LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of January 6,
2003, by and between CITIZENS BUSINESS CREDIT, a division of
Citizens Leasing Corporation (together with its successors and
assigns, "Lender"), a Rhode Island corporation with an office at
000 Xxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000; and
MILTOPE CORPORATION ("Borrower"), an Alabama corporation with its
chief executive office and principal place of business at 0000
Xxxxxxxxxx Xxxx Xxxxx, Xxxx Xxxx, Xxxxxxx 00000.
R e c i t a l s
Borrower has requested that Lender make revolving loans and
other financial accommodations to Borrower as more fully
described in this Agreement.
Lender is willing to make such loans and other financial
accommodations to Borrower, subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) in
hand paid and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as
follows:
SECTION 1.DEFINITIONS; RULES OF CONSTRUCTION
1.1. Definitions. When used herein the following terms
shall have the following meanings (terms defined in the singular
to have the same meaning when used in the plural and vice versa):
Account - shall have the meaning given to "account" in
the UCC.
Account Debtor - any Person who is or may become
obligated under or on account of an Account.
Accounts Formula Amount - on any date of determination
thereof, an amount up to 85% of the net amount of Eligible
Accounts on such date. As used herein, the phrase "net
amount of Eligible Accounts" shall mean the face amount of
such Accounts on any date less any and all returns, rebates,
discounts (which may, at Lender's option, be calculated on
shortest terms), Deposits, credits, allowances or Taxes
(including sales, excise or other taxes) at any time issued,
owing, claimed by Account Debtors, granted, outstanding or
payable in connection with, or any interest accrued on the
amount of, such Accounts at such date.
Affiliate - a Person (other than a Subsidiary):
(i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under
common control with, a Person; (ii) which beneficially owns
or holds 5% or more of any class of the Voting Stock of a
Person; or (iii) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% or more of
the equity interest) of which is beneficially owned or held
by a Person or a Subsidiary of a Person.
Agreement - the Loan and Security Agreement referred to
in the first sentence hereof and all Exhibits and Schedules
hereto.
Applicable Law - all laws, rules and regulations
applicable to the Person, conduct, transaction, covenant or
Loan Documents in question, including all applicable common
law and equitable principles; all provisions of all
applicable state and federal constitutions, statutes, rules,
regulations and orders of governmental bodies; and orders,
judgments and decrees of all courts and arbitrators.
Availability - the amount that Borrower is entitled to
borrow from time to time as Revolver Loans, such amount
being the difference derived when the sum of the principal
amount of Revolver Loans then outstanding (including any
amounts which Lender may have paid for the account of
Borrower pursuant to any of the Loan Documents and which
have not been reimbursed by Borrower) is subtracted from the
Borrowing Base. If the amount of the Revolver Loans
outstanding is equal to or greater than the Borrowing Base,
Availability is 0.
Availability Reserve - on any date of determination
thereof, an amount equal to the sum of the following on such
date: (i) any amounts which Borrower is obligated to pay
pursuant to the provisions of the Loan Documents but does
not pay when due and which Lender elects to pay pursuant to
any of the Loan Documents for the account of Borrower;
(ii) a reserve for general inventory shrinkage, whether as a
result of theft or otherwise, that is determined by Lender
from time to time in its reasonable credit judgment based
upon Borrower's historical losses due to such shrinkage;
(iii) all amounts of past due rent, fees or other charges
owing at such time by Borrower to any landlord of
any premises where any of the Collateral is located or to
any processor, repairman, mechanic or other Person who is in
possession of any Collateral or has asserted any Lien or
claim thereto; (iv) $500,000 until such time that Borrower
shall have obtained the written consent of The Montgomery
Airport Authority, as lessor, and Lender shall have filed of
public record the Mortgage with respect to Borrower's real
Property leased from such authority and received title
insurance commitments in respect thereof in form reasonably
acceptable to Lender, and (v) for so long as any Event of
Default exists, such additional reserves as Lender in its
sole and absolute discretion may elect to impose from time
to time, without waiving any such Event of Default or
Lender's entitlement to accelerate the maturity of the
Obligations as a consequence thereof.
Average Loan Balance - for any month, the amount
obtained by adding the unpaid balance of Revolver Loans
owing by Borrower to Lender at the end of each day for each
day during the month in question and by dividing such sum by
the number of days in such month that this Agreement is in
effect.
Bank - Citizens Bank of Rhode Island, N.A.
Bankruptcy Code - Title 22 of the United States Code.
Borrowing Base - on any date of determination thereof,
an amount equal to the lesser of: (a) the Revolver Facility
Amount, or (b) an amount equal to the (i) Accounts Formula
Amount on such date plus (ii) the Inventory Formula Amount
on such date minus (iii) the Availability Reserve on such
date.
Borrowing Base Certificate - a Borrowing Base
Certificate in the form of Exhibit B attached hereto.
Business Day - any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State
of Georgia or Rhode Island or is a day on which banking
institutions located in such states are closed.
Capital Expenditures - expenditures made or liabilities
incurred for the acquisition of any fixed assets or
improvements, replacements, substitutions or additions
thereto which have a useful life of more than one year,
including the total principal portion of Capitalized Lease
Obligations.
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Capitalized Lease Obligation - any Debt represented by
obligations under a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
Cash Equivalents - (i) marketable direct obligations
issued or unconditionally guaranteed by the United States
government and backed by the full faith and credit of the
United States government having maturities of not more than
22 months from the date of acquisition; (ii) domestic
certificates of deposit and time deposits having maturities
of not more than 22 months from the date of acquisition,
bankers' acceptances having maturities of not more than
22 months from the date of acquisition and overnight bank
deposits, in each case issued by any commercial bank
organized under the laws of the United States, any state
thereof or the District of Columbia, which at the time of
acquisition are rated A-2 (or better) by Standard & Poor's
Corporation or P-2 (or better) by Xxxxx'x Investors
Services, Inc., and (unless issued by a Lender) not subject
to offset rights in favor of such bank arising from any
banking relationship with such bank; (iii) repurchase
obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (i)
and (ii) entered into with any financial institution meeting
the qualifications specified in clause (ii) above; and
(iv) commercial paper having at the time of investment
therein or a contractual commitment to invest therein a
rating of A-2 (or better) by Standard & Poor's Corporation
or P-2 (or better) by Xxxxx'x Investors Services, Inc., and
having a maturity within 9 months after the date of
acquisition thereof.
CERCLA - the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ' 9602 et seq. and
its implementing regulations.
Chattel Paper - shall have the meaning ascribed to the
term "chattel paper" in the UCC.
Claims - any and all claims, demands, liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, awards, remedial response, costs, expenses or
disbursements of any kind or nature whatsoever (including
reasonable attorneys', accountants' or consultants' fees and
expenses), whether arising under or in connection with the
Loan Documents, under any Applicable Law (including any
Environmental Law) or otherwise, that may now or hereafter
be suffered or incurred by a Person.
Closing Date - the date on which all of the conditions
precedent in Section 10 hereof are satisfied and the initial
Loan is made under this Agreement.
Collateral - all of the Property and interests in
Property described in Section 6 hereof, and all other
Property and interests in Property that now or hereafter
secure the payment and performance of any of the
Obligations.
Commercial Tort Claim - shall have the meaning given to
"commercial tort claim" in the UCC.
Compliance Certificate - a Compliance Certificate to be
provided by Borrower to Lender in accordance with, and in
the form annexed as Exhibit C to, this Agreement.
Consolidated - the consolidation in accordance with
GAAP of the accounts or other items as to which such term
applies.
Current Maturities of Long Term Debt shall mean all
payments in respect of Long Term Debt (other than the
Obligations) that are required to be made within one year
from the date of determination, whether or not the
obligation to make such payments would constitute a current
liability of the obligor under GAAP.
Debt - as applied to a Person means, without
duplication: (i) all items which in accordance with GAAP
would be included in determining total liabilities as shown
on the liability side of a balance sheet of such Person as
at the date as of which Debt is to be determined, including
Capitalized Lease Obligations; (ii) all obligations of other
Persons which such Person has guaranteed; (iii) all
reimbursement obligations in connection with letters of
credit or letter of credit guaranties issued for the account
of such Person; and (iv) in the case of Borrower (without
duplication), the Obligations.
Default - an event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or
both, become an Event of Default.
Default Rate - a fluctuating rate per annum which, on
any date, is equal to the interest rate then in effect for
such date plus 2%.
Deposit Account - shall have the meaning given to
"deposit account" in the UCC.
Deposits - any prepayment, deposit, down payment or
similar payment made to Borrower in respect of an Account.
Distribution - in respect of any entity, (i) any
payment of any dividends or other distributions on Equity
Interests of the entity (except distributions in such Equity
Interests) and (ii) any purchase, redemption or other
acquisition or retirement for value of any Equity Interests
of the entity or any Affiliate of the entity unless made
contemporaneously from the net proceeds of the sale of
Equity Interests.
Document - shall have the meaning ascribed to the term
"document" in the UCC.
Dollars and the sign "$" - lawful money of the United
States of America.
Dominion Account - a special account of Lender
established by Borrower pursuant to this Agreement at a bank
selected by Borrower, but acceptable to Lender in its
reasonable discretion, and over which Lender shall have sole
and exclusive access and control for withdrawal purposes.
EBITDA - for any Fiscal Quarter of Borrower, without
duplication, the sum of the following for such period
determined on a Consolidated basis: (i) Net Income, plus
(ii) depreciation, plus (iii) amortization, plus (iv) all
interest expense, plus (v) income tax expense, plus
(vi) other non-cash charges deducted in calculating Net
Income (excluding extraordinary gains and losses).
Eligible Account - an Account arising in the ordinary
course of Borrower's business from the sale of goods or
rendition of services which is payable in Dollars and which
Lender, in its customary credit judgment, deems to be an
Eligible Account. Without limiting the generality of the
foregoing, no Account shall be an Eligible Account if:
(i) it arises out of a sale made by Borrower to a Subsidiary
or an Affiliate of Borrower or to a Person controlled by an
Affiliate of Borrower; (ii) it is due or unpaid more than
90 days after the original invoice date; (iii) 50% or more
of the Accounts from the Account Debtor are not deemed
Eligible Accounts hereunder; (iv) the total unpaid Accounts
of the Account Debtor exceed 10% of the net amount of all
Eligible Accounts or exceeds a credit limit established by
Lender for such Account Debtor, in each case, to the extent
of such excess; (v) any covenant, representation or warranty
contained in this Agreement with respect to such Account has
been breached; (vi) the Account Debtor is also Borrower's
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creditor or supplier, or the Account Debtor has disputed
liability with respect to such Account or the Account
otherwise is subject to any right of setoff, counterclaim,
reserve or chargeback, to the extent of such offset,
counterclaim, disputed amount, reserve or chargeback;
(vii) it arises from a sale to an Account Debtor with its
principal office, assets or place of business outside the
United States, unless the sale is backed by an irrevocable
letter of credit issued or confirmed by a bank acceptable to
Lender and that is in form and substance acceptable to
Lender and payable in the full amount of the Account in
freely convertible Dollars at a place of payment within the
United States and, if requested by Lender, such letter of
credit, or amounts payable thereunder, is assigned to
Lender; (viii) it arises from a sale to the Account Debtor
on a xxxx-and-hold, guaranteed sale, sale-or-return,
sale-on-approval, consignment or any other repurchase or
return basis; (ix) the Account Debtor is the United States
of America or any department, agency or instrumentality
thereof, unless Borrower assigns its right to payment of
such Account to Lender, in a manner satisfactory to Lender,
so as to comply with the Assignment of Claims Act of 2940
(32 U.S.C. '3727 and 42 U.S.C. '25), or is a state, county
or municipality, or a political subdivision or agency
thereof and Applicable Law disallows or restricts an
assignment of Accounts on which it is the Account Debtor;
(x) the Account is evidenced by chattel paper or an
instrument that have not been endorsed and delivered to
Lender; or (xi) the performance of the services or delivery
of goods giving rise to such Account has been bonded or
guaranteed, unless all rights of such surety or guarantor to
payment under any such Account have been subordinated, in
form acceptable to Lender, to the Lien of Lender under this
Agreement.
Eligible Inventory - such Inventory of Borrower (other
than packaging materials, labels, supplies) which Lender, in
its sole credit judgment, deems to be Eligible Inventory.
Without limiting the generality of the foregoing, no
Inventory shall be Eligible Inventory unless: (i) it is raw
materials or computer subassemblies in their original,
unopened packaging; (ii) it is owned by Borrower and not
held by it on consignment or other sale or return terms;
(iii) it is in good, new and saleable condition and is not
damaged or defective; (iv) it is not slow-moving, obsolete
or unmerchantable and is not goods returned to Borrower by
or repossessed from an Account Debtor; (v) it meets all
standards imposed by any Governmental Authority; (vi) it
conforms in all respects to the warranties and
representations set forth in this Agreement; (vii) it is at
all times subject to Lender's duly perfected, first priority
security interest and no other Lien except a Permitted Lien;
(viii) it is situated at a location in compliance with this
Agreement, is not in transit or outside the continental
United States and is not consigned to any Person; and (ix)
it is not the subject of a negotiable warehouse receipt or
other negotiable Document.
Environmental Laws - all federal, state and local laws,
rules, regulations, codes, ordinances, programs, permits,
guidance, orders and consent decrees, now or hereafter in
effect and relating to health, safety or environmental
matters, including the CERCLA.
Environmental Release - a release as defined in CERCLA
or under any applicable Environmental Law.
Equipment - shall have the meaning given to "equipment"
in the UCC.
Equity Interest - the interest of (i) a shareholder in
a corporation, (ii) a partner (whether general or limited)
in a partnership (whether general, limited or limited
liability), (iii) a member in a limited liability company,
or (iv) any other Person having any other form of equity
security.
ERISA - the Employee Retirement Income Security Act
of 1974, as amended, and all rules and regulations from time
to time promulgated thereunder.
Event of Default - as defined in Section 11.1 hereof.
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Fiscal Quarter - any of the quarterly accounting
periods of Borrower.
Fiscal Year - the fiscal year of Borrower for
accounting and tax purposes.
Fixed Charge Coverage Ratio shall mean, on a
consolidated basis for Borrower and its Consolidated
Subsidiaries, the ratio of (i) EBITDA for the Fiscal Quarter
just ended and the immediately preceding 3 Fiscal Quarters,
minus total Capital Expenditures incurred and cash Taxes
paid during any applicable period, to (ii) the sum of
Interest Expense for the Fiscal Quarter just ended and the
immediately preceding 3 Fiscal Quarters and Current
Maturities of Long Term Debt, calculated at the end of the
Fiscal Quarter just ended.
Funded Debt of any Person shall mean at any date,
without duplication, (i) all obligations of such Person for
borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the
deferred price of property or services, except trade
accounts payable arising in the ordinary course of business,
(iv) all obligations of such Person as lessee under
Capitalized Leases, (v) all obligations of such Person to
reimburse any bank or other Person in respect of amounts
payable under a banker's acceptance, and (vi) all
obligations of such Person to reimburse any bank or other
Person in respect of amounts paid or to be paid under a
letter of credit or similar instrument.
GAAP - generally accepted accounting principles in the
United States of America in effect from time to time.
General Intangible - shall have the meaning given to
"general intangible" in the UCC.
Governmental Approvals - means all authorizations,
consents, approvals, licenses and exemptions of,
registrations and filings with, and reports to, all national
state or local government (whether domestic or foreign) and
any political subdivisions thereof in any other
governmental, quasi-governmental, judicial, administrative,
public or statutory instrumentality, authority, body,
agency, bureau or entity.
Governmental Authority - any federal, state, municipal,
national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government
or any court, in each case whether associated with a state
of the United States, the District of Columbia or a foreign
entity or government.
Guarantor - Parent or any other Person who may
hereafter guarantee payment or performance of the whole or
any part of the Obligations.
Guaranty Agreement - a guaranty that is at any time
executed by a Guarantor in favor of Lender.
Insolvency Proceeding - any action, case or proceeding
commenced by or against a Person, or any agreement of such
Person, for (a) the entry of an order for relief under any
chapter of the Bankruptcy Code or other insolvency or debt
adjustment law (whether state, federal or foreign), (b) the
appointment of a receiver, trustee, liquidator or other
custodian for such Person or any part of its Property,
(c) an assignment or trust mortgage for the benefit of
creditors of such Person, or (d) the liquidation,
dissolution or winding up of the affairs of such Person.
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Instrument - shall have the meaning ascribed to the
term "instrument" in the UCC.
Intellectual Property - Property constituting under any
Applicable Law a patent, patent application, copyright,
trademark, service xxxx, tradename or mask work, or license
or other right to use any of the foregoing.
Intellectual Property Claim - the assertion by any
Person of a claim (whether asserted in writing, by action,
suit or proceeding or by other means) that Borrower's
ownership, use, marketing, sale or distribution of any
Inventory, Intellectual Property or other Property is
violative of any ownership, patent, copyright, trademark or
other rights of such Person.
Intercreditor Agreement - the Intercreditor Agreement,
dated on or about the date hereof, between Regions and
Lender.
Interest Expense shall mean, for any period, interest
expense (including capitalized interest) in respect of
Indebtedness of Borrower and its Consolidated Subsidiaries
as determined in accordance with GAAP.
Inventory - shall have the meaning given to "inventory"
in the UCC.
Inventory Formula Amount - on any date of determination
thereof, an amount equal to the lesser of (i) $2,000,000 or
(ii) 24% of the Value of Eligible Inventory consisting of
raw materials and computer subassemblies in their original,
unopened packaging.
Investment Property - shall have the meaning given to
"investment property" in the UCC.
Letter of Credit Right - shall have the meaning given
to "letter-of-credit right" in the UCC.
Lien - any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on common law,
statute or contract. The term "Lien" shall also include
reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting
Property. For the purpose hereof, Borrower shall be deemed
to be the owner of any Property which it has acquired or
holds subject to a conditional sale agreement or other
arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security
purposes.
Loan Account - the loan account established on the
books of Lender pursuant to Section 4.6 hereof.
Loan Documents - this Agreement, the Other Agreements
and the Security Documents.
Loan Year - a period commencing each calendar year on
the same month and day as the date hereof and ending on the
same month and day in the immediately succeeding calendar
year, with the first such period (i.e., the first Loan Year)
to commence on the date of this Agreement.
Loans - all loans and advances of any kind made by
Lender pursuant to this Agreement.
Long Term Debt shall mean at any date all Funded Debt
which matures (or the maturity of which may at the option of
the Parent or any Consolidated Subsidiary be extended such
that it matures) more than one year after such date.
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Margin Stock - as such term is defined in Regulation U
and Regulation G of the Board of Governors.
Material Adverse Effect - the effect of any event or
condition which, alone or when taken together with other
events or conditions occurring or existing concurrently
therewith, (a) has a material adverse effect upon the
business, operations, Properties, condition (financial or
otherwise) or business prospects of any Obligor; (b) has any
material adverse effect whatsoever upon the validity or
enforceability hereof or any of the other Loan Documents;
(c) has or may be reasonably expected to have any material
adverse effect upon the value of the whole or any material
part of the Collateral, the Liens of Lender with respect to
the Collateral or any material part thereof or the priority
of such Liens; (d) materially impairs the ability of
Borrower or any other Obligor to perform its obligations
under this Agreement, any Guaranty Agreement or any of the
other Loan Documents, including repayment of the Obligations
when due; or (e) materially impairs the ability of Lender to
enforce or collect the Obligations or realize upon any of
the Collateral in accordance with the Loan Documents and
Applicable Law.
Material Contract - an agreement to which an Obligor is
a party (other than the Loan Documents) for which breach,
termination, cancellation, nonperformance or failure to
renew could reasonably be expected to have a Material
Adverse Effect.
Maximum Rate - the maximum non-usurious rate of
interest permitted by Applicable Law that at any time, or
from time to time, may be contracted for, taken, reserved,
charged or received on the Debt in question or, to the
extent that at any time Applicable Law may thereafter permit
a higher maximum non-usurious rate of interest, then such
higher rate. Notwithstanding any other provision hereof,
the Maximum Rate shall be calculated on a daily basis
(computed on the actual number of days elapsed over a year
of 365 or 366 days, as the case may be).
Money Borrowed - (i) Debt arising from the lending of
money by any Person to Borrower; (ii) Debt, whether or not
in any such case arising from the lending by any Person of
money to Borrower, (A) which is represented by notes payable
or drafts accepted that evidence extensions of credit,
(B) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (C) upon which
interest charges are customarily paid (other than accounts
payable) or that was issued or assumed as full or partial
payment for Property; (iii) Debt that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations
with respect to letters of credit or guaranties of letters
of credit and (v) Debt of Borrower under any guaranty of
obligations that would constitute Debt for Money Borrowed
under clauses (i) through (iii) hereof, if owed directly by
Borrower.
Mortgages - the mortgages, deeds of trust or deeds to
secure debt to be executed by Borrower on or before the
Closing Date in favor of Lender and by which Borrower shall
grant and convey to Lender Liens upon the Real Estate as
security for the payment of the Obligations.
Multiemployer Plan - has the meaning set forth in
Section 4001(a)(3) of ERISA.
Net Income (Loss) - for any applicable period, the
aggregate net income (or loss) of Borrower from continuing
operations (excluding any income (or loss) included therein
resulting from extraordinary items).
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Net Proceeds - with respect to a disposition of any
Collateral, proceeds (including cash receivable (when
received) by way of deferred payment) received by Borrower
from the sale, lease, transfer or other disposition of any
Property, including insurance proceeds and awards of
compensation received with respect to the destruction or
condemnation of all or part of such Property, net of:
(i) the reasonable and customary costs of such sale, lease,
transfer or other disposition (including legal fees and
sales commissions); and (ii) amounts applied to repayment of
Debt (other than the Obligations) secured by a Permitted
Lien on the Collateral disposed of that is senior to
Lender's Liens with respect to such Collateral.
Net Worth - at any date of determination, Borrower's
total shareholders' equity (including capital stock,
additional paid-in capital and retained earnings, after
deducting treasury stock) which would appear as such on a
balance sheet of Borrower prepared in accordance with GAAP.
Note - the Revolver Note.
Obligations - all debts, liabilities, obligations,
covenants and duties now or at any time or times hereafter
owing by Borrower to Lender, howsoever evidenced or arising,
and whether direct or indirect, absolute or contingent, due
or to become due, primary or secondary, or joint or several,
including all of the Loans and all interest payable in
connection therewith and all other sums chargeable to or
payable by Borrower under the Loan Documents, any other
agreement heretofore or hereafter entered into by Borrower
with or executed by Borrower in favor of Lender, or
Applicable Law.
Obligor - Borrower, each Guarantor and each other
Person (other than Lender) who is at any time liable for the
payment of any of the Obligations.
Organization Documents - with respect to any Person,
its charter, certificate or articles of incorporation,
articles of organization, operating agreement, partnership
agreement or similar agreement or instrument governing the
formation or operation of such Person.
Original Term - as defined in Section 5.1 hereof.
Other Agreements - any and all agreements, instruments
and documents (other than this Agreement and the Security
Documents), heretofore, now or hereafter executed by
Borrower, any Subsidiary of Borrower or any other Person and
delivered to Lender in respect of the transactions
contemplated by this Agreement, including the Note, the
Intercreditor Agreement and the Subordination Agreement.
Out-of-Formula Condition - as defined in Section 2.1
hereof.
Out-of-Formula Loan - a Revolver Loan made when an Out-
of-Formula Condition exists or the amount of any Revolver
Loan which, when funded, results in an Out-of-Formula
Condition.
Parent - Miltope Group Inc., a Delaware corporation.
Participant - each Person who shall be granted the
right by Lender to participate in any of the Loans described
in this Agreement and who shall have entered into a
participation agreement in form and substance satisfactory
to Lender.
Payment Items - all checks, drafts, or other items of
payment payable to Borrower, including proceeds of any of
the Collateral.
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Permitted Lien - a Lien of a kind specified in
Section 9.2.5 hereof.
Permitted Use - a use of proceeds of any of the Loans
to pay (i) on the Closing Date, the repayment of certain
indebtedness owing to Regions Bank and all fees and expenses
then payable to Lender under this Agreement, and (ii) after
the Closing Date, any Debt incurred in the ordinary course
of Borrower's business to the extent not prohibited by this
Agreement, Capital Expenditures to the extent permitted by
the Loan Documents and any of the Obligations.
Person - an individual, partnership, corporation,
limited liability company, limited liability partnership,
joint stock company, land trust, business trust,
unincorporated organization or other form of business
entity, or a government or agency or political subdivision
thereof.
Plan - an employee benefit plan now or hereafter
maintained for employees of Borrower that is covered by
Title IV of ERISA.
Prime Rate - the rate of interest announced or quoted
by Bank from time to time as its prime rate, which rate
might not be the lowest rate charged by Bank; and, if such
prime rate for commercial loans is discontinued by Bank as a
standard, a comparable reference rate designated by Bank as
a substitute therefor shall be the Prime Rate.
Projections - Borrower's forecasted (a) balance sheets,
(b) profit and loss statements, (c) cash flow statements,
and (d) capitalization statements, all prepared on a
consistent basis with Borrower's historical financial
statements, together with appropriate supporting details and
a statement of underlying assumptions.
Properly Contested - in the case of any Debt of an
Obligor (including any Tax) that is not paid as and when due
or payable by reason of such Obligor's bona fide dispute
concerning its liability to pay same or concerning the
amount thereof, (i) such Debt and any Liens securing same
are being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted;
(ii) such Obligor has established appropriate reserves as
shall be required in conformity with GAAP; (iii) the non-
payment of such Debt during the period being contested by
such Obligor will not have a Material Adverse Effect and
does not and will not result in a forfeiture of, foreclosure
upon or loss of any assets of such Obligor; (iv) no Lien is
imposed upon any of such Obligor's assets with respect to
such Debt unless such Lien is at all times junior and
subordinate in priority to the Liens in favor of Lender
(except only with respect to property taxes that have
priority as a matter of applicable state law) and
enforcement of such Lien is stayed during the period prior
to the final resolution or disposition of such dispute;
(v) if the Debt results from or is determined by the entry,
rendition or issuance against a Obligor or any of its assets
of a judgment, writ, order or decree, such judgment, writ,
order or decree is stayed pending a timely appeal or other
judicial review and such Obligor shall have established
adequate reserves in accordance with GAAP for such judgment,
writ, order or decree or the same is either fully insured
against by an insurer that has not denied or reserved rights
with respect to coverage or has been bonded to Lender's
satisfaction; and (vi) if such dispute or contest is
abandoned, settled or determined adversely to such Obligor,
such Obligor forthwith pays such Debt and all penalties and
interest in connection therewith.
Property - any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or
intangible.
Purchase Money Debt - means and includes (i) Debt
(other than the Obligations) for the payment of all or any
10
part of the purchase price of any fixed assets, (ii) any
Debt (other than the Obligations) incurred at the time of or
within 10 days prior to or after the acquisition of any
fixed assets for the purpose of financing all or any part of
the purchase price thereof, and (iii) any renewals,
extensions or refinancings thereof, but not any increases in
the principal amounts thereof outstanding at the time.
Purchase Money Lien - a Lien upon fixed assets which
secures Purchase Money Debt, but only if such Lien shall at
all times be confined solely to the fixed assets acquired
through the incurrence of the Purchase Money Debt secured by
such Lien.
Real Estate - all parcels or tracts of real Property of
Borrower located in Montogomery County, Alabama, and Windsor
County, Vermont.
Regions - Regions Bank, a bank organized under the
laws of the State of Alabama.
Regions Documents - the Regions Note and all loan
agreements, security agreements, mortgages and other
documents, instruments or agreements executed or delivered
by Borrower evidencing or securing any Debt at any time
owing by Borrower to Regions.
Regions Note - a promissory note, dated on or about the
Closing Date, made by Borrower to the order of Regions in
the original principal amount of $1,000,000.
Reportable Event - any of the events set forth in
Section 4043(b) of ERISA.
Restricted Investment - any acquisition of Property by
Borrower or any of its Subsidiaries in exchange for cash or
other Property, whether in the form of an acquisition of
Equity Interests or Debt, or the purchase or acquisition by
Borrower or any Subsidiary of any other Property, or a loan,
advance, capital contribution or subscription, except
acquisitions of the following: (a) fixed assets to be used
in the business of Borrower or any Subsidiary so long as the
acquisition costs thereof constitute Capital Expenditures
permitted hereunder; (b) goods held for sale or lease or to
be used in the manufacture of goods or the provision of
services by Borrower or any Subsidiary in the ordinary
course of business; (c) Current Assets arising from the sale
or lease of goods or the rendition of services in the
ordinary course of business of Borrower or any Subsidiary;
(d) investments in Subsidiaries to the extent existing on
the Closing Date; and (e) Cash Equivalents.
Revolver Facility Amount - the amount of $8,000,000.
Revolver Loan - a Loan made by Lender as provided in
Section 2.1.1 hereof.
Revolver Note - the Revolver Note to be executed by
Borrower in favor of Lender on the Closing Date in the form
of Exhibit A attached hereto.
Schedule of Accounts - as defined in Section 7.2.1
hereof.
Security - shall have the same meaning as in
Section 2(1) of the Securities Act of 1933.
Security Documents - the Mortgages, any Guaranty
Agreement, and all other instruments and agreements now or
at any time hereafter securing the whole or any part of the
Obligations.
Senior Officer - the chairman of the board of
directors, the president or the chief financial officer of,
or any in-house legal counsel to, Borrower.
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Solvent - as to any Person, such Person (i) owns
Property whose fair saleable value is greater than the
amount required to pay all of such Person's Debts (including
contingent debts), (ii) is able to pay all of its Debts as
such Debts mature, (iii) has capital sufficient to carry on
its business and transactions and all business and
transactions in which it is about to engage; and (iv) is not
"insolvent" within the meaning of Section 101(32) of the
Bankruptcy Code.
Subordinated Debt - Debt of Borrower that is
subordinated to the Obligations pursuant to the
Subordination Agreement.
Subordination Agreement - any agreement entered into
among Lender, Borrower and a creditor of Borrower
subordinating the payment of Debt owing to such creditor to
the payment of the Obligations.
Subsidiary - any Person a majority of the Equity
Interests of which is at the time owned, directly or
indirectly, by Borrower or by one or more other Subsidiaries
or by Borrower and one or more other Subsidiaries.
Supporting Obligation - shall have the meaning given to
"supporting obligation" in the UCC.
Tangible Net Worth - as applied to any Person, the Net
Worth of such Person at the time in question, after
deducting therefrom the amount of all intangible items
reflected therein, including all unamortized debt discount
and expense, unamortized research and development expense,
unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, unamortized excess
cost of investment in Subsidiaries over equity at dates of
acquisition, and all similar items which should properly be
treated as intangibles in accordance with GAAP.
Taxes - any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other
charges of whatever nature, including income, receipts,
excise, property, sales, transfer, license, payroll,
withholding, social security and franchise taxes now or
hereafter imposed or levied by the United States, or any
state, local or foreign government or by any department,
agency or other political subdivision or taxing authority
thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto.
Termination Date - the date on which this Agreement is
terminated for any reason under Section 5 hereof.
UCC - the Uniform Commercial Code (or any successor
statute) as adopted and in force in the State of Georgia or,
when the laws of any other state govern the method or manner
of the creation or perfection of any security interest in
any of the Collateral, the Uniform Commercial Code (or any
successor statute) of such state.
Value - with reference to the value of Eligible
Inventory, value determined on the basis of the lower of
cost or market of such Eligible Inventory, with the cost
thereof calculated on a first-in, first-out basis,
determined in accordance with GAAP.
Voting Stock - Securities of any class or classes of a
corporation the holders of which are ordinarily, in the
absence of contingencies, entitled to elect a majority of
the corporate directors (or Persons performing similar
functions).
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1.2. Accounting Terms. Unless otherwise specified herein,
all terms of an accounting character used in this Agreement shall
be interpreted, all accounting determinations under this
Agreement shall be made, and all financial statements required to
be delivered under this Agreement shall be prepared, in
accordance with GAAP, applied on a basis consistent with the most
recent audited Consolidated financial statements of Borrower and
its Subsidiaries heretofore delivered to Lender and using the
same method for inventory valuation as used in such audited
financial statements, except for any change in which Borrower's
independent public accountants concur or as required by GAAP. In
the event of any change in GAAP that occurs after the date hereof
and that is material to Borrower, Lender shall have the right to
require either that conforming adjustments be made to any
financial covenants set forth in this Agreement, or the
components thereof, that are affected by such change or that
Borrower report its financial condition based on GAAP as in
effect immediately prior to the occurrence of such change.
1.3. Other Terms. All other terms contained in this
Agreement shall have, when the context so indicates, the meanings
provided for by the UCC to the extent the same are used or
defined therein.
1.4. Certain Matters of Construction. The terms "herein,"
"hereof" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to
cover all genders. In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means
"to but excluding." All references to statutes and related
regulations shall include any amendments of same and any
successor statutes and regulations. All references to any Person
shall mean and include the successors and permitted assigns of
such Person. All references to any of the Loan Documents shall
include any and all amendments or modifications thereto and any
and all restatements, extensions or renewals thereof. Wherever
the phrase "including" shall appear in this Agreement, such word
shall be understood to mean "including, without limitation."
Whenever the phrase "to the best of Borrower's knowledge" or
words of similar import relating to the knowledge or the
awareness of Borrower are used herein, such phrase shall mean and
refer to (i) the actual knowledge of a Senior Officer of Borrower
or (ii) the knowledge that a Senior Officer would have obtained
if they had engaged in good faith and the diligent performance of
their duties.
SECTION 0.XXXXXX FACILITIES
Subject to the terms and conditions of, and in reliance upon
the representations and warranties made in, this Agreement and
the other Loan Documents, Lender agrees to make a total credit
facility of up to $8,000,000 available upon Borrower's request
therefor, as follows:
2.1. Revolver Loans.
2.1.1 Revolver Loans. Lender agrees, during the
term of this Agreement and for so long as no Default or Event of
Default exists, to make Revolver Loans to Borrower from time to
time, as requested by Borrower in the manner set forth in
Section 4.1.1 hereof, up to a maximum principal amount at any
time outstanding equal to the Borrowing Base at such time. The
Revolver Loans shall be evidenced by the Revolver Note and used
solely for Permitted Uses. In no event shall any proceeds of any
Revolver Loans be used to purchase or to carry, or to reduce,
retire or refinance any Debt incurred to purchase or carry, any
Margin Stock. If the unpaid balance of Revolver Loans
outstanding at any time should exceed the Borrowing Base at such
time (an "Out-of-Formula Condition"), such Revolver Loans shall
nevertheless constitute Obligations that are secured by the
Collateral and entitled to all of the benefits of the Loan
Documents. In the event that Lender is willing in its sole and
absolute discretion to make Out-of-Formula Loans, such Out-of-
Formula Loans shall be payable on demand and shall bear interest
as provided in this Agreement for Revolver Loans generally or at
such higher rate of interest as Lender may require as a condition
to making any such Out-of-Formula Loans.
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SECTION 3.INTEREST, FEES AND CHARGES
3.1. Interest.
3.1.1. Rates of Interest. Borrower agrees to pay
interest in respect of all unpaid principal amounts of the Loans
from the respective dates such principal amounts are advanced
until paid (whether at stated maturity, on acceleration or
otherwise) at a rate per annum equal to .5% plus the Prime Rate
in effect from time to time. The applicable rate of interest
shall be increased or decreased, as the case may be, by an amount
equal to any increase or decrease in the Prime Rate, with such
adjustments to be effective as of the opening of business on the
day that any such change in the Prime Rate becomes effective.
Interest on each Loan shall accrue from and including the date on
which such Loan is made, but excluding the date of any repayment
thereof; provided, however, that, if a Loan is repaid on the same
day made, one day's interest shall be paid on such Loan. The
Prime Rate on the date hereof is 4.25% per annum and, therefore,
the rate of interest in effect hereunder on the date hereof,
expressed in simple interest terms, is 4.75% per annum.
3.1.2. Default Rate of Interest. Interest shall
accrue at the Default Rate (i) with respect to the principal
amount of any portion of the Obligations (and, to the extent
permitted by Applicable Law, all past due interest) that is not
paid on the due date thereof (whether due at stated maturity, on
demand, upon acceleration or otherwise), until such amount is
paid in full, and (ii) with respect to the principal amount of
all of the Obligations (and, to the extent permitted by
Applicable Law, all past due interest), upon the earliest to
occur of (x) Borrower's receipt of notice of Lender's election to
charge the Default Rate based upon the existence of any Event of
Default or (y) the commencement by or against Borrower of an
Insolvency Proceeding, whether or not under the circumstances
described in either clause (i) or (ii) hereof Lender elects to
accelerate the maturity or demand payment of any of the
Obligations. To the fullest extent permitted by Applicable Law,
the Default Rate shall apply and accrue on any judgment entered
with respect to any of the Obligations and with respect to the
unpaid principal amount of the Obligations during any Insolvency
Proceeding of Borrower. Borrower acknowledges that the cost and
expense to Lender attendant upon the occurrence of an Event of
Default are difficult to ascertain or estimate and that the
Default Rate is a fair and reasonable estimate to compensate
Lender for such added cost and expense.
3.2. Fees.
3.2.1. Origination Fee. Borrower shall pay to
Lender an origination fee of $80,000, which shall be deemed fully
earned and payable upon Borrower's execution and delivery of this
Agreement.
3.2.2. Unused Line Fee. Borrower shall pay to
Lender a monthly fee equal to .5% per annum of the amount by
which the Average Loan Balance for any month (or portion thereof
that this Agreement is in effect) is less than the Revolver
Facility Amount, with such fee to be paid on the first day of the
following month; but if this Agreement is terminated on a day
other than the first day of a month, then any such fee payable
for the month in which termination shall occur shall be paid on
the effective date of such termination.
3.2.3. Audit and Appraisal Fees. Borrower shall
reimburse Lender for all reasonable costs and expenses incurred
in connection with audits and appraisals of Borrower's books and
records and such other matters as Lender shall deem appropriate
at a rate not to exceed $800 per day for each auditor plus out of
pocket expenses; provided, however, that for so long as no Event
of Default exists, Borrower shall not be obligated to reimburse
Lender for more than four (4) such audits during any fiscal year
of Borrower.
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3.2.4. General Provisions Relating to Fees. All
fees shall be fully earned by Lender when due and payable and,
except as otherwise set forth herein or required by Applicable
Law, shall not be subject to refund, rebate or proration. All
fees provided for in Section 3.2 hereof are and shall be deemed
to be for compensation for services and are not, and shall not be
deemed to be, interest or any other charge for the use,
forbearance or detention of money.
3.3. Computation of Interest and Fees. All interest, fees
and other charges hereunder shall be calculated daily and shall
be computed on the actual number of days elapsed over a year of
360 days. For the purpose of computing interest hereunder, all
Payment Items received by Lender shall be deemed applied by
Lender on account of the Obligations (subject to final payment of
such items) on the second Business Day after receipt by Lender of
such items in Lender's account located in Providence, Rhode
Island, and Lender shall be deemed to have received such Payment
Item on the date specified in Section 4.4 hereof.
3.4. Reimbursement of Expenses. If, at any time or times
regardless of whether or not an Event of Default then exists,
Lender incurs reasonable legal or accounting expenses or any
other costs or out-of-pocket expenses in connection with (i) the
negotiation and preparation of this Agreement or any of the other
Loan Documents, any amendment of or modification of this
Agreement or any of the other Loan Documents, or any sale or
attempted sale of any interest herein to a Participant; (ii) the
administration of this Agreement or any of the other Loan
Documents and the transactions contemplated hereby and thereby;
(iii) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Lender, Borrower or any other
Person) in any way relating to the Collateral, this Agreement or
any of the other Loan Documents or Borrower's affairs; (iv) any
attempt to enforce any rights of Lender against Borrower or any
other Person which may be obligated to Lender by virtue of this
Agreement or any of the other Loan Documents, including the
Account Debtors; or (v) any attempt to inspect (subject to limits
as may be applicable under Section 3.2.3 hereof), verify,
protect, preserve, perfect or continue the perfection of Lender's
Liens upon, restore, collect, sell, liquidate or otherwise
dispose of or realize upon the Collateral; then all such
reasonable legal and accounting expenses, other costs and out of
pocket expenses of Lender shall be charged to Borrower. All
amounts chargeable to Borrower under this Section 3.4 shall be
Obligations secured by all of the Collateral, shall be payable on
demand to Lender. Borrower shall also reimburse Lender for
expenses incurred by Lender in its administration of the
Collateral to the extent and in the manner provided in Section 6
hereof.
3.5. Bank Charges. Borrower shall pay to Lender, on demand,
any and all fees, costs or expenses which Lender or any
Participant pays to a bank or other similar institution
(including, any fees paid by Lender to any Participant) arising
out of or in connection with (i) the forwarding to Borrower or
any other Person on behalf of Borrower, by Lender or any
Participant, of proceeds of Loans made by Lender to Borrower
pursuant to this Agreement and (ii) the depositing for
collection, by Lender or any Participant, of any check or item of
payment received or delivered to Lender or any Participant on
account of the Obligations. Borrower acknowledges and agrees
that Lender may charge such costs, fees and expenses to Borrower
based upon Lender's good faith estimate of such costs, fees and
expenses as they are incurred by Lender, subject to later
adjustment for the amount actually incurred.
3.6. Maximum Interest. Regardless of any provision
contained in any of the Loan Documents, in no contingency or
event whatsoever shall the aggregate of all amounts that are
contracted for, charged or received by Lender pursuant to the
terms of any of the Loan Documents and that are deemed interest
under Applicable Law exceed the highest rate permissible under
any Applicable Law. No agreements, conditions, provisions or
stipulations contained in any of the Loan Documents or the
exercise by Lender of the right to accelerate the payment or the
maturity of all or any portion of the Obligations, or the
exercise of any option whatsoever contained in any of the Loan
Documents, or the prepayment by Borrower of any of the
Obligations, or the occurrence of any contingency whatsoever,
shall entitle Lender to charge or receive in any event, interest
or any charges, amounts, premiums or fees deemed interest by
Applicable Law (such interest, charges, amounts, premiums and
fees referred to herein collectively as "Interest") in excess of
the Maximum Rate and in no event shall Borrower be obligated to
15
pay Interest exceeding such Maximum Rate, and all agreements,
conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel
Borrower to pay Interest exceeding the Maximum Rate shall be
without binding force or effect, at law or in equity, to the
extent only of the excess of Interest over such Maximum Rate. If
any Interest is charged or received in excess of the Maximum Rate
("Excess"), Borrower acknowledges and stipulates that any such
charge or receipt shall be the result of an accident and bona
fide error, and such Excess, to the extent received, shall be
applied first to reduce the principal Obligations and the
balance, if any, returned to Borrower, it being the intent of the
parties hereto not to enter into a usurious or otherwise illegal
relationship. All monies paid to Lender hereunder or under any
of the other Loan Documents, whether at maturity or by
prepayment, shall be subject to any rebate of unearned interest
as and to the extent required by Applicable Law. By the
execution of this Agreement, Borrower covenants that (i) the
credit or return of any Excess shall constitute the acceptance by
Borrower of such Excess, and (ii) Borrower shall not seek or
pursue any other remedy, legal or equitable, against Lender,
based in whole or in part upon contracting for, charging or
receiving any Interest in excess of the Maximum Rate. For the
purpose of determining whether or not any Excess has been
contracted for, charged or received by Lender, all interest at
any time contracted for, charged or received from Borrower in
connection with any of the Loan Documents shall, to the extent
permitted by Applicable Law, be amortized, prorated, allocated
and spread in equal parts throughout the full term of the
Obligations. Borrower and Lender shall, to the maximum extent
permitted under Applicable Law, (i) characterize any non-
principal payment as an expense, fee or premium rather than as
Interest and (ii) exclude voluntary prepayments and the effects
thereof. The provisions of this Section shall be deemed to be
incorporated into every Loan Document (whether or not any
provision of this Section is referred to therein).
SECTION 4. LOAN ADMINISTRATION
4.1. Manner of Borrowing Revolver Loans. Borrowings under
the credit facility established pursuant to Section 2.1 hereof
shall be as follows:
4.1.1. Revolver Loan Requests. A request for a
Revolver Loan shall be made, or shall be deemed to be made, in
the following manner: (i) Borrower may give Lender notice of its
intention to borrow, in which notice Borrower shall specify the
amount of the proposed borrowing and the proposed borrowing date,
no later than 11:00 a.m. on the proposed borrowing date; and
(ii) unless payment is otherwise timely made by Borrower, the
becoming due of any amount required to be paid under this
Agreement or any of the other Loan Documents, as principal,
accrued interest, fees or other charges, shall be deemed
irrevocably to be a request by Borrower from Lender for a
Revolver Loan on the due date of, and in an aggregate amount
required to pay, such principal, accrued interest, fees or other
charges and the proceeds of each such Revolver Loan may be
disbursed by Lender by way of direct payment of the relevant
Obligation and shall bear interest at the rate of interest
applicable to Revolver Loans. Lender shall have no obligation to
Borrower to honor any deemed request for a Revolver Loan under
clause (ii) of the immediately preceding sentence, but may do so
in its discretion and without regard to the existence of, and
without being deemed to have waived, any Default or Event of
Default and without regard to the existence or creation of an Out-
of-Formula Condition. As an accommodation to Borrower, Lender
may permit telephonic requests for loans and electronic
transmittal of instructions, authorizations, agreements or
reports to Lender by Borrower. Unless Borrower specifically
directs Lender in writing not to accept or act upon telephonic or
electronic communications from Borrower, Lender shall not have
any liability to Borrower for any loss or damage suffered by
Borrower as a result of Lender's honoring of any requests,
execution of any instructions, authorizations or agreements or
reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Lender by
Borrower and Lender shall have no duty to verify the origin of
any such communication or the identity or authority of the Person
sending it.
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4.1.2. Disbursement Authorization. Borrower
hereby irrevocably authorizes Lender to disburse the proceeds of
each Revolver Loan requested, or deemed to be requested pursuant
to Section 4.1.1, as follows: (i) the proceeds of each Revolver
Loan requested under Section 4.1.1(i) shall be disbursed by
Lender in immediately available funds, in the case of the initial
borrowing, in accordance with the terms of the written
disbursement letter from Borrower, and in the case of each
subsequent borrowing, by wire transfer to such bank account as
may be agreed upon by Borrower and Lender from time to time or
elsewhere if pursuant to a written direction from Borrower; and
(ii) the proceeds of each Revolver Loan requested under
Section 4.1.1(ii) shall be disbursed by Lender by way of direct
payment of the relevant interest or other Obligation.
4.2. Repayment of Revolver Loans.
4.2.1. Payment of Principal. The outstanding
principal amounts with respect to the Revolver Loans shall be due
and payable in Dollars without any offset or counterclaim
immediately upon (a) each receipt by Borrower or Lender of any
proceeds or payments of any of the Collateral, to the extent of
such proceeds or payments, and (b) the Termination Date.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if an Out-of-Formula Condition shall exist,
Borrower shall, on demand, repay the outstanding Revolver Loans
in an amount sufficient to reduce the aggregate unpaid principal
amount of all Revolver Loans by an amount equal to such excess.
4.2.2. Payment of Interest. Interest accrued
on the Revolver Loans shall be due and payable on (i) the first
calendar day of each month (for the immediately preceding month),
computed through the last calendar day of the preceding month,
with respect to any Revolver Loan, and (ii) on the Termination
Date.
4.3. Payment of Other Obligations. The balance of the
Obligations requiring the payment of monies shall be payable by
Borrower to Lender in Dollars and without offset, defense or
counterclaim, as and when provided in the Loan Documents, or, if
no date of payment is otherwise specified in the Loan Documents,
on demand.
4.4. Application of Payments and Collections. All Payment
Items received by Lender by 12:00 noon, Atlanta, Georgia time, on
any Business Day shall be deemed received on the second Business
Day thereafter. All Payment Items received after 12:00 noon,
Atlanta, Georgia time, on any Business Day shall be deemed
received on the third Business Day thereafter. If as the result
of collections of Accounts as authorized by Section 7.2.6 hereof
a credit balance exists in the Loan Account, such credit balance
shall not accrue interest in favor of Borrower, but shall be
available to Borrower at any time or times for so long as no
Default or Event of Default exists.
4.5. All Loans to Constitute One Obligation. The Loans
shall constitute one general Obligation of Borrower and (unless
and to the extent otherwise expressly provided in any of the
Security Documents) shall be secured by Lender's Lien upon all of
the Collateral.
4.6. Loan Account. Lender shall establish an account on its
books (the "Loan Account") and shall enter all Loans as debits to
the Loan Account and shall also record in the Loan Account all
payments made by Borrower on any Obligations and all proceeds of
Collateral which are finally paid to Lender, and may record
therein, in accordance with customary accounting practice, other
debits and credits, including interest and all charges and
expenses properly chargeable to Borrower.
4.7. Statements of Account. Lender will account to Borrower
monthly with a statement of Loans, charges and payments made
pursuant to this Agreement, and, in the absence of manifest
error, such accounting rendered by Lender shall be deemed
rebuttably conclusive upon Borrower unless Lender is notified by
Borrower in writing to the contrary within 30 days after the date
each accounting is deemed to have been sent pursuant to
Section 12.8. Such notice shall only be deemed an objection to
those items specifically objected to therein.
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4.8. Marshalling; Payments Set Aside. Lender shall be
under no obligation to marshal any assets in favor of Borrower or
any other Obligor or against or in payment of any or all of the
Obligations. To the extent that Borrower makes a payment to
Lender or Lender receives payment from the proceeds of any
Collateral or exercises its right of setoff, and such payment or
the proceeds of such enforcement or setoff (or any part thereof)
are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee,
receiver or any other Person, then to the extent of any such
recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor, shall
be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not
occurred. The provisions of the immediately preceding sentence
of this Section 4.9 shall survive any termination of this
Agreement and payment in full of the Obligations.
SECTION 5.TERM AND TERMINATION
5.1. Term of Agreement. Subject to Lender's right to cease
making Loans to Borrower upon or after the occurrence of any
Default or Event of Default or upon termination of this Agreement
as provided in Section 5.2 hereof, this Agreement shall be in
effect for a period of three (3) years from the date hereof,
through January 5, 2006 (the "Original Term").
5.2. Termination.
5.2.1. Termination by Lender. Lender may
terminate this Agreement without notice upon or after the
occurrence of an Event of Default; provided, however, that this
Agreement shall automatically terminate as provided in Section
11.2 hereof.
5.2.2. Termination by Borrower. Upon at least
60 days prior written notice to Lender, Borrower may, at its
option, terminate this Agreement. Any notice of termination
given by Borrower shall be irrevocable unless Lender otherwise
agrees in writing. Borrower may elect to terminate this
Agreement in its entirety only. For purposes hereof, the
Obligations shall not be deemed to have been satisfied until all
Obligations for the payment of money have been paid to Lender in
same day funds and all Obligations that are at the time in
question contingent have been fully cash collateralized in favor
and to the satisfaction of Lender or Lender has received as
beneficiary a direct pay letter of credit in form and from an
issuing bank acceptable to Lender and providing for direct
payment to Lender of all such contingent Obligations at the time
they become fixed.
5.2.3. Termination Charges. On the effective
date of termination of this Agreement for any reason, Borrower
shall pay to Lender (in addition to the then outstanding
principal, accrued interest, fees and other charges owing under
the terms of this Agreement and any of the other Loan Documents),
as liquidated damages for the loss of the bargain and not as a
penalty, an amount equal to 1% of the Revolver Facility Amount if
termination occurs during the first or the second Loan Year.
5.2.4. Effect of Termination. All of the
Obligations shall be immediately due and payable upon the
effective date of termination by Lender or, in the case of a
termination by Borrower, upon the date specified in Borrower's
notice of termination of this Agreement as the effective date of
such termination. All undertakings, agreements, covenants,
warranties and representations of Borrower contained in the Loan
Documents shall survive any such termination, and Lender shall
retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents notwithstanding such
termination, until Borrower has satisfied all of the Obligations
in the manner described in Section 5.2.2. Notwithstanding the
payment in full of the Obligations, Lender shall not be required
to terminate its security interests in the Collateral unless,
with respect to any loss or damage Lender may incur as a result
of dishonored Payment Items received by Lender from Borrower or
any Account Debtor and applied to the Obligations, Lender has
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either (at its option) (i) received a written agreement, executed
by Borrower and by any Person whose loans or other advances to
Borrower are used in whole or in part to satisfy the Obligations,
indemnifying Lender from any such loss or damage; or
(ii) retained such monetary reserves and Liens on the Collateral
for such period of time as Lender, in its reasonable discretion,
may deem necessary to protect Lender from any such loss or
damage. The provisions of Section 4.8 hereof and all obligations
of Borrower pursuant to this Agreement to indemnify Lender shall
in all events survive any termination of this Agreement.
SECTION 6.COLLATERAL SECURITY
6.1. Grant of Security Interest in Collateral. To secure
the prompt payment and performance to Lender of all of the
Obligations, Borrower hereby grants to Lender a continuing
security interest in and Lien upon all of the following Property
and interests in Property of Borrower, whether now owned or
existing or hereafter created, acquired or arising and
wheresoever located:
(i) All Accounts;
(ii) All Inventory;
(iii) All Instruments;
(iv) All Chattel Paper;
(v) All Documents;
(vi) All General Intangibles;
(vii) All Equipment;
(viii) All Investment Property, including
Securities, whether certificated or uncertificated (but
excluding any portion thereof that constitutes Margin
Stock), and all securities entitlements;
(ixx) All Deposit Accounts;
(x) All Supporting Obligations;
(xi) All Letter of Credit Rights;
(xii) All Commercial Tort Claims;
(xiii) All monies now or at any time or times
hereafter in the possession or under the control of Lender
or a bailee or Affiliate of Lender;
(xiv) All accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of any
of the foregoing, including proceeds of and unearned
premiums with respect to insurance policies insuring any of
the Collateral and claims against any Person for loss of,
damage to, or destruction of any of the Collateral; and
(xv) All books and records (including customer lists,
files, correspondence, tapes, computer programs, print-outs,
and other computer materials and records) of Borrower
pertaining to any of the foregoing.
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6.2. Lien Perfection; Further Assurances. Promptly after
Lender's request therefor, Borrower shall execute and deliver to
Lender such instruments, assignments or documents as are
necessary under the UCC or other Applicable Law to perfect (or
continue the perfection of) Lender's Lien upon the Collateral and
shall take such other action as may be requested by Lender to
give effect to or carry out the intent and purposes of this
Agreement. Unless prohibited by Applicable Law, Borrower hereby
authorizes Lender to execute and file any such financing
statement on Borrower's behalf. The parties agree that a carbon,
photographic or other reproduction of this Agreement shall be
sufficient as a financing statement and may be filed in any
appropriate office in lieu thereof.
6.3. Lien on Deposit Accounts. As additional security for
the payment and performance of the Obligations, Borrower grants
to Lender a security interest in and assigns to Lender all of
Borrower's right, title and interest in and to each Deposit
Account of Borrower and in and to any deposits or other sums at
any time credited to each such Deposit Account, including any
sums in any blocked account or any special lockbox account. In
connection with the foregoing, Borrower hereby authorizes and
directs each bank or other depository at which a Deposit Account
is maintained to pay or deliver to Lender upon its written demand
therefor made at any time that an Event of Default exists and
without further notice to Borrower (such notice being hereby
expressly waived), all balances in each Deposit Account
maintained by Borrower with such depository for application to
the Obligations then outstanding. The rights given Lender in
this Section shall be cumulative with and in addition to Lender's
other rights and remedies in regard to the foregoing Property as
proceeds of Collateral. Borrower hereby irrevocably appoints
Lender as its attorney to collect any and all such balances to
the extent any such payment is not made to Lender by such bank or
other depository after demand thereon is made by Lender pursuant
hereto.
6.4 Lien on Real Estate. The due and punctual payment and
performance of the Obligations shall also be secured by the Lien
created by the Mortgages upon the Real Estate of Borrower
described therein. The Mortgages shall be executed by Borrower
in favor of Lender on or about the Closing Date and shall be duly
recorded, at Borrower's expense, in each office where such
recording is required to constitute a fully perfected Lien upon
the Real Estate covered thereby.
SECTION 7.COLLATERAL ADMINISTRATION
7.1. General.
7.1.1. Location of Collateral. All tangible
items of Collateral, other than Inventory in transit and motor
vehicles, shall at all times be kept by Borrower and its
Subsidiaries at one or more of the business locations set forth
in Schedule 7.1.1 hereto and shall not be moved therefrom,
without the prior written approval of Lender, except that prior
to an Event of Default and Lender's acceleration of the maturity
of the Obligations in consequence thereof, Borrower may (i) make
sales or other dispositions of any Collateral to the extent
authorized by Section 9.2.9 hereof and (ii) may move Inventory or
any record relating to any Collateral to a location in the
United States other than those shown on Schedule 7.1.1 hereto so
long as Borrower has given Lender at least 30 Business Days'
prior written notice of such new location and prior to moving any
Inventory to such location Borrower has executed and delivered to
Lender UCC-1 financing statements and any other appropriate
documentation to perfect or continue the perfection of Lender's
Liens with respect to such Inventory and all proceeds thereof.
7.1.2. Insurance of Collateral; Insurance and
Condemnation Proceeds.
(i) Borrower shall maintain and pay for insurance
upon all Collateral, wherever located, covering casualty, hazard,
public liability, theft, malicious mischief, and such other risks
in such amounts and with such insurance companies as are
reasonably satisfactory to Lender. All proceeds payable under
each such policy shall be payable to Lender for application to
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the Obligations. Borrower shall deliver the originals or
certified copies of such policies to Lender with satisfactory
lender's loss payable endorsements reasonably satisfactory to
Lender, naming Lender as sole loss payee, assignee or additional
insured, as appropriate. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less
than 30 days prior written notice to Lender in the event of
cancellation of the policy for any reason whatsoever and a clause
specifying that the interest of Lender shall not be impaired or
invalidated by any act or neglect of Borrower or the owner of the
Property or by the occupation of the premises for purposes more
hazardous than are permitted by said policy. If Borrower fails
to provide and pay for such insurance, Lender may, at its option,
but shall not be required to, procure the same and charge
Borrower therefor. Borrower agrees to deliver to Lender,
promptly as rendered, true copies of all reports made in any
reporting forms to insurance companies. For so long as no Event
of Default exists, Borrower shall have the right to settle,
adjust and compromise any claim with respect to any insurance
maintained by Borrower provided that all proceeds thereof are
applied in the manner specified in this Agreement, and Lender
agrees promptly to provide any necessary endorsement to any
checks or drafts issued in payment of any such claim. At any
time that an Event of Default exists, only Lender shall be
authorized to settle, adjust and compromise such claims. Lender
shall have all rights and remedies with respect to such policies
of insurance as are provided for in this Agreement and the other
Loan Documents.
7.1.3. Protection of Collateral. All expenses
of protecting, storing, warehousing, insuring, handling,
maintaining and shipping the Collateral, all Taxes imposed by any
Applicable Law on any of the Collateral or in respect of the sale
thereof, and all other payments required to be made by Lender to
any Person to realize upon any Collateral shall be borne and paid
by Borrower. If Borrower fails to promptly pay any portion
thereof when due, Lender may, at its option and after notice to
Borrower, but shall not be required to, pay the same and charge
Borrower therefor. Lender shall not be liable or responsible in
any way for the safekeeping of any of the Collateral or for any
loss or damage thereto (except for reasonable care in the custody
thereof while any Collateral is in Lender's actual possession) or
for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other
Person whomsoever, but the same shall be at Borrower's sole risk.
7.1.4. Defense of Title to Collateral. Borrower
shall at all times defend Borrower's title to the Collateral and
Lender's Liens therein against all Persons and all claims and
demands whatsoever.
7.2. Administration of Accounts.
7.2.1. Records, Schedules and Assignments of
Accounts. Borrower shall keep accurate and complete records of
its Accounts and all payments and collections thereon and shall
submit to Lender on such periodic basis as Lender shall request a
sales and collections report for the preceding period, in form
satisfactory to Lender. Borrower shall also provide to Lender on
or before the 20th day of each month, (i) a detailed aged trial
balance of all Accounts existing as of the last day of the
preceding month, specifying the names, addresses, face value,
dates of invoices and due dates for each Account Debtor obligated
on an Account so listed ("Schedule of Accounts") and the basis on
which such Schedules of Accounts are prepared and, upon Lender's
request therefor, copies of proof of delivery and the original
copy of all documents, including repayment histories and present
status reports relating to the Accounts so scheduled and such
other matters and information relating to the status of then
existing Accounts as Lender shall reasonably request and (ii) a
detailed aged payables balance of all trade payables existing as
of the last day of the preceding month. In addition, if Accounts
in an aggregate face amount in excess of $50,000 cease to be
Eligible Accounts in whole or in part, Borrower shall notify
Lender of such occurrence promptly (and in any event within
2 Business Days) after Borrower's having obtained knowledge of
such occurrence and the Borrowing Base shall thereupon be
adjusted to reflect such occurrence. Upon Lender=s written
request, Borrower shall promptly deliver to Lender copies of
invoices or invoice registers related to all of its Accounts.
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7.2.2. Discounts, Allowances, Disputes. If
Borrower grants any discounts, allowances or credits that are not
shown on the face of the invoice for the Account involved,
Borrower shall report such discounts, allowances or credits, as
the case may be, to Lender as part of the next required Schedule
of Accounts. If any amounts due and owing in excess of $50,000
are in dispute between Borrower and any Account Debtor, Borrower
shall provide Lender with written notice thereof at the time of
submission of the next Schedule of Accounts, explaining in detail
the reason for the dispute, all claims related thereto and the
amount in controversy. Upon and after the occurrence of an Event
of Default, Lender shall have the right to settle or adjust all
disputes and claims directly with the Account Debtor and to
compromise the amount or extend the time for payment of the
Accounts upon such terms and conditions as Lender may reasonably
deem advisable, and to charge the deficiencies, costs and
expenses thereof, including attorneys' fees, to Borrower.
7.2.3. Taxes. If an Account includes a charge
for any Taxes payable to any governmental taxing authority,
Lender is authorized, in its sole discretion, to pay the amount
thereof to the proper taxing authority for the account of
Borrower and to charge Borrower therefor if Borrower shall fail
to pay such amounts within three (3) Business Days after Lender's
request to do so ; provided, however, that Lender shall not be
liable for any Taxes that may be due by Borrower.
7.2.4. Account Verification. Whether or not a
Default or an Event of Default exists, any of Lender's officers,
employees or agents shall have the right, at any time or times
hereafter, in the name of Lender, any designee of Lender or
Borrower, to verify the validity, amount or any other matter
relating to any Accounts by mail, telephone, telegraph or
otherwise. Borrower shall cooperate fully with Lender in an
effort to facilitate and promptly conclude any such verification
process.
7.2.5. Maintenance of Lockbox and Dominion
Account. Borrower shall maintain a lockbox arrangement
("Lockbox") with Bank ("Collecting Bank"). Promptly after the
Closing Date, Borrower shall notify all Account Debtors to remit
all payments due Borrower to the Lockbox. Borrower shall issue
to Collecting Bank an irrevocable letter of instruction directing
Collecting Bank to deposit all payments or other remittances
received in the Lockbox to the Dominion Account. All funds
deposited in the Dominion Account shall immediately become the
property of Lender and Borrower shall obtain the agreement by
such banks in favor of Lender to waive any offset rights against
the funds so deposited. Lender assumes no responsibility for
lockbox arrangements, including any claim of accord and
satisfaction or release with respect to deposits accepted by any
bank thereunder.
7.2.6. Collection of Accounts; Proceeds of
Collateral. All Payment Items received by Borrower in respect
of Accounts, together with the proceeds of any other Collateral,
shall be held as Lender's property by Borrower as trustee of an
express trust for Lender's benefit and Borrower shall immediately
deposit same in kind in the Dominion Account. Lender retains the
right at all times after the occurrence of a Default or an Event
of Default to notify Account Debtors that Accounts have been
assigned to Lender and to collect Accounts directly in its own
name and to charge to Borrower the collection costs and expenses,
including attorneys' fees.
7.3. Administration of Inventory.
7.3.1. Records and Reports of Inventory.
Borrower shall keep accurate and complete records of its
Inventory consistent with past practices and without change in
format or assumptions on which such Inventory reports are based.
Borrower shall furnish Lender Inventory reports in form and
detail satisfactory to Lender at such times as Lender may
request, but at least once each month, not later than the 20th
day of such month. Borrower shall conduct a physical inventory
no less frequently than annually and shall provide to Lender a
report based on each such physical inventory promptly thereafter,
together with such supporting information as Lender shall
request.
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7.3.2. Returns of Inventory. Borrower shall
not return any of its Inventory to a supplier or vendor thereof,
or any other Person, whether for cash, credit against future
purchases or then existing payables, or otherwise, unless such
return is in the ordinary course of business of Borrower and such
Person and any payments received by Borrower in connection with
any such return is promptly turned over to Lender for application
to the Obligations.
7.4. Administration of Equipment.
7.4.1. Records and Schedules of Equipment.
Borrower shall keep accurate records itemizing and describing the
kind, type, quality, quantity and cost of its Equipment and all
dispositions made in accordance with Section 7.4.2 hereof, and
shall furnish Lender with a current schedule containing the
foregoing information on at least an annual basis and more often
if requested by Lender. Promptly after request therefor by
Lender, Borrower shall deliver to Lender any and all evidence of
ownership, if any, of any of the Equipment.
7.4.2. Dispositions of Equipment. Borrower
will not sell, lease or otherwise dispose of or transfer any of
the Equipment or any part thereof without the prior written
consent of Lender; provided, however, that the foregoing
restriction shall not apply, for so long as no Default or Event
of Default exists, to (i) dispositions of Equipment which, in the
aggregate during any consecutive 12-month period, has a fair
market value or book value, whichever is more, of $10,000 or
less, provided that all Net Proceeds thereof are remitted to
Lender for application to the Obligations, or (ii) replacements
of Equipment that is substantially worn, damaged or obsolete with
Equipment of like kind, function and value, provided that the
replacement Equipment shall be acquired prior to or concurrently
with any disposition of the Equipment that is to be replaced, the
replacement Equipment shall be free and clear of Liens other than
Permitted Liens that are not Purchase Money Liens, and Borrower
shall have given Lender at least 10 days prior written notice of
such disposition.
7.4.3. Condition of Equipment. The Equipment
is in good operating condition and repair, and all necessary
replacements of and repairs thereto shall be made so that the
value and operating efficiency of the Equipment shall be
maintained and preserved, reasonable wear and tear excepted.
Borrower will not permit any of the Equipment to become affixed
to any real Property leased to Borrower so that an interest
arises therein under the real estate laws of the applicable
jurisdiction unless the landlord of such real Property has
executed a landlord waiver or leasehold mortgage in favor of and
in form acceptable to Lender, and Borrower will not permit any of
the Equipment to become an accession to any personal Property
that is subject to a Lien unless the Lien is a Permitted Lien.
7.5. Borrowing Base Certificates. On the Closing Date and
on or before the third Business Day of each week after the
Closing Date or at more frequent intervals as Lender may request,
Borrower shall deliver to Lender a Borrowing Base Certificate
prepared as of the close of business of the previous week, and at
such other times as Lender may request. All calculations of
Availability in connection with any Borrowing Base Certificate
shall originally be made by Borrower and certified by a Senior
Officer to Lender, provided that Lender shall have the right to
review and adjust, in the exercise of its reasonable credit
judgment, any such calculation (i) to reflect its reasonable
estimate of declines in value of any of the Collateral described
therein and (ii) to the extent that such calculation is not
in accordance with this Agreement or does not accurately reflect
the amount of the Availability Reserve.
7.6. Payment of Charges. All amounts chargeable to Borrower
under this Section 7 shall be Obligations secured by all of the
Collateral and shall be payable on demand.
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SECTION 8.REPRESENTATIONS AND WARRANTIES
8.1. General Representations and Warranties. To induce
Lender to enter into this Agreement and to make advances
hereunder, Borrower warrants and represents to Lender and
covenants with Lender that:
8.1.1. Organization and Qualification. Each of
Borrower and its Subsidiaries is an entity duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization. Each of Borrower and its
Subsidiaries is duly qualified and is authorized to do business
and is in good standing as a foreign limited liability company or
corporation in each state or jurisdiction listed on
Schedule 8.1.1 hereto.
8.1.2. Corporate Power and Authority. Each of
Borrower and its Subsidiaries is duly authorized and empowered to
enter into, execute, deliver and perform this Agreement and each
of the other Loan Documents to which it is a party. The
execution, delivery and performance of this Agreement and each of
the other Loan Documents have been duly authorized by all
necessary action and do not and will not (i) require any consent
or approval of any of the holders of the Equity Interests of
Borrower or any of its Subsidiaries; (ii) contravene Borrower's
or any of its Subsidiaries' Organization Documents;
(iii) violate, or cause Borrower or any of its Subsidiaries to be
in default under, any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award
in effect having applicability to Borrower or any of its
Subsidiaries; (iv) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which Borrower or any of its
Subsidiaries is a party or by which it or its Properties may be
bound or affected; or (v) result in, or require, the creation or
imposition of any Lien (other than Permitted Liens) upon or with
respect to any of the Properties now owned or hereafter acquired
by Borrower or any of its Subsidiaries.
8.1.3. Legally Enforceable Agreement. This
Agreement is, and each of the other Loan Documents when delivered
under this Agreement will be, a legal, valid and binding
obligation of each of Borrower and its Subsidiaries enforceable
against it in accordance with its respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally, or by principles of equity pertaining to the
availability of equitable remedies.
8.1.4. Capital Structure. As of the date
hereof, Schedule 8.1.4 hereto states (i) the correct name of each
of the Subsidiaries of Borrower, its jurisdiction of organization
and the percentage of its Equity Interests having voting powers
owned by Borrower, and (ii) the name of each of Borrower's
corporate or joint venture Affiliates and the nature of the
affiliation. Borrower has good title to all of the shares it
purports to own of the Equity Interests of each of its
Subsidiaries, free and clear in each case of any Lien other than
Permitted Liens. All such Equity Interests have been duly issued
and are fully paid and non-assessable.
8.1.5. Corporate Names. During the preceding
7 years, neither Borrower nor any of its Subsidiaries has been
known as or used any corporate, fictitious or trade names except
those listed on Schedule 8.1.5 hereto. Except as set forth on
Schedule 8.1.5, during the preceding 7 years neither Borrower nor
any of its Subsidiaries has been the surviving corporation of a
merger or consolidation or acquired all or substantially all of
the assets of any Person.
8.1.6. Business Locations; Agent for Process.
Each of Borrower's and its Subsidiaries' chief executive office
and other places of business are as listed on Schedule 7.1.1
hereto. During the preceding five-year period, neither Borrower
nor any of its Subsidiaries has had an office, place of business
or agent for service of process other than as listed on
Schedule 7.1.1. Except as shown on Schedule 7.1.1, no Inventory
is stored with a bailee, warehouseman or similar Person, nor is
any Inventory consigned to any Person.
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8.1.7. Title to Properties; Priority of Liens.
Each of Borrower and its Subsidiaries has good, indefeasible and
marketable title to and fee simple ownership of, or valid and
subsisting leasehold interests in, all of its real Property, and
good title to all of the Collateral and all of its other
Property, in each case free and clear of all Liens except
Permitted Liens. Borrower has paid or discharged all lawful
claims which, if unpaid, might become a Lien against any of
Borrower's Properties that is not a Permitted Lien. The Liens
granted to Lender under Section 6 hereof are first priority
Liens, subject only to those Permitted Liens which are expressly
stated to have priority over the Liens of Lender.
8.1.8. Accounts. Lender may rely, in
determining which Accounts are Eligible Accounts, on all
statements and representations made by Borrower with respect to
any Account. Unless otherwise indicated in writing to Lender,
with respect to each Account:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale
and delivery of goods or rendition of services by Borrower
in the ordinary course of its business and in accordance
with the terms and conditions of all purchase orders,
contracts or other documents relating thereto and forming a
part of the contract between Borrower and the Account
Debtor;
(iii) It is for a liquidated amount maturing
as stated in the duplicate invoice covering such sale or
rendition of services, a copy of which has been furnished or
is available to Lender; and
(iv) Borrower has made no agreement with any
Account Debtor for any extension, compromise, settlement or
modification of any such Account or any deduction therefrom,
except for down payments received by Borrower or discounts
or allowances which are granted by Borrower in the ordinary
course of its business for prompt payment and all of which
are reflected in the calculation of the net amount of each
respective invoice related thereto and are reflected in the
Schedules of Accounts submitted to Lender pursuant to
Section 7.2.1 hereof.
8.1.9. Financial Statements; Fiscal Year. The
Consolidated and consolidating balance sheets of Borrower and
such other Persons described therein (including the accounts of
all Subsidiaries of Borrower for the respective periods during
which a Subsidiary relationship existed) as of December 31,
2001, and the related statements of income, changes in
stockholder's equity, and changes in financial position for the
periods ended on such dates, have been prepared in accordance
with GAAP, and present fairly, in all material respects, the
financial positions of Borrower and such Persons at such dates
and the results of Borrower's operations for such periods. Since
December 31, 2001, there has been no material change in the
condition, financial or otherwise, of Borrower and such other
Persons as shown on the Consolidated balance sheet as of such
date, except changes in the ordinary course of business, none of
which individually or in the aggregate has been materially
adverse.
8.1.10. Full Disclosure. The financial
statements referred to in Section 8.1.9 hereof do not, nor does
this Agreement or any other written statement of Borrower to
Lender, contain any untrue statement of a fact or omit a fact
necessary to make the statements contained therein or herein not
misleading in any material respect. There is no fact or
circumstances which Borrower has failed to disclose to Lender in
writing and which may reasonably be expected to have a Material
Adverse Effect.
8.1.11. Solvent Financial Condition. Each of
Borrower and its Subsidiaries is now and, after giving effect to
the Loans to be made hereunder, at all times will be, Solvent.
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8.1.12. Surety Obligations. Neither Borrower nor
any of its Subsidiaries is obligated as surety or indemnitor
under any surety or similar bond or other contract issued or
entered into any agreement to assure payment, performance or
completion of performance of any undertaking or obligation of any
Person.
8.1.13. Taxes. Borrower's federal tax
identification number is 00-0000000. Borrower and each of its
Subsidiaries has filed all federal, state and local tax returns
and other reports it is required by law to file and has paid, or
made provision for the payment of, all Taxes upon it, its income
and Properties as and when such Taxes are due and payable, except
to the extent being Properly Contested. The provision for Taxes
on the books of Borrower and its Subsidiaries are adequate for
all years not closed by applicable statutes, and for its current
fiscal year.
8.1.14. Brokers. There are no claims for
brokerage commissions, finder's fees or investment banking fees
in connection with the transactions contemplated by this
Agreement.
8.1.15. Patents, Trademarks, Copyrights and
Licenses. Borrower and its Subsidiaries each owns or possesses
all Intellectual Property necessary for the present and planned
future conduct of its business without any conflict with the
rights of others; there is no objection to or pending
Intellectual Property Claim with respect to any Borrower's right
to use any such Intellectual Property and Borrower is not aware
of any grounds for challenge or objection thereto; and, except as
may be disclosed on Schedule 8.1.15, Borrower pays no royalty or
other compensation to any Person for the right to use any
Intellectual Property. All such patents, trademarks, service
marks, tradenames, copyrights, licenses and other similar rights
are listed on Schedule 8.1.15 hereto.
8.1.16. Governmental Approvals. Each of Borrower
and its Subsidiaries has, and is in good standing with respect
to, all Governmental Approvals necessary to continue to conduct
its business as heretofore or proposed to be conducted by it and
to own or lease and operate its Properties as now owned or leased
by it.
8.1.17. Compliance with Laws. Each of Borrower
and its Subsidiaries has duly complied with, and its Properties,
business operations and leaseholds are in compliance in all
material respects with, the provisions of all Applicable Law
(except to the extent that any such noncompliance with Applicable
Law would not reasonably be expected to have a Material Adverse
Effect) and there have been no citations, notices or orders of
noncompliance issued to Borrower or any of the Subsidiaries under
any such law, rule or regulation. No Inventory has been produced
in violation of the Fair Labor Standards Act (29 U.S.C. ' 201 et
seq.).
8.1.18. Restrictions. Neither Borrower nor any
of its Subsidiaries is a party or subject to any contract,
agreement, or charter or other corporate restriction, which has
or could be reasonably expected to have a Material Adverse
Effect. Neither Borrower nor any of its Subsidiaries is a party
or subject to any contract or agreement which restricts its right
or ability to incur Debt, other than as set forth on
Schedule 8.1.18 hereto, none of which prohibit the execution of
or compliance with this Agreement or the other Loan Documents by
Borrower or any of its Subsidiaries, as applicable.
8.1.19. Litigation. Except as set forth on
Schedule 8.1.19 hereto, there are no actions, suits, proceedings
or investigations pending, or to the knowledge of Borrower,
threatened, against or affecting Borrower or any of its
Subsidiaries, or the business, operations, Properties, prospects,
profits or condition of Borrower or any of its Subsidiaries, none
of which if resolved adversely to Borrower or its Subsidiaries
would have Material Adverse Effect. Neither Borrower nor any of
its Subsidiaries is in default with respect to any order, writ,
injunction, judgment, decree or rule of any court, governmental
authority or arbitration board or tribunal.
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8.1.20. No Defaults. No event has occurred and
no condition exists which would, upon or after the execution and
delivery of this Agreement or Borrower's performance hereunder,
constitute a Default or an Event of Default. Neither Borrower
nor any of its Subsidiaries is in default, and no event has
occurred and no condition exists which constitutes or which with
the passage of time or the giving of notice or both would
constitute a default, under any Material Contract or in the
payment of any Debt to any Person for Money Borrowed.
8.1.21. Leases. Schedule 8.1.21 hereto is a
complete listing of all capitalized and operating leases of
Borrower and its Subsidiaries on the date hereof. Each of
Borrower and its Subsidiaries is in full compliance with all of
the terms of each of its respective capitalized and operating
leases.
8.1.22. Pension Plans. Except as disclosed on
Schedule 8.1.22 hereto, neither Borrower nor any of its
Subsidiaries has any Plan on the date hereof. Borrower and each
of its Subsidiaries is in full compliance with the requirements
of ERISA and the regulations promulgated thereunder with respect
to each Plan. No fact or situation that could result in a
material adverse change in the financial condition of Borrower or
any of its Subsidiaries exists in connection with any Plan.
Neither Borrower nor any of its Subsidiaries has any withdrawal
liability in connection with a Multiemployer Plan.
8.1.23. Trade Relations. There exists no actual
or threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship between
Borrower or any of its Subsidiaries and any customer or any group
of customers whose purchases individually or in the aggregate are
material to the business of Borrower or any of its Subsidiaries,
or with any material supplier, and there exists no condition or
state of facts or circumstances which would materially affect
adversely Borrower or any of its Subsidiaries or prevent Borrower
or any of its Subsidiaries from conducting such business after
the consummation of the transactions contemplated by this
Agreement in substantially the same manner in which it has
heretofore been conducted.
8.1.24. Labor Relations. On the date hereof,
there are no material grievances, disputes or controversies with
any union or any other organization of Borrower's or any of its
Subsidiaries' employees, or threats of strikes, work stoppages or
any asserted pending demands for collective bargaining by any
union or organization.
8.1.25. Investment Company Act; Public Utility
Holding Company Act. No Obligor is an "investment company" or a
"person directly or indirectly controlled by or acting on behalf
of an investment company" within the meaning of the Investment
Company Act of 1940, or a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act
of 1935.
8.1.26. Margin Stock. Neither Borrower nor any
of the Subsidiaries is engaged, principally or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
8.1.27. No Subsidiaries. Borrower has no
Subsidiaries as of the date hereof.
8.2. Reaffirmation of Representations and Warranties. Each
representation and warranty contained in this Agreement and the
other Loan Documents shall be deemed to be reaffirmed by Borrower
on each date that Borrower requests an extension of credit under
this Agreement, except for changes as to which Lender has
consented or which are not violative of any provision of this
Agreement. Notwithstanding the foregoing, representations and
warranties which by their terms are applicable only to a specific
date shall be deemed made only at and as of such date.
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8.3. Survival of Representations and Warranties. All
representations and warranties of Borrower contained in this
Agreement or any of the other Loan Documents shall survive the
execution, delivery and acceptance thereof by Lender and the
parties thereto and the closing of the transactions described
therein or related thereto.
SECTION 9.COVENANTS AND CONTINUING AGREEMENTS
9.1. Affirmative Covenants. During the term of this
Agreement, and thereafter for so long as there are any
Obligations to Lender, Borrower covenants that, unless otherwise
consented to by Lender in writing, it shall and shall cause each
Subsidiary to:
9.1.1. Visits and Inspections. Permit
representatives of Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours, to
visit and inspect the Properties of Borrower and each of its
Subsidiaries, inspect, audit and make extracts from Borrower's
and each Subsidiary's books and records, and discuss with
Borrower's officers, employees and independent accountant,
Borrower's and each Subsidiary's business, assets, liabilities,
financial condition, business prospects and results of
operations.
9.1.2. Notices. Notify Lender in writing
promptly after Borrower's obtaining knowledge thereof (i) of the
occurrence of any event or the existence of any fact which
renders any representation or warranty in this Agreement or any
of the other Loan Documents inaccurate, incomplete or misleading
in any material respect; (ii) of the commencement of any
litigation affecting Borrower or any of its Properties or the
institution of any administrative proceeding which, if determined
adversely to Borrower, would have a Material Adverse Effect;
(iii) at least 60 days prior thereto, of Borrower's opening of
any new office or place of business or Borrower's closing of any
existing office or place of business; (iv) of any labor dispute
to which Borrower may become a party, any strikes or walkouts
relating to any of its plants or other facilities, and the
expiration of any labor contract to which it is a party or by
which it is bound; (v) of the existence of any Default or Event
of Default; or (vi) of any judgment rendered against Borrower in
an amount exceeding $25,000.
9.1.3. Financial Statements. Keep adequate
records and books of account with respect to its business
activities in which proper entries are made in accordance with
GAAP reflecting all its financial transactions; and cause to be
prepared and furnished to Lender the following (all to be
prepared in accordance with GAAP applied on a consistent basis,
unless Borrower's certified public accountants concur in any
change therein and such change is disclosed to Lender and is
consistent with GAAP):
(i) not later than 120 days after the close of
each Fiscal Year of Borrower, unqualified audited financial
statements of Borrower and its Subsidiaries as of the end of
such year, on a Consolidated and consolidating basis,
certified by a firm of independent certified public
accountants of recognized standing selected by Borrower but
acceptable to Lender (except for a qualification for a
change in accounting principles with which the accountant
concurs);
(ii) not later than 30 days after the end of each
month hereafter, including the last month of Borrower's
Fiscal Year, unaudited interim financial statements of
Borrower and its Subsidiaries as of the end of such month
and of the portion of Borrower's Fiscal Year then elapsed,
on a Consolidated and consolidating basis, certified by the
controller of Borrower as prepared in accordance with GAAP
and fairly presenting the Consolidated financial position
and results of operations of Borrower and its Subsidiaries
for such month and period subject only to changes from audit
and year-end adjustments and except that such statements
need not contain notes;
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(iii) promptly after the sending or filing
thereof, as the case may be, copies of any proxy statements,
financial statements or reports which Borrower has made
available to its shareholders and copies of any regular,
periodic and special reports or registration statements
which Borrower files with the Securities and Exchange
Commission or any governmental authority which may be
substituted therefor, or any national securities exchange;
(iv) promptly after the filing thereof, copies of
any annual report to be filed in accordance with ERISA in
connection with each Plan; and
(v) such other data and information (financial
and otherwise) as Lender, from time to time, may reasonably
request, bearing upon or related to the Collateral or
Borrower's and each of its Subsidiaries' financial condition
or results of operations.
Concurrently with the delivery of the financial
statements described in clause (i) of this Section 9.1.3,
Borrower shall forward to Lender a copy of the accountants'
letter to Borrower's management that is prepared in connection
with such financial statements and also shall cause to be
prepared and shall furnish to Lender a certificate of the
aforesaid certified public accountants certifying to Lender that,
based upon their examination of the financial statements of
Borrower and its Subsidiaries performed in connection with their
examination of said financial statements, they are not aware of
any Default or Event of Default, or, if they are aware of such
Default or Event of Default, specifying the nature thereof, and
acknowledging, in a manner satisfactory to Lender, that they are
aware that Lender is relying on such financial statements in
making its decisions with respect to the Loans.
9.1.4. Compliance Certificates. Concurrently
with the delivery of the financial statements described in
clause (i) of Section 9.1.3 and concurrently with the delivery
of the monthly financial statement described in clause (ii) of
Section 9.1.3 ending a Fiscal Quarter, or more frequently if
requested by Lender, Borrower shall cause to be prepared and
furnished to Lender a Compliance Certificate executed by the
controller of Borrower.
9.1.5. Landlord and Storage Agreements. Upon
Lender's written request, provide Lender with copies of all
agreements between Borrower or any of its Subsidiaries and any
landlord or warehouseman which owns any premises at which any
Inventory may, from time to time, be kept.
9.1.6. Projections. No later than 30 days
prior to the end of each Fiscal Year of Borrower, deliver to
Lender Projections of Borrower for the forthcoming Fiscal Year,
quarter by quarter.
9.1.7. Taxes. Pay and discharge all Taxes
prior to the date on which such Taxes become delinquent or
penalties attach thereto, except and to the extent only that such
Taxes are being Properly Contested.
9.1.8. Compliance with Laws. Comply with all
Applicable Law, including all laws, statutes, regulations and
ordinances regarding the collection, payment and deposit of
Taxes, and all ERISA and Environmental Laws, and obtain and keep
in force any and all Governmental Approvals necessary to the
ownership of its Properties or to the conduct of its business,
which violation or failure to obtain might have a Material
Adverse Effect. Without limiting the generality of the
foregoing, if any Environmental Release shall occur at or on any
of the Properties of Borrower or any Subsidiary, Borrower shall,
or shall cause the applicable Subsidiary to, act immediately to
investigate the extent of, and to make appropriate remedial
action to eliminate, such Environmental Release, whether or not
ordered or otherwise directed to do so by any governmental
authority.
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9.1.9. Insurance. In addition to the insurance
required herein with respect to the Collateral, maintain with
financially sound and reputable insurers, insurance with respect
to its Properties and business against such casualties and
contingencies of such type (including product liability, business
interruption, larceny, embezzlement, or other criminal
misappropriation insurance) and in such amounts as is customary
in the business of Borrower or as otherwise reasonably required
by Lender.
9.1.10. Authority Consent. No later than
January 20, 2003, Borrower shall have delivered to Lender a copy
of a written consent of The Xxxxxxxxxx Airport Authority to
Borrower's grant to Lender of a mortgage Lien in and the filing
of a Mortgage with respect to all of Borrower's interest in and
to the real Property leased by Borrower from such authority and a
title insurance commitment with respect thereto in form
reasonably acceptable to Lender.
9.2. Negative Covenants. During the term of this Agreement,
and thereafter for so long as there are any Obligations to
Lender, Borrower covenants that, unless Lender has first
consented thereto in writing, it shall not and shall not permit
any Subsidiary to:
9.2.1. Fundamental Changes. Enter into any
transaction to merge, reorganize, consolidate or amalgamate with
any Person, or liquidate, wind up or dissolve itself, except for
mergers or consolidations of any Subsidiary with another
Subsidiary.
9.2.2. Loans. Make any loans or other advances
of money to any Person other than to an officer or employee of
Borrower or a Subsidiary for salary, travel advances, advances
against commissions and other similar advances in the ordinary
course of business.
9.2.3. Total Debt. Create, incur, assume, or
suffer to exist any Debt, except: (i) the Obligations;
(ii) Subordinated Debt existing on the Closing Date; (iii) Debt
of any Subsidiary of Borrower to Borrower; (iv) accounts payable
to trade creditors and current operating expenses (other than for
Money Borrowed) which are not aged more than 120 days from
billing date or more than 30 days from the due date, in each case
incurred in the ordinary course of business and paid within such
time period, unless the same are being Properly Contested;
(v) obligations to pay rent in connection with Borrower's
business operations; (vi) Purchase Money Debt; (vii) contingent
liabilities arising out of endorsements of checks and other
negotiable instruments for deposit or collection in the ordinary
course of business; and (viii) Debt not included in
paragraphs (i) through (vii) above which does not exceed at any
time, in the aggregate, the sum of $25,000.
9.2.4. Affiliate Transactions. Enter into, or
be a party to any transaction with any Affiliate or stockholder,
except: (i) the transactions contemplated by the Loan Documents;
(ii) payment of customary directors' fees and indemnities;
(iii) Distributions to the extent permitted under Section 9.2.7
hereof; (iv) transactions with Affiliates that were consummated
prior to the date hereof and have been disclosed to Lender prior
to the Closing Date; and (v) in the ordinary course of and
pursuant to the reasonable requirements of Borrower's or such
Subsidiary's business and upon fair and reasonable terms which
are fully disclosed to Lender and are no less favorable to
Borrower or such Subsidiary than would obtain in a comparable
arm's length transaction with a Person not an Affiliate or
stockholder of Borrower or such Subsidiary.
9.2.5. Limitation on Liens. Create or suffer
to exist any Lien upon any of its Property, income or profits,
whether now owned or hereafter acquired, except:
(i) Liens at any time granted in favor of Lender;
(ii) Liens for Taxes (excluding any Lien imposed
pursuant to any of the provisions of ERISA) incurred in the
ordinary course of Borrower's business and not yet due or
being Properly Contested;
30
(iii) Liens arising in the ordinary course of
Borrower's business by operation of law or regulation, but
only if payment in respect of any such Lien is not at the
time required or the Debt secured by any such Lien is being
Properly Contested and such Liens do not materially detract
from the value of the Property of Borrower or materially
impair the use thereof in the operation of Borrower's
business;
(iv) Purchase Money Liens securing Purchase Money
Debt;
(v) Liens securing Debt of a Subsidiary to
Borrower or another such Subsidiary;
(vi) Liens arising by virtue of the rendition,
entry or issuance against Borrower or any Subsidiary, or any
Property of Borrower or any Subsidiary, of any judgment,
writ, order, or decree for so long as each such Lien is
(a) either in existence for less than 20 consecutive days
after it first arises or is being Properly Contested and
(b) is at all times junior in priority to the Liens in favor
of Lender;
(vii) Liens incurred or deposits made in the
ordinary course of business to secure the performance of
tenders, bids, leases, contracts (other than for the
repayment of Money Borrowed), statutory obligations and
other similar obligations or arising as a result of progress
payments under government contracts, provided that, to the
extent any such Liens attach to any of the Collateral, such
Liens are at all times subordinate and junior to the Liens
upon the Collateral in favor of Lender;
(viii) easements, rights-of-way, restrictions,
covenants or other agreements of record and other similar
charges or encumbrances on real Property of Borrower or a
Subsidiary that do not interfere with the ordinary conduct
of the business of Borrower or such Subsidiary;
(ix) Liens in existence immediately prior to the
Closing Date that are satisfied in full and released on the
Closing Date as a result of the application of Borrower's
cash on hand at the Closing Date or the proceeds of the
Loans to be made on the Closing Date;
(x) such other Liens as appear on Schedule 9.2.5
hereto; and
(xi) such other Liens as Lender may hereafter
approve in writing.
9.2.6. Subordinated Debt. Make any payment of
all or any part of any Subordinated Debt or take any other action
or omit to take any other action in respect of any Subordinated
Debt, except as otherwise permitted by the Subordination
Agreement or by Lender in writing.
9.2.7. Distributions. Declare or make any
Distributions.
9.2.8. Capital Expenditures. Make Capital
Expenditures (including expenditures by way of capitalized
leases) which, in the aggregate, as to Borrower and its
Subsidiaries, exceed $1,000,000 during the 2002 Fiscal Year and
$500,000 during any Fiscal Year thereafter, provided that
Borrower may submit to Lender its budget for Capital Expenditures
in future Fiscal Years and Lender will consider in good faith
modifications to the foregoing limitations.
9.2.9. [Reserved]
9.2.10. Disposition of Assets. Sell, lease or
otherwise dispose of any of its Properties, including any
disposition of Property as part of a sale and leaseback
transaction, to or in favor of any Person, except (i) sales of
Inventory in the ordinary course of business for so long as no
Event of Default exists hereunder, (ii) a transfer of Property to
Borrower by a Subsidiary of Borrower, and (iii) other
dispositions expressly authorized by other provisions of the Loan
Documents .
31
9.2.11. Equity Interests of Subsidiaries. Permit
any of its Subsidiaries to issue any additional Equity Interests
except director's qualifying shares.
9.2.12. Xxxx-and-Hold Sales, Etc. Make a sale to
any customer on a xxxx-and-hold, guaranteed sale, sale and
return, sale on approval or consignment basis, or any sale on a
repurchase or return basis.
9.2.13. Restricted Investment. Make or have any
Restricted Investment.
9.2.14. Tax Consolidation. File or consent to
the filing of any consolidated income tax return with any Person
other than a Subsidiary.
9.2.15. Fiscal Year. Establish a fiscal year
different from the Fiscal Year.
9.2.16. Directors= and Financing Fees. Pay
directors= fees or financing fees other than directors' fees to
outside directors at current levels.
9.2.17. Organization Documents. Amend, modify or
otherwise change any of the terms or provisions and any of its
Organization Documents as in effect on date hereof, except for
changes that do not affect in any way Borrower's or such
Subsidiary's rights and obligations to enter into and to perform
the Loan Documents to which it is a party and to pay all of the
Obligations and that do not otherwise have a Material Adverse
Effect.
9.3. Specific Financial Covenants. During the term of this
Agreement, and thereafter for so long as there are any
Obligations outstanding, Borrower covenants that, unless
otherwise consented to by Lender in writing, it shall not:
9.3.1. Fixed Charge Coverage Ratio. Permit
Borrower's Fixed Charge Coverage Ratio to be less than 1.5 to 1.0
as of the last day of each Fiscal Quarter hereafter, in each case
for the period of 4 Fiscal Quarters then ending.
9.3.2. Tangible Net Worth. Permit the Tangible
Net Worth of Borrower to be less than $9,000,000 as of the last
day of any Fiscal Quarter; provided, however, that on the 90th
day of each Fiscal Year after the Closing Date, the minimum
Tangible Net Worth required hereunder shall be thereafter
increased by an amount equal to 50% of Borrower's Net Income for
the immediately preceding Fiscal Year.
SECTION 10. CONDITIONS PRECEDENT
10.1.Conditions Precedent to Initial Loans. Notwithstanding
any other provision of this Agreement or any of the other Loan
Documents, and without affecting in any manner the rights of
Lender under the other sections of this Agreement, Lender shall
not be required to fund any Loan requested by Borrower unless, on
or before January 15, 2003, each of the following conditions has
been and continues to be satisfied:
32
10.1.1. Documentation. Lender shall have
received, in form and substance satisfactory to Lender and its
counsel, a duly executed counterpart of this Agreement and the
other Loan Documents, together with such additional documents,
instruments and certificates as Lender and its counsel shall
require in connection therewith from time to time, all in form
and substance satisfactory to Lender and its counsel.
10.1.2. Evidence of Perfection and Priority of
Liens in Collateral. Lender shall have received copies of all
filing receipts or acknowledgments issued by any governmental
authority to evidence any filing or recordation necessary to
perfect the Liens of Lender in the Collateral and evidence in
form satisfactory to Lender that such Liens constitute valid and
perfected Liens, and that there are no other Liens upon any
Collateral except for Permitted Liens.
10.1.3. Organization Documents. Lender shall
have received a copy of the Organization Documents of Borrower,
and all amendments thereto, certified by the Secretary of State
or other appropriate official of the jurisdiction of Borrower's
formation.
10.1.4. Good Standing Certificates. Lender
shall have received good standing certificates for Borrower,
issued by the Secretary of State or other appropriate official of
Borrower's jurisdiction of organization and each jurisdiction
where Borrower has qualified to do business.
10.1.5. Opinion Letters. Lender shall have
received a favorable, written opinion of Xxxxx & Xxxxxxx, LLP,
counsel to Borrower, as to the transactions contemplated by this
Agreement and the matters set forth in Exhibit D attached hereto.
10.1.6. Insurance. Lender shall have received
loss payable endorsements on Lender's standard form of loss payee
endorsement naming Lender as loss payee together with
endorsements naming Lender as a co-insured with respect to
Borrower's liability insurance coverage.
10.1.7. Disbursement Letter; Borrowing Base
Certificate. Lender shall have received written instructions
from Borrower directing application of proceeds of the initial
Loans made pursuant to this Agreement, and an initial Borrowing
Base Certificate from Borrower, in form satisfactory to Lender.
10.1.8. Dominion Account. Lender shall have
received the duly executed agreement establishing the Dominion
Account with a financial institution acceptable to Lender for the
collection or servicing of the Accounts.
10.1.9. Landlord Agreements. Lender shall have
received landlord or warehouseman agreements in substantially the
form presented to Borrower with respect to certain premises
leased by Borrower and which are disclosed on Schedule 7.1.1
hereto.
10.1.10. Title Insurance Policies. Lender shall
have received, had at least 15 days to review and found
acceptable fully paid mortgagee title insurance policies (or
binding commitments to issue title insurance policies, marked to
Lender's satisfaction to evidence the form of such policies to be
delivered after the Closing Date), in standard ALTA form, issued
by a title insurance company satisfactory to Lender, each in an
amount equal to not less than the fair market value of the real
Property or leasehold interest (other than the real Property
located in Indiana), as the case may be, subject to the
Mortgages, insuring the Mortgages to create a valid Lien on all
real Property and valid Liens on the leasehold interest described
therein with no exceptions which Lender shall not have approved
in writing and no survey exceptions.
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10.1.11.Survey. Lender shall have received and
found acceptable an as-built survey with respect to each parcel
of real Property comprising a part of the Collateral, which
survey shall indicate the following: (i) an accurate metes and
bounds or lot, block and parcel description of such Property;
(ii) the correct location of all buildings, structures and other
improvements on such Property, including all streets, easements,
rights of way and utility lines; (iii) the location of ingress
and egress from such Property, and the location of any set-back
or other building lines affecting such Property; and (iv) a
certification by a registered land surveyor in form and substance
acceptable to Lender, certifying to the accuracy and completeness
of such survey and to such other matters relating to such real
Property and survey as Lender shall require.
10.1.12. Assignment of Claims Act Compliance.
Borrower shall have entered into a appropriate written
assignments of claims as may be reasonable and necessary to
comply with the Assignment of Claims Act with respect all US
government supply agreements of Borrower currently in force.
10.1.13. Regions Documents. Borrower shall have
entered into the Regions Documents and Lender and Regions shall
have entered into the Intercreditor Agreement.
10.2.Conditions Precedent to all Credit Extensions.
Notwithstanding any other provision of this Agreement or any of
the other Loan Documents, and without affecting in any manner the
rights of Lender under the other sections of this Agreement,
Lender shall not be required to make any Loan or otherwise extend
any credit or other financial accommodations to or for the
benefit of Borrower, unless and until each of the following
conditions has been and continues to be satisfied:
10.2.1. No Default. No Default or Event of
Default exists at the time of, or would result from, the funding
of such Loan or other extension of credit.
10.2.2. No Litigation. No action, proceeding,
investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises
out of any of the Loan Documents or the consummation of the
transactions contemplated hereby or thereby.
10.2.3. No Material Adverse Effect. No event
shall have occurred and no condition shall exist which has or may
be reasonably likely to have a Material Adverse Effect.
10.2.4. Current Borrowing Base Certificate.
Lender shall have timely received a Borrowing Base Certificate in
compliance with the provisions of Section 7.5.
00.0.Xxxxxxx Waiver of Conditions Precedent. If Lender
shall make any Loans or otherwise extend any credit to Borrower
under this Agreement at a time when any of the foregoing
conditions precedent are not satisfied (regardless of whether the
failure of satisfaction of any such conditions precedent was
known or unknown to Lender), the funding of such Loans or the
extension of such credit shall not operate as a waiver of the
right of Lender to insist upon the satisfaction of all conditions
precedent with respect to each subsequent borrowing requested by
Borrower or a waiver of any Default or Event of Default as a
consequence of the failure of any such conditions to be
satisfied, unless Lender, in writing waives the satisfaction of
any condition precedent in which event such waiver shall only be
applicable for the specific instance given and only to the extent
and for the period of time expressly stated in such written
waiver.
SECTION 00.XXXXXX OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
00.0.Xxxxxx of Default. The occurrence of any one or more
of the following events or conditions shall constitute an "Event
of Default":
11.1.1. Payment of Obligations. Borrower shall
fail to pay on the due date thereof any of the other Obligations
(whether due at stated maturity, on demand, upon acceleration or
otherwise).
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11.1.2. Misrepresentations. Any representation,
warranty or other statement made or furnished to Lender by or on
behalf of Borrower, any Subsidiary of Borrower or Guarantor in
this Agreement, any of the other Loan Documents or any
instrument, certificate or financial statement furnished in
compliance with or in reference thereto proves to have been false
or misleading in any material respect when made or furnished or
when reaffirmed pursuant to Section 8.2 hereof.
11.1.3. Breach of Specific Covenants. Borrower
shall fail or neglect to perform, keep or observe any covenant
contained in Sections 6.2, 6.3, 7.1.1, 7.1.2, 7.2, 9.1.1, 9.1.3,
9.2 or 9.3 hereof on the date that Borrower is required to
perform, keep or observe such covenant.
11.1.4. Breach of Other Covenants. Borrower shall
fail or neglect to perform, keep or observe any covenant
contained in this Agreement (other than a covenant which is dealt
with specifically elsewhere in Section 11.1 hereof) and the
breach of such other covenant is not cured to Lender's
satisfaction within 15 days after the sooner to occur of
Borrower's receipt of notice of such breach from Lender or the
date on which such failure or neglect first becomes known to any
officer of Borrower; provided, however, that any such notice and
opportunity to cure shall not apply in the case of any failure to
perform, keep or observe any covenant which is not capable of
being cured at all or within such 15 day period, or which has
been the subject of a prior failure within the preceding 90 days,
or which is a willful and knowing breach by Borrower.
11.1.5. Default Under Security Documents/Other
Agreements. Any event of default shall occur under, or Borrower
shall default in the performance or observance of any term,
covenant, condition or agreement contained in, any of the
Security Documents or the Other Agreements and such default shall
continue beyond any applicable grace period.
11.1.6. Other Defaults. There shall occur any
default or event of default on the part of Borrower under any
agreement, document or instrument to which Borrower is a party or
by which Borrower or any of its Property is bound, creating or
relating to any Debt (other than the Obligations) if (i) such
Debt is Subordinated Debt; (ii) if such Debt is evidenced by the
Regions Note; or (iii) the payment or maturity of any other Debt
in an amount exceeding $50,000 in the aggregate is accelerated in
consequence of such event of default or demand for payment of
such Debt is made.
11.1.7. Uninsured Losses. Any material loss,
theft, damage or destruction of any of the Collateral not fully
covered (subject to such deductibles as Lender shall have
permitted) by insurance.
11.1.8. Solvency. Any Obligor shall cease to be
Solvent.
11.1.9. Insolvency Proceedings. Any Insolvency
Proceeding shall be commenced by or against Borrower (and, if
against Borrower, the continuation of such Insolvency Proceeding
for more than 45 days), or Borrower shall make any offer of
settlement, extension or composition to Borrower's unsecured
creditors generally.
11.1.10. Business Disruption; Condemnation. There
shall occur a cessation of a substantial part of the business of
Borrower, any Subsidiary of Borrower or any Guarantor for a
period which may be reasonably expected to have a Material
Adverse Effect; or Borrower, any Subsidiary of Borrower or any
Guarantor shall suffer the loss or revocation of any license or
permit now held or hereafter acquired by Borrower or such
Guarantor which is necessary to the continued or lawful operation
of its business; or Borrower or any Guarantor shall be enjoined,
restrained or in any way prevented by court, governmental or
administrative order from conducting all or any material part of
its business affairs; or any material lease or agreement pursuant
to which Borrower or any Guarantor leases, uses or occupies any
Property shall be canceled or terminated prior to the expiration
of its stated term; or any material part of the Collateral shall
be taken through condemnation or the value of such Property shall
be materially impaired through condemnation.
35
11.1.11. [Reserved]
11.1.12. ERISA. A Reportable Event shall occur
which Lender, in its sole discretion, shall determine in good
faith constitutes grounds for the termination by the Pension
Benefit Guaranty Corporation of any Plan or for the appointment
by the appropriate United States district court of a trustee for
any Plan, or if any Plan shall be terminated or any such trustee
shall be requested or appointed, or if Borrower, any Subsidiary
of Borrower or any Guarantor is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan resulting from Borrower's, such Subsidiary's
or such Guarantor's complete or partial withdrawal from such
Plan.
11.1.13. Challenge to Loan Documents. Borrower,
any Subsidiary of Borrower or any Guarantor, or any Affiliate of
any of them, shall challenge or contest in any action, suit or
proceeding the validity or enforceability of this Agreement or
any of the other Loan Documents, the legality or enforceability
of any of the Obligations or the perfection or priority of any
Lien granted to Lender.
11.1.14. Repudiation of or Default Under Guaranty
Agreement. Any Guarantor shall revoke or attempt to revoke the
Guaranty Agreement signed by such Guarantor, shall repudiate such
Guarantor's liability thereunder, or shall be in default under
the terms thereof, or shall fail to confirm in writing, promptly
after receipt of Lender's written request therefor, such
Guarantor's ongoing liability under the Guaranty Agreement in
accordance with the terms thereof.
11.1.15. Criminal Forfeiture. Borrower, any
Subsidiary of Borrower or any Guarantor shall be criminally
indicted or convicted under any law that could lead to a
forfeiture of any Property of Borrower, any Subsidiary of
Borrower or any Guarantor.
11.1.16. Judgment. A judgment or order for the
payment of money in an amount that exceeds the uncontested
insurance available therefor by $50,000 or more shall be entered
against the Borrower by any court and such judgment or order
shall result in the creation of a Lien upon any asset of Borrower
that is not a Permitted Lien.
11.2.Acceleration of the Obligations. Without in any way
limiting the right of Lender to demand payment of any portion of
the Obligations payable on demand in accordance with this
Agreement, upon or at any time after the occurrence of an Event
of Default which remains uncured after the expiration of any
applicable grace period and for so long as such Event of Default
shall exist, Lender may in its discretion declare the principal
of and any accrued interest on the Loans and all other
Obligations to be, whereupon the same shall become without
further notice or demand (all of which further notice and demand
Borrower expressly waives), forthwith due and payable and
Borrower shall forthwith pay to Lender the entire principal of
and accrued and unpaid interest on the Loans and other
Obligations plus reasonable attorneys' fees and expenses if such
principal and interest are collected by or through an attorney-at-
law. Notwithstanding the foregoing, upon the occurrence of an
Event of Default specified in Section 11.1.9 hereof all of the
Obligations shall become automatically due and payable without
declaration, notice or demand by Lender and this Agreement shall
automatically terminate as if terminated by Lender pursuant to
Section 5.2.1 and with the effect set forth in Section 5.2.4
hereof.
11.3.Other Remedies. Upon and after the occurrence of an
Event of Default which remains uncured after the expiration of
any applicable grace period, and for so long as such Event of
Default shall exist, Lender shall have and may exercise from time
to time the following rights and remedies:
36
11.3.1. All of the rights and remedies of a
secured party under the UCC or under other Applicable Law, and
all other legal and equitable rights and remedies to which Lender
may be entitled under any of the Loan Documents, all of which
rights and remedies shall be cumulative and shall be in addition
to any other rights or remedies contained in this Agreement or
any of the other Loan Documents, and none of which shall be
exclusive.
11.3.2. The right to collect all amounts at any
time payable to Borrower from any Account Debtor or other Person
at any time indebted to Borrower.
11.3.3. The right to take immediate possession of
the Collateral, and to (i) require Borrower to assemble the
Collateral, at Borrower's expense, and make it available to
Lender at a place designated by Lender which is reasonably
convenient to both parties, and (ii) enter any premises where any
of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be
the Property of Borrower, then Borrower agrees not to charge
Lender for storage thereof).
11.3.4. The right to sell or otherwise dispose of
all or any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale or
sales, with such notice as may be required by Applicable Law, in
lots or in bulk, for cash or on credit, all as Lender, in its
sole discretion, may deem advisable. Borrower agrees that any
requirement of notice to Borrower or any other Obligor of any
proposed public or private sale or other disposition of
Collateral by Lender shall be deemed reasonable notice thereof if
given at least 10 days prior thereto, and such sale may be at
such locations as Lender may designate in said notice. Lender
shall have the right to conduct such sales on Borrower's
premises, without charge therefor, and such sales may be
adjourned from time to time in accordance with Applicable Law.
Lender shall have the right to sell, lease or otherwise dispose
of the Collateral, or any part thereof, for cash, credit or any
combination thereof, and Lender may purchase all or any part of
the Collateral at public or, if permitted by law, private sale
and, in lieu of actual payment of such purchase price, may set
off the amount of such price against the Obligations. The
proceeds realized from the sale or other disposition of any
Collateral may be applied, after allowing 2 Business Days for
collection, first to the costs, expenses and attorneys' fees
incurred by Lender in collecting the Obligations, in enforcing
the rights of Lender under the Loan Documents and in collecting,
retaking, completing, protecting, removing, storing, advertising
for sale, selling and delivering any Collateral, second to
interest accrued with respect to any of the Obligations; and
third, to the principal of the Obligations. If any deficiency
shall arise, Borrower and each Guarantor shall remain jointly and
severally liable to Lender therefor.
Lender is hereby granted a license or other right to use, without
charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, tradenames, trademarks and advertising
matter, or any Property of a similar nature, as it pertains to
the Collateral, in advertising for sale and selling any
Collateral and Borrower's rights under all licenses and all
franchise agreements shall inure to Lender's benefit.
11.4.Setoff. In addition to any Liens granted under any of
the Loan Documents and any rights now or hereafter available
under Applicable Law, Lender is hereby authorized by Borrower at
any time that an Event of Default exists, without notice to
Borrower or any other Person (any such notice being hereby
expressly waived) to set off and to appropriate and to apply any
and all deposits, general or special (including Debt evidenced by
certificates of deposit whether matured or unmatured (but not
including trust or escrow accounts)) and any other Debt at any
time held or owing by Lender or its Affiliates to or for the
credit or the account of Borrower against and on account of the
Obligations of Borrower arising under the Loan Documents to
Lender, including all Loans and all claims of any nature or
description arising out of or in connection with this Agreement,
irrespective of whether or not (i) Lender shall have made any
demand hereunder or (ii) Lender shall have declared the principal
of and interest on the Loans and other amounts due hereunder to
be due and payable as permitted by this Agreement and even though
such Obligations may be contingent or unmatured or (iii) the
Collateral for the Obligations is adequate.
37
11.5.Remedies Cumulative; No Waiver.
11.5.1. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of
Borrower contained in this Agreement and the other Loan
Documents, or in any document referred to herein or contained in
any agreement supplementary hereto or in any schedule or in any
Guaranty Agreement given to Lender or contained in any other
agreement between Lender and Borrower, heretofore, concurrently,
or hereafter entered into, shall be deemed cumulative to and not
in derogation or substitution of any of the terms, covenants,
conditions, or agreements of Borrower herein contained.
11.5.2. The failure or delay of Lender to require
strict performance by Borrower of any provision of this Agreement
or to exercise or enforce any rights, Liens, powers, or remedies
hereunder or under any of the aforesaid agreements or other
documents or security or Collateral shall not operate as a waiver
of such performance, Liens, rights, powers and remedies, but all
such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and all other
Obligations owing or to become owing from Borrower to Lender
shall have been fully satisfied. None of the undertakings,
agreements, warranties, covenants and representations of Borrower
contained in this Agreement or any of the other Loan Documents
and no Event of Default by Borrower under this Agreement or any
other Loan Documents shall be deemed to have been suspended or
waived by Lender, unless such suspension or waiver is by an
instrument in writing specifying such suspension or waiver and is
signed by a duly authorized representative of Lender and directed
to Borrower.
11.5.3. If Lender shall accept performance by
Borrower, in whole or in part, of any obligation that Borrower is
required by any of the Loan Documents to perform only when a
Default or Event of Default exists, or if Lender shall exercise
any right or remedy under any of the Loan Documents that may not
be exercised other than when a Default or Event of Default
exists, Lender's acceptance of such performance by Borrower or
Lender's exercise of any such right or remedy shall not operate
to waive any such Event of Default or to preclude the exercise by
Lender of any other right or remedy.
SECTION 12.MISCELLANEOUS
12.1.Power of Attorney. Borrower hereby irrevocably
designates, makes, constitutes and appoints Lender as Borrower's
true and lawful attorney (and agent-in-fact) and Lender may,
without notice to Borrower and in either Borrower's or Lender's
name, but at the cost and expense of Borrower:
12.1.1. At such time or times as Lender, in its
sole discretion, may determine, endorse Borrower's name on any
checks, notes, acceptances, drafts, money orders or any other
evidence of payment or proceeds of the Collateral which come into
the possession of Lender or under Lender's control for the
purpose of crediting such payments to the Obligations pursuant to
the terms of this Agreement.
12.1.2. At such time or times during the
existence of an Event of Default which was uncured after the
expiration of any applicable grace period, as Lender in its sole
discretion may determine: (i) demand payment of the Accounts from
the Account Debtors, enforce payment of the Accounts by legal
proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of
the Accounts; (ii) settle, adjust, compromise, discharge or
release any of the Accounts or other Collateral or any legal
proceedings brought to collect any of the Accounts or other
Collateral; (iii) sell or assign any of the Accounts and other
Collateral upon such terms, for such amounts and at such time or
times as Lender deems advisable; (iv) take control, in any
manner, of any item of payment or proceeds relating to any
Collateral; (v) prepare, file and sign Borrower's name to a proof
of claim in bankruptcy or similar document against any Account
Debtor or to any notice of lien, assignment or satisfaction of
lien or similar document in connection with any of the
Collateral; (vi) receive, open and dispose of all mail addressed
to Borrower and to notify postal authorities to change the
address for delivery thereof to such address as Lender may
designate; (vii) endorse the name of Borrower upon any of the
items of payment or proceeds relating to any Collateral and
38
deposit the same to the account of Lender on account of the
Obligations; (viii) endorse the name of Borrower upon any chattel
paper, document, instrument, invoice, freight xxxx, xxxx of
lading or similar document or agreement relating to the Accounts,
Inventory and any other Collateral; (ix) use Borrower's
stationery and sign the name of Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (x) use the
information recorded on or contained in any data processing
equipment and computer hardware and software relating to the
Accounts, Inventory and any other Collateral; (xi) make and
adjust claims under policies of insurance; and (xii) do all other
acts and things necessary, in Lender's determination, to fulfill
Borrower's obligations under this Agreement.
12.2.Indemnity. Borrower hereby agrees to indemnify and
defend Lender and hold Lender harmless from and against any
Claims against Lender as the result of Borrower's failure to
observe, perform or discharge any of Borrower's duties hereunder.
In addition, Borrower shall indemnify and defend Lender against
and save Lender harmless from all Claims of any Person arising
out of, related to, or with respect to any transactions entered
into pursuant to this Agreement or any of the other Loan
Documents or Lender's Lien upon any of the Collateral, excluding,
however, Claims arising by reason of Lender's own gross
negligence or intentional misconduct. Without limiting the
generality of the foregoing, this indemnity shall extend to any
Claims asserted against Lender by any Person under any
Environmental Laws or similar laws by reason of Borrower's or any
other Person's failure to comply with laws applicable to solid or
hazardous waste materials or other toxic substances.
Additionally, if any Taxes (excluding Taxes imposed upon or
measured solely by the net income of Lender, but including, any
intangibles tax, stamp tax, recording tax or franchise tax) shall
be payable by Lender or Obligor on account of the execution or
delivery of this Agreement, or the execution, delivery, issuance
or recording of any of the other Loan Documents, or the creation
of any of the Obligations hereunder, by reason of any existing or
hereafter enacted federal, state, foreign or local statute, rule
or regulation, Borrower will pay (or will promptly reimburse
Lender for the payment of) all such Taxes, including any interest
and penalties thereon, and will indemnify, defend and hold Lender
harmless from and against all liability in connection therewith.
Notwithstanding any contrary provision in this Agreement, the
obligation of Borrower under this Section 12.2 shall survive the
payment in full of the Obligations and the termination of this
Agreement.
12.3.Modification of Agreement; Sale of Interest. This
Agreement may not be modified, altered or amended, except by an
agreement in writing signed by Borrower and Lender. Borrower may
not sell, assign or transfer any interest in this Agreement, any
of the other Loan Documents, or any of the Obligations, or any
portion thereof, including Borrower's rights, title, interests,
remedies, powers, and duties hereunder or thereunder. Borrower
hereby consents to Lender's participation, sale, assignment,
transfer or other disposition, at any time or times hereafter, of
the Obligations, this Agreement and any of the other Loan
Documents, or of any portion hereof or thereof, including
Lender's rights, title, interests, remedies, powers, and duties
hereunder or thereunder. In the case of an assignment, the
assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as it would if it were "Lender"
hereunder and Lender shall be relieved of all obligations
hereunder upon any such assignment. Borrower agrees that it will
use its best efforts to assist and cooperate with Lender in any
manner reasonably requested by Lender to effect the sale of
participations in or assignments of any of the Loan Documents or
any portion thereof or interest therein, including assisting in
the preparation of appropriate disclosure documents. Borrower
further agrees that Lender may disclose credit information
regarding Borrower and its Subsidiaries to any potential
participant or assignee.
12.4.Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under Applicable Law, but if any provision of
this Agreement shall be prohibited by or invalid under Applicable
Law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this
Agreement.
39
12.5.Successors and Assigns. This Agreement, the Other
Agreements and the Security Documents shall be binding upon and
inure to the benefit of the successors and assigns of Borrower
and Lender permitted under Section 12.3 hereof.
12.6.Cumulative Effect; Conflict of Terms. The provisions
of the Other Agreements and the Security Documents are hereby
made cumulative with the provisions of this Agreement. Except as
otherwise provided in Section 4.2 hereof and except as otherwise
provided in any of the other Loan Documents by specific reference
to the applicable provision of this Agreement, if any provision
contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern
and control.
12.7.Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same
instrument.
12.8.Notice. All notices, requests and demands to or upon a
party hereto shall be in writing and shall be sent by certified
or registered mail, return receipt requested, personal delivery
against receipt or by telecopier or other facsimile transmission
and shall be deemed to have been validly served, given or
delivered when delivered against receipt or 3 Business Days after
deposit in the U.S. mail, postage prepaid, or, in the case of
facsimile transmission, when received at the office where the
noticed party's telecopier is located, in each case addressed as
follows:
If to Lender: Citizens Business Credit
000 Xxxxxxxx Xxxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Office Head
Facsimile No.: 770.850.4895
If to Borrower: Miltope Corporation
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxx,
President
Facsimile No.: 334.613.6302
or to such other address as each party may designate for itself
by notice given in accordance with this Section 12.8. Any
written notice or demand that is not sent in conformity with the
provisions hereof shall nevertheless be effective on the date
that such notice is actually received by the noticed party.
00.0.Xxxxxx Inquiries. Borrower hereby authorizes and
permits Lender (but Lender shall have no obligation) to respond
to usual and customary credit inquiries from third parties
concerning Borrower or any of its Subsidiaries.
12.10.Time of Essence. Time is of the essence of this
Agreement, the Other Agreements and the Security Documents.
40
12.11.Entire Agreement; Exhibits. This Agreement and the
other Loan Documents, together with all other instruments,
agreements and certificates executed by the parties in connection
therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and
thereto with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings and inducements,
whether express or implied, oral or written. Appendix A and each
of the Exhibits attached hereto are incorporated into this
Agreement and by this reference made a part hereof.
12.12.Governing Law; Consent To Forum. This Agreement has
been negotiated, executed and delivered at and shall be deemed to
have been made in Atlanta, Georgia. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Georgia: provided, however, that if any of the
Collateral shall be located in any jurisdiction other than
Georgia, the laws of such jurisdiction shall govern the method,
manner and procedure for foreclosure of Lender's Lien upon such
Collateral and the enforcement of Lender's other remedies in
respect of such Collateral to the extent that the laws of such
jurisdiction are different from or inconsistent with the laws of
Georgia. As part of the consideration for new value received,
and regardless of any present or future domicile or principal
place of business of Borrower or Lender, Borrower hereby consents
and agrees that the Superior Court of Xxxxxx County, Georgia, or,
at Lender's option, the United States District Court for the
Northern District of Georgia, Atlanta Division, shall have
jurisdiction to hear and determine any claims or disputes between
Borrower and Lender pertaining to this Agreement or to any matter
arising out of or related to this Agreement. Borrower expressly
submits and consents in advance to such jurisdiction in any
action or suit commenced in any such Court, and Borrower hereby
waives any objection which Borrower may have based upon lack of
personal jurisdiction, improper venue or forum non conveniens and
hereby consents to the granting of such legal or equitable relief
as is deemed appropriate by such Court.
12.13. Waivers by Borrower. To the fullest extent permitted
by Applicable Law, Borrower waives (i) the right to trial by jury
(which Lender hereby also waives) in any action, suit, proceeding
or counterclaim of any kind arising out of or related to any of
the Loan Documents, the Obligations or the Collateral;
(ii) presentment, demand and protest and notice of presentment,
protest, default, non payment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper
and guaranties at any time held by Lender on which Borrower may
in any way be liable and hereby ratifies and confirms whatever
Lender may do in this regard; (iii) notice prior to taking
possession or control of the Collateral or any bond or security
which might be required by any Court prior to allowing Lender to
exercise any of Lender's remedies; (iv) the benefit of all
valuation, appraisement and exemption laws; and (v) notice of
acceptance hereof. Borrower acknowledges that the foregoing
waivers are a material inducement to Lender's entering into this
Agreement and that Lender is relying upon the foregoing waivers
in its future dealings with Borrower. Borrower warrants and
represents that it has reviewed the foregoing waivers with its
legal counsel and has knowingly and voluntarily waived its jury
trial rights following consultation with legal counsel. In the
event of litigation, this Agreement may be filed as a written
consent to a trial by the Court.
41
IN WITNESS WHEREOF, this Agreement has been duly executed
in Atlanta, Georgia, on the day and year specified at the
beginning of this Agreement.
MILTOPE CORPORATION ("Borrower")
By:___________________________________
Title: President
Accepted in Atlanta, Georgia:
CITIZENS BUSINESS CREDIT, a division
of Citizens Leasing Corporation
("Lender")
By:___________________________________
Title:______________________________
42
EXHIBIT A
-------------
REVOLVER NOTE
January 6, 2003
U.S $8,000,000.00 Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, MILTOPE CORPORATION
("Borrower"), an Alabama corporation, hereby unconditionally
promises to pay to the order of CITIZENS BUSINESS CREDIT, a
division of Citizens Leasing Corporation (herein, together with
any subsequent holder hereof, called the "Holder") the principal
sum of $8,000,000.00 or such lesser sum as may constitute the
outstanding principal amount of all Revolver Loans pursuant to
the terms of the Loan Agreement (as defined below) on the date on
which such outstanding principal amounts become due and payable
pursuant to Section 4.2 of the Loan Agreement, in strict
accordance with the terms thereof. Borrower likewise
unconditionally promises to pay to Holder interest from and after
the date hereof on the outstanding principal amount of Revolver
Loans at such interest rates, payable at such times, and computed
in such manner as are specified in Sections 3.1 and 4.2 of the
Loan Agreement, in strict accordance with the terms thereof.
This Revolver Note ("Note") is issued pursuant to, and is
the "Revolver Note" referred to in, the Loan and Security
Agreement dated the date hereof (as the same may be amended from
time to time, the "Loan Agreement"), between Borrower and Holder
and is and shall be entitled to all benefits thereof and of all
Loan Documents executed and delivered in connection therewith.
All capitalized terms used herein, unless otherwise defined
herein, shall have the meanings ascribed to such terms in the
Loan Agreement.
The repayment of the principal balance of this Note is
subject to the provisions of Section 4.2 of the Loan Agreement.
The entire unpaid principal balance and all accrued interest on
this Note shall be due and payable immediately upon the
termination of the Loan Agreement as set forth in Section 5.2.4
of the Loan Agreement.
All payments of principal and interest shall be made in
Dollars in immediately available funds as specified in the Loan
Agreement.
Upon or after the occurrence of an Event of Default that is
uncured after the expiration of any applicable grace period and
for so long as such Event of Default exists, the principal
balance and all accrued interest of this Note may be declared due
and payable in the manner and with the effect provided in the
Loan Agreement, and the unpaid principal balance hereof shall
bear interest at the Default Rate as and when provided in
Section 3.1.5 of the Loan Agreement. Borrower agrees to pay, and
save Holder harmless against, any liability for the payment of,
all costs and expenses, including, but not limited to, reasonable
attorneys' fees actually incurred, if this Note is collected by
or through an attorney-at-law.
All principal amounts of Revolver Loans made by Holder to
Borrower pursuant to the Loan Agreement, and all accrued and
unpaid interest thereon, shall be deemed outstanding under this
Note and shall continue to be owing by Borrower until paid in
accordance with the terms of this Note and the Loan Agreement.
In no contingency or event whatsoever, whether by reason of
advancement of the proceeds hereof or otherwise, shall the amount
paid or agreed to be paid to Holder for the use, forbearance or
detention of money advanced hereunder exceed the highest lawful
rate permissible under any law which a court of competent
jurisdiction may deem applicable hereto; and, in the event of any
such payment inadvertently paid by Borrower or inadvertently
received by Holder, such excess sum shall be, at Borrower's
option, returned to Borrower forthwith or credited as a payment
of principal, but shall not be applied to the payment of
interest. It is the intent hereof that Borrower not pay or
contract to pay, and that Holder not receive or contract to
receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by Borrower under
Applicable Law.
Time is of the essence of this Note. To the fullest extent
permitted by Applicable Law, Borrower, for itself and its legal
representatives, successors and assigns, expressly waives
presentment, demand, protest, notice of dishonor, notice of non-
payment, notice of maturity, notice of protest, presentment for
the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
Wherever possible each provision of this Note shall be
interpreted in such a manner as to be effective and valid under
Applicable Law, but if any provision of this Note shall be
prohibited or invalid under Applicable Law, such provision shall
be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining
provisions of this Note. No delay or failure on the part of
Holder in the exercise of any right or remedy hereunder shall
operate as a waiver thereof, nor as an acquiescence in any
default, nor shall any single or partial exercise by Holder of
any right or remedy preclude any other right or remedy. Holder,
at its option, may enforce its rights against any Collateral
securing this Note without Holder enforcing its rights against
any Borrower, any Guarantor of the indebtedness evidenced hereby
or any other property or indebtedness due or to become due to
Borrower. Borrower agrees that, without releasing or impairing
Borrower's liability hereunder, Holder may at any time release,
surrender, substitute or exchange any Collateral securing this
Note and may at any time release any party primarily or
secondarily liable for the indebtedness evidenced by this Note.
The rights of Holder and obligations of Borrower hereunder
shall be construed in accordance with and governed by the laws
(without giving effect to the conflict of law principles thereof)
of the State of Georgia. This Note is intended to take effect as
an instrument under seal under Georgia law.
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed under seal and delivered by its duly authorized officers
on the date first above written.
BORROWER:
MILTOPE CORPORATION
By:___________________________
Title: President
2
EXHIBIT B
---------
BORROWING BASE CERTIFICATE
--------------------------
(Format and criteria subject to modification based on
results of current and future field examinations)
VIA FACSIMILE
------------
Citizens Business Credit Miltope Corporation
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000 Borrowing Base Certificate
Xxxxxxx, Xxxxxxx 00000
Certificate#: _________
Attention: Xx. Xxxxx Xxxxx Date Submitted: _________
For the period ended ______
A. ACCOUNTS RECEIVABLE (based on invoice dated a/r aging)
-----------------------------------------------------
1. a. Eligible Accounts Receivable $____________
b. Advance Rate 85%
c. Accounts Availability $____________
B. TOTAL ACCOUNTS RECEIVABLE AVAILABILITY $____________
--------------------------------------
C. INVENTORY
---------
1. a. Eligible Inventory (parts, units) $____________
b. Advance Rate 24%
c. Inventory Availability $____________(not to
exceed $2,000,000)
D. TOTAL INVENTORY AVAILABILITY $____________
---------------------------
E. TOTAL OF LINES B AND D $____________
----------------------
F. MAXIMUM LOAN AMOUNT $8,000,000
-------------------
F. LESSER OF LINES E OR F $____________
----------------------
G. LOAN BALANCE
------------
1. Beginning Loan Balance $_____________
2. Plus Revolver Loans Requested $_____________
3. Less Loan Collections $_____________
4. Adjustments (attach explanation) $_____________
H. ENDING LOAN BALANCE $____________
-------------------
I. TOTAL EXCESS AVAILABILITY (LINE F LESS LINE H) $____________
---------------------------------------------
The undersigned hereby represents and warrants that the
foregoing is accurate and complete in all material respects and
conforms with the representations regarding Eligible Accounts and
Eligible Inventory as set forth in the Loan and Security
Agreement between us, as in force at any date. The undersigned
further represents and warrants that no Default or Event of
Default has occurred and is continuing under such Loan Agreement.
Borrower understands that Citizens Business Credit will extend to
Borrower Revolver Loans in reliance upon the information
contained herein.
MILTOPE CORPORATION
By:_____________________________
Title:__________________________
Date:___________________________
2
SCHEDULE 7.1.1
BUSINESS LOCATIONS
------------------
1. Borrower currently has the following business locations, and
no others:
Chief Executive Office: 0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxxxxx 00000
Other Locations: 0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
2. Borrower maintains its books and records relating to
Accounts and General
Intangibles at:
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxxxxx 00000
3. Borrower has had no office, place of business or agent for
process located in any
county other than as set forth above.
4. Borrower has no Subsidiaries.
SCHEDULE 8.1.1
JURISDICTIONS IN WHICH BORROWER IS
----------------------------------
AUTHORIZED TO DO BUSINESS
-------------------------
Name of Entity Jurisdictions
-------------- -------------
MILTOPE CORPORATION Alabama
SCHEDULE 8.1.4
CAPITAL STRUCTURE
-----------------
1. The classes and number of authorized shares of Borrower are
as follows:
Common stock.
2. There are no other outstanding Securities of Borrower.
3. Borrower has no subsidiaries or corporate or joint
venture Affiliates.
SCHEDULE 8.1.5
CORPORATE NAMES
---------------
1. Borrower's correct corporate name is MILTOPE CORPORATION
SCHEDULE 8.1.15
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
--------------------------------------------
NECESSARY FOR THE CONDUCT OF BUSINESS
-------------------------------------
1. Borrower has the following patents, copyrights and trademarks:
PATENTS
PATENT NUMBER REGISTRATION DATE TITLE
------------ ------------------- -----------------------
5,297,711 3/29/94 Perforated web
transport system
5,297,124 3/22/94 Tape drive emulation
system for a disk
drive
5,214,415 5/25/93 Cursor control
assembly with
electromagnetic
shielding
5,142,427 8/25/92 Magnetic transducer
pressure pad
4,994,823 2/19/91 Color striping
thermal printer
4,788,559 11/29/88 Apparatus and method
for removing an
image from the
ribbon of a thermal
transfer printer
4,726,293 2/23/88 Wrinkle-preventing
passive roller
system for printing
machines
4,725,858 2/16/88 Roller pressure
unloading means for
a thermal printing
mechanism
4,642,715 2/10/87 Environmental
conditioning and
safety system for
disk-type mass
memories
TRADEMARKS
SERIAL NUMBER APPLICATION DATE WORD XXXX
------------- ---------------- ---------
75350229 9/2/97 ENIGMA
75013341 11/1/95 PROWLER
2. Borrower has licenses relating to the use of software and
equipment in the ordinary course of
its business.
SCHEDULE 8.1.18
CONTRACTS RESTRICTING BORROWER'S RIGHT TO INCUR DEBTS
-----------------------------------------------------
There are no contracts that restrict the right of Borrower
to incur Debt.
SCHEDULE 8.1.19
LITIGATION
----------
1. There are no actions, suits, proceedings and investigations
pending against Borrower.
2. There are no threatened actions, suits, proceedings or
investigations of which Borrower is aware.
SCHEDULE 8.1.21
CAPITALIZED LEASES
------------------
Borrower has no capitalized leases.
SCHEDULE 8.1.22
PENSION PLANS
-------------
1. 401(k) plan.
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
[Letterhead of Borrower]
__________________, 200__
Citizens Business Credit
Xxxxx 0000
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
The undersigned, the controller of MILTOPE CORPORATION., an
Alabama corporation ("Borrower"), gives this certificate to
Citizens Business Credit ("Lender") in accordance with the
requirements of Section 9.1.3 of that certain Loan and Security
Agreement dated as of January 6, 2003, between Borrower and
Lender ("Loan Agreement"). Capitalized terms used in this
Certificate, unless otherwise defined herein, shall have the
meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets
and statements of income of Borrower for the [fiscal year]
[quarterly period] ending __________________, 20__, copies of
which are attached hereto, I hereby certify that:
(a) Fixed Charge Coverage Ratio is ____ to 1
(minimum: not less than ___ to 1);
(b) Tangible Net Worth is $______ (minimum:
not less than $__________);
(c) Capital Expenditures during the period and
for the fiscal year to date total $__________ and
$__________, respectively (maximum: $__________ annually).
2. No default exists on the date hereof under
any lease covering business premises leased by Borrower, other
than: _________________________________ [if none, so state]; and
3. No Default exists on the date hereof, other
than: __________________
________________________________________________ [if none, so
state]; and
4. No Event of Default exists on the date
hereof, other than __________
____________________________________________________ [if none,
so state].
5. As of the date hereof, Borrower is current in
its payment of all accrued rent and other charges to Persons who
own or lease any premises where any of the Collateral is
located, and there are no pending disputes or claims regarding
Borrower's failure to pay or delay in payment of any such rent
or other charges.
Very truly yours,
_______________________________
Controller
EXHIBIT D
---------
OPINION LETTER REQUIREMENTS
Borrowers' counsel's opinion letter should address the
following in a manner satisfactory to Lender:
1. Borrower's due incorporation, valid existence, good standing
and qualification as a foreign corporation.
2. Corporate name of Borrower.
3. Borrower's corporate power to execute, deliver and perform
the Loan Documents to which it is a party.
4. Borrower's due authorization to execute, deliver and perform
the Loan Documents, and their due execution and delivery
thereof.
5. Borrower's execution, delivery and performance of the Loan
Documents do not (a) violate the articles or bylaws, (b) cause a
breach or default under any agreement, (c) violate any law,
regulation, judgment or order, or (d) result in or require a
Lien or other encumbrance other than in favor of Lender.
7. The Loan Documents as legal, valid and binding obligations,
enforceable against all Obligors in accordance with their
respective terms, subject to standard bankruptcy and other
creditor's rights and equity exceptions.
8. Counsel's lack of knowledge of litigation or other
proceedings, except as disclosed in Loan Agreement.
9. Absence of any registration, filing, consent or approval
requirement of governmental authority in connection with the
execution, delivery and performance of the Loan Documents.
10. Non-violation by the Loan Documents of any Applicable Laws
relating to interest or usury.
11. Due payment of all applicable taxes and fees required to be
paid in connection with the Loans, the Loan Documents, UCC-1
financing statements and other Security Documents.
12. Creation in favor of Lender of a duly perfected security
interest in the Collateral described in the Security Documents.
13. Absence of requirement under the laws of applicable states
for Lender to qualify in such states to enter into or enforce
the provisions of the Loan Documents.
SCHEDULE 9.2.5
PERMITTED LIENS
---------------
Secured Party Nature of Lien
----------------- ------------------------------
Regions Bank, N.A. Security interest in all
inventory, receivables and
instruments of Borrower, all
documents and files related to
such collateral and all
proceeds and products of such
collateral
All personal property and
fixtures and interests of
Borrower as described in Real
Estate Mortgage and Security
Agreement dated January 1, 1995
Specified Equipment
Innovative Strategic All property of Borrower
Advanced Systems, Inc.
IBM Credit Corporation Specified leased equipment
GE Capital Corporation Specified leased equipment
Telogy, Inc. Specified leased equipment
Leasing Partners Specified leased equipment
________________________________________________________________
MILTOPE CORPORATION
________________________________________________________________
________________________________________________________________
________________________________________________________________
LOAN AND SECURITY AGREEMENT
Dated: January 6, 2003
$8,000,000
________________________________________________________________
________________________________________________________________
________________________________________________________________
CITIZENS BUSINESS CREDIT
________________________________________________________________
TABLE OF CONTENTS
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION - 1 -
1.1. Definitions. - 1 -
1.2. Accounting Terms. - 17 -
1.3. Other Terms. - 17 -
1.4. Certain Matters of Construction. - 17 -
SECTION 2. CREDIT FACILITIES - 18 -
2.1. Revolver Loans. - 18 -
SECTION 3. INTEREST, FEES AND CHARGES - 20 -
3.1 Interest - 20 -
3.2. Fees. - 23 -
3.3. Computation of Interest and Fees. - 23 -
3.4. Reimbursement of Expenses. - 23 -
3.5. Bank Charges. - 24 -
3.6. Maximum Interest. - 24 -
3.7. Illegality. - 25 -
3.8. Increased Costs. - 25 -
3.9. Capital Adequacy. - 26 -
3.10. Funding Losses. - 27 -
SECTION 4. LOAN ADMINISTRATION - 27 -
4.1. Manner of Borrowing Revolver Loans. - 27 -
4.2. Payment of Other Obligations. - 29 -
4.3. Application of Payments and Collections. - 30 -
4.4. All Loans to Constitute One Obligation. - 30 -
4.5. Loan Account. - 30 -
4.6. Statements of Account. - 30 -
4.7. Marshalling; Payments Set Aside. - 30 -
SECTION 5. TERM AND TERMINATION - 31 -
5.1. Term of Agreement. - 31 -
5.2. Termination. - 31 -
SECTION 6. COLLATERAL SECURITY - 32 -
6.1. Grant of Security Interest in Collateral. - 32 -
6.2. Lien Perfection; Further Assurances. - 32 -
6.3. Lien on Deposit Accounts. - 33 -
6.4. [Lien on Real Estate] [Other Collateral]. - 33 -
SECTION 7. COLLATERAL ADMINISTRATION - 33 -
7.1. General. - 33 -
7.2. Administration of Accounts. - 34 -
7.3. Administration of Inventory. - 35 -
7.4. Payment of Charges. - 36 -
i
SECTION 8. REPRESENTATIONS AND WARRANTIES - 36 -
8.1. General Representations and Warranties. - 36 -
8.2. Reaffirmation of Representations and
Warranties. - 40 -
8.3. Survival of Representations and Warranties. - 40 -
SECTION 9. COVENANTS AND CONTINUING AGREEMENTS - 40 -
9.1. Affirmative Covenants. - 40 -
9.2. Negative Covenants. - 43 -
9.3. Specific Financial Covenants - 45 -
SECTION 10. CONDITIONS PRECEDENT - 46 -
10.1. Conditions Precedent to Initial Loans. - 46 -
10.2 Conditions Precedent to all Credit
Extensions. - 48 -
SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON
DEFAULT - 49 -
11.1. Events of Default. - 49 -
11.2. Acceleration of the Obligations. - 50 -
11.3. Other Remedies. - 51 -
11.4. Setoff. - 52 -
11.5. Remedies Cumulative; No Waiver. - 52 -
SECTION 12. MISCELLANEOUS - 53 -
12.1. Power of Attorney. - 53 -
12.2. Indemnity. - 53 -
12.3. Modification of Agreement; Sale of Interest. - 54 -
12.4. Severability. - 54 -
12.5. Successors and Assigns. - 54 -
12.6. Cumulative Effect; Conflict of Terms - 54 -
12.7. Execution in Counterparts. - 54 -
12.8. Notice. - 54 -
12.9. Lender's Consent. - 55 -
12.10. Credit Inquiries. - 55 -
12.11. Time of Essence. - 55 -
12.12. Entire Agreement; Appendix A and Exhibits. - 55 -
12.13. Interpretation. - 56 -
12.14. Governing Law; Consent To Forum. - 56 -
12.15. Waivers by Borrower. - 56 -
ii
LIST OF EXHIBITS
---------------
Exhibits
--------
Exhibit A Revolver Note
Exhibit B Borrowing Base Certificate
Exhibit C Compliance Certificate
Exhibit D Opinion Letter
Schedules
---------
Borrower's and each Subsidiary's Business Locations
Jurisdictions in which Borrower and each Subsidiary is Authorized
to do Business
Capital Structure of Borrower
Corporate Names
Patents, Trademarks, Copyrights and Licenses
Contracts Restricting Borrower's Right to Incur Debts
Litigation
Capitalized and Operating Leases
Pension Plans
Permitted Liens
iii
