Exhibit 10.27
RIDER TO
FINANCING AGREEMENT
between
GIBRALTAR CORPORATION OF AMERICA ("Gibraltar")
and
▇▇▇▇ INDUSTRIES, INC.("Borrower")
In addition to and not in limitation of any and all rights granted to
Gibraltar and obligations incurred by Borrower in the printed portion of this
Agreement, Borrower further warrants, covenants and agrees as follows:
14. DEFINITIONS
a. Affiliate. The term "Affiliate" or "affiliate" shall mean and
include any Person (as hereinafter defined) which, directly or
indirectly, is controlled by or is under common control with the
Borrower, including the officers, directors, or partners of the
Borrower, whether through ownership, voting securities, contracts or
otherwise.
b. Borrower Agreements. The term "Borrower Agreements" shall
mean and include, without limitation, this Agreement, the Security
Agreement-Inventory, the Security Agreement [Equipment], and the
Trademark and Patent Security Agreement each executed and delivered by
Borrower in favor of Gibraltar, the Guaranty executed and delivered by
ALCORE, INC. ("Other Borrower"), and all other related present and
future agreements, documents, notes, including the "Term Note" (as said
quoted term is defined below), instruments, mortgages and guaranties
creating or evidencing indebtedness or granting collateral security
therefor, executed and delivered in favor of Gibraltar, as all of the
foregoing may now exist or may hereafter be amended, modified,
supplemented, renewed or extended.
c. Collateral. The term "Collateral" or "collateral" shall mean and
include, without limitation, the "Receivables" described in paragraph 1
of the printed portion of this Agreement and any and all other items of
personal property, in which Borrower has granted or may in the future
grant a security interest to Gibraltar under the Loan Agreements or in
any supplement or supplements thereto or under any other agreement or
document executed and delivered in connection therewith, including, but
not limited to, any and all of the Borrower's inventory and equipment,
all of Borrower's right, title and interest in and to the goods or
other property represented by or securing any of the Collateral, all of
Borrower's rights as an unpaid vendor or lienor, including stoppage in
transit, replevin and reclamation, all additional amounts due to
Borrower from any customer or account debtor, irrespective of whether
such additional amounts have been specifically assigned to Gibraltar,
all guaranties and other agreements or property securing or relating to
any of the items referred to above or acquired for the purpose of
securing or enforcing any of such items, all present and future general
intangibles (including, but not limited to, all of Borrower's
now-existing or hereafter-acquired tax refunds, patents, trademarks,
trade names and tradestyles and license agreements relative to the
rendering of services or the sale or manufacture of goods, choses in
action, rights to ▇▇▇ any Person (as hereinafter defined) and proceeds
of any lawsuits or proceedings brought by Borrower against any Person),
chattel paper, documents, monies, deposits, securities, instruments,
credits and letters of credit, and all property now or hereafter held
by Gibraltar or any entity which at any time participates in
Gibraltar's financing transactions with Borrower, and all proceeds and
products of all of the foregoing in whatever form, together with all
present and future books and records relating to any of the above
including, without limitation, all tapes, cards, computer programs,
runs and computer data in the possession or control of Borrower, any
computer service bureau or other third party. Borrower hereby grants
Gibraltar a continuing security interest in and general lien upon all
of the Collateral to secure payment and performance of all of the
Obligations (as hereinafter defined).
d. Effective Net Worth. The term "Effective Net Worth" shall mean,
for any period, Tangible Net Worth plus any liability of Borrower and
Other Borrower to any party, the payment of which liability is
subordinated to the payment of the Obligations.
e. GAAP. The term "GAAP" shall mean generally accepted
accounting principles in the United States of America.
f. Liabilities. The term "Liabilities" shall mean, at any given time,
all liabilities of Borrower and Other Borrower on a consolidated basis
which would be classified as liabilities under GAAP.
g. Tangible Net Worth. The term "Tangible Net Worth" shall mean,
for any period, stockholders' equity less the aggregate amount of
intangible assets, less the aggregate principal amount of all unsecured
loans outstanding from Borrower and/or Other Borrower to any officer,
director and/or shareholder, less advances to Borrower's trade
suppliers or to any trade suppliers of Other Borrower constituting
prepayment for merchandise purchases, all as determined on a
consolidated basis for Borrower and Other Borrower in accordance with
GAAP.
h. Net Income. The term "Net Income" shall mean for any given
period, the net income of Borrower and Other Borrower, determined on a
consolidated basis, computed in accordance with GAAP.
i. Long Term Liabilities. The term "Long Term Liabilities" shall
mean, at any given time, all Liabilities of Borrower and Other Borrower
determined on a consolidated basis, which would be classified as long
term liabilities under GAAP.
j. Loan Agreements. The term "Loan Agreements" shall collectively
mean the Borrower Agreements and the Other Borrower Agreements.
k. Obligations. The term "Obligations" or "obligation" shall mean and
include, without limitation, that which is set forth in Paragraph 5 of
the printed portion of this Agreement and any and all of the Borrower's
indebtedness and/or liabilities to Gibraltar of every kind, nature and
description, direct or indirect, secured or unsecured, joint or
several, absolute or contingent, due or to become due, now existing or
hereafter arising, regardless of how they arise or by what agreement or
instrument they may be evidenced, including, but not limited to, all
amounts owing by Borrower to Gibraltar under this Agreement, the other
Loan Agreements, or any other security agreement or note, and all
obligations to perform acts or refrain from taking any action.
l. Other Borrower Agreements. The term "Other Borrower
Agreements" shall mean and include, without limitation, the Financing
Agreement, the Security Agreement-Inventory and the Security Agreement
[Equipment] executed and delivered by Other Borrower in favor of
Gibraltar, the Guaranty of Other Borrower's Obligations to Gibraltar
executed and delivered by Borrower in favor of Gibraltar and all other
related agreements, documents, notes, instruments, mortgages,
guaranties and deeds of trust creating or evidencing indebtedness or
granting collateral security therefor, executed and delivered in favor
of Gibraltar, as all of the foregoing may now exist or may hereafter be
amended, modified, supplemented, renewed or extended.
m. Participant. The term "Participant" shall mean and include any
person which, at any time, participates with Gibraltar in respect of
the Obligations of Borrower.
n. Person. The term "Person" or "person" shall mean and include any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, institution,
entity, party or government, whether national or federal, state,
county, city, municipal or otherwise, including without limitation any
instrumentality, division, agency, body or department thereof.
o. Uniform Commercial Code. All capitalized terms and other terms used
herein or in the other Loan Agreements which are defined in the Uniform
Commercial Code, shall have the meanings set forth in such Uniform
Commercial Code, unless otherwise defined herein or therein.
p. Value. The term "Value" or "value" shall mean the lower of cost or
market, as determined by Gibraltar in its sole discretion in accordance
with generally accepted accounting principles, consistently applied.
15. ADDITIONAL SECURITY
In addition to any other security interest granted in the Loan
Agreements, and not in limitation of any of the foregoing, and to secure the
payment and performance of all of the Obligations, Borrower hereby pledges and
assigns to Gibraltar, and grants to Gibraltar a continuing first priority
general security interest in all of the Collateral, and all of Borrower's ledger
sheets, files, records and documents relating to the Collateral and all
equipment containing or relating to said ledger sheets, files, records and
documents, which shall, until delivered to or removed by Gibraltar, be kept by
Borrower in trust for Gibraltar and without cost to Gibraltar in appropriate
containers in safe places, bearing suitable legends disclosing Gibraltar's
security interest. Each confirmatory assignment schedule or other form of
assignment hereafter executed by Borrower shall be deemed to include the
foregoing, whether or not same appears therein.
16. ADVANCES
a. Inventory Advances. In addition to the advances made with
reference to the formula set forth in paragraph 2 of the printed
portion of this Agreement (the "Accounts Advances"), Gibraltar shall
make additional advances to Borrower, in such amounts from time to time
determined by Gibraltar in its sole discretion, of up to twenty-five
(25%) percent of the value of Borrower's eligible and acceptable
inventory ("Inventory Advances"). For purposes hereof, "value" shall
mean the lower of cost or market value, as determined by Gibraltar in
its sole discretion.
b. Inventory Advances Sublimit. Except in Gibraltar's sole
discretion, the aggregate principal amount of Inventory Advances made
by Gibraltar to Borrower shall not, at any time outstanding, exceed the
principal sum of $600,000.
c. [Intentionally Deleted].
d. [Intentionally Deleted].
e. Term Loan. In addition to the Accounts Advances and Inventory
Advances, Gibraltar has contemporaneously herewith made an additional
advance to Borrower in the sum of $750,000 (the "Term Loan"). The
Term Loan shall be evidenced by a Promissory Note in the principal sum
of $750,000 dated of even date herewith, executed and delivered by
Borrower in favor of Gibraltar (the "Term Note"). The indebtedness
evidenced by the Term Note shall be payable as set forth therein.
f. Maximum Credit. Except in Gibraltar's sole discretion, the
aggregate principal amount of the Accounts Advances and Inventory
Advances plus the outstanding principal amount due under the Term Loan
(collectively, the "Loan") plus the outstanding principal amount of the
obligations from time to time due and owing Gibraltar by Other
Borrower under the Other Borrower Agreements shall not exceed the
aggregate principal sum of $3,500,000 outstanding at any one time
("Maximum Credit").
g. Interest. All Loans, including the Accounts Advances, by Gibraltar
pursuant to the Loan Agreement shall bear interest at the rate of two
(2%) percent per annum in excess of the Base Rate, publicly announced
from time to time by United Jersey Bank at its principal office as its
"base rate", whether or not said rate is the best available rate at
said Bank, and shall be calculated on the basis of a 360-day year.
Such interest, as well as any other fees due and payable hereunder to
Gibraltar, shall be payable on the first day of each month for the
immediately preceding month while this Agreement is in effect, and may,
at Gibraltar's option, be charged to any of Borrower's accounts
(maintained by Gibraltar). On or after the occurrence of any Event of
Default (as defined below), or termination or non-renewal of the Loan
Agreements, interest on all outstanding unpaid Obligations shall accrue
at a rate equal to two (2%) percent per annum in excess of the
pre-default rate set forth above from the date of such Event of Default
or termination or non-renewal, and all interest accruing hereunder
shall thereafter be payable on demand.
h. Over Formula Provision. Without limiting Gibraltar's rights to
demand payment of the Obligations or any portion thereof in accordance
with other provisions hereof, in the event that the Maximum Credit or
any components thereof at any time exceed the respective maximum
amounts set forth in paragraphs ▇.▇, ▇.▇, ▇.▇, ▇.▇, or in paragraph 2
of the printed portion of this Agreement, the entire amount of such
excess(es) shall, at Gibraltar's option, become immediately due and
payable upon Gibraltar's demand.
i. Non-Refundable Facility Fee. Borrower and Other Borrower,
jointly and severally, shall pay to Gibraltar an annual facility fee in
the aggregate amount of one (1%) percent of the Maximum Credit
("Facility Fee"), payable simultaneously with the execution of this
Agreement and yearly thereafter on the anniversary date hereof for the
term, including all renewal terms of this Agreement or so long as any
of the Obligations are outstanding. Such Facility Fee, which shall be
fully earned as of the date hereof for the first year of this Agreement
and on each anniversary date of this Agreement for each subsequent year
of this Agreement, is in addition to all other amounts due hereunder
and may, at Gibraltar's option, be charged to any account(s) of
Borrower maintained with Gibraltar.
j. Loan Administration Fee. Borrower and Other Borrower, jointly and
severally, agree to pay Gibraltar a loan administration fee in the
aggregate amount of SEVEN HUNDRED ($700.00) DOLLARS per month. The loan
administration fee shall be fully earned as of the first day of each
month and shall be due and payable on the first day of each successive
month during the term of this Agreement.
k. Other Costs and Expenses. Borrower will pay all costs and
expenses and all recording and filing fees and taxes payable upon
filing or recording (including Uniform Commercial Code financing
statement filing taxes and fees) in connection with the preparation,
execution, delivery, administration and enforcement of this Agreement,
all other Loan Agreements, and all other documents contemplated herein
or therein or related hereto or thereto, including any amendments,
supplements or consents which may be hereafter made or entered into in
respect hereof or thereof, and all title insurance premiums, appraisal
fees, audit fees and personal and real property searches in connection
herewith and therewith, and the fees and disbursements of in-house and
outside counsel to Gibraltar. Gibraltar is hereby authorized to charge
any amounts payable hereunder (including principal, interest, fees,
charges and expenses) directly to any account(s) of Borrower maintained
with Gibraltar.
l. Reserve Provision. Without limiting any other rights and remedies
of Gibraltar under the printed portion of this Agreement, hereunder or
under the other Loan Agreements, the aggregate amount of loans,
advances or financial accommodations made or otherwise available to
Borrower shall be subject to Gibraltar's continuing right, in its sole
discretion, to withhold a reserve, and to increase and decrease such
reserve from time to time, if and to the extent that, in Gibraltar's
sole judgment, such reserve is necessary to protect Gibraltar against
possible non-payment of the Obligations, possible non-payment of any
indebtedness owed to third parties, or in respect of any state of facts
which does or would with notice or passage of time or both constitute
an Event of Default hereunder or under any of the other Loan
Agreements.
m. Application of Payments. All payments made by or on behalf of
Borrower with respect to the Obligations may be applied by Gibraltar in
such order and manner as Gibraltar shall determine.
n. Maintenance of Accounts. Gibraltar may maintain one or more
accounts reflecting the advances, repayments and any notes contemplated
under this Agreement. At Gibraltar's option, all principal, interest,
fees, costs, expenses or other charges with respect to this Agreement
and any and all loans and advances to Borrower may be charged directly
to any account of Borrower maintained with Gibraltar. All Collateral
held by Gibraltar and granted to Gibraltar by Borrower (or any third
party) pursuant to the Loan Agreements shall be security for the
payment and performance of any and all Obligations of Borrower to
Gibraltar, notwithstanding the maintenance of separate accounts by
Gibraltar or the existence of any notes.
o. Promissory Notes. Borrower shall, from time to time at Gibraltar's
request, execute and deliver to Gibraltar one or more promissory notes,
in form and substance satisfactory to Gibraltar, evidencing the Loan or
portions thereof, made to Borrower pursuant to this Agreement, as
Gibraltar may specify.
p. Use of Proceeds. The initial loans and advances made by
Gibraltar to Borrower and Other Borrower hereunder shall be used by
Borrower and Other Borrower to pay, inter alia, Borrower's outstanding
indebtedness due Shawmut Bank Connecticut, National Association; ▇.▇.
▇▇▇▇▇▇▇ & Co. not to exceed the amount of $115,000; and Jonas Aircraft
and Arms Pension Plan and Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇. ▇▇▇▇▇▇▇ Retirement Plan, collectively, not to exceed the aggregate
amount of $122,000. Borrower shall use all future loans and advances
solely for general operating and working capital purposes in the
conduct of its business.
q. Participants. Gibraltar may, from time to time, sell, issue or
acquire, on such terms as Gibraltar shall deem appropriate,
participations with respect to all or any part of its right, title and
interest in this Agreement, the other Loan Agreements, the Obligations
and the Collateral thereunder or related thereto.
r. Unacceptable Receivables. Notwithstanding anything to the
contrary contained in the printed portion of this Agreement, and
without in any manner limiting Gibraltar's ability, in its sole
discretion, to determine whether any Receivable is acceptable, the
Borrower and the Other Borrower acknowledge, confirm and agree that:
(w) any Receivable with respect to any account debtor whose chief
executive office or principal place of business is located outside the
United States ("Foreign Account") and such Foreign Account is not
either insured by a foreign credit insurance policy in form, substance
and amount satisfactory to Gibraltar, which insurance policy, together
with the proceeds thereof, shall be duly assigned to Gibraltar or
secured by a letter of credit issued by a bank acceptable to Gibraltar
in form, substance and amount satisfactory to Gibraltar, which letter
of credit, together with the proceeds thereof shall be duly assigned to
Gibraltar; (x) any Receivable with respect to which exists contra
relationships, setoffs, counterclaims or disputes; (y) any Receivable
which is owed by an account debtor not deemed to be creditworthy at any
time by Gibraltar in its sole and absolute discretion; and (z) any
Receivable with respect to which exists any facts (actual or
threatened) which would impair or delay the collectibility of all or
any portion thereof, shall be deemed unacceptable Receivables under the
Loan Agreements.
s. Audit Fees. Borrower and Other Borrower, jointly and severally,
shall pay to Gibraltar all expenses and costs hereafter incurred by
Gibraltar during periodic field examinations of the Collateral and
Borrower and Other Borrower's operations, plus a per diem charge at a
rate of $500.00 per person per day for Gibraltar's auditors in the
field and office.
17. ADDITIONAL REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to Gibraltar the following,
each of which shall be a continuing representation and warranty, the truth and
accuracy of which shall be a continuing condition of financing by Gibraltar:
a. Organization. Borrower is a duly organized and validly existing
corporation in good standing under the laws of the State of Delaware
with perpetual corporate existence, and has the corporate power and
authority to own its properties and to transact the business in which
it is engaged or presently proposes to engage. Borrower has qualified
as a foreign corporation in all states or other jurisdictions where the
nature of its business or the ownership or use of property requires
such qualification or where the failure to so qualify as a foreign
corporation would not have an adverse effect upon the Borrower's
business as presently conducted.
b. Authorization. Borrower has the corporate power to borrow and
to execute, deliver and carry out the terms and provisions of this
Agreement and the other Loan Agreements, and all other instruments and
documents delivered by it pursuant hereto and thereto, and Borrower has
taken or caused to be taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and the other
Loan Agreements and such other agreements, the borrowings hereunder and
the execution, delivery and performance of the instruments and
documents delivered and to be delivered by it pursuant hereto and
thereto, and this Agreement and the other Loan Agreements constitute
and will constitute legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms.
c. Compliance with Other Agreements. Borrower is not in default
in any material respect under any indenture, mortgage, deed of trust,
agreement or other instrument to which it is a party or by which it or
its properties may be bound, except that, Borrower is in default under
that certain Lease dated November 23, 1993 between Borrower and First
Danbury Properties, Inc. Neither the execution and delivery of this
Agreement and the other Loan Agreements, or any of the instruments and
documents to be delivered by Borrower pursuant hereto or thereto, nor
the consummation of the transactions herein or therein contemplated,
nor compliance with the provisions hereof or thereof, has violated any
law or regulation, or any order or decree of any court or governmental
instrumentality in any respect, or does or will conflict with, or
result in a breach of, or constitute a default in any material respect
under, any indenture, mortgage, deed of trust, agreement or other
instrument to which Borrower is a party or by which it or its
properties may be bound, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property of Borrower
(except as contemplated hereunder or under the other Loan Agreements)
or violate any provision of the Certificate of Incorporation or By-Laws
of Borrower.
d. Compliance with Applicable Law. Borrower is in compliance in
all material respects with the requirements of all applicable licenses,
laws, rules, regulations and orders of any governmental authority
relating to its business, including, without limitation, those embodied
in or promulgated pursuant to the Employee Retirement Income Security
Act of 1974, the Internal Revenue Code of 1986, the Securities Act of
1933, the Securities Exchange Act of 1934, the Federal Food, Drug and
Cosmetic Act, the Americans with Disabilities Act of 1990, the Resource
Conservation and Recovery Act of 1976, the Environmental Cleanup
Responsibility Act and any other Federal or State environmental
statute, all as amended to date.
e. Governmental Approval. No action of, or filing with, any
governmental or public body or authority (other than the filing or
recording of Uniform Commercial Code financing statements, mortgages or
other instruments typically required to perfect security interests or
liens in the types of property constituting Collateral) is required in
connection with the execution, delivery and performance of this
Agreement, the other Loan Agreements, or any of the instruments or
documents to be delivered by Borrower pursuant hereto or thereto.
f. Title To Properties. Borrower has good and marketable title
to all of its properties and assets and such properties and assets are
not subject to any liens, mortgages, pledges, security interests,
encumbrances or charges of any kind, except those in favor of Gibraltar
and such others as are specifically disclosed under the provisions of
this Agreement and the other Loan Agreements, as set forth in Schedule
A.
g. Principal Office; Collateral Locations. The address of the
principal place of business and chief executive office of Borrower is ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, which address is a
mailing address for said principal place of business and chief
executive office. All books and records of Borrower with respect to
the Collateral and the Collateral itself are maintained at the
addresses set forth on Schedule B annexed hereto and Borrower agrees
not to change such principal place of business or Collateral locations
without providing Gibraltar with ten (10) days prior written notice
and, prior to making such change, to execute any additional documents,
Uniform Commercial Code financing statements or notices which Gibraltar
may require.
h. Priority Of Liens. The security interests and liens granted by
Borrower to Gibraltar under this Agreement and the other Loan
Agreements constitute valid and perfected first priority liens and
security interests in and upon the property described herein and
therein, subject to the existing liens and security interests, if any,
set forth in the Loan Agreements and those set forth on Schedule A.
i. No Misrepresentation. None of the information contained in the
representations and warranties made by Borrower in this or the other
Loan Agreements, or in any other instrument, document, list,
certificate, statement, schedule or exhibit heretofore delivered or to
be delivered to Gibraltar as contemplated in this Agreement or in the
other Loan Agreements contains or will contain any untrue statement of
a material fact or omits or will omit to state a fact necessary in
order to make the statements contained herein or therein not
misleading.
j. No Event of Default. After giving effect to the transactions
contemplated by this Agreement, the other Loan Agreements and the other
instruments or documents delivered in connection herewith and
therewith, there does not exist, as of the date hereof, any condition
or event which constitutes an Event of Default (as herein defined) or
which, after notice or passage of time or both, would constitute such
an Event of Default.
k. Related Entities. Borrower has no parents or subsidiaries or
affiliates which Borrower makes loans or advances to or otherwise
transacts business with, except for the subsidiaries and affiliates
noted on Schedule C.
18. ADDITIONAL COVENANTS
Borrower covenants and agrees that, until all of the Obligations have
been indefeasibly paid in full, it shall comply with the following covenants,
each of which shall be a continuing condition of financing by Gibraltar, unless
Gibraltar shall otherwise consent in writing:
a. Tradestyles. Certain Receivables may be and/or certain of
Borrower's invoices may be, from time to time, rendered to customers
under the tradestyles listed on Schedule D annexed hereto (which,
together with any new tradestyles used after the date hereof are
referred to collectively as the "Tradestyles" and individually as a
"Tradestyle"). As to such Tradestyles and the related Accounts (as
such term is defined in the printed portion of this Agreement),
Borrower hereby warrants and agrees that:
i. each Tradestyle is a trade name and style (and not the
name of an independent corporation or other legal entity) by which
Borrower may identify and sell certain of its goods or services and
conduct a portion of its business;
ii. all Receivables and proceeds thereof and returned merchandise
which arise from the sale of goods invoiced under the Tradestyles
are and shall be (i) owned solely by Borrower and (ii) subject to
the security interest and other terms of this Agreement and the
other Loan Agreements;
iii. any dispute which may arise with customers with respect to the
products invoiced under the name of any of the Tradestyles are to
be subject to the terms of this Agreement and the other Loan
Agreements as though the Tradestyle did not exist;
iv. all confirmation sheets on assignments of accounts
delivered to Gibraltar by Borrower, whether such accounts are
invoiced in the name of any of the Tradestyles or Borrower, shall
be executed by Borrower as the owner of such assigned accounts;
v. new Tradestyles may only be used by Borrower after
Gibraltar is given fifteen (15) days prior written notice of the
use of any such new Tradestyle, which notice shall set forth the
name of such new Tradestyle; and
vi. Borrower does not currently use any Tradestyle other than
the Tradestyles listed on Schedule D hereto.
b. Sale of Assets, Consolidation, Merger, etc. Borrower will not
directly or indirectly sell, lease, transfer, abandon or otherwise
dispose of all or any substantial portion of its property or assets or
consolidate with or merge with or into any other entity or Person, or
permit any other entity to consolidate with or merge with or into it,
without the prior written consent of Gibraltar.
c. Maintenance of Existence. Borrower will, at all times, preserve,
renew and keep in full force and effect its existence as a Delaware
corporation and its rights and franchises with respect thereto,
continue to engage in business of the same type as it is now engaged,
and maintain, in full force and effect, all permits, licenses,
copyrights, trademarks, trade names, patents, approvals,
authorizations, leases and contracts necessary to carry on the business
as the same is being operated as of the date hereof.
d. Loans, Investments, Distributions and Inter-Company
Transactions. Borrower will not, directly or indirectly, during any
fiscal year of Borrower commencing with Borrower's current fiscal year:
lend or advance money or property to, or invest (by capital
contribution or otherwise) in any firm, corporation or Person; declare
or pay any cash dividends, or dividends in property, or make any other
distribution on account of any shares of any class of capital stock of
Borrower now or hereafter outstanding, or set apart any sums for such
purpose, or directly or indirectly, retire, purchase, redeem, or
otherwise acquire any such capital stock for any consideration other
than stock or apply or set apart any sums or other assets therefor, or
make any other distribution (by reduction of capital or otherwise) in
respect of any such capital stock, or agree to do any of the forgoing
until all the Obligations to Gibraltar have been fully and indefeasibly
paid; make any payment of the principal amount of or interest on any
indebtedness owing to any officer, director, shareholder, Affiliate or
other related Person of Borrower; make any loans or advances to any
officer, director, shareholder, Affiliate or other related Person of
Borrower, except that, Borrower may make inter-company transactions
with Other Borrower; directly or indirectly, enter into any sale, lease
or other transaction with any officer, director, shareholder, Affiliate
or other related Person of Borrower which is not in the ordinary course
of business and at arm's length, including terms no less favorable than
would be available if the sale, lease or other transaction were with an
unrelated Person; become a guarantor, surety or otherwise liable for
the debts or obligations of any Affiliate; or make or incur any
liability to make any investment by means of purchase or other
acquisition of stock or other securities, capital contributions, loans
or otherwise in any Affiliate. Notwithstanding anything to the contrary
contained herein, provided that no event of default then exists or is
continuing upon the prior written consent of Gibraltar, which consent
shall not be unreasonably withheld, Borrower may make any payment
permitted under the intercreditor agreements dated of even date hereof
between Gibraltar and the parties listed on Schedule E annexed hereto;
upon the prior written consent of Gibraltar, which consent shall not be
unreasonably withheld, Borrower may make payments to the parties listed
on Schedule E from the proceeds of sale of the Borrower's capital
stock; and Borrower and Other Borrower may make payments on an
unmatured, unaccelerated basis to ▇▇▇▇▇ ▇▇▇▇▇▇▇ not to exceed the
aggregate amount of $56,000.
e. Compliance with Other Agreements and Applicable Law. Borrower will
comply with the requirements of all applicable laws, rules,
regulations, orders of any governmental authority, and all agreements
to which Borrower is a party, the noncompliance of which would
adversely affect its business, properties or credit.
f. Limitation on Liens. Borrower will not create, assume, or suffer
to exist any liens or encumbrances with respect to its real or personal
property, whether now owned or hereafter acquired, except: tax,
mechanics and other like liens arising in the ordinary course of
business securing obligations which are not overdue or (unless or until
foreclosure or other similar proceedings shall have been commenced) are
being contested in good faith by appropriate proceedings and are
adequately reserved against, liens arising in connection with worker's
compensation, unemployment insurance, appeal and release bonds and
securities pledged as collateral for any of the foregoing, the liens,
encumbrances, or security interests in favor of Gibraltar and the
liens, security interests, claims and encumbrances set forth in the
other Loan Agreements.
g. Further Assurances. Borrower will duly execute and deliver, or
will cause to be duly executed and delivered, such further instruments
and documents, including, without limitation, additional security
agreements, mortgages, collateral assignments, Uniform Commercial Code
financing statements or amendments or continuations thereof,
subordination agreements from Affiliates to whom monies are owed by
Borrower, including shareholders, officers and/or directors of
Borrower, landlord's or mortgagee's waivers of liens and consents to
the exercise by Gibraltar of all its rights and remedies hereunder or
under the other Loan Agreements with respect to the Collateral, and do
or cause to be done such further acts as may be necessary or proper in
Gibraltar's opinion to effectuate the provisions or purposes of this
Agreement or the other Loan Agreements.
h. Additional Financial Reports. In addition to the financial
information and schedules of Collateral to be delivered by Borrower to
Gibraltar as provided in the Loan Agreements, and not in limitation
thereof, Borrower shall provide Gibraltar with the following financial
reports: daily sales reports; daily collection reports; within
twenty (20) days after the end of each month, copies of Borrower's
internally prepared schedules pertaining to accounts receivable aging,
accounts payable aging and inventory designation in a form and
substance satisfactory to Gibraltar; quarterly compilation financial
statements prepared by management in a form and substance satisfactory
to Gibraltar; annual certified financial statements in a form and
substance satisfactory to Gibraltar; and any other financial
information and reports which may be reasonably required or requested
by Gibraltar.
19. ADDITIONAL DEFAULT AND REMEDY PROVISIONS
a. In addition to any default or event of default hereunder or under
any of the other Loan Agreements, including, without limitation, any
default set forth in the printed portion of this Agreement, the
occurrence of any of the following shall each constitute an Event of
Default hereunder and under all of the other Loan Agreements
(collectively, "Events of Default"): if, at any time, the Borrower and
the Other Borrower, on a consolidated basis, fail to maintain a
Tangible Net Worth of at least $6,800,000; if, at any time, for the
Borrower and Other Borrower on a consolidated basis, the ratio of
Liabilities, less any Liabilities the payment of which is subordinated
to the payment of the Obligations, to Effective Net Worth is greater
than 1.5 to 1; if, for any fiscal year for the Borrower and the Other
Borrower on a consolidated basis, the ratio of Net Income (computed
before net interest expense, taxes, depreciation and amortization) to
the sum of interest expense plus that portion of Long Term Liabilities
(including capitalized lease payments) which have become due and
payable during such fiscal year is less than 1.2 to 1; if, for any
fiscal year, the Net Income for Borrower and Other Borrower, on a
consolidated basis, is less than $1.00; or any change in the chief
executive officer, chief operating officer, chief financial officer or
controlling ownership of Borrower or Other Borrower; or in the event
that the Borrower is required to expend in excess of $250,000 in
connection with the removal, restoration or clean-up of any hazardous
substances, waste or other materials under any federal, state or local
environmental or similar laws, statutes, ordinances or regulations,
unless the same is adequately insured, as determined by Gibraltar in
its sole discretion; or any guarantor revokes, terminates or fails to
perform any of the terms of any guaranty, endorsement or other
agreement of such party in favor of Gibraltar or any affiliate of
Gibraltar; or upon the occurrence of any event which, with notice,
lapse of time or both, would constitute a default under any of the
other Loan Agreements or a default by Borrower on any indebtedness for
borrowed money or with respect to any material contract, lease or other
obligation owed to any Person or entity other than Gibraltar.
b. Upon the occurrence of an Event of Default (other than a payment
default or a default as expressly designated in paragraph F.2(b) below)
which remains uncured for ten (10) days after notice to Borrower, or
immediately upon the occurrence of a default in payment when due of
any of the Obligations, or if a tax lien is filed against Borrower and
remains unvacated for forty-five (45) days or if a case or proceeding
is commenced by or against the Borrower under Title 11 of the United
States Code or under any Federal or State bankruptcy or insolvency
statute and which, solely in the case of such petition or application
filed against Borrower remains undismissed for forty-five (45) days
after the filing thereof, of if Borrower fails, suspends or goes out of
business, or if any present or future warranty or representation or
other statement now or hereafter made or furnished to Gibraltar by
Borrower herein or in any document or instrument furnished in
connection herewith proves to have been false or misleading in any
material respect when made or furnished, or if any such Event of
Default consists of a failure to maintain, protect or preserve a
material portion of the Collateral as provided in any of the Loan
Agreements, or immediately upon the termination or non-renewal of this
Agreement or any of the other Loan Agreements, then Gibraltar shall
have all rights and remedies against Borrower available to Gibraltar
pursuant to paragraph 8 of the printed portion of this Agreement, as
well as all other rights and remedies hereunder and under applicable
law, including without limitation, the right to declare any and all of
the Obligations to be immediately due and payable together with
interest at the rate set forth in paragraph 3 of the printed portion of
this Agreement and the right to terminate the Loan Agreements pursuant
to paragraph 7 of the printed portion of this Agreement, and Gibraltar
shall have the right to immediately exercise all of its rights and
remedies hereunder or under any of the other Loan Agreements, without
notice to Borrower, which notice is hereby expressly waived by
Borrower.
c. In the event Gibraltar institutes an action to recover any Collateral
or seeks recovery of any Collateral by way of prejudgment remedy or
otherwise, Borrower waives the posting of any bond which might
otherwise be required.
20. CURING OF CERTAIN DEFAULTS BY GIBRALTAR
Gibraltar may, at its option, cure any default by Borrower under any
agreement with a third party which constitutes, or with notice or lapse of time
or both would constitute, an Event of Default hereunder or under any other
agreement between Gibraltar and Borrower, or pay or post bond on appeal with
respect to any judgment entered against Borrower (irrespective of the amount of
said judgment or the time elapsed since entry thereof), and Gibraltar may add
any amounts so expended to the Obligations and charge Borrower's account
therefor, such amounts to be repayable by Borrower on demand; Gibraltar shall be
under no obligation to effect such cure, payment or bonding and shall not, by
making any payment for Borrower's account, be deemed to have assumed any
obligation or liability of Borrower.
21. NOTICES
All notices, requests and demands to or upon the respective parties
hereto shall be deemed to have been duly given or made: if by hand, immediately
upon delivery; if by telex, telecopier, facsimile or telegram, immediately upon
sending, provided it is sent on a business day, but if not, then immediately
upon the beginning of the first business day after being sent; if by Federal
Express, Express Mail or any other overnight delivery service, one (1) day after
dispatch; and if mailed by certified mail, return receipt requested, five (5)
days after mailing. All notices, requests and demands are to be given or made to
the respective parties at the following addresses (or to such other addresses as
either party may designate by notice in accordance with the provisions of this
paragraph):
If to Borrower: ▇▇▇▇ INDUSTRIES, INC.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to Gibraltar: GIBRALTAR CORPORATION OF AMERICA
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
22. CONTROLLING LAW
This Agreement, the other Loan Agreements, and any other document
referred to herein or therein are being executed and delivered in New York, New
York and shall be, together with the obligations and rights thereunder,
construed and interpreted in accordance with the laws of the State of New York.
23. JURISDICTION/WAIVER OF JURY TRIAL
Borrower hereby agrees that the Supreme Court for the County of New
York, State of New York and the United States District Court for the Southern
District of New York shall have non-exclusive jurisdiction to hear and determine
any claims or disputes pertaining directly or indirectly to this Agreement and
the other Loan Agreements. Borrower expressly and irrevocably submits and
consents in advance to such jurisdiction in any action or proceeding commenced
by Gibraltar in any of such courts, and agrees that service of such summons and
complaint, or other process or paper shall be made inside or outside the State
of New York by registered or certified mail, return receipt requested, addressed
to Borrower at its address as set forth in the printed portion of the Agreement,
or in such other manner as may be permissible under the rules of said courts.
Should Borrower fail to appear or answer any summons, complaint, process or
papers so served within thirty (30) days after the mailing thereof, Borrower
shall be deemed in default and an order and/or judgment may be entered by
Gibraltar against Borrower as demanded or prayed for in such summons.
Borrower hereby waives trial by jury in any action or proceeding
pertaining directly or indirectly to this Agreement and the other Loan
Agreements, and further agrees not to assert any offset or counterclaim, except
for compulsory counterclaims, in any such action or proceeding.
24. PARTIAL INVALIDITY
If any provision of this Agreement or the other Financing Agreements is
held to be invalid or unenforceable, such invalidity or unenforceability shall
not invalidate this Agreement or the other financing Agreements as a whole, but
this Agreement or the particular Financing Agreement, as the case may be, shall
be construed as though it did not contain the particular provision or provisions
held to be invalid or unenforceable and the rights and obligations of the
parties shall be construed and enforced only to such extent as shall be
permitted by law.
25. TERMINATION/PREPAYMENT
a. In addition to, and not in limitation of, paragraph 7 of the
printed portion of this Agreement, Borrower shall have the right, in
its sole discretion, to pay and prepay in full, but not in part, the
outstanding Obligations and to terminate this Agreement in accordance
with the terms and provisions of paragraph 7 of the printed portion of
this Agreement; provided that, (a) the other Loan Agreements are
terminated simultaneously herewith, (b) in any such case, Borrower
provides Gibraltar with sixty (60) days prior written notice of its
intent to terminate this Agreement (the sixtieth (60th) day following
such written notice being hereinafter the "Termination Date"), (c)
Borrower complies with the other provisions of paragraph 7 of the
printed portion of this Agreement, and (d) Borrower pays to Gibraltar
the amount of all principal, interest, charges, fees and expenses owed
to Gibraltar by the Borrower under this Agreement, the other Loan
Agreements, or otherwise, including but not limited to the early
termination fee as set forth in paragraph L.2. below.
b. If Gibraltar terminates this Agreement upon the occurrence of a
default or any Event of Default, or if this Agreement is terminated at
Borrower's request in accordance with paragraph L.1. above, in view of
the impracticability and extreme difficulty of ascertaining actual
damages and by mutual agreement of the parties as to a reasonable
calculation of Gibraltar's lost profits as a result thereof, Borrower
and Other Borrower shall, jointly and severally, pay to Gibraltar, upon
the effective date of such termination, an early termination fee in an
amount equal to (any such amount as calculated below, an "Early
Termination Fee"):
(a) If such termination occurs on or prior to the first anniversary
of this Agreement, three (3%) percent of the Maximum Credit; and
(b) If such termination occurs after the first anniversary of this
Agreement or any renewal period, two (2%) percent of the Maximum Credit.
Such Early Termination Fee shall be presumed to be the amount of
damages sustained by such termination and Borrower agrees that it is reasonable
under the circumstances currently existing. The Early Termination Fee shall be
deemed included in the Obligations.
26. CONFLICTS
In the event that any term or provision of this Rider conflicts with
any term or provision of the printed portion of this Agreement or any of the
other Loan Agreements to which Borrower is a party, or any document or
instrument delivered in connection herewith or therewith, the term or provision
of this Rider shall control.
▇▇▇▇ INDUSTRIES, INC.
By:
Title: Chief Executive Officer
[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
ACCEPTED:
GIBRALTAR CORPORATION OF AMERICA
By:
Title:
SCHEDULE A
EXISTING LIENS
Liens upon and security interest in certain of the Borrower's assets in favor
of:
▇. ▇▇▇▇▇▇▇ Grill
b. Fleet National Bank of Connecticut
▇. ▇▇▇▇▇ Aircraft and Arms Pension Plan and Trust
d. ▇▇▇▇▇▇ ▇▇▇▇▇▇
e. ▇▇▇▇▇ ▇▇▇▇▇▇
f. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Retirement Plan
SCHEDULE B
EXISTING LOCATIONS OF COLLATERAL
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE C
RELATED ENTITIES
Alcore Inc.
SCHEDULE D
TRADESTYLES
None
SCHEDULE E
Parties to Intercreditor Agreement
▇▇▇▇ & Cie
▇▇▇▇▇▇▇ Grill
Jonas Aircraft and Arms Pension Plan and Trust
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Retirement Plan
Fleet National Bank of Connecticut
ACKNOWLEDGEMENT AND AGREEMENT
The undersigned, being the Other Borrower referred to in the within and
foregoing Financing Agreement and Rider (collectively, the "Loan Agreement"),
hereby acknowledge each of the terms and provisions of the foregoing Loan
Agreement and agree to be bound by the terms of paragraph the Loan Agreement and
agree to be bound by and, jointly and severally, agree to pay, the fees set
forth in paragraphs C.9, C.10 and L.2 of the Rider to the Financing Agreement.
The undersigned each acknowledge and agree that although it may
acknowledge this Loan Agreement, it is not a party thereto and does not and will
not receive any right, benefit, priority or interest under or because of the
existence of the Loan Agreement.
ALCORE, INC.
By:
Title: Chief Executive Officer
