. MLBFS also reserves the right at any time to pool the Loan
with one or more other loans originated by MLBFS or any other Person, and to
securitize or offer interests in such pool on whatever terms and conditions
MLBFS shall determine. Customer consents to MLBFS releasing financial and other
information regarding Credit Parties, the Collateral and the Loan in connection
with any such sale, pooling, securitization or other offering. Customer shall
not assign any of its rights or delegate any of its obligations under this Loan
Agreement, the Note or any of the other Loan Documents without the prior written
consent of MLBFS. Unless otherwise expressly agreed to in a writing signed by
MLBFS, no such consent shall in any event relieve Customer of any of its
obligations under this Loan Agreement, the Note or any of the other Loan
Documents.
(i) Interpretation; Construction. (i) Captions and section and paragraph
headings in this Loan Agreement are inserted only as a matter of convenience,
and shall not affect the interpretation hereof; (ii) no provision of this Loan
Agreement shall be construed against a particular Person or in favor of another
Person merely because of which Person (or its representative) drafted or
supplied the wording for such provision; and (iii) where the context requires:
(a) use of the singular or plural incorporates the other, and (b) pronouns and
modifiers in the masculine, feminine or neuter gender shall be deemed to refer
to or include the other genders.
(j) Governing Law. This Loan Agreement, the Note and, unless otherwise expressly
provided therein, each of the other Loan Documents, shall be governed in all
respects by the laws of the State of Illinois, not including its conflict of law
provisions.
(k) Severability of Provisions. Whenever possible, each provision of this Loan
Agreement, the Note and the other Loan Documents shall be interpreted in such
manner as to be effective and valid under applicable law. Any provision of this
Loan Agreement, the Note or any of the other Loan Documents which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Loan Agreement, the Note and the
other Loan Documents or affecting the validity or enforceability of such
provision in any other jurisdiction.
(l) Term. This Loan Agreement shall become effective when accepted by MLBFS at
its office in Chicago, Illinois, and subject to the terms hereof, shall continue
in effect so long thereafter as there shall be any moneys owing hereunder or
under the Note, or there shall be any other Obligations outstanding. Customer
hereby waives notice of acceptance of this Loan Agreement by MLBFS.
(m) Exhibits. The exhibits to this Loan Agreement are hereby incorporated and
made a part hereof and are an integral part of this Loan Agreement.
(n) Counterparts. This Loan Agreement may be executed in one or more
counterparts which, when taken together, constitute one and the same agreement.
(o) Jurisdiction; Waiver. Customer acknowledges that this Loan Agreement is
being accepted by MLBFS in partial consideration of MLBFS' right and option, in
its sole discretion, to enforce the Loan Documents in either the State of
Illinois or in any other jurisdiction where Customer or any Collateral may be
located. Customer irrevocably submits itself to jurisdiction in the State of
Illinois and venue in any state or federal court in the County of Xxxx for such
purposes, and Customer waives any and all rights to contest said jurisdiction
and venue and the convenience of any such forum, and any and all rights to
remove such action from state to federal court. Customer further waives any
rights to commence any action against MLBFS in any jurisdiction except in the
County of Xxxx and State of Illinois. Customer agrees that all such service of
process shall be made by mail or messenger directed to it in the same manner as
provided for notices to Customer in this Loan Agreement and that service so made
shall be deemed to be completed upon the earlier of actual receipt or three (3)
days after the same shall have been posted to Customer or Customer's agent.
Nothing contained herein shall affect the right of MLBFS to serve legal process
in any other manner permitted by law or affect the right of MLBFS to bring any
action or proceeding against Customer or its property in the courts of any other
jurisdiction. Customer waives, to the extent permitted by law, any bond or
surety or security upon such bond which might, but for this waiver, be required
of MLBFS. Customer further waives the right to bring any non-compulsory
counterclaims.
(p) Jury Waiver. MLBFS and Customer hereby each expressly waive any and all
rights to a trial by jury in any action, proceeding or counterclaim brought by
either of the parties against the other party with respect to any matter
relating to, arising out of or in any way connected with the Loan, the
Obligations, this Loan Agreement, any of the other Loan Documents and/or any of
the transactions which are the subject matter of this Loan Agreement.
(q) Integration. This Loan Agreement, together with the other Loan Documents,
constitutes the entire understanding and represents the full and final agreement
between the parties with respect to the subject matter hereof, and may not be
contradicted by evidence of prior written agreements or prior, contemporaneous
or subsequent oral agreements of the parties. There are no unwritten oral
agreements of the parties. Without limiting the foregoing, Customer acknowledges
that: (i) no promise or commitment has been made to it by MLBFS, MLPF&S or any
of their respective employees, agents or representatives to make any Loan on any
terms other than as expressly set forth herein, or to make any other loan or
otherwise extend any other credit to Customer or any other party; and (ii)
except as otherwise expressly provided herein, this Loan Agreement supersedes
and replaces any and all proposals, letters of intent and approval and
commitment letters from MLBFS to Customer, none of which shall be considered a
Loan Document. No amendment or modification of any of the Loan Documents to
which Customer is a party shall be effective unless in a writing signed by both
MLBFS and Customer.
(r) Survival. All representations, warranties, agreements and covenants
contained in the Loan Documents shall survive the signing and delivery of the
Loan Documents, and all of the waivers made and indemnification obligations
undertaken by Customer shall survive the termination, discharge or cancellation
of the Loan Documents.
(s) Customer's Acknowledgments. The Customer acknowledges that the Customer:
(i) has had ample opportunity to consult with counsel and such other parties as
deemed advisable prior to signing and delivering this Loan Agreement and the
other Loan Documents; (ii) understands the provisions of this Loan Agreement and
the other Loan Documents, including all waivers contained therein; and (iii)
signs and delivers this Loan Agreement and the other Loan Documents freely and
voluntarily, without duress or coercion.
This Loan Agreement and the other Loan Documents are executed under seal and are
intended to take effect as sealed instruments.
IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and year
first above written.
ORBIT INTERNATIONAL CORP.
By: /s/ Xxxxxx Sunshine /s/ Xxxxxxxx Xxxxxx
Signature (1) Signature (2)
Xxxxxx Sunshine Xxxxxxxx Xxxxxx
Printed Name Printed Name
President Vice President
Title Title
Accepted at Chicago, Illinois:
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
By:
EXHIBIT A
ATTACHED TO AND HEREBY MADE A PART OF TERM LOAN AND SECURITY AGREEMENT DATED AS
OF APRIL 4, 2005 BETWEEN XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC. AND
ORBIT INTERNATIONAL CORP.
Additional Locations of Tangible Collateral:
00 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
